7. United Nations History of Emerging Markets MDCs (more-developed countries) e.g. Canada, England, France, Netherlands Germany, USA LDCs (less-developed countries) industrialized countries just entering world trade; most in Asia & Latin America LLDCs (least-developed countries) industrially underdeveloped, agrarian, rural populations; little world trade; Most in Africa
11. How many emerging markets are there? Depends who you ask? MSCI (Morgan Stanley) identifies 52 Emerging Markets. The Economist has 24 countries on their Emerging Markets list. Dow-Jones has 35 countries on their Emerging Markets list.
34. CANKUN FACTORY, XIAMEN CITY (R) coffeemakers / irons By 2030-2035, the combined GDP of emerging markets will overtake that of currently mature economies Goldman Sachs estimates that the four largest emerging markets (known as BRICs – China, Brazil, India and Russia) will overtake the G7 (US, Japan, Germany, France, UK, Italy and Canada) by 2040. By 2027, it’s estimated that China’s economy will be the largest in the World. Currently number two after USA. By 2050, the emerging markets, in aggregate, will be nearly twice as large as the current developed economies.
35. CANKUN FACTORY, XIAMEN CITY (R) coffeemakers / irons Emerging markets will account for 70% of world’s total growth in next 10 years and beyond. Emerging markets will account for 70% of world’s total growth in next 10 years and beyond.
37. Realignment of Global Economies Samsung (Korea) – powerful global brand, effectively rivals Sony, R&D budget larger than Intel Embraer (Brazil) – premier producer of regional jets CEMEX (Mexico) – largest cement company in US, second largest in UK, third largest globally Gazprom (Russia) – oil reserves larger than all the oil majors combined, principal supplier of gas to Europe Inbev (Brazil/Belgium) – CEO is Brazilian, world’s largest beer company, Most computers made and designed in Taiwan and China. Most advice on how to fix computers comes from India. R&D centers – pharma companies India, GE health-care arm spent $50 mm to build R&D center in India, Cisco spent over $1B on a 2nd global HQ in India, Microsoft’s R& D center in Beijing is its largest outside of US New inventions in consumer electronics and wireless technology emanating from Asia. Inventions and technology on the rise in emerging markets
38. Emerging Markets Gaining in Political Influence In 2009, the G20 permanently replaced G8 as the main economic council of wealthy nations
41. Who cares about Emerging Markets? Strong economic growth disposable income
42. PG Currently operates in more than 100 countries Americans and Europeans spend around 110 euro /year/capita on PG products vs. 12 euro globally. In Mexico consumption is 20 euro/year/capita vs. less than 4 euro in China and less than 2 euro in India. Goal is to get China and India consumption to Mexico’s level of consumption. If they do, that’s another 40 billion euro in sales.
43. GLOBALIZATION Globalization is by many seen as inevitable & controversial Some win Some Lose Fear for diluting of local cultures Reaction such as protectionism pop up
44. ProtectionismThe US vs Brazil cotton war US cotton farmers get gov’t subsidies. These subsidies are illegal, by WTO rules. Brazil filed complaint & won. US kept paying cotton farmers. Now US pays Brazilian farmers too.
46. OtherObstacles Other Obstacles Political instability Legal framework Restrictions on foreign investment Investment – disclosure, ownership, minority shareholder culture Varying levels of corruption Political instability and legal structure Restrictions on foreign investment and ownership Corruption undervalued exchange rates
47. DO YOU SEE THEM AS AN OPPURTUNITY OR AS A THREAT ?
Map by AlperCelik, business writer; November 18, 2008; http://celikalper.wordpress.com/2008/11/18/emerging-markets/Emerging Markets are countries considered to be in a transitional phase between developing and developed status. Political scientist Ian Bremmer defines an emerging market as "a country where politics matters at least as much as economics to the markets".In the 2008 Emerging Economy Report,the Center for Knowledge Societies defines Emerging Economies as those "regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization." The category is constantly changing.FTSE (British stock market index co.) breaks out Advanced Emerging Markets (6 countries) & Secondary Emerging Markets (16 countries), based on market infrastructures. MSCI (Morgan Stanley) identifies 21 Emerging Markets.Dow Jones classifies 35 countries as Emerging Markets.
Map by AlperCelik, business writer; November 18, 2008; http://celikalper.wordpress.com/2008/11/18/emerging-markets/Emerging Markets are countries considered to be in a transitional phase between developing and developed status. Political scientist Ian Bremmer defines an emerging market as "a country where politics matters at least as much as economics to the markets".In the 2008 Emerging Economy Report,the Center for Knowledge Societies defines Emerging Economies as those "regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization." The category is constantly changing.FTSE (British stock market index co.) breaks out Advanced Emerging Markets (6 countries) & Secondary Emerging Markets (16 countries), based on market infrastructures. MSCI (Morgan Stanley) identifies 21 Emerging Markets.Dow Jones classifies 35 countries as Emerging Markets.
Map by AlperCelik, business writer; November 18, 2008; http://celikalper.wordpress.com/2008/11/18/emerging-markets/Emerging Markets are countries considered to be in a transitional phase between developing and developed status. Political scientist Ian Bremmer defines an emerging market as "a country where politics matters at least as much as economics to the markets".In the 2008 Emerging Economy Report,the Center for Knowledge Societies defines Emerging Economies as those "regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization." The category is constantly changing.FTSE (British stock market index co.) breaks out Advanced Emerging Markets (6 countries) & Secondary Emerging Markets (16 countries), based on market infrastructures. MSCI (Morgan Stanley) identifies 21 Emerging Markets.Dow Jones classifies 35 countries as Emerging Markets.
Emerging Markets are characterized by strong economic growth, which leads to more disposable income in the hands of a growing middle class. As emerging countries improve their infrastructure and their GDPs continue to rise, the demand for cars is likely to increase as well. Coca Cola, Pepsico, Kraft, and other food and beverage manufacturers have seen strong growth in emerging markets in recent years. As incomes rise, packaged food becomes more accessible for a larger percentage of the population, stimulating demand for these companies' products. Vodafone recently bought a controlling stake in the fourth-largest mobile service provider in India, Hutchison Essar. This was seen as a strategic move on Vodafone's part, as the Indian cell phone market is among the fastest-growing in the world. By 2012, total mobile subscribers number will have doubled (from 2008) and about 90% of this increase will come from emerging markets. As growth in advertising spending slows in mature markets such as the United States and Western Europe, advertising conglomerates are focusing on Russia, China, India and other emerging markets, where advertising spending is growing at much higher rates.
Nov.9, 2010 “All Things Considered” report on NPRhttp://www.npr.org/blogs/money/2010/11/09/131192182/cottonUS cotton farmers have received government subsidies for years. ($1.5 – 4 billion per year).WTO rules of global trade stipulate NO subsidies.All member countries have agreed to follow this rule. Brazil & 151 other countries follow the rule. USA doesn’t. 2002 Brazil filed case against US at the WTO2004 WTO ruled in favor of BrazilThe US didn’t change anything (i.e. continued subsidies)The US appealed, the case made the rounds in the WTO for 7 years. US kept losing appeals.WTO couldn’t do anything to force US to comply. "The WTO has no legal authority to make any sovereign country do anything,”. "It has no police forceBrazil could RETALIATE: WTO rules allow the winning country (Brazil) to tax imports from the losing country (US). So Brazil threatened to impose import taxes on 102 products from the US. Brazil said the new tax would go into effect in 30 days unless the US sent a team to Brazil to negotiate the cotton issue. These 102 products were made by a number of powerful US industries, which necessarily became allies of the Brazilian cotton farmers. The affected US manufacturers pressured the US government to immediately dispatch a negotiating team to Brazil. The US negotiators told their Brazilian hosts it would be impossible to remove subsidies immediately. They offered to pay Brazilian farmers $147 million per year if Brazil would drop the threat of retaliation.Yes, that’s a bribe.What are the implications for other cotton producers in the world?
