Hi All,
This post mainly deals with the
Emerging Market Economy (EME)
Emerging Market Economy (EME) was a term coined in 1981 by Antoine W. Van Agtmael of the International Finance Corporation of the World Bank. EME is a country which has an economy of low to middle per capita income.
It constitutes of 80% of Global Population and 20% of World Economies (not sure
if it refers to 1981 or present term).
EMEs are said to be transitional – they move from closed economy to open economy. They should carry out an economic reform program that will improve the economy of the country. EMEs are more likely to get advice from World Monetary Fund.
Based on Investment factor, an EME will have increase in both local and foreign investment. This is due to the improvement in the domestic economy. It also means that the world has begun to take note of the EME. The investment will turn out to be a big boost to the local government. EMEs are quite riskier in nature. The famous quote, ‘Bigger the risk, bigger the reward’ makes lot of people and firms to invest in EMEs.
Moving from a closed market to an
open market is not easy in nature. People inside the country will be
apprehensive of the foreign investments. They have distrust over the new
people. They feel that the culture of the country maybe affected in the long
run.
As a by-product of foreign investment, certain cultures of theirs like Fast food spreads (you may remember the example of how the country has changed from 1980s to 2000s). Over the generations, it may form a completely different society and from that point it is always tough to come back. This is one of the main apprehensions of the local people.
On the basis of GDP, the eight largest EMEs of the world are said to be China, Brazil, Russia, India, Mexico, South Korea, Indonesia and Turkey. World Bank’s report in May 2011 says that by 2025, BRIC countries + South Korea + Indonesia will lead World’s economy with more than half of global growth.
Apart from this, there are lot of lists prepared by various institutes like Columbia University, FTSC, MSCI, S&P, Dow Jones, etc – it can be seen in the Wikipedia link given below.
As a by-product of foreign investment, certain cultures of theirs like Fast food spreads (you may remember the example of how the country has changed from 1980s to 2000s). Over the generations, it may form a completely different society and from that point it is always tough to come back. This is one of the main apprehensions of the local people.
On the basis of GDP, the eight largest EMEs of the world are said to be China, Brazil, Russia, India, Mexico, South Korea, Indonesia and Turkey. World Bank’s report in May 2011 says that by 2025, BRIC countries + South Korea + Indonesia will lead World’s economy with more than half of global growth.
Apart from this, there are lot of lists prepared by various institutes like Columbia University, FTSC, MSCI, S&P, Dow Jones, etc – it can be seen in the Wikipedia link given below.
____________________________________________________________________
This article is a basic one that
tries to bring out or explain what an EME is. The sources of this article are http://www.investopedia.com/articles/03/073003.asp#axzz20WUrB95l
and http://en.wikipedia.org/wiki/Emerging_markets
Written by
As per the latest article in the moneycontrol.com it is said that India and Russia lead the emerging markets in the case of Export orders for the Month of April & June eventhough other emerging markets did not show a significant growth. India showed a solid rise in New Orders whereas Russia saw a solid expansion.
ReplyDeleteThe growth of the emerging market now faces high external uncertainities and we will have to just hope that we stay on the right track.
In the case of employment also India showed a rise whereas China showed a reduction in Staff , the first time in 13quaters.
There is a lot of things happening in case of the emerging markets. We will have to wait and watch.
The main source of the article: http://www.moneycontrol.com/news/economy/india-russia-lead-emerging-marketsexport-order-growth_728991.html