Emerging markets and export dependency

In the past most emerging markets relied on heavy exports to developed markets. This was a risky strategy. The emerging markets were very dependent on the west. This resulted in low predictability and unstable earnings.

But luckily there are two favorable developments. Firstly emerging markets are becoming internal markets. Secondly emerging markets trade with each other.

Because emerging markets become more advanced the worker get richer. These workers start spending more and create internal demand for good and services. Some governments take an active role and support the development of internal markets. A good example is China.

The trade between emerging markets is becoming bigger and bigger. As an example i pick Brazil and Russia but the same story could be told about more nations. Brazil is rich in natural resources. China is in high need of these resources. This is why ships full of iron ore and fuel are sailing from Brazil to China. The people in Brazil are getting richer and have some money to spend. But they don't have very much so they prefer cheap products. China makes a lot of cheap consumer products. Once the ships have unloaded the natural resources they are stuffed full of consumer product before they sail back to Brazil. As you can see the role the western world has to play is getting smaller.

The reasons above are only part of the reason to like emerging markets.