Higher risk ratings imply high country vulnerability. This analysis assumes that our US industry Y2K-risk ratings apply to industries across countries. The fourth country risk is import supply chain risk. This risk factor captures the risk that international transportation and financing systems may bring to the ready supply of key inputs. Manufacturers who depend on imported intermediate goods are at risk of a trade disruption hampering the flow of these inputs.
Apparent supply is defined as the sum of domestic production and imports.
The larger the share of imports in apparent supply, the greater the risk. This is another risk factor that ranks trading centers such as Hong Kong and Singapore with high risk if foreign trade is disrupted, these countries will certainly feel the pinch. While several small European countries ranked as high risk countries by this measure, the risk is likely overstated in this measure, since much of their trade is with other countries in Europe, and intra-Europe trade is probably not that risky. Export financing risk is the fifth risk that WEFA has identified. Export capabilities may also be constrained by Y2K problems in transportation logistics, payment systems and other factors.