How to Sustain Strong Growth in Emerging and Frontier Markets

• Emerging markets are projected to grow by 4% this year, compared to 1.7% for advanced economies.
• Emerging markets are expected to generate 70% of global economic growth in 2016.
• A significant portion of global growth is now driven by young populations requiring job creation and expanded opportunities for women.
• Countries like Brazil, Hungary, and Mexico face risks of the "middle-income trap," delaying their transition to adulthood in economic terms.
• Investor Joseph Boateng advocates an opportunistic approach, emphasizing that risks vary significantly by country and cannot be generalized.
• Boateng identifies three critical investment criteria: cultural competence to navigate local business environments, strong institutions to enforce rights, and adequate human capital.
• Execution risk remains the primary concern for investors in Africa, often outweighing headline-driven fears.
• Panelist Marcela Moraes notes that emerging markets often deviate from the traditional growth recipe of capital and human capital investment, favoring consumption instead.
• The collapse in oil prices has forced commodity-dependent nations like Nigeria to confront the need for economic diversification.
• Nigeria's rebased economy shows oil accounted for only 14% of GDP, with the remainder driven by non-oil sectors.
• Nigeria is pivoting toward technology and agriculture, with mobile teledensity rising from under 4% to over 70-80% in a population of 150 million.
• Oil prices are expected to find a new equilibrium that balances producer and consumer interests, rather than returning to the $100 level soon.
• Net commodity importing emerging markets are currently benefiting from the decline in global commodity prices.
• The Cherie Blair Foundation reported helping 2,200 women establish new businesses and create 2,100 new jobs in 90 countries over the last year.
• Research cited by Cherie Blair indicates that global women's equal economic participation could add $28 trillion to the world economy.
• Women entrepreneurs tend to reinvest 90% of their income into their communities, compared to 30-40% by men.
• A new blended learning program in Nigeria successfully trained 250 female entrepreneurs in financial literacy and business management.
• China's economic growth has slowed from 10% to 6.5%, yet this represents significant absolute growth given its $11 trillion economy size.
• China is shifting from a capital-intensive, export-focused model to one driven by domestic demand and services.
• Marcelo Moraes warns that China's past reliance on debt-fueled infrastructure investment has led to diminishing marginal returns.
• Brazil's impeachment process is viewed by Moraes as a positive step to resolve political paralysis and restore fiscal stability.
• Brazil's fiscal accounts are described as being in "very bad shape," with economic growth expected to contract again this year.
• Brazil's Supreme Court is vetting the impeachment process, signaling a functioning judiciary and adherence to the rule of law.
• Power deficits remain a major bottleneck for African manufacturing, prompting a shift toward gas-to-power projects in Nigeria.
• Nigeria's power sector is being unbundled and privatized, with the private sector now driving more generation and gas production than the government.
• Mexico's energy reforms, which opened the sector to foreign investment, are expected to boost potential GDP despite the timing coinciding with an oil price crash.
• Mexico's financial sector reforms stalled due to a judiciary that is slow, not independent, and lacks transparency.
• Panelists anticipate that an educated, information-accessible middle class will increasingly demand political change and adherence to the rule of law.
• The rule of law is identified as a prerequisite for sustainable growth, with China facing unique challenges in separating party control from judicial independence.
• The fourth industrial revolution will not eliminate the need for manufacturing in Africa but will integrate technology into industrial growth.

One-Sentence Forward-Looking Trends Identified by Panelists:

• Abubakar Ojiaka: Betting on economic diversification driven by strong leadership, political stability, and public-private infrastructure integration.
• Marcela Moraes: Betting on economies that can rapidly transition away from commodity dependence and consumption models toward sustainable manufacturing and domestic demand.
• Joseph Boateng: Betting on opportunities that exist beyond the headlines, specifically those involving significant impact through the inclusion of women.
• Cherie Blair: Betting that countries removing barriers to women's economic participation will become the strongest economies of the future.