âForget the BRICS, invest In âBreakout Nationsâ
Breakout Nations, By Ruchir Sharma - Reviews - Books - The Independent
Forget the BRICS, invest In Breakout Nations
THURSDAY, 19 APRIL 2012 00:00 PATRICK ATUANYA AND PYEMO AFEGO
Ruchir Sharma, head of emerging markets at Morgan Stanley, a leading American investment bank, says investors and fund managers are putting too much stock in BRIC nations (Brazil, Russia, India, and China) and instead they should turn to breakout nations.
Ruchir Sharma, says that considering current sluggish global economic activity, investors who only focus on BRICs are making a mistake, and may be looking at the wrong emerging nations and should also think about putting money to work in something he calls Breakout Nations
Sharma lists his favorite break out nations as: Nigeria, Indonesia, Poland Philippines, Turkey, South Korea and Thailand. Sharma defines breakout nations as countries that will be able to beat expectations and grow better than their peer group in the same per capital income.
Breakout Nations, By Ruchir Sharma - Reviews - Books - The Independent
BRIC is so last decade.Breakout Nations, By Ruchir Sharma
BRICs but in the structure of their economies, their policies, and indeed their prospects. That clever acronym diverts our attention from the other powerful middle-income economies, such as Mexico, Indonesia and Turkey, and the African giant, Nigeria. What we need is a primer to guide us. That is the core contribution of Ruchir Sharma's thoughtful analysis of these nations: what they are doing, why they are different, their prospects, their achievements, their errors, and the threats they face.
He starts, as one must, with China. For anyone who has been to China recently and particularly anyone who knew it even a decade ago, the story will be a familiar one: the helter-skelter race for growth, the wealth this has brought to the new middle class, the self-confidence generated by this achievement, but also the human and environmental costs of untrammelled growth the swagger and the squalor. But this race for growth will come to an end as China's population ages and as development reaches a natural plateau.
There are a series of snapshots about the other important emerging economies, in which he makes a series of sensible judgements. His gold medal goes to South Korea, the "Germany of Asia", in particular for the way it has become a manufacturing powerhouse in one generation and managed to turn adversity to advantage. In the Asian financial crisis of 1998, it had to go to the IMF for a bail-out loan. But it used this crisis to reorganise its industry, allowing many weaker companies to go under or be taken over, and by the middle of 2001 had repaid the debt. Sharma believes South Korea will manage a successful unification with the North.
