Emerging Markets
Chapter
9
Stages of Economic Development
1. The Traditional Society
9-2
2. The Pre Conditions for Take-off
3. The Take-Off
4. The Drive to Maturity
5. The Age of High Mass Consumption
Irwin/McGraw-Hill
SOURCES: Walt W. Rostow, The Stages of Economic Growth 2d ed.
(London: Cambridge University Press, 1971), p.10.
United Nations Economic
Development System
9-3
More-Developed Countries (MDC)
Less-Developed Countries (LDC)
Least-Developed Countries (LLDC)
Irwin/McGraw-Hill
Newly Industrialized Countries
Growth Factors
9-4

Political Stability

Economic and Legal Reforms

Entrepreneurship

Central Planning

Outward Orientation

Factors of Production

Industries Targeted for Growth

Financial Incentives

Privatized State-Owned Enterprises

Large, Accessible Markets

Low Tariffs
Irwin/McGraw-Hill
Infrastructure of Selected Countries
Highways*
(paved km)
(000)
Railways
(km)
(000)
Trucks
and Buses
in Use (000)
Electricity
Production
(kwh per head)
United States
6,243.2
214.3
49,259
13,696
Brazil
1,670.1
22.1
2,540
1,925
Japan
1,115.6
26.5
21,392
8,182
Colombia
12.6
3.3
4,154
1,147
Germany
618.2
43.9
3,174
6,680
8.3
2.7
110
105
Mexico
242.3
26.5
3,773
1,898
Spain
318.0
15.3
3,360
4,728
1,100.0
62.4
2,567
485
55.4
21.4
1,853
5,020
170.0
58.3
3,591
946
Country
9-5
Kenya
India
South Africa
China
*Includes unpaved and paved.
Irwin/McGraw-Hill
SOURCES: For additional information, see International Marketing Data and Statistics, 19997
(London: Euromonitor Pulications, 1997); and “Indicators of Market Size for 115 countries, “
Country Monitor, December 25, 2000.
Common Traits of
Big Emerging Markets
9-6

Are physically large.

Have significant populations.

Represent considerable markets for a wide
range of products.

Have strong rates of growth or the potential for significant
growth.

Have undertaken significant programs of economic
reform.

Are of major political importance within their regions.

Are "Regional Economic Drivers".

Will engender further expansion in neighboring markets as
they grow.
Irwin/McGraw-Hill
Big Emerging Markets
Population
(millions)
GDP
($ billions)
GDP
(per capita)
Trade*
($ billions)
Asia
9-7
ASEAN^
434.8
CEA (Chinese Economic Area)‡ 1,205.0
India
10,028.0
South Korea
43.7
$666.0
1,374.6
437.2
476.0
$ 15,317
1,141
458
10,063
$ 1,294.8
1,109.0
63.3
280.5
97.4
35.7
158.6
486.1
283.1
551.8
4,992
7,740
3,305
328.4
53.6
108.6
41.4
147.8
3,570
59.4
38.7
58.6
135.3
189.2
3,500
3,027
26.4
63.4
41.6
23.7
91.5
102.1
2,201
4,307
24.9
40.9
Latin America
Mexico
Argentina
Brazil
Africa
South Africa
Europe
Poland
Turkey
Possible Additions
Colombia
Venezuela
* Imports and exports.
^ASEAN includes Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam.
‡CEA consists of the provinces of Southern China, Hong Kong, and Taiwan.
Irwin/McGraw-Hill
SOURCES: For additional information, see “indicators of Market Size for 115 countries,
” Country Monitor. December 25, 2000. “Direction of Trade Statistics Yearbook, 1999.
International Monetary Fund, 2000, and visit www.stat-usa.gov/bems/bemschi/bemschi.html/.
The Americas
GREENLAND
(DENMARK)
Alaska
(United States)
CANADA
9-8
Montreal
Toronto
San Francisco
Los Angeles
UNITED
STATES
Chicago
Dallas
Detroit
Miami
CUBA
Hawaii
(United States)
GUATEMALA
HONDURAS
ST. SALVADOR
NICARAGUA
COSTA RICA
PANAMA
ECUADOR
HAITI
JAMAICA
VENEZUELA
COLOMBIA
BRAZIL
PERU
BOLIVIA
PARAGUAY
PACIFIC OCEAN
GUYANA
SURINAME
FRENCH GUIANA
Belo Horizonte
Rio de Janeiro
Sao Paulo
URUGUAY
Buenos Aires
Irwin/McGraw-Hill
Economic and Social Data for
Selected Countries
Food
($ million)
Country
Consumer Spending
Hospital Number
Percent
Clothing Percent Beds per
of
of
($ million)**
of
(000s)
Doctors
Total*
Total* Population
Literacy Tourism
(Percent) Receipts
($ million)**
9-9
United States
$ 741,340
18.1%
$221,800
5.4%
5.1
560,300
99.5%
$45,579
Argentina
16,952
38.8%
2,332
5.3%
5.3
96,000
93.9%
2,336
Brazil
81,934
31.2%
12,799
4.9%
3.5
169,488
77.8%
1,559
9,264
35.2%
1,597
6.1%
1.5
29,353
85.2%
410
Mexico
57,900
33.7%
12,066
7.0%
0.7
130,000
87.6 %
4,355
Venezuela
15,501
43.2%
3,679
10.2%
2.6
*28,400
84.7%
36.5
Colombia
* Percent of all consumer spending.
** In U.S. dollars, basis 1988.
Irwin/McGraw-Hill
Eastern Europe and the Baltic States
ESTONIA
LATVIA
Baltic
Sea
9-10
LITHUANIA
POLAND
CZECH
REPUBLIC SLOVAKIA
SLOVENIA
HUNGARY
ROMANIA
Black
Sea
BOSNIA AND
HERCEGOVINA
YUGOSLAVIA
BULGARIA
MACEDONIA
Tyrmenian
Sea
Irwin/McGraw-Hill
ALBANIA
GREECE
Aegean
Sea
TURKEY
Eastern European Markets
Population
GDP
GDP
Exports
Imports
(millions) ($ billions) ($ per capita) ($ millions) ($ millions)
9-11
Albania
Bosnia/
Herzegovina (*)
Bulgaria
Croatia (*)
Czech Republic(**)
Hungary
Macedonia(*)
Poland
Romania
Slovakia(**)
3.28
$ 2.7
$ 820
$ 80
$ 147
2.66
9.00
4.78
10.30
10.30
2.05
38.40
22.80
5.27
0.8
10.1
26.3
52.0
45.7
4.8
135.3
34.8
20.7
300
1,220
5,600
5,050
4,505
2,400
3,500
1,544
1,763
NA
4,303
4,633
14,575
19,100
1,244
25,751
8,385
12,063
NA
3,271
7,582
16,284
15,224
1,420
42,307
10,131
13,003
(*) Former republics of Yugoslavia.
(**) Former republics of Czechoslovakia.
Irwin/McGraw-Hill
Sources: “Indicators of Market Size for 115 Countries,” Country Monitor,
December 25, 2000; and International Trade Statistics yearbook (New York:
United Nationa, 2999).
Asia
N. K0REA
JAPAN
S. K0REA
9-12
CHINA
NEPAL
TAIWAN
BHUTAN
Hong Kong
MYANMAR
INDIA
LAOS
PAKISTAN
BANGLADESH
VIETNAM
CAMBODIA
THAILAND
BRUNEI
MALAYSIA
SRI LANKA
SINGAPORE
INDONESIA
INDIAN OCEAN
Irwin/McGraw-Hill
PHILIPPINES
Asian Markets - Selected Countries
Population
GDP
GDP
Exports
Imports
(millions) ($ billions) ($ per capita) ($ millions) ($ millions)
Australia
18.5
$ 411.0
$ 22,000
$ 52,966
$ 61,347
1,230.1
917.7
746
148,755
132,007
6.5
173.6
26,701
173,546
192,764
India
955.2
437.2
458
30,537
34,456
Indonesia
199.9
215.0
1,076
43,285
39,456
Japan
126.2
4,199.5
33,277
443,000
335,871
South Korea
46.0
476.0
10,361
125,365
135,153
Taiwan
21.5
283.3
13,000
111,837
103,652
China
9-13
Hong Kong
Irwin/McGraw-Hill
SOURCES: “Indicators of Market Size for 115 Countries,”
Country Monitor. December 25, 2000; and S.T.E.T.
Capitalism with Chinese Characters
Jiang Zemin’s Reform Agenda
9-14

Restructure state enterprises. SOEs account for about
two-fifths of the industrial output but soak up four-fifths of
investment.

Strengthen financial markets. Expand and ensure the
integrity of capital markets.

Sell state assets. Sell off all but 1,000 of China’s 305,000
state enterprises and allow some to go bankrupt.

Build social services. Create housing, pension programs,
and other services to relieve burdens on SOEs and to care
for millions who may lose jobs.

Slash tariffs. Reduce average tariffs to 17 percent in 1997
and to 15 percent by 2000 as part of China’s bid to join the
World Trade Organization.
Irwin/McGraw-Hill
India’s Five-Point Agenda
1. The improvement of the investment climate.
9-15
2. The development of a comprehensive WTO strategy.
3. The reformation of the agriculture, the food processing,
and the small-scale industry.
4. The elimination of red tape
5. The institution of better corporate governance.
Irwin/McGraw-Hill
Living Standards in Selected Countries
Households
(000)
9-16
Brazil
Chile
China
Colombia
Ecuador
Hong Kong
India
Indonesia
Japan
Peru
Philippines
Singapore
South Africa
United States
Irwin/McGraw-Hill
38,434
3,216
357,064
8,482
2,626
1,797
185,048
43,065
40,548
5,057
12,750
815
13,300
100,308
Persons per
Household
4.05
4.35
3.40
4.14
4.36
3.44
5.00
4.50
3.09
4.65
5.37
3.67
3.37
2.62
Percent of Households
Piped
Flush
Electric
Water
Toilers
Lighting
73%
70%
90%
76%
52%
98%
10%
12%
93%
49%
NA
48%
96%
99%
76%
59%
NA
64%
33%
80%
5%
15%
65%
43%
NA
42%
35%
99%
69%
88%
NA
87%
62%
93%
16%
30%
98%
48%
NA
37%
90%
99%
SOURCES: For additional data, see Demographic Yearbook 1997
(New York: United Nations, 1997); and International Marketing Data
Statistics, 18th ed. (London: Euromonitor Publications, 1997).
Which of the Following have you
Purchased in the Past Three Months?
Product
9-17
Percent
in
United
States
Percent
in
Australia
Percent
in
Brazil
Percent
in
Germany
Percent
in
Japan
Percent
in
United
Kingdom
Soft drinks
96
90
93
83
91
94
Fast-food
94
94
91
70
86
85
Athletic footwear
59
40
54
33
30
49
Blue jeans
56
39
62
45
42
44
Beer*
46
50
60
46
57
57
Cigarettes*
24
33
30
38
39
40
* Among adults 18+. Source: Yankelovich Clancy Shulman.
Irwin/McGraw-Hill
SOURCE: Nancy Giges, "Global Spending Patterns Emerge,"
Advertising Age, November 11, 1991, p. 64.
Consumption Patterns in Selected Countries
(percent of household expenditures)
U.S.
Food
9-18
Germany Singapore
Mexico
Poland
Iran
Kenya Thailand India
10%
12%
19%
35%
29%
37%
38%
30%
52%
6%
7%
8%
10%
9%
9%
7%
16%
11%
Gross rent
18%
18%
11%
8%
6%
23%
12%
7%
10%
Medical care
14%
13%
7%
5%
6%
6%
3%
5%
3%
8%
6%
12%
5%
7%
5%
10%
5%
4%
Transport/
communications 14%
13%
13%
12%
8%
6%
8%
13%
7%
Appliances/
other durables
31%
30%
25%
35%
14%
22%
24%
13%
Clothing
Education
Irwin/McGraw-Hill
30%
SOURCE: For additional data, see Ricardo Sookdeo, "The New global consumer
Fortune, Autumn-Winter 1993, pp. 68-72.
Living Standards in Selected Countries
9-19
Country
Household
(000)
Brazil
Chile
China
Colombia
Ecuador
Hong Kong
India
Indonesia
Japan
Peru
Philippines
Singapore
South Korea
United States
38,434
3,216
357,064
8,482
2,626
1,797
185,048
43,065
40,548
5,057
12,750
815
13,300
100,308
Irwin/McGraw-Hill
Persons per
Household
4.05
4.35
3.40
4.14
4.36
3.44
5.00
4.50
3.09
4.65
5.37
3.67
3.37
2.62
Percent of Households
Piped
Flush
Electric
Water
Toilets
Lighting
73%
70%
90%
76%
52%
98%
10%
12%
93%
49%
NA
48%
96%
99%
76%
59%
N/A
64%
33%
80%
5%
15%
65%
43%
N/A
42%
35%
99%
69%
88%
N/A
87%
62%
93%
16%
30%
98%
48%
N/A
37%
90%
99%
SOURCE: Demographic Yearbook 1997 (New York: United
Nation, 1997); and International Marketing Data and Statistics,
1997 (London: Euromonitor Publication, 1997)