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Financial Crisis And Emerging Markets Essay

1730 words - 7 pages

Table of Contents

Introduction …………………………………………………………………….....1

Analysis of the Financial Crisis and Emerging Markets………………………….1


List of Tables and Figures…………………………………………………….......9



In the last years we all heard about financial crisis, economic crisis or even strong words like recession or depression.

The goal of this paper is to define these terms and to analyze the effects that they produce in the economy. Another objective is to understand the emerging markets and compare then with developed economies. The ...view middle of the document...


The crisis itself ended in late 2009 but the damage was done as it propagated to Europe and the rest of the world and it became a global crisis, and today we are still affected by the result of the crisis.

Emerging market is the term used to describe countries that execute social and business activities and are in the process of rapid growth and industrialization. In 2006 where about 28 emerging markets in the world, in 2010 the number increased to 40. The largest emerging economies are considered India and China. The largest regional emerging market in the world is the ASEAN-China Free Trade Area, launched in January 2010.

There are a lot of terms that describe the largest developing countries: BRIC (Brazil, Russia, India and China), BRICET (BRIC + Eastern Europe and Turkey), BRICK (BRIC + South Korea), Next Eleven (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam) or CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa).

It is very hard to find a list of all emerging markets because are many lists with different criteria’s. Some of this are compiled by: MSCI (21 emerging markets), S&P (19 emerging markets), Dow Jones (35 emerging markets), Frontier Strategy Group (F10) (which is a top ten emerging list: China, Brazil, India, Mexico, Russia, Indonesia, Colombia, Argentina, Chile, Turkey).
Another classification is made by FTSE Group and the countries are evaluated as Advanced and Secondary Emerging markets based on national income and the development of their market infrastructure. The Advanced Emerging markets are: Brazil, Czech Republic, Hungary, Malaysia, Mexico, Poland, South Africa, Taiwan, Turkey. The Secondary Emerging markets are: Chile, China, Colombia, Egypt, India, Morocco, Pakistan, Indonesia, Peru, Philippines, Russia, Thailand and United Arab Emirates (UAE).
Below is a table with the emergent economies from each group of analysts and we can see that 3 countries are in every list. Those are Egypt, Indonesia and Turkey, but there are some that appear on only one list.

[pic] Table 1: Emerging Markets by Each Group of Analysts; Source: Wikipedia

This happens because each group of analysts has different interests and criteria’s when compiling these lists. So a large amount of confusion can arise from these lists.

Overview of the World Economic Outlook Projections
(Percent change unless noted otherwise)
Year over Year

Fig.1 Overview of the WEO; Source: IMF World Economic Outlook Update, June, 2011

We can see in these projections how hard was hit the economy in 2009 by the global crisis, then in 2010 the economy regains some traction and are registered increases. This is a good sign but the projections shows a global...

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