Risk Mitigation in Emerging Markets Checklist

Political and Economic Risk

Assess the political stability and potential for political upheaval.

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Political Stability Initial Assessment

Monitor macroeconomic conditions, including inflation, exchange rates, and economic growth.

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Economic Conditions Ongoing Monitoring

Understand the legal and regulatory environment, including contract law and intellectual property protection.

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Regulatory Environment Initial Assessment and Ongoing Monitoring

Assess and manage currency fluctuation risk.

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Currency Risk Ongoing Monitoring

Operational and Infrastructure Risk

Evaluate the quality of infrastructure, including transportation, communication, and energy.

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Infrastructure Assessment Initial Assessment

Assess the reliability and stability of supply chains.

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Supply Chain Reliability Ongoing Monitoring

Evaluate the availability of skilled local talent.

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Local Talent Availability Initial Assessment

Assess security risks, including crime and political violence.

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Security Risks Ongoing Monitoring

Financial and Legal Risk

Understand local financial regulations and accounting standards.

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Financial Regulations Initial Assessment and Ongoing Monitoring

Assess the effectiveness of contract enforcement mechanisms.

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Contract Enforcement Ongoing Monitoring

Assess the convertibility and transferability of local currency.

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Currency Convertibility Ongoing Monitoring

Understand the tax regulations and tax treaties in place.

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Tax Regulations Initial Assessment and Ongoing Monitoring

Mitigation Strategies

Conduct thorough due diligence on potential partners and investments.

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Due Diligence Before Entry

Consider obtaining political risk insurance.

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Political Risk Insurance Ongoing

Implement hedging strategies to manage currency risk.

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Hedging Strategies Ongoing

Develop contingency plans for potential disruptions.

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Contingency Planning Ongoing