Emerging Economies – Leading the Way Out of a Slowdown?
Wednesday, February 24, 2010 20:25Major economies across the world have declined significantly which may adversely affect the emerging markets. Emerging economies are those regions of the world that are experiencing rapid growth in regards to the computerization of business, industry, and military under conditions of limited or partial industrialization. The leading emerging economies are an increasingly dominant force in global economic, social and environmental affairs.
It is time to not only re-examine strategies but also see how the growth process is going on. Sources say that Emerging economies of US may help in saving the metal sector but when the talk is about countries like China and India, the emerging economies here will ensure that the shipping industry is not out of work.While many sustainability issues are relevant in both developed and emerging economies, the way they play their cards would be an event to watch out for.
According to a report from asset management giant F&C Investments, large emerging economies such as Brazil, Russia, India and China will put their long-term growth prospects at risk if they do not accelerate efforts to develop more environmentally sustainable infrastructure. This will further force the economic condition to dip.
A question which would arise is that on what factor are the emerging economies relying? Different people may have different views in this regard. The base for every answer would be that every factor affects but the right combination is very essential. Is it the heavy dependence on exports for growth or is it the local market effect? Is it the proper use of Debt-Equity ratio? Is it the condition caused by deflation or inflation?
Even experts agree that the condition of slowdown isn’t easy to face and this problem cannot be resolved easily. Ved Prakash Chaturvedi , is the managing director of Tata Asset Management said recently that, ‘ upturn is not round the corner and we will go through a few more months of concern and pain particularly related to the earnings growth slowdown from key Indian companies.’ Ahmed Abou-Elkheir (Egypt) said the real problem of the global financial crisis was not the lack of resources, but the need for a real understanding of the crisis and its general impact. The world was facing a slowdown in economic growth and an increase in bank indebtedness, a situation which, if it continued, could destabilize the global economic and social systems. Rio Tinto’s chief executive, Toma Albanese, said the slowdown in one of the world’s fastest growing economies had led the mining company to revise its capital spending plans.
Finally, I would like to say that, at this time when the world is hit by global economic crisis, these economies might just fail to help the economic slowdown. It can be seen that these economies will continue to grow but the growth is still not enough to handle the slowdown cause.
