Emerging economies driving global rebound

Developing countries are gaining a stronger position on the world economic stage and becoming significant investors in their own right, and helping to drive the economic recovery.

Emerging markets are providing up to 80% of the growth in global wealth. Once a destination for ‘hot money’ – which can leave as quickly as it arrives – the emerging markets are no longer just a destination for cash, according to Aleksandr Pertsovsky, President of Renaissance Capital

“Capital is not just going to the emerging markets where there are the highest returns, but it's generated in the emerging markets. China, Russia, Brazil, India are the largest holders of foreign exchange reserves, that's where the capital is.”

At the G20 meeting in Toronto emerging market leaders demanded a bigger voice in international decisions, and more voting rights at the IMF. But these economies are not just partners on an international level – they are also competitors, especially in the commodity and energy sectors, according to Sergey Vakulenko, managing director, IHS CERA.

“Russian companies are trying to enter the international stage as well. the main contenders will be Indian and Chinese companies who have extremely deep pockets and also national mandates assuring a supply of hydrocarbons to these growing national economies. in any direct competition Russian companies will be in a very difficult position.”

Meanwhile, the leading emerging markets are themselves becoming financial powers. The Asian tigers, Russia and India are, in turn, investing heavily in Africa – creating new financial bridges that could help drive the world out of recession.