--.--.-- --. --:-- :edit
2011.09.18 Sun. 16:29 :edit
Report on Emerging Countries
1 Brain Storming
what is the purpose of this article? > to examine the possibility of development of emerging countries(EC) for next decades.
Emerging countries? > BRICs, the next eleven, Africa, Middle East, South America
which do i focus on? BRICs or the others > to survey how BRICs will deteriorate and how the others will develop. 2 vectors.
Economy, Political risk, foreign investment, human resource, education level, culture, currency, transport
2 from Nikkei articles…
foreign investment by Japanese companies > 60% of this year go to EC.
ユニチャーム is expanding in India. building factories. > if export from Japan, the commodity will be expensive due to tariff. >accelerating decrease of GDP?
BRICs deterioration… INFLATION, and protective trade
(Brazil) 2011-8-31 Interest cut > clear measure switch from containing inflation to stimulating economy. however, inflation rate is expected to be over 6% in 2011, and it is said that minimum wage is increasing 13~14% in 2012. even though interest was cut this time, economy is still expected to inflate.
rising salary > from world's factory to becoming-developed countries
(Brazil) 2011-9-15 impose higher tariff on imported car. > in order to protect domestic workers and car industry. same things happen in Russia.
(India) 2011-9-16 Interest increase to 8.25% > in order to amend inflation.
political risk… bribery.
(China) braking of export. >after decrease of the US national bond rate, companies refrain from ordering producing commodities in China
(China) bubbling real estate?
Nestle is going to invest on sub-sahara over 10 billion swiss franc in 3 years. > expecting on the development of the market due to population growth and foreign currency gained through exporting resources.
African population is expected to grow over 15 billion in 2030.
Mazda is building factories in Vietnam. > tariff on car is 70%.
Toyota is expanding market in Indonesia > producing 750 thousand cars in 2010. soon excelling produce in Thailand (800 thousand). Indonesia is growing to the no1 car market in asia
BRICs will struggle with heavy inflation. Indonesia and Vietnam will survive through this coming 10~20 years. Africa will become a major consuming market and also producing base of foreign companies after 2030.
4 Heavy Inflation on BRICs
The glory of BRICs will be over in these 20 years because of heavy inflation. This is because of 3 reasons, first reason is that contained risk of bad debt is going to increase by continuous increase of interest. Next, domestic consumption will shrink and at the same time export will no longer develop. Lastly, foreign investment will avoid BRICs due to high expense on human resource.
As inflation goes, the government will increase interest in order to avoid overheat of the economy. Companies which own much to debt finance will take a certain risk of paying interest to bank, and so do individuals. Concealed bad debts could be a trigger for bigger bubble burst when the development of economy in those countries over and go to collapse. Next two paragraphs explains how BRICs will lose their power.
Under inflation, the price of goods will get higher. In other words, domestic consumption will no longer contribute to the growth of the economy. Also, since the price of goods increase, it will harm most of manufacturer in EC, because they would take more costs to purchase materials and ingredients. Therefore, it is estimated that as inflation gets stronger in EC, their markets will shrink as domestic consumption lost its dynamics, and manufacturing lost sufficient mechanism.
Foreign companies have dropped tremendous effect by outsourcing manufacture to the cheap labors in China, which let this country called "the world factory". However,
X To Search on Data
* 景気指数 Brazil, India
* currency rate of Real
| h o m e |