your company is international with key relationships in several
countries, a global enterprise with worldwide reach, or a local
organization interested in doing business beyond your borders, there
are a number of countries that deserve your attention.
When people talk about international expansion, they are quick to
distinguish countries as developed,
transitioning, or developing.
These three words must be in your lexicon to talk intelligently when it
comes to international investment.
As countries build their economies they may move from one category to
another. That said, it’s easy to understand what the three categories
mean. Below I spell it out and list the countries in each category at
A developed country is one
with a strong economy including the infrastructure needed to maintain
stability. It has fully entered the free market with most of the
necessary policies in place. Its government is capable of managing its
infrastructure as well as entering into trustworthy relationships with
other countries. It generally provides a standard of living that
enables a significant portion of its population to experience a
relative high quality of life.
A transitioning country is
that is moving toward a free market, though it is not there yet. In a
free market commerce determines how much things cost, as opposed to a
body of officers with that role. Some of these countries are still
determining trade rules by fiat rather than market conditions. Trade
barriers are in the process of being taken away so that the country can
deal more freely with other countries, but this is often not systemic.
A developing country
has low living standards, a spotty or non-existent industrial base, and
may not even have the stability in the government required to satisfy
the needs of its people or the wherewithal to engage in trade outside
its borders with consistency.
Of course there are critics of these three terms as not all subscribe
to this language. Nonetheless, as organizations investigate where to
invest their resources, this simple system provides a beginning
framework for understanding and categorizing the economic situation
According to the United Nations Conference on Trade and Development
(UNCTAD)*, these are the countries in each of those three categories:
Andorra, Australia, Austria, Belgium, Bermuda, Bulgaria, Canada,
Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Latvia,
Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, New
Zealand, Norway, Poland, Portugal, Romania, San Moreno, Slovak
Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United
South-east Europe (Albania, Bosnia and Herzegovina, Croatia,
Montenegro, Republic of Macedonia, Serbia, The former Yugoslav) and the
Commonwealth of Independent States (Armenia, Azerbaijan, Belarus,
Kazakhstan, Kyrgyzstan, Moldova, Republic of Russian Federation,
Tajikistan, Turkmenistan, Ukraine, Uzbekistan)
All other countries.
UNCTAD conducts the World Investment Prospects Survey (WIPS) , which is
designed to generate insights about foreign direct investment. Foreign
direct investment is when money is placed overseas to either support
activity that is already taking place there or expand operations into
The most recent WIPS, for 2012-2014, polled 5,000 executives who worked
for non-financial trans-national companies and 245 professionals who
worked for investment promotion agencies.
The results of the most recent WIPS points to eleven countries as the
most promising sources for
investments over the next two years. Here they are in order of
selection (developing in bold):
2. United States
4. United Kingdom
10. United Arab Emirates
These are the countries that have the
resources to invest overseas and a best guess at ranking them by the
magnitude of their predicted investment. In other words, China will
likely top the list as the chief world investor, followed by the United
States, and so on down to Brazil. Keep in mind these are the top
eleven. So even though Brazil is at the bottom of the list, it is still
a major player on the world stage when it comes to investing. Note that
three, including the first on the list, are developing countries!
Now, let’s look at the most promising destinations for all this money.
Below are the top twenty-one according to the WIPS. What is striking to
note is the number of developing economies that made the list. Among
the top five, four are developing. And among all twenty-one,
twelve come from that category – more than half.
This shows confidence in overall development across the globe in the
years ahead. Even though we are rolling through serious financial
turmoil, there is reason for optimism. There is no greater sign of
economic hope than strong financial predictions across the board that
includes many of the planet’s rising countries.
So, next time you become depressed by current world events or global
doomsayers, recognize that the top trans-national companies and
investment promotion agencies believe that strength and development are
on the rise among these star performers.
On this list some are tied, causing the ones that follow to jump in
ranking to reflect the proper order. (developing countries in bold):
2. United States
6. United Kingdom
8. Russian Federation
11. Viet Nam
14. South Africa
17. Korea, Republic of
* United Nations Conference on Trade and Development,
World Investment Report 2012
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