Download Governments and Governance, and Emerging Markets

Welcome to class of
Governments, Emerging Markets, and
Trading Blocks
by
Dr. Satyendra Singh
University of Winnipeg
Canada
Why Emerging Markets Now?
• No fighting!
• More confidence in governance/people/system
• Economic reform/free market policies
– Tariff/quota ↓, FDI ↑, investors as partners, deregulated industry,
privatization of state-owned firms
• Sense of market development in EMs
– Two market segments (Urban and rural)
– First mover advantage/educate customers
• Change in culture
– Social mobility ↑  demand for expensive products
– Buy now, pay later
EM: Eastern Europe
• Czech Republic and Poland
– Quick to implement free market policies
• Hungary and Romania
– Slow  bureaucrats from communists days
• Yugoslavia
– Ethnic and religious divisions – Albania, Bosnia
• Czech, Hungary, Slovak, Poland  OECD
– I.e., accept the obligation to modernize the economies
• Baltic statesEstonia, Latvia, LithuaniaWTO/EU
– Quick to move away from soviet-style economies
– Drop Rubal, tariff-free, free-market economy
EM: Asia
• 4 tigers/dragons  HK, S Korea, Taiwan, S’pore
– From assembly line to electronics, machines, ship building
• Japan is lagging behind
– S Korea links with China, USSR, and influences the region
• China  dual economy  socialism/capitalism
– By 2015, GNP of China = USA
– China now in WTO  should follow the WTO rules
– Human rights, legal system, corruptions, protectionism
• India
– free-market economy, > 51% share, no import restrictions
– 400m MIG/HIG, 800m LIG consumers
Canada’s Relations with the EMs
• Canada has good relations with
– South America, NAFTA, Africa
• Canada’s role in E. Europe is limited
• Canada is interested in ASEAN
– 4 tigers + Indonesia, Malaysia, Philippines, Thailand
• Canada is a member of APEC
– Apprehensive in pursuing substantial business due to
risks
International Agencies…
• Organization For Economic Cooperation and
Development (OECD)
– Group of developed countries dedicated to
promoting economic expansion in its membernations
• Organization of Petroleum Exporting
Countries (OPEC)
– Cartel of 11 petroleum exporting countries
• Middle East (6): Iran, Iraq, Kuwait, Qatar, Saudi Arabia
and UAE
• Africa(3):Algeria, Libya
• Other (2): Indonesia and Venezuela
Other non OPEC oil exporting countries: UK, Russia, Mexico, Norway
International Agencies
• WTO Principles
– Trade will be without discrimination
– Trade should be freer, with trade barriers negotiated
downward
– Trade should be predictable
– Trade should be more competitive
– Trade should be more beneficial for less developed
countries, encouraging development and economic
reform
– protects copyrights, trademarks, trade secrets, and
other intellectual property matters
– Disagreement on agricultural policies
• India, Brazil…
Emerging Markets Trading Blocks
• Asia
– Association of SouthEast Asian Nations (ASEAN)
– Asia Pacific Economic Cooperation (APEC)
• Africa
– Economic Council of West African States (ECOWAS)
– Common Market for Eastern and Southern Africa (COMESA)
• South America
– Mercosur (Mercosul)
ASEAN: Asso. Southeast Asian Nations
• Free Trade
• 10 countries
– Brunei, Cambodia,
Indonesia, Lao, Malaysia,
Mayamar, Philippines,
Singapore, Thailand, and
Vietnam
• HO: Jakarta
• ASEAN scholarship
• ASEAN Univ.Network
APEC: Asia Pacific Economic Cooperation
• Eco. Growth & prosperity
– Trade/invst Liberalization
– Business Facilitation
– Economic/tech cooperation
• Important
– 40% of world’s pop
– 50% of world’s GDP
– 40% of world’s trade
• 21 countries
– Australia, Brunei, Canada, Indonesia, Japan, Korea, Malaysia, NZ,
Phil, Singapore, Thai, US, Taipei, HK, china, Mexico, PNG, Chile,
Peru, USSR, Vietnam
• HO: Singapore
ECOWAS: Economic Council West African States
• Economic integration
– Mutual defense, court of justice
– Ecowas rail, common currency 2015
– Gambia, Ghana, Guinea, Nigeria, Sierra L
• 15 countries
– Benin, Burkina Faso, Cape Verde
Cote d’lvoire, Gambia, Ghana, GuineaBissau, Liberia, Mali, Nigeria, Senegal,
Sierra Leone, Togo
– Niger – suspended 2009– election problem
– Guinea – suspended 2008 – coup attempt
– Liberia wants to join Ecowas
• HO: Abuja, Nigeria
COMESA: Common Mkt for Eastern Southern Africa
• Regional economic integration
– Trade and investment
• 19 countries
– Burundi, Comoros, Congo, Djibouti,
Egypt, Eretria, Ethiopia, Kenya,
Libya, Madagascar, Malawi, Mauritius
Rwanda, Seychelles, Sudan, Swaziland
Uganda, Zambia, Zimbabwe
• HO: Lusaka, Zambia
• Branding: Buy African, Build Africa
• COMESA statistics
MERCOSUR
• Free trade and people movement
• Full member
– Argentina, Brazil, Paraguay, Urguay
Venezuela (Paraguay to ratify)
• Associate member
– Bolivia, Chile, Columbia, Ecuador
Peru
• Observer
– Mexico
• HO: Sao Paula, Brazil