Nov 1, 2023

How To Think Global but Go Local – Part 1 – Country

Resources

Diligence is associated with location. Today is a review of basic country information and the ways in which country affiliations impact diligence.

The Global – Local Connection

The web is the largest global resource available for diligence research.  However, the global aspect is about the ability to access material from around the world; the actual material is local. All content originates in a country or a territory that is associated/affiliated with a country.

What is the defintion of country? This has been open to dispute but typically “country” means a: (i) designated territory with borders (ii) that is presided over by some form of government and (iii) includes a particular population or citizenship. In the modern world the concept of country also includes the idea of “recognition” by other established countries.

Once you have identified the subject of your diligence project, it is useful to identify countries that are associated with that diligence subject.

Country Matters

What if your subject isn’t a location but rather an individual or an entity – How do you know which countries are relevant? The answer is that you start by brainstorming a list of all possible topics that relate to your diligence subject and country affiliation. Here are some examples:

  • Physical location
  • Laws, regulations, compliance requirements
  • Risk factors and assessments
  • Geography and geographic attributes that give rise to diligence requirements, for example certain minerals and gems
  • Government and political units that exert control over your subject
  • Nationality and citizenship
  • Culture
  • Language
  • Ownership
  • Entity formation
  • Trade partners
  • Investment
  • History

TIP – This is not an exhaustive list, the idea is to challenge yourself to think broadly to answer the question – Which countries are, or may be, affiliated with my diligence subject and why? Then you proceed to do the research to confirm relevant country affiliation or to eliminate a country affiliation.

Country Basics

If you ever studied geography or social studies it has been years. So, what do you know about countries, especially those that are not in the news? This is a review of some basic country information with some resources to get you started or to use once you have identified countries of interest.

Country existence is tied to country recognization. It is not enough that a group of people in a geographic area declare themselves a new or separate country. To be considered a country there must be recognition by a group of other countries. There is no set number but practically it is some majority of existing countries, that being said, each existing country has the right to decide if it recognizes another country.

This recognition requirement means the question has to be asked as follows: How many countries does the United States recognize? You can substitute any other country name for the United States and then research the answer to the question.

The answer for the United States is – the United States recognizes 197 countries also known as “independent states”.

What about the United Nations? The United Nations makes a point of explaining that it does not recognize countries as it is not a country or a state, instead it considers them for membership. The United Nations currently has 193 members and 2 non-member state observers – The Holy See (Vatican) and Palestine.

If you look at the countries that the US recognizes and compare it to the Member and Nonmember states that the UN acknowledges you will see the lists are not the identical. This is to be expected. A majority of country recognitions will be the same but there are differences. This is particularly true if there are recent political, boundary or ideological changes that impact a region.

TIP – If you want to know if a country is recognized first, ask which country’s recognition matters for your project and second, research that country’s list of recognized or non-recognized nations. For example, pose the questions as – I want to know if Canada recognizes Kosovo?

Names of countries are interesting because:

  • Many of the names that you are used to using are shortened versions of a formal country name.
  • If you are in an English speaking location you may be using the English language version of country names and usually that is acceptable.
  • Countries may use different names for the same country, for example, the US refers to Burma rather than Myanmar.

If you are not aware of these issues you may have trouble finding accurate country information. For diligence purposes it is helpful to know the full name of a country, the name in its original language(s) and any name variations.

TIP – Here are some ideas to help you research:

  • To find formal country names try this UN membership list.
  • To find the name of a country in its native language go to the government website for that country and check the name provided in the native language (as opposed to any provided or automatic translations).
  • To identify the name of a country used by one country to refer to another country find the government agency that is responsible for matters of “state”or the “foreign ministry” and look for the list of countries that are recognized or with which they maintain diplomatic relations.

Country names change, borders change, recognitions change, so how do you know what was what?

You need to look for the area of the government that deals with history or archives relating to country relations. For the US it is the State Department – Office of the Historian which maintains a listing of country histories. If you are looking for recent changes, using a search engine to look for relevant news is probably best as it may take a while for a government site to update that information.

TIP – When might you need the former name of a country? I can think of several instances when you may want to conduct diligence that:

  • involves a new country with ties to an older name
  • has a historical component
  • involves a country referred to by two different names such as the Burma/Myanmar example.

There is a wealth of country related material available online. Here is a list to start you identifying these types of materials, obviously what is available varies by country:

  • Governments – national governments and government agencies and are online often through portals
  • Maps – both current and historic
  • Archives
  • Statistics – published by countries and third parties
  • Economic data
  • Directories of government officials and businesses both state and private
  • Images – ranging from still photography to satellite imagery
  • Laws – official government gazettes, codes, decrees and regulations
  • Assessments, indexes and reports – usually comparative and sometimes based on a topic, such as freedom of the press, corruption, narcotic trafficking

TIP – If you need third party assessments or want to see country comparisons, look for third parties that specialize in releasing this information. For example major accounting/consultancies will sometimes issue reports or assessments for countries where they do business and organizations such as Transparency International issue annual indexes.

What Else

There is a lot more! This post has just scratched the surface of the idea of how country information is used in diligence and where to find that material. But it is a start and there will be more information in future posts.