Japan is now experiencing low economic growth, these emerging economies are experiencing high rates of economic growth . Eventually, the scale of their economies will come to equal and even surpass some currently larger economies.Nevertheless, if we look at these countries as markets, it can be said that no single country offers a particularly attractive market. Accordingly, companies should aim to move into multiple markets simultaneously.
2 “Emerging economies” and “re-emerging economies”
So far, the author has simply referred to countries and regions that are compared and evaluated in this paper as “emerging economies.”However, it is not actually correct to refer t o all such countries in this way. Among those countries that have been mentioned as
promising emerging economies, Turkey, Mexico and some others actually started to experience growth to some extent toward the end of the last century, rather than just recently, and already have a per capita GDP in excess of $10,000.
Figure 6 shows the relationshipbetween income inequality and the level of a country’s economy. The curve shown in this figure is known as a Kuznets curve, from the work of economist Simon Kuznets.
The leftmost side of the figure shows countries that have relatively impoverished economies where, for example, the per capita GDP is only a few hundred dollars. Because the entire country is poor, the income gap is small. In thesecountries, the economic growth that may result from industrialization, etc., not only causes an increase in per capita GDP (horizontal axis), but also
leads to a larger disparity in incomes within the country.
In other words, we see the appearance of “the rich.” Often, this segment goes on to form a conglomerate. When the economic level (per capita GDP) of the country increases to some extent, thedisparity in wealth also grows considerably, which tends to throttle any further economic growth. The center section of Figure 6 corresponds to this state, in which the economy stagnates.
This discrepancy in incomes manifests itself as a class structure within the society. In such countries, economic growth might resume because of one particular factor, that is, an increase in
The incomes of thelow-income segment. We can say, therefore, that there are two patterns of economic growth: one where “economic growth gives rise to income disparity” (left of Figure 6) and the second where “economic growth eliminates income disparity” (right of the figure). Mexico and Turkey are said to be examples of the latter phenomenon. Although both countries exhibit very large disparities inincomes, in recent years, Mexico has seen increasing remittances from migrant workers, leading to a higher income growth rate in the low-income segment (based on data as of 2008 prior to the global financial crisis). In Turkey, in an effort to increase the incomes of the lowest-income segment, Prime Minister Recep Tayyip Erdogan has increased public spending in the central regions, where incomes are...