Breakout Nations:In Pursuit of the Next Economic Miracles

After a decade of rapid growth, the world’s most celebrated emerging markets are poised to slow down. As an era of easy money comes to a close, China, Brazil, Russia and India face daunting challenges and inflated expectations.  In our summary of Breakout Nations:  In Pursuit of the Next Economic Miracles, Ruchir Sharma identifies which nations are most likely to rise up in the coming decade, and why.

Sharma is head of Emerging Market Equities and Global Macro at Morgan Stanley Investment Management, where he manages around $25 billion in emerging assets.  Sharma’s basic approach is to avoid the popular habit of lumping these nations together as one class, or in catchy categories like “BRICs.”  To identify the economic stars of the future, it’s vital to understand these countries as individual stories.  Data points alone can’t reveal the story; you have to hit the road.

For the past 15 years, Sharma has typically spent one week every month in a particular emerging market, obsessing about it, meeting all sorts of local characters, and traveling the breadth of the country, mostly by road.  As the writer Aldous Huxley put it, “To travel is to discover that everyone is wrong about other countries.” 

For a truly rounded view, Sharma monitors everything from per capita income levels to the top-ten billionaire lists, the speeches of radical politicians, the prices of black-market money changers, the travel habits of local businessmen (for example, whether they are moving money home or off-shore), the profit margins of big monopolies, and the size of second cities, because oversized capital cities often indicate excessive power in the hands of the political elite. 

This summary will help you to be right about which economies are going to beat their peers — and which are not — as the world economy enters an era of slower growth.