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The Kimchi Matters, a New Book on Emerging Markets Investing

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As reported in Best's Insurance News:

In the medium-risk category (grade C) fall the most promising of emerging-market countries, such as China, India, Russia and Brazil.

These are particularly interesting countries in terms of risk vs. economic opportunity, said Samuel Wilkin, Aon Trade Credit's country risk advisor. Dubbed the 'BRICs' in a recent report published by Goldman Sachs, these countries are on track to overtake the developed nations in terms of economic growth.

"These economies are growing at 7% to 8% a year, two to three times as fast as the developed countries," said Wilkin...By 2009, annual increases in consumer spending in the BRICs together will outpace that of the six largest developed countries combined -- the United States, United Kingdom, Japan, Germany, France and Italy.

There is another dramatic business shift coming in the future, and it is related to the rise of the emerging economies, said Wilkin. "The ranks of the world's largest multinational companies will change dramatically as emerging markets become central," he said.

Current global leaders such as oil companies and automakers don't sufficiently understand the "local concerns" in emerging economies, he said. "They will be replaced by others that do."

Wilkin co-wrote a recently published book, "The Kimchi Matters," that examines that phenomenon. Kimchi, a spicy cabbage dish popular in Korea, is a symbol for the local knowledge that will determine success or failure for multinational firms in the future, he said.

"Understanding kimchi means appreciating the unique local dynamics at work in a particular country or region."

As reported in National Underwriter:

Samuel Wilkin, a country risk advisor at Aon Trade Credit, noted that one mistake firms make when investing in foreign countries is not to understand the dynamics of business at the local level. Many corporations in the developed world see little or no growth in their home territories and are looking overseas to developing countries for new markets, he said.

However, not understanding the dynamics of a nation's culture, politics, regulations and economy can prove to be very costly, according to Mr. Wilkin, who co-authored a book with Marvin Zonis and Dan Lefkovitz on the subject, called: "The Kimchi Matters: Global Business and Local Politics In A Crisis-Driven World."

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