Mapping the Path to Future Prosperity: Emerging Markets Inclusive Growth Index
Given a more problematic global economic environment, inclusive growth will be the new success criterion for emerging markets in the coming decade. Inclusive growth in practice is reflected in an expanding, dynamic and increasingly prosperous middle class. And for it to happen, the fruits of economic growth have to be more equitably shared, benefiting not just a few large business conglomerates, but more importantly small businesses, entrepreneurs, and the rank and file of the working people in the emerging markets.
The Inclusive Growth Index evaluates 60 of the world’s most important emerging markets in terms of their abilities to generate inclusive growth. The Index is organized in two dimensions: the “present conditions” (PC) and the “enabling conditions” (EC). The PC dimension identifies and quantifies a set of conditions that have contributed to inclusive growth to date in these markets. The EC dimension identifies and calibrates a second set of conditions that would contribute to inclusive growth in the future. In addition, the Index also compares the 60 emerging markets with the benchmark set by ten developed economies.
In this 2013 edition of the Index, the Baltic countries lead the pack of the 50 emerging markets in inclusive growth. The so-called BRICS countries, however, perform less well. Brazil is ranked 11th, followed by South Africa in 14th rank, China in 24th rank, Indonesia in 30th rank, and India in 32nd rank (Russia is excluded from the Index because its 2013 per capita GPA exceeds US$12,000). The outlook for emerging markets is, however, generally positive as the scores of their EC dimension are typically higher than that of the PC dimension, suggesting stronger momentum for inclusive growth going forward.