In spite of dramatic signs of political instability and violent terrorist attacks in Pakistan, Mexico rated higher on the risk agenda of a sample of companies that comprises more than two thirds of the Global Fortune 500 index and is monitored each month by Control Risks.

Our analysts attributed Mexico's prominence to the attention that has been drawn to its drug trade. The US has promised more aid to fight the drug barons and Hillary Clinton, the Secretary of State, admitted on a visit to the country that responsibility for fighting cross-border drug traffic should be shared. New trade restrictions will also have caused alarm.

As an open economy with a sizeable domestic market, stable political system and relatively investor-friendly regulatory framework, Mexico is considered an attractive investment destination. Its links to the US lead to some correlation with the downturn, but what most concerns investors and business travellers more than the financial crisis is the drug-related violence problem and the deteriorating security situation, particularly in US border areas, prompting a debate on the viability of the Mexican state.

Pakistan's position is less surprising. A critical role in the fight against terrorism has awarded it a high global profile, tainted by the presence of al-Qaeda and Taleban safe havens, which ensure persistent suspicions about its intentions. The significance of its security problems, exacerbated by an uncertain and volatile political environment, extends beyond its borders. Natural resources and opportunities for the resilient mean some businesses retain an interest in the country but serious economic difficulties and severe energy shortages are off-putting for investors. India ranks third, having been No1 from September to January. Successive years of rapid growth and favourable demographics have exalted the country's status among global investors.

The Mumbai attacks of November 2008 threatened to test their resolve for participation in an investment environment complicated more typically by political, bureaucratic and infrastructure challenges than security fears, but extremism and Islamist militancy remain a low-level threat. Economic expansion will slow sharply this year but it will still far exceed growth in much of the world and uncertainty remains over the general election that is weeks away.

Angola, down from No1 in February, and Nigeria are regulars in the top ten but with Nigerian oil production continuing to suffer from the effects of violent insurgency in the Niger delta, Angola's recently won status as Sub-Saharan Africa's largest oil producer is unlikely to be withdrawn in the short term. Economic diversification and relatively high levels of political stability since the end of the civil war in 2002 have transformed perceptions of the country as an investment destination. However, notable risks remain, particularly fluctuating levels of crime in Luanda, the capital. Although the situation in many areas of the economy is improving, concerns also persist about transparency.

Despite popular perceptions, the risk profile of Nigeria is as varied as it is localised. Nigeria is West Africa's most favoured investment destination and offers a wealth of opportunity. Global news headlines about the Niger delta conflict keep many investors awake at night although its political and economic resilience keep some coming back for more.

— Patrick Sherwen is senior consultant, corporate investigations, at Control Risks, an independent London-based risk consultancy. For further information visit www.control-risks.com

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