PwC: Global commerce set to bypass the West

Rob Starr, Big4.com content manager

According to “Project Blue: Capitalising on the rise and interconnectivity of the emerging markets” published recently by PwC, rapidly accelerating growth and increased intra-trading across South America, Africa, Asia and the Middle East (SAAAME) is leading to a radical shake-up in the competitive environment for financial services businesses, both within the SAAAME region and beyond.

The PwC Project Blue report highlights that the interconnectivity of intra-SAAAME trade and investment flows is as significant as the growth and projected size of the emerging markets.  These flows are growing much faster than the traditional routes from developed-to-emerging and developed-to-developed countries. Within SAAAME, there are pockets of particularly high trade growth, notably between Asia and Latin America and between Africa and the Middle East. Singapore is one of the 12 largest destination countries for Foreign Direct Investment (FDI) to SAAAME, and leads among ASEAN as a trading partner to other markets within SAAAME.

SAAAME regions are emerging as an increasingly interconnected trading zone, which effectively, in physical terms at least, bypasses the West. Trade flows within this region are growing around 50% faster than trade flows between SAAAME and developed markets. This is underpinned by factors such as the rate of population growth in this region and the availability of capital in the form of current account and fiscal surpluses as well as sovereign wealth funds.