Title of The Project: (Emerging Economies) Submitted in Partial Fulfilment of The Requirements For (

Title of the Project
(Emerging Economies)
Submitted in partial fulfilment of the requirements for
(BACHELOR OF VOCATIONAL Financial Markets and Services [FMS] )
(BVOC)
(2015-2016)
SUBMITTED BY
(Kiran katore)
Roll No: (67)
(FMS)
Batch: (2015- 2016)
UNDER THE GUIDANCE OF
Prof. Soni Khemani
RAMNIRANJAN JHUNJHUNWALA COLLEGE

GHATKOPAR (W)
JULY 2015 - MARCH 2016
1
Student’s Declaration
I hereby declare that this report submitted in partial fulfillment
of the requirement of the award for the Bachelor of vocational
course in Financial Markets and Services (2015-16) to
Ramniranjan Jhunjhunwala College is my original work and not
submitted for award of any degree or diploma fellowship or for
similar titles or prizes.
Place : MUMBAI
Date : 07/05/2016
Class : (B.VOC (FMS) – SEM II)
Roll No. : (67)
Signature of the student
2
Certificate
This is to certify that the dissertation submitted in partial fulfillment for the award of
Bachelor in vocational courses (B.VOC) of Ramniranjan Jhunjhunwala college is a
result of the Bonafide research work carried out by MR.kiran katore under my supervision
and guidance, no part of this report has been submitted for award of any other degree,
diploma, fellowship or other similar titles or prizes. The work has also not been published in
any journals/Magazines.
Date
College : Ramniranjan Jhunjhunwala College
Place: Ghatkopar
Signature of Principal
PROJECT GUIDE
(Mrs. Soni Khemani)
3
ACKNOWLEDGEMENT
It is my great pleasure to present this Final Report, which is part of my

Summer Internship Program. This report is a result of great contribution
and guide lines from project guides.
To start with, I am deeply indebted to my project guide Prof. Soni

Khemani who helps, stimulating suggestions and encouragement helped
us at all times right from the start to the complete of this project. I would
like to express my sincere gratitude to the other employees of
Ramniranjan Junjhunwala college (Assi.H.O.D) for extending their
time and support for the project.
I would also like to place on record my gratitude & sincere thanks to

MUMBAI UNVERSITY for giving me an opportunity to work on this
project
Finally very special thanks to all friends who helped me, with their
comments, suggestions and remarks in the various stages of this project.
4
EMERGING ECONOMIES
5
Summary
Emerging Economies
Demographic trends. Emerging economies are home to over 80% of the world’s population.
Moreover, due to the profound economic transformations under way, many of the emerging
economies are
faced with rapid
urbanisation and
massive migrations
from rural areas to
cities.
Economic
importance:
macro
evidence. While
the demographic
numbers are high,
the economic
weight of these countries is also increasingly influential. Chart 1 below shows that emerging
economies’ share in global output has increased from less than 20% in the early 1990s to
more than 30% at present, measured at market exchange rates. If the concept of purchasing
power parity (PPP) is used – that is, taking account of differences in the cost of living – the
share of emerging economies in world GDP is already over 45%, 13 percentage points higher
than in the early 1990s. According to the IMF’s World Economic Outlook, this share will
surpass 50% in 2013.
6
While these economies are already large, they continue to grow vigorously. The pace of
growth in emerging economies and their increased resilience to economic and financial
turbulence are good news for the world economy, which can rely on the dynamism of
emerging economies more than in the past. People from emerging economies have reaped the
benefits of such rapid development with higher standards of living. Between 2000 and 2009,
GDP per capita has risen, albeit from low levels, by over 70% in these countries. The
integration of emerging economies into global markets for goods and services has been
similarly swift. As for world exports of goods and services, the combined share of emerging
economies almost doubled between the early 1990s and 2010, reaching roughly 35%.
Economic importance: micro evidence. While emerging economies are rapidly gaining
importance at the macroeconomic level, also at the micro level their greater role is becoming
clear. In this context, for instance, seven out of the world’s 25 largest companies in terms of
market value come from emerging markets (see the Global 2000 list at www.forbes.com)
Long-term economic outlook. The current situation looks promising for emerging
economies, but the future seems even brighter. The projections for long-term growth, based
on demographic trends and models of capital accumulation and productivity, indicate that
emerging economies are likely to play an even greater part in the world economy. In this
respect, several studies have found startling results regarding the growth prospects of
emerging economies. According to some of these studies, Brazil, Russia, India and China,
taken together, could account for over half the size of today’s six largest industrialised
economies by 2025, and they could overtake them in less than 40 years.
7
INDEX
 India
 Brazil
 Russia
 China
 South Africa
 BRICS bank
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INDIA
India ranks among the well known emerging markets in the global economic scenario. Since
the economic liberalization policies were undertaken in the 1990s, emerging market India has
really prospered which has helped to boost the Indian economy to a great extent.
Factors behind the favorable emerging market in India
In simple terms, emerging market is used to evaluate the socio economic scenario of the
country in terms of the growth of the market and industrial development. According to the
recent survey, there are around 28 emerging markets in the world out of which India ranks in
the second place.
The main factors behind this booming emerging market are the economic liberalization and
the perfect competition market, the high standard of living and per capita income, the
development of medical facilities and infrastructure, the increase in foreign investments and
so on. Over the few years, there has been a significant growth of the Indian market which has
resulted in the high Gross Domestic Product (GDP). The average annual growth rate ranges
between 6 to 7 %. The growth rate of GDP was around 6.7 % during the financial year 2008-
09.
To boost the emerging market India, the government is also taking some positive steps. The
main aim is to increase the growth rate to around 9 %. Due to the favorable emerging market,
more and more industries are being set up and the customer base is also increasing. Currently,
India is the 4th largest economic system in the world in terms of the purchasing power
parity.
The recent economic development has also put a positive impact on the various sectors.
There has been a significant development in the agricultural, service and industrial sector in
the country. Today, to complement the rapid pace of economic growth, the service sector
contributes around 54 % of the annual Gross Domestic Product.
Foreign investment and emerging market India
The increase in foreign investment has also cast a favorable effect on the emerging market in
India. Due to the increase in demand, well known global companies are investing in the
9
Indian market. The foreign institutional investments (FII) amount has reached around US$ 10
billion mark. In case of the Foreign direct investments (FDI, there has been a significant
increase of around 85.1 % from US$ 25.1 billion to US$ 46.5 billion.
A market is described as a platform where buyers and sellers are allowed to trade, exchange
goods, services, and information. These involvements of the goods and the parties to trade
simplify the demand and supply concepts and are thus the fundamentals of an economy. Any
type of trade can take place in a market. The two major dependant factors by which a market
can operate are buyers and sellers. It is in an India market place that the physical meeting of
the buyers and sellers take place such that they can trade. Nobody can deny the importance of
physical India market places, but still there are virtual marketplaces mainly supported by IT
networks such as the internet.
Some India markets are really very competitive - with a large number of players (vendors)
selling the same kind of products or services. On the other hand, few of the markets have
very low or no competition at all (with a single player in the market). It depends on the
number of buyers and sellers in the market that how much will be the price of the good or
service that is sold in the market. This determines the law of demand and supply in the
market.
In an India market place, where there is more number of sellers than the buyers, the supply is
bound to bring down the prices. On the other hand, if there are more buyers than sellers in a
market place, the reciprocative action would take place - demand pushing up prices.
Types of India Market -

Free Markets - Usually free markets are operational under the 'laissez-faire' conditions -
where there is no government intervention. A free market may get distorted if there exists a
monopolistic situation (seller controlling major portion of the supply) or a monopsonistic
situation (a buyer having power on majority of the demand). In case of these distortions, the
government or business bodies make an entry to ensure that the free markets operate
smoothly.
Currency Markets - Currency markets are among the largest traded markets in the globe, on
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a continual basis. Money flows are continuous around the globe - governments, banks,
investors and consumers - all of them are involved in buying and selling currency round the
clock. That is the velocity of money is huge with so many constantly changing hands.
Stock Markets - Stock markets seem to be the backbone of any economy - and of late they
have become the most complex structure allowing investors the scope of buying and selling
shares in multitude companies. Majority of the Indian stock markets are operating on an
electronic network, with a physical location being maintained for buyers separately. This is
the place where the parties involved can interact with each other directly.
Types of Consumer India Markets -
Previously, India Markets originated from the center of villages and towns, where there was a
sale or barter of farm produce, clothing and tools and various other products. Later on these
street markets went on to become consumer-oriented markets like the specialist markets,
shopping centers, supermarkets.
1.Commodity Markets - In India, with high oil and food prices, the commodity markets
have again gathered all the attention. The prices of the essential commodities steer the
economy to a desired level. Commodity markets deal in energy (oil, gas, coal, and biodiesel),
soft commodities and grains (wheat, oat, corn, rice, soya beans, coffee, cocoa, sugar, cotton,
frozen orange juice, etc), meat, and financial commodities like bonds.
2.Capital Goods & Industrial Markets - India capital goods market help businesses to buy
durable goods that can be used in industrial and manufacturing methods. There are usually
wholesale trades that take place with bulk goods being transacted at very cheap prices.
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Importance of India market -
Markets in India after the liberalization era have been leveraged to the extent that they are
well protected by legal procedures and boasts of efficient administrators. The government has
always been proactive in its strategies to make the future of India market lucrative and
attractive. India market has witnessed outstanding growth over past few years. The liberal
and transparent financial policies have steered the economy towards free flow of FII and that
is why India Market has achieved a sound place in the international arena.
The returns on investments in the India market have been substantially moderate from all the
listed stocks. Public Private Partnership (PPP) is the new trend in the Indian marketplace,
with red tape and bribes being shed off to quite an extent. The few public enterprises like
IOC, ONGC, BHEL, NTPC, SAIL, MTNL, BPCL, HPCL and GAIL, SBI, LIC etc are giving
the private players a run for their money. Whereas at the same time, private players like
Reliance Industries Limited, Infosys, Tata, Birla Corporation, Jet Airways, Ranbaxy, Biocon,
Bajaj Auto, ICICI have been performing exponentially in all the financial years.
Industrial Rules and Policies in India

If the industrial sector in India has to flourish, then there has to be sufficient foreign capital
in the country. However, as many foreign firms would attest, it is not that easy to invest in
India. Recently, the stock prices of some companies had taken a hit because of their issues
with the ongoing tax regime. However, the Modi government is attempting to make things
better for international companies interested in investing in India. Foreign Direct Investment
(FDI) rules have been amended significantly so as to allow interested Non-Resident Indians
(NRIs) to invest in India.
It also stated recently that in sectors where there is provision for automatic rules for FDI,
foreign companies need not to get permission from the Foreign Investment Promotion Board
(FIPB) if they want to merge with a company in India or just acquire it. This information has
been revealed by a circular emanating from the Department of Industrial Policy and
Promotion. The same circular has also stated that in cases where automatic rules are
applicable, one does not need to take the government’s permission for issuing employee stock
options. It is expected that such initiatives will increase the levels of credibility of the FDI
policy and make India a far more attractive business destination for international investors.
12
Imports and Exports- Success Rate
India has not been doing well in its Balance of Trade as can be gauged from the fact that
April 2015 was the 5th straight month that its exports took a hit and imports went up by some
margin. In that month, its gold imports increased by a whopping 78 percent, while its exports
plunged at a rate of 14 percent. The total worth of goods exported by India in April 2015 was
US$ 22 billion. Much of this can be blamed on the fact that the prices of gems and jewellery
and petroleum had fallen in the international markets.
The decrease of international prices of crude oil is one reason India’s imports came down.
The aggregate worth of crude oil imported in India was US$ 33 billion and it marked a
decrease of 7.5 percent. However, the fall in petroleum exports has been even higher and this
is why the trade deficit ran up to almost US$ 11 billion. A year back, this deficit was
calculated at US$ 10 billion. There was a reduction of 42.6 percent in oil imports in April and
the present figure reads US$ 7.4 billion. Non-oil imports during that period were measured at
US$ 25.6 billion, an increase of 12.6 percent.
The entire amount of gold imported during April 2015 was estimated at US$ 3.1 billion and
this further increased the trade deficit. Of late, in May, oil prices have been increasing
somewhat. However, their present price is still below the 100-dollar-per-barrel mark and this
is why the exports have gone down a lot as well. During March, India’s exports reduced by
21 percent, which was the highest rate of contraction in the last six years. November 2014
was the last occasion when exports showed some growth with an increase of 7.3 percent.
The Federation of Indian Export Organisations has said that the prime reason for the fall in
exports continues to be the fall in the prices of commodities like crude oil, metals and other
necessary commodities. The growth rate of prices of products such as gems and jewellery,
plastic goods and electronics is also a matter of great worry for the economic policymakers of
India.
13
Major Industries in India
 Textile Industry
This industry covers a wide range of activities ranging from generation of raw materials such
as jute, wool, silk and cotton to greater value added goods such as ready made garments
prepared from different types of man made or natural fibres. Textile industry provides job
opportunity to over 35 million individuals thus playing a major role in the nation's economy.
It has 4 per cent share in GDP and shares 35% of the gross export income besides adding
14% of value addition in merchandizing sector.
 Food Processing Industry

In terms of global food business, India accounts less than 1.5% inspite of being one of the
key food producing nations worldwide. But this on the other hand also indicates the
enormous possibilities for the growth of this industry. Supported by the GDP estimates, the
approximate expansion of this sector is between 9-12% and during the tenth plan period the
growth rate was around 6-8%. Food Processing Industry provides job opportunities to 1.6 mn
people and it is estimated to expand by 37 mn by 2025.
 Chemical Industry:
Indian Chemical industry generates around 70,000 commercial goods ranging from plastic to
toiletries and pesticides to beauty products. It is regarded as the oldest domestic sector in
India and in terms of volume it gives a sense of pride to India by featuring as the 12 largest
producer of chemicals. With an approximate cost of $28 billion, it amounts to 12.5% of the
entire industrial output of India and 16.2% of its entire exports. Under Chemical industries
some of the other rapidly emerging sectors are petrochemical, agrochemical, and
pharmaceutical industries.
 Cement Industry:
India has 10 large cement plants governed by the different State governments. Besides this
India have 115 cement plants and around 300 small cement plants. The big cement plans have
installed competence of 148.28 million tones per annum whereas the mini cement plants have
the total capacity of 11.10 million tonnes per annum. This totals the capacity of Indian
cement industry at 159.38 million tonnes. Ambuja cement, J K Cement, Aditya Cement and L
& T Cement are some of the major steel companies in India.
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 Steel Industry:
Indian Steel Industry is a 400 years old sector which has a past record of registering 4%
growth in 2005-06. The production during this period reached at 28.3 million tones. India
steel industry is the 10th largest in the world which is evident from its Rs 9,000 crore of
capital contribution and employment opportunities to more than 0.5 million people. The key
players in Steel Industry are Steel Authority of India (SAIL), Bokaro Steel Plant, Rourkela
Steel Plant, Durgapur Steel Plant and Bbilai Steel Plant.
 Software Industry:
Software Industry registered a massive expansion in the last 10 years. This industry signifies
India's position as the knowledge based economy with a Compounded Annual Growth Rate
(CAGR) of 42.3%. In the year 2008, the industry grew by 7% as compared to 0.59% in 1994-
95.
 Mining Industry:
The GDP contribution of the mining industry varies from 2.2% to 2/5% only but going by the
GDP of the total industrial sector it contributes around 10% to 11%. Even mining done on
small scale contributes 6% to the entire cost of mineral production. Indian Mining Industry
provides job opportunities to around 0.7 million individuals.
 Petroleum Industry:
Petroleum industry started its operations in the year 1867 and is considered as the oldest
Indian industry. India is one of the most flourishing oil markets in the world and in the last
few decades has witnessed the expansion of top national companies like ONGC, HPCL,
BPCL and IOC.
15
Brazil
With a gross domestic product of 2.346 trillion, Brazil is the world’s seventh largest economy
and the largest economy in Latin America. Until 2010, Brazil had been one of the world’s
fastest growing economies; however, it is currently weighed down by multiple issues. These
issues are a reflection of a declining growth rate. In 2014, the growth rate declined to 0.1%,
following three years of moderate growth. The nation is also fighting against corruption,
which has vitiated the investment atmosphere and dented the confidence of the private
investor. As for the external sector, low commodity prices and slack demand have been the
problems. Industrial production has taken a dip, and its current account deficit has widened
from 2.1% of GDP in 2001 to 4.2% of GDP in 2014. Moreover, Brazil currently has
high inflation and interest rates.
Brazil’s growth graph has been uneven, with periods of very high growth and then
intermittent periods of slowdown, as well as dips. This is why despite achieving growth at a
high rate, the average growth rate for Brazil over the 35-year period since 1980 is just 2.8%.
These years have witnessed the Brazilian economy touch a 8% growth rate or higher. The
growth rate has also plummeted to 4%. Nevertheless, despite the dips in growth on its growth
journey, Brazil has achieved a lot. The period 2003-2013 witnessed steady growth and
reduction in the levels of poverty and inequality existing in the country. According to the
World Bank, “the income of the bottom 40% of the population grew on average 6.1% (in real
16
terms) between 2002 and 2012, compared to a 3.5% growth in income of the total
population”.
Sectoral Break-Up
The composition of Brazil’s GDP reflects the dominance of its service sector, which
composes 71% of its GDP. Its secondary sector contributes towards a little less than one-
fourth of the GDP. Brazil’s agriculture sector has composed less than 10% of the country's
GDP since the 1990s. According to the World Bank, in 2014 Brazil's GDP was derived from
5.6% agriculture, 23.4% industry and 71% service sector.
Agriculture
Brazil’s transition from a net food importer to one of the largest exporter of agricultural
products in the world has been spectacular. Technically, since agriculture represents 5.6% of
Brazil’s economy it cannot be called an agricultural country, but the importance of the sector
is far beyond what statistics suggest. The country’s agricultural sector supports its fast-
growing agribusiness sector, which has been an essential component of Brazil’s economic
progress over the years. The agribusiness sector accounts for approximately 23% of the
Brazilian GDP while accounting for 44% of its exports. (Read more on the global agriculture
business, here: The 4 Countries That Produce the Most Food.)
Several factors have helped increase and diversify the production and exports from the
agriculture and agri-business sectors. For example, modern technology and agricultural
17
research, government policies funding agriculture and the development of new frontiers for
farming in the Centre-West region since 1970s. Brazil’s production of agricultural and
livestock increased significantly since the 1990s with the second thrust coming in around the
millennium change in 2000. The agriculture sector engages approximately 20% of its labor
force. Some of the most significant agriculture produce and exporting items are coffee,
soybeans, sugar, beef, chicken, orange juice and corn. (For related reading, see: The 5
Countries That Produce the Most Coffee.)
Industry
Brazil has a well-diversified and well-developed industrial sector. The rate of expansion in
industrial activity was at its peak while the process of import substitution was been carried
out in the country.The initial focus of import substitution was on the non-durable consumer
goods industry followed by the durable goods industry in the 1960s. The process came to a
competition when import of basic raw materials and capital goods was taken up in the latter
part of the 1970s. The whole import substitution industrialization (ISI) policy was exhausted
by the start of the 1980s. The period after that witnessed compressive programs by the
government to push further the development of its industrial sector. Brazil’s industrial growth
was high in the 1970s and 1980s, and the 1990s witnessed a slower growth.
Brazil has advanced industries in the fields of petroleum processing, automotive, cement, iron
and steel production, chemical production and aerospace. Other than these, the food and
beverage industry is a very crucial part of the manufacturing sub-sector. The availability of
cheap labor and abundance of raw materials has helped Brazil in its industrial development.
18
The overall contribution of the industrial sector towards the GDP gradually declined from the
mid-1980s to mid-1990s, but it has remained more or less steady since the 1990s.
Manufacturing, which is a significant subset of the industrial sector, contributes
approximately 11% to the country’s GDP. The industrial sector employs around 15% of its
workforce. (For related reading, see: Is Now the Right Time to Buy Brazilian Stocks?)
Service Sector
The services sector is the largest sector in Brazil contributing 71% to its gross domestic
product. The decreasing share of agriculture and industry over the years was taken up by the
service sector, which has contributed more than 50% of the country’s GDP since the 1990s.
By this time, the service sector looked developed with sub-sectors such hospitality, financial
services, IT BPO, retail sales and personal and professional services. The service sector is the
biggest employer for the country’s workforce; in 2000 approximately 58% of the workforce
was employed by the sector, it gradually increased to 60% by 2005. The service sector now
employs 70% of the country’s workforce who are employed in various departments and
services like hospitality industry, financial services, repair shops, information technology as
well as bureaucracies at the national and local level as well as public utilities and special
agencies.
19
The financial sector is by far the most important of the services industry in Brazil. The
Brazilian banks showed great strength during the 2008 meltdown. The banking sector is the
provider of huge funding for mega projects of mining and aerospace amongst other industries
in the country. Other than financial services, travel and tourism are considered essential
components of the service sector in Brazil. The direct contribution of travel and tourism to
Brazil’s GDP was around 3.5% in 2014, and that number is expected to rise in the coming
years. This subset includes the revenue generation by hotels, travel agents, airlines,
restaurants and other directly supported activities. The overall revenue from the services
sector grew at a nominal rate of 6.6% in 2014, slower than the revenue growth of 8.5% in
2013.
The Bottom Line

Brazil is going through a rough patch; the IMF projects its economy to contract by 3% in
2015 and further 1% in 2016. Brazil needs to adopt urgently reforms with an eye on the
future growth trajectory; raising productivity, competitiveness and investment are all crucial
for a successful growth rate in the future. (For related reading, see: Emerging Markets:
Analyzing Mexico's GDP)
20
Brazil’s Income vs. the Brazilian’s Income
We may be tempted to think that Brazil must be doing relatively well with its management
and development strategies, considering that its total income (i.e. GDP) was the seventh
largest in the world in 2013 at $2.246 trillion. That’s a lot of money, making Brazil a major
player in the global economy.
Yet, considering Brazil’s total population (approximately 200.4 million in 2013), the average
Brazilian income (i.e. GDP per capita) is relatively small at only about $11,208 in 2013. This
ranks it 63rd globally, according to the most recent data from the World Bank.
Although Brazil’s income is relatively large, the relative smallness of its individual citizens’
income suggests that productivity improvements could be made. Before considering some of
these improvements let’s first take a look at what it is that Brazilians do to make money. (For
more, see: Investing In Brazil 101.)
Brazil’s Income Decomposed
Decomposing Brazil’s income, we find that it is derived from the following three sectors:
agriculture, industry, and services. According to 2014 estimates, 5.8% of Brazil’s income
came from agriculture, 23.8% from industry, and 70.4% from services.
A further decomposition shows that the agriculture sector is comprised of coffee, soybeans,
wheat, rice, corn, sugarcane, cocoa, citrus, and beef; the industry sector is comprised of
textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and
parts, and other machinery and equipment; and finally, the service sector is comprised of
hospitality, finance, IT BPO, retail sales, and personal services.
The work done in these sectors determines the supply of goods and services to both domestic
and foreign consumers. In turn, the spending from these consumers results in income for
Brazil’s workers. Yet, it is primarily domestic consumption that is responsible for supplying
Brazil’s workforce with income as the country’s total exports comprised only 12.6% of GDP
in 2013. We now examine the fundamentals of this consumer demand in recent years.
21
The Boom: Increases in Foreign and Domestic Demand
The recent explosion in Chinese growth fueled a global commodity boom from 2003 to 2011.
As China is Brazil’s leading foreign consumer, this boom had significant benefits to Brazil’s
exports, the value of which increased by approximately 250% over the same period.
Brazil’s economic climate during this time also helped attract large capital flows, leading to
an enormous expansion of consumer credit. Domestic consumption rose significantly
as household debt increased from 20% of personal income to 43% between 2005 and 2012.
Government spending also helped fuel consumption growth. Spending from the government,
largely fueled by higher taxes and increased debt, increased between 2002 and 2013 from
15.7% of GDP to 18.9%.
Thus, much of the strong economic growth witnessed by Brazil in the first decade of the
21st century was primarily due to external factors and not to the country’s prudent
management and development strategies. As we shall see, these external factors soon dried
up, revealing the real intrinsic weakness of Brazil’s economy. (For more, see: Economic
Indicator Sources for Brazil.)
The Downturn: Lower Demand
Currently, all Latin American economies are experiencing a decline in growth due to the end
of the global commodity boom cycle, slower growth in China, and a decrease in capital
flows to emerging economies. Brazil is no exception. What is obvious now is that the country
cannot simply wait things out in hopes that these external factors will reignite.
For one, the higher prices fueled by the commodity boom are an exception to their long term
historical trend. In real terms, there has been a definite downward trend of commodity prices
since 1913. The recent fall in commodity prices between 2011 and 2014 has actually brought
them back in line with this long term trend and are thus unlikely to return to the high levels
characteristic of the period between 2003 to 2011 in the near future.
Further, government spending appears somewhat handicapped as Brazil’s fiscal accounts

have significantly worsened. In fact, one rating agency recently downgraded
Brazil’s sovereign credit rating from stable to negative while keeping the country at the
22
second-lowest investment grade rating of BBB. This downgrade comes despite the
government’s recent actions to cut spending and raise taxes.
These austere measures take their toll on the individual consumer’s disposable income, of
which a large proportion is already used to service consumer debt. Consumers will not be
taking on more debt any time soon and thus the debt-fueled consumption of recent years has
come to an end.
All of these factors are contributing to serious difficulties for Brazil’s economy and are
highlighting the weaknesses that may have been hidden during the country’s strong growth
during the first decade of this century. The only way to improve is to refocus on prudent
management and development strategies.
Moving Forward: Improvements for Income Growth
As evidenced by Brazil’s relatively low GDP per capita noted above, the country needs to
focus its energy on increasing productivity, which will in turn increase its international
competitiveness. In fact, a recent competitiveness study ranked Brazil 15th among 16 peer
nations, and the country has been at the bottom of these rankings for the past three years.
There are several development improvements Brazil could undertake to increase its
competiveness. According to McKinsey & Company, these improvements include increasing
investment, promoting closer integration with major markets, upgrading infrastructure that
will connect Brazil to the rest of the world, lowering regulatory costs, improving public
sector efficiency, and improving education and training.
The Bottom Line
Brazil has a lot going for it as it has an abundance of natural resources and people. Yet, as
recent events have shown, having an abundance of these things does not necessarily mean
strong incomes for citizens. These resources must be appropriately managed and developed.
Brazil has some of the fundamental components of what it takes to make money, but if it
wants to truly improve the lives of its citizens then it will need to develop greater productivity
and increase its international competitiveness.
23
Russia
The Emerging Market of Russia
Russia is the world’s largest country in terms of land and has an emerging market to match,
although it doesn’t have as much foreign investment as many other emerging markets.
After the dissolution of the Soviet Union in 1991, Russia experienced dramatic changes, and
after the government defaulted on much of its Soviet-era debt in 1998, the economy
strengthened dramatically.
Essential facts about Russia:
 Type of government: Federation
 Major industries: Agricultural machinery, tractors, and construction equipment; all

forms of machine building, from rolling mills to high-performance aircraft and space
vehicles; communications equipment; complete range of mining and extractive industries
producing coal, oil, gas, chemicals, and metals; consumer durables, foodstuffs, and
handicrafts; defense industries, including radar, missile production, and advanced
electronic components; electric power generating and transmitting equipment; medical
and scientific instruments; road and rail transportation equipment; shipbuilding; textiles
 Currency: Ruble
 English-language newspaper: The Moscow Times
The pros of doing business in Russia
Even 20 years after the fall of the Soviet system, some amazing opportunities are ahead for
Russia:
 Educated population: The Russian education system is excellent. Almost 43 percent of

Russian adults are college graduates, and almost 90 percent of high school students
graduate. Russia has one of the world’s highest literacy rates, so most of the people can
function in a modern economy. The country has people who can do whatever work needs
to be done.
 Rich natural resources: One of the world’s leading producers of oil and gas, Russia
produces iron ore, bauxite, and gold, too. Russia has rich agricultural soil and is a net
exporter of grain and timber.
24
Russia can sustain its own people, and it can provide food and materials to other nations.
The growth in India and China creates demand for Russia’s resources.
 Strong financial system: After the 1998 default, the Russian economy was completely
restructured. Russians concentrated on making their own system strong in the absence of
outside investors, and with banks taking a hard line on risk, Russia made it through the
2008 global financial crisis with no problems.
Risks of doing business in Russia
Some Russians complain that international investors focus too much on Russia’s risks while
ignoring similar risks in other markets. For example, Russia gets demerits because it repealed
of many of the glasnost-era freedoms but China’s repression is overlooked. The Russian
resentment is probably valid, but even so, Russia has plenty of risk:
 An aging population and brain drain: The average age of the population in Russia is
38.5 years, and the birthrate is below the replacement rate. This situation raises the
question of whether Russia will have enough workers to support its retirees and enough
workers and consumers to support a more diversified economic base.
On top of the declining birthrate, Russian scientists and engineers have a long history of
leaving for greener pastures in other countries.
However, as Russia’s economy becomes more stable, the people will feel more confident
about the future, which in turn will boost the birthrate (the government already pays a
bonus to women who have a second child) and lower migration.
 Corruption and crime: Like many formerly Communist countries, Russia has a long-
standing culture of corruption because that’s how people got things done. That corruption
scares off foreign investors. Furthermore, Russia had a bit of a lawless era after the
Soviet government fell, and organized criminals stepped into the void in many cities.
The government has been addressing the issue, and if investors notice a real change,
Russia will become a more attractive place to do business.
 Reliance on one key industry: The Russian economy is based on oil and gas. That’s
good because global demand for carbon-based fuel is huge and growing. However, by
being so narrowly focused, the Russian economy is directly exposed to price
fluctuations. Also, the planet’s oil and gas will be used up someday. The lack of diversity
in Russia’s economy creates a big challenge over the long term.
25
On the plus side, Russia has the potential to have a more diverse economy. It has a range
of natural resources and geography, and its people are talented. Diversification should
happen.
The Emerging Market in Russia

By Ann C. Logue from Emerging Markets For Dummies

 Currency: Ruble
Russia:

to be done.
26
27
happen.
The Emerging Market in Russia

By Ann C. Logue from Emerging Markets For Dummies

 Currency: Ruble
Russia:
28
to be done.
29
happen.
Russia has grown at a real terms average of 7 per cent a year. In 2007, growth hit 8.1 per cent
- higher than the year before, despite the US-originated sub-prime crisis that has hobbled
much of the world.
Russia's reserves have ballooned from practically zero in 1998 to $480bn (£242bn) today -
the third largest haul on earth. The country is now almost debt-free - with a budget surplus of
6 per cent of GDP, and a trade surplus almost twice as much again.
Goldman Sachs describes Russia's economic performance as "remarkable". UBS calls it
"awesome". Russia, India, China and the other large emerging markets are upending the
world economic order. Their resurgence has created hundreds of billions of dollars of wealth
and lifted tens of millions from poverty.
Western politicians struggle to adjust to these new realities - particularly when it comes to the
old "Cold War" enemy. But Russia is now the world's ninth largest economy - and rising fast.
And, in my view, much of the scorn aimed its way is nothing but a small-minded reaction to
this rapidly shifting balance of global power.
Three years ago, Russia overtook Saudi Arabia to become the world's largest crude exporter.
And the country's post-Soviet recovery was initially built on a 50 per cent rise in annual
crude production.
Had that increase not happened (had Russia chosen to join OPEC, for example), oil would
now be way above $150 a barrel, rather than close to $100. Imagine how much that would
now be hurting oil importers like America and the UK.
30
But Russia is now far more than "just an oil and gas economy". Retail sales are growing at
around 13 per cent a year in real terms - one reason why leading multi-nationals are now
piling into Russia. Construction is expanding by 16 per cent a year, and domestic investment
by 20 per cent - as Russia rebuilds its shattered post-Soviet infrastructure. Again, this trend is
now attracting massive - and welcome - foreign investment.
The big blot on Russia's economic landscape is inflation - almost 12 per cent last year. Like
many fast-growing emerging markets, the country suffers from high food prices. But Russian
policy-makers are now allowing the rouble to appreciate more quickly - bearing down on
expensive food imports. And, while the rest of the world has been cutting interest rates,
Russia's Central Bank just raised them - as part of its bid to tackle inflation.
This is a country, of course, with many problems. As in any nascent capitalist society (think
England in the 1780s, or America in the 1870s), there is corruption and the legal system is
fragile.
But, in recent years, despite factional in-fighting, the direction of economic policy has been
clear. Russia now has a 13 per cent basic rate of income tax. Foreign banks can set up at will.
Moscow, St. Petersburg and, increasingly, Russia's regions are rippling with stores bearing
Western names and products. Despite his "hard-man" image, these developments have all
happened since Russia has grown at a real terms average of 7 per cent a year. In 2007, growth
hit 8.1 per cent - higher than the year before, despite the US-originated sub-prime crisis that
has hobbled much of the world.
crude production.
31
fragile.
happened since President Putin took office in 1999.
And today's likely winner - Dmitri Medvedev - will encourage further liberalisation. The 42-
year-old has made a series of speeches calling for "reduced taxes" and "decentralisation of
power". A trained lawyer, Medvedev will put effort into "improving the legal system".
Dismiss this as a wish-list if you like. But, again, the direction of travel is clear. Russia wants
to be a fully-developed market economy and part of the global system - but on equal terms.
Will it be pushed around by the West? No. Will it allow the West to pull its historic trick of
annexing countries with large natural resources, or treating them as supine? No.
Above all, Russia wants to trade with the West. But the West keeps blocking its membership
of the World Trade Organisation - despite admitting China.
Since the Soviet Union collapsed, Russia has made huge strides - economically, but also in
terms of freedom. Today's election, while imperfect, is a testament to that
32
Russia has grown at a real terms average of 7 per cent a year. In 2007, growth hit 8.1 per cent
- higher than the year before, despite the US-originated sub-prime crisis that has hobbled
much of the world.
crude production.
fragile.
33
happened since President Putin took office in 1999.
President Putin took office in 1999.
34
China
A brief history of China’s economic growth

China’s meteoric rise over the past half century is one of the most striking examples of the
impact of opening an economy up to global markets.
Over that period the country has undergone a shift from a largely agrarian society to an
industrial powerhouse. In the process it has seen sharp increases in productivity and wages
that have allowed China to become the world’s second-largest economy.
While the pace of growth over recent decades has been remarkable, it is also important to
look at what the future might hold now that a large chunk of the gains from urbanization have
been exhausted. A new paper published by the NBER attempts to do just that, looking back
over China’s growth story between 1953-2012 and using the data to model plausible
scenarios for the country up to 2050.
Here are some of the key charts that help explain China’s rise:
Lessons from history
The first two decades following the founding of the People’s Republic of China in
35
1949 was marked by periods of substantial growth in per capita GDP growth, the growth of
output per person, followed by sharp reversals.
The authors of the NBER paper suggest this represented the success of the First Five-Year
Plan, during which “6000 Soviet advisers helped establish and operate the 156 large-scale
capital intensive Soviet-assisted projects”, significantly increasing the pace and quality
(productivity) of industrialization in the country. However, it was followed by the Great Leap
Forward (1958-1962), which undid many of the gains through worsening of incentives by
banning material incentives and restricting markets.
These reforms were then unwound between 1962 and 1966, leading to another period of
productivity and per capita GDP growth, before the events of the Cultural Revolution (where
strikers clashed with the authorities) set the economy back once again.
According to the authors, the Third Plenary Session of the 11th Central Committee of the
Communist Party in December 1978 was the defining moment in shifting the country from its
unsteady early economic trajectory on to a more sustainable path. It laid the groundwork for
future growth by introducing reforms that allowed farmers to sell their produce in local
markets and began the shift from collective farming to the household responsibility system.
A year later the Law on Chinese Foreign Equity Joint Ventures was introduced, allowing
foreign capital to enter China helping to boost regional economies although it took until the
mid-1980s for the government to gradually ease pricing restrictions and allow companies to
retain profits and set up their own wage structures. This not only helped to boost GDP from
an annual average of 6% between 1953-1978 to 9.4% between 1978-2012 but also increased
the pace of urbanization as workers were drawn from the countryside into higher-paying jobs
in cities.
This process of market liberalization led to the establishment of China as a major global
exporter. It eventually allowed for the reopening of the Shanghai stock exchange in
December 1990 for the first time in over 40 years and, ultimately, to China’s accession to the
World Trade Organisation
These reforms had a significant impact both on per capita GDP and the pace of the falling
share of the labour force working in agriculture.
36
What the future holds
The good news for the global economy is that the authors of the NBER paper claim that the
Chinese economy can continue to see relatively robust levels of growth, albeit significantly
lower than we have seen over recent decades.
While the average growth rate of real GDP between 1978-2012 has been an impressive 9.4%,
that figure could decline to between 7-8% between 2012-2024 in the authors’ base case. This
is significantly higher than most commentators believe is likely given clear signs of a slowing
economy in China’s recent economic data.
Here are their projections:
Of course, such long-range projections should be treated with a great deal of caution but the
trajectory of travel is already clear – growth is slowing.
37
This is to be expected for an economy of China’s size, as compounding makes it harder and
harder to deliver the same rate of growth from a higher level of GDP.
Moreover, the factors that have driven the country’s expansion over recent decades will also
have to shift in their relative importance. For example, the numbers of people making the
shift from agricultural jobs into higher value add city jobs are likely to decrease and the
process of urbanization will therefore not be able to add as much to output per worker as it
has done in the recent past.
Also, the catch-up process that has delivered significant productivity growth in the country is
also likely to slow as Chinese industry gets closer to the technological sophistication of its
Western counterparts, while the initial gains of adding hundreds of millions of workers to the
global labour supply are also quickly fading.
Instead of allowing low-cost exports to drive growth, China will increasingly have to rely on
expanding its own domestic demand to meet the government’s ambitious growth targets.
Achieving this, however, will require further reforms to release Chinese consumers’ spending
power and build the foundations of a more balanced economy.
38
South Africa
South Africa has been ranked as the leading emerging economy in Africa and the only
country on the continent to be ranked in the top 15 worldwide, according to the Emerging
Markets Opportunity Index compiled by international advisory firm Grant Thornton.
The country also ranked ahead of Nigeria as a potential investment destination, coming in at
14th on the index while Nigeria ranked 17th.
"Although recent events in the mining sector have hurt our country's reputation as a
destination of choice for foreign direct investment (FDI), there are significant benefits that
continue to attract investors," Grant Thornton South Africa's national chairperson, Deepak
Nagar, said in a statement on Wednesday.
The index analayses a variety of indicators from Grant Thornton's International Business
Report, the International Monetary Fund and United Nations Human Development Report.
Indicators include economic size, population, growth prospects and levels of development to
rate the countries potential to attract business investment.
"With Nigeria improving its ranking by nine places since the previous survey, South Africa
will need to improve its competitive edge in order to maintain its leading ranking in the years
to come," Nagar said.
The index showed inflows of foreign direct investment into South Africa have been irregular
over the past 10 years and that FDI in the first six months of 2012 dropped by 44% compared
to the same period in 2011.
The growth of the country's banking sector and financial services could help improve levels
of FDI though. "It is a well-known fact internationally that SA's financial systems are
sophisticated, robust and well-regulated while its economy boasts a world-class securities
exchange," he said.
"The government has identified massive infrastructure projects as key to boosting the
economic growth rate, as well as creating employment, and it is spending billions of rand on
getting the investment ball rolling."
The index also showed that business expect to grow in 2013; 71% of local businesses expect
an increase in revenue and forecast 4.1% growth between 2013 and 2017.
39
From mining to financial services
The global economic crisis and disruptions at home have had their impact on South African
mining, but the sector remains a significant contributor to the economy. Recent research
presented at the workshop shows that platinum, coal and gold contribute 66% to revenue, and
84% to employment.
Research also shows that the South African economy has diversified in the past 20 years. The
contribution of banking and real estate has risen from 12.5% to 24%, a good sign that the
country is on its way to a knowledge economy.
South Africa also remains a reliable destination for international investors. Foreign direct
investment projects grew at a compound rate of 22.4% between 2007 and 2012, making the
country the top investment destination in Africa.
The workshop also discussed the joint commitment by government and business to the rollout
of the National Development Plan, the vision for what the country will look like in the year
2030.
Key components of the plan include:
 Making sustainable investments in competitive economic infrastructure

 Increasing the pace of job creation, especially for young job-seekers
 Encouraging the expansion of businesses and the development of new enterprises
 Transforming human settlements and developing a functioning public transport system
 Providing policy certainty to encourage long-term investment in mining and other key
sectors
 Increasing economic integration within sub-Saharan Africa in areas such as energy
production, finance, tourism, communications, infrastructure and customs administration
 Promoting domestic competition between firms in South Africa can help spur faster
growth and poverty alleviation in an environment of slow growth and limited fiscal
space, according to a new World Bank report.
 The South Africa Economic Update: Promoting Faster Growth and Poverty
Alleviation through Competition, reviews recent economic developments and assesses
South Africa’s near-term economic prospects. As with all emerging markets, South
Africa faces challenges from weaker commodity prices, lower Chinese demand and
rising U.S. interest rates, the report says. These already difficult headwinds are further
40
compounded by domestic factors including policy uncertainty, infrastructure gaps and
drought, according to the report. Furthermore, the report notes that rising public debt
and prospective inflationary pressures have placed fiscal and monetary policy on a
tightening foot.
 The forecast for real gross domestic product (GDP) growth is at 0.8% in 2016, down
from 1.3% 2015 and the lowest rate of growth since 2009. Growth is forecast at 1.1%
in 2017. Overall, South Africa is projected to remain largely below the average
growth rate of 4.5% for Sub-Saharan Africa in 2016–2017. Against this backdrop,
poverty in South Africa is set to rise as incomes fall, placing the National
Development Plan (NDP) goals of the eradication of extreme poverty, reduction in
joblessness and doubling of incomes by 2030 further out of reach.
 “In this prevailing weak economic climate, it is important for South Africa to look to
other avenues outside the fiscal space to stimulate faster growth,” said Guang Zhe
Chen, World Bank country director for South Africa. “With this study we offer
evidence for one such route, competition policy, and hope this will enhance debate
and reinforce the case for the bold policy decisions needed to revive the country’s
economy for faster growth, more jobs, and poverty eradication.”
 South Africa’s lagging economic and productivity growth, as well as export
performance, have been associated with a lack of competitive pressure in its domestic
input and downstream production markets. Research has shown that when firms
compete, they offer lower prices and higher quality products to win market share.
This results in lower input costs to other industries who use these goods, improving
competitiveness. Exploring the case of cement, the report shows how the breaking of
a regional cartel reduced cement prices to users by 7.9-9.7%. If South Africa reduces
regulatory restrictiveness of professional services, the report estimates value-added
growth in industries which use professional services intensively could grow by
between $1.4 - 1.6 billion. This is equivalent to an additional 0.4 - 0.5 percentage
points of GDP growth.
 “We see in this report that if South Africa is to succeed in promoting its
competiveness internationally, it needs to lower input costs for key services that firms
use. For example evidence from other countries shows that improving broadband
penetration has potential to boost growth by 1.4%,” said Tania Begazo, World Bank
senior competition economist.
41
 The report also shows how competition can work to promote faster poverty
alleviation. The sanctioning of the cartels in wheat, maize, poultry and
pharmaceuticals helped lower the retail prices of these goods that form a 15.6% share
of the consumption basket of the bottom 10% of the poor. This lifted the purchasing
power of the poor by 1.6%, took some 202,000 people above the poverty line, and
lowered the national poverty rate by 0.4 percentage points.
 “The breaking up of the cartels in basic food products that colluded to artificially raise
the retail prices of these essential goods are a powerful example of how competition
policy can alleviate poverty and ensure that cash grants provided to the poor by the
budget stretch further and result in improved living standards,” said Catriona Purfield,
World Bank program leader.
 The report recommends the South Africa Competition authorities expand their
investigations beyond the traditional areas of food, intermediate inputs and
construction to new industries and markets. Safeguarding the efficacy of the
Corporate Leniency Policy, which provides incentives for cartel members to disclose
information, will be key ensuring the continued success of the Competition
Authorities in cartel detection. The upcoming assignment of spectrum for broadband
services offers the possibility to get the regulatory environment right so to encourage
greater competition between providers allowing for more rapid progress towards the
NDP target of achieving 100% access to broadband by 2020 at an affordable cost to
consumers.
42
BRICS BANK
National development bank
The New Development Bank BRICS (NDB BRICS), formerly referred to as the BRICS
Development Bank, is multilateral development bank operated by the BRICS states (Brazil,
Russia, India, China and South Africa) as an alternative to the existing US-dominated World
Bank and International Monetary Fund. The Bank is set up to foster greater financial and
development cooperation among the five emerging markets. Together, the four original BRIC
countries comprise in 2014 more than 3 billion people or 41.4 percent of the world’s
population, cover more than a quarter of the world’s land area over three continents, and
account for more than 25 percent of global GDP. It will be headquartered in Shanghai, China.
Unlike the World Bank, which assigns votes based on capital share, in the New Development
Bank each participant country will be assigned one vote, and none of the countries will have
veto power.
SHANGHAI—When leaders from five of the world’s fastest-growing economies convened a

summit four years ago, they agreed a development bank would amplify their “voice” in
international financial affairs. Now, many of those economies are slumping, and their new
bank’s immediate plans hinge on Beijing.
43
The New Development Bank, the just-opened institution co-owned by the Brics countries of
Brazil, Russia, India, China and South Africa, is awaiting Chinese regulators’ approval to sell
about $1 billion worth of long-term yuan-denominated bonds, K.V. Kamath, president of the
bank, told The Wall Street Journal on Thursday.
The timing of the decision will help determine how soon the bank can begin lending. Its
board will begin considering proposals at an April meeting.
One possible project is a hydropower plant in western Russia, part of the bank’s plans to
focus on green energy. It aims to lend to South Africa in the rand to limit the country’s
exposure to potentially volatile swings in the U.S. dollar. Bank officials say outlays this year
could total as much as $2 billion in 2016 and over triple that amount next year.
China’s bond market is bigger than the ones in other countries and theoretically more
accommodating for the bank because it has already obtained a triple-A credit rating in the
country, which should allow it to borrow cheaply.
But borrowing on the country’s interbank debt market is also tightly regulated.
“There certainly is an opportunity to raise funding in China,” Mr. Kamath said. “We hope in
the next six to eight weeks, we will be able to make our first bond issue in China.” He added
no other bond market appears feasible for the moment.
44
Like a mini-World Bank for the Brics nations, the New Development Bank exemplifies
efforts by emerging-market countries, primarily China, to design new international financial
institutions to serve their interests. It was hatched at a March 2012 summitIndia hosted. In a
communiqué, Brics leaders expressed frustration with their limited “voice and
representation” in existing global forums considering the size of their economies, which at
the time were sizzling at an average growth rate above 5%.
Since then, slumping commodity prices have pushed Brazil and Russia into recession and
weakened South Africa, while China is undergoing a wrenching slowdown. Only India
among them is expected to post a faster growth rate this year than it did around the time the
bank was proposed. The International Monetary Fund pegs the Brics’ average growth rate at
2% this year.
“China and the emerging economies have set out to develop institutions of their own,” said
Robert Wihtol, a Manila-based consultant and former China country director for the Asian
Development Bank. But a particular challenge to the New Development Bank, he said, is that
fast growth was its designers’ primary “common denominator.”
A hitch for the bank: Sovereign-debt downgrades for some of its member countries could
translate into higher borrowing costs for it on international markets. Plus, slowing growth
makes the kinds of low-payback infrastructure projects development banks lend to even more
risky.
Mr. Kamath, a 68-year-old veteran Indian banker who in his current post effectively reports
to the finance ministers of the five Brics members, said the economies remain dynamic and
still need development financing.
“They may be slowing but, put together, they are contributing more to growth than the rest of
the system,” he said in his office, which offers views across Shanghai’s financial district.
“I’m not trying to boast. I’m only trying to say there’s an appetite for growth in all these
countries.”
China appears critical to the emerging world’s push for new global financial strategies. It is
the force behind another, larger development bank recently inaugurated, the 57-nation Asian
Infrastructure Investment Bank, as well as wholly domestic initiatives like a $40 billion fund
to develop infrastructure along the ancient Silk Road and maritime trade routes that
connected China with much of the rest of the world.
45
The New Development Bank’s proposed bond not only illustrates Beijing’s outsize
importance to the process but also how its involvement introduces uncertainties.
China’s $6.1 trillion interbank bond market represents the bank’s only viable debt-market
funding option at the moment, in part due to its local credit rating, said Mr. Kamath.
Still, Mr. Kamath said the bank isn’t sure yet about how China’s currency policies may affect
plans to serve the broader membership. A key plank in the bank’s strategy is to limit
borrowing costs by using local-currency lending, but he isn’t yet sure how money raised in
yuan can be swapped into other currencies so it can be lent to projects in the other four
member countries.
“For example, can we raise renminbi here and swap part of it into African rand, and on-lend
into rand?” he said. Mr. Kamath said the bank doesn’t anticipate significant hurdles to
working with yuan as a result of recent downward pressure on the currency, but added: “We
will learn to work within the constraints that the marketplace poses.”
46
CONCLUSION
Weak growth among major emerging markets will weigh on global expansion in 2016,
according to the latest report from the World Bank, with advanced economies solely
responsible for a modest increase in global activity.
According to the World Bank's "January 2016 Global Economic Prospects" report published
Wednesday, economic growth in 2016 would pick up to a 2.9 percent pace, from 2.4 percent
in 2015, despite weakness in emerging market economies.
AsianDream | Getty Images
While global economic growth was less than expected in 2015 amid a decline in commodity
prices, flagging trade and episodes of financial volatility, the World Bank noted, the outlook
for the coming year hinged on how developed economies performed.
"Firmer growth ahead will depend on continued momentum in high-income countries, the
stabilization of commodity prices, and China's gradual transition towards a more
consumption and services-based growth model."
The World Bank predicted that developing economies are set to expand by 4.8 percent in
2016, less than earlier forecasts, but up from a post-crisis low of 4.3 percent in the year just
ended.
47
However, growth is projected to slow further in China, while Russia and Brazil are expected
to remain in recession in 2016. The South Asia region, led by India, is projected to be a
"bright spot" with the recently negotiated Trans-Pacific Partnership having the potential , it
said, to "provide a welcome boost to trade."
Although the World Bank saw a faster-than-expected slowdown in large emerging economies
as "unlikely," such a scenario could have global repercussions, it warned. "Risks to the
outlook also include financial stress around the U.S. Federal Reserve tightening cycle and
heightened geopolitical tensions."
Poverty reduction
For the poor, the prospects of economic improvement appeared distant, however. The World
Bank — whose aim is "to end extreme poverty within a generation and boost shared
prosperity" — warned that simultaneous weakness in most major emerging markets "is a
concern for achieving the goals of poverty reduction and shared prosperity because those
countries have been powerful contributors to global growth for the past decade."
World Bank Group President Jim Yong Kim commented in the report that more than 40
percent of the world's poor live in the developing countries where growth slowed in 2015 and
signaled that governments in those nations needed to do more.
"Developing countries should focus on building resilience to a weaker economic environment

and shielding the most vulnerable. The benefits from reforms to governance and business
conditions are potentially large and could help offset the effects of slow growth in larger
economies."
48
BIBLIOGRAPHY
 http://www.cnbc.com
 http://www.investopedia.com
 http://www.telegraph.co.uk
 http://www.worldbank.org
49

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Title of the Project

Prof. Soni Khemani

RAMNIRANJAN JHUNJHUNWALA COLLEGE

JULY 2015 - MARCH 2016

Class : (B.VOC (FMS) – SEM II)

Roll No. : (67)

Signature of the student

College : Ramniranjan Jhunjhunwala College

(Mrs. Soni Khemani)

It is my great pleasure to present this Final Report, which is part of my

To start with, I am deeply indebted to my project guide Prof. Soni

I would also like to place on record my gratitude & sincere thanks to

Foreign investment and emerging market India

Types of India Market -

Types of Consumer India Markets -

Industrial Rules and Policies in India

 Food Processing Industry

The Bottom Line

Brazil’s Income Decomposed

The Downturn: Lower Demand

Further, government spending appears somewhat handicapped as Brazil’s fiscal accounts

Moving Forward: Improvements for Income Growth

The Bottom Line

The Emerging Market of Russia

Essential facts about Russia:

 Type of government: Federation

 Major industries: Agricultural machinery, tractors, and construction equipment; all

 English-language newspaper: The Moscow Times

The pros of doing business in Russia

 Educated population: The Russian education system is excellent. Almost 43 percent of

Risks of doing business in Russia

The Emerging Market in Russia

Essential facts about Russia:

 Type of government: Federation

 Major industries: Agricultural machinery, tractors, and construction equipment; all

 English-language newspaper: The Moscow Times

The pros of doing business in Russia

 Educated population: The Russian education system is excellent. Almost 43 percent of

Risks of doing business in Russia

The Emerging Market in Russia

Essential facts about Russia:

 Type of government: Federation

 Major industries: Agricultural machinery, tractors, and construction equipment; all

 English-language newspaper: The Moscow Times

The pros of doing business in Russia

Risks of doing business in Russia

A brief history of China’s economic growth

Lessons from history

Here are their projections:

Key components of the plan include:

 Making sustainable investments in competitive economic infrastructure

National development bank

SHANGHAI—When leaders from five of the world’s fastest-growing economies convened a

AsianDream | Getty Images

"Developing countries should focus on building resilience to a weaker economic environment

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