Emerging market's future

Emerging Market’s Future Business, Innovation, Entrepreneurship and Financing

Abstract: Ever accelerating pace of globalization has opened a window of opportunity for innovative entrepreneurs to jump from spring board of their locally retained markets into promise lands of globally acclaimed high ranking business heavens. The other name of these business heavens is Emerging Markets. It is now a known fact that the growth advantage in emerging markets, if other things remain the same, is expected to translate into 62% of global growth. Multinationals expect about 70 percent of the world‘s growth over the next few years to come from emerging markets, with 40 percent emanating from just two countries: China and India. In addition to growth rate advantage, expanding middle-class consumer base, impressive Doing Business regulatory reforms, more than half of $55 billion of global middle-class spending will come from Asia Pacific. Global financial and economic crisis has necessitated the emphasis on business regulatory reforms. Through its indicators World Bank and IFC‘s co-publication Doing Business Index 2011 has tracked changes to business regulation around the world, recording more than 1,500 important improvements since 2004. ―Long-term success,‖ according to Deloitte‘s report Innovation in Emerging Markets - strategies for achieving commercial success, ―will take far more than simply making minor adjustments to existing products, lowering prices, or replica ting existing sales channels. Instead, a new set of competencies and organizational structures will be required to generate a continuing stream of innovative products and services tailored to the needs of consumers and industrial buyers in emerging markets .‖ Referring to challenges ahead ILO / International Institute for Labour Studies in one of their Studies on Growth with Equity titled Making Recovery Sustainable – Lessons from Country Innovations maintain that unemployment and inefficient income inequali ties are the principal factors explaining social unrest. ―The issue,‖ according to them, ―deserves urgent attention.‖ How these unemployment and income inequalities can be addressed? For that the global business entrepreneurs and financial institutions have to address a Cycle of Nine Social and Economic Evils by creating a powerful independent apolitical Entrepreneurial Platform for developing a genuine Global Natural and Human Resource Vision and Index as a take-off base for a Global Entrepreneurial Initiative with a Five-Point Agenda. Why do I want the entrepreneurs and financial sector to focus their attention on the first two rings, illiteracy / ignorance and unemployment, of the cycle of social and economic evils? Is there room for any doubt that the fi rst casualty of social unrest is always economic activity? The truly genuine social unrest that is invisible at present, if not addressed before it is visible, can and will surely turn all growth projections upside down.

Tags:

Emerging Markets, Busine ss, Innovation, Entrepreneurship, Financing

2011

Zahid Hussain Khalid

Bureau Chief & Country Manager – Pakistan, ASiAMONEY Magazine 12/16/2011

Emerging Market’s Future Page 2

Contents

Introduction……………………………………..……………………………………………………………………3

The keys to Emerging Market‘s future growth……………………………..………………………………….….4 Business Prospects and Growth Potential…………………………………………………………….………….9 Importance of emerging-market cities…………………………………………..………………..………………12

Starting and Doing Business…..…………..……………………………………………………..……………….13 Innovating the innovation…………………...……………………………………………………….…………….17 Entrepreneurship and Financing…..…………………………………………………………..………………….19

Tables

Income thresholds for establishing stages of developments………………………………..………..…………3

Across the board emerging-market economies grow faster than those from developed ones…………………………………………………………………..……………….5 Annual wealth growth rates by country, 2000-09 and 2010-2011………………………………………………9

Good practices around the world in making it easy to start a business………………..……..………………14 Who made starting a business easier in 2009/10-and what did they do………..……………………………15 Highlights of Doing Business Index 2011 reflecting positive developments…………..……………………..21

Figures

World government debt………………………………………………………………….……………………...…..6 Global distribution of net government debt……………………………………………..…………………………6

Foreign exchange reserves held by emerging markets………………………….……………………………...7 Foreign assets and liabilities……………………………………………………………..…………………………8 Current account imbalances……………………………………………………………………..…………………8

Global distribution of GDP……………………………………………………………………..…………………..10

Maps

Financial and economic hotspots around the world, 2010 and Q 1 2011………………………………………4 World Wealth Levels 2011………………………………………………………………….……………………..12

Graphs

Economic Intelligence Unit‘s growth engines…………………..…………………………….…………………10 Global middle-class spending.………………………………………….…………..….....………………………11

Boxes

Three major areas of regulatory reforms……………..………………………………….………………………13

Illustrations

Three keys and twelve pillars of competitiveness…………………….……..………………….……………….5 Three drivers of growth………………………………………………..…………………….……………………...5

Dollarization of opportunities in emerging-market cities………………………….………….…………………12 Six imperatives for capturing growth opportunity presented by emerging-market cities…….…………..…13 Nine areas of regulatory reforms….………………..……………………………………………..……………...13

Cycle of nine social and economic evils………………………………………………………….……………...18 Five-point Agenda for proposed Entrepreneurial Initiative……..………………………….…………………..20


INTRODUCTION:

Local growth of and expansion in a business enterprise motivates a businessman, as an entrepreneur, to

come up with an innovative overseas business expansion plan that requires internal and / or external

financing. The companies in country focused pioneering and local competitive business cycles remain

confined to local / a single country market. Retentive business cycle encourages ambitious companies /

entrepreneurs to start thinking and planning for crossing the borders and entering into competition in

regional and global markets. However an extremely powerful innovative pioneering initiative breaks the

barriers of boundaries and local competitive / retentive business cycles to directly catapult a local brand

into a transnational brand in international markets, such as, Microsoft Windows, Apple appliances, Yahoo,

Face Book, Google, Twitter, 800 CC Suzuki cars and now potentially Tata‘s Nano etc. etc. A country‘s

economic development and growth is nothing but the cumulative growth and expansion of its

manufacturing, agriculture and service sectors.

The ―economicians‖ have divided the countries / markets into following three, widely used and accepted

but controversial, categories and two sub categories based on income thresholds for establishing stages

of development: Under-developed, Developing and Developed. The transitory sub-categories fall between

the first and second and the second and third categories respectively upgrading consequently the

countries / markets from under-developed to developing and developing to developed countries / markets

as illustrated below:

TABLE 1: INCOME THRESHOLDS FOR ESTABLISHING STAGES OF DEVELOPMENT STAGE OF DEVELOPMENT GDP PER CAPITA (IN US$) Stage 1: Factor Driven > 2000 Transition from stage 1 to stage 2 2000 – 3000 Stage 2: Efficiency Driven 3000 – 9000 Transition from stage 2 to stage 3 9000 – 17000

Stage 3: Innovation Driven > 17000

SOURCE: WORLD ECONOM IC FORUM – THE GLOBAL C OMPETITIVENESS REPORT 2010-2011

Lynge Nielson in his working paper, ―Classifications of Countries Based on Their Level of Development:

How it is Done and How it Could be Done?‖ has questioned the system developed by UNDP, the World

Bank and the IMF arguing that their ―…existing taxonomies suffer from lack of clarity with regard to how

they distinguish among country groupings. The World Bank does not explain why the threshold between

developed and developing countries is a per capita income level of US$6,000 in 1987-prices and the

UNDP does not provide any rationale for why the rat io of developed and developing countries is one to

three. As for the IMF‘s classification system, it is not clear what threshold is used.‖ He proposes ―an

alternative transparent methodology where data—rather than judgment or ad hoc rules—determine the

thresholds. In the dichotomous version of this system, the threshold between developing and developed

countries—pitched at the average development outcome—lies well below existing thresholds used by

international organizations.‖ He proposes the replacement of dichotomous version with trichotomous

version arguing, ―…the group of higher development countries is broadly equal to the group of developed


countries in existing systems and the two lower groups provide for the distinction among developing

countries that all three institutions find warranted. The taxonomy can be implemented using a variety of

development proxies. Multivariate proxies—such as the UNDP‘s HDI or a lifetime income measure—can

easily be incorporated into this framework.‖ Markus Jaeger of Deutsche Bank Research in his report

captioned, ―The Great Risk Shift – or why it may be the time to rethink the developed-/emerging-markets

distinction,‖ has also demanded, though in assessment of sovereign default risk context, justification for

―…the fact that until very recently Greece and China carried pretty much the same long -term foreign

currency ratings. It looks odd that Greece with very limited macroeconomic flexibility due to EMU

membership and a public debt burden exceeding 100% of GDP should be rated at the same level as

China whose public debt amounts to a mere 25% of GDP and whose FX reserves exceed 45% of GDP.‖

MAP 1: FINANCIAL AND ECONOMIC HOT SPOTS AROUND THE WORLD, 2010 AND Q1 2011

SOURCE: Capgemini Analysis 2011

He has raised another point regarding emerging market credit metrics and qualitative improvement in

macroeconomic management. He argues ―… the distinction between Emerging Market-Developed market

obscures more than it enlightens. When the world‘s major economies were the largest ec onomies with

the highest degree of financial stability, the strongest external financial position (at least vis -à-vis less

developed countries) and the highest per capita incomes, this distinction may have made sense. But

following what may in the future be recalled as the ‗great risk shift‘ regarding ‗developed‘ and ‗emerging

economies‘, it may be time to re-think old labels and traditional distinctions – and established views of

economic and financial risk.‖


THE KEYS TO EMERGING MARKET’S FUTURE GROWTH

The following 4 pillars of factor-driven economies, six pillars of efficiency-driven economies and two pillars

of innovation-driven economies are the keys to and areas of emerging market‘s future growth:

ILLUSTRATION 1: THREE KEYS AND 12 PILLARS OF COMPETITIVENES

SOURC E: WORLD ECON OMIC FORUM – THE GLOBAL COMP ETITIVEN ESS REP ORT 2010-2011

A cursory look at 12 pillars of competitiveness and 3 keys indicates that the story of development and

growth begins with institutional excellence and efficient infrastructure networks / linkages and takes off in

real sense with innovation. Institutions, infrastructure and innovation with support and use of other pillars

trigger national and transnational market expansion.

Another equally important growth measure is Agility Emerging Markets Logistic Index 2011 that has been

built up through three sub-indices: ‗The Market Size and Growth Attractiveness‘; ‗Market Compatibility‘;

and ‗Connectedness‘. Sumit Dora, Sven Smit and Patrick Vigguerie have ―disaggregated growth,‖ in

McKinsey Quarterly‘s strategy analysis Drawing a New Road Map for Growth, ―into three drivers: port folio

momentum, or the market growth of the segments in a company‘s portfolio; M&A; and market share

gains.‖ They conclude: ―…companies out -performing their peers on two or three of these drivers grow

faster and achieve better returns than those that outperform on just one.‖

ILLUSTRATION 2: THREE DRIVERS OF GROWTH

Factor-Driven Economies

Institutions

Infrastructure

Macroeconomic environment

Health and primary education

Efficiency-Driven Economies

Higher education and training

Goods market efficiency

Labor market efficieny

Fianancial market development

Technological readiness

Market size

Innovation-Driven Economies

Business sophistication

Innovation

1: Resilience

Multi-faceted growers have withstood the test of the f inancial crisis and the economic downturn---

and continued to outperform

2: Consistant Growth

Companies f rom emerging markets are outgrowing competitors f rom developed ones at a startling pace

3: Expanding Market Share

The smallest companies, with revenues of less than $1 billion, are growing by increasing their market share to a much greater extent than larger

companies are.


They substantiate their conclusions with the following data.

TABLE 2: ACROSS THE BOARD EMERGING-MARKET COMPANIES GROW FASTER THAT THOSE FROM DEVELOPED ECONOMIES

Revenue growth rates segmented by geographic market*

Compound annual growth rate (CAGR)

By Location of Company Headquarters

Overall Growth

Growth in Home Market

Growth in Developed Market (for developed, other than home)

Growth in Emerging Markets (for emerging markets other than home)

Emerging Market Companies

23.9%

17.9%

22.4%

30.7%

Developed Market Companies

10.7%

7.5%

11.7%

12.6%

Growth Rate Advantage in Emerging Markets

13.2%

10.4%

10.7%

18.1%

*Based on growth-decomposition analysis of 2229 ma rket segments for 720 companies, spanning a number of time frames between 1999 and 2008

SOURCE: McKinsey Quarterly – “Drawing a new road map for growth.” April 2011

The growth rate advantage in emerging market economies is a planned outcome of emerging market

credit metrics and qualitative improvement in macroeconomic management , ―that,‖ according to Markus Jaeger ―…the agencies have insufficiently taken into account.‖ Substantiating his argument he explains ―…a typical, top-tier EM today has ‗excess‘ FX reserves and does not suffer anymore from ‗foreign

currency mismatches‘, which were at the epicenter of virtually every EM crisis of the past 15 years. Most emerging markets are also net external creditors. This has allowed the EM to overcome the ‗fear of floating‘ and adopt more flexible exchange rate arrangements, making them far less vulnerable to

balance-of-payments shocks. Meanwhile, the EM that do maintain rigid exchange rate regimes have more than sufficient FX reserves to back them up (e.g. China). The EM, by and large, have also strengthened their commitment to public debt sustainability – for the most part, they already have low

public debt ratios. Last but not least, many EM have independent central banks, which has instilled greater confidence in economic stability and sharply diminished traditional concerns about ―fiscal dominance‖.

___________________________________________________________________________________ FIGURE 1: WORLD GOVERNMENT DEBT

Aggregate Debt (in trillion of US dollars) Rate of Aggregate Debt to Aggregate GDP (in %)

DATA SOURCES: IMF's Fiscal Monitor, International Financial Statistics and World Economic Outlook

Notes: This f igure shows the aggregate level of general government debt (upper panel) and the ratio of this variable to aggregate world GDP (low er panel), with all variables converted to U.S. dollars at market exchange rates. In the upper panel, the

data for advanced and emerging market economies add up to the w orld aggregates. In the low er panel, aggregate debt is expressed as a ratio of aggregate GDP for the respective group of countries. Net debt is used except for the following countries that report only gross debt data: Advanced Economies -- Czech Republic, Greece, Hong Kong SAR, Singapore, Slovak Republic

and Slovenia; Emerging Market Economies -- Argentina, China, India, Indonesia, Malaysia, Pakistan, Peru, Philippines, Romania, Russia and Thailand.


FIGURE 2: GLOBAL DISTRIBUTION OF NET GOVERNMENT DEBT

DATA SOURCES: IMF's Fiscal Monitor, International Financial Statistics and World Economic Outlook

NOTES: Other AE denotes other advanced economies and EM stands for emerging markets. Net debt is used except for the following countries that report only gross debt data: Advanced Economies -- Czech Republic, Greece, Hong Kong

SAR, Singapore, Slovak Republic and Slovenia; Emerging Market Economies -- Argentina, China, India, Indonesia, Malaysia, Pakistan, Peru, Philippines, Romania, Russia and Thailand. ________________________________________________________________________________________________________

During ―the past twenty years, especially the post-2000 era,‖ according to Alan M. Tay lor in his CFR

report captioned The Future of International Liquidity and the Role of China, ―…demand for reserves has

seen an explosive growth. Most of this growth has taken the form of demand for international reserves

denominated in U. S. dollars, and most has occurred in emerging markets. ‖ ―External liabilities‖ of

emerging markets according to Eswar Prasad ―are no longer dominated by foreign-currency debt and

have shifted sharply towards direct investment and portfolio equity. Their external assets are

increasingly concentrated in foreign exchange reserves. Given the trajectories of reserve currency

FIGURE 3: FOREIGN EXCHANGE RESERVES HELD BY EMERGING MARKETS

A: Total Foreign Exchange Reserves (trillion USD) B: Currency Composition

C: Share of Reserves for Which Currency Composition is Known

DATA SOURCES: IMF COFER Database, June 30, 2011; The People’s Bank of China


economic areas, the long-term risk on emerging markets‘ external balance sheets is shifting to the asset

side.‖ Going into further details Eswar Prasad explains, ―Among the emerging markets, China has a

large net asset position, Brazil has a significant net liability position and India has a small net liability

position. Large net liability positions are no longer the norm for emerging markets. More importantly,

there has been a dramatic shift in the external liability structure of emerging markets during the past

decade. Liabilities used to be dominated by debt but FDI and port folio equity have now become far more

important. These liabilities account for 70 percent of external liabilities for Brazil and China, 51 percent

for India and 56 percent for Russia (77 percent for South Africa). What is even more interesting is that,

on the asset side, foreign exchange reserves account for a large share of total external assets —47

percent for Brazil, 69 percent for China, 68 percent for India and 37 percent for Russia (17 percent for

South Africa).‖

―Currency depreciations‖ another area of serious concern according to Eswar Prasad‘s assessment ―are

far less of a risk for emerging markets now than in the debt dominated era. First, the effects of such

currency devaluations are likely to be small since emerging markets no longer have large stocks of

foreign currency-denominated external debt, either sovereign or corporate. The devastating balance

sheet effects that brought some Asian economies to their knees during the Asian financial crisis of 1997-

98 are less of a concern. Indeed, with many emerging markets now able to issue international debt

denominated in their own currencies, even debt is no longer as fearsome as it once was.

Elaborating that further Alan M. Taylor maintains, ―…since 1990, the ratio of reserves to GDP in the

advanced countries has held steady at about 4 percent, but the emerging markets‘ reserve ratio has

more than quintupled, going from 4 percent to more than 20% of GDP. Since 1990, global holding of

international reserve assets have risen fully sixty-fold, from $200 billion to roughly $12 trillion.‖ He

deduces from the trend, ―…reserve accumulation seems to have been motivated by a desire for

insurance against capital flight in a world of semi -fixed exchange rates.

In particular, three main factors—financial openness, domestic financial depth (M2/GDP), and the rigidity

of the exchange rate—have conspired to drive up demand for reserves relative to GDP. He concludes

that there is little sign that emerging economies will give up their ‗ fear of floating‘ and embrace flexible

exchange rates.' In his working paper ―Role Reversal in Global Finance,‖ Eswar S. Parsad also

maintains, ―…emerging markets are looking for more insurance against balance of payments crises even

as adverse debt dynamics in advanced economies increase the potential costs of self-insurance through

reserve accumulation.‖

The liabilities of emerging markets have come to be dominated by FDI and portfolio equity flows, while

their assets are increasingly in the form of foreign exchange reserves. In tandem with the uphill flows of

capital characterized in other studies, this implies a sharp role reversal between emerging markets and

advanced economies. Emerging markets have not only become net exporters of capital to the advanced

economies but have also substantially reduced the risk emanating from the structure of their external

liabilities even as advanced economies‘ external liabilities continue to be dominated by debt .


FIGURE 4: Foreign Asse ts and Liabilities

Source: Robert C. Feenstra and Alan M. Taylor, Inter- national Economics (New York: Worth Publishers, 2007), p. 411

FIGURE 5: Current Account Imbalances

Source: IMF, RBNZ calculations

The emerging economies have survived the Great Recession in rem arkable shape and headed off on a

more secure recovery track, which no one could have expected beforehand. Their gross asset to GDP

ratios are now far above anything seen during recorded history. Moreover, the process of cross -border

financial integration is potentially subject to a worrisome feedback. The larger these balance sheet

connections grow, the more vulnerable emerging economies are to a funding crisis. That vulnerability

drives emerging economies to accumulate more reserves, so expanding cross -border balance-sheet

linkages further and setting off the next twist in the cycle. ―In light of the fiscal challenges,‖ Sebastian

Becker of Deutsche Bank Research seems hopeful in his paper, ‗Public Debt in 2020: A sustainability

Analysis for DM and EM countries,‘ ―many DM countries may introduce new or more effective national

debt limits, similar to those put in place by some EMs.‖

BUSINESS PROSPECTS AND GROWTH POTENTIAL

It is now a known fact that the growth advantage in emerging markets , if other things remain the same, is

expected to translate into 62% of global growth. Multinationals expect about 70 percent of the world‘s

growth over the next few years to come from emerging markets, with 40 percent emanating from just two

countries: China and India. According to Bloomberg Businessweek ‘s 2010 ranking of the ―50 Most

Innovative Companies,‖ 15 are Asian and, for the first time, 11 are from emerging economies.

TABLE 3: ANNUAL WEALTH GROWTH RATES BY COUNTRY, 2000-09 AND 2010-11

2010-2011 High (>10%)

2010-2011 Medium (5%-10%)

2010-2011 Low (>5%)

002-2009 High (>10%)

Australia, Brazil, Chile, Colombia, India, Indonesia, Malaysia, South Africa

Czech Republic, Poland

Bulgaria, France, Hungary, Romania, Russia, Turkey

2000-2009 Medium (5%-10%)

Canada, Korea, Mexico, Philippines, Sw eden, Sw itzerland, Thailand

Egypt

Austria, Belgium, Germany, Greece, Italy, Netherland,

Portugal, UK

2000-2009

Low (>5%)

Argentina, Hong Kong, Japan, Saudi

Arabia

Taiwan, USA

SOURCE: JAMES DAVIES, RODRIGO LLUBERAS AND ANTHONY SHORROCKS, CREDIT SUISSE WEALTH DATABOOK 2011


GRAPH 1: ECONOMIST INTELLIGENCE UNIT’S GROWTH ENGINES

SOURCE: Economist Intelligence Unit

FIGURE 6: GLOBAL DISTRIBUTION OF GDP

DATA SOURCES: IMF's Fiscal Monitor, International Financial Statistics and World Economic Outlook NOTES: Other AE denotes other advanced economies and EM stands for emerging markets. GDP is measured at current prices and converted to a common currency at market exchange rates.

If this growth rate remains unchallenged by natural and man-made circumstances than according to an

―estimate,‖ by Wayne G. Borchardt, Jill S. Dailey and Paul F. Nunes published in 3rd

issue of Accenture

Outlook in 2011: ―New global middle class will rise from approximately 1.8 billion househ olds in 2009 to

nearly 4.9 billion in 2030.‖ This new middle class at present has annual household incomes between

$5000 and $30,000 already representing ―…a surging mass market all by themselves, and these newly

empowered consumers shop eagerly for stylish and high quality goods.‖ The following graph from The

Emerging Middle Class in Developing Countries in a report by OECD Development Centre indicates that

in developing countries by 2030, global middle-class spending is expected to more than double,

reaching more than $55 billion---and over half of that spending will come from Asia Pacific. Over the next

five years,


GRAPH 2: GLOBAL MIDDLE-CLASS SPENDING ($ million)

Source: The Emerging Middle Class in Developing Countries, OECD Development Centre, 2010

Wealth is one of the pillars of economic system - driving economic growth, the accumulation of capital,

trends in consumption, asset prices and specific industries such as pharmaceutical and banking. Credit

Suisse Research Institute estimates that global household wealth totaled USD 231 trillion in mid-2011,

equivalent to USD 51,000 per adult. From the viewpoint of their estimate, the financial crisis would

appear to be more than a modest setback in a benign decade for household wealth accumulation, which

saw aggregate wealth double from USD 113 trillion recorded for 2000. Part of the rise may be attributed

to the rise in the adult population from 3.6 billion to 4.5 billion. The depreciation of the dollar against most

major currencies has also had a significant impact on dollar-denominated values. Nevertheless, since

the start of the millennium, net worth per adult had still risen by 67% as of mid-2011 when measured in

current dollars and by 36 percent when exchange rates are held constant.

Credit Suisse Research Institute expects to see a big improvement in the position of emerging market

economies. Wealth in both China and Africa as whole is projected to rise by over 90%, but India and

Brazil are forecast to do even better, with personal wealth more than d oubling by 2016. The case of

India is particularly striking. With total wealth of USD 4.1 trillion in 2011, India‘s household wealth is

comparable to the USA in 1916. But during the next five years India is projected to gain as much wealth

as the USA achieved over the course of thirty years beginning in 1916. This is due to increase in wealth

per adult accompanied by a significant rise in the adult population. The case of Brazil is also noteworthy.

With household wealth expected to reach USD 9.2 trillion by 2016 – a level comparable to the USA in

1948 – the rise in wealth in the next five years should correspond to the gain in the USA over the 23-

year period from 1925 to 1948. Total household wealth in China is currently USD 20.1 trillion, equivalent

to that recorded for the USA in 1968. If recent trend continue, by 2016 China could reach the wealth

level that USA achieved in 1990 – a jump of 22 US years in just five years.


MAP 2: WORLD WEALTH LEVELS 2011

Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Wealth Databook 2011

IMPORTANCE OF EMERGING MARKET CITIES

The Boston Consulting Group in its report, Winning in Emerging -Market Cities – A guide to the World‘s Largest Growth Opportunities, presents the following population, infrastructure, housing and

consumption scenario: ___________________________________________________________________________________ ILLUSTRATION 3: DOLLARIZATION OF OPPORTUNITIES IN EMERGING-MARKET CITIES

CONSUMPTION Emerging market ci ties will account for 30 percent of global private consumption by

2015 and private consumption is growing at a rate of 11 percent per year.

___________________________________________________________________________________ DATA SOURCE: WINNING IN EMERGING MARKET CITIES – A GUIDE TO THE WORLD’S LARGEST GROWTH OPPORTUNITIES, BOSTON CONSULTING GROUP, 2008

POPULATION

One-third of the world’s population---2.6 billion people---live in mega cities, cluster capitals, specialized hubs and horizon towns which are located in the emerging markets. By 2030, the number of emerging-market urban dwellers will increase by another 1.3 billion. In contrast, cities in developed markets will add only 100 million new residents in the next 20 years.

INFRASTRUCTURE

The infrastructure investment in these cities is forecast at $30 trillion to $40 trillion cumulatively over the next 20 years. The shortfall between needed infrastructure in emerging-market cities and available public funds is estimated to be in the neighborhood of $11 trillion to $14 trillion through 2030

HOUSING

Emerging markets will require an estimated $13.8 trillion in housing investments from 2010 to 2030, with a huge portion of the demand coming from Brazil, China, India and Mexico


___________________________________________________________________________________

ILLUSTRATION 4: SIX IMPERATIVES FOR CAPTURING OPPORTUNITY PRESENTED BY EMERGING-MARKET CITIES

___________________________________________________________________________________ SOURCE: WINNING IN EMERGING MARKET CITIES – A GUIDE TO THE WORLD’S LARGEST GROWTH OPPORTUNITIES, BOSTON CONSULTING GROUP, 2008

STARTING AND DOING BUSINESS

Regionally and globally resilient growth indicators and carefully assessed growth potential, therefore,

attract the investors and before starting overseas business operations they cautiously weigh the merits

and demerits of the available options in terms of business regulatory regimes in the countries under

consideration. In their co-publication, 8th

Annual Report Doing Business Index 2011: Making a

Difference for Entrepreneurs, the World Bank and International Finance Corporation have ranked

economies on the basis of the following 9 areas of regulation:

ILLUSTRATION 5: NINE AREAS OF BUSINESS REGULATION

Global financial and economic crisis has necessitated the emphasis on business regulatory reforms.

―Through its indicators,‖ according to Janamitra Devan, Vice President and Head of Network, Financial

and Private Sector Development, The World Bank and IFC, ―Doing Business has tracked changes to

business regulation around the world, recording more than 1,500 important improvements since 2004.‖

It is comparatively much easier to start business in OECD economies than Sub-Saharan Africa and

South Asia where starting business and property protections are weakest. In Finland and Singapore,

efficient e-government systems have left less room for improvement in property law protection by law.

Long-term judicial or insolvency reforms, as in Italy, shy away the cautious potential investors.

1 Define growth plans on the

basis of specific target cities---the portfolio of emerging-market cities to be served now and in the future

2 Specify the necessary go-to-

market models to enable profitable expansion into more and smaller cities

3 Develop true expertise and

insight regarding consumer needs across a range of city environments in emerging markets

4 Forge a game plan to profit

from infrastructure boom

5 Develop talent and

organization plans at a city-by-city level over a five-to-ten-year time frame

6 Upgrade capabilities for

managing complexity and risk

Starting a Business

Dealing with

construction permits

Registering property

Getting credit

Trading across

borders

Enforcing contracts

Paying taxes

Protecting investors

Closing a business


BOX 1: THREE MAJOR AREAS OF REFORMS FOR STARTING BUSINESS, GETTING CREDIT AND OBTAINING ELECTRICITY CONNECTION

DATA SOURCE: Doing Business Index 2011, World Bank/IFC

Since 1990s Australia, Singapore and the United States hold public servants and judiciary accountable

through performance-based systems. Case disposal rates in Malaysia have improved after the

introduction of performance index for judges in 2009.

The detailed background research on size and growth prospects of economies / markets, number of

consumers and depth of their pockets, business environment and gradually but impressively improving

regulatory regimes provide a base for innovative national and transnational business growth and

TABLE 4: GOOD PRACTICES AROUND THE WORLD IN MAKING IT EASY TO START A BUSINESS

PRACTICE

ECONOMIES*

EXAMPLES

Putting Procedures online

105

Cape Verde, FYR Macedonia, Maldives, New Zealand, Puerto Rico, Saudi Arabia, Singapore

Having no minimum capital requirement

80

Bangladesh, Belarus, Canada, Colombia, Mauritius, Tunisia, Vietnam

Having a one-stop shop

72

Afghanistan, Azerbaijan, Italy, Jordan, Peru, Philippines, Riwanda

*Among 183 countries surveyed Source: Doing Business Database, World Bank (2009f)

•In the past year about 66% of developing economies made it easier to do business, up from only 34% of this group 6 years before. Compelling results are starting to show, as illustrated by Rwanda and Ghana, and these results have inspired others. Exporting, for example, requires 11 documents in the Republic of Congo but only 2 in France. Starting a business still costs 18 times as much in Sub-Saharan Africa as in OECD high-income economies (relative to income per capita). Many businesses in developing economies might simply opt out and remain in the informal sector. There they lack access to formal business credit and markets, and their employees receive fewer benefits and no protections. Globally, 1.8 billion people are estimated to be employed in the informal sector, more than the 1.2 billion in the formal sector.

Starting Business

•Today only 1.3% of adults in low-income economies are covered by a credit bureau. Many micro, small and medium size enterprises, which typically have 95% of their assets in movable property rather than real estate, cannot use those assets to raise funds to expand their business. But this is not so everywhere. While only 35% of Sub-Saharan African economies have laws encouraging the use of all types of assets as collateral, 71% of East Asian and Pacific and 68% of OECD high-income economies do. Seventy low and lower-middle-income economies lack centralized collateral registries that tell creditors whether assets are already subject to the security right of another creditor. All this presents an opportunity for changes that can promote the growth of firms and employment.

Getting Credit

•According to World Bank surveys of businesses, managers in 108 economies consider the availability and reliability of electricity to be the second most important constraint to their business activity, after access to finance.

•The new data allow objective comparison of the procedures, time and cost to obtain a new electricity connection across a wide range of economies. Some, such as Germany, Iceland and Thailand, perform well: a business with moderate electricity demand can get a connection in 40 days or less. But in the Czech Republic it can take 279 days, in Ukraine 309 and in the Kyrgyz Republic 337. In 100 of 176 economies connection costs are insufficiently transparent.

•These and other findings suggest that many governments and regulators could ease a critical bottleneck for businesses by encouraging reforms around the electricity connection process. rdination could be a start.

Obtaining Electricity Connection


expansion initiative and to deliver the jobs, goods, services, consumer choices and general prosperity

that are expected from ethical innovative democratic capitalism. Here I desire a special mention of

Business Ethics, a manual for managing a responsible business enterprise in emerging market

economies published by Good Governance Program of U. S. Department of Commerce, International

Trade Administration in 2004. The report expects businesses around the world, ―to design and

implement business ethics programs to address the legal, ethical, social responsibility, and

environmental issues they face. By addressing these issues in a systematic way, enterprises can

improve their own business performance, expand opportunities for growth, and contribute to the

development of social capital in their markets. They can realize specific business benefits, such as:

enhanced reputations and good will, reduced risks and costs, protection from their own employees and

agents, stronger competitive positions, expanded access to capital, credit, and foreign investment,

increased profits, sustained long-term growth, international respect for enterprises and emerging

markets.‖

The manual builds on three essential concepts: responsible business conduct, res ponsible business

enterprise and business ethics program based on business and professional ethics, organizational

ethics, corporate social responsibility and corporate governance.

TABLE 5: WHO MADE STARTING A BUSINESS EASIER IN 2009/10—AND WHAT DID THEY DO?

Feature

Economies

Some Highlights

Simplified registration formalities (seal, publication, notarization, inspection, other requirements)

Bangladesh, Brunei Darussalam, Chile, DR of Congo, Croatia, Grenada, Guyana, Haiti, India, Kazakhstan, Kenya, Kyrgyz Republic, Lithuania, Luxemburg, Panama, Syrian AR, Tajikistan, Zimbabwe

Haiti, before the earthquake, eliminated the requirement that the office of the president or prime minister authorize publication of company statutes in the official gazette. Entrepreneurs can now publish them directly in the gazette. This cut start-up time by 90 days. Bangladesh replaced the requirement for buying a physical stamp with payment of stamp fees at a designated bank. It also enhanced its electronic registration system. Start-up time fell by 25 days.

Introduced or improved online procedures

Brazil, Brunei Darussalam, Chile, Croatia, Ecuador, Germany, India, Indonesia, Islamic Republic of Iran, Italy, Malaysia, Mexico, Peru

Croatia made it possible for limited liability companies to file registration applications electronically through the notary public. This cut 1 procedure and 15 days from the start-up process.

Cut or simplified post registration procedures (tax registration, social security registration, licensing)

Brazil, Cape Verde, Arab Republic of Egypt, Montenegro, Mozambique, Peru, Philippines, Taiwan (China)

The Philippines introduced a one-stop shop for the municipal license and cut the inspection by the mayor’s office, reducing start-up time by 15 days.

Created or improved one-stop shop

Cameroon, FYR Macedonia, Mexico, Peru, Slovenia, Tajikistan, Vietnam

Peru created an online one-stop shop allowing an entrepreneur to receive confirmation of business registration and the tax registration number at the same time. This cut 3 procedures and 14 days from start-up.

Abolished or reduced minimum capital requirement

Bulgaria, Denmark, Kazakhstan, Sweden, Syrian Arab Republic, Ukraine, Zambia

Zambia eliminated its minimum capital requirement. Syria reduced its requirement by two thirds.

SOURCE: Doing Business Database


INNOVATING THE INNOVATION:

Like 12 Pillars ―determinants‖ used by World Economic Forum‘s Global Competitiveness Report 2011,

Global Innovation Index 2011‘s ―…Innovation Input Sub-Index gauges elements of the national economy

that enable innovative activities, grouped in five pillars: (1) Institutions, (2) Human capital and research,

(3) Infrastructure, (4) Market sophistication, and (5) Business sophistication (almost same as in WEF‘s

Global Competitiveness Report 2011). The Innovation Output Sub-Index captures actual evidence of

innovation outputs, divided in two pillars: (6) Scientific outputs and (7) Creative outputs. ‖ I am sure that

everyone in this conference has thoroughly studied the GII 2011. Without going into details, therefore, I

just want to share an interesting observation of the authors of GII 2011 with you that convincingly points

out that, ―…innovations are no longer restricted to R&D laboratories and to published scientific papers;

these days, knowledge production is centered mostly around the firm where research is increasingly

context-driven, problem-focused, application-oriented, and interdisciplinary. New or significantly improved

product, processes and methods in the provision of services; in business and organizational models; in

low-tech industries; through creative imitation and technological catch-up; at the public level or at the level

of society, all constitute innovations.‖

―Global manufacturers,‖ according to Deloitte‘s report Innovation in Emerging Markets - strategies for

achieving commercial success, ―are focused intently on the opportunities to source, develop,

manufacture, sell, and service their products in emerging markets. But long-term success will take far

more than simply making minor adjustments to existing products, lowering prices, or replicating existing

sales channels. Instead, a new set of competencies and organizational structures will be required to

generate a continuing stream of innovative products and services tailored to the needs of consumers

and industrial buyers in emerging markets.‖ Deloitte‘s report has listed the following five challenges:

rethinking value propositions, globalizing research, tailoring talent management , mastering the

complexity of global value chains and managing risks. Accenture‘s report New paths to growth – The

Age of Aggregation maintains that technological developments are driving three shifts in the competitive

landscape that are ushering in the New Age of Aggregation: converging business activities and players

are blurring industry boundaries, rising incomes and the desire for affordable luxury are melding to

create a new global middle class and Savvy new emerging -market players are redrawing the competit ive

map. Authors of the report suggest ―…the companies must first redefine their business strategies to

include the new markets and segments. They must then redraw their product/market matrix with an eye

toward refining existing offerings and creating new ones, and work out the issues that surround

expanded retail channels, logistics requirements and supply chain management considerations.‖ They

further propose that ―Companies must also redraw positioning maps to take into account the entry of

new competitors from emerging markets and other industries and to incorporate the newly expanded set

of customer values and demands that are surfacing as companies bring scattered market segments

together.‖ Another aspect of the challenges ahead is pointed out by International Labour Organization /

International Institute for Labour Studies in one of the Studies on Growth with Equity titled Making


Recovery Sustainable – Lessons from Country Innovations. ―To sustain recovery,‖ study cautions,

―several emerging and developing countries need to consolidate the gains made in boosting domestic

sources of growth in order to compensate for weaker export markets in advanced economies. Well -

designed employment and social policies can be instrumental in this respect. There is no one-size-fits-all

strategy for achieving this. Indeed, the obstacles to domestic growth vary across countries, requiring a

different mix of infrastructure investment, wage and social protection policies and rural development

initiatives, including facilitating enterprise creation and expansion.‖ The study refers ―to recent events in

certain countries in the Middle East and North African region that have highlighted the centrality of

employment and balanced income developments for social cohesion – itself a key ingredient of

sustainable growth. Empirical evidence shows that unemployment and inefficient income inequalities are

the principal factors explaining social unrest. The issue deserves urgent attention, especially since the

trend rise in food prices is likely to exacerbate income inequalities.‖

ENTREPRENEURSHIP AND FINANCING

In 2010, Global Entrepreneurship Monitor (GEM) surveyed 175,000 people in 59 economies covering

over 52% of the world‘s population and 84% of the world‘s GDP. ―Some 110 million people between 18

and 64 years old,‖ according to the findings of the survey, ―were actively engaged in starting a business.

Another 140 million were running new businesses they started less than 3⅟2 years earlier. Taken

together, some 250 million were involved in what GEM defines as early stage entrepreneurial activity.

Out of these individuals an estimated 63 million people expected to hire at least five employees over the

next five years, and 27 million of these individuals anticipate hiring twenty or more employees in five

years. This illustrates the contribution of entrepreneurship to job growth across the globe.‖

Entrepreneurship and financing are two areas that can be looked at for employment creation and

balanced income developments for social cohesion. Governments, in present global economic and fiscal

scenarios, can not go beyond facilitating policy support. There are two specific initiatives that need to be

focused by entrepreneurs and financial institutions: creation of institutions for work integrated learning

and subsequent employment creation in professional career corridors and re-packaging and heavily

advertised global introduction of financial products for self-employment avenues. First is successfully

done in Germany with excellent results and being attempted in dozens of other countries. The second is

scarcely available and rarely advertised. Investment in these two areas will equip the entrepreneurs with

the quality human resource that is an essential pre-requisite for success of and expansion in any

business any where in the world. But prior to that, it is necessary, first of all to address a vicious Cycle of

Nine Social and Economic Evils: Illiteracy and Ignorance; Unemployment; Poverty; Deprivation; Disease;

Crime and Corruption; Injustice and Violation of Human Rights; Political, Religious and Ethnic

Prejudices; Sectarianism and Terrorism.

If one carefully looks at the formation of the cycle of social and economic evils he will note that the last

seven social and economic evils are nothing but the direct outcome of the first two evils, i.e. illiteracy /

ignorance and unemployment. These social and economic evils are inter-connected and that connection


needs to be clearly understood before any remedial plan or process is initiated.

ILLUSTRATION 6: CYCLE OF NINE SOCIAL AND ECONOMIC EVILS

Why do I want the entrepreneurs and financial sector to focus their attention on the first two rings of the

cycle of social and economic evils? Is there room for any doubt that the first casualty of social unrest is

always economic activity? When crime and corruption, injustice and violation of human rights, political,

ethnic and religious prejudices and sectarianism and terrorism paralyze cities and countries, the first

casualty of that unrest is always business activity resulting in daily business losses of hundreds of

millions of dollars per hour and per day in both developed and developing countries. Who suffers the

most? The business community suffers the most excluding those who sell arms and ammunition and

also those who provide financial back up for such activities. If you look at the rarely discussed genuine

reasons for present economic crisis you will surely see the same evils working behind the scene. The

situation in and around Iraq, the ongoing war on terror in and around Afghanistan, the unrest and armed

conflicts across Africa, the real and artificial political upheaval in the middle-east are all directly or

indirectly influencing the supply and prices of the commodities, products and services. This situation,

wars, unrest and upheavals or engineered changes in political landscapes all are caused by the illiteracy

/ ignorance and unemployment and other evils that follow the two. You may also add the inward looking

and self-centered educated strategists and policy makers into the list of culprits at the delivering end who

are taking undue advantage of the illiteracy / ignorance and unemployment of socially and economically

Cycle of Nine Social and

Economic Evils

Illiteracy and Ignorance

Unemployment

Poverty

Deprivation

Disease Crime and Corruption

Injustice and Violation of Human Rights

Political, Religious and Ethnic Prejudices

Sectarianism and Terrorism


deprived people who are at the receiving end across the globe. Consequently, creating artificial hurdles

in the flow of natural and human resources and making them expansive to the extent that a large

number of people around the world are economically pushed below poverty line every day. There is a

very important aspect of an emerging business survival philosophy that needs to be explored and

seriously discussed further at platforms like these. And that philosophy necessitates the focus on those

―economically (dis)advantaged consumers (too) who (cannot) shop eagerly for stylish and high quality

goods.‖ In this I see a window of opportunity for innovative entrepreneurs to create a range of products,

plan financial packages and show case low-cost services for socially and economically deprived people

by consciously and scientifically addressing social and economic exclusion that is the main reason for

unrest both in the developing and the developed economies. The message is to create room at

considerably low-cost through innovative entrepreneurship and financial assistance for that socially and

economically handicapped / deprived segment of the consumer mix that has the potential to disturb

economic progress, growth and development in emerging markets and geo-politically sensitive resource-

rich economic zones. As a business rule, the entrepreneurs and financial institutions have to make sure

that all market segments are taken into consideration at a planning stage so that the intentionally or

unintentionally excluded segment does not resort to violent agitation at a later stage hindering the

implementation or expected outcome of the strategic business plan in any part of the world. This is

actually what is ignored at present in sensitive economic zones around the globe creating uncertainty

and confusion in entrepreneurial, business and financial circles. How can these uncertainties and

confusion be addressed? The immediate remedial measures that need to be discussed are

rationalization of profit margins, reduction in unrealistic gaps in pay scales and removal of regulatory

flaws. Another area of concern is the urgent need for balancing of consumer and commercial income

and expenses to create room for personal and institutional savings and genuine profit margins. ―The

level of savings,‖ according to 2011 Global Wealth Report, ―is one obvious source of wealth differences,

with increased savings translated into greater aggregate wealth and a higher wealth -income ratio. In

practice it is often difficult to identify the connection. Among G7 countries, the household saving rate

shows substantial heterogeneity, ranging from as little as 2% in Japan to 16% in Italy and 17% in

Germany. During the past 15 years, saving rates decreased in the UK, the USA, Italy, Japan and

Canada, but remained unchanged in France and even rose slightly in Germany.‖ This situation calls for

―provision of more sophisticated financial instruments‖ and ―carefully engineered impact of financial

innovation on debts.‖ The declining saving rate is alarming for economic activity across the globe leading

to flawed economic and business growth projections and disappointing results.

The entrepreneurs need to create an independent powerful apolitical entrepreneurial plat form for

developing a Global Natural and Human Resource Vision and Index as a take-off base for a Global

Entrepreneurial Initiative with the following Five-Point agenda that can be discussed, debated and

reviewed:


ILLUSTRATION 7: PROPOSED FIVE-POINT AGENDA FOR ENTREPRENEURAL PLATFORM

I propose to draw two short-term, mid-term and long-term maps of natural and human resources that are

available and will be available in a given timeline. Based on real potential and actual performance, the

human and natural resource efficiency and deficiency spots have to be marked on the map highlighting

their flow from resource rich to resource poor countries. The proposed map will also indicate the artificial

barriers of any nature in the flow of resources and the cost of barrier to the countries involved.

If something is not done seriously on these lines than I have every reason to believe that economic

unpredictability, uncertainty and crises after crises will make the world economically unviable!

1: Resources

The proper evaluation of the natural and human resource potential of the least developed and the developing countries in general and “failed / fragile countries” in particular

2: Performance Evaluation

A real and unbiased evaluation of the performance of the social and economic indicators to determine the precise extent of their self-reliance and reliance on others

3: Gap

The declaration of a Strategic Plan consisting of workable options for the bilateral, regional and global entrepreneurial cooperation to fill and / or narrow the artificial bridgeable gap between natural and human resource potential and social and economic performance

4: Removal of Barriers

The creation of unhindered channels for the flow of human and natural resources from human and natural resource rich countries to natural and human resource poor countries.

5: Accountability

The mandatory authorization of International Court of Justice to try and punish the rulers, politicians, bureaucrats, top officers of the armed forces and business tycoons who are responsible for the creation and perpetuation of the “Cycles of National, Regional and Global Social and Economic Evils” through “Well-Conceived Structures and Systems of Inhuman Exploitation.”


TABLE 6: HIGHLIGHTS OF DOING BUSINESS INDEX 2011 REFLECTING POSITIVE DEVELOPMENTS

PERIOD

ECONOMIES

REFORMS

NATURE OF REFORMS

June 2009 May 2010

117

216

Making it easier to start and operate a business. Strengthening transparency, property rights and improving the efficiency of commercial dispute resolution and bankruptcy procedures. More than half of those policy changes eased start -up, trade and the payment of taxes

2009/2010

16

---

Facing rising numbers of insolvencies and debt disputes, most of the Eastern

European, Central Asian and the OECD high-income economies have reformed their insolvency regimes, including Belgium, the Czech Republic, Hungary, Japan, the Republic of Korea, Romania, Spain, the United Kingdom and the Baltic States focusing on improving or introducing reorganization procedures to ensure that viable firms can continue operating. Before, it was common for insolvent firms in many economies of Eastern Europe and Central Asia to be liquidated even if they were still viable.

2009-2011

East Asia and Pacific

---

Indonesia, Malaysia and Vietnam took the lead, easing start-up, permitting and property registration for small and medium-size firms and improving credit information sharing. Hong Kong SAR (China), after seeing the number of bankruptcy petitions rise from 10,918 in 2007 to 15,784 in 2009, is working on a new organization procedure.

-----------

Latin America, Caribbean, South Asia and Eastern Europe

25

In Latin America and Caribbean, 23 of the 25 reforms simplified administrative processes. Many did so by introducing online procedures or synchronizing the operations of different agencies through electronic systems. In this way Brazil, Chile, Ecuador and Mexico simplified start-up, Columbia eased construction permitting, and Nicaragua made it easier to trade across borders. In South Asia, where 5 of 8 economies introduced changes (7 in all), India continued improvements to its electronic registration system for new firms by allowing online payment of stamp fees. Across Eastern Europe the implementation of Eastern Union regulati ons encouraging electronic systems triggered such changes as the implementation of electronic systems in Latvia and Lithuania.

2004-2011

140

296

The average time to start a company fell from 49 days to 34, and the average cost from 86% of income per capita to 41%.

2006-2011

Georgia, Rwanda, Belarus, Burkino Faso, Saudi Arabia, Mali, the Kyrgyz Republic, Ghana, Croatia and Kazakhstan

>12

All made the largest strides in making their regulatory environment more favorable to business

2004-2011

China

14

Made it easier to do business, affecting 9 areas covered by Doing Business. In 2005 a new company law reduced what had been one of the world’s highest minimum capital requirements from 1,236% of income per capita to 118%. In 2006 a new credit registry started operating. Today 64% of adults have a credit history. In 2007, after 14 years of consultation, a new property rights law came into effect, offering equal protection to public and private property and expanding the range of assets that can be used as collateral.

2004-2011

India

---

India implemented 18 business regulation reforms in 7 areas. Many focused on technology—implementing electronic business registration, electronic filing for taxes, an electronic collateral registry and online submission of customs forms and payments. Changes also occurred at the sub-national level. In India, as in other large nations, business regulations can vary among states and cities. According to Doing Business in India, 14 of the 17 Indian cities covered in the study implemented changes to ease business startup, construction permitting and property registration between 2006 and 2009.

1980s 2008

Hong Kong SAR (China), Singapore, Denmark, United Kingdom

---

Economies where it is easy for firms to do business often have advanced e-government initiatives. E-government kicked off in the 1980s, and economies with well developed systems continue to improve them. Hong Kong SAR (China) and Singapore turned their one-stop shop for building permits into online systems in 2008. Denmark just introduced a new computerized land registration system. The United Kingdom recently introduced online filing at commercial courts.

DATA SOURCE: Doing Business Index 2011


Bibliography

1: Lynge Nielson, ―Classif ication of countries based on their level of development: How it is done and how it could be done,‖ IMF w orking paper, February 2011

2: Markus Jaeger, ―The Great Risk Shift – or why it may be the time to rethink the developed-/emerging-markets distinction,‖ Deutsche Bank Research, 2010

3: World Economic Forum, Global Competitiveness Report, 2011

4: Agility Emerging Markets Index 2011

5: Sumit Dora, Sven Smit & Patrick Vigguerie, ―Drawing a new road map for growth‖, McKinsey Quarterly, Apr 2011

6: Alan M. Taylor, ―The Future of International Liquidity and the Role of China,‖ Maurice R. Greenberg Center for Geoeconomic

Studies and International Institutions and Global Governance Program, CFR, November 2011

7: Esw ar S. Prasad, Role Reversal in Global Finance, Cornell University, Brookings Institute and NBER, August 2011

8: Sebastian Becker, ―Public Debt in 2020: A Sustainability Analysis for DM and EM Countries,‖ Deutsche Bank Research, March 24, 2010

9: Wayne G.Borchardt, Jill S. Dailey and Paul F. Nunes, ―New paths to growth, The Age of Aggregation,‖ 3 rd issue of Accenture Outlook, 2011

10: The Emerging Middle Class in Developing Countries, OECD Development Centre

11: Credit Suisse Research Institute, 2011 Global Wealth Report, October 2011

12: David Jin, David C. Michael, Paul Foo, Jose Guevara, Ignacio Pena, Andrew Tratz, Sharad Verma, Winning in Emerging-Market Cities – A guide to the World‘s Largest Growth Opportunities, The Boston Consulting Group Inc., September 2010

13: Doing Business 2011, Making a Difference for Entrepreneurs, A co-publication of the World Bank and IFC, 2011

14: Good Governance Program, Business Ethics, A Manual for Managing a Responsible Enterprise in Emerging Market

Economies, U. S. Department of Commerce, International Trade Administration, Washington D. C. 2004

15: Global Innovation Index 2011, INSEAD 2011

16, Deloitte Touche Tohmatsu, ―Innovation in Emerging Markets, Strategies for Achieving Commercial Success,‖ 2006

17: Studies on Growth with Equity, Making Recovery Sustainable – Lessons from Country Innovations, International Labour

Organization / International Institute for Labour Studies, 2011

18: Global Entrepreneurship Monitor, 2010

19: Financial turmoil and global imbalances: the end of Bretton Woods II? Chris Hunt, September 2008