International Monetary Fund
........according to IMF’s Regional Economic Outlook for sub-Saharan Africa in October 2010, African trade is already shifting toward the dynamic emerging markets, notably China. Trade between China and Africa has been expanding rapidly, growing by an average of 30 percent a year over the past decade, and likely exceeded $100 billion in 2010. These new partners will continue to show strong demand for goods that Africa can supply, and will be alert for opportunities to invest directly. For Africa, the key priorities will be negotiating fair and durable deals with big multinational firms and making the best use of the revenue windfalls, especially when the resources are nonrenewable (see Box 2)....http:////www.imf.org/external/pubs/ft/survey/so/2011/CAR011211A.htm
By Shawn Ladd
IMF African Department
January 12, 2011
The article in this week's reading on "Strategies that Fit Emerging Markets" is clearly written for an American or 'Western' audience. The term 'institutional void' to describe the weak or nonexistent institutional resources and processes in some emerging markets is obviously in relation to the more robust institutions in the U.S. and Europe. It seems that some of the largest hurdles in developing strategies for entering emerging markets (namely most areas of the world outside of the U.S. and Europe) are the required adjustments to 'institutional voids' and differences across political and social systems, levels of openness, product markets, labor markets and capital markets.
(By Academy of Management Journal, 2000)
Emerging economies are low-income, rapid-growth countries using economic liberal-ization as their primary engine of growth. They fall into two groups: developing countries in Asia, Latin America, Africa, and the Middle East and transition economies in the former Soviet Union and China. Private and public enterprises have had to develop unique strategies to cope with the broad scope and rapidity of economic and political change in emerging economies. This Special Research Forum on Emerging Economies examines strategy formulation and implementation by private and public enterprises in several different regional settings and from three primary theoretical perspectives: institutional theory, transaction cost economics, and the resource-based view of the firm. In this introduction, we show how different theoretical perspectives can provide useful insights into enterprise strategies in emerging economies. We discuss the special methodological as well as empirical challenges associated with doing research in emerging economies. Finally, we briefly summarize the individual contributions of the works included in our special research forum.
The rapid and widespread adoption of market-based policies by emerging economy governments raises important issues for the strategies adopted by private enterprises, both domestic and foreign. In ad-dition, privatization is one means of placing pressure on former public enterprises to effect major changes in their strategies as they adapt to the competitive pressureso f a market-baseda nd open economy (Ron-dinelli, 1998). Privatization also means an increasing number of joint ventures with or acquisitions by for-eign firms, with subsequent restructuring, downsiz-ing, and adaptation to Western practices. At the same time as domestic policies are becom-ing more market-oriented, emerginge conomy govern-ments are opening their countries to foreign markets and joining regional trading associations. New rela-tionships between foreign and domestic enterprises are emerging as strategic alliances replace export-pro-cessing zone and subcontractinga rrangements. Enter-prise strategies in emerging economies are therefore facing strong environmental pressures for change, yet this change is neither smooth, automatic, nor uniform across different markets.
Tibebu Tefeta - Business Consultant