The changing shape of global economies could lead to increased protectionism in emerging markets as they attempt to avoid being sucked into a developed world slowdown in 2012.
According to Reuters, Germany’s BMW isseeing a trend of increasing protectionism in emerging economiesthat are trying to attract foreign investments and more localproduction at the expense of imports.
“We are seeing in these markets the rise of protectionism,” BMW group sales chief Ian Robertson said at the Detroit Car Show on Monday, citing countries like Brazil, Argentina, Turkey, Russia and India.
“Gone are the days when you were classified as a localmanufacturer with a minimum of localness. In the past, I’ve beento plants where literally all you did was put the wheels on thecar,” Robertson added.
According to Norweigan fund Skagen, emerging markets will adopt more protectionist approaches in 2012 in order to safeguard against unemployment in industrialised countries and potential contagion from the eurozone. Another major factor in growing protectionism would be the status of emerging market currencies. It said, at the moment, falling EM currencies is helping defend resource-rich nations, such as Brazil and Russia, against falling commodity prices.