Ruchir Sharma disaggregates the BRICs
There’s been a spate of reviews about ‘Breakout Nations: In Pursuit of the Next Economic Miracles’ (Allen Lane, 2012) by Ruchir Sharma, a senior fund manager at Morgan Stanley who is paid to pick emerging market success stories. I can recommend the FT and Economist. Mr Sharma, who spends much of his time in emerging markets, argues that each one is different (though he draws a relatively untried comparison between India and Brazil), and that they are slowing down. “Failure to sustain growth is the general rule,” Sharma writes, “and that rule is likely to reassert itself in the coming decade.” He identifies those countries he backs to breakthrough (which include South Korea and Poland) and those which he fears are overblown (Brazil and Russia are examples). He puts India’s chances of breaking through at 50-50. Stefan Wagstyl in the Financial Times thinks it significant that democracies “abound” in Sharma’s top picks.
That may be true in the short term but in the long run authoritarian regimes have generally given way to democracy in countries as diverse as South Korea, South Africa and Brazil. It is surely revealing that democracies abound among Sharma’s top candidates for breakout nations.