International Investors Are Targeting These 7 Emerging Markets in 2023
The best international markets to invest in aren’t always top-of-mind.
Sure, places like the United States, Australia, and the European Union are politically stable and relatively wealthy, making them safe havens for international capital. But they’re not growing as quickly as some emerging economies. Increasingly, they’re not even the top epicenters of innovation.
It isn’t always easy to distinguish promising emerging markets from those with deep-rooted problems that could stymie or reverse hard-won efforts at economic growth. These seven countries fall into the former category, offering a high likelihood (if not guarantee) of long-term return on investment.
1. India
India recently surpassed China in population, but per capita measures of economic output continue to lag. This sets up an incredible opportunity in the coming years as the Indian middle class swells and the country’s economy diversifies further.
One of the most exciting developments in Indian business, and one that’s reassuring for risk-averse international investors, is the development of a homegrown venture capital ecosystem that’s lessening local entrepreneurs’ reliance on fickle Western investors and increasing the breadth of innovations likely to get funded on the ground here. Look for continued maturity in this space as the 2020s progress.
2. Indonesia
Indonesia is another large Asian emerging market that’s developing a homegrown startup financing ecosystem before the world’s eyes. It’s also playing an increasingly central role in the green economy thanks to an array of natural resources and relatively lax processes for approving new mines. Much of the nickel EV manufacturers require already comes from Indonesia, and the proportion could increase by 2030.
3. The Philippines
The Philippines is shedding its reputation as a cheap source of back-office labor and moving into higher-value professional services as the world globalizes. A well-educated population with high English penetration certainly doesn’t harm its appeal to international investors nor firms looking to slash costs by relocating offices overseas. And while much of its professional workforce is based in the greater Manila area, rich natural resources in its vast hinterland offer another avenue for foreign capital.
4. Kenya
Kenya has long been a key hub of innovation on the African continent. Its revolutionary M-PESA phone-based payment system enabled a virtually cashless economy a decade ahead of most other countries’ cash-to-digital transitions, and it’s now leading the way in the decentralized energy transition. To support its entrepreneurial networks, Kenya relies to some extent on microfinance networks and support from NGOs, but it’s increasingly turning to traditional sources of international capital — and international investors are responding in turn.
5. Brazil
Despite some political instability and ongoing tension over Amazon deforestation, Brazil continues to transition from a lower-middle-income to a high-middle-income economy more reliant on professional services and high-tech industry. It’s also earning its keep as a South American innovation hub, though many homegrown Brazilian startups focus on its huge Portuguese-language market and aren’t as visible to Anglo-American investors. Secondary industries like ecotourism could play a supporting role in its economy moving forward as well.
6. Turkiye
Turkiye has seen its share of political instability as well in recent years, not to mention tragedies like the devastating 2023 earthquake. But like Brazil, it’s a large market with a great deal of economic momentum and a growing middle class. Turkiye also sits at an important geopolitical crossroads that allows it to punch above its weight on the world stage, both economically and diplomatically. Even if it’s not top-of-mind for international investors right now, it’s impossible to ignore.
7. Vietnam
Vietnam took the “low-cost manufacturing” baton from China back in the 2010s, and now it’s gunning for a more prominent role in the regional technology ecosystem. International investors were heartened by an Asian Development Bank report showcasing the surprising breadth of this space — breadth that’s only likely to grow by 2030.
Go Global or Stay Local — Why Not Both?
Risk-averse investors tend to stick with what they know. Often, this means investing only in their home countries, or only in companies that do business in their home countries.
This is a fine strategy, but it’s not the best way to bet on global growth. To do that, investors must cast a wider net and look at some markets they might not have considered.
These seven emerging markets offer a reasonable balance between safety and growth potential. They’re not without their risks, but they also have a lot of momentum, and seasoned international investors have already placed their bets accordingly. Maybe you’re next.
