Monday, 2 September 2013

Emerging Markets Must Continue Investing in Economic Growth


As the world economy grows and evolves into the 21st century, there is bound to be some ups and downs along the way in terms of overall GDP. While industry experts have forecast that the global economy will double by the year 2020, many factors will play a role on how it will ultimately unfold year after year until it reaches it’s expected potential value. In the last five to ten years, the emerging markets have been the main driving force behind it’s current growth rate and will still be in the next few years, but they must continue to make the right investments in their individual economies to keep the global economy moving forward.

China, the world’s largest exporter and soon to be biggest importer, has enjoyed double-digit growth over the last 10 years, but has recently announced that it is going to put measures in place to manage a consistent annual growth rate of around 7%; for the next few years. While this news has had a particular negative effect on some markets around the world, China, the world’s biggest emerging market, maintains that it wants to be able to stabilize it’s own economy and by doing so, the entire global economy will exponentially follow suit and become somewhat more stable itself. In the long term, what is best for China will subsequently be best for the rest of the world’s economies.

India, the second most populous nation and an appealing emerging market with incredible potential, has been slow in making the right investments in it’s transport and port infrastructures, and unless they reach their domestic economic goals, the global economic forecasts will not fully come to fruition as expected.  However, the government does have an ambitious target for building it’s required infrastructures and is just now starting to generate more interest from the private sector to help build India’s foundation for it’s economic future. Other major emerging markets such as Brazil, Russia and the continent of Africa to name a few, must also continue to make giant investments to grow their GDP in order for the global economy to continue to grow into it’s vast potential, and they seem to be on the right track but still have much work and further investments are needed; if they intend to keep up the pace.

When it comes to these types of large investments, these emerging markets must think long-term and continue to grow their economies even if the overall global economy goes through some tumultuous times. Without investment to attain future prospects, there simply won’t be any rewards to be gained down the road. As the old saying goes ... you can’t win the game, if you don’t play. When it comes to enjoying long-term investment success, investors can’t get a return in the future if they don’t invest in the first place.

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