The world has experienced amazing growth in wealth in developing nations. As these countries embrace free markets and free trade, their residents gain access to better jobs and a better life. Many emerging markets see a new middle class with consumer money to spend. Not only will they continue to see growth in exporting products and providing labor to the rest of the world, local demand is expected to climb. Growth-minded companies will want to ride this wave toward more profit. Here are the best opportunities for businesses in an emerging markets outlook.
India is the only large economy that is growing at 7% or more, and their stock market has four of the top 10 ETF’s (Exchange-Traded Fund) in emerging markets. Their economic engine has surpassed China in growth and many experts believe that the economy will continue to grow at a steady pace. Additionally, Prime Minister Narenda Modi, is a business-friendly leader and the government is expected to make several pro-business economic reforms in the near future. Their rising middle class can also be expected to drive growth through internal demand.
From May 1st, 2017 to May 24th, 2017, a key ETF in Pakistan, Global X MSCI Pakistan, had its best month in history, taking in $11.8 million. While Pakistan was downgraded to a frontier market by benchmark KSE100 Index in late 2008, the government fended off several crises and Pakistan has seen tremendous growth and investment. Having regained its emerging market status, Pakistan is set for a new wave of growth.
Bangladesh is emerging as a manufacturing powerhouse, focusing on exporting goods across the globe. Their export-focused industrial sector grew 9.6% in FY 2014-2015. The country has skilled workers, low wages, and a large workforce. Bangladesh expected to grow their public infrastructure spending by 57% in 2015-2016 to further enhance their business capacity.
Egypt has struggled through political instability in the last decade but has recently returned to relative stability. In a short period, Hosni Mubarack was toppled by the Arab Spring. Mohammed Morsi was elected and then quickly deposed. Now, with Abdel Fattah El Sisi at the helm, stability has led to economic growth with more in the future.
The IMF saw growth in Egypt nearly double in 2015, from 2.2% to 4.2 %, and they expect that growth to continue through 2020. Egypt’s strategic global location gives it access to several other growth markets in Africa, Europe, and Asia. In addition to being a transportation resource, Sisi’s government has put serious money behind extending the canal along with other infrastructure projects.
Ethiopia is going through the process of rapid urbanization as rural Ethiopians move to cities for economic opportunity. The home construction sector is racing to keep up with demand and the government plans to invest in infrastructure to improve their logistics channels. The construction industry in Ethiopia is expected to grow at the highest rate in Africa, 10.7% between 2016 and 2012. As a result, the BMI research company expects to see foreign investment climb, especially in export-oriented manufacturing.
Since 2010, the government of Myanmar has implemented many political and economic reforms. Prior to these reforms, the economy was struggling and the international community had sanctions in place. After several years of work, this country is poised for growth on the global scene. BMI expects the government to continue to liberalize both politics and the economy to allow for an even more business-friendly culture.
Myanmar’s growth plan focuses on developing three new special economic zones at Thilawa, Dawei, and Kyaukpyu. Each includes heavy investment in infrastructure including deepwater ports, setting Myanmar up for increased global trade.
To learn how we can help you expand into these emerging international markets, contact the Velocity Global team. We have a team of experts dedicated to helping businesses experience successful global growth.