PwC EM20 Index Report 2008

8/14/2019 PwC EM20 Index Report 2008

1/161Balancing Risk & Reward June 2008

Balancing Risk & Reward

June 2008

Emerging Markets

The PricewaterhouseCoopers EM20 Index


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This is the second year that we are publishing thePricewaterhouseCoopers1 EM20 Index (the PwC EM20Index) a ranking o attractive emerging markets generated

by PwCs innovative Risk & Reward Model (the Model). Ourinitial desire to develop this model recognised the stronginterest shown by UK companies in fnding appropriateemerging markets or investment. That interest shows no signo abating and the PwC EM20 Index continues to providecompanies with a starting point or consideration o potentialinvestment locations. In act, our analysis indicates that all othe countries qualifed to be included in the PwC EM20 Indexoer good opportunities worthy o urther investigation.

Headline fndingsThe PwC EM20 Index shows that the BRIC countries(Brazil, Russia, India and China) continue to oer interesting

opportunities or investment all our appear in both the PwCEM20 Manuacturing Index (the Manuacturing Index) andPwC EM20 Services Index (the Services Index). However,the results o our modelling also indicate a range o otherlocations that can oer attractive alternatives.

This year Egypt tops the Manuacturing Index, and Polandtakes frst place in the Services Index. Low labour costs,a strategic geographic location and its alling country riskpremium have helped to drive Egypts Manuacturing Indexranking, while Polands high position in the Services Indexreects its middle income status (compared to other countriesin the Model) and relatively low country risk premium.

Competition or these top spots was tight. Bulgaria comes

a close second in the Manuacturing Index, while India andVietnam also rank highly. Chile is an even closer runner-up toPoland in the Services Index, achieving the same index valueon a round number basis. Russia scores well in third placein the Services Index.

This year, or the frst time, we have also run our Model usinghistorical data or all the countries we have looked at to give afve-year track record which we will reer to at various points.This allows you to consider the direction and speed omovement o various countries within the PwC EM20 Indexover time and spot rising (or waning) stars.

This also illustrates the sensitivity o rankings to short-termimpacts and highlights the relatively high volatility o emerging

markets in general.

Risk actorsPolitical risk has emerged as a actor which has a major impacton countries ascending or descending in both indices. This isillustrated particularly strongly by Serbia, which has dramaticallyimproved its perormance in the Manuacturing Index largelydue to improving political stability since 2000. In 2008 Serbiais ranked third in the Manuacturing Index, compared to 25thin 2004. Although Serbias country risk premium remains highcompared to nearby countries such as Bulgaria, its dramaticimprovement in recent years has made it a signifcantly moreattractive investment destination than beore.

1. Unless otherwise indicated, PricewaterhouseCoopers reers toPricewaterhouseCoopers LLP (www.pwc.com/uk) a limited liabilitypartnership incorporated in England.

The impact o political risk is also evident across Central andSouth East European member states o the European Union.Slovakia joined the EU in 2004. The political and economic

stability both leading up to and since accession has made it arising star in the Services Index (sixth in 2008,16th in 2004).The trend is also reected in the experience o Romania andBulgaria, which joined the EU in 2007.

This is not simply an EU eect; Argentina provides urtherevidence o the impact that alling country risk premium canhave on a countrys perormance in the Model. Its continuingrecovery rom upheavals at the start o the decade hassignifcantly reduced its country risk premium and, as aresult, increased the relative attractiveness o Argentina asan investment destination. Although still outside the top 20countries, Argentina looks like an investment location to watchor the uture.

A golden triangle?Three countries Bulgaria, Serbia and Romania are rankedin the top seven in both the Manuacturing Index and theServices Index. This might initially appear counterintuitivegiven that a key driver o a high ranking in the ManuacturingIndex is relatively low labour cost, while high placement inthe Services Index is linked to household incomes beingsufciently high to create markets or service providers, bethey banks or media companies.

However, what this confrms is that attractive investmentlocations are determined by more than just GDP per capitalevels. The high rankings achieved by these three countries

in both indices reect the complex interaction o a number oactors which, in combination, determine the attractiveness oan emerging market or investment.

GDP per capita levels are important, but not paramount.In the case o Bulgaria and Romania, or example, recentaccession to the EU has reduced their country risk premia,which has had a positive eect on their rankings in bothindices. While Serbias country risk premium is relativelyhigh, it scores particularly well in the Manuacturing Indexas the risk is counterbalanced by its proximity to large WestEuropean markets. Although there are still downsides to thesethree countries in terms o inrastructure and governance,our analysis suggests that South East Europe deserves to be

given serious attention as a region with considerable potential.To explore this urther, we will be running a series o eventsin Autumn 2008 which we hope you will join us or and fndinteresting and inormative.

I hope that you fnd the PwC EM20 Index report an interestingand useul read. I look orward to receiving your comments.

Ian ColemanUK Emerging Markets Leader


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Manuacturing in Focus...

Manuacturing Index Summary Rankings

For manuacturing companies seeking to invest in emerging markets, lowproduction costs are essential. Other actors then come into play, including thelocations risk premium, its distance rom key export markets (as the Modelassumes 50% o production is exported) and the local corporation tax rate.

The rankings o the Manuacturing Index are shown in the fgure below.

Egypt and Bulgaria emerge as the leaders in the group in 2008, ollowed bySerbia, India and Vietnam. Many regions o the world are represented in the topten: Arica, Eastern Europe, Asia and Latin America.

Low GDP per capita, reecting low labour costs, is a signifcant actor indetermining Manuacturing Index rankings. But the fve-year trend results (partiallyillustrated overlea) show the signifcant impact o country risk premia and, inparticular, political risk on the rankings. Traditionally one o the most difcultaspects o investment appraisal to assess, proven methodologies now exist toquantifably ascertain and project political risk allowing meaningul inclusion intoinvestment modelling.

0 10 20 30 40 50 60 70 80 90 100

Index Value

Egypt

Bulgaria

Serbia

India

Vietnam

Peru

Romania

Ukraine

Chile

Turkey

Thailand

Brazil

Malaysia

China

Poland

Philippines

Indonesia

Russia

South Africa

Mexico

The range

o crediblemanuacturingdestinationscontinues toexpand


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Manuacturing in Focus...)

What about China?Although China is an attractive investment location, it may be surprisingto many that it is not one o the top ten most attractive destinations ormanuacturing investment as measured by our Manuacturing Index. Its 14thplace may even seem counterintuitive, given the high prominence o China as arecipient o manuacturing FDI.

The main reason behind Chinas trailing o countries such as Bulgaria andVietnam is that the methodology behind the PwC EM20 Index does not giveany advantage to countries based on the size o the local market. Approachinga hypothetical investment decision rom the perspective o a medium-sized

manuacturer, the methodology allows or relatively small but nonethelesscredible locations to outperorm China in terms o risk-adjusted investmentreturns. However, i a company was looking to develop a very large-scalemanuacturing acility, the labour capacity and physical inrastructure requiredwould arguably rule out some o the countries at the top o the ManuacturingIndex, increasing Chinas relative atrractiveness.

Another actor behind Chinas ranking is that it is not the most cost-competitivemanuacturing location. Countries like Vietnam, Cambodia and small butrelatively low-cost countries on Europes ringes can sometimes oer highermargins to manuacturers. It is worth noting, however, that as the incomes oChinese workers rise, they will become more attractive consumers or serviceproviders, which is likely to boost Chinas position in the Services Index in the

coming years.

Bulgarias second place ranking reects its achievement o an average GDPgrowth o 5.5% since 2000. Flows o FDI into the country increased by 391%between 2000 and 2006, to $5.2bn, involving global companies such as

Hyundai, Carlsberg and American Standard. However, Bulgaria still presentssome challenges or investors, such as the relatively high degree o corruption,organised crime and weaknesses in inrastructure as illustrated in the WorldEconomic Forums Global Competitiveness Report 2007-2008.

IndiaIndia, ranked ourth this year, has traced a gently rising course in theManuacturing Index since 2004, when it was ranked ninth. Though growingstrongly, Indias GDP per capita remains relatively low due to the countrysast-growing population a actor which ensures that low-cost labour is widelyavailable.

This also suggests that India is likely to maintain a high position in the Manuacturing

Index or some years. By 2038 (the end o the Models 30-year time rame)

IndiasGDP per capita is still expected to be less than 10% o the average GDP per capitao the developed world 4, whereas Chinas will be almost 25% o that level. But acontinued high ranking in the Manuacturing Index depends on India maintainingrecent openness to trade and investment and improving its transport and energyinrastructure, as well as its average education levels.

VietnamApplying the refned version o the Model to data covering the last fve yearsreveals a rising trend or Vietnam in the Manuacturing Index. Vietnam is highlycompetitive rom a cost perspective, and oers investors sufciently highpotential returns that oset a relatively high country risk.

4. In the Model, the developed world is represented by Germany and the US.



Manuacturing in Focus...)

A number o countries have shown signifcant improvements in their ranking

over the last fve years. As already noted, Serbia has benefted rom a signifcantimprovement in political stability, thus reducing substantially its country riskpremium. This is also the case with Ukraine, which achieved an eighth placeranking in this years Manuacturing Index, rising rom 15th in 2004.

Alongside Eastern Europe, South America is home to a number o rising stars, withPeru and Brazil in particular improving their rankings.

Turkey, though achieving a dramatic leap up the Manuacturing Index to 10th in2008, having been outside the top 20 in 2007, was tracing a declining curve orthe preceding three years. It remains to be seen i its current high ranking will besustained.

In general, the perormance o countries such as Serbia and Turkey illustrates howquickly a countrys relative ranking can charge and the inherent challenges thisbrings to companies making investment decisions.

One to watch: CambodiaLike China and India in earlier periods, Cambodia has been identifed as a locationwith a promising uture or manuacturing investment, primarily due to the wideavailability o low-cost labour and its alling country risk premium, arising rom itscontinued recovery rom the upheavals it experienced in the late 1970s and 1980s.In terms o location, it also benefts rom relative proximity to the West Coast o theUS.

This year Cambodia did not qualiy or inclusion in the top 20 o the ManuacturingIndex, largely due to the small size o its current manuacturing base. For thepurposes o this Model it is considered essential or countries to have a reasonablemanuacturing base, so that inward investors have access to an adequate pool o

suppliers. It ollows that, as Cambodias manuacturing base increases in size, it willlikely become a strong contender or a high place in uture Manuacturing Indices.

Rising stars

Rising stars Manuacturing Index

1

5

10

15

20

25

30

35

2004 2005 2006 2007 2008

Peru SerbiaBrazil UkraineTurkey

Ranking


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Services in Focus...

East European

countries have astrong presencein the ServicesIndex

Services Index Summary Rankings

For businesses in the services sectors, relatively high GDP per capita levels area signifcant determinant o attractiveness. This is because the Model assumesthat 90% o services produced will be provided to the domestic market in which

the business is located. Typical service businesses represented in the Model arefnancial service companies such as banks and insurers, or media, telecoms andIT-related operators.

O-shoring activities such as call centres are not represented, given that theservice being provided would be geographically remote rom the end user.Accordingly, qualitative actors such as the availability o English language skillsare not taken into account in the Services Index.

The rankings o the Services Index are shown in the fgure below.

The clear leaders in the Services Index are Poland and Chile (with index valueso 95.0 and 94.9 respectively), ollowed closely by Russia.

South East European countries also have a strong presence, with Romania,

Bulgaria and Serbia ranked ourth, fth and seventh respectively. Slovakiacomes in the midst o them, in sixth place.

0 10 20 30 40 50 60 70 80 90 100

Index Value

Poland

Chile

Russia

Romania

Bulgaria

Slovakia

Serbia

Brazil

Malaysia

Turkey

Mexico

Kazakhstan

South Africa

Egypt

ThailandChina

Ukraine

Iran

Peru

India

In general there is less volatility in the Services Index than in the ManuacturingIndex reecting the act that the high GDP per capita crucial to making a marketattractive to a services company is generally a result o greater and prolongedmarket stability. This suggests that services businesses can enjoy a relatively higherdegree o confdence as to the sustainable nature o their investment when enteringthe highest placed markets in the Services Index.




Poland

Poland achieves the top ranking in 2008, as it does or the previous our yearswhen the refned Model is applied to historical data. Unlike the Czech Republic andHungary (no longer meeting the criteria or inclusion in the Model), Poland is stillseen as an emerging market, although this may not remain so or much longer.It is wealthy enough to be very attractive to service providers, oering a relativelylucrative domestic market or them to tap into, and achieving average GDP growth o4.1% since 2000.

Inows o FDI increased by 49%between 2000 and 2006, reaching $13.9bn.Investors in Polands services sector are companies such as France Telecom, Canal+and Deutsche Bank. There are still some challenges or investors, however, suchas the transport (particularly road) inrastructure and the burden o governmentregulation.

ChileChiles Services Index value is only a raction behind Polands and it could be seenas Polands equivalent in South America. Chile does well in the Services Indexbecause it is a middle income country with one o the lowest country risk premia inthe PwC EM20 Index. This reects its reputation as being one o the better-governedcountries in South America, with a relative absence o political upheaval and agenerally good record on economic stability compared to some other Latin Americancountries.

RussiaRussias relatively high wealth, as reected in its GDP per capita, supports its thirdposition in the Services Index. Like Chile, Russia also benefts rom having one othe lowest risk premia in the Model. Both these actors high GDP per capita and

low risk are underpinned by substantial revenues rom commodity exports, whichboth boost household income and enable the Russian government to meet its debtservicing obligations. Consumer and business services markets in ast-growing,relatively auent Russian cities such as Moscow and St Petersburg oer particularlyattractive opportunities to inward investors.

The top fve services destinations in 2008

Five-year track record

1

5

10

15

20

25

30

35

2004 2005 2006 2007 2008

Poland Chile Russia Romania Bulgaria

Ranking

Note: Results or the years 2004 to 2007 werecalclulated by running historical data through theModel. Refnements in the Model in 2008 meanthat the results or 2007 may not correspond tothose included in last years report.



Services in ocus...

Surprised about Serbia?One country that eatures prominently inthis years PwC EM20 Index, both in theManuacturing and Services Indices, isSerbia. This may be surprising given that the

country is only starting to appear on manyinvestors radars as it recovers rom theconicts o the 1990s. Nonetheless, GDPhas grown by 5.5% on average since 2000and FDI is growing as the government opensup the economy and international buyersoverhaul recently privatised Communist-eramanuacturing acilities. The level o annualFDI inows has grown steadily in recentyears, shown in the fgure opposite.

One o the drivers behind Serbias growingpotential attractiveness to oreign investorsis the alling risk o investing in the country.Political risk is considerably lower than at thestart o the decade, while improved legal andfnancial institutional rameworks make capitalinvested in Serbia more secure. As a result,investors are willing to accept lower returns ontheir capital, making viable greater numberso potential Serbian investment opportunities.O course, Serbia still experiences someunderlying political uncertainty, its accessionto the EU is not imminent and urtherinvestment in inrastructure is necessary, but

many international investors show confdencein the markets potential, including thecompanies shown in the table opposite.

Manuacturing Services

Investor Sector Investor Sector

US Steel Metals processing Merrill Lynch Real estate

Fiat Motor vehicles Telekom Austria Telecommunications

Gazprom Oil and gas News Corporation Broadcasting

Risk (right-hand side)

1

0

2

3

4

5

6

2002 2003 2004 2005 2006 2007 2008

$bn

0%

5%

10%

15%

20%

25%

30%

35%

Weightedaveragecostofcapital(WACC)

FDI inflows (left-hand side)

RomaniaRomania achieves its ourth place ranking, just ahead o Bulgaria, due largely to

its relatively high GDP per capital level (by emerging market standards).Since accession to the EU Romanias economy has been growing rapidly, withGDP per capita rising accordingly. Romania is gradually being transormed moving away rom being a source o cheap labour or manuacturing (which canbe seen in its downward trajectory in the Manuacturing Index since 2006) andtowards being an attractive location or service companies ocusing on meetingthe needs o the growing domestic market.

BulgariaBulgarias GDP per capita is sufcient to keep it within the top fve in theServices Index.

Bulgaria is in the enviable position o scoring highly in the Manuacturing Index,

where it achieved second place, as well as in the Services Index. It will beinteresting to see how the countrys ranking changes in the uture. As its GDPper capita rises, so Bulgaria will likely become less competitive in manuacturingbut more attractive to services companies seeking a strong domestic market inwhich to invest.

Serbias FDI inows and risk

Examples o recently completed or announced investments in Serbia


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9Balancing Risk & Reward June 2008

Two countries just outside the top fve in the Services Index, Slovakia and Serbia,are clear rising stars. Slovakia dramatically improved its ranking between 2004 and

2008, rising rom 16th to sixth. This reects its strong growth in GDP per capita andimproved political and economic stability noted previously. Since joining the EU, itscountry risk premium has allen signifcantly.

Serbia was ranked outside the top 20 in 2004, but achieved seventh place in 2008.Its improvement largely reects increasing GDP per capita, although its country riskpremium remains relatively high. The country risk premium reduction reects theimprovements in political and economic stability as the country moves towards EUadmission.

One to watch: ArgentinaWhen looking or uture potential star locations or investment by services companies,Argentina has been identifed as one to watch. Argentina made it through all theflters in the Model, but achieved a fnal ranking outside the top 20 this year. On itscurrent trajectory, this could change next year.

Argentinas growing appeal reects its recovery rom economic turmoil at the starto the decade, with its GDP per capital increasing in recent years. Its GDP percapita is currently 16% o that o the developed world average. However, one o themajor drivers behind Argentinas improving perormance in the Model is its allingcountry risk premium, a reection o its enhanced economic stability in recentyears.

Rising stars

Rising stars Services Index

1

5

10

15

20

25

30

35

2004 2005 2006 2007 2008

SlovakiaSerbiaBrazil TurkeyPeru

Ranking



In conclusion

The range o potentially attractive investment locations across several continents identifed in this years PwC EM20 Index should provide encouragement orglobal groups looking or their next international investment opportunity.

Some countries identifed as attractive emerging markets in this years report willcome as no surprise. Others may do so. What is apparent is that the best-knownemerging markets may not always provide the optimal solution in terms o potentialinvestment returns.

This is the great strength o the PwC EM20 Index. It is based on the understandingthat choosing the right emerging market or investment requires careul analysiso potential returns in the context o risk. What is important is not the size o themarket but whether you can make adequate profts there to compensate you orthe risks involved.

The trend analysis contained in this years report also highlights the speed withwhich market attractiveness can change, oten triggered by an improvement or weakening in the political and economic climate and, as a result, a lower or higher country risk premium.

The PwC EM20 Index oers a ramework to assist in an initial screening oinvestment opportunities, but business-specifc actors must always be consideredbeore decisions are made. Certain criteria may be crucial to the success o aninvestment or a particular business. For example, the extent and quality o thelabour supply, education levels, availability o specifc skills, oreign languagecapability, regulatory environment and cultural match can all have high importance,depending on the nature o the business in question. Tax issues can also have amajor impact on the success o any oreign direct investment, and careul planningis essential.

Setting up manuacturing operations in a new location or oering services in a newmarket is never an easy process. But the rewards can be great. By using the PwC

EM20 Index as a springboard or debate and urther analysis, executives in globalcompanies can set out on the investment path with greater confdence that thedecisions they make will prove to be successul ones.

The impact o

country riskshould not beunder-estimated

10 PricewaterhouseCoopers LLP


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Appendix 1:

Updated and refned results or 2008Last years initial PwC EM20 Index report generated a highdegree o interest and useul eedback, which has been reectedin some refnements to the methodology used. The majordevelopment has been an expansion in scope to include allemerging markets considered to be plausible candidates ororeign direct investment (FDI). In addition, a number o extraflters have been applied during the process or identiyingeligible emerging markets. This has been done in order toprovide a degree o real-world business credibility, so that all othe locations analysed are those that businesses would considertruly viable investment options when making decisions.

Another new eature o this years report is the inclusion o

historical trend data or the last fve years. This extra dimensionto the fndings helps readers to look or trends and see whetherlocations are moving up or down the rankings, and how quickly.

A number o rising stars are also highlighted, as well as acouple o countries to watch locations that could be worthconsidering, i not immediately, then at some point in the uture.

Model eaturesPwCs Risk & Reward Model has distinctive characteristics,combining both risk and reward in order to assess a locationor FDI. Risk is incorporated by means o country risk premiaderived rom bond market data, whilst reward is impacted byeconomic undamentals such as GDP per capita and projectedeconomic growth rate. The inuence o these key actors iscombined by means o discounted cash ow analysis, as usedin actual business investment appraisals, rather than the more

judgemental weighting and scoring systems used in most othercountry indices. The result is the PwC EM20 Index a reectiono the relative value to be gained rom investing in the emergingmarkets analysed.

Separate rankings are generated or stylised manuacturingand services businesses, reecting their diering operatingrequirements and investment criteria. For example, a countrysaverage labour cost is an important actor or manuacturinginvestment, whereas average income levels are highly relevantto services companies. Note that o-shoring activities such ascall centres are not represented because the services provided

would be geographically remote rom the end user, whereas ourModel relates (by assumption) to a business where the majorityo services are sold locally.

Thorough investment appraisalThe overall aim o the PwC EM20 Index is to generate inthe business community an ongoing discussion about themarkets potentially most attractive or investment. It does notclaim to provide all the answers. No model can ever replicatethe real world precisely. Our Model, or example, does notcapture the size o a market. Once the initial fltering has beencompleted, the relative size o a given market is not reectedin that countrys fnal index value. Overall market size could,however, be o particular relevance to services companies

such as banks, insurers or media businesses seeking to servedomestic customers. Similarly, country risk premia reect marketopinion, but may not always ully capture actors such as thepredictability o legal and tax regimes. Such issues always needto be considered when making real-world investments.

The fndings presented in this report thereore cannot beseen as a replacement or in-depth research by individualinvestors. Specifc issues such as a locations cultural traditions,regulation, or access to English speakers could have animportant bearing on the preerred choice o location. Corporatematters, such as tax policies and planning, also require careulattention.

Investment decisions cannot be rushed, but the process can beginon an inormed ooting with the help o the PwC EM20 Index.

Country selection criteria and EM20methodologyIn order to be considered or inclusion in the PwC EM20 Index,countries needed to meet certain criteria associated withemerging market status. These were as ollows:

GDP per capita in 2007 less than $13,500 at marketexchange rates;

population greater than 5m people in 2007; and

GDP at purchasing power parity in 2007 greater than $50m.

These criteria were set to identiy countries with populationsand resources o sufcient size to meet the needs o inwardinvestors, while also having an appropriately low cost base. Thecriteria yielded a list o 50 countries. From this list we removedthose countries deemed unsuitable due to circumstances suchas civil war or international trade sanctions. The remainder

were shortlisted by considering their scores against the threeselection criteria identifed above and, especially, their averageGDP growth rate rom 2002 to 2007, to ensure that onlydynamic, growing markets were included in the EM20 analysis.

From the short list o 34 countries, selection flters were appliedwhereby countries whose manuacturing or services sector wassmaller than the minimum required or a credible investmentdestination were not considered suitable or the PwC EM20Index in 2008. Countries were thereore excluded i their:

manuacturing sector in 2007 was worth less than $3bn in2002 prices or less than 10% o GDP in 2006;

services sector in 2007 was worth less than $10bn in 2002prices or less than 35% o GDP in 2006.

The established PwC EM20 Index methodology was thenapplied to all remaining countries 29 in all or both themanuacturing and the services sectors, with the top 20 in eachbeing listed in the fnal Manuacturing and Services Indices. (See

Appendix 2 or the ull listing.) The model considers greenfeldinvestments in both a stylised manuacturing company (which is50% export orientated) and a stylised services business (whichprovides 90% o its services to the market where it is located).

The PwC EM20 Index was calculated by applying discountedcash ow analysis (over a 30 year period) as used in actualbusiness investment appraisals. It combines the inuence okey actors such as initial income levels (GDP per capita),projected economic growth, corporate tax rates, transport costs

to key export markets, and country risk premia derived rombond market data. The resulting PwC EM20 Index represents therelative attractiveness o business opportunities in the top20 ranking countries in each sector based on the net presentvalue o the investment in each country relative to the amountoriginally invested.

How the PwC EM20 Index was compiled


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Appendix 2:

Manufacturing ServicesCountries in the PwC EM20 Index in 2008 Brazil Brazil

Bulgaria Bulgaria

Chile Chile

China China

Egypt Egypt

India India

Indonesia Iran

Malaysia Kazakhstan

Mexico Malaysia

Peru Mexico

Philippines Peru

Poland Poland

Romania Romania

Russia Russia

Serbia Serbia

South Arica Slovakia

Thailand South Arica

Turkey Thailand

Ukraine Turkey

Vietnam Ukraine

Countries alling outside the top 20 in 2008 Argentina Argentina

Bangladesh Bangladesh

Colombia Colombia

Iran Indonesia

Kazakhstan Pakistan

Pakistan Philippines

Slovakia Sri Lanka

Sri Lanka VenezuelaVenezuela Vietnam

Countries considered but not included in theanalysis in 2008*

Algeria Algeria

Azerbaijan Azerbaijan

Cambodia Cambodia

Nigeria Nigeria

Uzbekistan Uzbekistan

* Due to not meeting the screening criteria or minimum size o manuacturing and/or services sectors

Emerging market countries considered or inclusion in the PwC EM20 Index (Alphabetically)

13Balancing Risk & Reward June 2008


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www.pwc.co.uk/emergingmarkets

This publication has been prepared or general guidance on matters o interest only, and does not constitute proessionaladvice. You should not act upon the inormation contained in this publication without obtaining specifc proessional advice. Norepresentation or warranty (express or implied) is given as to the accuracy or completeness o the inormation contained in thispublication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents accept noliability, and disclaim all responsibility, or the consequences o you or anyone else acting, or reraining to act, in reliance on theinormation contained in this publication or or any decision based on it.

2008 PricewaterhouseCoopers LLP. All rights reserved. PricewaterhouseCoopers reers to PricewaterhouseCoopers LLP (ali it d li bilit t hi i th U it d Ki d ) th t t i th P i t h C l b l t k th

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