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Academy Speaks


Academy Speaks 2011 University Excellence Award in Research Texas A&M University-Corpus Christi A. N. M. Waheeduzzaman Professor of Marketing and International Business – PowerPoint PPT presentation

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Title: Academy Speaks

Impact of Emerging Nations in a Globalized World
  • Academy Speaks
  • 2011 University Excellence Award in Research
  • Texas AM University-Corpus Christi
  • A. N. M. Waheeduzzaman
  • Professor of Marketing and International Business
  • College of Business
  • Mary and Jeff Bell Library
  • May 3, 2011

  • Born and raised in Bangladesh
  • Educated in Bangladesh and USA
  • MBA in Marketing-Dhaka University, Bangladesh
  • MBA in International Business-George Washington
  • Ph.D.-Kent State University
  • Came to USA about 25 years ago, to Texas about 10
    years ago in 2000, as fast as I could, and joined
  • Teaching and Research Interest Marketing and
    International Business

Thank You All
  • African proverb it takes a village to raise a
    child. Perhaps, it also applies in my situation.
    It takes a university, with a good support system
    and a great group of colleagues, to perform and
    win awards.
  • To College of Business Awards Committee and
    University Awards and By-Laws Committee
  • To the University for Research/Data Support
    especially, Global Market Information Database
    (GMID) and Travel Support
  • Thanks to the following individuals for
    nomination and support Drs. Moustafa Abdelsamad,
    Abbas Ali, Patrick Carroll, Leon Dube, and
    Marilyn Spencer
  • To all my Student Assistants for the great help
    over these years

Presentation Outline
  • This presentation is from the following article
    published in April, 2011.
  • Waheeduzzaman, A. N. M. (2011), Competitiveness
    and convergence in G7 and Emerging Nations,
    Competitiveness Review, 21 (2), 110-128.
  • Who are Emerging Markets? Why study them?
  • How are they going to affect the U.S. or the
  • What would be the policy implication for business
    and government?
  • Impact or implication in three areas economic,
    political/international relations, and

Naming of Emerging Markets
  • Antoine van Agtmael, an officer of the
    International Finance Corporation, is credited to
    have coined the term in 1981
  • He wrote a bestseller The Emerging Markets
    Century in 2007 published by The Free Press

Who are the Emerging Markets?
Data Collection
  • G7 (Developed) countries Canada, France,
    Germany, Italy, Japan, United Kingdom, and United
  • Big Emerging Markets (12 countries) Brazil,
    China, Egypt, India, Indonesia, Mexico, Poland,
    Philippines, Russia, South Africa, South Korea,
    and Turkey.
  • BRIC nations Brazil, Russia, India, and China.
  • Time period 1980-2009 and 1980-2020
  • Data source Most data came from the Global
    market Information Database, Euromonitor The
    World bank, Heritage Foundation, Freedom House,
    and the United Nations

Comparative Series Data
Figure 1 Per Capita GDP
Comparative Series Data
Figure 2 Real GDP Growth
Comparative Series Data
Figure 3 Index of ageing
Comparative Series Data
Figure 4 Trade of GDP
Perspectives in Competitiveness
  • Table IPerspectives in International
  • Note The table has been adapted and updated from
    Waheeduzzaman and Ryans (1996).

Comparison of GDP, Trade, and FDI
  • Table IIA PPPGDP-Total and Ratio in Percentage

Comparison of GDP, Trade, and FDI
  • Table IIB World Trade-Total and Ratio in

Comparison of GDP, Trade, and FDI
  • Table IIC FDI-Total and Ratio in Percentage

Table III Top Seven Economies
  • Based on GDP measured at PPP (in billions), 2009
    US Dollars

Table IV Comparative position of G7, BEM and
  • A. Series and Growth Variables

Table IV Comparative position of G7, BEM and
  • B. Average of Various Indices

Table IV Comparative position of G7, BEM and
  • C. Summary of Findings

Convergence between G7 and BEM
  • Yi D (t) a ß1 t ß2 m Equation 1
  • where,
  • Yi Mean growth of the variable in G7 and BEM
  • t Discrete time interval t
  • m Type of market dummy variable, where, 0 BEM
    and 1 G7.
  • ?Yi a ß1 t1 Equation 2
  • where,
  • ?Yi ((YG YE)/ (YE))100
  • YG Mean score of the variable in G7
  • YE Mean score of the variable in BEM
  • t Discrete time interval t

Table V Testing Difference and Convergence
between G7 and BEM
  • A. Time growth model (Equation 1)
  • Note significant at a lt.05 level.

Table V Testing Difference and Convergence
between G7 and BEM
  • B. Growth of proportional difference (Equation 2)
  • Note significant at a lt.05 level.

Summary Comparative Economic Growth
  • BEM is growing at a rate double than that of G7
  • 50 of growth comes from only 4 nations Brazil,
    Russia, India, and China (BRIC)
  • By 2020, four out of seven top economies will be
    in the emerging markets
  • BEM has 65 of the global population compared to
    13 in the G7
  • BEM has 8 of global wealth, collective demand
    pull is high
  • BEM enjoys 21 of global trade
  • BEM and G7 are converging, though slowly

Impact of Economic Growth
  • A new economic revolution?- the phenomenon can be
    compared with the Post-Industrial Revolution
    growth, shift in global wealth creation and
    change of production center- is the center of
    gravity changing from Europe/ North America to
  • The demand pull- increased consumer expenditure
    and purchasing power in emerging nations
  • Intense competition- for markets and resources
    (especially energy)
  • Environmental depletion/degradation- very high
  • A realtivley weak dollar making the situation

Carbon Emission
Impact on Political and International Relations
  • Economic growth may have helped democracy?
  • Is a new political reality emerging because of
    the shift of the center of gravity?
  • Emerging nations political power is evident
  • UN- expansion of Security Council
  • WTO- Doha Round negotiations
  • IMF- dollar as a global currency
  • Military modernization, satellite-based
    communication infrastructure, and competition in
    cyber space are increasing
  • Economic Integration (ASEAN, MERCOSUR) and
    cooperation among emerging nations increasing
  • Will this lead to polarization? Will China, India
    and Russia be the next pole?

UN Security Council Expansion
  • India, Japan, Brazil and Germany

China, India and Russia- A new pole emerging?
  • Rise of China- in their mind, the 21st Century is
    the Century of the Dragon
  • Asia is at the center of growth, ASEAN nations
    cooperation with China and India increasing
  • Shanghai Cooperation Organization (China,
    Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and
    Uzbekistan) meets every year- a Central Asian or
    Eurasian Alliance?
  • India and Russia have been strategic partners for
    about 50 years- Indias place is in Asia and she
    needs a Super Power support
  • Chinese and Russian heads of the states/leaders
    are meeting almost every year

Social and Cultural Impact
  • Globalization of consumption- a new culture
    emerging (McDonaldization?)
  • Consumers rely on global brands- brands from
    emerging nations are entering
  • Global travel growth- 15 in emerging nations,
    the 2016 Olympic in Rio de Janeiro effect
  • A new genre of world citizenship is emerging
    through Internet, Google, Youtube, Facebook or
    Myspace where youths from the emerging nations
    are playing a significant role
  • They eat fast food, wear, blue jeans, listen to
    Beyonce, have a Facebook account, love tweeting
    and texting, chat via hotmail, and think that
    their governments are trapped in old ideological

Selling Coffee in China
Would like to be buried with Coke? Coca Cola
Coffin in Ghana
Big Mac Index
Promoting Kimono in Kyoto (Do you notice the
Gucci bag?)
Worlds Tallest Buildings
Want to buy a house in Palm Island, Dubai?
What should be done?
  • America faces the largest budget deficit, the
    largest trade deficit and the largest debt- need
    attention at individual and collective level
  • Look for markets and allies in emerging markets,
    engage in commercial diplomacy- proposed by
    Secretary Ron Brown and Under Secretary Yale
    University Professor Jeffery Garten (source The
    Big Ten, 1997)
  • Also, there is a classic rational choice issue-
    where to spend, how to allocate resources, GUN or
    BUTTER? a very contentious political issue?

What should be done?...continued
  • Yale University Professor Paul Kennedy (1987) in
    his The Rise and Fall of the Great Powers states
  • Great Power ascendancy correlates strongly to
    economic resources
  • And, military "over-stretch" not supported by
    economic resources causes the decline
  • Ancient Indian materialistic philosopher Charvak
    (like Greek philosopher Epicurus) notes live
    happily, eat butter, even if you have to borrow.
  • Interestingly, he has few followers in India but
    many in America
  • Today, the followership is increasing in India
    because of their new-found affluence
  • Treasury Secretary Geithners (October 17, 2009)
    call- we should live within our means (will that
    reduce the debt?)

Conclusion Are we on the right track?
  • America is one of the most creative nations on
    earth so far, she has risen to her feet whenever
    needed- e.g., WWI, WWII, Great Depression, or
    global calamities
  • Two world wars should have taught us that war is
    not a good means to resolve disputes. Belief in
    peace and diversity and sharing of global
    resources are fundamental to global economic
  • Even if we disagree let us continue the debate to
    get to the right track- hopefully, with
    creativity, collective vision, and leadership we
    will get there..

If they can do it in the sky we can do it on the
International Skydivers in Thailand
  • Thank you for your time
  • Questions? Comments?