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India goes missing in Forbes capital hospitality list

Pratap Ravindran

The Forbes Capital Hospitality Index measures macroeconomic indicators like GDP growth and international trade, along with societal factors affecting investment, including poverty, bureaucracy, technological advancement, and corruption.

Pune , Feb. 16

FORBES has listed Denmark, Finland, Iceland, the US, the UK, Singapore, Australia, Estonia, Ireland, and New Zealand as the top 10 countries in the world in terms of capital hospitality. India, which fancies itself as a hot global capital destination, does not figure in the list at all.

The premier business publication said: "As access to capital markets around the world becomes commonplace for individual investors and multinational institutions alike, the race is on for countries to attract the foreign investment capital needed to fuel the engines of growth at home.

"Yet, the degree to which nations are qualified for or receptive to foreign investment has gone largely un-quantified by a single source, unlike statistics-driven corporate research churned out by Wall Street."

Addressing this need for a "one-stop reference", Forbes began with a list of principles employed by the US Chamber of Commerce when considering international investments.

It sought out many of the world's top institutions of sociological and economic theory, gathered the results of surveys, statistical studies, and socio-economic data on each of the 135 countries in its index, assigning relative per cent-rankings for each of the chamber's largely qualitative principles.

The magazine then aggregated scores across 10 separate categories to develop the first Forbes Capital Hospitality Index (FCHI).

Among the institutions that contributed "vital analyses of various socio-economic indicators on the countries included in the FCHI" are The Heritage Foundation, World Economic Forum, World Bank, Transparency International, Freedom House, Deloitte Tax, the US Chamber of Commerce, and the Central Intelligence Agency.

In addition, a breakdown of the actual capital flows along with macroeconomic insight and outlook for the US was provided by Moody's Economy.com.

The FCHI measures macroeconomic indicators like GDP growth and international trade, along with societal factors affecting investment, including poverty, bureaucracy, technological advancement, and corruption.

The FCHI is intriguing in terms of its variance with other studies on foreign direct investment destinations.

For instance, it was not all that long ago that AT Kearney, the high-value management consulting subsidiary of global services major EDS, had released its Foreign Direct Investment Confidence Index, in which it had stated that China and India were competing with one another and aggressively challenging the US to become the world's most favoured destination for foreign direct investment.

The index, published in 2004, had said: "For the first time since 2000, a sizable majority (69 per cent) of leading executives are more optimistic about the global economy, compared to only one in 10 expressing more pessimism.

"Corporate investors expressed an increased willingness to make overseas investments compared to 2003 - the first positive year-to-year increase in overall FDI confidence in global investment locations since 2001."

It also said: "Helping spur likely future FDI, corporate investors see macroeconomic and political risks as less threatening and perceive greater profit opportunities, and reduced risk, in the world's leading emerging markets. Global executives are more likely to invest in China and India than at any time since 1998."

According to AT Kearney, China "maintained its position as the number one most attractive FDI destination in the world, while India rose from sixth to third most likely FDI location globally - the country's highest ranking ever, just behind the US Although the US remained the second most attractive FDI location in the world, the gap between the US and India may be closing."

AT Kearney had gone on to predict that as China and India "forge their leading positions in the global economy, the US and the rest of the world will face severe competitive pressures from these two dynamic and rapidly evolving economies... "

Things haven't quite worked out that way - at least, not according to Forbes.

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