In an article in the November/December issue of Foreign Affairs, Ruchir Sharma of Morgan Stanley Investment Management punctures the notion that the BRICs–and emerging markets more broadly–are set for an inexorable economic rise. Instead, he argues, they are entering an era of variable growth in line with historical norms. As he writes:
None of this should be surprising, because it is hard to sustain rapid growth for more than a decade. The unusual circumstances of the last decade made it look easy: coming off the crisis-ridden 1990s and fueled by a global flood of easy money, the emerging markets took off in a mass upward swing that made virtually every economy a winner. By 2007, when only three countries in the world suffered negative growth, recessions had all but disappeared from the international scene. But now, there is a lot less foreign money flowing into emerging markets. The global economy is returning to its normal state of churn, with many laggards and just a few winners rising in unexpected places.
Interestingly, Sharma adds that of the best-performing developing countries, many will be low-income:
To the extent that there will be a new crop of emerging-market stars in the coming years, therefore, it is likely to feature countries whose per capita incomes are under $5,000, such as Indonesia, Nigeria, the Philippines, Sri Lanka, and various contenders in East Africa.
You can read the full article here.