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We've all heard about the amazing growth taking place in developing
countries and how the global economy will never be the same again.
But countries like China, India and Vietnam seem so far away. It can
be hard to understand how those marketplaces can affect the
individual investor here in the U.S.A. After my recent trip to
Cambodia, I'm here to tell you that emerging markets aren't some
short-lived fad. We've only begun to see the impact they will have
in the financial markets.
My wife and I had visited Cambodia last March, but this time was
different. Besides having our four children along for the
experience, the signs of a growing economy were everywhere.
Construction was taking place all around Phnom Penh, the nation's
capital. A new 42 story office building had broken ground, the
country's first skyscraper. It's being financed by a South Korean
company. A huge new complex of shops and office buildings were
coming up on old rice fields north of town in a special economic
zone.
Masses of new apartment buildings were being constructed. The prices
of these condo/apartments continue to increase. Those that were
$40,000 when construction started are now $100,000. Land values
continue to soar exponentially. More people can afford cars.
Everyone has a cell phone. Universities and schools teaching
everything from nursing to English classes to management and
computer skills are popping up on every corner. And the schools are
packed.
The city continues to improve its infrastructure with the paving of
roads and improvement of their drainage system, which is important
during the monsoon season. Internet access is growing, as is the
availability of cable television. But there's much work to be done.
Power outages occur almost daily. The municipal water isn't potable.
The sewer system has a very limited reach. There is no mass public
transportation service in a city of well over 1 million. There's
little garbage collection.
Just outside of town, the picture is even starker. When you travel
out to the provinces, it's like stepping back in time. Once you get
off the main highway, there are no paved roads. Many homes are
simple wooden shacks with thatch roofs. Naked children play with
sticks in the road next to ditches that are little more than open
sewers. Electricity comes from generators that operate a few hours a
day. Health care is almost non-existent. The rice grown in the
fields hardly supplies enough grain for each family's yearly needs.
Not all provincial families live in dire poverty. But the majority
do. The young people don't want the same life their parents have.
They want more. And they're willing to work for it. Many of them
turn to the garment factories, where by working six to seven days a
week, ten to twelve hours a day, they can make $100 a month. In
country where unemployment can reach 50%, that's a nice sum of
money. But it's not much of a life.
Others realize that education is their ticket to a better future.
The church we visited and were working with offers free English and
computer classes. Over 200 students jam every available room of the
building four nights a week. In addition, all of these kids attend
either high school or university during the day. Many of them came
from the provinces and plan to send money they earn back home to
help support their families.
So if you think the emerging marketsā is just the latest financial
talk point, think again. The story in Cambodia is the same story all
over Asia. These people want a better life. They want a higher
standard of living. They are becoming educated. Their countries are
only beginning to improve their infrastructure. Astute companies
from around the world are investing big bucks into these economies.
And the growth is only going to increase.
This isn't a five year fad. It will take decades for these countries
to grow into modern nations. But there's no going back. The young
people we met are determined and focused. This generation will do
what it takes to succeed.
Your generation worked very hard to achieve financial security. In
today's changing global marketplace, you'll have to invest smarter
in order to maintain it. In next week's article, I'll give you
practical steps to take advantage of the opportunities these
emerging markets provide.
In addition to being a nationally syndicated columnist and Certified
Financial Planning Practitioner, Mr. Voudrie provides personal,
private money management services to clients nationwide. |
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