Emerging_markets

The term emerging markets is commonly used to describe business and market activity in industrializing or emerging regions of the world.

Terminology

Originally brought into fashion in the 1980s by then World Bank economist Antoine van Agtmael,FT.com / Columnists / John Authers - The Long View: How adventurous are emerging markets? the term is sometimes loosely used as a replacement for emerging economies, but really signifies a business phenomenon that is not fully described by or constrained to geography or economic strength; such countries are considered to be in a transitional phase between developing and developed status. Examples of emerging markets include China,Five Years of China’s WTO Membership. EU and US Perspectives on China’s Compliance with Transparency Commitments and the Transitional Review Mechanism, Legal Issues of Economic Integration, Kluwer Law International, Volume 33, Number 3, pp. 263-304, 2006. by Paolo Farah India, Mexico, Brazil Alternative Stock Library / Looking for Escape? Go Brazil!, Chile, much of Southeast Asia, South Asia, countries in Eastern Europe, the Middle East, parts of Africa and Latin America. Emphasizing the fluid nature of the category, political scientist Ian Bremmer defines an emerging market as "a country where politics matters at least as much as economics to the markets."[1]

The research on emerging markets is diffused within management literature. While researchers including C. K. Prahalad, George Haley, Hernando De Soto, Usha Haley, Rajesh K Pillania and several professors from Harvard Business School and Yale School of Management have described activity in countries such as India and China, how a market emerges is little understood.

It appears that emerging markets lie at the intersection of non-traditional user behavior, the rise of new user groups and community adoption of products and services, and innovations in product technologies and platforms.

The term "rapidly developing economies" is now being used to denote emerging markets such as The United Arab Emirates, Chile and Malaysia that are undergoing rapid growth.

In recent years, new terms have emerged to describe the largest developing countries such as BRIC and BRIMC that stand for Brazil, Russia, India, Mexico, and China. These countries do not share any common agenda, but some experts believe that they are enjoying an increasing role in the world economy and on political platforms.

Newly industrialized countries are emerging markets whose economies have not yet reached first world status but have, in a macroeconomic sense, outpaced their developing counterparts.

A large number of research works are in progress at leading universities and business schools to study and understand various aspects of Emerging Markets.

List of countries

MSCI All Country World Index by Morgan Stanley Capital International 2006     Emerging markets     Developed markets

It is difficult to make an exact list of emerging (or developed) markets; the best guides tend to be investment information sources like ISI Emerging Markets and The Economist or market index makers (such as Morgan Stanley Capital International). These sources are well-informed, but the nature of investment information sources leads to two potential problems. One is an element of historicity; markets may be maintained in an index for continuity, even if the countries have since developed past the emerging market phase. Possible examples of this are South Korea, Taiwan, Israel, and Czech Republic. A second is the simplification inherent in making an index; small countries, or countries with limited market liquidity are often not considered, with their larger neighbours considered an appropriate stand-in.

As of July 2006, the Morgan Stanley Emerging Markets Index included:

The list tracked by The Economist is the same, except with Hong Kong, Singapore and Saudi Arabia included (MSCI classifies the first two as Developed Markets) -- and Jordan omitted.

BRIC Countries

BRIC or BRICs are terms used in economics to refer to the combination of Brazil, Russia, India, and China. General thinking is that the term was first prominently used in a thesis of the Goldman Sachs investment bank.[1] The main point of this 2003 paper was to argue that the economies of the BRICs are rapidly developing and by the year 2050 will eclipse most of the current richest countries of the world.G8+5. BRIC economies are expected to join the global economic powers, although other emerging markets are unlikely to match India or China in strength.CNW Group | GRANT THORNTON LLP | Mexico along with Indonesia, Pakistan, and Turkey are the emerging markets to watch India and China are expected to overtake the United States economically by 2050.India projected to join China in surpassing size of the U.S. economy by 2050 - International Herald Tribune According to CEO of Grant Thornton, Indonesia and Pakistan, with their large populations, have the potential to grow their labor intensive exports and could capitalize on the process of low-cost production that China and India have so successfully exploited. As of March 2008, the top five countries in the MSCI Emerging Markets index were: Brazil, China, Korea, Taiwan and Russia, accounting for more than 60% of total weigh in the benchmark.

See also

• Developed market

References

• Goldman Sachs Paper No.134 BRIMC (English)

• Michael Pettis, The Volatility Machine: Emerging Economies and the Threat of Financial Collapse (2001) ISBN 0-19-514330-2

External links

• What Is An Emerging Market Economy?
• Grant Thornton International Business Report emerging markets (BRIC) focus
• What Are Emerging Markets? University of Iowa Center for International Finance and Development
• Emerging markets reports from Economist Intelligence Unit

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