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Emerging Markets Advisors Ltd.
Emerging Markets and Potential for Investment

Emerging markets have become an important part of the world economy in the new millennium and their significance will increase in the forthcoming years. This is a result of the long-lasting development trend according to which the economic growth in the emerging markets substantially exceeds that of the industrialised countries. Also the foreign direct investments in the emerging markets strenghten these countries and foster globalisation development. Since 2008 due to the global financial crisis, the downturn in the world economy however has generated new challenges in the investment activities.

The interest of the enterprises toward the emerging markets is best reflected in the total amount of foreign direct investment (FDI), which grew rapidly during the 15 years until the financial crisis, but fell then in 2008-09. Flows of global FDI exceeded however pre-financial crisis average levels in 2011. In the long term, it is probable that the foreign direct investments will continue to grow due the opening of single economies and globalisation of the entrepreneurial activity.

Although there are uncertainties in the economic development, the emerging markets will have substantial investment needs in all areas of the economy in the forthcoming decades. Significant investment priorities are, inter alia, information and communication networks and technology, energy production, ports development and logistics, housing, environment and food production.

In line with globalisation, new opportunities will open up for investments and capital goods exports. Successful risk management and appropriate long-term financial arrangements will play a key role in this development.

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