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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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Investors most often ask where is most profitable to put their money. Not so often they ask where is safer to invest. High profits usually go hand-in-hand with high risks, and high risks go often, but not always, hand-in-hand with political insecurity. The most pronounced form of this insecurity is where the state fails its obligations toward people. The failed states are those that cannot effectively protect the lives of people, including investors; these states cannot guarantee the enforcement of contracts, including those of real estate transactions; these states cannot guarantee the value of their proper currency, thus making any investment not only riskier but also less profitable; these states should be avoided no matter how attractive their promises of fast returns are.

One recent study of Carnegie Endowment for International Peace ranks most states according to their (in)stability. The argument why this organization looks for state stability is similar to that exposed in the introduction. All other things being equal, the countries with more stable states are preferable, for their citizens and the foreigners alike, including foreign investors. To show clearly what's the picture of the world in terms of investment security, another dynamic factor should be taken into account, the short-term projections for economic growth in different areas of the world.

What's the situation in the world according to the Carnegie Endowment in terms of state stability? The world is divided into 5 groups, representing countries where stability is high, just enough, intermediate, in danger, and critical. Two 'best' groups embrace most of Northern, Western and Central Europe, Northern America, rich part of South and Central America, Japan, Australia, and parts of Oceania. The two 'worst' groups are located in a large corridor from Central Africa to the Middle East. The intermediate group includes most of Asia, North Africa, and the poorer sections of South and Central America.

What are the short-term projections for growth in the world? They are moderate in North America, moderate to above moderate in most of South America, almost nil in Western Europe, moderate to above moderate in Eastern Europe and most of the former USSR, almost nil in Japan, moderate to high in East Asia and Australia, varying form nil to high in Africa depending on the natural resource exports. Before trying to make useful prediction regarding the rationality of investing in one or another context (combination of state capacity and economic projections), it's necessary to make several assumptions.

Insecurity doesn't come always from poverty; sometimes it comes from sudden affluence that isn't matched by corresponding state capacity to absorb the change. Relative impoverishment is always bad for security, but some countries remarkably well manage to escape this curse by mobilizing state resources to overcome the problems without exposing people to the harsh reality. Sometimes people rebel not because they lack money but because they feel betrayed in their search for prosperity.

So the tentative conclusions are: North America, most of Europe, Japan and Australia will be good places for investment in terms of security. The rates of economic growth will be different; putting parts of North America, 'new' Europe, plus Australia in favorite positions compared to 'old' Europe and Japan. More complicated is the picture in the intermediate region of stability, including both growing and stagnating economies. In this case the level of stability is critical in predicting how safe the investments may be. As a rule, the better economies perform, the less risky the investments will be. For the group of failed states, the picture may be even more complicated. In this case, even good performing economies may face problems of security as long as the level of economic growth and the level of fair distribution don't match the public expectations.

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