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Emerging and Developing Markets

What you need to know to do business in and with these markets

What is an emerging market?

"WHAT COUNTS AS an emerging market? Broadly speaking, an economy that is not too rich, not too poor and not too closed to foreign capital. The term was coined by Antoine van Agtmael in 1981 when he was working for the International Finance Corporation (IFC), a division of the World Bank. He hoped to create what he had named: a set of promising stockmarkets, lifted from obscurity, thereby attracting the investment they needed to thrive."(Economist)

"The emerging market universe is diverse and defies a uniform narrative. Although there is no formal definition, emerging markets are generally identified based on such attributes as sustained market access, progress in reaching middle-income levels, and greater global economic relevance (see box). Even so, these economies are dissimilar, and the distinction between emerging markets and other developing economies is also imprecise." (International Monetary Fund) . 

Note that in this guide "emerging" and "developing" may be used interchangeably. 

What are some of the challenges of researching an emerging market?

  • How do you define an emerging market? Is it based on size of the economy or number and nature of trade partners, or...?
  • Less information may be readily available due to smaller market size, fewer integrations with US and other major markets, less written in English-language media.
  • Does the U.S. have good diplomatic relations with these market countries? Are there trade representatives located there?
  • Are the "big players" (major companies, NGO's et al.) interested in these markets? Do they commission studies or send teams to investigate and report back? Is that info made public?

FIT students: What challenges are you encountering? Let us know!

Alphabet Soup?

  • BRIC?  (BRICS?)

BRICS with map

"While the BRIC engines may be misfiring, other economies have been gaining speed. O'Neill has now come up with a new group of promising emerging markets. He's coined them M-I-N-T. "It stands for Mexico, Indonesia, Nigeria and Turkey," he says.

There's MIST (Mexico, India, South Korea, Turkey). There's the Fragile Five, which stands for Indonesia, South Africa, Brazil, Turkey and India.

"Some optimists have named them the Fabulous Five," he laughs.

There's also PINE (Philippines, Indonesia, Nigeria and Ethiopia) and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa).

There are the EAGLEs, which stands for Emerging and Growth Leading Economies and includes Brazil, China, Egypt, India, Indonesia, South Korea, Mexico, Russia, Taiwan and Turkey.

With the exception of MIKT (Mexico, Indonesia, South Korea and Turkey), the acronyms roll off the tongue, and incorporate emerging markets from all corners of the globe, says Williams.

Williams says he might start working on his own grouping, focusing on markets in Africa, particularly East Africa.

"You've got Kenya, you've got Ethiopia, Tanzania, Uganda," he says, which would give him KETU. However, they could be rearranged to come up with the catchier K-U-T-E."  ("The Global Economy: A World Of Acronyms", NPR, MAY 13, 2014)

 

  • "Here is a list of some of the most popular catchy acronyms for emerging market economies" (CEO WORLD )