VISTA Countries- Glimpses Of Promising Future

Posted in Finance Articles, Total Reads: 1782 , Published on 24 September 2012
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VISTA stands for Vietnam, Indonesia, South Africa, Turkey, and Argentina. These countries have been showing impressive economic growth since2000 and are now attracting attention from around the world as emerging markets.Some of the experts are calling it as a second wave of emerging market after BRICS and likely to enlarge up to 28 times by 2050. The concept was first proposed in 2006 by the BRICs Economic Research Institute of Japan and after that it came on the global investors Radar.The word ‘VISTA’ means glimpses. So it would be interesting to study whether these countries are really showing glimpses of promising future?


Because of China’s rising costs, India’s problematic regulatory system, Russia’s corruption and Brazil’s saturated retail market; investors are increasingly looking elsewhere for opportunities. Due to this reason, investors are taking a close look at VISTA Countries. But unfortunately, these countries are less developed than their BRIC cousins , as VISTA nations  have weaker infrastructure and smaller market size. Even with their own little problems, these countries are worth Investing in. Let us take a look at these countries-

Socialist Republic of Vietnam: Today world is looking at Vietnam for the quality of its labor force and is also 15th largest country in terms of population. In the late 80’s, this country with an iron curtain like its big brother China, started opening its door for the foreign players. Compared with other developing nations, the ability to learn technology and the willingness to work of Vietnamese worker is exceptional. Vietnam aspires to become a global manufacturing hub & even many of the corporate giants want to invest in Vietnam as a place to diversify the risk of rising labor cost in China. Today its domestic market is driven by strong consumption of young, middle class population.

Population

91.5 million

GDP PPP

$ 303.8 billion

Per Capita GDP

$ 3400

Labor Force

46.48 million

% of Population between 15-64 years

69.3%

Challenges:Struggling to restrain its trade and budget deficits,it also faces inflationary pressure today.

Republic of Indonesia:Once considered as a tiger cub economy is now seen as a roaring tiger of Asia. It’s a country with a population of more than two hundred million. It is the largest populated & biggest economy in Southeast Asia. Not just abundant labor force but rich natural resources is its strength today. Its growth is driven by strong domestic consumption. Previously its political instability was considered as a major impediment for growth; but the political situation started stabilizing, when Mr. Yudhoyano return to power in 2004. According to many experts roots of its success lies in ‘tough decisions’ taken by the Indonesian government in the year 1997 after the Asian financial crisis.

Population

248.64 million

GDP PPP

$ 1.139 trillion

Per Capita GDP

$ 4,700

Labor Force

117.4 million

% of Population between 15-64 years

66.5%

Challenges:  Issues such as weak infrastructure, environmental degradation, and institutional weaknesses are the main barriers for the economic development.

Republic of South Africa:South Africa is called as the economic powerhouse of the entire African continent. South Africa has abundant natural resources like platinum, diamonds & gold with world class infrastructure.The banking regulations in South Africa are one of the best in the world which has given the robustness to its financial system.South Africa is not only considered as an emerging economy but also a gateway to other untapped markets in the African continent. South Africa is a resource-based economy and but now wants to become an industrial export nation in order to strengthen their nation’s economy.

Population

48.10 million

GDP PPP

$562.2 billion

Per Capita GDP

$11,100

Labor Force

17.66 million

% of Population between 15-64 years

65.8%

Challenges:High unemployment, increasing crime rate & latest issues like mining Labors’ unrests are hurting the prospects of its economy.

Republic of Turkey:   Turkey was hit by the two back to back crises in 2000 and 2001. However, the tight financial policy & reforms by Ankara have made the economy stronger.Since then the Eurasian Tiger has shown significant economic growth.An aggressive privatization program has reduced state involvement in banking, transportation, and communication, and an emerging cadre of middle-class entrepreneurs has added dynamism to the economy. Global financial crisis in 2008 caused GDP to contract in 2009, but its strong fundamentals helped GDP bounce back to 8.2% in the year 2010.Its strategically important location has given it major influence in the region, several gas pipelines from central Asia to Europe passes through Turkey. This has assured Turkey a long term energy security.

Population

79.74 million

GDP PPP

$1.087 trillion

Per Capita GDP

$14,700

Labor Force

27.43 million

% of Population between 15-64 years

67.1

Challenges:Turkey's relatively high current account deficit, Inflation & political turmoil within Turkey's neighborhood are major hurdles.

Argentine Republic: A third largest Latin America’s economy boasts of rich natural resources such as iron, copper and uranium. Apart from that it has an export-oriented agricultural sector and a diversified industrial base. Today Argentina is an upper-middle income country with a per capita nominal GDP of $11000, which is the highest in the Latin America. By Land Area, it is 8th largest in the world and the largest among Spanish speaking nations. It is also part of G-15 & G-20 major economies. That’s why  today multinational companies are aspiring to get significant market share of this Latin American market.

Population

42.19 million

GDP PPP

$ 725.6 billion

Per Capita GDP

$17,700

Labor Force

16.76 million

% of Population between 15-64 years

63.6

Challenges: Double digit unemployment rate & uneven economic progress don’t provide stability to a business in Argentina.

Today VISTA countries are in a formative phase and fighting with their own challenges. But no doubt they will definitely make a mark in the future and will set an example for other third world countries.

* All country statistics in the article are taken from ‘CIA World Factbook (2011 est.)’

This article has been authored by Nikhil Deshmukh, Dhiraj Nemade, Sunil Mehta from Sydenham Institute of Management Studies (SIMSREE), Mumbai.


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