How do you become Country Risk Analyst?

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Country Risk AnalystProfessionals and students who attend my Country Risk Analysis Summer Schools and Workshops often ask me one particular question. What does it take to get a position as country risk analyst? A few of them managed to get an internship in this field after I introduced them to one of my contacts. Another one decided to do a Master’s in Economics, after I had advised him to do so. In this post, I offer five suggestions in the form of the kinds of knowledge that Country Risk Analysis managers expect from aspiring analysts.

The easiest way that someone started a Country Risk Analysis career that I have ever heard of, was a classical one. Knowing a manager who had sufficient authority to decide on the right candidate did the job. Some with less authority in the same organisation were quite surprised because their new colleague lacked particular skills. This example underlines the importance of luck in job applications, which refers to all. Getting a job without the right background is however posible for only a few. Therefore, the following five suggestions refer to kinds of knowledge that make it easier to become a country risk analyst. The suggestions apply to jobs in which you need to assess the likelihood that either all debtors in country are unable to repay their foreign-currency debt (i.e. transfer risk) or the national government is unable to repay its debt (sovereign risk).

1. Knowledge of Macro-Economics – In all four positions where I was a country risk analyst, this was a hard condition even for being considered for a job interview. This knowledge is required to analyse how macro-economic indicators are related to one another. One particular question needs to be repeatedly answered in any country risk analysis: what are the causes and consequences of the change in the value of this indicator? Pivotal indicators in this regard are often the economic growth level and the level of foreign-exchange reserves.

2. Knowledge of Econometrics – This could be a hard condition for some country risk analyst positions and internships. In fact, all the times I successfully introduced a student of mine to a country risk department for an internship, their econometric expertise was highly appreciated or even required. In combination with a narrative analysis, the model-based comparison of economic indicators over time and between countries can yield extra insights into recent, and plausible future, trends. Even elementary econometric knowledge could give you sufficient expertise to be involved in the development of quantitative country risk models. I experienced this when I developed a country risk model with a colleague. The insights from my earlier course Basic Econometrics prevented me from making beginners’ mistakes. Moreover, it helped me communicate with the expert econometricians who had to validate and fine-tune the eventual model. Finally, this course enabled me to explain the model in clear terms to my colleagues without econometric background.

3. Knowledge of International Relations/Geopolitics – This is not a hard condition, but undoubtedly improves your chances vis-à-vis the others that want the same job. From the experience of a former student, I know that a Master’s degree in both Macro-Economics and International Relations (or related fields) could be decisive in the final application round. This combined expertise helps you assess when and how political disagreement within a country or between countries could affect the economic growth potential of the countries involved. It can also be important in anticipating policy decisions, labour unrest or outbreaks of violence, among other things that affect the national growth potential.

4. Knowledge of a Particular Region – This is not a hard condition either, but it could make a difference if one of the two remaining, otherwise equal, candidates has relevant living experience. Such a background can help you analyse unique and complex aspects of the countries concerned. These aspects could refer to the economic, political, social, historical and cultural context of a country. Examples are the size and functions of the informal economy, the relationship between state and society and the connections between political and economic interest groups.

5. Knowledge of Foreign Languages – This is the least important condition, but could nonetheless make a decisive difference if you are among the two best qualified candidates for that one country risk analyst vacancy. Another former student of mine once obtained a job as country risk analyst for the Middle East because he had learned Arabic in his spare time. Mastering this language at the intermediate level turned out to be the decisive factor in the final application round. Being able to read an (additional) foreign language could help you further expand your expertise of countries by reading first-class sources in their national language. Being my company’s Africa analyst, I experienced this myself after doing a French course at Maison Descartes. This enabled me to read Marchés Tropicaux et Méditerranéens, a well-informed magazine with political and economic insights into many African countries.

I hope that this post adequately answers the question that is raised at its beginning. If you aspire a Country Risk Analysis career and have questions that this post does not address, please let me know. I would further appreciate to hear experiences from other Country Risk Analysis professionals. You may have additional suggestions that would make it easier for those without that experience to find their dream job. After all, the easiest way to become a country risk analyst is not really in anybody’s long-term interest.

This post was earlier published by author on LinkedIn Pulse

Country Risk Analyst

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