The rise of emerging markets to prosperity and global influence will be short-lived unless the challenges to longer-term economic growth are addressed. But, a massive increase in the number of competent and motivated leaders and professionals will be needed in order to overcome these challenges head-on. A major transformation of tertiary education in emerging markets is thus a fundamental condition of sustainable growth.
Finance ministers from the BRICS bloc have raised the idea of setting up a common development bank. This comes at the time when many questions have been raised over the group’s ability to function as a cohesive policy bloc.
Leaders from the five-nation bloc arrived in New Delhi yesterday for their annual summit. On the agenda, the emerging nations are expected to unveil closer trade and investment initiatives.
Following Burma’s recent political reform, the United States has announced that it would lift sanctions on Myanmar, opening new economic and funding opportunities for the South-East Asian nation.
The United States State Department announced in a statement today that Secretary of State Hillary Clinton has signed a partial waiver of restrictions imposed on Myanmar under the Trafficking Victims Protection Act.
While there remains much optimism in the potential of emerging markets, the truth is their economies are still largely dependent on the performance and health of developed markets. By most accounts, emerging markets are export-driven, and highly sensitive to currency movements and commodity prices. Given the weak slim chance of global recovery this year, what is the fate of emerging markets?
Both China and India depend heavily on the broader economic global climate. The fear is that if China and India fall, Asia would be at risk, and it would be hard to avoid a global recession. Yet fears of hard landings for both economies are overblown, especially regarding China.
The decade for emerging markets has come. It is not an understatement that there has been a major shift in global powers following the financial storm that started almost 5 years ago. Despite the storm, emerging markets have already captured 40 percent of world GDP. Looking ahead, a lesser-known revolution – theorised: disruptive innovation – will see to the exponential growth of emerging markets in the next decade.
The emerging and developing economies are expected to drive global trade growth by more than 8 percent annually in 2011 and 2012 according to the Organisation for Economic Co-operation and Development (OECD).
BRICS (Brazil, Russia, India, China and South Africa), the five largest emerging economies in the world, account for 18 percent of global trade and about 45 percent of current growth. While Brazil, Russia and South Africa focus primarily on raw material exports, India and China’s key exports lie in manufacturing and services.
The emerging markets was a term coined by World Bank economist Antoine W.
A key characteristic of emerging and developing economies is the shift from agriculture to the industrial and services industries. While agriculture is often a vital component for an emerging economy’s GDP, most countries seek to diversify into more high-value industries. One example of this is China. In 2001, agriculture was responsible for 17.7 percent of China’s GDP while industries and services sector made up 49.3 percent and 33 percent respectively.
While emerging and developing economies promise the most growth compared to more advanced economies, its potential is often accompanied by higher risks and greater uncertainty. At an individual level, this uncertainty is higher in countries with volatile social and political environments. However, a global and all-encompassing view of emerging and developing economies indicates rapid economic growth and better investment opportunities, owing to larger markets such as China and India.
