Page 16 - RMAI Bulletin July 2024

RMAI BULLETIN JULY 2024

Understanding Emerging Economies management need to evaluate the likelihood of each

Countries that are in the process of developing their risk as well as the potential impact it could have. This
economies and transitioning from low-income to requires not only an in-depth knowledge of the com-
middle-income status are examples of what are known pany and the market, but also the capacity to analyse
as emerging economies. These economies are distin- complicated data and come to well-informed conclu-
guished by brisk rates of economic expansion, rising sions based on the findings of the analysis.
levels of foreign investment, and rising levels of con-
sumer demand. China, India, Brazil, and Mexico are all 3. Developing Risk Mitigation Strategies
examples of economies that are currently in the pro- After risks have been uncovered and evaluated,
cess of developing. those responsible for risk management are obli-
gated to devise plans that will reduce the impact
However, emerging economies are also characterised of those threats. These strategies may include the
by a number of challenges that can make it difficult for implementation of new policies and procedures,
businesses to operate. These challenges can make it the investment in new technologies, or the devel-
more difficult for businesses to operate in emerging opment of contingency plans in order to address
economies. Instability on the political front, corruption, the possibility of disruptions.
inadequate infrastructure, and lax regulatory frame-
works are all examples of these challenges. Because 4. Monitoring and Reporting on Risks
of the potential for these factors to raise the level of Professionals in risk management have an obliga-
risk that companies are exposed to, it is essential for tion to the organisation to continuously monitor
professionals working in risk management to develop the threats it faces and report on those threats to
strategies that are effective in managing risk. senior management and any other relevant stake-
holders. This requires a deep understanding of the
The Importance of Professionals in business and the market, as well as the ability to
Risk Management in Newly Industri- communicate complex information in a clear and
concise manner.
alized Countries
Professionals in the field of risk management play an The obstacles that Risk Management

essential part in assisting businesses in navigating the Experts must overcome when work-
difficulties associated with doing business in emerging
economies. Professionals in the field of risk manage- ing in Emerging Economies
ment in emerging economies are tasked with a number Professionals in the field of risk management who
of important responsibilities, including the following: work in emerging economies face a variety of obstacles
1. Identifying Risks that can make it difficult to manage risk in an efficient
Professionals in the field of risk management are manner. The following are some of the most significant
tasked with the responsibility of identifying poten- difficulties:
tial threats that may have an effect on the opera- 1. Political Instability
tions, financial performance, or reputation of an Instability in political systems is a challenge that
organisation. This can be a particularly difficult is faced by many emerging economies. Businesses
task in developing economies due to the dynamic that are active in these markets may experience
nature of the business environment, which is both significant repercussions as a result of shifts in the
complex and constantly shifting. Professionals in policies of the government, social unrest, and
risk management are required to maintain a high other political developments. Professionals in the
level of awareness regarding the most recent de- field of risk management are required to remain
velopments in the market, which may include current on the most recent political developments
shifts in regulations, political developments, and and be ready to adjust their risk management
emerging trends. strategies in accordance with those changes.

2. Assessing Risks 2. Corruption
After risks have been identified, professionals in risk Another obstacle that is prevalent in many devel-

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