Consider these 10 Emerging Markets that Your Business Should Enter
As businesses aim for growth, one avenue they can pursue are emerging markets, meaning economies in developing countries. These markets often offer growth opportunities because as countries develop, investment opportunities and markets are created. As the world becomes more connected, doing business in these countries has become easier.
Here are the Top 10 emerging markets to consider.
China had the world’s sixth-largest economy in 2001; today it is second, trailing only the United States, with a GDP of $9.24 trillion (U.S. dollars) and a growth rate of 7.7 percent. Although the economy is stable, growth is slowing in China, which is expected after years of growth. The U.S. presidential election could have a big effect on China’s future, with Donald Trump criticizing trade deals, and accusing China of manipulating currency. Most experts say China had to devalue the yuan because investment has decreased. FInd out more information how the China's economic environment is poised for growth.
Indonesia has been seeing steady economic growth since 2009 following increased spending on infrastructure and high commodity prices. Its GDP stands at $868.3 billion (U.S. dollars) with a growth rate of 5.8 percent. Last year saw a decline in growth, but President Joko Widodo has been able to drum up support for economic reforms that are expected to bring in new investors.
Vietnam was a country in extreme poverty in 1986, when it became a market economy after the death of its leader, Le Duan. The country’s economy began to gradually grow in the 1990s; today, GDP growth stands at 5.4 percent, with a GDP at $171.4 billion (U.S.). As the people of Vietnam are demanding goods, investors are finding the country to be an enticing market. The country’s communist party leaders have hope that by 2020, Vietnam will be considered an industrialized nation.
Nigeria has a lot going for it — a diverse economy with strong showings in the financial, service, communications and entertainment sectors. Its manufacturing sector (textiles, apparel, plastic and rubber products) also is strong—the third-largest in Africa—and provides goods and services for much of West Africa. Also, its GDP is growing at a rate of 5.4 percent. However, some of the news there hasn’t been good lately, with some experts predicting a recession, but Nigeria remains Africa’s biggest economy, and its pro-business government could defy expectations.
India’s liberal labor and environmental laws are big draws for foreign investors in such industries as technology, pharmaceuticals, textiles and tourism. India is a stable democracy and its government is considered one of the most business-friendly governments in the world. While the country has long had serious issues with poverty, GDP growth is 5 percent, with a younger, educated population. Half of India’s population is younger than 25 and more than 65 percent is younger than 35. It also is a highly educated country, with around 700 universities and more than 20 million students enrolled in higher education.
Turkey is defying the odds because its economy continues to grow (it added $30 billion in value in the first quarter of 2016) despite being a target of recent terrorist activity. The country has seen increased investment and growth (GDP growth is 4.1 percent), and the local population has been spending money at home, which should lead to more growth.
Colombia. Despite being Latin America’s oldest democracy, Colombia has been dealing with civil conflict for more than 40 years. That has made stability a challenge, but that is changing. Recent policies, such as trade agreements, are promoting new businesses, and it’s fairly easy for foreign companies to do business there, which is drawing investors. GDP growth in Colombia is 4.7 percent.
Brazil’s population stood at 177 million in 2001 and geographically is nearly as big as Europe, but the country’s economy was smaller than Spain’s. Its economy is growing, with a GDP of $2.246 trillion (U.S. dollars) and a GDP growth rate of 2.5 percent. Its stock market is known to be robust. President Dilma Rouseff has been suspended after her administration was accused of forcing energy company Eletrobras to cut electricity prices. As Rouseff faces an impeachment trial, Brazil’s markets remain strong with investors betting that the worst has happened.
Egypt. Political stability has been an issue in Egypt, but several factors are drawing the attention of investors. GDP growth is at 2.1 percent. Ports on the Mediterranean and Red Sea are expected to get very busy following the expansion of the Suez Canal. The government is looking into gas exploration, and there are plans to build a new international airport. There’s even a proposal to build a new capital city on undeveloped land, about 30 miles east of Cairo. This would be done, in part, to cut down on congestion in Cairo, one of the world’s most crowded cities, but would also be a potential boon for investors. Find out more about the Egypt's political climate and economic development by reading Egypt's Situation Report.
South Africa. Not only is South Africa the second-largest economy in Africa (behind Nigeria), it is responsible for 25 percent of the continent’s gross domestic product. The end of apartheid in the mid-1980s led to gradual, steady growth (GDP growth in South Africa is 1.9 percent), and brought more people to the country, and many of those people were educated. Key industries there include electronics, textiles and motor vehicle manufacturing. Johannesburg’s stock exchange is the largest in Africa, and the world’s 10th-largest. South Africa’s scenic national parks have also made it a tourist destination in recent years.
How to Protect Your Business and Employees Overseas
Entering a new market is like exploring a new frontier—you don’t fully know what you’ll discover. That’s why getting the proper insurance is vital before doing business in an emerging market.
“Make sure all policies are global and don’t have country restrictions,” Peter James, Global Organizations Producer at Clements Worldwide, says. “Businesses should have foreign liability insurance which protects them from occurrences worldwide and civil lawsuits filed both in the U.S and abroad. I recommend that businesses also consider global coverage for workers compensation, medical expenses, evacuation, kidnap and ransom, life insurance, accidental death and dismemberment, and disability.”
Companies doing business in an emerging market should consider protecting their employees with the following types of coverage:
Medical and Evacuation and Repatriation Insurance provides transport coverage to the nearest capable medical facility in case a local medical center is not able to provide adequate treatment.
Extortion, Kidnap, and Ransom Insurance provides financial indemnification and expert crisis management in the event of a kidnapping for ransom, wrongful detention and/or extortion.
International Defense Base Act Insurance Coverage is a form of insurance provided to employers to protect against injury incurred or disease contracted by an employee arising during employment.
Group Life Insurance protects employees’ beneficiaries against future financial burdens should an untimely loss occur, anywhere in the world.
High-Limit Temporary and Permanent Disability Insurance is a high-limit disability insurance for professionals to cover the loss of income in the event of disablement.
Group Personal Accident Insurance provides comprehensive coverage for accidents occurring on overseas assignments to individuals and organizations.
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