Four Essential Principles of Emerging Market Success
Article by Dan Harris, Harris & Moure, pllc
Emerging markets are high risk and high reward. In my work as an attorney representing
Western companies in emerging markets, I have concluded there are four essential elements to
emerging market success: a good partner, an open mind, active participation, and extreme
patience.
I have seen enough essential similarities between such diverse countries as Russia, Korea (ten
years ago when it was still an emerging market country), Vietnam, and even the Gambia and
Papua New Guinea, to believe certain core generalizations hold true for all or nearly all emerging
market nations. Just as a good concept, a strong market, and good execution are necessary in all
countries, so too are these four simple principles the keys to success in emerging market nations.
PRINCIPLE ONE: A Good Partner is the sine qua non of Success.
The quality of the local partner is the indispensable element for emerging market success. So
where do you begin?
Start with due diligence. Before doing business with anyone, you must first determine what you
need from your partner in the particular country in which you will be conducting business. In my
experience, foreign companies need a local partner who is effective, cooperative, and (most
important of all) trustworthy.
Emerging market countries almost always have less-than-fully-formed legal systems. Their laws
are oftentimes slanted towards the government and away from free markets. Their courts are
slow and often corrupt. Form takes precedence over substance in ways completely unfamiliar to
Westerners. One small technical miscue on your part might eliminate your right to sue your
partner for having stolen all of your money. It might even lead to you and your company being
kicked out of the country, while your assets remain.
Of course you should do your best to avoid technical miscues, but the better strategy is to pick
your partner well.
So what should you l