Emerging markets have been considered the backbone of the global economy for several years now, and their resilience in the face of economic uncertainty has been commendable. As the world grapples with the uncertainties created by the COVID-19 pandemic, emerging markets are showcasing their strong fundamentals, robust economic policies, and strategies that promote resilience and sustainability. This article discusses how emerging markets continue to exhibit strength in the midst of economic gloom.
The response of emerging markets to the COVID-19 pandemic has been proactive and swift with governments setting up various economic measures to cushion businesses and households from the impact of the pandemic. The immediate responses offered by these economies served to instill confidence in investors, providing a clear indication that emerging markets are on a firm footing in dealing with crises.
One notable characteristic of emerging markets is the resilience of their financial markets, which have seen little disruption despite the economic pressures caused by the pandemic. This demonstrates resilience and market confidence, providing a vibrant atmosphere for businesses to thrive.
Another key factor that has contributed to the resilience of emerging markets is their strong macroeconomic fundamentals. A large number of emerging markets have fiscal and monetary policies that are well-anchored and can sustain the COVID-19 induced disruptions. This is in contrast to some advanced economies, which have struggled to deal with monetary and fiscal policy measures applying “unconventional tools.” Moreover, many emerging markets have a robust and growing consumer market, which makes them less reliant on exports than before.
Emerging markets are home to a large number of skilled and creative entrepreneurs, who are at the forefront of developing new business models, ideas and innovations. It is these entrepreneurs, with their unique insights that will help businesses emerge from the pandemic stronger and more resilient. Governments in emerging markets are keen to nurture startup enterprises by offering them technical assistance, funding, incubation and support to help accelerate the creation of an environment where innovation can thrive.
Finally, emerging markets’ governance standards have been enhanced, with many economies embracing transparency and accountability in their structural and institutional reforms. They have implemented policies that promote economic growth, while also improving the overall level of governance. These initiatives allow governments to become more trustworthy and ensure that their platforms offer an environment where businesses can thrive.
In conclusion, emerging markets have performed admirably in the face of global economic uncertainty. By setting up robust policies to support businesses and households during the COVID-19 pandemic, resolving macro-economic fundamentals, and promoting transparency through governance and innovative approaches, emerging markets demonstrate that they have the potential to become even stronger and more robust economies. With their continued focus, emerging markets may become the engine of the global economy, and a beacon of economic resilience and sustainability.