Germany

Germany has the largest population in the European Union with 81.8 inhabitants in January, 2010. The prosperous German economy attracts millions of immigrants from around the world as it is the third largest country in terms of immigration. Germany is bordered by Poland, Czech Republic, Austria, Switzerland, France and Netherland. The land area is around 357,021 square kilometers and has maintained a high standard of living. Germany is known for its well established social security system which stems from the flourishing German economy.

In the world, the German economy ranks 4th in terms of nominal GDP and 5th in terms of purchasing power. Germany is the world’s second largest trader both in terms of imports and exports. Germany is also the hub of global scientific and technological developments.

Germany is the largest economy in the European Union. It benefits from a large pool of talented work force that has enabled Germany to dominate the vehicles, machinery, chemicals and household equipment vertical across the globe.

It is this strong and productive work force that enabled Germany to face recession with a resilient face and the Germany economy could manage to have a GDP (purchasing power parity) of $2.182 trillion in 2009. The graph below shows how the German economy performed since 2007 till 2009.

Even in the recession marred years, the German economy managed to stay stable as the world sixth largest country in terms of GDP (2009.)

However as is the case with recession, the economy did constrict and stood at -5% in 2009. The graph below shows how the real growth rate has performed since 2007 till 2009. (in percentage)

The GDP per capita has been strong as well. In 2009, the per capita GDP was $34,200. In 2008, the per capita GDP was slightly higher at $35,900 and $35,500 in 2008. However, the unemployment rate grew from 7.8% to 8.2% in 2009. This may be attributed to factors ranging from an industrial slow down to lesser imports for productivity.

Germany is part of the G-7, Group of Seven, G-8, Group of Eight, and G-20, Group of Twenty.

III. Emerging markets

The Emerging Markets was a term coined by World Bank economist Antoine W. van Agtmael in 1981 in reference to nations undergoing rapid economic growth and industrialization. The term is often used interchangeably with 'emerging and developing economies'. The IMF classifies 150 countries as Emerging Markets based on the composition of countries' export earnings and other income from abroad; a distinction between net creditor and net debtor countries; and, for the net debtor countries, financial criteria based on external financing sources and experience with external debt servicing.

Emerging and developing economies are often transitional economies, shifting from closed economies to open market economies. Often, the transition involves structural or policy reforms such as currency or capital market changes. The level of foreign investment is also critical for an emerging economy. In most cases, increased foreign investment is a sign the economy has potential. The injection of foreign currency into the local economy aids long-term investment to its infrastructure.

For foreign investors on the other hand, an emerging economy is an ideal investment opportunity as it often promises massive returns on investment. However, the risks involved in investing in an emerging economy are often larger than those in a developed economy.

IMF’s List of Emerging Economies (150 countries) encompasses countries such as China, India and Russia, who could potentially become the three largest economies in the world, poorer nations such as Haiti, and war-torn countries such as Afghanistan and Iraq.

The FTSE group classifies emerging markets into two separate groups based on the country’s national income as well as the development of its market infrastructure.

Advanced Emerging Markets: Brazil, Hungary, Mexico, Poland, South Africa, Taiwan

Secondary Emerging Markets: Chile, China, Colombia, Czech Republic, Egypt, India, Indonesia, Malaysia, Morocco, Pakistan, Peru, Philippines, Russia, Thailand, Turkey, United Arab Emirates.

MSCI Barra’s List (21 countries): Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan.

The Economist’s List (24 countries): Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hong Kong, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan.

Standard & Poor’s List (19 countries): Brazil, Chile, China, Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey

Dow Jones’ List (35 countries): Argentina, Bahrain, Brazil, Bulgaria, Chile, China, Colombia, Czech Republic, Egypt, Estonia, Hungary, India, Indonesia, Jordan, Kuwait, Latvia, Lithuania, Malaysia, Mauritius, Mexico, Morocco, Oman, Pakistan, Peru, Philippines, Poland, Qatar, Romania, Russia, Slovakia, South Africa, Sri Lanka, Thailand, Turkey, United Arab Emirates

Other Important Classifications.

Apart from these lists, other commonly used classification of emerging and developing economies include the BRICS (Brazil, Russia, India, China, and South Africa), the Next Eleven (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam), and the Global Growth Generator Countries (Bangladesh, China, Egypt, India, Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam).

Emerging and Developing Economies Export, Import & Trade

Emerging and developing economies were responsible for driving global trade growth by more than 8 percent annually in 2011 and 2012 according to the Organisation for Economic Co-operation and Development (OECD). As the five largest emerging economies in the world, BRICS account for 18 percent of global trade and about 45 percent of current growth.

Brazil, Russia and South Africa focus primarily on raw material exports, while India and China’s key exports lie in manufacturing and services. In April 2011, economic and trade ministers from the BRICS nations came together in a summit and vowed to “oppose trade protectionism in all its forms” by creating a task force designed to come up with suggestions to improve and expand economic cooperation between BRICS and other developing economies.

Emerging and Developing Economies Industry Sectors.

Emerging economies also tend to experience a shift from agriculture to the industrial and services industries. The agriculture sector is often seen as a vital component of an emerging economy’s GDP, however most emerging and developing economies will seek to diversify into more high-value industries.

A classic example is China. In 2001, agriculture was responsible for 17.7 percent of China’s GDP while the industrial and services industries took up 49.3 percent and 33 percent respectively.

However in less than ten years, the importance of China’s agriculture indsutry shrunk to 9.6 percent of GDP while the services industry experienced massive growth of 43.6 percent of China’s GDP in 2010. The industrial industry, which has long been China’s main driver for economic growth, has also decreased to 46.8 percent of China’s GDP in 2010.

Emerging and Developing Economies Economic Structure.

China, like larger emerging economies has a massive population that makes up a large market and sizeable labour force. Eight out of the top ten most populous nations in the world are emerging economies. China, India, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh and Russia account for 52.173 percent of the world’s total population.

A large population can be often seen to be an economic asset as there is higher potential demand within the country. Most advanced economies face an aging population, while emerging economies such as India now possess the world’s largest working-age population.

Larger emerging economies also have a relative abundance of natural resources, particularly oil and natural gas. Iran, Iraq, Russia, Nigeria, China, Brazil, Mexico, India, Egypt and Indonesia are among the top 30 countries with the largest proven oil reserves in the world. In addition, apart from Iraq (57th) and Brazil (40th), these countries are also in the top 30 countries with the largest proven natural gas reserves in the world.

Emerging and Developing Economies Economic Forecast

Emerging and developing economies now have a 47.139 percent share of the world’s total GDP (PPP).

By 2013, the total GDP (PPP) for emerging and developing economies is expected to account for more than half of the world’s total share, eventually reaching 52.137 percent of the world’s total GDP (PPP) by 2015. The total GDP (PPP) for emerging and developing economies in 2015 is expected to be US$52.174 trillion.

The total current account balance for emerging and developing economies is also expected to grow over the next five years. While the total current account balance took a massive hit between 2008 to 2010 due to the global financial crisis, 2011 to 2015 promises a return to pre-financial crisis levels. By 2015, the total current account balance for emerging and developing economies is forecasted to be US$763.781 billion.

Finally, it was compared the unemployment rates of 70 emerging and developing economies in 2010 to the forecasted rate in 2015. In 2010, the mean unemployment rate was 9.733 percent and the median unemployment rate was 8.159 percent. Both numbers are expected to drop to 8.196 percent and 7.349 percent respectively by 2015.

RUSSIA

Russia, also known as the Russian Federation, is a country in northern Eurasia. Russia is the largest country in the world in terms of area (more than 6.6 million square miles). Russia shares its borders with Norway, Finland, Estonia, Latvia, Lithuania, Poland, Belarus, Ukraine, Georgia, Azerbaijan, Kazakhstan, Mongolia, China and North Korea. Russia is also the ninth most populous nation in the world with more than 142 million inhabitants. The nation encompasses the entire northern Asia and 40% of the European continent. It spans 11 time zones and enjoys a varied climate. While European and Asian Russia enjoy a humid continental and subarctic climate, the Black Sea area near Sochi enjoys a subtropical climate.

The Russian economy has undergone massive changes since the fall of the Soviet Empire, transitioning from a state controlled, socialist structure to a more market-based and globally integrated economy. Economic reforms in the 1990s privatized most industries, and some energy and defense related sectors. The Russian economy has averaged 7% growth since the 1998 crisis, resulting in the emergence of its middle class. But Russia’s heavy reliance on commodity exports made the country vulnerable during the global economic crisis of 2008, though recovery signs were evident in 2010. This was due to the rising oil and commodity prices, and the government’s $200 billion rescue package to increase liquidity in the banking sector.

Russian Economy

The global economic crisis hit Russia hard, which caused a crisis in its stock market. As the financial crisis gathered steam in the fall of 2008, the accompanying steep fall in global demand, commodity prices, and tightening of credit served to almost grind Russia’s economic growth to a halt in the fourth quarter of 2008, to 1.1% down from 9.5% during the same period in 2007. By late 2009, however, the Russian economy had begun a modest recovery, bolstered by the government's anti-crisis policies, the global rebound, and the nearly 50% rise in oil prices over the course of the year. Russia’s leaders put renewed emphasis on promoting innovation as key to economic modernization as well as on the need to diversify the economy away from oil and gas.

Russia is one of the most industrialized of the former Soviet republics. However, years of low investment have left much of Russian industry antiquated and highly inefficient. Besides its resource-based industries, it has developed large manufacturing capacities, notably in metals, food products, and transport equipment. Russia is now the world's third-largest exporter of steel and primary aluminum. Russia inherited most of the defense industrial base of the Soviet Union, so armaments remain an important export category for Russia.

According to the 2010 U.S. Trade Representative's National Trade Estimate, Russia continues to maintain a number of barriers with respect to imports. Discussions continue within the context of Russia's WTO accession to eliminate these measures or modify them to be consistent with internationally accepted trade policy practices. Non-tariff barriers are frequently used to restrict foreign access to the market and are also a significant topic in Russia's WTO negotiations.