ICGN’s annual conference, this June held in Toronto, is on “The Changing Global Balances.” It just so happens that students at theRacetotheBottom.org are also exploring a good portion of this phenomena with a series “The BRIC Project,” which began on April 1, 2010. Dan O’Connell will write posts about corporate governance practices in Brazil. Rich Jasik will do the same for Russia. Kinny Bagga will examine India, with Dan Snare exploring corporate governance in China. Here’s a few fascinating observations from day one:
- Between 1997 to 2006, the cumulative volume of foreign portfolio investment into shares of companies located in BRIC countries grew to $697 billion from $70 billion.
- Brazil, Russia, India and China made up more than 50% of world GDP back in 1800, make up about 15% now are are likely to again make up 50% by 2050.
- BRICs already contribute almost half of global consumption growth.
- Being invested in the right markets—particularly the right emerging markets—may become an increasingly important strategic choice for corporations.
- “Conditions for Growth” include macro-economic stability supported by price stability via fiscal deficit reduction, institutions, openness to trade and foreign direct investment, and education.
- Corporate governance remains one of the most important factors constraining the BRICs’ attractiveness to potential long-term shareholders. Less active minority shareowners and large share concentrations inhibit market-driven changes in control.
I look forward to future posts in this interesting series.