This article attempts to understand the forces that led to the golden decade (2001–2011) of BRIC, the four large emerging economies, Brazil, Russia, India, and China and the subsequent slowdown. Then it discusses some of the troubling signs that are now surfacing in these emerging economies and tries to suggest some of the areas where these governments should focus to return to their earlier success.
Emerging nations have provided the growth and solid returns to global investors for almost a decade while pulling out millions out of poverty at the same time. But then their growth engines lost steam. According to most economic estimates, the near future for the emerging economies is not going to be as rosy as the golden decade and it will be mired with uncertainty. Growth in commodity prices or multilateral trade will be nowhere near what was seen in the golden decade. So, what is the key for the emerging economies to keep up the growth momentum of the last decade? The answer is simple on paper but requires a lot of actual hard work: structural reforms. These countries need to identify the structural bottlenecks in their respective economies and address them by removing labor market bottlenecks, improving public infrastructure, controlling the national debt and nonperforming assets of the commercial banks, and reducing income inequality by promoting social mobility.
The emerging economies experienced unprecedented growth between 2001 and 2011. They not only survived the 2008–2009 great recession, but provided the fuel for the global economic engine to get back on the road to recovery. But since then their economies have faltered and the enthusiasm surrounding them has waned. This article discusses some of the reasons that were behind the decade long rise of these economies and the subsequent fall. It also sheds some light on the troubling signs that are now surfacing in these emerging economies and finally suggests some of the key areas where these governments should focus to return to their earlier success.
Emerging Nations: Perspectives on Past Success and Future Challenges*
Emerging Economy Studies November 2015 1: 163-170, doi:10.1177/2394901515599120