What does 2009 hold for emerging economies?

After the doom and gloom of the last half of 2009, economies worldwide were holding their collective, proverbial breath.  And although this year will see the global economy recovering slowly at best, it seems the full extent of economic recession hasn’t yet been totally felt.  While most media attention was focused on the big banks and financial institutions that were falling ad nauseum attempting, or almost drumming up sympathy for their tragic plight – and whose demise was sending the stockmarket crashing – and we were crying foul over the billions being poured into helping them recover and hopefully averting disaster, much of what the world could do, was merely cling on for the ride.  So how was all of this effecting the economies of the emerging world, and what will it mean for the year ahead?

Growth in the emerging world has undoubtedly slowed.  Many of its economies however, have been enjoying growth far greater than the massive, highly sophisticated economies of its first world counterparts, where dependency means that the effects of the stockmarket crash have also been felt far deeper.  And, according to the economist’s, the world in 2009: forecasting the year ahead report, emerging economies like Malawi, Congo’s Brazzaville and Angola may be thumbing their noses somewhat at the rest of the world, as they enjoy further economic growth – coming in at numbers 4,3 and 2 respectively, in terms of GDP growth worldwide.  China, rounding out the top 5, and Qatar at number 1 point to what some are saying could help developing countries to renew and develop their economies, as well as helping big economies like China’s to have more of a say in world economics.

With an expected GDP growth for 2009 of 8.3%, Malawi – one of the world’s poorest nations – will enjoy another consecutive year of positivity in its economic environment, as well as benefiting from a democratic government that has been drastically increasing living conditions for the past few years.  A surplus of food production also means that the rise in international food prices hasn’t yet affected Malawi, and of its major exports – tobacco, coffee, tea and sugar – their most recent tobacco harvest (sold just before world commodity prices crashed in 2008) brought in a record $465 million.  President Mutharika’s recently started fertilizer program will also ensure that agriculture in Malawi continues to improve.  Congo’s capital Brazzaville, located on the Congo river in the South of the country – at a predicted 8.5% GDP growth – is seeing the gains from promoting growth in the non-oil sector, even though most of its income is from the production of oil, gas and petroleum.  Nonetheless, oil production will increase in 2009 and Congo may only be mildly affected by the global economic crisis.  Add to this, reforms aimed at taking the country out of poverty instigated after civil war in 1997 (even though war in the neighboring Democratic Republic of Congo is still claiming lives) Congo’s president Sassou Nguesso’s economic reforms, which are still gaining momentum today, hold the country in good stead.  Similarly, Angola – with 9.8% GDP growth – will rely heavily on its sales in the oil and petroleum industry.  As of 2007 though, the country was the biggest supplier of oil to China, as well as being able to boast of being the fastest growing African economy for some time.

While the situation in the developed world may seem dour, emerging markets have in recent times, enjoyed much higher rates of growth – a trend which seems set to continue, especially with the positivity and optimism with which many of its governments are looking into the future.  Among the biggest emerging markets the BRICs group of economies (Brazil, Russia, India and China) is showing the way with innovative ideas.  Brazil in particular – with its “Zero hunger” and HIV-AIDS programmes, has seen massive positive changes in its society, its current president Luiz Inàcio Lula da Silva, reporting the halving of the number of poor in the country since he was elected president in 2003, as well as being able to boast of being one of the benchmark nations for alternative and renewable fuel sources.  By also helping to replicate their AIDS (Brazil will open an antiretroviral plant in 2009 to help fight the epidemic in Mozambique) and agricultural initiatives in the rest of Latin America and Africa too, Brazil is showing that emerging nations will soon not only have a role to play on the global stage, but must also remain aware of the benefits of them banding together to assist each other.  Brazil’s Latin American counterparts Cuba, are also looking forward to some positive change in 2009, after economic disaster in 2008 for housing and agriculture, as well as the natural devastation caused by twin hurricanes in the later part of ’08.  A change in the white house may bring a new agreement in trade, and the possible discovery of oil could well establish some economic might in the region.

Needless to say, all are still aware that there are certainly many people who are still struggling, as is the case in the emerging African nations too, and even though much of Africa has been enjoying strong growth for a number of years, poverty levels haven’t yet dropped proportionally, there are still riots and strikes over food and output per capita is still very low – among the world’s lowest in Angola, for example.  Even though it seems that growing African nations won’t be as adversely effected by the global economic crisis – mostly due to their financial infrastructure being less complicated – there is still much to be wary of.  Problems such as self-serving, corrupt governments, poor living conditions and a shortage of skills will remain a burden, as will the lack of investment in areas such as the electricity industry – which will surely hinder development.

As positive as it seems – and there is undoubtedly a lot to look forward to for many of these emerging nations – there are massive changes still waiting to come into effect, and still many problems needing to be ironed out.  Unfortunately too, pledges are often being made, but are too frequently proving impossible to meet.  One example is in Zambia, whose government has promised free basic health-care for all its citizens, but where life expectancy is still amongst the lowest of any nation.  Smart thinking, strong will and advantageous ideas are what is needed in this pivotal time for the developing and emerging world. Nevertheless, 2009 will certainly cause the world to take notice of the emerging African nations (and others the world over).   East Africa’s introduction to the global fibre optic system, as well as a new availability of digital maps of the continent – allowing easily accessible data to help monitor conflict, disease and famine – coupled with their strong economic growth, are just the tip of a collective iceberg for the optimistic few.

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