Foreign Markets That Trade in Corruption; Corporate Investors Still Prepared to Take the Risk

The Birmingham Post (England), March 14, 1998 | Go to article overview

Foreign Markets That Trade in Corruption; Corporate Investors Still Prepared to Take the Risk


More than four in ten companies investing overseas run into problems caused by organised crime.

Almost half find themselves hampered by bureaucracy and corruption while a similar proportion say their own ignorance of foreign cultures leads them into difficulties, a Merchant International Group study has revealed.

However, companies continue to believe that investment in emerging markets is a necessary precondition for sustained growth, causing anxiety among investors.

In a three-year study MIG looked at the risks, weaknesses and threats faced by corporate investors in overseas markets across the world. The study questioned more than 4,000 executives.

A massive 42 per cent said organised criminal activity was an impediment and a deterrent to the conduct of business in non-domestic and emerging markets, specifically Eastern Europe, Asia-Pacific and Latin America.

Bureaucracy and corruption scored even higher, mentioned by 48 per cent as a problem they had recently encountered.

Foreign customers and traditions also proved to be an obstacle with 47 per cent stating that their own ignorance of these issues had hampered business.

While interest in Latin America continues to gain pace, South Africa and Turkey have become much more attractive markets, however, Poland remains one of the most popular. According to MIG media horror stories do deter some companies from entering the higher risk markets such as Russia, although a large percentage of companies interviewed still felt that the Russian market was attractive and that many of the stories were exaggerated.

But, surprisingly, this distrust has spread into other areas.

Some 22 per cent of the companies surveyed felt they could no longer rely on publicly accessible information from places such as banks, credit rating agencies and government departments, for objectivity.

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Foreign Markets That Trade in Corruption; Corporate Investors Still Prepared to Take the Risk
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