Asia, Latin America Emerging Markets

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"Some 70 emerging market countries in East and South Asia, Eurasia, Latin America, and Africa that share prospects of superior economic performance or seek to create a conducive business environment are of interest to investors." - Emerging Markets Forum, Washington, D.C. MANILA, Philippines - As discussed in several columns since April, 2011, based on FVR's active participation in several regional/global gatherings, the economies of the Philippines, Indonesia, Vietnam, Kazakhstan, Chile, and Mexico, among others, have been identified by multilateral analysts as capable of reaching higher per capita growth on a sustainable development trajectory within the next generation.The BRICSThis listing does not include the top 5 emerging economies already tagged as the "BRICS" (Brazil-Russia-India-China-South Africa) by Beijing last April during its special summit in Sanya, Hainan, during which Presidents/PMs Dilma Rouseff, Dmitry Medvedev, Manmohan Singh, and Jacob Zuma were singled out by China's Hu Jintao for their economic sustainability.Beijing's focus on BRICS and emerging BRICS -- a more advanced multilateral framework for economic synergy than the US initiative for the "Trans-Pacific Partnership" caused some grumblings of dissatisfaction about South Africa's inclusion -- especially because of unresolved racial inequities, small population base, pollutive mining, and failure (as leader of the African Union) to successfully mediate Libya's civil war to end killing of innocent civilians.The likes of Turkey, Chile, Argentina, and Indonesia had consistently been branded to reach the top rank of emerging markets because of their natural resources, policy regime, geographic connectivities, stable security condition, and productive labor pool.Among ASEAN countries, the Philippines, Malaysia, and Thailand are rated as potential "tiger cubs" attractive to foreign investors.EMF criteriaThe EMF Global gathering in Warrenton, Virginia, last 25-27 September was attended by 110 leaders and experts, including former IMF, World Bank, and Inter-American Development Bank executives, plus incumbents from the Asian Development Bank, Latin American Development Bank, and UNOutlined in last week's EMF confab are these critical reforms needed by countries aspiring for "emerging" (from "developing") status:(1) Strengthen governance and democratic institutions against organized crime, drug trafficking, and corruption.(2) Ensure stable, level, and transparent macroeconomic environments.(3) Improve competitiveness based on human development and provision of dependable finance, infrastructure, and energy systems.(4) Reduce costs/time for doing business with minimum bureaucratic red tape.(5) Implement inclusive policies that bridge disparities.(6) Consolidate positions as competitive players in the regional/ global economy.These same criteria were prescribed in ADB's recent "Asia 2050: Realizing the Asian Century."The Mexican caseMexico today is an interesting case. In its latest study "Mexico 2042: Prosperity For All," EMF concludes that it is being surpassed by other emerging economies because it:(a) Remains in the "Middle-Income Trap."(b) Lags in innovation due to poor education quality.(c) Is high in income inequality, with shortcomings in human development.(d) Is over-dependent on the US, and must move out to engage other regions.Because of their erratic quality of leadership, boom-bust cycles, and lack of inclusiveness, many countries of great potential like Mexico and the Philippines, among others, have been caught in the "M.I. Trap" and have been unable to develop sustainably.To economic strategists, the "M.I. Trap" is a situation when a country is not able to compete with low-income, low-wage economies in manufacturing; and compete capably high-skill, innovative industries. Mexico's plan of actionTo raise its rate and sustainability of GDP growth, Mexico needs to move out of the "MI Trap" by emphasizing inclusiveness and equality -- says the EMF. …