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About this book

This book provides an assessment of the megatrends that are reshaping the emerging markets landscape. With developing countries already accounting for 40% of world GDP, emerging markets consumption growth will be an increasingly important growth engine for the world economy over the next two decades. However, emerging markets in many parts of Asia, Africa, the Middle East and Latin America are still facing tremendous economic challenges such as poverty, inequality, weak governance and inadequate infrastructure. The developed nations are no longer insulated from the economic shockwaves impacting developing countries, as globalisation and economic integration have also amplified the transmission effects to the West through immigration flows, cross-border crime and the proliferation of international terrorism.
Emerging Markets Megatrends is an essential read for government policymakers, corporate executives, international investors and analysts wishing to understand more about the economic drivers and long-term outlook for emerging markets.

Table of Contents

Frontmatter

Chapter 1. Demographic Trends in Emerging Markets

Abstract
Over the next three decades to 2050, global demographic trends will substantially alter the distribution of the world’s population. Among the advanced economies, many nations are facing demographic ageing and low fertility rates, with some nations in Asia projected to experience severe demographic ageing and in some cases even declines in the total size of their populations. In contrast, the population of Africa is projected to double by 2050, creating significant challenges for African governments to manage the social and economic impact of such rapid population growth. A number of other large developing countries in South Asia and the Middle East are also facing rapid population growth, with large numbers of young workers projected to enter the workforce over the next decade, creating risks of social unrest if their governments cannot generate sufficient employment growth.
Rajiv Biswas

Chapter 2. The Emerging Markets Consumer Boom

Abstract
Since the 1950s, a dramatic transformation has taken place in the structure of the global economy due to the rising economic importance of developing countries. Rapid growth in the size of consumer markets in developing countries has become an important growth driver for the global economy. Over the next three decades, the new growth engines for the global economy will increasingly be emerging markets. China, India and ASEAN will be the largest growth engines among developing countries, as rapidly rising household incomes will drive strong growth in the total size of Asian consumer markets.
Rajiv Biswas

Chapter 3. Emerging Markets Megacities

Abstract
Since 1950, the world’s population has roughly tripled, rising from 2.5 billion people to an estimated 7.4 billion people by 2015, according to United Nations population statistics. By 2050, United Nations medium variant demographic projections indicate that the world’s population will have risen to 9.8 billion people, a further increase of 2.4 billion people. The population of developing countries has risen from 1.7 billion in 1950, or around 68 per cent of the world’s population, to 6.1 billion by 2015, or around 83 per cent of the global population. Moreover, the UN projects that the global urban population will increase by 2.4 billion persons by 2050, creating tremendous new demand for urban infrastructure such as electricity, power, transport and health care.
Rajiv Biswas

Chapter 4. Reshaping the Global Financial Architecture

Abstract
Since the end of the Second World War, global governance and international standards-setting has been dominated by the developed countries, with North America and Europe driving the decision-making structures and voting rights of the Bretton Woods system, notably the IMF and World Bank. However the old global governance architecture is no longer relevant and developing countries are seeking a greater voice in international decision-making at key international institutions. Due to the significant increase in the number of new sovereign nations as well as the rising share of world GDP accounted for by developing nations, the global financial architecture that was built in the 1940’s has become anachronistic. The rising economic importance of developing countries is transforming the international economic order, with large emerging markets driving the creation of new multilateral development institutions as well as changing the governance of the Bretton Woods institutions to create greater inclusiveness for developing nations.
Rajiv Biswas

Chapter 5. Financing Infrastructure for Developing Countries

Abstract
Mobilising private sector financing for infrastructure is a key priority for developing countries worldwide, in order to provide critical physical and social infrastructure for economic development. The G-20 Presidency in 2018 has identified that the global infrastructure gap between 2018 and 2035 is estimated to be around USD 5.5 trillion, while the pool of assets under management by institutional investors globally is estimated at USD 80 trillion. Catalysing greater private capital flows for financing infrastructure is therefore one of the key challenges facing developing countries.
Rajiv Biswas

Chapter 6. China’s Belt and Road Initiative

Abstract
The Belt and Road Initiative is a grand strategy for building infrastructure connectivity between China and 68 other partner countries. The geographic scope of the Belt and Road Initiative extends from China to ASEAN, Central Asia, Africa, the Middle East and Europe. Over USD 1 trillion of infrastructure projects have either been built or are planned over the next decade under the Belt and Road Initiative. In tandem with the Belt and Road Initiative, China has also led initiatives to create new multilateral development banks to provide infrastructure financing to developing countries, notably the Asian Infrastructure Investment Bank and the New Development Bank.
Rajiv Biswas

Chapter 7. Emerging Manufacturing Hubs

Abstract
Since the 1960s, a succession of developing countries in East Asia have achieved rapid industrial growth, creating what has become known as ‘The East Asian Economic Miracle’. Sustained high economic growth rates have succeeded in lifting their economies out of the ranks of low-income developing countries, transforming them into industrial nations with upper middle income or advanced economy status. However as manufacturing wage levels have risen in these nations, eroding their competitiveness in low cost manufacturing, new manufacturing hubs with lower manufacturing wage costs are emerging, such as Vietnam, Cambodia and Bangladesh, transforming the competitive landscape. However the newly emerging low cost manufacturing hubs in developing countries are facing challenges from disruptive technological change and innovation that could create significant hurdles to their industrial development strategies.
Rajiv Biswas

Chapter 8. Disruptive Change from Robotics, Industrial Automation and the Digital Economy

Abstract
Industrial automation, robotics, artificial intelligence and big data are transforming the global industrial landscape, creating disruptive change in many industries. Tens of millions of jobs will be lost worldwide over the next decade due to the impact of these technological trends. The transformation of industrial competitiveness by digital disruption and industrial automation have created new challenges to the East Asian development model of using low-cost manufacturing as a platform for industrial development and rapid economic growth.
Rajiv Biswas

Chapter 9. The New Global Technology Wars

Abstract
Disruptive technological change in the global economy from the Internet of Things, industrial automation, robotics, digitalization, artificial intelligence and big data is creating new competitive challenges for developing countries. Due to the rapid pace of technological change, the divide between emerging markets with well-established and fast-growing technology industries and low technology developing countries that are still highly dependent on commodities exports is widening, creating increasing development challenges for many low income developing nations. Many of the nations in Africa, the Middle East and Latin America are among the countries that are facing a widening technology gap compared with OECD countries and a number of technologically advanced Asian developing economies.
Rajiv Biswas

Chapter 10. The Least Developed Countries: Opportunities and Challenges

Abstract
Among the 193 member nations of the United Nations, there are 47 countries that are still classified as Least Developed Countries (LDCs) by the United Nations. The inability of so many developing countries to exit from LDC status after many decades highlights the tremendous challenges facing a large number of low income developing nations. While many Asia-Pacific LDCs are projected to graduate from LDC status over the next five years, the 32 African LDCs face a more challenging economic outlook, with only two expected to exit from LDC status in the medium term. Those nations that do graduate from LDC status will need to develop their transitional roadmaps for strengthening private capital inflows as access to concessional financing from international financial institutions and bilateral donor countries is reduced.
Rajiv Biswas

Chapter 11. Crisis Prevention and Resolution in Emerging Markets

Abstract
Over the past 50 years, many developing countries have displayed a high degree of vulnerability to economic crises for a number of reasons, including poor macroeconomic management, high and unsustainable levels of external debt, large fiscal deficits and government debt levels, banking crises, bursting real estate bubbles, political instability, and a high degree of reliance on volatile commodity exports. These vulnerabilities often magnify the transmission effects on the domestic economy from external shocks. Crisis prevention and resolution is therefore a key focus for national macroeconomic policy as well as for international policymakers through the Bretton Woods institutions as well as regional initiatives.
Rajiv Biswas

Chapter 12. The Impact of Climate Change

Abstract
Developing countries are gradually implementing a broad range of strategies to adapt to climate change. The vulnerability of least developed countries and small island developing states to climate change is particularly high. Due to the rapid projected growth of Africa’s population over the next three decades, one of the most important threats from climate change relates to the impact on Africa’s agricultural production and food security. The combination of rising sea levels and more extreme weather disasters could be particularly devastating for Asian countries with large urban populations in low-lying floodplains. Therefore for developing countries, one of the most important priorities over the next decade will be to invest in infrastructure that helps to mitigate the impact of climate change. Raising green finance will be a key priority for developing countries, with green bond financing playing an increasingly important role in funding projects for renewable energy or sustainable land use.
Rajiv Biswas

Chapter 13. Combating Terrorism and Organized Crime: Cryptocurrencies and Cybercrime

Abstract
A large number of developing countries remain mired in poverty, with weak institutional capacity and high levels of corruption. Terrorist groups and organized crime gangs are able to exploit such failures of governance, which create fertile breeding grounds for terrorism and transnational crime. The rapid growth of online banking and e-payments have also increased the vulnerability of the global financial system to cybercrime, with the lack of regulatory supervision of cryptocurrencies creating regulatory white spaces for criminal organisations to undertake financial transfers anonymously.
Rajiv Biswas

Chapter 14. Conclusion: The Future Emerging Markets Landscape

Abstract
The rising economic importance of developing countries in the global economy is one of the key global megatrends that has transformed the international economic order, resulting in the growing geopolitical influence of large emerging markets such as China and India. However many developing countries still face tremendous challenges due to a toxic mix of factors, including adverse demographic trends, disruptive technological change as well as global warming. Conflicts have also been a key factor that has disrupted the economic development of many developing countries. Despite these challenges, the share of world GDP accounted for by developing coutries will continue to rise, increasing the geopolitical, economic and investment impact of emerging markets on the global political landscape.
Rajiv Biswas

Backmatter

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