1. Emerging Markets In The Spotlight The Six Most Promising Economies in Asia, Africa and Latin America Atradius Dutch State Business Bert Burger ICTF's International Credit Professionals Symposium in Europe, Madrid, May 22 - 24, 2016

2. ■ Risk-on, risk-off financial markets > impact on portfolio investment flows Turkey, South Africa and Indonesia vulnerable due to combination of high external financing requirement and relatively low buffers ■ Growth slowdown China & low commodity prices Mongolia, Mozambique, Zambia, Malaysia, Chile etc. ■ Monetary tightening in the US > stronger US dollar, weakening EM currencies Not a real problem for now ■ World GDP growth still driven by Emerging Markets 2 Emerging Markets, Are They Promising?

3. Yes, but not all of them: ■ India ■ Philippines ■ Iran ■ Colombia ■ Peru ■ Kenya 3 Emerging Markets, Are They Promising? Not any more (maybe never have been): ■ Mozambique

4. The bright side: ■ Stable political situation, reform-oriented policy (Modi!) ■ High economic growth, relatively small exposure to China ■ Low commodity prices But: ■ Reforms go slow ■ Not easy to do business ■ High leverage corporate sector vulnerable to interest rate rises & weaker rupee 4 India

5. Strength: ■ High economic growth (moderate impact China, strong domestic demand) ■ Current account helped by remittances But: ■ Weak institutions, corruption ■ Inequality, elite dominates politics ■ Violence (Mindanao) Unclear: ■ President Dutarte’s policy 5 Philippines

6. Positive: ■ Favourable economic growth prospects ■ Current account surplus ■ Low public and external debt levels But: ■ Political situation outlook unclear ■ Still sanctions ■ Western banks very cautious 6 Iran

7. Good: ■ Good economic policy ■ High investments growth ■ Large reserves ■ Peace talks Risks: ■ Low oil price ■ Internal dissent at FARC 7 Colombia

8. Positive: ■ Good economic policy (whoever wins the elections) ■ High and stable GDP growth, low inflation ■ Rising middle-income class ■ Solid public and external finances ■ Investment grade status, positive for FDI Negative, but not so much: ■ Reliance on commodity exports 8 Peru Source: IHS

9. Positive: ■ Diversified economy ■ Efforts to improve infrastructure ■ Improved access of population to financial services ■ Relatively well-developed financial sector ■ Low, well-financed external debt Negative: ■ Terrorism & civil unrest ■ Weak public finances 9 Kenya

10. Good: ■ Natural resources ■ High investements growth, FDI Bad: ■ Dependency on commodity exports ■ No diversification of economy ■ Weak public and external finances ■ El Niño Ugly: Poor governance 10 Mozambique

11. Need to have (at least 4 of 6) ■ Sound economic policy ■ Strong institutions ■ Solid public and external finances ■ Developed infrastructure ■ Diversified economy ■ Political stability Nice to have ■ Large population, middle class ■ Commodities (but not too much) 11 What Makes A Country Promising? ‘Do Not Underestimate The Human Factor’