The Emerging Markets Have Emerged

The acquisition of IBM’s PC business by China’s Lenovo was no red herring. The emerging markets have, at long last, emerged. It looks, at first, like just another bubble in emerging equities. Following the acquisition of IBM’s PC business by China’s Lenovo, Chinese businesses are in the headlines. The usual suspects are up – Brazil, Russia, Turkey. Americans who once feared a rising Japan now talk of a rising India. All of which usually means, sooner or later, another emerging market meltdown. But there is an important difference. That difference is Nigeria. Or, more specifically, the fact that Nigeria became, in 2004, the third largest global market for Guinness breweries – trailing only Ireland and Britain in Guinness’s global sales and edging out the United States. So odd a fact cannot be dismissed as a fluke. There are no speculative bubbles in beer consumption. Nigeria’s unlikely rise is, in fact, the harbinger of a trend that is changing the global business landscape. That trend is not a simple expansion of wealth. Since the early 1990s emerging markets enthusiasts have made much of the fact that the combined output of the developing economies is, by some measures, roughly on par with that of the rich world. But this sizeable economic output does not make the emerging markets relevant to global business – any more than the Warsaw Pact economies were relevant to global business during the days of the USSR. To be relevant, economies must be integrated. Until recently the emerging markets were cordoned off by barriers of politics, policy, culture, and sheer economic difference. These barriers were as real...