1. society
2. work
3. unemployment

Transitory Shift to “Renewed Normal”
Global Economic Outlook 2014-2020
Executive Summary
§  The global economy is finally beginning to stabilize, with leading forecasts
suggesting average annual real growth of 3-4% for the 2014-2020 period
§  Emerging economies will continue to grow in excess of 4%, while the growth rate
of advanced economies is forecast to reach >2% for the first time since 2010
§  But we expect a shakeout in 2014 based on key policy choices, as
governments grapple with structural reforms and the diminishing returns to
monetary stimulus
§  The next wave of global growth will come from ten key growth markets, what we
call the “2020-10,” with support from a variety of Sub-Saharan Africa markets
§  Despite this benign medium-term global outlook, there are several significant
risks that could derail sustained global economic growth
A.T. Kearney Global Business Policy Council
2
Global Economic Outlook 2014-2020
•  Global Economic Outlook: “Renewed Normal”
•  The Next Wave of Growth: The “2020-10”
•  Key Wildcards
A.T. Kearney Global Business Policy Council
3
The global economy is finally transitioning from the Great
Recession to a period of more stable growth
Then
Now
Global growth took a nosedive
More Growth &
Confidence
10%
Increased
International Trade
Recovering
Investment
6%
4%
2009
2008
2007
2006
2005
2004
2003
-2%
2002
0%
2001
2%
2000
Real annual growth rate
8%
-4%
World
Advanced economies
Developed Economies Retake
Global Growth Engine Role
- Wall Street Journal
Lagarde: ‘Guardedly Optimistic’ on
Global Economy
- Bloomberg
‘Dr. Doom’ Roubini gets bullish on
global economy
- Project Syndicate
Emerging economies
Historic events whose ‘severity and
economic consequences were
enormous’
- Ben Bernanke
Sources: Oxford Economics; A.T. Kearney
Global economy 'back on track‘
- Financial Times
A.T. Kearney Global Business Policy Council
4
In the 2014-2020 period, we anticipate a return to annual global
growth of approximately 3%-4%
Key Points
Global growth will stabilize
5%
•  The U.S. is returning to growth,
but Europe has yet to fully
address the core of its financial
crisis and Japan’s continued
economic recovery will be
determined by structural reforms
in 2014
Forecast
3%
•  Emerging markets are
experiencing a slowdown driven
by near-term cyclical and longterm structural factors
2%
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
-1%
2002
0%
2001
1%
2000
Real annual growth rate
4%
-2%
-3%
Oxford Economics
IMF
EIU
Sources: Oxford Economics; IMF World Economic Outlook, April 2014; Economist Intelligence Unit; A.T. Kearney
•  Winners and losers will be
determined by policy discipline
and structural reforms that
support competitiveness
•  This projected global economic
growth, however, is subject to
downside effects from a range of
contingencies
A.T. Kearney Global Business Policy Council
5
As a result of this economic growth, international flows of goods
and capital will surpass their pre-Great Recession levels
Key Points
Global trade and FDI flows will rebound
$30
•  Prior to the 2008 global economic
crisis, FDI flows were primarily
directed to advanced economies
$2.5
Forecast
$25
•  All economies hit heavily by the
global economic crisis with export
and import levels declining
precipitously
$2.0
$1.5
$15
$1.0
$10
$0.5
Trade (left axis)
1. Nominal US dollars
Sources: Oxford Economics, A.T. Kearney
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
$0
2000
$5
$0.0
Trillions
Trillions
$20
•  Between 2008 and 2013,
emerging markets surpassed
advanced economies in FDI
inflows
•  Looking ahead to 2020, the
advanced economies will drive
global FDI growth to more than
$2.5 trillion
•  FTAs currently in negotiation
could be critical to unlocking
stalled multilateral free trade
FDI (right axis)
A.T. Kearney Global Business Policy Council
6
But the drivers of global economic growth are shifting again, as
we enter into a new era after a decade of instability
2003-2007
The Great Bubble
•  Advanced economies powered
global growth
•  Emerging economies grew
strongly, in part due to exports
2008-2013
2014-2020
Emerging Emergence
•  Emerging markets decoupled
and continued to grow
without support from
advanced economies
•  Growth was fueled partly by a
massive asset bubble in the
U.S. and parts of Europe
•  Growth was driven in part by
unsustainable fiscal stimulus
in China and elsewhere, and
by U.S. monetary easing
•  Global imbalances between
creditor and indebted nations
grew to unsustainable levels
•  Advanced economies shrank
or stagnated
Growth Divergence
•  Growth rates are stabilizing
and are converging at lower
levels
•  In all economies, success will
be tied increasingly to
proactive structural reforms
that unlock underlying growth
potential
•  This marks a return to reality
in which fundamentals and
policy choices trump macrolevel trends
A.T. Kearney Global Business Policy Council
7
This year advanced economies—led by the U.S.—will surpass
emerging markets in contribution to global GDP
The shift back toward advanced economies leading growth
The Great Bubble
Emerging Emergence
Growth with Divergence
$2.5
Forecast
GDP Growth, Trillions
$2.0
$1.5
$1.0
$0.5
$0.6
$0.8
$0.9
$0.9
$0.6
$0.7
$1.0
$0.9
$1.0
$1.0
$0.6
$0.2
$0.0
$1.0
$1.0
$1.1
$1.1
$1.0
$1.0
$1.0
$1.0
$1.0
$0.7
$1.0
$0.7
$0.9
$0.7
$0.9
$0.5
$0.7
$0.8
$0.5
$0.5
$0.8
$1.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
-$0.5
-$1.3
-$1.0
-$1.5
Advanced economies
“Renewed Normal:”
Period of higher contribution by
advanced economies
Emerging economies
In 2014-18 interval, advanced economies to contribute more than emerging
economies to global growth for the first time since the Great Recession
1.  GDP is based on constant dollars at market exchange rates
Sources: Oxford Economics, A.T. Kearney
A.T. Kearney Global Business Policy Council
8
The U.S. economic outlook is stronger, bolstered by private
sector growth, financial sector stability and rising demand
Sources: US Energy Information Agency, Oxford Economics, A.T. Kearney
Oil (left axis)
Billion cubic feet
2012
2010
2008
2006
2004
2002
2000
1998
1996
15,000
1994
5,000
1992
20,000
1990
10,000
Natural gas (right axis)
US industrial production index
105
100
95
90
A.T. Kearney Global Business Policy Council
2014 Q1
2013 Q3
2013 Q1
2012 Q3
2012 Q1
2011 Q3
2011 Q1
2010 Q3
2010 Q1
2009 Q3
2009 Q1
2008 Q3
2008 Q1
2007 Q3
2007 Q1
80
2006 Q3
85
2006 Q1
Stronger
Output
•  Companies increasing fixed investment
•  Stronger domestic and global demand
for durable goods
•  Slower government fiscal consolidation
25,000
2005 Q3
Rising
Demand
•  Stronger employment is supporting
improved consumption
•  Other drivers included repaired
household balance sheets and
renewed credit growth
15,000
2005 Q1
Improved
Competitiveness
•  Energy revolution leading to greater
cost competitiveness
•  Capitalizing on strong R&D with a
large, educated workforce and high
innovative potential
US oil and gas production
Thousand barrels per day
Increased
Stability
•  Stronger financial markets are growing
credit
•  Wealth effect from greater stability in
the housing markets
•  Improved worker mobility
9
The Eurozone growth outlook remains weak, but could improve
as the credit environment strengthens
Forecast
Eurozone Industrial Production is Flat
Index (2005=100)
110
Key Points
•  Currency appreciation could
aggravate competitiveness
problems, but recent monetary
policy expansion should help
105
100
95
90
•  Periphery countries have
begun to turn the corner due to
structural reforms and falling
wage levels
85
2005
2006
2007
2008
2009
Falling Inflation Poses Risks…
2010
2011
2012
2013
2014
…As Does High Unemployment
3.5
Forecast
13
Forecast
12
Percent change
3.0
11
2.5
Percent
10
2.0
1.5
1.0
9
8
•  However, key EU and national
reforms still need to be enacted
to achieve long-term resiliency
2014
2013
2012
2011
2010
2009
2008
2007
2006
2014
2013
2012
2011
2010
2009
2008
2007
2006
5
2005
6
0.0
2005
7
0.5
•  Oversubscribed public and
private debt auctions for
periphery economies reflect
increased investor confidence
There is substantial potential upside in the Eurozone if higher confidence and
stronger credit markets lead to increased investment in undervalued assets
Sources: Economist Intelligence Unit, A.T. Kearney
A.T. Kearney Global Business Policy Council
10
In Japan, Abenomics is showing signs of traction, but political
resistance to reforms must still be overcome
3.0
2.0
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2013 Q4
2013 Q3
2013 Q2
2013 Q1
2012 Q4
2012 Q3
-1.0
2012 Q2
0.0
2012 Q1
1.0
GDP growth is also trending upward
Forecast
4.0
3.0
2.0
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2013 Q4
2013 Q3
-1.0
2013 Q2
0.0
2013 Q1
1.0
2012 Q4
Pending
Forecast
2012 Q3
•  Structural reforms for
competitiveness—
especially in services
and agriculture
Succeeding
4.0
2012 Q2
Structural
Reforms
•  Aggressive monetary
easing to support
currency devaluation
and inflation
Succeeding
Inflation is finally in positive territory
2012 Q1
Monetary
Easing
•  Massive fiscal stimulus
of $170bn (or 1.5% of
GDP over last 2 years)
Current
Status
Percent change, year on year
Fiscal
Stimulus
Overview
Percent change, year on year
3 Arrows of
“Abenomics”
If inflation goals are achieved without a sustained return to economic growth,
Japan’s economy may encounter new obstacles
Sources: Economist Intelligence Unit, A.T. Kearney
A.T. Kearney Global Business Policy Council
11
In the 2014-2020 period, emerging markets’ growth will be
lower and more divergent than it was in the previous period
Emerging Markets
Eurasia
Eastern Europe
2008-2013
2014-20201
2008-2013
2014-20201
5.3%
5.0%
1.2%
3.5%
2008-2013
2014-20201
2.0%
2.3%
Middle East & North Africa
2008-2013
2014-20201
3.6%
4.2%
China
2008-2013
2014-2020
9.0%
6.1%
South Asia
Latin America
2008-2013
2014-20201
3.0%
3.3%
1. Forecast data
Source: Economist Intelligence Unit
2008-2013
2014-20201
6.1%
6.1%
ASEAN
2008-2013
2014-20201
4.8%
5.6%
Sub-Saharan Africa
2008-2013
2014-20201
4.6%
5.5%
A.T. Kearney Global Business Policy Council
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Emerging markets are nevertheless continuing their steady rise
in the relative share of the global economy
Advanced
Economies
2010
Emerging
Economies
2000
Advanced
Economies
Shifting Leaders of Global GDP
•  In the near term, GDP growth in
emerging economies is projected
to drop slightly
35%
65%
2020
Advanced
Source: Oxford Economics
Emerging Markets Overview
45%
55%
47%
53%
•  This is primarily driven by China,
where growth will slow from an
average of 9% annually in
2008-2013 to about 7% through
2020
•  However, the growth outlook for
emerging markets still outpaces
that of advanced economies, so
emerging markets will continue to
increase their share of total global
economic output
•  As more emerging markets
achieve middle income status,
their global economic and political
clout will rise accordingly
Emerging
A.T. Kearney Global Business Policy Council
13
China will continue to lead the BRICs in the near term, but India
could surge ahead of the pack later in the forecast period
Economic growth in the BRICs
12%
Key Points
•  China will continue to have the
highest growth rate among BRIC
nations through 2016
Forecast
10%
•  China’s economic rebalancing will
require unlocking consumer-driven
growth
6%
4%
-4%
-6%
-8%
Brazil
China
India
Russia
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
-2%
2010
0%
2009
2%
2008
Annual real growth
8%
•  On the other hand, India’s
economic growth could be
unleashed by newly-elected Prime
Minister Narendra Modi’s proposed
reform agenda
•  Policy choices will play a large role
in determining the BRICs’
economic trajectories
A critical medium-term uncertainty is China’s ability to reduce its reliance on
investment for growth and achieve the “soft-landing” it seeks
Source: Economist Intelligence Unit
A.T. Kearney Global Business Policy Council
14
However, the BRICs will increasingly face significant cyclical
and structural constraints to growth
What’s Constraining Growth?
Brazil
Russia
Cyclical
•  Falling commodity
prices and increasing
interest rates hurt
economic growth
Cyclical
•  Falling oil prices have
a significant impact on
Russia’s fiscal and
external deficits
Structural
•  Growth outlook stays at
3% levels, but
structural reforms are
necessary to raise
productivity and boost
private investment
Structural
•  Constrained by poor
infrastructure,
governance, and
demographics; oil and
gas continue to fuel
“Dutch disease”
50/50 – Cyclical &
Structural
50/50 – Cyclical &
Structural
Sources: International Monetary Fund, World Economic Forum, A.T. Kearney
India
Cyclical
•  Rising cost of capital
and inflation constrain
growth
Structural
•  To attract investment,
India must improve
energy, transportation,
and ICT infrastructure
as well as enact key
business reforms on
domestic and
international firms
50/50 – Cyclical &
Structural
China
Structural
•  Export weakness and
rising non-performing
loans illustrate inherent
weakness in
unbalanced growth
strategy
•  China will eventually
need to rebalance itself
away from unsustainable investment- and
export-driven growth
Long-Term
Structural
A.T. Kearney Global Business Policy Council
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National policies and structural reform effectiveness will be
decisive for determining economic outcomes through 2020
Key Policy Tests for G20 and Other Economies
Business
Environment
Critical
Issues
Inflexible labor
markets, FDI
restriction and
other businessconstricting
regulations
Importance Liberalization
of Success eases business
operations and
enables freer
flow of people,
goods and
capital
At-Risk
Countries
Argentina, Brazil,
China, India,
Indonesia, Italy,
Japan, Russia,
Saudi Arabia,
Turkey
Education
Fiscal Policy
Governance
Inequality
Infrastructure
Institutional
Weakness
Poor quality of
schools and
student
performance in
secondary and
post-secondary
education
High debt levels
in advanced
economies and
rising levels in
emerging
economies
Corruption and
weak rule of law
undermining
business activity
and economic
growth
High levels of
income
inequality stifling
growth
Lack or poor
quality of
infrastructure
constraining
growth
Governing
institutions that
are unable to
carry out their
mandate
Better education
systems improve
labor force
quality and
unlock
innovative
potential
Improving longrun finances
provides tax
stability and
sustainability of
social safety net
Transparency on
regulatory and
contracts
enforcement
supports growth
Policies to
support class
mobility promote
growth and
reduce social
tensions
Investing in
transportation,
energy, and ICT
infrastructure
boosts growth
potential
Strengthening
institutions and
clarifying their
mandates
improve
regulatory clarity
Argentina, Brazil,
India, Indonesia,
Italy, Mexico,
Russia, Turkey,
U.S.
Brazil, France,
India, Italy,
Japan, U.K.,
U.S.
Argentina, Brazil,
China, India,
Indonesia, Italy,
Mexico, Russia,
Saudi Arabia
South Africa,
Turkey
Argentina, Brazil,
China, India,
Indonesia,
Mexico, Russia,
Saudi Arabia,
South Africa,
Turkey, U.S.
Argentina, Brazil,
India, Indonesia,
Italy, Mexico,
Russia, S. Africa
Argentina, E.U.,
India, Indonesia,
Italy
For each country, the key question will be whether the political system can
identify and address the hard choices necessary to drive long-term growth
Sources: World Bank, United National Development Programme, PISA, International Monetary Fund,
Transparency International, World Economic Forum, A.T. Kearney
A.T. Kearney Global Business Policy Council
16
In conclusion…
■ The global economy is returning to a period of stronger growth, but
identifying specific opportunities will be more difficult than in the previous
decade
• Through 2020, neither sub-set of economies—advanced and emerging—can be
characterized as monolithically as in the recent past
• As macro-level fiscal and monetary supports recede, growth will be differentiated
by the substance of structural reforms and the quality of policy decisions
■ Structural reforms will be critical for both advanced and emerging economies
• Advanced economies, particularly in the Eurozone, must enact policies that
address underlying competitiveness issues including long-term debt, education,
innovation, inequality, aging and unresolved post-crisis institutional weakness
• Many emerging markets continue to be in near-term stress from tapering, facing
the structural limits of their growth, or both;
• Governments must begin to implement reforms in labor markets, rules governing
FDI, education, infrastructure and other areas to attract foreign investment and
drive more balanced consumption-driven growth
A.T. Kearney Global Business Policy Council
17
Global Economic Outlook 2014-2020
•  Global Economic Outlook: “Renewed Normal”
•  The Next Wave of Growth: The “2020-10”
•  Key Wildcards
A.T. Kearney Global Business Policy Council
18
The next wave of global growth will not only come from the
ongoing U.S. recovery, but also from ten key emerging markets
The “2020–10” Next-Wave Growth Markets
Size of
economy
Economic
performance
Economic
resilience
Economic
imbalances
Labor
force
Infrastructure
Regulations
and
governance
Reform
status
Growth
market
China
Chile
Malaysia
Peru
Poland
Philippines
Mexico
Colombia
Turkey
India
Indonesia
Nigeria
Thailand
Brazil
South Africa
Russia
Argentina
Egypt
Venezuela
Scores
Very Low
Low
Moderate
Sources: Economist Intelligence Unit; IMF; World Bank; World Economic Forum, United Nations; A.T. Kearney
High
Very High
A.T. Kearney Global Business Policy Council
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2020:10
Despite the risks associated with rebalancing, China remains an
important growth market
China’s Rapidly Rising in GDP Per Capita1
$18,000
Forecast
$16,000
Key Statistics
$12,563 bn GDP
Purchasing Power Parity, 2014
$14,000
6.2%
$12,000
$10,000
$10,920
$8,000
$6,000
$4,000
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
■  At 1.4 billion people, China is the most populous country in
the world, providing both a large labor force and a huge
consumer market
■  The World Bank predicts that in 2014 China will overtake the
U.S. as the world’s largest economy on a purchasing power
parity basis
■  China’s large infrastructure investments in recent years have
improved logistics in the country—a competitive advantage
over many other emerging markets
1.  GDP per capita measured at purchasing power parity
Sources: Economist Intelligence Unit; IMF; World Bank; United Nations; A.T. Kearney
2014-2020
GDP per capita
Purchasing Power Parity, 2014
2.5%
Inflation
16.6%
Government Debt
1.4 bn
Population
72.4%
Working Age Population
55.6%
Urbanization Rate
$2,000
$0
Average Real GDP Growth
Annual Percent Change, 2014
Percent of GDP, 2014
Total, 2015
Percent of Total, 2015
Percent of Total, 2015
3.6
Logistics Performance Index
96
Doing Business Rank
-0.54
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
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2020:10
Chile’s strong institutions and liberal economic policies provide
a stable macroeconomic environment
Chile’s Governance Outperforms Its Neighbors
Regulatory Quality
Control of
Corruption
Rule of Law
Key Statistics
$299 bn
2.5
Scores (-2.5–2.5)
2.0
1.6
1.5
4.4%
1.4
1.5
1.0
$19,900
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
-0.1
-0.3
-0.4
Chile
Latin America
■  Chile’s dramatic liberalizing reforms in the 1980s put the
country on a more sustainable economic growth than many of
its peers, and it continues to be very open to foreign
investment and trade
GDP
Purchasing Power Parity, 2014
Average Real GDP Growth
2014-2020
GDP per capita
Purchasing Power Parity, 2014
3.9%
Inflation
14.9%
Government Debt
17.9 mn
68.9%
90%
Annual Percent Change, 2014
Percent of GDP, 2014
Population
Total, 2015
Working Age Population
Percent of Total, 2015
Urbanization Rate
Percent of Total, 2015
■  As the world’s largest copper producer, Chile’s economy
benefited from the recent commodity boom cycle, and the
government has used the revenues to create a rainy day fund
3.2
Logistics Performance Index
34
Doing Business Rank
■  Newly re-elected President Michele Bachelet has proposed
an increase in corporate taxes in order to fund education
reform, which should improve the quality of the labor force
0.35
Sources: Economist Intelligence Unit; IMF; World Bank; United Nations; A.T. Kearney
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
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2020:10
Malaysia’s business-friendly regulatory environment and
relatively high per capita income provide growth opportunities
Workforce is Becoming More Educated
100%
90%
20.3%
$477 bn
24.4%
80%
70%
5.4%
60%
56.3%
50%
55.8%
$18,620
40%
30%
20%
10%
Key Statistics
4.1%
19.3%
16.8%
2007
2012
3.0%
0%
Less than primary
Primary
Secondary
Tertiary
■  Malaysia’s economy has recently begun to transition toward
being driven by domestic demand, helped along by
government policies such as the strengthening of the social
safety net
Purchasing Power Parity, 2014
Average Real GDP Growth
2014-2020
GDP per capita
Purchasing Power Parity, 2014
3.2%
Inflation
51.8%
Government Debt
30.7 mn
69%
75.4%
■  As a key member of ASEAN and of the TPP negotiations,
Malaysia is a very open economy with trade volumes
amounting to 162% of GDP in 2012
3.4
■  The country is well-placed to withstand any global capital
markets turmoil due to its strong regulatory institutions,
flexible exchange rate and high international reserves level
0.00
Sources: Economist Intelligence Unit; IMF; World Bank; United Nations; A.T. Kearney
GDP
6
Annual Percent Change, 2014
Percent of GDP, 2014
Population
Total, 2015
Working Age Population
Percent of Total, 2015
Urbanization Rate
Percent of Total, 2015
Logistics Performance Index
1–5, with 5=high
Doing Business Rank
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
22
2020:10
The economic fortunes of Peru are on the rise, following recent
structural reforms and continued liberalization
Productivity Growth is Expected to Rise1
Annual percent
2.5
Forecast
Key Statistics
$313 bn
2.0
5.4%
1.5
$11,670
1.0
2020
2019
2018
2017
2016
2015
2014
2013
2012
■  After decades of populist or authoritarian politics, Peru’s
government has become part of Latin America’s new, more
pragmatic left, combining liberalization with social spending
■  Recent economic growth has been driven in part by Peru’s
endowment of minerals and natural gas, but natural
resources only account for 11% of the country’s output
■  Peru’s membership in TPP negotiations highlights the
country’s outward-looking policies, as well as its higher
growth potential once that agreement is enacted
1. Total factor productivity growth
Sources: Economist Intelligence Unit; IMF; World Bank; United Nations; A.T. Kearney
Purchasing Power Parity, 2014
Average Real GDP Growth
2014-2020
GDP per capita
Purchasing Power Parity, 2014
3.3%
Inflation
15.1%
Government Debt
0.5
0.0
GDP
31.2 mn
Annual Percent Change, 2014
Percent of GDP, 2014
Population
Total, 2015
65.3%
Working Age Population
78.6%
Urbanization Rate
Percent of Total, 2015
Percent of Total, 2015
2.7
Logistics Performance Index
42
Doing Business Rank
-0.86
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
23
2020:10
Poland’s diversified economy, business-friendly regulations and
educated labor force make it a strong growth market
High Ranks on Doing Business Relative to Peers
Key Statistics
Doing
Business
Starting a
Business
Getting
Credit
Paying
Taxes
Trading
Across
Borders
Enforcing
Contracts
$728 bn
Bulgaria
58
65
28
13
79
79
3.9%
Czech Rep.
75
146
55
8
68
75
Hungary
54
59
55
12
70
15
Poland
45
116
3
18
49
55
Romania
73
60
13
39
76
53
Slovakia
49
108
42
20
108
65
$22,300
■  Poland was the only EU member to maintain positive
economic growth throughout the Great Recession and
Eurozone Crisis, giving it the highest average annual growth
rate in the EU in the 2008-2013 period
■  Its proximity to Germany—the economic powerhouse of
Europe—and its access to the Baltic Sea provide the country
with structural geographic advantages
Sources: Doing Business, Economist Intelligence Unit; IMF; World Bank; United Nations; A.T. Kearney
Purchasing Power Parity, 2014
Average Real GDP Growth
2014-2020
GDP per capita
Purchasing Power Parity, 2014
1.1%
Inflation
49.6%
Government Debt
38.2 mn
■  Embracing economic liberalization in the early 1990s and
implementing other policies, such as investments in
infrastructure and education, has fostered economic growth
GDP
Annual Percent Change, 2014
Percent of GDP, 2014
Population
Total, 2015
69.6%
Working Age Population
60.7%
Urbanization Rate
Percent of Total, 2015
Percent of Total, 2015
3.1
Logistics Performance Index
45
Doing Business Rank
1.03
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
24
2020:10
Recent reforms and more stable politics enabled the Philippines
to grow faster than the ASEAN average in recent years
Favorable Demographics Will Support Growth
Forecast
Key Statistics
$421 bn
66%
64%
5.8%
62%
$4,960
60%
58%
2050
2045
2040
2035
2030
2025
2020
2015
2010
2005
54%
■  President Benigno Aquino’s government has implemented a
variety of structural, administrative, institutional and
governance reforms that have unlocked the country’s growth
potential
■  All three major credit ratings agencies upgraded the
Philippines to investment grade in 2013 as a result of its
sound economic policies and high economic growth
■  The Philippines ranks 7th on A.T. Kearney’s most recent
Global Services Location Index, highlighting the country’s
competitive business process outsourcing sector
Sources: Economist Intelligence Unit; IMF; World Bank; United Nations; A.T. Kearney
GDP
Purchasing Power Parity, 2014
Average Real GDP Growth
2014-2020
GDP per capita
Purchasing Power Parity, 2014
4.0%
Inflation
46.3%
Government Debt
56%
2000
Working age population % of total
68%
101.8 bn
Annual Percent Change, 2014
Percent of GDP, 2014
Population
Total, 2015
62.5%
Working Age Population
49.8%
Urbanization Rate
Percent of Total, 2015
Percent of Total, 2015
2.8
Logistics Performance Index
108
Doing Business Rank
-1.16
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
25
2020:10
Mexico’s ambitious structural reform agenda is unlocking
growth and providing new opportunities for investment
FDI Into Mexico Will Rise1
Key Statistics
Forecast
$45
$40
$1,638 bn GDP
Purchasing Power Parity, 2014
Billions
$35
3.8%
$30
$25
$18,640
$20
$15
$10
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
$0
2000
$5
■  Mexico’s economy has benefited over the long term from its
close proximity to the U.S. and its oil wealth, but it had lost
some of its dynamism in the 2000s
■  President Enrique Pena Nieto’s ambitious structural reform
agenda—including partial liberalization of the vital oil sector—
is reinvigorating Mexico’s economy and boosting growth
■  The middle class grew by about 4% from 2000 to 2010,
reaching almost 40% of the total population, and it continues
to expand
1. Three year moving average of inward FDI
Sources: Economist Intelligence Unit; IMF; INEGI; World Bank; United Nations; A.T. Kearney
Average Real GDP Growth
2014-2020
GDP per capita
Purchasing Power Parity, 2014
4.3%
Inflation
40.5%
Government Debt
Annual Percent Change, 2014
Percent of GDP, 2014
125.2 mn Population
Total, 2015
65.8%
Working Age Population
79.2%
Urbanization Rate
Percent of Total, 2015
Percent of Total, 2015
3.0
Logistics Performance Index
53
Doing Business Rank
-0.67
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
26
2020:10
Improving security and policy environments will fuel Colombia’s
economy, which is already among the largest in Latin America
Simplifying Business Regulations
Key Statistics
60
Starting a business
50
Registering property
Exporting
Days
40
$475 bn
4.2%
Importing
$11,310
Paying taxes
30
20
10
2007
2008
2009
2010
2011
2012
2013
2014
■  Colombia’s economy has grown by an average of 5%
annually in the past three years, and is projected to continue
to grow above 4% through 2020
■  The recent reelection of President Juan Manuel Santos
demonstrates popular support for the government’s peace
talks with the FARC, which is improving security in the
country
■  Poor infrastructure has been a drag on growth, but the
government’s ambitious $24 billion infrastructure investment
plan should improve transportation and logistics
Sources: Economist Intelligence Unit; Doing Business; IMF; World Bank; United Nations; A.T. Kearney
Purchasing Power Parity, 2014
Average Real GDP Growth
2014-2020
GDP per capita
Purchasing Power Parity, 2014
2.9%
Inflation
41.2%
Government Debt
0
2006
GDP
49.5 mn
Annual Percent Change, 2014
Percent of GDP, 2014
Population
Total, 2015
66.4%
Working Age Population
76.4%
Urbanization Rate
Percent of Total, 2015
Percent of Total, 2015
2.7
Logistics Performance Index
43
Doing Business Rank
-1.40
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
27
2020:10
Turkey’s strategic advantages of size and location, coupled with
good infrastructure and an open economy, should foster growth
A Diversified and Service-based Economy
Value added, % of GDP
100%
Services
Industry
80%
57.2%
63.9%
Agriculture
Key Statistics
$1,035 bn GDP
Purchasing Power Parity, 2014
4.2%
60%
$16,050
40%
31.5%
20%
0%
9.1%
2000
2012
■  Turkey’s infrastructure quality is among the highest of any
emerging market, which enables easier trade and fixed
investment by companies operating there
■  Over 67% of Turkey’s population is of working age and 75%
of Turks live in urban areas, providing a large and
concentrated labor force
■  Turkey’s location at the crossroads of Europe, the Middle
East and Asia is a strategic advantage, although it currently
faces security risks along its borders with Syria and Iraq
Sources: Economist Intelligence Unit; IMF; World Bank; United Nations; A.T. Kearney
2014-2020
GDP per capita
Purchasing Power Parity, 2014
9.2%
Inflation
36.5%
Government Debt
27.0%
11.3%
Average Real GDP Growth
76.7 mn
Annual Percent Change, 2014
Percent of GDP, 2014
Population
Total, 2015
67.4%
Working Age Population
75.1%
Urbanization Rate
Percent of Total, 2015
Percent of Total, 2015
3.6
Logistics Performance Index
69
Doing Business Rank
-1.19
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
28
2020:10
Recent reform proposals could boost India’s medium-term
growth, which has already been strong in recent years
Positive Demographic Trends
1.75
Forecast
$4,650 bn GDP
Purchasing Power Parity, 2014
1.50
80%
1.25
60%
1.00
40%
0.75
Billions
Percent of total
100%
Key Statistics
0.50
20%
6.3%
$4,360
0.00
2000
2005
Working age (left)
2010
2015
Urban (left)
2020
2025
■  India is the second most populous country in the world and is
expected to overtake China’s population by 2030, providing
potential opportunities in sourcing and consumer sales
■  India’s per capita income is expected to almost double in
purchasing power parity terms between 2010 and 2020,
thanks to average annual real growth rates of more than 6%
during that period
■  Prime Minister Naredra Modi announced an ambitious reform
agenda that would boost India’s potential growth—if it clears
the difficult hurdles of legislative approval and implementation
Sources: Economist Intelligence Unit; IMF; World Bank; United Nations; A.T. Kearney
GDP per capita
Purchasing Power Parity, 2014
Inflation
52.0%
Government Debt
2030
Total population (right)
2014-2020
8.0%
0.25
0%
Average Real GDP Growth
Annual Percent Change, 2014
Percent of GDP, 2014
1,282.4 mn Population
Total, 2015
66.2%
Working Age Population
32.8%
Urbanization Rate
Percent of Total, 2015
Percent of Total, 2015
2.9
Logistics Performance Index
134
Doing Business Rank
-1.25
1–5, with 5=high
1–189, with 1=high
Political Stability
-2.5–2.5, with 2.5=high
A.T. Kearney Global Business Policy Council
29
In addition to these “2020–10” next-wave markets, SubSaharan Africa will increasingly drive the global economy
Growing Share of the Global Economy
Key Points
Percent of global GDP1
2.5%
•  Sub-Saharan Africa’s economy
grew at an average annual rate of
4.9% in 2008-2013—higher than
any other region except Asia
2.0%
1.5%
•  The regional economy is not only
growing larger, it is also becoming
more globalized
1.0%
0.5%
0.0%
2000
2005
2010
2015
2019
Attracting a Rising Share of FDI
Percent of global FDI
2.0
1.8
1.6
•  Sub-Saharan Africa is increasing
its external trade relationships,
particularly with other emerging
markets; African exports to the
BRICs increased from 9% of total
African exports in 2000 to 34% a
decade later
•  International tourism has boosted
many African economies, growing
5.3% in 2013 and reaching a
record of 36 million tourists
1.4
1.2
1.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1.  GDP in current US dollars at market exchange rates
Sources: International Monetary Fund; UNCTAD
A.T. Kearney Global Business Policy Council
30
Sub-Saharan Africa has a variety of strengths that poise it for
continued economic growth and rising prosperity
Economic Unions Create Larger Markets
Key Points
•  Although most domestic African markets
remain small, regional trade agreements and
other economic unions provide greater scale
•  About 36% of the Sub-Saharan African
population lives in cities, and the urban
population is expected to grow 3.5% between
2015 and 2020
Africa’s Emerging Cities
A.T. Kearney 2014
Emerging Cities
Outlook Ranking
Population1
Addis Ababa
Ethiopia
3
3.0 mn
Nairobi
Kenya
9
3.4 mn
13
3.8 mn
Johannesburg
South Africa
Cape Town
South Africa
16
3.6 mn
Lagos
Nigeria
32
10.8 mn
1.  Data from 2010 or 2011
2.  Cape Verde not pictured
Sources: United Nations World Trade Organization; A.T. Kearney
Economic Community of
West African States2
Economic and Monetary
Community of Central Africa
Southern African
Customs Union
A.T. Kearney Global Business Policy Council
East African
Community
Southern Africa
Development
Community
31
In particular, several dynamic Sub-Saharan Africa markets have
the potential to drive global growth in the future
Real GDP
(billions)1
Angola
Botswana
Cameroon
Cote d'Ivoire
DRC
Ethiopia
Gabon
Ghana
Kenya
Liberia
Mozambique
Namibia
Nigeria
Rwanda
South Africa
Sudan
Tanzania
Uganda
$60.8
$14.9
$23.0
$22.1
$12.7
$26.5
$12.3
$33.6
$28.4
$1.3
$12.1
$10.8
$319.1
$5.0
$320.7
$34.8
$25.8
$17.5
GDP at
GDP per capita
purchasing power
(purchasing power
parity
parity)
(billions)
$119.2
$31.4
$48.4
$40.6
$27.9
$102.0
$25.2
$81.9
$72.7
$3.1
$25.5
$16.1
$700.2
$14.9
$526.8
$78.7
$73.7
$50.3
$7,250
$18,190
$2,520
$2,300
$474
$1,250
$17,540
$3,630
$1,880
$820
$1,180
$8,130
$4,610
$1,450
$11,680
$3,030
$1,710
$1,590
Population
(millions)
22.1
2.0
22.7
20.8
69.4
96.5
1.7
26.6
45.6
4.4
26.5
2.3
179.0
12.1
53.1
30.6
50.8
38.9
Average Real GDP Average Annual
Growth,
Inflation,
2008-2013
2008-2013
5.7%
3.5%
3.7%
3.6%
6.4%
8.7%
3.9%
8.6%
4.0%
10.4%
7.0%
3.9%
7.0%
7.6%
2.2%
0.8%
6.8%
5.9%
12.2%
8.3%
2.9%
2.7%
21.9%
20.8%
2.2%
12.3%
11.4%
9.2%
7.2%
6.8%
11.4%
7.4%
6.3%
22.6%
10.9%
11.2%
Economic opportunities in these markets will be highest in three key areas:
retail, natural resources, and manufacturing
1.  Green shading represents a top five data point
2.  At constant 2005 prices and market exchange rates
Sources: Economist Intelligence Unit, A.T. Kearney
A.T. Kearney Global Business Policy Council
32
Ten Sub-Saharan African markets provide strong opportunities
for the retail sector as growing consumer markets
A.T. Kearney’s 2014 Africa Retail Development Index
Market Size
70.3
Country Risk
Market Saturation
Time Pressure
64.2
60.2
100
59.5
58.9
19
71
79
65
56.9
55.5
41
28
0
89
6
71
53.7
38
65
94
79
100
94
81
71
71
55
61
100
50
23
22
Nigeria
100
72
80
56
Rwanda
54.2
35
17
87
75
54.3
Namibia
Tanzania
Gabon
62
48
19
29
Mozambique
Ethiopia
66
34
Ghana
South Africa
Botswana
1.  Rankings are based on 2012 data. Each of the four factors (time pressure, market saturation, country risk, market
size) is worth 25%. Maximum value for each factor is 100. For definitions of each factor, see
http://www.atkearney.com/consumer-products-retail/african-retail-development-index
Source: A.T. Kearney
A.T. Kearney Global Business Policy Council
33
Sub-Saharan Africa has vast natural resources—many of which
remain untapped and provide future investment opportunities
Resource Wealth in Sub-Saharan Africa
Key Points
•  The region has 62.6 billion barrels
of proven crude oil reserves and
221.6 trillion cubic feet of proven
natural gas reserves
•  32% of the world’s bauxite, the
main source of aluminum, is in
Sub-Saharan Africa
•  Africa produced 46.3 million tons
of iron ore in 2011, and this
number is expected to quadruple
by 2018
Oil
Coal
Natural Gas
Aluminum
•  DRC and Zambia are the largest
producers of copper in SubSaharan Africa, each with 20
million tons of proven copper
reserves
Copper
Iron Ore
Sources: African Development Bank, U.S. Geological Survey, U.S. Energy Information Administration
A.T. Kearney Global Business Policy Council
34
Manufacturing has historically been underdeveloped in SubSaharan Africa, but it is starting to expand in some markets
Lower Wage Growth
Manufacturing is Advancing
250
Asia
200
150
Africa
Latin
America
Middle East
100
50
Value added, percent of GDP
Cumulative wage growth1
12%
Eastern Europe
& Central Asia
300
10%
10%
2005
2012
9%
9%
7%
8%
7%
6%
6%
4%
4%
3%
2%
0%
2006
2007
2008
2009
2010
2011
Tanzania
Uganda
Nigeria
Angola
Key Points
•  Sub-Saharan Africa has lower average unit wage costs than many other emerging market regions, which
could lead some manufacturers to shift production there—particularly as wages in China, which has been
the “manufacturer to the world,” become less competitive
•  There are still hurdles to manufacturing in Africa—including poor infrastructure and security issues in some
areas—but certain markets are poised for growth in this sector
1.  2005 = 100 for all regions
Sources: International Labor Organization; World Bank
A.T. Kearney Global Business Policy Council
35
However, the region is still grappling with some development
challenges that could put this promising outlook in jeopardy
Africa’s Key Challenges
Poverty
Poor Infrastructure
Weak Governance
•  Living standards have
improved, but many still live
in poverty
•  Africa needs $38 billion in
annual infrastructure
investments, according to the
World Bank
•  Governance is generally
weak and corruption remains
a problem in many countries
Rising Living Standards
Low Infrastructure Quality
Governance Challenges
2.5
3,057
-8.0%
76
70
2,381
GDP per capita1
1990
Quality of
Infrastructure
Rank
Poverty Rate2
South Africa
63
Kenya
68
Ghana
90
Uganda
111
Ethiopia
112
Mozambique
126
Nigeria
129
Angola
148
2010
1. GDP per capita at purchasing power parity, constant 2011 US dollars
2. Poverty headcount ratio at $2 per day at purchasing power parity
Sources: International Monetary Fund; World Bank; World Economic Forum; A.T. Kearney
2.0
2000
2012
1.5
Scores (-2.5–2.5)
+28.4%
1.0
0.5
0.0
-0.5
-1.0
-0.6
-0.7
-0.7
-0.7
-1.5
-2.0
-2.5
Control of
Corruption
Rule of Law
A.T. Kearney Global Business Policy Council
36
Global Economic Outlook 2014-2020
•  Global Economic Outlook: “Renewed Normal”
•  The Next Wave of Growth: The “2020-10”
•  Key Wildcards
A.T. Kearney Global Business Policy Council
37
Despite the benign global economic outlook, significant risks
persist that could produce negative economic shocks
Acute Geopolitical
Instability
U.S. Monetary
Tightening
Emerging Market
Instability
Key Sources of
Uncertainty
Resource Scarcity and
Volatility
Hard Financial Landing
in China
Europe Economic
Stress
Deflationary Pressures
A.T. Kearney Global Business Policy Council
38
The Federal Reserve tapering its bond-buying program could
expose risks in the U.S. financial system and macroeconomy
Reducing QE3 Monetary Stimulus
Key Points
$90
•  The Fed announced its third round of
quantitative easing in September 2013,
providing continued monetary support to the
weak U.S. economy
$80
$70
•  With the economic recovery gaining steam,
the Fed began tapering its bond-buying
program in January 2014
Billions
$60
$50
$40
•  At its current pace of tapering, the Fed
would end the quantitative easing program
in late 2014
$30
$20
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
Apr-13
May-13
Mar-13
Feb-13
$0
Jan-13
$10
•  Although Fed Chair Janet Yellen expects to
continue with low interest rates after bond
buying ends, markets are nervous about the
withdrawal of monetary stimulus
“There’s still too much leverage for us to believe that accidents won’t happen with
the removal of stimulus…[which] may force the Fed into a much slower path.”
-Deutsche Bank, “Credit Outlook 2014: The Bubble-Taper Tightrope”
Sources: U.S. Federal Reserve; Deutsche Bank
A.T. Kearney Global Business Policy Council
39
Some emerging markets are vulnerable to capital outflows,
whether driven by Fed tapering or other financial shifts
Emerging Market Risks
Contagion Risks
Capital Market
Outflows
Collapsing Exchange
Rates
Rising Interest
Rates
Emerging Market
Linkages
•  With rising rates of
return in advanced
economies, capital is
leaving many
emerging market debt
and equity markets
and causing volatility
•  Some emerging
market currencies are
likely to come under
increased pressure if
capital outflows
continue
•  Raising interest rates
would help to prop up
currencies, but they
could also dampen
domestic economic
activity and potentially
widen fiscal deficits
•  As with past emerging
market financial crises,
if one or more markets
come under intense
pressure, the risks of
contagion will be high
Some emerging markets are relatively well-positioned to weather a crisis,
including the 2020–7 growth markets we highlighted in our analysis
Sources: Federal Reserve Bank, Economist Intelligence Unit, A.T. Kearney
A.T. Kearney Global Business Policy Council
40
Although the Eurozone crisis has subsided, key vulnerabilities
remain that could spark a new wave of instability
High and Rising Levels of Government Debt
Key Points
Projection
•  The Eurozone economy contracted
about 0.4% in 2013, and is forecast to
grow only 1.1% this year
175%
Percent of GDP
150%
125%
•  The Eurozone is being squeezed
internally from a collapse in credit
creation and a lack of domestic demand
and externally from the Euro’s strength
100%
75%
50%
25%
2008
2009
France
Italy
2010
2011
Germany
Portugal
2012
2013
Greece
Spain
2014
Ireland
Euro Appreciation2 Hurts Exports
3.5%
$
€
18.5%
1.6%
RMB
1.  Represented as a base 100 values, with January 2013=100
2.  Appreciation from January 2013 to May 2014
Sources: Economist Intelligence Unit; IMF; Oanda
¥
•  The ECB has pledged to keep interest
rates at or below current levels (0.25%)
to support the Eurozone
•  Competitiveness issues could hold back
growth; for instance, France has low
labor market flexibility due to strict rules
on hiring and firing and a very high tax
rate
•  Unemployment, especially for youth, is
another critical indicator, with Greece
and Spain recording record-high
unemployment of 25%-28%
A.T. Kearney Global Business Policy Council
41
Disinflation and even deflation remain key risks in developed
markets—particularly the Eurozone
Inflation Remains Low in Developed Markets
5%
Projection
4%
•  Fundamentals are weak in Europe and
there is concern that an external shock
could propel the Eurozone into
deflationary territory
•  While the U.S. appears to have
stronger fundamentals, the beginning of
tapering could undermine the upward
trend in inflation
3%
Percent change
Key Points
2%
1%
0%
2007
2008
2009
2010
2011
2012
2013
2014
-1%
-2%
Japan
U.S.
Eurozone
•  The inflation outlook is more positive in
Japan as a result of recent stimulus
measures, but concerns remain that
disinflation could return
•  Disinflation has the potential to
undercut aggregate demand and make
it more difficult for public and private
borrowers to retire their debt
•  Deflation would result in borrowers and
businesses delaying purchases and
investments, reducing economic growth
Source: International Monetary Fund
A.T. Kearney Global Business Policy Council
42
The risk of a Chinese hard landing is small, but it would have
major consequences domestically and in the rest of the world
Investment
Overreliance
Rising Bad
Loans
Credit
Tightening
Slower
Growth
•  Growth in fixed capital investment has
exceeded 200% since 2008
•  This far exceeds that of consumption,
government spending, or net exports
Potential Impacts
Vulnerabilities to Falling Chinese Imports
Countries
Exports ($B)
% China Imports
•  This has led private-sector nonfinancial debt as a share of GDP to
surge to close to 200%
•  Non-performing loans (NPLs) have
risen for nine straight quarters to
highest levels since 2008 crisis
EU
$212
12%
ASEAN
$196
11%
Japan
$178
10%
SOUTH KOREA
$167
9%
TAIWAN
$132
7%
U.S.
$128
7%
•  As NPLs are rising, banks have begun
to tighten credit
•  Chinese authorities have also begun
cracking down on loan standards and
shadow banking
ROW
$787
44%
•  China’s worsening credit environment
is constraining growth
•  Experts believe the longer China
delays reforms to balance its
economy, the greater the risks for
Beijing and the global economy
Sources: World Trade Organization, Societe Generale, A.T. Kearney
BOLD: Exports to China >10% of National GDP
Effects of Chinese Growth Falling to 4%
Global GDP
1.5%
Oil Prices
Base Metals
30%
A.T. Kearney Global Business Policy Council
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43
Natural resource scarcity could severely weaken the economic
outlook to 2020 if negative shocks occur
Climate change has
led to stronger
storms causing
increased damage
Water scarcity will cost
the world $1.2-$2 trillion
in foregone output over
the next 5 years
Food scarcity and
price inflation has led
to social unrest, such
as the Arab Spring
Index values (2005=100)
Forecast
200
150
•  The UN estimates that natural
disasters, which are becoming
more frequent as a result of
climate change, have cost the
global economy over $2 trillion in
the past two decades
100
All Commodities
Fuels
50
Food and Beverage
Agricultural Raw Materials
Sources: USDA, World Bank, IMF, CGIAR; United Nations; A.T. Kearney
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Metals
2000
0
•  The shale revolution has vastly
increased known energy
reserves, but geopolitical events
(such as the recent ISIS incursion
into Iraq) could disrupt supplies
and make prices volatile
•  With current global dietary and
population trends, the world will
need to produce 60% more food
in 2050 than it does today and 10
million km2 will need to be
cleared for agricultural production
Rising and Volatile Commodity Prices Will Continue
250
Key Points
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Finally, in this fragile global environment, several potential
geopolitical flashpoints represent particularly significant risks
Key Potential Geopolitical Flashpoints
North Korean
Instability
Russia Tensions
Syrian Civil War
China-Japan
Tension
Wider MENA
Instability
South China Sea
Disputes
Wider African
Instability
Central Asia
Instability
In a transitional period of contested regional leadership, these flashpoints
represent major risks to global economic, political and social stability
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45
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