24-26 BRIC feature 30/1/09 18:43 Page 24
24 emerging markets
Cracks in
the Bricwork
It was too much to hope the world’s biggest emerging markets –
known as the Bric countries – would prove completely immune to
the downturn. But they are all fighting it, with varying degrees of
success... Adam Coulter and Martin Ferguson report
hen the global economic downturn Meanwhile, India was in danger of economic
W
began, many in the business travel capitulation and war with Pakistan following
sector assumed – or hoped – that November’s terrorist attacks in Mumbai. But the
the four booming economies of the country’s economy has remained solid.
so-called Bric club would offset the The volumes of travellers doing business in India
drop in business travel to North America and Europe. means hotel room rates are among the highest in the
Brazil, Russia, India and China have all experienced world. Some analysts predict the service sector may
robust growth rates for the past couple of years, and suffer as it is strongly underwritten by struggling
travel management companies have not wasted time in western companies. But growth of GDP, while it will
setting up ventures in these countries. slow down, looks set to be positive.
However, as the credit crunch has deepened, all four China, the great economic powerhouse for so many
have seen cracks emerge, with inevitable effects on years, is less immune to the downturn as it relies so
ON THE COVER: We look business travel to the regions. heavily on Western exports and also has a lot of
at the four members of But the downturn in all four is not uniform and investment in North America. And it has seen a
the Bric club: Brazil, some countries are faring relatively better than others. significant slowing in growth at the tail end of last
Russia, India and China. For example, Brazil’s tourism minister has an year, falling from double-digit growth for the first time
These countries were unequivocal response when asked if his country is in five years, to 8%. Growth rates like this would be
lauded as the world’s experiencing a downturn. “Actually we do not have a the envy of any western economy, but for China it is a
most significant growing credit crunch in Brazil,” he says. huge shock to the system.
markets, but how are He goes onto explain that much of the reason for However, because it is such an enormous market
they faring in the global this is Brazil is not exposed to sub-prime mortgages both internally and potentially externally, business
downturn? And how is and companies do not have the same levels of travellers are still on the move, according to TMCs.
this affecting business indebtedness as their western counterparts. Market American Express Business Travel vice-president
travel? L50480L50480 forecasts for growth in 2009 are 2-3%, though the Gregor Lochtie says: “China has by no means remained
government has set a target of 4%. immune from global cutbacks in business travel.
The situation is very different in Russia, where the “However, in China companies are increasingly
stock market has plunged and growth is predicted to be viewing business travel as an investment and are
flat at best. Daily friction between the Kremlin and interested in doing everything they can to maximise
Ukraine over gas supplies and the military skirmishes their return on investment.”
with Georgia have done little to aid economic stability. ✱ Bric city guides, see p46
ttgbusiness.com ❖ february/march 2009
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