Best

Practice
Report

Argentina
January 2011

www.eStandardsForum.org
 Best Practice Report
Argentina

The Best Practice Report provides a concise, comprehensive overview of a country’s status with
respect to global best practice benchmarks. The report contains a summary of compliance with
the 12 Key Standards for Sound Financial Systems in the Standards Compliance Index, as well
as a summary of performance in the Business Indicator Index and other leading global indices
addressing related aspects of the country’s economic, business, political, and social climate.

Table of contents

I. Summary Financial Standards Index

II. Detailed Summary of Observance by Standard
III. Business Indicator Summary
IV. Performance in Global Best Practice Indices
V. Credit Ratings
VI. Macroeconomic Data

This report is based entirely on publicly available sources. For a list of all the sources used for the Standards Reports and the Business Indicators
please refer to the detailed reports available for each country and standard on www.estandardsforum.org.

© eStandardsForum 2010

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I. Summary Financial Standards Index

Overall: Low | Rank: 61 | Score: 35.83

MACROECONOMIC POLICY AND DATA TRANSPARENCY

Full Compliance Intent No Insufficient
Compliance in Progress Enacted Declared Compliance Information
Data Dissemination X
Monetary Transparency X
Fiscal Transparency X

INSTITUTIONAL AND MARKET INFRASTRUCTURE

Full Compliance Intent No Insufficient
Compliance in Progress Enacted Declared Compliance Information
Insolvency Framework X
Accounting X
Corporate Governance X
Auditing X
Anti-Money Laundering X
Payment Systems X

FINANCIAL REGULATION AND SUPERVISION

Full Compliance Intent No Insufficient
Compliance in Progress Enacted Declared Compliance Information
Banking Supervision X
Securities Regulation X
Insurance Supervision X

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SUMMARY
Argentina achieves low overall compliance with international standards and codes, with a score of 35.83 out of 100 in our Financial
Standards Index. Macroeconomic Policy and Data Transparency standards are for the most part observed, however, there have
been serious concerns about the independence of the Central Bank of Argentina and doubts about the accuracy of inflation data.
Credible implementation of Argentina's comprehensive legal framework for fiscal transparency remains one of the country's top
priorities. Argentina is working towards greater compliance with Institutional and Market Infrastructure standards. International
Financial Reporting Standards will be adopted by listed companies (with some exceptions) from January 1, 2012. The prospective
timeframe for adoption of International Standards on Auditing would be 2011 for entities of public interest, and 2014 for all
other entities. Although the corporate insolvency regime in Argentina is consistent with the World Bank's principles, the adoption
of a new legal mechanism instituting a consensual, out-of-court, corporate workout framework is recommended. In the area
of corporate governance, the National Securities Commission mandated listed companies in October 2007 to annually comply
or explain their adoption with a minimum set of governance standards. Compliance with Financial Regulation and Supervision
standards is low due to the scarcity of information for banking and insurance supervision.

II. Detailed Summary of Observance by Standard

1. MACROECONOMIC POLICY AND DATA TRANSPARENCY

Data Dissemination: Compliance in Progress

Argentina is a subscriber to the International Monetary Fund's (IMF) Special Data Dissemination Standard (SDDS). The IMF's
SDDS website discloses that Argentina meets SDDS specifications for coverage, periodicity, and timeliness of the data. The
website also indicates that Argentina satisfies the conditions for the access dimension of the SDDS for all data categories, except
for the advance dissemination of a release calendar for population data. Several reports have put in doubt the reliability of data
released by the National Institute of Statistics and Censuses (INDEC), particularly that of the Consumer Price Index, despite the
fact that in 2009 the national government passed Decree No. 927 for the implementation of greater control over the INDEC’s
data revision process.

Monetary Transparency: Enacted

The last comprehensive assessment of Argentina’s monetary policy transparency was performed by Oxford Analytica (OA)
in 2006. On this occasion, the rating of Argentina's overall compliance with this standard was downgraded from "Compliance
in Progress" to "Enacted." Over the last years there have been grave concerns about the independence of the Central Bank
of Argentina (BCRA). The ousting of Martin Redrado as BCRA’s President over the use of foreign-exchange central bank’s
reserves in February 2010 confirmed these concerns. In addition, serious doubts about inflation data have emerged in the
recent past. Several publications have stated that inflation, and indeed inflation data, are a cause of concern since there are
serious doubts as to the accuracy of the Consumer Price Index published by the National Institute of Statistics and Censuses.
While back in 2002, the BCRA aimed for a fully operational inflation-targeting regime, it appears now to have adopted a more
flexible regime. The BCRA's monetary policy is based on the control of monetary aggregates through the establishment of
quarterly quantitative targets on the aggregate M2 and the private sector M2. According to the BCRA's 1st Quarter Inflation
Report for 2010, monetary targets for both the aggregate M2 and private sector M2 were within the target ranges established
in the 2009 Monetary Program. The information on monetary policy is considered to be reliable and comprehensive on a wide
range of monetary variables. The BCRA's charter clearly establishes the responsibilities and goals for the BCRA.

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Fiscal Transparency: Enacted
In the last available comprehensive assessment against the IMF's Code of Good Practices on Fiscal Transparency, Oxford
Analytica (OA) in 2006 rated Argentina as "Enacted." The assessment reasoned that Argentina's legal framework provides
clear guidelines for fiscal management and transparency. These guidelines have been enhanced by the enactment of the Fiscal
Responsibility Law (LRF) in 2004. Fiscal data disclosure at the national level is adequate, but the disclosure standards at the
provincial level vary. The LRF is meant to increase the fiscal efficiency of sub-national governments and limit future spending
and debt issuance by the provinces. Enforcement of Argentina's comprehensive legal framework for fiscal transparency remains
one of the country's top priorities. Adherence to the LRF could substantially improve fiscal data reliability and the development
of homogeneous indicators. However, fiscal transparency has been negatively affected by the weak control over the use of
resources of fiduciary funds. Furthermore, in late 2009, Congress suspended the LRF for a two-year period in order to provide
relief to cash-strapped provinces hurt by the global economic downturn that year.

2. INSTITUTIONAL AND MARKET INFRASTRUCTURE

Insolvency Framework: Enacted

According to a 2002 World Bank assessment of Argentina's insolvency and creditor rights system, the legal framework for
enforcement of both secured and unsecured rights and the Argentine corporate insolvency regime are largely consistent with
the World Bank's Principles and Guidelines for Effective Insolvency and Creditor Rights System as issued in 2001. Nevertheless,
the assessment identified some needed improvements. Due to the lack of appropriate incentives for debtors and creditors, the
legal framework for informal workouts is rarely used. Also, years of economic recession have significantly increased the number
of insolvencies, over-burdening the insolvency courts in most jurisdictions. As a result, the World Bank has recommended the
implementation of a new mechanism for instituting a consensual, out-of-court, corporate workout framework. This mechanism
should incorporate needed reforms to the insolvency system, leaving less-urgent amendments for a later time. In the medium
term, Argentina should focus on changing the legal and institutional framework for creditors' rights and adopting other
amendments to the insolvency regime.

Accounting: No Compliance
The Argentine Federation of Professional Councils of Economic Sciences (FACPCE) coordinates the issuance of professional
accounting and auditing standards. According to a 2010 Ernst & Young report, in 1998 the FACPCE’s Governing Board
developed a plan to adapt Argentine accounting standards to International Financial Reporting Standards (IFRSs) issued by the
International Accounting Standard Board (IASB). On December 8, 2000, the FACPCE approved Technical Resolutions (TRs)
16 through 19, thus completing the first stage of the harmonization plan. Finally, on March 20, 2009, the FACPCE approved
TR 26, which adopted IFRSs as issued by the IASB in effect as of 2009. However, in order for the companies to start applying
the new standards, they have to be approved by the respective industry regulator. In December 2009, the National Securities
Commission (CNV) passed General Resolution No. 562, which incorporated TR 26 and provided for the legal implementation
of IFRSs for listed companies (except banks, financial trusts, insurance companies, and cooperatives) starting January 1, 2012,
with early application after January 1, 2011 allowed. The Resolution includes the commitment to incorporate all new IFRSs and
modifications to the existing ones as they become available in the future. In its turn, as pointed out on the Deloitte’s IAS Plus
website, the BCRA also announced its intention to require IFRSs, most likely beginning in 2014. According to a 2010 publication
by PricewaterhouseCoopers, regulators other than the CNV and the BCRA, have not yet announced any plans to introduce
IFRSs. According to Deloitte’s IAS Plus website, on December 3, 2010, through Technical Resolution No. 29 the FACPCE
adopted IFRS for Small and Medium-sized Entities (SMEs) effective January 1, 2012, with earlier application permitted for annual
financial statements beginning on or after January 1, 2011. Companies exempt from the application of IFRSs and IFRS for SMEs
may either apply the international standards or continue to follow Argentine Generally Accepted Accounting Principles issued
by the FACPCE, which differ from the international standards.

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Corporate Governance: Enacted
Corporate governance reform started in Argentina in 2001 when Decree No. 677 was passed promoting the adoption of good
corporate governance practices for publicly-traded companies. Argentina is considered to be relatively developed in corporate
governance matters compared to similar countries, according to a paper published by the Center for Financial Stability in 2005.
However, only modest progress has been recorded since, and evidence shows that there is still a need to improve corporate
governance practices for publicly-traded companies, privately-held firms and financial institutions. Enforcement mechanisms and
the regulators’ supervisory powers also need to be strengthened. In September 2004, the Argentine Institute for Corporate
Governance published a Code of Good Practices for Corporate Governance in conjunction with KPMG and the Institute
for Enterprise Development in Argentina. The Code is primarily intended for listed companies, but can also be applied to
privately held and small and medium-sized enterprises. Its recommendations are based on the Organization for Economic Co-
operation and Development's (OECD) Principles on Corporate Governance and the recommendations of the OECD's 2003
White Paper on Corporate Governance in Latin America. The Code is voluntary in nature and companies who adhere to the
principles of the Code must make a public declaration regarding their compliance with it. In October 2007, the CNV issued
General Resolution No. 516, which mandated listed companies to annually disclose their compliance with a minimum set of
governance standards established by the CNV or to explain the reason for not doing so.

Auditing: Intent Declared

On July 4, 2003 the FACPCE issued Technical Resolution No. 284 whereby it approved a project to adopt International
Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board of the International Federation
of Accountants (IFAC). The adoption was set to take effect as of June 30, 2004. The Resolution stipulated that the FACPCE
would retain the right to adopt ISAs either in full or in part, and the text of the approved standard should include: (1) ISAs
translated into Spanish, using Argentine vocabulary and expressions on the basis of a translation that the FACPCE will prepare
or adopt; (2) differences stemming from the particular conditions in Argentina; (3) a manual on ISAs for small entities, and
(4) stipulation of future modifications. However, as explained by Godoy 2008 in the FACPCE´s Imagen Professional Magazine,
subsequent FACPCE resolutions postponed the application of ISAs in the country and, at the time of the writing of the article,
the discussions about the introduction of ISAs were focused on what type of entities should be required to have their financial
statements audited in accordance with ISAs and whether the implementation should be gradual or wholesale. In a July 2008
response to the Part 3 of the IFAC’s Member Body Compliance Program, the FACPCE explains that the deadlines for the
adoption of ISAs were to be determined by the end of 2008. According to Lattuca’s 2009 presentation on Argentina’s adoption
of ISAs, the prospective timeframe for adoption would be by 2011 for entities of public interest (yet to be defined), and by
2014 for all other entities.

Anti-Money Laundering: No Compliance

The Financial Action Task Force (FATF) conducted a joint Mutual Evaluation with the Financial Action Task Force on Money
Laundering in South America (GAFISUD) of Argentina’s Anti-Money Laundering and Combating the Financing of Terrorism
(AML/CFT) regime against the FATF’s 40 Recommendations and nine Special Recommendations in 2009. The FATF published
its findings in a report in October of 2010. The 2010 Mutual Evaluation report pointed to several significant shortcomings in
Argentina’s AML/CFT framework. The report finds that Argentina either did not comply or only partially complied with an
overwhelming majority of the recommendations. Notably, among the six core recommendations and special recommendations,
the FATF rated Argentina partially compliant with three and noncompliant with three. The FATF considers a country to have an
effective AML/CFT regime only if it achieves a rating of largely compliant or compliant with all of its core recommendations. The
FATF expressed its disappointment and grave concern with Argentina’s failure to establish an efficient and effective AML/CFT
system. The FATF concludes that Argentina has not made any progress since its last mutual evaluation in 2004. The FATF stated
that it will work closely with Argentina to guarantee that the country corrects these deficiencies. Despite Argentina being one

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of the jurisdictions that have undertaken to implement the FATF's recommendations, Argentina has failed to make significant
progress in terms of its AML/CFT regime. In December of 2010, the FATF gave Argentina ten months to make serious changes
to its AML/CFT regime, or else be the first G20 country to ever be placed on a blacklist of jurisdictions in which financial
transactions present a high risk of criminal activity.

Payment Systems: Insufficient Information

According to a report jointly prepared by the Center for Latin American Monetary Studies (CEMLA) and the World Bank in
2000, the Central Bank of Argentina (BCRA) redefined the regulatory and operational framework for payment systems, and
took the lead in implementing payments reforms in 1996. Per a 2003 CEMLA and World Bank report, these reforms included
the creation of a real-time gross settlement system, the main system employed for large-value funds transfers; the Electronic
Payment Means, operated by the BCRA; the privatization of automated low-value clearinghouses throughout the country;
and the development of large value automated clearinghouses owned and operated by the private sector. The Argentine
Interbank Commission for Payment Means of the Republic of Argentina (CIMPRA) was created in the mid-1990s to manage
the development of the National Payment System plan, coordinate its implementation, and implement future improvements in
the payment systems. Similarly, according to the World Bank’s 2008 report on Global Payment Systems, the national payment
system has been undergoing a reform of the legal and regulatory framework of its large-value funds transfer and of its retail
payment systems, among others. This reform was triggered by the need to minimize systemic risk and ameliorate the overall
efficiency of the payment system. However, as at the time of this report there was no update publicly available as to whether
these reforms have been passed into law and there is no publicly available source addressing Argentina's compliance with the
Core Principles for Systemically Important Payment Systems. Moreover, the 2008 Latin America report by the World Bank
asserts that the weak regulatory basis and absence of a unit specialized in payments policy issues within the BCRA limit the
effectiveness of the supervisory authority.

3. FINANCIAL REGULATION AND SUPERVISION

Banking Supervision: Insufficient Information

An assessment of the transparency aspects of the Basel Core Principles (BCPs) for banking supervision in Argentina was
conducted in 1999 by the IMF. The report found at the time of the assessment that Argentina had an effective legal basis for
banking regulation and that its supervisory practices appeared to be consistent with the disclosure aspects of the BCPs. The
report also found that the relevant laws and regulations in Argentina were effectively implemented. The Argentine banking
legal framework separates banking regulation from supervision, the latter being the responsibility of the Superintendency of
Financial and Exchange Institutions (SEFyC), a unit within the BCRA. However, the IMF assessment was conducted prior
to the 2001-2002 financial crisis in Argentina. Since then there has been insufficient information publicly available regarding
Argentina's compliance with the BCPs. According to a 2004 IMF report, the BCRA is making progress in strengthening banking
supervision. Financial reporting obligations by all banks have now been fully reinstated as was the case prior to the 2001-2002
crisis. In addition, a capital adequacy regime was reintroduced in January 2004 requiring banks to gradually amass adequate
capital relative to their exposure to sovereign and interest rate risks. In 2007, the BCRA issued a statement of intent for
the implementation of all three Basel II Pillars by January 2010, as well as a detailed timeline for the implementation process.
However, there has since been little information regarding Argentina’s recent progress with Basel II implementation.

Securities Regulation: Enacted

A self-assessment conducted by the CNV in 1999 and published by the IMF indicated that Argentina's legislation comports
with the majority of the Objectives and Principles of Securities Regulation promulgated by the International Organization
of Securities Commissions (IOSCO). However, this statement was not verified by IMF staff. The CNV, which regulates the
securities markets in Argentina, is an autonomous entity; however, its independence is restricted due to its dependence on the

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national budget for funding, and the appointment and removal of its board by the President. Also, according to a 2004 article
by Weitz, the CNV’s regulatory and supervisory powers over different market participants (stock exchanges, rating agencies,
mutual funds, open market operators, financial trusts, and the public offering of securities) are notably asymmetric. In particular,
the CNV has limited capacity to sanction stockbrokers for violation of the legal and regulatory framework, and enforcement
is mainly under the control of the stock exchanges. More recently, a 2010 study by Pasquini analyzed Argentina’s securities
market regulations’ degree of implementation of the first 13 IOSCO principles, which concern the regulator, self-regulatory
organizations, enforcement, and supervisory cooperation. The report found that when all indicators were averaged, Argentina
scores approximately 65 percent implementation, ranking third out of the four countries analyzed – behind Brazil and Chile,
and ahead of Peru. A 2010 report by the U.S. Department of Commerce notes that securities and accounting standards are
transparent and consistent with international standards.

Insurance Supervision: Insufficient Information

In 1998, Argentina conducted a self-assessment of its observance of the International Association of Insurance Supervision’s
(IAIS) Insurance Supervisory Principles of 1997. The self-assessment is unpublished but available to the public upon request
to the Superintendency of Insurance (SSN). The assessment stated that a majority of IAIS’s 1997 Principles were satisfied,
either by provisions in Argentine law or through resolutions issued, monitored, and enforced by the SSN. A 1999 report by
the IMF stated that, according to the self-assessment, supervision of insurance risk by local insurance companies and on-site
supervision were the two main areas where compliance was lacking. However, the Insurance Supervisory Principles of 1997
were superseded by the Insurance Core Principles (ICPs) of 2000, and the latter were further amended in 2003. In 2008, the
SSN hosted an insurance training workshop for other countries in the region, in which the SSN reevaluated its compliance
with some of the 2003 ICPs. The assessment analyzed the SSN’s compliance with ICPs 11, 14, 18, 19, 20, and 23, and found
that it observed or partially observed almost all essential criteria of these principles. However, the SSN did find shortcomings
in the areas of market analysis, risk management, and capital adequacy. Although the self-assessment addressed Argentina’s
compliance with some of the ICPs, it does not constitute a comprehensive assessment of Argentina's overall compliance with
the new, more stringent ICPs

III. Business Indicator Summary

Overall: In Progress | Rank: 67 | Score: 7.07
With an overall score of 7.07/12, Argentina is at standard on the economic, legal, and political indicators that make up our
Business Index. Argentina is a market-based economy with a steadily growing role of the state. Energy and transport in particular
are dominated by the public sector. Unorthodox policies have been employed to contain inflation, such as imposing pressure
on the private sector to limit price increases on some consumer goods, export taxes, and export bans. Argentinian total
government expenditure, including consumption and transfer payments is moderate. Although registering a foreign business is
fairly simple, and most local companies may be wholly owned by foreign investors, foreign investment is prohibited in various
sectors. The most significant deterrent to investors is the legal uncertainty concerning creditor, contract, and property rights. The
executive branch influences Argentina's judiciary, the courts are notoriously slow and inefficient, and foreign investors resort to
international arbitration. The legal framework to protect intellectual property has improved in recent years although enforcement
is uneven. According to the World Bank's worldwide governance indicators, public sector corruption in Argentina is a serious
problem. Corruption appears particularly frequent in procurement, tax collection, healthcare, and regulatory systems. The country’s
excessive perceived level of corruption as reported by Transparency International’s Corruption Perception Index supports these
findings. The current president Cristina Fernandez de Kirchner was elected in October 2007, succeeding her husband, Nestor
Kirchner. The next presidential election will be held in 2011.

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IV. Performance in Global Best Practice Indices

Argentina is ranked from the 2nd to the 5th quintile in the global indices benchmarking its political, economic, business and human
capital climate below. On the one hand this reflects its principal commitment to market democracy. On the other hand, this
commitment is subject to a continuous political struggle between populist protectionism and economic and financial liberalization.
Combined with the government's inability to cut red tape in its business environment these factors result in a low ranking in
the Economic Freedom in the World Index, the Global Competitiveness Index, and the World Bank's Doing Business Index. The
institutional environment in Argentina is ranked among the worst in the world, due in large part to public distrust of politicians
and doubts in the strength of the rule of law. The high perceived level of corruption, reflected in its low score in Transparency
International's Index, is particularly noteworthy.

Index Year Rank Score Quintile

Bertelsmann Transformation Status Index 2010 29/128 7.25/10 2
Heritage Foundation Economic Freedom Index 2011 138/183 51.7% 4
Economic Freedom of the World Index 2010 114/141 5.99/10 5
World Economic Forum Global Competitiveness Index 2010 87/139 3.95/7 4
Milken Institute Capital Access Index 2010 75/122 3.84/10 4
World Bank Ease of Doing Business Index 2010 118/183 N/A 4
UNDP Human Development Index 2010 46/169 0.78/1 2
Transparency International Corruption Perceptions Index 2010 105/178 2.9/10 3
Freedom House Index 2010 Free 2/7

V. Credit Ratings
Fitch: B/Stable
Moody's: B3/Stable
Standard & Poor's: B-/Stable

VI. Macroeconomic Data

2009 GDP (estimate) (IMF) 2010 Forecast (IMF) 2008 FDI (UNCTAD) Official Development Assistance
$310.3 billion Real GDP Growth: 1.5 Inward: $8.9 billion Received: 82 million (2007 OECD)
Per capita: $7,732 CPI: 5.6% Outward: $1.35 Disbursed: N/A million (2007 OECD)
Unemployment: 7.9% (CIA 2008)

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Methodology Note
I. The Financial Standards Index

This index measures a country’s level of compliance with the 12 international standards and codes. Compliance with each of the 12
standards is measured on a scale of six levels of compliance and then converted into a numerical score. The Index ranks countries
from 1 (most compliant) to 81 (least compliant) and provides a score from 0 (worst performance) to 100 (best performance).
Overall compliance is determined as follows:

Very high 80 to 100

high 60 to 80
medium 40 to 60
low 20 to 40
very low 0 to 20

The chart provided with the summary of a country’s performance against the Financial Standards Index provides the exact levels
of compliance with the 12 international standards and codes. The descending order of compliance is as follows: Full Compliance,
Compliance in Progress, Enacted, Intent Declared, No Compliance, and Insufficient Information. A exact definition of each compliance
level and the methodology used to determine them is available on the eStandardsForum website.

II. Detailed Summary of Observance of Standards & Codes

This section provides the executive summaries of eStandardsForum’s country compliance reports against the 12 Key international
standards and codes. The full assessments are available on the eStandardsForum website.

The three standards grouped under “Data and Macroeconomic Policy Transparency” are the IMF’s “Special (or General) Data
Dissemination Standard,” the “Code of Good Practices in Monetary and Financial Policies,” and the “Code of Good Practices on
Fiscal Transparency”.

The six standards grouped under “Institutional and Market Infrastructure” are the World Bank’s “Principles and Guidelines for
Effective Insolvency and Creditor Rights Systems,” the International Accounting Standard Board’s “International Accounting
Standards,” the OECD’s “Principles of Corporate Governance,” the International Federation of Accountants’ “International
Standards on Auditing,” the Financial Action Taskforce’s “Recommendations on Money Laundering,” and the Bank for International
Settlements’ “Core Principles for Systemically Important Payment Systems”.

The three standards grouped under the “Financial Regulation and Supervision” sub-section are the Basel Committee’s “Core
Principles for Effective Banking Supervision,” the International Organization of Securities Commissions’ “Principles of Effective
Securities Regulation,” and the International Association of Insurance Supervisors’ “Insurance Core Principles”.

III. The Business Indicator Index

This index measures a country’s attractiveness to foreign investment by analyzing various economic, legal, and political indicators.
Countries are ranked from 1 to 81 according to a score ranging from 0 (least attractive) to 12 (most attractive). The overall score
also determines whether a country is:

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At Standard 9 to 12
Progressing toward standard 6 to 9
Below standard 0 to 6

The three standards grouped under the “Financial Regulation and Supervision” sub-section are the Basel Committee’s “Core
Principles for Effective Banking Supervision,” the International Organization of Securities Commissions’ “Principles of Effective
Securities Regulation,” and the International Association of Insurance Supervisors’ “Insurance Core Principles”.

IV. Performance in Global Indices

In this section, the rank and score of a country in nine distinct global indices is summarized. The country’s relative position in these
indices is made more comparable by calculating the quintile corresponding to the country’s rank. In addition, a short summary
interpreting the country’s performance in the nine indices is provided. The following nine indices are used:

The Freedom in the World Survey is published annually by Freedom House. The political rights and civil liberties categories contain
numerical ratings between 1 and 7 for each country or territory, with 1 representing the most free and 7 the least free. The status
designation of “Free”, “Partly Free”, or “Not Free”, which is determined by the combination of the political rights and civil liberties
ratings, indicates the general state of freedom in a country or territory.
Source: http://www.freedomhouse.org/

The Bertelsmann Transformation Status Index shows the development achieved by states on their way toward democracy and a
market economy. States with functioning democratic and market-based structures receive the highest scores. The Status Index’s
overall result represents the mean value of the scores for the dimensions “Political Transformation” and “Economic Transformation”.
The rating is based on a system of points ranging from 1 (worst score) to 10 (best score).
Source: http://www.bertelsmann-transformation-index.de/16.0.html?&L=1

The Heritage Foundation Economic Freedom Index measures economic freedom against a list of 50 independent variables divided
into 10 broad factors of economic freedom. For each factor, a country receives a 0 to 100 percentage score, indicating the degree
of economic freedom in the country.
Source: http://www.heritage.org/research/features/index/index.cfm

The Economic Freedom of the World Index, published by the Fraser Institute, covers five broad areas: size of government; legal
structure and security of property rights; access to sound money; freedom to trade internationally; regulation of credit, labor, and
business. Each component and sub-component is placed on a scale from 0 to 10 that reflects the distribution of the underlying
data. A higher value signifies greater economic freedom.
Source: http://www.freetheworld.com/index.html

The World Economic Forum Global Competitiveness Index provides an overview of factors that are critical to driving productivity and
competitiveness. These factors are grouped into nine distinct but interconnected pillars: (1) Institutions, (2) Infrastructure, (3) Macro
economy, (4) Health and primary education, (5) Higher education and training, (6) Market efficiency, (7) Technological readiness,
(8) Business sophistication, and (9) Innovation. The Index is calculated from a mixture of survey and hard data, and the data for
each pillar is converted into a scale from 1 to 7. A higher value indicates greater competitiveness.
Source: http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm

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The Milken Institute Capital Access Index scores the ability of entrepreneurs to gain access to financial capital in countries around the
world. The Index is intended to measure not only the breadth, depth, and vitality of capital markets, but also openness in providing
access without discrimination, a measure of global progress in the democratization of capital. The Index has 7 subcomponents with
a score assigned from 1 to 10 for countries ranking lowest to highest in terms of capital access. The Capital Access Index is then
calculated using the weighted average of the seven subcategories.
Source: http://www.milkeninstitute.org/research/research.taf?cat=indexes

The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education, and standard of living for
most UN member states The index has been used since 1993 by the United Nations Development Program in its annual Human
Development Report. The HDI measures the average achievements in a country in three basic dimensions (life expectancy, literacy
and standard of living) of human development. These measures are then converted into a 0 to 1 scale and each of the 177 UN
member states are ranked accordingly each year.
Source: http://hdr.undp.org/

The World Bank’s Ease of Doing Business Index provides measures of business regulations and their enforcement. The Doing Business
indicators are designed to indicate the regulatory costs of business and can be used to analyze specific regulations that enhance
or constrain investment, productivity, and growth. The Index then ranks economies. The index is calculated as the ranking on the
simple average of country percentile rankings on each of the 10 topics covered.
Source: http://www.doingbusiness.org/

The Transparency International Corruption Perception Index (CPI) ranks countries in terms of the degree to which corruption is
perceived to exist. The CPI Score relates to these perceptions of the degree of corruption as seen by business people and country
analysts from around the world, including experts who are citizens in the countries evaluated. The score ranges between 10 (highly
clean) and 0 (highly corrupt).
Source: http://www.transparency.org/

V. Credit Ratings:

Long-term foreign currency ratings and outlooks, indicating the likelihood of a sovereign default of the country, are provided as of
the last date of upgrade or downgrade by the three leading credit rating agencies.

VI. Macroeconomic data:

This section provides the latest GDP and GDP per capita figures, projected GDP growth, and inflation as provided by the latest
available IMF World Economic Outlook, unemployment figures by the CIA World Factbook; the latest inward and outward foreign
investment figures as reported in UNCTAD’s annual World Investment Report; and the most recent figure for official development
assistance (ODA) received or disbursed, as reported by the OECD.

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