The Great Debate UK

from The Great Debate:

The short and long of emerging markets

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Fickle investors have spurned emerging markets in recent weeks, but this rout has obscured a more alluring vista out on the horizon.

Developing economies now account for 50 percent of global output and 80 percent of economic expansion and are projected to continue growing far faster than developed nations. They are expected to possess an even larger share of global growth, wealth and investment opportunities in years to come. So much so that the labels investors use to classify some of these nations will change as the developing develop and the emerging emerge into more potent economic powers

But this long-term view has been lost on many of those who look to emerging market assets for a higher yield in the short term. Their ardor cooled when the Federal Reserve signaled it may soon ease the stimulus that has kept credit cheap, signaling higher interest rates ahead. That was coupled with signs of slower growth in key emerging markets like China and Brazil.

Still, the developing world’s gross domestic product growth of 5 percent this year and 5.4 percent next, as projected by the International Monetary Fund, will far outpace the advanced economies’ 1.2 percent and 2.1 percent. Developing countries are now also better armed to keep panic at bay, with more foreign exchange reserves than before and less aggregate debt than developed nations. Many have put their economies on firmer foundations.

from David Rohde:

The global middle class awakens

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People stand during a silent protest at Taksim Square in Istanbul June 18, 2013.  REUTERS/Marko Djurica

Alper, a 26-year-old Turkish corporate lawyer, has benefited enormously from Prime Minister Recep Tayyip Erdogan’s rule. He is one of millions of young Turks who rode the country’s economic boom to a lifestyle his grandparents could scarcely imagine.

from David Rohde:

Prosperity without power

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A woman walking near the headquarters (L) of the Federal Security Service, in central Moscow, May 14, 2013. REUTERS/Maxim Shemetov

In Moscow, they are “non-Soviet Russians.” In New Delhi, they are a “political Goliath” that may soon awake. In Beijing and São Paolo, they are lawyers and other professionals who complain about glacial government bureaucracies and endemic graft.

from The Great Debate:

With Chavez gone, what of ‘Chavismo’?

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“The End of the Chávez Era” That was the headline on Colombia’s major newspaper, El Tiempo, the day after Hugo Chávez’s death.

True, Chávez’s controversial and colorful 14-year rule has ended, and Venezuela has lost a president who evoked uncommonly intense passions among followers and detractors.   Venezuelans will not easily forget a leader who, for better or worse, was the consummate showman and left an indelible mark on a highly polarized society.

from Reuters Investigates:

Will Brazil be ready for kick off?

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SOCCER-LATAM/Everybody knows Brazil is booming these days. But they don’t always see the dark side of that progress: some of the world’s worst traffic jams, blackouts, and trucks that sit in lines for several days at harvest time because seaports are so full.

Hoping to fix those problems, Brazil plans more than $1 trillion in infrastructure improvements in the next decade, and the scope is pretty amazing. The government wants a bullet train between Rio de Janeiro and Sao Paulo; a huge new hydroelectric dam in the Amazon; and a railroad criss-crossing Brazil’s northeast, a region that is a bit like the American Deep South in that it has historically lagged behind the rest of the country in investment.

from Davos Notebook:

Will Goldman’s new BRICwork stand up?

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RTXWLHHJim O'Neill, the Goldman Sachs economist who coined the term BRICs back in 2001, is adding four new countries to the elite club of emerging market economies. But does his new edifice have the same solid foundations?

In future, the BRIC economies of Brazil, Russia, China and India will be merged with those of Mexico, Indonesia, Turkey and South Korea under the banner “growth markets,” O'Neill told the Financial Times.

from Reuters Investigates:

Weird weather and the Amazon

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As scientists from around the world gather in Cancun for the latest U.N. conference on climate change, Stuart Grudgings reports from Caapiranga, in the heart of the Amazon rainforest, for his special report "Weird weather leaves Amazon thirsty."

This year's drought in the Amazon was the kind of thing experts call a "once in a century" event. Unfortunately, it was the second one in five years.

from MacroScope:

Building BRICs in Africa

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Some eye-catching numbers from Standard Bank out today on the influence of BRICs countries -- Brazil, Russia, India and China -- on Africa.

First off, the bank says the global recession and its recovery have been nourishing these so-called South-South ties. But it is all now ready to take off. The bank estimates:

from Global Investing:

What worries the BRICs

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Some fascinating data about the growing power of emerging markets, particularly the BRICs, was on display at the OECD's annual investment conference in Paris this week. Not the least of it came from MIGA, the World Bank's Multilateral Investment Guarantee Agency, which tries to help protect foreign direct investors from various forms of political risk.

MIGA has mainly focused on encouraging investment into developing countries, but a lot of its latest work is about investment from emerging economies.

from Global Investing:

Time to kick Russia out of the BRICs?

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It may end up sounding like a famous ball-point pen maker, but an argument is being made that Goldman Sach's famous marketing device, the BRICs, should really be the BICs. Does Russia really deserve to be a BRIC, asks Anders Åslund, senior fellow at the Peterson Institute for International Economics, in an article for Foreign Policy.

Åslund, who is also co-author with Andrew Kuchins of "The Russian Balance Sheet", reckons the Russia of Putin and Medvedev is just not worthy of inclusion alongside Brazil, India and China  in the list of blue-chip economic powerhouses. He writes:

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