The confluence of economic growth, rising middle class, and upcoming ASEAN Economic Community have drawn many international players to the potential of frontier markets. Today, we see luxury brands such as Rolls-Royce and BMW in Cambodia – with more brands following suit. We also see increasing affluence – for example, Sri Lanka, whose Gross Domestic Product (GDP) per capita rose from US$859 in 2000 to US$3,256 in 2013. If we were to look beyond the current wave of optimism, the question is, how substantial is the market potential of frontier markets vis-a-vis their risks? Which market is likely to emerge as the front runner?

1. COUNTRIES TO WATCH OUT FOR
SRI LANKA - AN UP AND COMING FRONTIER MARKET
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Note: 1
Composite risk is an indicator of political, economic and operational risk of a country (as of 2015)
2
As of 2014
Source: BMI Research, World Bank, Ipsos analysis
Size of bubble represents population in millions2
Emerging markets Frontier markets
Comparison of relative size, affluence and risks
1,000
0
3,000
2,000
4,000
5,000
6,000
7,000
40 50 60 70 80
Post the end of war in 2004-05,
Sri Lanka’s economic growth has
been one of the fastest in
South East Asia. Its GDP per capita
is one of the highest amongst
frontier markets in the region.
6.7 Laos
Thailand
Philippines
Vietnam
Sri Lanka
Cambodia
Myanmar
Composite risk rating1
Lower riskHigher risk
More
affluent
Less
affluent
GDPpercapita2
53.4
67.7
15.3
90.7
20.6
99.1