Look Who's Set To Pounce
Judging by the unprecedented gains being made by developing nations, the global economy is entering a new era of widespread growth. But that doesn't mean progress will be evenly distributed. In the next decade, only a few countries are likely to become "tigers"--nations demonstrating the capacity for rapid, sustained growth.
According to a scorecard devised by American Express Bank Ltd., the elite club of confirmed tigers now includes a new member, China, which joins the ranks of Hong Kong, Malaysia, Singapore, South Korea, and Thailand. The scoring--based on measures of economic stability, human capital, export outlook, and investment--also shows that Taiwan has slipped back to near-tiger status because of a high budget deficit and slow export growth.
Meanwhile, the bank reports that fast growth has spread beyond Asia: Its list of near-tigers (chart) includes three non-Asian members: Argentina, Chile, and the Czech Republic. What's more, the first two, plus the Philippines and Vietnam, have at least doubled their tiger scores in the past decade--evidence of the rapid economic strides possible in today's integrated global economy.
Looking regionally at the 45 nations surveyed, African countries are the laggards, with scant progress in foreign investment, privatization, and financial-sector reform. Latin America, by contrast, chalked up the most improvement and is moving toward investment- and export-led growth--though hampered by low savings, high payroll taxes, and inefficient government sectors.
At the moment, the most difficult region to assess is Eastern Europe--partly because reforms are so new and macroeconomic instability remains high. Still, the Czech Republic, Poland, and Slovakia show potential tiger capabilities. And the region's well-educated labor force should prove invaluable once market reforms start to pay off.