Callback
Contact
+1 786 233 6668
In partnership with 
A pioneering framework to help investors, families, and governments navigate global volatility. Read about the new geography of risk and resilience shaping our world.
Countries worldwide are facing unprecedented volatility in both the short and long term owing to escalating geopolitical tensions, intensifying economic competition, rapid technological disruption, worsening climate crises, and other drivers of global uncertainty. Ultra-high-net-worth individuals, institutional investors, and corporations must consider all these variables when determining how and where to allocate capital.
The Global Investment Risk and Resilience Index — a new partnership between AlphaGeo and Henley & Partners — has been developed to help stakeholders evaluate countries’ performance across a comprehensive set of indicators that capture their ability to withstand and adapt to shocks.
This pioneering index draws on nearly 3,000 data points structured around two core parameters — Risk and Resilience — and encompasses 13 indicators (5 measuring risk and 8 measuring resilience) to deliver a balanced, data-driven appraisal of each jurisdiction's reliability as an investment destination.
The index is structured around two thematic pillars:
By combining a country’s performance in these two dimensions into a single composite score, the index not only identifies where risks are elevated but also highlights where strong resilience mitigates those risks. This provides investors with a strategic tool for capital allocation while enabling governments to benchmark and enhance their attractiveness as destinations for foreign investment.
The index was calculated through an eight-step process.
To ensure consistency and comparability across diverse indicators, all features were first preprocessed. Features with an inverse relationship to performance were reversed so that higher values consistently represented better outcomes.
Extreme outliers were mitigated using z-score clipping, followed by min-max normalization. This scales values for each Risk and Resilience indicator to a uniform range between 0 and 1, facilitating fair comparison.
Countries with missing data for specific indicators were assigned a score based on their respective regional average.
The arithmetic mean of the features within each parameter (Risk and Resilience) was calculated to produce an initial Total Risk Score and Total Resilience Score for each country, both ranging from 0‒1.
The Global Investment Risk and Resilience Index Score was derived using the following formula: (Total Resilience Score – Total Risk Score+1)×50. This formula balances the contributions of both parameters and scales the final score to a range of 0‒100, where higher values indicate better performance.
The initial 0‒1 scores for both the Total Risk Score and the Total Resilience Score were scaled to a 0‒100 range for ease of interpretation.
Small differences in ranks might reflect marginal score gaps. To avoid over-interpretation on the basis of ranks or scores alone, countries were banded into the following investment categories based on their:
Countries with confidence levels above 85% (see section below on Confidence Levels) were then ranked based on their unrounded Global Investment Risk and Resilience Index Score. Scores were then rounded to two decimal places for readability in our reports and visualizations.
Confidence levels indicate the proportion of underlying data directly available for each country. For example, a confidence score of 80% means that 80% of the data was obtained directly, while the remaining 20% was imputed using regional averages. This metric provides transparency on both data availability and the reliability of a country’s final score.
While we have developed a comprehensive dataset covering 226 countries and territories to ensure representation even for states with limited data, only those with a confidence level above 85% are displayed in our report. This is equivalent to no more than two missing — and therefore imputed — datasets out of the 14 that underpin our 13 risk and resilience indicators (the Inflation Risk indicator comprises two datasets).
In addition to confidence levels, the index can also be filtered along the following parameters to enable more granular comparative analysis across regions and income categories. Filters for both income levels and five-year average GDP growth were included to allow users to filter countries by both structural wealth and recent momentum.
The Global Investment Risk and Resilience Index encompasses 13 indicators, with 5 assessing risk and 8 measuring resilience.
Indicator | Data Feature | Rationale for Inclusion |
Inflation Risk | Equally-weighted combination of:
Source: World Bank, then engineered (2023) | This indicator weights inflation rate and volatility equally to capture both the costs and predictability of inflation. A country’s inflation rate is a core determinant of its macro-economic stability. High or persistent inflation erodes real returns, reduces consumer purchasing power, and undermines monetary policy credibility. Empirical studies show a link between inflation and reduced investment flows.1 Inflation volatility undermines long-term planning, complicates debt servicing, and signals fragility in monetary and fiscal frameworks. Periods of higher inflation uncertainty have been followed by large economic growth declines, particularly in investment.2 |
Currency Volatility | 5-year rolling standard deviation in exchange rate relative to the USD Source: BIS, then engineered (2023) | High currency volatility introduces exchange rate risks and uncertainty. Research has found that exchange rate volatility negatively influences bilateral FDI flows.3,4 |
Political Instability | Worldwide Governance Indicators: Political Stability and Absence of Violence/Terrorism Source: World Bank (2023) | Political instability increases policy unpredictability and market disruption. Studies have shown that investment decreases with increases in political instability owing to an uncertain environment and increased financing costs.5,6,7 This indicator uses the World Bank’s Worldwide Governance Indicators for Political Stability and Absence of Violence/Terrorism, which is composed of sub-indicators on conflict, unrest, and political terror, among others. A list of its representative sources can be found here. |
Legal and Regulatory Risk | Equally-weighted combination of Worldwide Governance Indicators: Rule of Law and Regulatory Quality Source: World Bank (2023) | A weak legal and regulatory environment can hamper effective business operations. Research has found that institutions are a robust predictor of FDI, with rule of law, property rights, and expropriation risk most significantly contributing.8 This indicator uses the World Bank’s Worldwide Governance Indicator for Rule of Law and Regulatory Quality. The Rule of Law component comprises data on judicial fairness, proprietary risk, private property protection and property rights, among others. A list of data sources can be found here. The Regulatory Quality component measures regulatorily driven costs of doing business, from price controls and discriminatory tariffs to non-tariff barriers and taxes. It also measures the ease of starting up a business. A list of data sources can be found here. |
Physical Climate Risk | Climate Risk and Resilience Index: Physical Climate Risk scores Source: AlphaGeo (2023) | Physical climate risks are now widely recognized by regulators, investors, and corporations as material business and investment risks. They manifest through damaged assets, higher operating costs, and reduced revenues — with extreme weather events alone driving more than USD 2 trillion in global economic losses over the past decade.9 AlphaGeo's Physical Climate Risk score measures a location’s exposure to the following hazards: heat stress, inland flooding, coastal flooding, wildfire, hurricane wind, and drought. AlphaGeo’s scoring methodology can be found here. |
Indicator | Data Feature | Rationale for Inclusion |
External Accounts | Current account balance (% of GDP) Source: World Bank (2023) | A strong current account balance reflects a country's ability to pay for its imports and service its foreign debt, providing a buffer against capital flight and currency crises, while a current account deficit may place limits on how much additional debt a country can assume, thereby limiting its capacity to introduce countercyclical measures. |
Fiscal Policy Space | Gross government debt (% of GDP) Source: IMF (2023) | A lower debt burden provides a government with greater fiscal policy space, or the capacity to implement stimulus measures or fund recovery efforts during a crisis without jeopardizing macro-economic stability and debt sustainability. Note: The Fiscal Policy Space indicator was adjusted for Singapore. While Singapore reports one of the highest gross government debt-to-GDP ratios globally — suggesting very limited fiscal space — taking this score as a sign of the city-state’s resilience would be misleading. While Singapore's gross debt-to-GDP ratio is large, it has a strong balance sheet with no net debt as it has significant financial assets in excess of debt.10 To reflect this, its score was adjusted from the baseline 0 (out of 1), indicating extremely low relative resilience, to the maximum 1 (out of 1), capturing its strong fiscal position. |
Economic Complexity | Economic Complexity Index calculated using HS12 product classification Source: Growth Lab at Harvard University (2023) | This indicator measures the knowledge embedded in a country's production and export structure. A highly complex economy, or one that produces a diverse range of sophisticated products, is likely more resilient to external shocks. This diversity allows it to reallocate resources and maintain economic activity. |
Innovation | Global Innovation Index Source: World Intellectual Property Organization (WIPO) (2023) | Innovation helps countries to adapt their industrial and technical structures when required. Bristow and Healy, for example, found in an empirical study of European regional economies that regions identified as Innovation Leaders at the time of the 2007‒2008 global financial crisis were significantly more likely to have either resisted the crisis or recovered quickly. 11 |
Investment | Gross capital formation (% of GDP) Source: World Bank (2023) | Capital formation can indicate the extent to which an economy is building buffers which would enable it to meet the effects of shocks, an essential element to resilience building within a country. |
Quality of Governance | Equally-weighted combination of Worldwide Governance Indicators: Government Effectiveness and Control of Corruption Source: World Bank (2023) | Effective governance is crucial for national resilience as it allows countries to better manage shocks, implement adaptive policies, and foster a stable environment for recovery. |
Social Progress | Inequality-adjusted Human Development Index (HDI) Source: UNDP (2023) | Better health, education, income and equality outcomes help develop healthy human capital that is essential to boosting resilience.12 Inequality-adjusted HDI was chosen for this indicator as wide gaps in income and opportunity may destabilize resilience. |
Climate Resilience | Climate Risk and Resilience Index: Resilience-adjusted Risk scores (inverted) Source: AlphaGeo (2023) | Building climate resilience through adaptation is critical to minimizing the rapidly rising costs of climate-driven physical hazards. A recent study by the World Resources Institute (WRI) has found that every dollar invested in adaptation and resilience generates more than USD 10 in benefits over 10 years.13 Adaptation investments evaluated by the WRI also showed significant and diverse benefits for avoided losses, induced economic benefits, and social and environmental benefits. The Climate Resilience indicator is derived by inverting AlphaGeo’s Resilience-adjusted Risk scores. These scores quantify climate risk exposure after factoring in the impact of adaptation measures in place. Inverting this score turns it into a measure of resilience: the country with the lowest resilience-adjusted risk is the most resilient, and vice versa. AlphaGeo’s scoring methodology can be found here. |
While we have sought to build a comprehensive, balanced index grounded in reliable data, there are inherent limitations that should inform interpretation:
Many countries are separated by very small score differences. Country ranks should therefore be interpreted alongside their relative scores and categories, rather than as absolute distinctions.
National circumstances do not always align neatly with standardized global data. Singapore’s debt-to-GDP ratio illustrates this challenge: Singapore’s gross government debt-to-GDP ratio is among the highest in the world, which would imply very limited fiscal space. In reality, Singapore has no net debt owing to its substantial financial assets and, unlike most countries, does not borrow to fund recurrent spending. In this case, we were able to manually adjust Singapore’s Fiscal Policy Space score to accurately reflect its fiscal strength (as detailed in our methodological notes). However, it is not feasible to capture every such nuance for every country. Scores should therefore always be interpreted in light of specific national contexts.
Indicators themselves can also be context dependent. For instance, low capital formation may signal underinvestment, but in highly developed economies with mature infrastructure it is less concerning. Similarly, a current account surplus can strengthen resilience by providing buffers but may also reflect weak domestic demand.
As this is a new index, we welcome constructive feedback to help refine and strengthen it in future editions.
1 Fischer, S. (1993). The Role of Macroeconomic Factors in Growth (NBER Working Paper No. 4565). National Bureau of Economic Research. doi.org/10.1016/0304-3932(93)90027-D
2 Ha, J. and So, I. (2024). The Economic Effects of Global Inflation Uncertainty. International Journal of Central Banking, 19(2), Article 3. ijcb.org/journal/ijcb24q2a3.pdf
3 Warren, M., Seetanah, B., and Sookia, N. (2023). An Investigation of Exchange Rate, Exchange Rate Volatility and FDI Nexus: A Gravity Model Approach. International Review of Applied Economics, 37(4), 482–502. tandfonline.com/doi/full/10.1080/02692171.2023.2239719
4 Hanusch, M., Nguyen, H., and Algu, Y. (2018). Exchange Rate Volatility and FDI Inflows: Evidence from Cross-Country Panel Data (Policy Research Working Paper No. 8494). World Bank. documents.worldbank.org/en/publication/documents-reports/documentdetail/534841528724321585/exchange-rate-volatility-and-fdi-inflows-evidence-from-cross-country-panel-data
5 Alesina, A. and Perotti, R. (1996). Income Distribution, Political Instability, and Investment. European Economic Review, 40(6), 1203–1228. doi.org/10.1016/0014-2921(95)00030-5
6 Gilchrist, S., Sim, J. W., and Zakrajšek, E. (2014). Uncertainty, Financial Frictions, and Investment Dynamics (NBER Working Paper No. 20038). National Bureau of Economic Research. doi.org/10.3386/w20038
7 Julio, B. and Yook, Y. (2012). Political Uncertainty and Corporate Investment Cycles. Journal of Finance, 67(1), 45–83. doi.org/10.1111/j.1540-6261.2011.01707.x
8 Ali, F., Fiess, N., and MacDonald, R. (2010). Do Institutions Matter for Foreign Direct Investment? Open Economies Review, 21(2), 201–219. gla.ac.uk/media/Media_92803_smxx.pdf
9 International Chamber of Commerce-Oxera. (2024, November 7). The Economic Cost of Extreme Weather Events. ICC. iccwbo.org/wp-content/uploads/sites/3/2024/11/2024-ICC-Oxera-The-economic-cost-of-extreme-weather-events.pdf
10 Government of Singapore. (2024, 16 January). The Singapore Government Has No Net Debt. We Have a Strong Balance Sheet with Assets in Excess of Liabilities. Factually – Corrections & Clarifications. factually.gov.sg/corrections-and-clarifications/the-singapore-government-has-no-net-debt-we-have-a-strong-balance-sheet-with-assets-in-excess-of-liabilities
11 Bristow, G. and Healy, A. (2018). Innovation and Regional Economic Resilience: An Exploratory Analysis. Annals of Regional Science, 60(2), 265–284. doi.org/10.1007/s00168-017-0841-6
12 Guo, T., Tong, Y., and Yu, H. (2025). The Influence of Government Health Investment on Economic Resilience in China from 2003 to 2021: Emphasizing the Role of Health Human Capital. Journal of Economic Studies. Advance online publication. doi.org/10.1016/j.iref.2025.104050
13 Brandon, C., Kratzer, B., Aggarwal, A., and Heubaum, H. (2025). Strengthening the Investment Case for Climate Adaptation: A Triple Dividend Approach. World Resources Institute. doi.org/10.46830/wriwp.25.00019
Henley & Partners assists international clients in obtaining residence and citizenship under the respective programs. Contact us to arrange an initial private consultation.
