{"id":91081,"date":"2016-06-09T09:45:21","date_gmt":"2016-06-09T13:45:21","guid":{"rendered":"http:\/\/countingpips.com\/?p=91081"},"modified":"2016-06-09T08:02:04","modified_gmt":"2016-06-09T12:02:04","slug":"looking-for-growth-part-2-leapfrog-to-the-new-frontier","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/06\/looking-for-growth-part-2-leapfrog-to-the-new-frontier\/","title":{"rendered":"Looking for Growth, Part 2 \u2013 Leapfrog to the New Frontier"},"content":{"rendered":"
June 9, 2016<\/div>
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By WallStreetDaily.com<\/u><\/a> \"Looking<\/p>\n

Yesterday, I examined Asia\u2019s two big economies, Japan and China<\/a>. In particular, their slowing growth and what it means for investments in those countries.<\/p>\n

Today, I\u2019m going to show you where to find 6% to 8% annual growth.<\/p>\n

To find high and lasting growth, you need to invest in countries that are booming. Many of these so-called \u201cfrontier\u201d markets have many more motorcycles than cars on the road, and some don\u2019t even have a McDonald\u2019s.<\/p>\n

Frontier markets offer investors a combination of great value, huge upside, and unique challenges.<\/p>\n

As giants run into growing pains, higher costs, and negative returns, frontier markets are being fueled by a bit more political stability and easy access to modern communications, technology, and capital. The simple smartphone<\/a> has connected every citizen to the global economy, as well as MIT\u2019s free online education.<\/p>

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My reasoning for choosing frontier markets is simple and powerful. Frontier countries are far behind developed countries like Japan and America, and are even playing catchup with countries like Thailand, Singapore, and Malaysia.<\/p>\n

But they\u2019re catching up fast. Imagine a chance to invest right now in the China of 1990 or even 1980, when its wages were at rock-bottom levels and it exported in a year what it now does every day.<\/p>\n

As you can see from the chart below, many of these countries are at levels of gross domestic product (GDP) per capita that were achieved by America before 1900.<\/p>\n

\"GDP<\/a><\/p>\n

Click to enlarge<\/a><\/p>\n

Youthful populations and the migration from rural areas to higher-income jobs in the cities are supercharging growth in these economies.<\/p>\n

The median age of many of these countries is at the demographic sweet spot of 25 years, compared to 37 years in China and South Korea, and 45 years in Germany and Japan.<\/p>\n

This explains the optimism driving families to open their first bank accounts and purchase new houses, washing machines, refrigerators, cars, as well as better food and medical care. This, in turn, explains why big companies from Japan, China, America, Europe, and South Korea are falling all over themselves and each other to invest in frontier Asia.<\/p>\n

And it\u2019s not just lucrative new consumer markets and rising tourism that\u2019s driving this wave of capital, but the need to access the region\u2019s natural resources.<\/p>\n

Evidence of this optimism and virtuous cycle of growth is everywhere:<\/p>\n