Emerging and Developing Economies Economic Structure

The emerging markets was a term coined by World Bank economist Antoine W.

The emerging markets was a term coined by World Bank economist Antoine W. van Agtmael in 1981 in reference to nations that were undergoing rapid economic growth and industrialization.The term is often used interchangeably with ’emerging and developing economies’, which the IMF uses to classify 150 countries based on criteria such as the composition of countries’ export earnings and other income from abroad; a distinction between net creditor and net debtor countries; and, for the net debtor countries, financial criteria based on external financing sources and experience with external debt servicing.

EconomyWatch adopts IMF’s classification of emerging and developing economies.

IMF’s List (150 countries)

The list compiled by the IMF is the most extensive. It encompasses countries such as China, India and Russia, who have the potential to become the three largest economies in the world. Poorer nations such as Haiti, and war-torn countries such as Afghanistan and Iraq are also included in the list.

Click on the individual countries to view country economic profiles on EconomyWatch:

Afghanistan, Albania, Algeria, Angola, Antigua and Barbuda, Argentina, Armenia, Azerbaijan, The Bahamas, Bahrain, Bangladesh, Belarus, Belize, Benin, Bhutan, Bolivia, Botswana, Bosnia and Herzegovina, Brazil, Bulgaria, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Chile, China, Colombia, Comoros, Democratic Republic of the Congo, Republic of the Congo, Costa Rica, Côte d’Ivoire, Croatia, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Equatorial Guinea, Eritrea, Estonia, Ethiopia, Fiji, Gabon, The Gambia, Georgia, Ghana, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hungary, Indonesia, India, Iran, Iraq, Jamaica, Jordan, Kazakhstan, Kenya, Kiribati, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Lesotho, Liberia, Libya, Lithuania, Macedonia, Madagascar, Malawi, Malaysia, Maldives, Mali, Marshall Islands, Mauritania, Mauritius, Mexico, Federated States of Micronesia, Moldova, Mongolia, Montenegro, Morocco, Mozambique, Myanmar, Namibia, Nauru, Nepal, Nicaragua, Niger, Nigeria, Oman, Pakistan, Palau, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Qatar, Romania, Russia, Rwanda, Saudi Arabia, Samoa, São Tomé and Príncipe, Senegal, Serbia, Seychelles, Sierra Leone, Solomon Islands, South Africa, Somalia, Sri Lanka, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Sudan, Suriname, Swaziland, Syria, Tajikistan, Tanzania, Thailand, Timor-Leste, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Tuvalu, Uganda, Ukraine, United Arab Emirates, Uruguay, Uzbekistan, Vanuatu, Venezuela, Vietnam, Yemen, Zambia, Zimbabwe

FTSE’s List (6+16 countries)

The FTSE group classifies emerging markets into two separate groups based on the country’s national income as well as the development of its market infrastructure.

Advanced Emerging Markets

Brazil, Hungary, Mexico, Poland, South Africa, Taiwan

Secondary Emerging Markets

Chile, China, Colombia, Czech Republic, Egypt, India, Indonesia, Malaysia, Morocco, Pakistan, Peru, Philippines, Russia, Thailand, Turkey, United Arab Emirates

MSCI Barra’s List (21 countries)

Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan

The Economist’s List (24 countries)

Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hong Kong, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan

Standard & Poor’s List (19 countries)

Brazil, Chile, China, Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey

Dow Jones’ List (35 countries)

Argentina, Bahrain, Brazil, Bulgaria, Chile, China, Colombia, Czech Republic, Egypt, Estonia, Hungary, India, Indonesia, Jordan, Kuwait, Latvia, Lithuania, Malaysia, Mauritius, Mexico, Morocco, Oman, Pakistan, Peru, Philippines, Poland, Qatar, Romania, Russia, Slovakia, South Africa, Sri Lanka, Thailand, Turkey, United Arab Emirates

Emerging and Developing Economies Economic Structure

Apart from these lists, other commonly used classifications of emerging and developing economies include the BRICS (Brazil, Russia, India, China and South Africa), coined by renowned Goldman Sachs economist Jim O’Neill, the Next Eleven (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam), considered to be the eleven most promising economies after the BRICs, and the Global Growth Generator Countries (Bangladesh, China, Egypt, India, Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam), which were identified by Citigroup analysts to be potential sources of high growth and investment opportunities.

Often, the main reason why these nations get highlighted as emerging markets is due to economic structure.

Emerging and Developing Economies’ Economic Geography

A commonly cited attribute among the larger emerging economies is relative abundance of natural resources; particularly oil and natural gas. Iran, Iraq, Russia, Nigeria, China, Brazil, Mexico, India, Egypt and Indonesia are among the top 30 countries with the largest proven oil reserves in the world. With the exception of Iraq (57^th) and Brazil (40^th), these countries are also among the top 30 countries with the largest proven natural gas reserves in the world.

Another factor that facilitates economic growth is a country’s geographic proximity and access to other markets. The ASEAN-China Free Trade Area is considered to be the largest regional emerging market in the world, and promises faster economic growth for the emerging economies within the region.

Physical land area can either facilitate or hinder economic growth in a country. Larger land areas may provide countries like Russia more natural resources, however it also incurs higher infrastructure costs. American economist and Nobel laureate Gary Becker observed that GDP per capita grew faster in countries with a smaller landmass compared to larger countries – provided that the smaller countries were open to international trade. Hong Kong and Singapore for example, that are countries with small land masses have both progressed from emerging to developed economies.

Emerging and Developing Economies’ Population and Labour Force

Larger emerging economies tend to have larger populations that make up a large market and a sizeable labour force Eight out of the top ten most populous nations in the world are emerging economies. They are China, India, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh and Russia. These eight countries alone account for 52.173 percent of the world’s total population.

A large population can be often seen to be an economic asset as there is a higher potential demand within the country. As most advanced economies face an aging population, emerging economies such as India now possess the world’s largest working-age population.

Emerging and Developing Economies’ Industry Sectors

Another key characteristic of emerging and developing economies often involves a gradual shift in the economy from agriculture to the industrial and services industry. Agriculture is often a vital component to an emerging economy’s GDP, most emerging and developing economies will however seek to diversify into more high-value sectors.

One example of this is China. In 2001, agriculture was responsible for 17.7 percent of China’s GDP while the industrial and services industries took up 49.3 percent and 33 percent respectively. However in less than ten years, the importance of China’s agriculture has shrunk to 9.6 percent of GDP, while services experienced growth to 43.6 percent of China’s GDP in 2010. The industrial sector, which has long been China’s main driver for economic growth, also decreased to 46.8 percent of China’s GDP in 2010.