THE EUROMONEY MAURITIUS CONFERENCE 2010
ACCESSING GROWTH MARKETS- THE ROLE OF GLOBAL BUSINESS CENTRES
30th March 2010
The Waldorf Hilton Hotel, London
Panel 1: The Global Growth Environment
This session was chaired by Christopher Garnett, Director, Euromoney Conferences and focused on the global growth environment. Speakers included Daniel Broby, Chief Investment Officer, Silk Invest; Richard Fairgrieve, Director, Global Emerging Markets, Blackfriars Asset Management; Slim Feriani, Chief Executive Officer, Advance Emerging Capital and Liam Halligan, Chief Economist, Prosperity Capital Management
Panel I proved to be an excellent platform to set the scene for the rest of the day. Panelists analysed the main risks that the global economy is currently going through and expressed their invaluable views on where they believed the global downturn currently stands.
According to Richard Fairgrieve, the world has not come out of the economic crisis yet. As investors, it is very important to see the world from its various horizons. It is important to split emerging markets from the rest of the world. Since emerging markets have the reserves, they will continue to grow at a faster pace. In previous years, emerging markets have grown by 4-5% while those of the West grew by only 2%.
According to Slim Feriani, major risks are still present in the developed and Western world. We live in a global village and there is currently lots of talk about decoupling. The reality is that if Western countries do not grow then the export engine of the emerging economies is going to be hit. The economic crisis has in some ways played a positive role for emerging markets as it has forced them to look inward and concentrate on their domestic and regional markets.
For Daniel Broby, the end of the game is what matters. During the crisis, the Mauritian tourism sector was hit by 10%. However, there had been a very pragmatic approach by the Government to tackle this crisis. For instance, hotels and services were upgraded to make the country more attractive. Slim Feriani pointed out that places like Istanbul and Turkey have had tangible progress as compared to what they were 10 years ago. Confidence and stability has helped the economies to grow.
The shift in the flow of capital and investment from the West to the East, the growing importance of emerging markets like India and China as well as the way major capital markets around the world are re-inventing themselves to take advantage of the new economic landscape were examined. Slim Feriani reiterated that as investment managers, they are cautious and conservative in their approach to invest. They have structures in Nigeria as well as in Mauritius. Mauritius is a stable country but not necessarily the most cost effective platform. There has been a major transformation in Africa. It is predicted that in 10 years from now, Nigeria will boom as long as politics and stability improves. However, the fact remains that while some African countries are progressing; some have gone backward, for example Zimbabwe.
For Daniel Broby, African economies such as Botswana and Mauritius have been successful as there has been a high correlation between democracy and success. It was further highlighted that for Global Business Centres to remain and enhance their competitiveness, factors like transparency, regulatory framework, consistency and extensive networks of bilateral agreements should be taken into consideration.