In this article, we will be taking a look at the 30 biggest developing countries in the world. To skip our detailed analysis, you can go directly to see the 5 biggest developing countries in the world.
Developing countries have presented a fantastic opportunity for investment and capital inflows for other nations, known as foreign direct investment (FDI), for decades. The primary reason behind this is the fact that developing countries often exhibit major growth, and most of the fastest growing countries in the world are developing countries, even if they aren’t among the biggest developing countries in the world, which also present a range of created assets. At the same time, the promise of higher returns is partially offset by higher risks, which are continuing to increase in the current economic scenario. Take the case of Sri Lanka for example. In 2022, Sri Lanka had to default on its sovereign debt after suffering an economic crisis which is still ongoing. Other countries such as Pakistan could also follow suit, as the World Bank warned that the country’s economy was “on the edge of precipice”. The stagnation of global economic growth has hit developing countries particularly hard, which have also been more impacted by inflation and higher interest rates. Additionally, the vast majority of debts of developing countries have their debts denominated in a foreign currency, and the strengthening of the U.S. dollar has resulted in their debt burdens increasing significantly. All of this has been further exacerbated by higher interest rates which has resulted in an increased debt burden. According to Lazard Asset Management, 10% of the total asset class of $87 billion left these markets amid a significant hike in interest rates.
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While developed economies have also seen their growth stagnate, the impact on developing countries, including the biggest developing countries, has been felt heavily in 2023. According to the United Nations Conference on Trade and Development (UNCTAD), the annual investment deficit has continued to widen in developing economies, even as they attempt to face and achieve their Sustainable Development Goals (SDG) by 2030 at the latest. When the SDGs were established in 2015, the annual investment deficit was $2.5 trillion in 2015, but now, in 2023, this gap has increased to a staggering $4 trillion. In 2022, FDIs in developing countries decreased by 12%. This is concerning particularly in the light of SDGs as $1.7 trillion is needed by developing countries per year just for clean energy FDIs, but instead, have only received $544 billion in this respect in 2022.
At the same time, the World Bank has also called out the risks being faced by developing countries as the per-capita income growth percentage in emerging markets and developing countries is at least 1% lower than what has been seen from 2010 to 2019. Meanwhile, in Africa, which is home to some of the poorest and most dangerous countries in the world, the growth rate is expected to be just 1.2% which will actually increase poverty levels in an already heavily impacted region.
While the biggest developing countries in the world are facing a major crisis because of the aforementioned issues and still attempting to recover from the economic devastation caused by the Covid-19 pandemic, many funds and investors are still really interested in the potentially lucrative returns emerging markets offer. Even for many companies, higher growth rates are seen in emerging markets, where markets are significantly larger than developed countries, even if income levels are much lower. This has led to many investment firms creating firms solely focused on countries in emerging markets. One such fund is the Asia Frontier Fund, which is based in Hong Kong, and invests heavily in high growth Asian frontier economies, with countries established not just in various countries including Pakistan, Bangladesh, Cambodia, Iraq, Kazakhstan, Maldives and Mongolia among many others. According to the Fund’s website “To take advantage of the growth in these Asian frontier countries, the fund primarily invests in Consumer Staple, Consumer Discretionary, Financial and Infrastructure stocks. Additionally, the fund also invests in country specific sector stocks such as Textiles in Pakistan and Bangladesh, Tourism in Sri Lanka, Natural Resources in Mongolia and Papua New Guinea and Power Generation in Laos. The fund’s investment strategy consists of building a core portfolio of large cap and liquid stocks as well as a satellite portfolio of mid and small cap stocks. One of the fund’s key sources of comparative advantages is the focus on capturing returns from small and mid-cap stocks which are often overlooked by larger, less flexible funds.”
Similarly, other hedge funds and investment companies have also dedicated funds exclusively in the emerging markets sector, including Capital Group’s New World Fund, which “Seeks broad exposure to emerging markets opportunities, principally by investing in emerging markets companies as well as multinational companies with material emerging markets exposure.” Currently, the fund has over $51 billion in assets and boasts a 10 year return of 5.15%.
Methodology
To determine the biggest developing countries in the world, we have obtained the GDP of all countries classified as “developing” according to the IMF, from the organization’s official website. While the rankings are based on the countries with the highest GDP, we’ve also included data on their population and GDP per capita, to present a more accurate picture of where the economy stands right now. While we’ve obtained total GDP and per capita GDP data from IMF, the population has been calculated by dividing the two, so there might be a slight difference between official statistics.
30. Hungary
Total GDP (in billions): $188.5
GDP per capita: $19,386
Population (in millions): 9.7
Hungary is aiming to become the center of Europe for EV batteries, and is aiming to attract investments from some of the biggest EV companies in the world.
29. Algeria
Total GDP (in billions): $206.0
GDP per capita: $4,481
Population (in millions): 46.0
While Algeria is a massive country, especially in terms of land mass, it has struggled to attract significant FDI, after achieving its peak in 2019.
28. Qatar
Total GDP (in billions): $219.6
GDP per capita: $83,891
Population (in millions): 2.6
Qatar’s wealth has seen it increase its influence in recent years, including hosting arguably the most prestigious sporting tournament in the world in the FIFA World Cup Finals.
27. Kazakhstan
Total GDP (in billions): $245.7
GDP per capita: $12,307
Population (in millions): 20.0
In September 2023, Kazakhstan’s Prime Minister called for an urgent action to increase more investment in the country, to the tune of at least $39.5 billion.
26. Iraq
Total GDP (in billions): $267.9
GDP per capita: $6,181
Population (in millions): 43.3
Despite Iraq suffering severely from the aftermath of the unprovoked war initiated by the U.S. in 2003, it is still among the biggest developing countries in the world, with its strategic location and better economic situation in recent years resulting in some level of improvement in terms of stability.
25. Peru
Total GDP (in billions): $268.2
GDP per capita: $7,773
Population (in millions): 34.5
While there has been some level of uncertainty after a change in government in Peru, it is still traditionally considered to be among the most trustworthy countries in Latin America for foreign investors.
24. Colombia
Total GDP (in billions): $334.7
GDP per capita: $6,417
Population (in millions): 52.2
Colombia has historically not been among the most preferred companies for FDI, but presents huge potential and in December 2022, Colombia received $3.9 billion in FDI, close to what it received in total in the entire first half of 2021.
23. Romania
Total GDP (in billions): $348.9
GDP per capita: $18,530
Population (in millions): 18.8
One of the few European nations categorized as developing, FDI in Romania in the first six months of 2023 dropped by 29%.
22. Chile
Total GDP (in billions): $358.6
GDP per capita: $17,827
Population (in millions): 20.1
After an economic contraction recently, Chile is now looking for increased foreign investment in a bid to stabilize the economy after being impacted by events such as the pandemic, and according to Banco de Chile, FDI represents nearly 75% of the country’s total GDP.
21. Iran
Total GDP (in billions): $368.0
GDP per capita: $4,252
Population (in millions): 86.5
Despite facing Western sanctions for many years now, Iran’s economy has managed to persevere.
20. Pakistan
Total GDP (in billions): $376.9
GDP per capita: $1,660
Population (in millions): 227.0
Pakistan has been in an economic crisis for a few years now, and things aren’t looking to improve anytime soon. If its currency continues to depreciate, the country’s hope of being counted among the biggest developing countries in the world will be at risk, despite enormous potential.
19. Egypt
Total GDP (in billions): $387.1
GDP per capita: $3,644
Population (in millions): 106.2
Tire manufacturer Rolling Plus has agreed to build a $1 billion tire factory in Egypt, showcasing the country to be an attractive proposition for investment despite turbulent politics.
18. South Africa
Total GDP (in billions): $399.0
GDP per capita: $6,485
Population (in millions): 61.5
The biggest developing country in Africa, South Africa has still been among many African nations impacted by the drop in FDI in the region, as investment flows to Africa dropped to just $45 billion in 2022.
17. Bangladesh
Total GDP (in billions): $420.5
GDP per capita: $2,470
Population (in millions): 170.3
While Bangladesh has maintained sustained growth in the past few decades, a new report by UNCTAD stated that the country needs to increase diversification in its exports and increase investment.
16. Philippines
Total GDP (in billions): $440.9
GDP per capita: $3,905
Population (in millions): 112.9
In January 2023, nine Chinese energy companies agreed to invest around $14 billion in clean energy development in the Philippines, showcasing why Philippines is among the biggest developing countries in the world.
15. Malaysia
Total GDP (in billions): $447.0
GDP per capita: $13,382
Population (in millions): 33.4
Alton Group, a global company which supplies commercial and consumer tools, floor care and applies, announced an investment of RM500 million to set up an R&D and manufacturing department.
14. Vietnam
Total GDP (in billions): $449.1
GDP per capita: $4,476
Population (in millions): 100.3
Vietnam’s new Prime Minister has met with U.S. companies recently in a bid to attract more investment in the country’s growing chip sector.
13. United Arab Emirates
Total GDP (in billions): $499.0
GDP per capita: $49,452
Population (in millions): 10.1
The United Arab Emirates has continued to be counted among the fastest growing countries in Asia for several years now, and China’s Asian Infrastructure Bank recently opened its first overseas branch in Abu Dhabi.
12. Nigeria
Total GDP (in billions): $506.6
GDP per capita: $2,280
Population (in millions): 222.2
Nigeria’s oil and gas sector has seen various multinationals promise an investment of more than $13 billion, including from some of the biggest oil companies in the world.
11. Thailand
Total GDP (in billions): $574.2
GDP per capita: $8,182
Population (in millions): 70.2
Thailand’s new Prime Minister has not wasted much time to ensure Thailand is continued to be counted among the biggest developing countries in the world, and met with various top U.S. companies to encourage more investment in Thailand.
10. Argentina
Total GDP (in billions): $641.1
GDP per capita: $13,709
Population (in millions): 46.8
While Argentina’s economy shrank for the first time since the start of the Covid-19 pandemic, Argentina has also seen major investment being made in the country, especially from Qatar after improved ties with the Middle Eastern nation.
9. Poland
Total GDP (in billions): $748.9
GDP per capita: $19,913
Population (in millions): 37.6
Poland is fast becoming a major destination for FDI, as its advancing economy combined with being relatively inexpensive, has led to many major multinationals establishing manufacturing facilities and European hubs in the country. Recently, Phillip Morris, one of the largest FMCG companies in the world, announced an investment of 1 billion zloty ($231 million) for the production of tobacco sticks.
8. Türkiye
Total GDP (in billions): $1,029.3
GDP per capita: $11,932
Population (in millions): 86.3
Türkiye has been suffering from extremely high inflation, which the central bank expects to peak at around 60% towards the end of the first half of 2024.
7. Saudi Arabia
Total GDP (in billions): $1,061.9
GDP per capita: $29,922
Population (in millions): 35.5
Despite human rights concerns, Saudi Arabia exhibits disproportionate influence on global politics because of its vast wealth, and the country’s Public Investment Fund has been in the news for its many investments, especially in the sporting world.
6. Indonesia
Total GDP (in billions): $1,391.8
GDP per capita: $5,017
Population (in millions): 277.4
The most populous Muslim country in the world, Indonesia is continuing to increase and recently, VinFast agreed to build a $200 million assembly plant in the country.
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Disclosure: None. 30 biggest developing countries in the world is originally published on Insider Monkey.