The Resurgence of the Rest
Article

The Resurgence of the Rest

Can Emerging Markets Find New Paths to Growth?

Ruchir Sharma
Foreign Affairs, 2021
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Dazzling growth once made emerging markets the darlings of Wall Street. But reduced trade and capital flows after the 2008 global financial crisis, along with rapidly falling commodity prices and shrinking labor forces, combined to reduce growth in developing countries. The coronavirus pandemic only made things worse. Yet this cogent analysis by strategist Ruchir Sharma contends that economic reform, the digital boom and geopolitical developments could help some emerging economies to break out in the 2020s.

Summary

Emerging markets’ once rapid growth appeared to augur a world of economic equality.

After World War II, the growth rates of developed and developing countries were close, though more rapid population growth in the latter often translated into declining per capita income. But the first decade of the 21st century turned prosperous for emerging markets: Their share of global GDP had doubled, to 35%, by the early 2010s. And the percentage of the global population subsisting on less than $2 per day halved, to 16%.

Observers foresaw a century of “the rise of the rest,” predicting that incomes in the less developed countries would rise to developed-world levels. Wall...

About the Author

Ruchir Sharma is chief global strategist at Morgan Stanley Investment Management.

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