Things to Consider When Investing in Emerging Economies

Being successful in finding a good investment requires some degree of research, a thorough understanding of your risk tolerance and some strict due diligence. To accomplish this, many investors meet with financial planners and set a course, or strategy, that matches up with their risk acceptance, their goals and their funds. This is a great strategy to follow with all of your traditional investments and investing money into emerging countries is no different. In fact, some would say it is even more important, given that these markets tend to be geographically distant and also have new or no banking regulations in place to regulate outside investment.

Often times (although not in Brazil and China so much) regulations and banking/investment standards are not always done the same way as in known financial marketplaces, such as North America and Europe. These rules and regulations can be both a blessing and curse at the same time if you do not know how to navigate your way through. Therefore it is best to deal with an experienced asset manager, with knowledge of these marketplaces.

For those investors who are unaware, an emerging market is an economy that is up-and-coming and that is growing into a mature economy. Places like China, India and Brazil can all be considered 'emerging' even though China is one of the world's largest economies and will soon surpass the United States (estimated to be in 2016) as the world's largest economy. But the sheer size of the marketplace does not mean that it cannot be considered to be emerging.The fact is that these countries are still developing and need investment to achieve their economic potential.

Aside from China, emerging markets - such as Brazil and India, have large population bases and an economy growing at a very high rate. Often times these markets have a mix of manufacturing and raw natural resources (mining, forestry etc) and are predicted to continue growing well into the future. Moreover, given that emerging countries will account for almost 70 percent of world economic growth in the next half-a-decade, there are many great investment experiences to be had.

India and UAE Could Establish Bilateral Trade Agreement

India, one of the world’s "most promising" countries, is looking to sign a Bilateral Investment Protection Agreement with the UAE in the near future, hoping it will help the growing nation in its quest to become a major force in the global economy. M.K. Lokesh, Indian Ambassador to the UAE, stated, "Both sides have agreed to start the negotiations next month," adding the Indian government is committed to addressing the concerns about UAE investments in India.

There has indeed been a lot of economic progress in India in the last 20 years. Long-regarded as one of the world’s most poorest nations in the last century, it looks as though those days are behind them as India continues to increase it’s prosperity levels among it’s more than one billion people. Although the country’s rise up the ranks as a viable contributor to the global economy has been somewhat slow with some peaks and valleys, it has been overall a relatively steady uphill climb although they have suffered somewhat of a setback as a result of the U.S.-European Banking crisis. They were not alone. Most other countries did as well.

In 1990, India’s GDP worth was a little over US$300 billion and has grown to more than six times since then, with periods of ups and downs due to a number of influential factors. A lot of which has to do with the economic ties that the country has with other major players on the global economic stage. What happens in the West has a big impact on India’s economy and at the same time, the growing markets of the east are putting pressure on India as they are emerging as strong competition. As well, India has had to rely on foreign investments to help power their growth and the government has been fairly slow in its restructuring of foreign investment laws, leading to a lack of confidence from businesses and investors looking to capitalize on its huge potential.

India’s push to grow their economy and increase their prosperity among their people was never going to be an easy task and they have had their struggles and continue to. This pending agreement with the UAE will go a long way in forging a good relationship with one of the world’s most stable and richest nations. The UAE is a great example of how to make the right investments that will generate the best returns in both the short and long term of a country’s economy. Above all, India could certainly benefit from more similar trade agreements with other more stable countries around the world, instead of having to depend too much on the United States or the European nations. Either way, the country has a bright future to look forward to in the 21st century. It just may take a little longer than expected and hoped for.

Economic Dominance Prompts Investors to Invest in Asia

For over a century the United States has been the largest economy in the world. However, the transition of global economic powerhouses has seen a shift from the United States, to the rich countries Europe, then to China and now; investors are focusing their attention on India.

With the current investor-hype India is receiving, it is as though the world had just discovered it. Yet, India's economic success is far from new. After independence in 1947, India made decades of meager progress, as its economy grew at an average GDP rate of 4 percent per year; between the 1950’s and the later part of the 1980’s. India's economy experienced a huge leap of 7.5 percent annually, between 2002 and 2006, which propelled India into the spotlight and earned itself recognition; as one of the world's best-performing economies. These impressive figures have prompted more and more investors, to seek access to Asian markets and a share of the region's prosperity.

Despite a myriad of obstacles that will challenge India's 1.1 billion people, the country is expected to record the second fastest growth among the world's major economies, by 2020.  According to the IMF, India will experience phenomenal growth of 9.7 percent, which will only be outperformed by China's bustling economy; which is expected to grow by 10.5 percent. Fueled by the ongoing financial successes and steady GDP growth of these two economic powerhouses, investing in Asia has become a very appealing option for private investors, across the globe.