Economist Dambisa Moyo believes the global trends of rapidly increasing population, an unprecedented rate of economic development, and a massive rate of urbanization will strain commodity resources in the near future — and only one country, China, has “a systematic and deliberate plan for securing resources.” Moyo’s latest book, Winner Take All: China’s Race for Resources and What It Means for the World, examines what China’s planned commodity investments mean for the global marketplace.
Although China’s “global shopping spree” may be cause for alarm in the developed nations that would be affected by future shortages, it may also present some unique opportunities for resource-rich emerging markets. If Moyo’s assertions are correct, China’s involvement with frontier markets in Africa and elsewhere may have a more dramatic impact than decades of financial assistance from the West.
In Moyo’s earlier book, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, she argued that foreign aid to emerging market countries leads to dependence on cash infusions from outside sources, doing little to promote long-term economic development. As Decca Aitkenhead of the Guardian noted in her article about Moyo, China deals with its trading partners as “valued commercial equals” — engaging in the kinds of transactions that could have a more positive and sustained impact on economic development.
At the 66th CFA Institute Annual Conference in Singapore, Moyo will examine some of the macro trends and key ingredients for growth in frontier markets, especially in light of China’s increased participation in global commodity markets. Her presentation, “Investing in the Frontier: Placing the Opportunity in a Global Context,” will be of value for investment professionals looking to identify risk premiums and returns in frontier equity and debt markets.
You can register to attend the conference to hear from Moyo in person, and follow this blog for more conference updates as the event draws closer.
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.