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The New Paradigm for Emerging Economies: BlockchainAgriculture, 2019). In 2017, Bangladeshproduced nearly three billion US dollarsin exports from the agricultural industrymainly in cotton and sugar (Faruque, 2018).According to the World Bank report, thisoutlook could be at least doubled withthe appropriate exploration of certainopportunities (The World Bank, 2016).Infrastructure, Urban, andTechnological Development Industry:The transportation sector is a major factorin the long-term development of emergingeconomies and in this case, it fundamentallyrestricts the efficient flow of people,commodities, and services. According to areport published by Credit Suisse, nearly46% of roads are unpaved in emerging Asiancountries (Zimmermann, 2018). Emergingeconomies fall far behind their establishedcounterparts in airports per capita, railroadsper capita, and roadways per kilometer.However, their amount of highways percapita is far above-average and could be avaluable tool if not for their recurring issues(Emerging Economies: Group Statistics, n.d.).Some such issues have large effects on theeconomy as a whole; in Dhaka, the capital cityof Bangladesh, approximately 3.8 million laborhours are lost daily due to traffic; an estimated4.3 billion US dollars worth of productivity(Correspondent, 2018).Issues with road corruption, safety, andsecurity have halted potential developmentin Bangladesh and many other developingAsian economies. A multitude of emergingnations struggle with high crime rates anda poor policing force per capita ratio in largeurban areas (Emerging Economies: GroupStatistics, n.d.). The lack of policing and highrates of crime in some emerging economiesare often also accompanied by corruptionfrom law enforcement to politics. When agovernment official is more interested in theirown self-benefit than the overall success oftheir communities, it can lead to repeatedinvestments into projects that sum to muchhigher than they should. Although publiclyavailable data did not provide total roadconstruction expenditures for the country,one could reasonably estimate billions ofsunk-costs over the past 20 years. In fact,according to a Bangladeshi report publishedby “The Daily Star”, on-average it costs overseven million US dollars per kilometer more toconstruct a four-lane highway in Bangladeshas compared to India or China due to lackof competitive bidding, overrun time, etc(Correspondent, 2017).Solving the roadway and other similarinfrastructure issues will ultimately comedown to the necessity for clear informationand mechanisms to monitor progress.These necessities present opportunitiesfor technology such as blockchain to playa key role in the development process ofemerging economies. After implementation,blockchain will allow emerging economiesand their developing cities to Developingcities are an obvious component in mostemerging economies. The following threevisuals represent the potential markets andchallenges in such cities.10

The New Paradigm for Emerging Economies: BlockchainThese are the world’s fastest growing megacitiesAnnual rate of change between 2010-2015Guangzhou, Guangdong, China5.2%Beijing, China4.6%Kinshasa,DRC4.2%Lagos, Nigeria3.9%Dhaka, Bangladesh3.6%Shangai, China3.4%Chongqing, China3.4%Tianjin, China3.4%Karachi, Pakistan3.3%Delhi, India3.2%Source: UN World Urbanization ProspectsFigure 3. The annual rates of change for the top ten fastest growing cities in the world (Myers, 2016).Middleweight cities in emerging markets are poised to delivernearly 40 percent of global growth by 2025, more than the entiredeveloped world and emerging market megacities combined1Developed economicsContribution to GDO and GDP growth by type of city %Emerging market small cities and rural areasGDP, 2007Emerging market megacitiesEmerging market middleweight citiesGDP growth, 2007-252100% 54.9 Trillion100% 55.5 Small8371013LargeMidsized1. Megacities are defined as metropolitan areas with ten million or more inhabitants. Middleweights are cities with populationsof between 150,000 and ten million inhabitants.2. Real exchange rate(RER) for 2007 is the market exchange rate. RER for 2025 was predicted from differences in the per capitaGDP growth rates of countries relative to the United States.SOURCE: McKinsey Global Institute Cityscope1.0Figure 4. The percent contributions of each type of city to global GDP and global GDP growth between 2007 and 2025(McKinsey Global Institute, 2011). Emerging market middleweight cities are poised to deliver nearly 40% of global growth by2025, more than the entire developed world and emerging market megacities combined.11

The New Paradigm for Emerging Economies: BlockchainTop cities by growth in given market, 2010-25Emerging regionDeveloped regionElderlyhigher-incomeconsumers1Rank (aged65 )Youngentry-levelconsumers2(aged 14 or under)Consumerspending onlaundrycare products3Demand forcommercial floorspace4Municipal waterdemand1ShanghaiLagosSão PauloNew YorkMumbai2BeijingDar es SalaamBeijingBeijingDelhi3TokyoDhakaRio de Los AngelesGuangzhou5MumbaiKhartoumMexico CityTokyoBeijing6São PauloGhaziabadMoscowWashington,DCBuenos obiIstanbulSao jingBaghdadJohannesburgChicagoIstanbul1. With household income 20,000 at purchasing-power parity.2. With household income of 7,500- 20,000 at purchasing-power parity.3. Based on city-level market-demand-growth model.4. Includes replacement floor space.Source: McKinsey Global Institute analysisFigure 5. The top ten cities for each growth category between 2010 and 2025 (McKinsey Global Institute, 2011).Looking at the visuals, one can’t help but thinkabout some of the issues currently plaguingthe cities listed: the cost of affordable living,the essential supplies and infrastructure foraccommodating a large number of people,and the safety and sustainability of the citiesthemselves.trillion more per year on physical capital—everything from office towers to new portfacilities—than they do today. In buildingconstruction, the new floor space required willbe equivalent to 85 percent of today's entireresidential and commercial building stock”(Dobbs; Remes; & Schaer, 2012).The three problems above are only asnapshot of the list that needs to be resolvedprior to economic progress. According to areport published by McKinsey, “By 2025, citiesworldwide will need to spend at least 10That being said, individuals may be ableto gain early-mover benefits by adoptingstrategic approaches now: whether thatbe developing better understandings ofdemographic and income trends or learning12

The New Paradigm for Emerging Economies: Blockchainthe market dynamics of specific productsin target cities. Information such as howemerging economies have a significantlylower pre-adolescence percentage of theirpopulation and a higher elderly (65 and up)percentage than the average may be criticalfor social planning. Planning such as creatingassisted living projects to care for an agingpopulation or investing in ways to decreaseinfant mortality and the number of stillbirths(Emerging Economies: Group Statistics, n.d.)Many cities also lack proper safetyregulations; Dhaka, for instance, recentlysuffered a series of deadly accidents inbusiness facilities that have claimed manylives (Nadi, 2019). As incidents like those tendto repeat, one must think about the measuresthat are necessary to avoid future dangers,which will be far more complicated due to theincrease in population and growth of the city.Technology will play a critical role intransforming these cities into “Smart Cities,”but first proper application and developmentprocesses must be established. In previouscases, technology is developed by theestablished economies and then presentedto the emerging ones as a market. The issuewith that solution is that most emergingcountries are presented with unique problemsassociated with their cultures, customs,demographics, terrain, etc. Therefore, it is farmore critical to develop localized technologyto address the issues that exist within thespecific community.In fact, in the paper “Why is Africa Poor?” theauthors, state “non-adoption of apparentlyhighly productive technologies such aswheeled carts or new methods of ploughingwere not appropriate to the African contextand was particularly driven by perversecauses of facilitating slave trade or creatingdependency of the locals to an already knownand efficient process” (Acemoglu & Robinson,2010). Such development inhibitors seem toprovide young companies within emergingeconomies an environment in which theyare forced to be content with their localtechnological capabilities. They lack theresearch, resources, and infrastructure tosatisfy their technological needs as well asface the possibility that any development hasthe potential to disrupt the preexisting localeconomy (Yusuf, 2017). Opportunity lies inthe readiness for and embracement of thesetechnologies through customization.In summary, the critical takeaways foremerging economies in technology are:1. Raise knowledge, awareness, andreadiness1. Harness new technologies to buildlocalized capabilities1. Formulate strategies to create valueadded services for existing vendors toaddress local markets (such as overcominglanguage barriers and gaining marketinsights among others)13

The New Paradigm for Emerging Economies: BlockchainGovernance, Finance, andCommerce Industry:Governance is subject to various challenges inthe economic development process; whetherthey be traditional or unexpected. Emergingeconomies’ governments must find solutionsto the same problems all governments must:protecting its citizens being one of them.Fatalities due to terrorism acts, terroristorganizations active, and political violenceare all untamed in emerging economies whencompared to some of the more establishedones. Additionally, emerging economies lackthe forces to solve these issues internally;despite having a significantly larger portion oftheir populations fit for military service, theyare below average on military personnel percapita. It has already been mentioned howother internal policing forces are subject tobribes and corruption; this, combined with aninadequate national military makes severallarge-scale operations impossible (EmergingEconomies: Group Statistics, n.d.). Someissues governments face are less-ordinary,one example being when the FinancialPolicy Council explicitly listed an “Open andTransparent PPP Bid Process” as part ofthe solution to tackle existing challenges inemerging markets (Kowlessar, 2018).The final objectives of e-governance, ascited by the United Nations DevelopmentProgramme led by Information andCommunications Technology innovationsare: transparency, efficiency, effectiveness,accountability, justice, and reliability andparticipatory democracy (Alam, 2012).This sort of e-governance is expensiveand challenging to establish due to factorssuch as the majority of the citizens in someemerging economies not having access to theinternet and the lack of essential hardwaresuch as connection infrastructures, advancedservers, and security systems to protectpublic data and information (Shil, 2016). Thecost of creating a functioning e-governancein a developing city could be upwards ofone billion US dollars, no small fee for aneconomy with a plethora of other problemsand financial stresses (Zambrano & Seward,2013). The reality of these situations promptthe questions of if and how an emergingeconomy would be able to obtain ane-governance while also minimizing costs?Financial services, unlike some of theaforementioned areas, are an area whereemerging economies believe presentsprospects. As of now, emerging economiesare looking at various opportunities foreconomic growth through remittance,addressing the unbanked and underbankedmarkets, and reducing cost for financial andcashless services.Bangladesh stands as the 9th highestremittance recipient country in the world at15.9 billion US dollars which accounts fornearly 4.58% of its GDP (Ahmed K.A., 2018;The World Bank, 2018). The actual figure isreported much higher but does not appear soin the statistic due to the country’s reliance oninformal systems such as “Hundi”. Such intrasocial methods of transmitting remittancehave been estimated to handle approximately24.9% of total remittance currently14

The New Paradigm for Emerging Economies: Blockchainaccumulated with more yet unaccounted for(Hussain, 2014).It is of utmost importance to bring theseinformal remittances to a formal system.Large portions of these remittances are usedby family members, for property and landacquisitions, and for education and medicalservices. Whenever a state imposes capitalcontrols preventing the free movement offunds, markets such as the “Hundi” areestablished. Furthermore, the central bankin its continuous efforts to enforce foreignexchange regulations becomes increasinglyintrusive in trying to limit the “Hundi” market.Foreign exchange may be entirely outsideof Bandladeshi financial institutions’ sphereof influence; however, the “Hundi” marketwill actively adjust their exchange ratesto divert remittances enough to satisfydemands (Cookson, 2018). If demandsincrease, a higher proportion of remittanceswill be redirected to the “Hundi” marketsand if they decrease the opposite will occur.Creating programs such as PSI (Pre-ShipmentInvoicing) to reduce the amount of underinvoicing, improve traceability, provideeducation services, and reduce the cost ofcross-border payments are some examples ofmeasures being taken benefit fully off of theremittance market. Matt Bakker beautifullysummarizes what the remittance marketmeans for emerging economies in his book,“Migrating into Financial Markets”, in summaryhis thoughts are:critical source of financial aid than officialdevelopment assistance (ODA). For example,in 2012, Africa received 60 billion USdollars in total remittances whereas theyonly received 44.6 billion in ODA. Similarly,remittances have also reached higher levelsthan private debt and portfolio equity,and average almost 60% of foreign directinvestments in developing countries.b. Remittances have not only proven to behigher as other sources of financial inflows,but they are also seen as more resilient toexternal economic shocks and are countercyclical in nature. Indeed, while a foreigngovernment is likely to cut ODA when its owneconomic growth slows, family members areless likely to do so. Similarly, family membersare more likely than foreign investors toinvest more when a developing country facesdifficulties (Bakker, 2015).The other major prospect in the financialindustry is the unbanked and underbankedmarket. As shown in the visual below,approximately 1.7 billion adults remainunbanked, of which adults in emergingmarkets account for a large share.a. In some of the frontier “least developed”countries, remittances are now a more15

The New Paradigm for Emerging Economies: BlockchainFigure 6. The amount distribution of adults living unbanked in the world(Demirguc-Kunt, Klapper, Singer, Ansar, & Hess, 2017).Bangladeshi mobile financial service usehas grown approximately 120% every yearsince 2011 and although strides have beenmade in Bangladesh through MPS (MobileFinancial Services) such as bKash, wherean estimate shows 22% of the populationis using it; it remains as mostly domesticperson-to-person transfers. According to onestudy, 85% of Bangladeshi mobile moneyusers don't have a bKash account and only20% have a bank account, which leaves astaggering 80% as unbanked and only 3% ofthe population with a mobile account. Withthe majority of transactions being domestictransfers and payments, rural Bangladeshiare not interested in saving money. They wantto be able to send money via mobile servicesto their families so that they can avoid loansand thus safeguard their families (Bryzek,n.d.).Further showing that sentiment holds trueacross developing economies, India hasshown that by lowering bank transactioncosts, hundreds of millions who werepreviously unbanked created accounts. In2011, 65% of India was unbanked; now,with the introduction of the JDY (PrimeMinister's People Wealth Scheme) andsimilar programs, that has fallen to 47%.Of the accounts opened in that time frame,60% were in rural areas and they have anaccumulated deposit of approximately 10billion US dollars.16

The New Paradigm for Emerging Economies: BlockchainFigure 7. The total number of bank accounts in India as well as what portion of them are positive-balanceand their distribution between rural and urban areas (Asktrakhan, 2018).When considering financial inclusion, anemerging economy should contemplatemaking the following changes:1. Closing the small business credit gap ataverage lending spreads and conservativeestimates of fee-based services.2. Including unbanked adults in the formalfinancial system and raising their financialservices spending levels. Social dividendsBanks at the forefront of financial inclusionfor low-income consumers will be wellpositioned to reap both economic andgoodwill value in return. It is important tonote that 70% of microenterpri

Globally, agriculture accounts for almost one billion in global employment and is the largest employer of women in developing nations. Additionally, seven of the ten largest agricultural producers and exporters are considered to be emerging economies and the agricultural sector constitutes a large portion of each of them. Such statistics make