Translated material
Capital grab
Russian companies are not afraid of the crisis in the financial market
Emerging markets will not only be able to maintain high growth rates, but also ease the current downturn in the global economy as a whole. This forecast is contained in a new report from the auditing company PricewaterhouseCoopers. CEOs in high-growth markets rely on internal financial resources and are therefore less concerned about capital availability. They are much more concerned about the problem of global warming and the lack of qualified personnel.The report, Convergence and Differentiation: How to Succeed in a World of Interdependence, interviewed 14 CEOs from key growth markets around the world. According to the study, since 2000, emerging markets have achieved trade surpluses and exported capital. These countries hosted the largest number of initial public offerings - 70% of the total number of IPOs in the world in 2007. Currently, 45% of world exports and 75% of all foreign exchange reserves come from developing countries.
The PricewaterhouseCoopers report identifies three types of “strategic mechanisms” that enable companies to succeed in high-growth markets. These assets include financial strength, brands and people, processes, as well as corporate governance and organizational structure. “The report revealed that often factors that companies themselves consider to be unique competitive advantages are viewed by external observers as limitations,” PwC experts note.
The majority of company executives confirmed that they will rely on internal sources of financing, and consider debt financing only as a second most attractive source. In terms of attractiveness, equity financing, sale of assets and attraction of private and venture capital are, according to managers, far from the first places. No one cited unavailability of capital as a barrier to business growth.
“The economic potential and sustainable growth of a number of developing countries will be able to at least reduce the impact of the economic downturn in developed countries on the global economy. Currently, the movement of capital, goods and labor between emerging markets is much greater than trade between developing and developed countries. "Increasing connections between the markets of fast-growing countries can protect them from the worst consequences of the economic crisis in the United States and Western Europe," said Samuel DiPiaza, president of the international network of PricewaterhouseCoopers firms.
As LUKOIL Vice President Leonid Fedun noted, in Western markets 70-80% of GDP comes from the service sector, and a significant part is from financial services. “For this reason, the financial instability currently observed has a negative impact on overall development; the entire economy is extremely dependent on the crisis,” he said in the study. -- For emerging markets the situation is somewhat different, since the service sector accounts for a maximum of 50%, and the industrial sector plays a more significant role. Therefore, there is no such strong dependence.”
However, according to many executives, a slowdown in economic growth in developed countries may reduce the volume of exports of raw materials, and the mortgage crisis in the United States may have a negative impact on regional financial markets.
In terms of longer-term risks, survey respondents expressed concern about the potential impact of global climate change. In addition, the lack of personnel was identified as one of the main difficulties. “As companies in fast-growing markets become larger and more complex, the need to recruit and retain more qualified employees is a challenge in many developing countries,” the report notes. Almost 90% of CEOs in developing economies admitted this. Few executives are willing to spend more time on people-related issues, and few believe their companies can make the changes needed to successfully source talent.
General Director of Russian Post Andrey Kazmin noted that “one of the greatest problems now is the shortage of human resources, which will only worsen in the coming years”: “This is one of the objective factors that can slow down growth. We must improve funding and raise wages. There is no other way out."