(Fortune)
The Magaba market in northern Zimbabwe is a hive of activity during the week. Zimbabweans can find almost anything under the low-slung tents blanketing a mile-wide square. The buyer's paradise offers everything from Mazoe Orange Crush juice drinks to sheet metal to clothes to plumbing equipment. And as hedge fund manager Larry Speidell likes to note when he visits, none of this activity is recorded as part of the country's official GDP, which grew 5% last year. "We call it 'walking around GDP,' " he says.
Speidell is an investor in so-called frontier markets, a term that dates back to the early 1990s, when an arm of the World Bank drew a distinction between the mainstream emerging markets and other far-flung economies where markets were illiquid, infrastructure was almost nonexistent, and economic development was in its very early stages. Today these economies across Africa, Southeast Asia, and South America present the same challenges for investors that BRIC countries (Brazil, Russia, India, and China) did more than a decade ago. They also offer the same potential for explosive growth and stock returns.
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