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Why Investors Should Invest in Emerging Markets

In: Business and Management

Submitted By qbrrw
Words 796
Pages 4
Hogeschool Rotterdam | Why investors should invest in emerging markets | Counter argumentative essay | Quincy Barrow
11-7-2016
|

Introduction
Investors have been attracted to emerging markets since the early 2000s due to their huge growth potential during their economic transition from being a developing country into becoming a developed country. Between the year 2000 and 2011 the rapid growth in nations like Brazil, Russia, India and China - also known as the BRIC nations - has created many investment opportunities for foreign investors. Later countries like Chile, Egypt, Colombia, Qatar, United Arab Emirates, South Africa and Thailand have also been classified as emerging markets based on the MSCI benchmark. This essay touches on the reasons why investors should invest in emerging markets, which risks investors could have and how these risks could be mitigated.
Emerging markets have been the drivers of the global economy
According to Forbes (N.D.) over 70% of the global economic growth in the recent years has from emerging markets and their growing economies, 40% of which was estimated to have come from China and India. China’s purchasing power is expected to go beyond that of the United States by the end of 2016, despite the growth slowing down in recent years. Also, nations like China and India have had a significant contribution to the growth in the world’s GDP in the last decade, including in the 2008 credit crisis. With the up rise of countries like South Africa, Qatar and the United Arab Emirates that are showing characteristics and growth trends that are similar to that of China and India, there are plenty of viable options for investors to focus on.
Favorable demographics
According to Matthew Goodburn (2009), another reason why investors should consider investing emerging markets is due to the fact that these developing countries...

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