Dr. Alexander Mirtchev Analyzes the Diverse Recovery Potential of Rapidly Developing and Emerging Markets

In an interview with Mergermarket.com, Dr. Alexander Mirtchev, founder and president of Krull Corporation, assesses the diverse recovery prospects for rapidly developing economies and emerging markets, noting that such recovery would be prolonged and uneven, much akin to the Hollywood-style multiple DVD endings for different regions. He stresses that "rapidly developing and emerging market economies are under the same pressure as the developed economies and each will face diverse recovery prospects, based on economic characteristics that vary between each country. All rapidly developing economies are looking for a way out of the recession -- one that would boost their regional and international standing, in the context of global cooperation and in directions they perceive as strategic."

The extent to which the fate of these markets is tied to the development of the global economy effectively demonstrates that they are neither "decoupled," nor a "single class of assets." 

 

The prominence of economies such as China, India, Brazil, Russia and emerging markets in general, is almost "taken for granted," as confirmed by the tacit international agreement that they should have a greater say in the management of world economic affairs. This notion was reaffirmed by the G-20 London Summit, including by just labeling it "G-20" rather than "G7" or "G8," and by the role of these economies in the new expanded Financial Stability Board. 

"For example, the provision of increased IMF allocation permitting new flexible borrowing facilities for emergency situations, hopefully without the stigma usually associated with IMF loans, may prove to be, under certain circumstances, not just a gesture of symbolic value, but a tangible instrument for alleviating specific economic imbalances.

 

However, it remains unclear to what extent and in what role rapidly developing economies would remain committed to being part of globally coordinated measures under the potential threat of market fragmentation and prolonged unfavorable economic circumstances. 

 

"Each would feel differently about the ultimate value of multilateral measures, according to the situation in their own economies and the global markets. In addition, these economies may not feel fully reassured that the potential for fragmentation of the global economy has disappeared," said Mirtchev. 

"The economic turnaround is not imminent and upward trends in rapidly developing and emerging market economies would probably be patchy and sector-oriented, which more or less would characterize the nature of the upcoming recovery globally." 

 

They are likely to see economic growth initially in select industry sectors, such as mining, power generation, consumer goods and agribusiness. At the end of the day, however, their recovery efforts would remain dependent to a large extent on the persistence of the downward pressure from the crisis among developed economies and the manner in which they utilize up-trends in specific sectors as a catalyst for overall growth. 

Mirtchev indicated that "the specific competitive advantages certain emerging markets, such as the ones in Latin America, South East and Central Asia enjoy would provide a select number of these economies with the ability to improve their chances of adapting to the new evolving economic realities." 

 

According to him, the success of the recovery efforts of the various emerging market economies would depend largely on strong leadership and ability to withstand the political pressure arising from the crisis. 

About Krull Corporation 

 

Krull Corporation is a Washington, D.C.-based advisory and project management firm with expertise in dealing with economic growth, industrial expansion and restructuring issues. Founded by Dr. Alexander Mirtchev in 1992, Krull Corporation capitalizes on his extensive professional experience in market developments and reforms and focuses primarily on emerging and transitional economies. 

 

Over the years, the firm has provided its clients with outstanding strategic guidance and professional services in various areas. Combining a unique blend of global reach and understanding of local markets, Krull is able to consistently produce high quality results and returns.