EMERGING MARKETS: GLOBAL GROWTH DRIVERS, FIREWALL ECONOMIES
Erle Frayne D. Argonza
Global economic growth has shown a sputtering pattern over the last couples of years. The EU-USA-Japan 1st World corridor has particularly been the lackluster topguns, mired as they are in vicious cycles of recession, near zero growth, and ‘virtual economy’ strategies that only deepened their entrapment in the cul de sac they’re in.
Salving the global economic health since the opening yet of the new millennium are the Emerging Markets. Learning the lessons from the 1st World’s mistakes, the Emerging Markets instituted regulatory measures and related strategies that enabled them to build ‘firewall’ economies.
A ‘firewall’ economy is sealed from the global economic turmoils emanating from the 1st World countries. Remaining unaffected as such, they are able to sustain growth patterns that are impeccable manifestations of their trajectories of ‘virtuous circle’ of growth & development. Growing in unison, though at variance in total aggregate growth, they altogether keep the global economy afloat, thus saving many workers in the developing world from the devastating blows of market conflagrations which the 1st World countries are tragically situated.
Emerging Markets are largely 2nd World or Middle Income economies, a fact that many blind simpletons in their own backyards and the 1st World fail to see nor understand. Once an economy breaches the U.S. $1,000 per capita, it qualifies as 2nd World economy. Another criterion is the population composition: over half are in services and industries. Industrialization is, of course, rapid.
Emerging Markets are unique in that (a) each one of them has large populations and (b) very significantly large percentage of Middle Income earners among their people (i.e. family earning $6,000-$30,000). Large populations fulfill their labor needs at all times, and the total aggregate values of goods produced by such large populations make total national income consistently large, assuming sustained significant-to-high-level growth.
Top qualifiers that are recognized as ‘lead countries’ of the Emerging Markets are the BRIC:
Following closely behind the BRIC are the Next 11, namely:
- South Korea
South Korea is the only odd one out, as it’s economy is already 1st World or ‘overdeveloped’ in stage. It is one of the Dragon Economies of East Asia that includes, to recall, Hong Kong, Taiwan, and Singapore. It’s close ties to the Developing Countries or DCs, from which it came from, remains though, as exhibited by trade and cultural interactions with the DCs.
Other DCs that are smaller in populations, though nonetheless part of the developing world and contributors to global growth, are the Malaysia, Thailand, Singapore, South Africa, Argentina, and Chile. Malaysia, Thailand, and Singapore are engaged members of ASEAN that will unify into a common market next year, which will make the entire region a gigantic growth corridor that is indubitably among the world’s topguns.
To sum up the broad strategies of the Emerging Markets + Tiger & Dragon Economies that enabled ‘firewall’ against global turbulence, these are:
- Putting breaks on predatory finance via monetary and capital controls.
- Consistent, persistent, yet resilient reliance on the ‘physical economy’ as basis for wealth production—agriculture, manufacturing, infrastructure, transport & communications, science & technology—that are their domestic economic drivers.
- Shoring up their Foreign Exchange Reserves at levels sufficient to effect elasticity against global turmoils and buy several months worth of imports.
Needless to say, the Emerging Markets will be graduating to 1st World economy status one by one across the coming decades. By 2030, their collective wealth put together will more than surpass the combined wealth of the EU-USA-Japan. Enabled to aid other developing countries move up the ladder of success, they are exemplars of ‘inclusive growth’ that hopefully will eradicate poverty across the globe well before 2050.
Contrast that to the ‘exclusive growth’ of the North 1st World (EU-USA-Japan) powers that industrialized and enriched themselves at the expense of the developing countries or DCs that the former encumbered via investments, trade, and aid. The Northern powers in particular have histories of destroying nations and populations via two (2) world wars and many more conflicts, or using coercive instruments disguised as “soft power” or maintaining “peace”.
As the Emerging Markets have been showing the way, new models of development are now available for the poorer DCs which the West/North just can’t destroy any longer via IMF austerity programs (IMF is a stooge institution of predatory financiers). Rest assured there will be wider breathing spaces for comfort & prosperity in the long run by the working peoples of both Emerging Markets (& DC allies) and those of the 1st World as well who seems to have been excluded from prosperity by their own greedy politicians and elites.
[Manila, 08 January 2014]