One of the principle driving factors behind our ideas in corporate foreign policy is the bifurcation of global financial and political influence.  With the rise of strong emerging economies such as China, India, and Brazil, and the steep losses in soft power suffered by the United States along with Wall Street’s struggles, it is only natural that we gradually see signs that the reallocated capital begin to shift the direction of investments - with entirely different actors (sometimes government) making the decisions.  This is a process that I see reflected in everything from Fareed Zakaria’s proclamation of the post-American world, up to all the tomes on your bookshelf heralding the tectonic shift in wealth from West to East and South.

Today in the Financial Times I was struck by the importance of an article highlighting comments made by several bankers and analysts who feel that the moment has finally come for some of these emerging markets to begin pumping their accumulated capital into domestic markets to fund infrastructure development.  If this does indeed begin happening, and we do see a surge in local markets surging, it will be an entirely new corporate policy ballgame … before one of these high growth markets blows up in our faces.  Check out the excerpt after the cut.

McKinsey forecasts that in the coming years the emerging markets will not just be an important source of global capital markets growth, but almost the only arena of real expansion, given that western capital markets now look increasingly mature, with limited capacity for growth.

“You don’t have to think that Asia will get to the same ratio as the US, but even if you think that the financial stock will grow to twice GDP, and if GDP is growing too, that creates huge opportunities in financial markets,” says Anshu Jain, head of global markets at Deutsche, which is scrambling to reach emerging market customers through an extensive network of local branches.

“For us, the real key to opportunities is to look for countries with high GDP growth, strong local savings, young demographics and undeveloped infrastructure,” adds Mr Jain.

“If you get each of these attributes together, then there will be huge funding needs and capital flows in the future, which creates real opportunity. The big measure is whether capital starts to be recycled and invested locally.”