Population growth index reports - Essay Example

This process includes consideration of rates of growth of economies, new developments such as opening up of markets in developing and emergent economies, technical changes that are creating new opportunities to sell and identification of long-term economic and demographic factors that are altering demand patterns. It should be mentioned that most firms will be reluctant to enter countries that have high political risks unless the potential returns are high or when countries with high political risk are providers of raw material that are in short supply.

Failure to carry out such investigations can lead to costly mistakes as was discovered by many of the firms that entered the Russian and Korean markets in the belief that the fall of communism and the introduction of markets had led to political and legal conditions that were similar to those in developed countries. All the countries selected, have the largest populations and high average population growth rate. According to the statistical data (Total Population, 2005, Average Population Growth Rate, 2005), Russia and Japan have big populations and could be potential markets for the new product, but they were excluded from the list because Russia (having 143,2 ml) expects decrease in population growth (- 0,6%), and Japan, having a population of about 128, 08 (ml), expects only 0,1% of average population growth rate.

Examining the statistical results, it is evident that China is on the top of the list having the highest population in the world. The average rate of population growth is a lower than in India and Indonesia, nevertheless, it is expected that in 2025 the population in China will be about 1,476.0 ml, in contrast to India which will has only 1,363.0 ml (2004 World Population Data Sheet, 2005). According to the survey, "China was the largest FDI destination in the world in 2003, overtaking the US" (FDI Confidence Index, 2004).

It has stable political situation, and high rates of economic growth. In case of China, FDI is a very important feature of the economies of the developing countries. For many big Western companies, expansion of their sphere of operations through the establishment of branches in other countries is regarded as a key aspect of strategy, often more important than immediate returns on capital. Many firms are seeing their investments as lower than they would have to be in the future and as providing them with a first-mover advantage as those economies begin to grow significantly.

Geographically FDI cover Russia, India, South America (Brazil), Middle East and North Africa. But, China remains the leader in FDI destination and potential return. In 2003, FDI inflows were $53.5 billion. The economic health of countries is also assessed to determine whether the macroeconomic conditions are conducive to stable economic conditions. The economic prognosis says that 40% of world's investors "expected a more positive outlook on