march 3, 2024

NEW TIMES, NEW CHALLENGES: NeLi starts BRICS+ Doing Business & Legal Index researches

While old ties are crumbling and new trade and economic alliances are being forged, business representatives are in search of partnerships to enter promising regions. Business responds more flexibly to turbulence, and many developing countries are changing their regulations to open their markets to investors. Increasing worldwide competition is fuelling the formation of new country alliances, such as One Belt, One Road, the Pacific Alliance, and the expansion of the SCO and BRICS alliances.

According to the IMF forecast in 2023, developing economies will see higher GDP growth than countries in the EURO and USD zone. In this regard, developing countries can bring investors high returns exceeding those of developed countries.

One of the key trends and challenges of the new time is the emergence of new major players in the global market, the so-called "super economies" - the countries with the potential and claim to gain economic and political sovereignty in the world. Initially, these were India, Brazil and China. The second stage witnessed Iran, Indonesia, Malaysia, Turkey and a number of other states. The third wave, which is now well underway, includes the Arab countries and the largest African states. In addition, the World Bank listed Russia among the top five largest economies in the world at the end of 2022. These regions are becoming the most promising locations for international trade, economic and investment projects.

Entering new international markets is an attractive goal for an array of companies, as expanding the geographical range of services enables them to diversify their business and reduce the risks of relying on a single region or ever-changing geopolitical situation. At present, the nature of international relations is shifting towards strengthening regional processes, which must be considered when planning business in new markets to ensure the safety and sustainability of projects. Many states are implementing major legislative reforms to protect their economic interests, digital sovereignty and technological autonomy, and to attract investors. Now it is more important than ever to understand what legal guarantees investors have at the level of national jurisdictions to build the integration process.

The latest growth forecasts in the World Economic Outlook report

Global economic trends

The dominant trend noted by IMF, UN, JP Morgan, World Bank economic reviews, national trade and economic departments in 2023-24 is that global economic and investment activity is shifting towards Eurasia, Asia-Pacific and the Middle East. Moreover, a number of countries in Africa and Latin America are emerging as promising destinations for international investors. This sets the stage for paying closer attention to the regions in question and exploring the opportunities that the countries offer for business and trade development.

We cannot but recognise the changing polarity of the world order, and in order to meet the challenges of the new times, seize opportunities and minimise risks, it is necessary to stay abreast of changes and grasp the main trends in the economic, political and legal areas.

Asia Pacific

According to ASEAN Economic Outlook 2023, Asian countries continue to expand their influence in the global economic market. ASEAN remained one of the fastest growing regions in the world in 2023 and remained a prime destination for foreign direct investment. Key sectors for investment in the Asian region include information technology, aerospace, electronics, pharmaceuticals, and professional services.

For 2023, Indonesia aimed to increase its target foreign and domestic investment to US$92 billion. Vietnam offered investors access to many internationally competitive industries and provided greater certainty for manufacturers than China.

India

India's economic growth rate is one of the highest among the world's largest economies. In April-June 2023, India's real GDP growth accelerated to 7.8% YoY from 6.1% in January-March. The government and the Reserve Bank of India (RBI) estimate the Indian economy to grow at 6.5% in FY 2023-24, a forecast also supported by the IMF (World Economic Outlook).

China

China’s economy gained momentum in 2023 and is expected to grow more than 10 times faster than the Eurozone (as per the UN Conference on Trade and Development survey). Under the IMF forecast, China is projected to be the world's second fastest growing economy in 2024 with 3%, 5% and 4.2% after India.

China has been expanding economic co-operation with Latin American countries in recent years. According to the General Administration of Customs of the People's Republic of China, the total trade volume between the two sides hit a record high of nearly $500 billion in 2023. China's Belt and Road Initiative plays an important role in promoting investment and infrastructure co-operation between the parties. Currently, China has implemented 192 infrastructure projects worth $98 billion in Latin America. In addition, the two sides have also stepped up co-operation in high-tech, green and digital economy. Now the trade turnover of Latin American countries with China is 41 per cent higher than that with the United States.

Turkey

The Government of Turkey notes that the country is targeting to become one of the largest economies in the world in 2024 through the fourth industrial revolution. Turkey attaches great importance to structural reforms of the economy and invests heavily in innovation in sectors such as livestock, agriculture, transport, energy, health and communications. The IMF notes in its outlook that the economy is becoming more resilient to risks that arise globally.

MENA

According to EY's MENA M&A Insights report for 2023, business activity in the Middle East and North Africa (MENA) region grew by 4% to reach US$86bn, with the UAE and Saudi Arabia leading the region in terms of M&A deal volume in 2023. JPMorgan predicts that the Middle East is poised for economic prosperity amid rising geopolitical tensions in the world. In the medium term, Saudi Arabia, the United Arab Emirates (UAE) and Qatar will be in the most favourable position. These states will attract an increasing number of top managers and investment funds from all over the world. Such a scenario will persist in the region for a long time. According to World Bank forecasts, Saudi Arabia and the UAE will be the leaders in terms of GDP growth among the Gulf countries in 2024.

Africa

The final report of the UN conference "On Africa's Economic Development. 2023" notes that Africa, with its rich reserves of raw materials which are of interest to the energy, automotive and electronics sectors, could emerge as a new regional market for the diversification of supply chains and the relocation of large-scale industries. According to the Global Mobility Association, there are more than 600 active technology hubs in Africa. This growing technology ecosystem should attract investors and technology companies. In addition, African countries are potential providers of mineral resources for high-tech industries, which will contribute to the steady development of new industries on the continent. African countries are engaged in a variety of trade agreements aimed at boosting trade, increasing productivity and deepening diversification.

BRICS+ Legal Index study

Global challenges of the new economy and changing geopolitical situation, establishing new economic and trade relations, implementating investment projects and M&A deals, forming new financial flows in promising regions require strong legal guarantees to protect the rights of investors and trade partners. International businesses need to get access to high-quality legal advice and understand the legal specifics of project implementation in the most actively and dynamically developing countries of Latin America, Asia, Africa and the Middle East.

In this regard, the Legal Infrastructure Research Institute (registered in Dubai) is conducting a large-scale study of the legal environment and new economic opportunities in BRICS+, MENA, LATAM, GCC, Asian-Pacific countries - BRICS+ Legal Index. The legal advisors who advised on numerous projects are better than anyone aware of the latest trends in their respective regions, and their expertise and resources are of major interest to international businesses. The study will serve as a bridge between countries and help to understand the complex nature of the changing economy and international law.

The purpose of the research is to provide information for building effective co-operation between the participants of global economic relations, providing high-quality legal advice through access to the information on reliable local legal advisors who have experience in supporting international projects and are able to effectively protect the interests of foreign investors.

The study will include countries from 8 regions of the world that are of the greatest interest to international investors in line with the following criteria: economic potential for international trade and investment, potential for development of new economy, and organisation of financial flows.

The research methodology is based on opinion polls and in-depth interviews with partners of leading law firms in 8 regions of the world.

Based on the results, the ranking of leading legal consultants will be published, as well as the Doing Business BRICS+ Guide - an overview of opportunities for foreign investors, legal environment, judicial system, investment specifics, trade contracts and transactions , intellectual property protection and organisation of financial flows in each jurisdiction.

The project will help participants of international economic relations to better navigate in the regions which are most promising for co-operation when implementing projects and to find partners to support international projects and protect their interests.