The Best Emerging Markets for Expat Entreprenuers

A very insightful article by Forbes opening your imagination about where you should be looking to do business beyond India and China.

Posted by Raghav Somani

You’re craving adventure and eye-popping growth?

Sure, there is plenty of action in India and China, where big boys like Microsoft (nasdaq: MSFT – news – people ), Citigroup (nyse: C – news – people ) and Intel (nasdaq: INTC – news – people ) have made deep inroads. But for entrepreneurs with vision, patience, an appetite for risk and command of a second language (or two), there are plenty of opportunities in even more exotic locales.

In Pictures: 20 Emerging Markets To Watch

Indeed, emerging economies–defined here as those not included in the 30 members of the Organization for Economic Cooperation and Development–now make up more than half of the world’s economic horsepower. By 2050, they will account for nearly 78% of total output, estimates a 2007 report by business services firm Grant Thornton.

“In general, you make money in countries [that] are currently not doing that well … but over the next five or 10 years, they’ll grow,” says Simeon Djankov, chief economist at the World Bank and co-author of the World Bank’s Doing Business series on business environments in emerging markets.

While the outsourcing trend has grabbed headlines in recent years, a small cadre of U.S. entrepreneurs is setting up shop abroad–mostly in the real estate, architecture, education, information technology and medical device fields, according to the U.S. & Foreign Commercial Service.

Of course, some countries are more hospitable to business than others. Ocean views don’t mean much if you can’t enforce a contract or fire incompetent employees. In India, for example, enforcing a simple commercial contract takes 56 procedures and nearly four years, notes the World Bank, while in Venezuela, workers who earn less than 1.5 times the minimum wage can’t be fired. Meanwhile, in Brazil, it takes an average of 152 days to start a business, compared with just five days in the U.S.

Another other huge hassle: corruption. Take Africa. On top of the devastation wrought by the HIV/AIDS epidemic, corruption devours $148 billion per year–25% of Africa’s gross domestic product–and increases the cost of goods by as much as 20%, estimates the African Union.

So where are the most promising locales? Eastern Europe’s Georgia was last year’s top reformer, according to the World Bank’s 2007 Doing Business report, which ranks countries based on regulatory reforms that enhance business activity. Georgia made strides in six of 10 categories, including the time it takes to start a business, dealing with licenses, employing workers, getting credit, cross-border trade and enforcing contracts.

Microfinance Fights Growing Pains

Ventures has been involved with a lot of Business Plans in the realm of Microfinance, including our very own BPlan represented at the Asian Students’ Ventures Forum. This a must read article for all members.

Posted by Raghav Somani

Nine years ago, Avarzed could not have gotten a small business loan anywhere in her province, even if she had possessed 10 times the value in collateral (which she didn’t).

She lives in the province of Dornogobi, part of the Gobi Desert in Mongolia, a land-locked country between China and Russia known for harsh winters, steppes and nomadic herders. In this country, 2.9 million people are spread out over a land the size of Western Europe, although more than a million of them live in the capital city of Ulaanbaatar.

Avarzed was a single mother with three children in school, barely making ends meet by operating a small kiosk selling food and sundries. Then she got her first loan; she used the $80 (U.S.) to buy more goods to sell in her kiosk. “I am grateful that someone trusted me, and I have always tried to repay my loans on time because of this,” she says.

Today, she is putting one child through university in Ulaanbaatar, lives in a three-room apartment and owns her own shop. She used her latest loan of $6,000 to expand her stock, buying stationary and beauty products. However, in the provincial capital where she lives, retail is not the only sector seeing growth: There are now six banks operating in this desert town of 19,000 people.

Forbes: Singapore’s 40 Richest

Posted by Raghav Somani

The city-state of Singapore has had a banner year. GDP was up 7.9% for 2006, the main stock index is up 19% year to date, and its 40 wealthiest citizens are worth a collective $32 billion, $4 billion more than last year. Fortunes centered on real estate, shipping and palm oil did particularly well. Ng Teng Fong takes the top spot based on the success of his hotel and mall holdings in Singapore and Hong Kong. Chua Thian Poh smartly bet on Sentosa Cove, which is emerging as the best address in Singapore. The richest of the list’s 12 new entrants is Zhong Shen Jian, who made his $2.5 billion fortune selling luxury residences in his native China. He is one of three newcomers to list companies on the Singapore stock exchange last year. The other two are Robert Chandran of marine fuel outfit Chemoil and Raymond Goh, whose Swiber Group provides offshore oil and gas services. Kuok Khoon Hong and Peter Lim make their debuts thanks to soaring palm oil demand. One of the list’s biggest gainers is Brian Chang, who operates one of Asia’s largest dry docks out of China. Banking tycoons didn’t do as well, recently hit by the global downturn in mortgages. Wee Chow Yaw’s United Overseas Bank (other-otc: UOVEY.PK – news - people ) dipped 10% since mid-July. A $100 million net worth was needed to make the list, up from $55 million last year. Dropoffs who failed to make the cut include Tang Wee Kit–who, with his brother, launched an unsuccessful $150 million bid to buy out retailer C.K. Tang’s minority shareholders–and Sudhir Gupta, who was forced to sell his stake in tiremaker Amtel-Vredestein for pennies on the dollar to his Russian partners. To better highlight individual wealth, we unraveled some extended family holdings. As a result Kwek Leng Beng’s net worth dropped by $2.5 billion, but he is now joined by his cousins Kwek Leng Kee and Kwek Leng Peck. We also delineate cases such as the Khoo family in which siblings share a fortune. Public fortunes were calculated using share prices and exchange rates as of Aug. 10. For privately held fortunes we estimated what they would be worth if public.