“Emerging markets are often portrayed as a major threat to the U.S. economy,” Bayer states, noting that many Americans and politicians are worried that emerging markets in China, India, Brazil, and sub-Saharan Africa could threaten American jobs and businesses. However, according to Bayer, these emerging economies represent important economic opportunities for U.S. companies and their future growth. Bayer cites The Independent Treasury Economic Model Club which estimates that by 2015 there will be a 71% increase in the number of middle and upper-middle class members in emerging economies such as China, Brazil, South Africa, India, and Indonesia. In addition, by 2020 the GDP growth rates in these countries will be much higher than in the developed world, with China projected to grow at 8.5%, India by 7.9%, and Brazil by 4.2%. Statistics such as these are increasingly resonating with U.S. companies, who are recognizing that growth in these markets means more consumers for U.S. goods and larger markets in which to sell those goods. It’s no surprise that some of America’s largest companies are also the most global.
Investments in emerging markets over the past decade are paying off. U.S. exports to China increased five-fold since 2000, outpacing export growth from other European countries and Japan. Within the next five years, seven of the top ten fastest growing economies will be in sub-Saharan Africa. The U.S. still has the world’s best and most successful business model, but these are economic opportunities the U.S. cannot afford to miss in an increasingly competitive international economy.
While many may think of the Department of Commerce and the Treasury when it comes to stimulating economic growth, it is important to also consider the role the International Affairs Budget plays in opening these new overseas markets for U.S. companies. Investments in diplomacy and development help build the infrastructure U.S. companies need to access these markets, provide financing and insurance to small companies seeking to invest abroad, help facilitate business leads, and help build stable and safe environments for the conduct of business. The proposed cuts to the International Affairs Budget will diminish the ability of U.S. companies to access these important emerging markets; decreasing America’s global competitiveness, and jeopardizing its economic future.