Hong Kong returns to the number one spot in the 2011 Market Potential Index for Emerging Markets (MPI) Overall Index, up from third place in 2010. China ranks second for the third year in a row, while Singapore drops from first to third in the rankings. But these three Asian dynamos have held the top three spots for five years running in the MPI. Not surprisingly, South Korea retains its fourth place ranking.
These MPI rankings represent aggregate market potential for the 26 countries listed on the MPI, an indexing study conducted by MSU-CIBER and utilized by companies and investors worldwide.
Egypt has worked its way up from 21 in the overall rankings to 16 in three short years. While Egypt has been in the news recently for its government overthrow, new focus on democracy and revised constitution, there is the potential for current political and economic events in the Middle East to impact specific predetermined performance rankings in the MPI. Questions surround whether markets will or will not open further, if Economic Freedom will be augmented, whether the Market Growth Rate will increase or the Country Risk will change – all are MPI Indicators, among others. Of note is Egypt’s impressive Market Consumption Capacity Rank of 6 in 2011.
While Hong Kong holds the number one ranking for Commercial Infrastructure, Russia, whose ranking fell from a previously impressive nine to 21 this year (its lowest rank in 11 years), stands at third in the MPI for Market Size and eighth for Commercial Infrastructure, ahead of China in this latter category, which rates a surprisingly low 21, given its number two overall ranking in the MPI. Another critical category is Market Growth Rate, with India holding the number two ranking after first-place China, followed by Pakistan at number three. Pakistan also ranks fourth in Market Consumption Capacity, where South Korea is number one.
MSU-CIBER Director Tomas Hult, Ph.D., observed that “The world and its emerging markets are changing everyday. With the MPI, a complex mix of international economics, socio-political, and consumption/use data is readily distilled into a user-friendly, invaluable format with which businesses may make decisions on where to locate and expand their international presence.”
Published annually by MSU-CIBER since 1995, the MPI index provides a scorecard of the export market potential for 26 countries based on the emerging markets list in The Economist.
The MPI index uses a variety of dimensions and weighted measures to arrive at its ratings. Among those are Market Size, Market Growth Rate, Market Intensity, Market Consumption Capacity, Commercial Infrastructure, Economic Freedom, Market Receptivity, and Country Risk. Measures include Urban Population, Electrical Consumption, Real GDP Growth Rate, technology use (phones, internet, PCs, TVs) and Paved Road Density, among others.
Emerging markets are nations experiencing powerful and rapid economic growth, representing countries which are somewhere on the continuum of transforming themselves socially, politically and economically. Sharing the earmarks of rapid industrialization, modernization and privatization, these markets comprise more than half the world’s population and account for a large share of world output, often exhibiting strong GDP growth which can be attractive to investors for their enormous market potential.
The most recent version of the MPI can always be found on the globalEDGE website at http://globaledge.msu.edu/resourcedesk/mpi/ along with the MPI index for prior years. The MPI online may also be sorted by any dimension, increasing its analytical utility.
As companies continue to seek new markets for expansion, the MPI provides an invaluable tool to assess the potential for market entry. This no-cost analytical tool is just one of the many reasons globalEDGE continues to be the most popular international business website online.