FYI A Heads Up on Globalization

iVillage Member
Registered: 04-16-2003
FYI A Heads Up on Globalization
2
Fri, 02-27-2004 - 8:31pm
While James Boric is pushing India, The Financial Express is reporting that India slipped four places in the Globalization Index 2004 rankings, from 57th to the 61st slot. Boric's article is second. I post this for those of you who might be interested; Asia is moving into the 21st century fast.

India Slips Four Slots In Kearney Globalization Index



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MUMBAI, FEB 27: India has slipped four positions in the Globalization Index 2004 rankings, from 57th to the 61st slot. The major reason attributed to this slip is the decline in foreign direct and portfolio investment volumes to India, as well as tensions with neighbouring Pakistan and ethnic violence in Gujarat, undercutting investor confidence. The study, covering 62 countries, was conducted by AT Kearney, in collaboration with The Foreign Policy Magazine.

South Asia remained the world’s least integrated region, with weaker global links than in any other collection of countries. However, despite low aggregate levels, South Asia demonstrated the most rapid year-on-year growth anywhere. The growth was driven partly by improved economic links with the rest of the world and partly by rapid growth in the number of Internet users — where both India and Pakistan report triple digit growth.

The study ranks Ireland as the world’s most global nation for the third year in a row. This year’s index shows that globalisation survived considerable challenges in 2002, the last year for which complete annual data is available. Economic integration dropped to the lowest levels since 1998, reflecting slow economic growth in many regions as well as the effects of heightened travel alerts, stringent security at ports and airports, corporate scandals, financial market fallout from Argentina’s economic unraveling and jarring terrorist attacks in Indonesia and Kenya.

India’s downslide was also due to the drop in travel and tourism, as also, the number of Internet users to support growing number of Internet users. As a result, India continued to rank quite low, the report added.

The positives for India included a 136 per cent expansion in the number of internet users, the highest remittances received by any country anywhere in the world totalling $ 14.7 billion in 2002.

http://www.financialexpress.com/fe_full_story.php?content_id=53646



A New Asian Superpower

“...Like China, the next Asian superpower has over 1 billion people and one of the fastest-growing economies in the world. Its stocks are dirt-cheap, trading for just 16 times earnings. And money is just staring to flow into the country. This emerging superpower's GDP will rise 8% in 2004 - and maintain a 7.5% growth rate well beyond 2005. Every industry from IT to finance to biotech will grow in the next 12 months. That means corporate profits will swell - which, in turn, will lead to predictable double- and triple-digit stock gains for investors...”

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2003 was the "Year of China." Everything from diesel engines to cell phones to pharmaceuticals were in demand. The economy was growing between 8% and 9%. And any stock trading in the United States with "China" in it rose double or triple digits.

It was almost impossible NOT to make money in China last year. And guess what? It's about to happen all over again! Only this time it won't be China that makes investors rich.

Like China, the next Asian superpower has over 1 billion people and one of the fastest-growing economies in the world. Its stocks are dirt-cheap, trading for just 16 times earnings. And money is just staring to flow into the country.

Major corporations like Microsoft, General Electric and IBM are already establishing offices in its major cities. All the big players want in. And they have good reason.

This emerging superpower's GDP will rise 8% in 2004 - and maintain a 7.5% growth rate well beyond 2005. (By comparison, the United States is only expected to grow 4.3% this year.) Every industry from IT to finance to biotech will grow in the next 12 months. That means corporate profits will swell - which, in turn, will lead to predictable double- and triple-digit stock gains for investors.

The next Asian superpower is India. You simply must consider India as a legitimate investment opportunity right now.

India is different from every emerging country in the world. Instead of relying on its natural resources and factory output to promote and sustain economic growth, India is using its brainpower. And that gives it a distinct advantage in this world we live in.

Sixty percent of the U.S. economy (the most powerful economy in the world) is driven by service-oriented business - from IT consultants to tax advisors to financial planners to newsletter writers. In fact, service industries provide two-thirds of all jobs in America. By contrast, manufacturing jobs only account for 14% of total U.S. output and 11% of all jobs.

What does this mean?

It means we (as a global society) value ideas and services more than gadgets. It means we value brainpower more than physical labor. And it means to be a legitimate superpower, you must have a large talent pool of educated people to provide these services.

India does.

There are more IT directors working in Bangalore (150,000) than in all of Silicon Valley (120,000). Between one-third and three-fourths of all IT development is done overseas - with India leading the way. And major companies like Microsoft, IBM, EDC, Oracle, Texas Instruments and JP Morgan Chase are choosing Indian workers (over Chinese and even American) to run their Asian plants and offices.

According to a December article published in BusinessWeek, General Electric already has a staff of 16,000 Indian workers doing back-office work. Intel has a staff of 1,700 Indians devoted to chip and software development. And by 2005, IBM will have a staff of 10,000 just for IT services and creating software packages.

Every major company in the world is looking at India right now. And it's not hard to see why...


India's GDP is expected to grow between 8% and 9% in 2004. Even once it is adjusted for inflation, you can expect real growth of 7%. That's 63% higher than the United States' 4.3% growth rate.

College graduates are expected to double from 3.1 million to over 6 million by 2010 - adding to India's most valuable asset class - its skilled workers.

By 2020, India will have the largest (and youngest) working class in the world - outpacing the United States and China . Forty-seven percent of all its workers will be between the ages of 15 and 59. And these workers will help India sustain its 7% to 8% GDP growth rate.

There's no denying the Indian economy is improving. It's slowly morphing from a Third World country to an Asian power. And now is the time to invest - before small Indian companies become well-known corporate superpowers.

India offers tremendous growth opportunities for investors. The average Indian company trades for just 16 times earnings. Corporate profits are increasing by double digits every year. And billions are being spent on roads, plants, equipment, etc. In other words, Indian companies are investing in themselves. They are preparing for rapid expansion.

Of course, there are no guarantees in life. India is still a Third World country. There are 300 million people who survive off the equivalent of $1 a day - or less. On top of the poverty, there is continual threat of nuclear war with neighboring Pakistan. Obviously, any terrorist attack or war would impact the Indian economy for the worse.

Still, many market watchers liken India to China ten years ago. And we all know what happened to the Chinese market - especially recently.

Last year there were 23 Chinese stocks trading in the United States. Of those, 20 rose an average of 165%. The smallest gainer made investors 46% and the best performer rose a whopping 488.8%.

Why did they rise?

At the beginning of 2003, Chinese stocks were cheap. Companies were fundamentally sound and growing their top and bottom lines. On top of that, the Chinese economy was growing between 8% and 9% a year. The result - Chinese stocks rose BIG.

The same thing is happening in India right now. The risks are there - but so are the rewards. The question is, do you want in?

http://www.dailyreckoning.com/home.cfm?loc=/body_headline.cfm&qs=id=3785

iVillage Member
Registered: 03-18-2000
Sun, 02-29-2004 - 10:42am

The advantages of globalization is phenomenal for India. Eventually it should benefit the whole country.


I have to wonder what happens when strife, of some sort, hits

 


Photobucket&nbs

iVillage Member
Registered: 04-16-2003
Sun, 02-29-2004 - 1:24pm
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Eventually, globalization will even out the distribution of wealth throughout the world, but it will not be easy.

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India takes strife in it's stride. Despite its poverty it has made steady strides toward a modern state. However, there are problems. India and Pakistan are trying to negotiate a peace over Kashmir. Because extreme Muslims and Hindus have long-standing greivances there are frequent clashes, so far these have been resolved peacefully. However, it is only a matter of time till al Qaeda sees American firms in India as easy targets. They have already launched attacks against American firms in Indonesia.

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Yes, asia, particularly, southeastern asia is a great opportunity. This area is "coming of age". Growth is never totally optimistic, that's why risk pays off.