In 2021, economists discover that the growth rates in many frontiers and emerging markets have been woefully underestimated in recent years, especially when delving into the private sector and entrepreneurial developments. Closer analysis reveals that key technologies may lie at the root of an acceleration in private sector productivity growth far beyond anything seen in the developed markets in recent decades. From the growing speed and lower costs of internet provisioning to an explosion of the use of mobile-based payment systems, growth of the private sector and an entrepreneurial spirit are clearly behind a revolution in the quality as well as the quantity of growth.
2021 proves to be a Eureka moment for investors on the anticipation that three areas of technology are set to deliver an enormous further boost to frontier and emerging market growth in the coming years. The first is the arrival of satellite-based internet delivery systems, which are set to crush the price of internet provisioning, both increasing uptime and coverage area, but more importantly delivering an order of magnitude increase in download speeds. SpaceX’s Starlink will be the first on the scene there, with as many as 1,500 operational by the end of 2021. In emerging and frontier markets, education and business productivity will reap the benefits. Second is the ongoing revolution in fintech payment and banking systems which have already given billions of people access to the digital economy via their mobile devices.
Finally, just as reliable mobile telephony suddenly replaced creaky, unreliable landline telephone systems in emerging and frontier markets over the last few decades, drone technology is set to revolutionise delivery systems and reduce the disadvantages and costs of living away from the largest cities and towns. Drone technology combined with automation also has applications in agriculture, where practices in many under-developed rural areas across the world stand to gain the most from productivity upgrades.
Trade: long emerging market currencies on superior growth outlook.
See next 2021 prediction:
Amazon "buys" Cyprus
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.