Emerging Economies

The term ‘emerging economies’ was introduced in the early 1980s by then World Bank economist, Antoine van Agtmael, and was defined in terms of a countries economic and level of wealth. Before Agtmael these countries were better known as “third-world” countries, which evoked many negative associations. To avoid this and to sell his idea, Agtmael came up with the term emerging economies. Emerging economies are described as countries with economies that are in the low-to-middle per capita income. These countries are estimated to constitute up to eighty percent of the global population and represent about twenty percent of the world’s economy.1 Typically emerging economies are economies that are transforming from a traditional political and economic system that is run by the government to a more open market model.

According to The World Bank, the four biggest, fasting-growing emerging economies are Brazil, Russia, India, and China, also known as BRIC’s2. It is speculated that by the year 2050, these four countries will have an economy that is wealthier than most of the current major economic powers.3 The belief is that China and India will become the world’s dominant suppliers of manufactured goods and services, while Brazil and Russia will become similarly dominant suppliers of raw materials. Though the BRIC countries have attracted the most investor attention in years past, there are also opportunities in less prominent but more promising emerging markets such as Egypt, Mexico, Poland, South Africa, South Korea, and Turkey.4 Although these non-BRIC countries do not have a billion-plus population market, what they do have are strong growth profiles, fast-track agendas, and investor-friendly climates. Also in their favor, unlike the BRIC countries which depend on exports to prosper, most of these countries are thriving mainly as a result of domestic demand from surging consumer spending.

There are two main causes for a country to enter an emerging...