Breakout Nations: In Pursuit of the Next Economic Miracles

by Ruchir Sharma

Overview

International Bestseller
One of Foreign Policy's "21 Books to Read in 2012"
A Publishers Weekly Top 10 Business Book

After a decade of rapid growth, the world’s most celebrated emerging markets are poised to slow down. Which countries will rise to challenge them?

To identify the economic stars of the future we should abandon the habit of extrapolating from the recent past and lumping wildly diverse countries together. We need to remember that sustained economic success is a rare phenomenon.

As an era of easy money and easy growth comes to a close, China in particular will cool down. Other major players including Brazil, Russia, and India face their own daunting challenges and inflated expectations. The new "breakout nations" will probably spring from the margins, even from the shadows. Ruchir Sharma, one of the world’s largest investors in emerging markets for Morgan Stanley, here identifies which are most likely to leap ahead and why.

After two decades spent traveling the globe tracking the progress of developing countries, Sharma has produced a book full of surprises: why the overpriced cocktails in Rio are a sign of revival in Detroit; how the threat of the "population bomb" came to be seen as a competitive advantage; how an industrial revolution in Asia is redefining what manufacturing can do for a modern economy; and how the coming shakeout in the big emerging markets could shift the spotlight back to the West, especially American technology and German manufacturing.

What emerges is a clear picture of the shifting balance of global economic power and how it plays out for emerging nations and for the West. In a captivating exploration studded with vignettes, Sharma reveals his rules on how to spot economic success stories. Breakout Nations is a rollicking education for anyone looking to understand where the future will happen.

Product Details

ISBN-13:	9780393083835
Publisher:	Norton, W. W. & Company, Inc.
Publication date:	04/08/2013
Sold by:	Barnes & Noble
Format:	eBook
Pages:	336
File size:	6 MB

About the Author

Ruchir Sharma penned the international bestseller Breakout Nations and is a contributing op-ed writer at the New York Times. His commentary has also appeared in the Wall Street Journal, the Financial Times, Foreign Affairs, and other publications. He is chief global strategist at Morgan Stanley Investment Management, based in New York.

Table of Contents

Prologue vii

1 The Myth of the Long Run 1

2 China's After Party 15

3 The Great Indian Hope Trick 35

4 Is God Brazilian? 59

5 Mexico's Tycoon Economy 73

6 In Russia, There's Room Only at the Top 83

7 The Sweet Spot of Europe 97

8 The Monophonic Voice of Turkey 111

9 On the Tiger Road 129

10 The Gold Medalist 153

11 The Endless Honymoon 171

12 The Fourth World

13 After the Ecstasy, the Laundry 220

14 The Third Coming 241

Acknowledgments 256

Appendix A The Emerging Markets Universe 259

Appendix B The Frontier Markets Universe 261

Bibliography 263

Index 269

Editorial Reviews

Sharma, the head of Morgan Stanley's Emerging Markets division, takes readers on a lively tour across five continents as he explores the factors behind the next economic powerhouses. Analyzing a smorgasbord of indicators—from income levels, to the number of billionaires in a country, to the pronouncements of local politicians—Sharma stresses that the nations poised to be the next big thing in the global marketplace are not the just usual suspects like China, Russia, and India. Instead, they are smaller countries that are making quiet, unheralded progress before the rest of the world catches on. The Czech Republic and Poland benefit from low levels of debt, strong political systems, and conservative businesses communities, as does South Korea, a perennial innovator. Turkey gets a nod for its efforts to bring its poorer areas in line with wealthier urban enclaves, and others like Indonesia and Nigeria have notable potential. But Sharma also offers cautionary advice, courtesy of former Bank of England adviser Charles Goodhart's law: "once an economic indicator gets too popular, it loses its predictive value." Accessible to newbies and revelatory for veterans, Sharma's observations upend conventional wisdom regarding what it takes to succeed in the relentlessly competitive global marketplace. Photos & maps. (Apr.)

Publishers Weekly

"There is no better book for country-by-country accounts of emerging markets (and riskier ones called frontier markets). Its strong point is the author’s reliance on grassroots experience in each country, avoiding statistical charts."

Times of India

"At the core of this impressive book is the counter-intuitive argument that the boom of the mid-2000s was a blip in the long historical trend for emerging economies and that the next decade may be one of decelerating. In Sharma’s view, the much-hyped decline of the West and emergence of the rest may take a lot longer than optimists would like to believe."

India Today Magazine

"Breakout Nations is basically an investors lonely planet guide to the world for the new century."

Bloomberg "On the Economy"

"Mr. Sharma’s intent is to help you find the best places around the world to invest, emphasizing that it will take some work on your part."

New York Times

"Breakout Nations works best as a compilation of highly illuminating country vignettes—similar, say, to Michael Lewis' Boomerang... As with Mr. Lewis' work on the European crisis, for sheer readability and insight on the various parts of the ongoing developing world drama, I dare say you won't find a better choice."

Wall Street Journal - Jonathan Anderson

"... it’s refreshing to read Breakout Nations, Ruchir Sharma’s book on the Bric countries—Brazil, Russia, India, China—and the rest of the developing world... [H]is book offers a careful view that has little truck with forecasts of the relentless Bric-led rise of the emerging world."

Financial Times

"A primer to guide us... this is a great road-map to the new and better-balanced world in which we will all live, and an encouraging one."

The Independent

"It is really the focus of economic attention around the world. It is a whole new look at which economies are going to be winners and which are going to be losers."

Prannoy Roy

"[A] country-by-country tour de force of what makes emerging markets tick. He is an excellent writer with a keen eye for detail and a lyrical prose sense... As with Michael Lewis’ Boomerang on the European crisis, for sheer readability and insight on the various parts of the ongoing emerging drama I daresay you won’t find a better choice."

Wall Street Journal - Jon Anderson

"This week’s Book of the Week is, Breakout Nations by Ruchir Sharma, one of the world’s leading emerging market investors. This is the best book on global economic trends I’ve read in a while."

Fareed Zakaria

"This is among the best books to understand the emerging world and its positive and negative aspects. Sharma matches the brilliance of Thomas L Friedman, author of the widely cited The World is Flat."

CNN-IBN

"Breakout Nations is basically an investors lonely planet guide to the world for the new century."

Bloomberg "On the Economy"

A book that combines keen on-the-ground reporting and economic and investment analysis with lively, lucid prose.

Forbes

There is no better book for country-by-country accounts of emerging markets (and riskier ones called frontier markets). Its strong point is the author’s reliance on grassroots experience in each country, avoiding statistical charts.

Time Magazines of India

Managing director and head of emerging markets equity at Morgan Stanley, Sharma is responsible for figuring out what nations will break out next. Apparently not China, whose booming growth rate will have to go bust, which will suppress the promising economies of countries like Russia and Brazil. But Bangladesh, Nigeria, Poland, and Turkey look good to go. Information-packed and fun, too, with Sharma pondering the meaning of a $17 Bellini. For all smart readers.

Library Journal

For economic policy wonks or anyone interested in the ever changing global economy, listening to this fascinating examination of emerging markets—which nations are poised to rise or fall, and why—will be a delight. Sharma's vast experience in Morgan Stanley's Emerging Markets Division and his extensive travel in developing markets provides a broad view of global economic trends and fascinating interpretations of the issues facing developing nations. Alan Sklar's balanced and authoritative tone lends credence to the author's arguments as Sklar adroitly takes the listener globe-trotting with Sharma. Sklar's steady pace helps listeners keep abreast of the myriad anecdotes and information, although the reading of a chart near the end of the book loses the value of that found in the print version. M.L.R. © AudioFile 2012, Portland, Maine

SEPTEMBER 2012 - AudioFile

The head of Morgan Stanley's emerging markets division conducts a brisk worldwide tour in search of new markets ready for takeoff. No first-book jitters for Sharma, longtime columnist for the likes of Newsweek and the Wall Street Journal. His smooth, almost chummy style suits him ideally for guiding civilians through the sometimes-arcane thicket of the dismal science, looking for those emerging markets likely to disappoint or exceed expectations in the coming years. Sharma insists on the importance of on-the-ground observations, and he's recently visited all the countries discussed here. While recognizing that factors explaining growth change continually, he divulges some helpful, broad rules of the road. We learn, for example, why a particular nation's form of government counts less than the economic understanding and vision of its leaders, why the size and growth of a nation's second city is important and why the list of top-ten billionaires matters. He offers informed speculation on why Russia's Putin may have outlived his usefulness, why Sri Lanka, the Philippines, even Nigeria may finally be headed in the right direction, why Mexico continues to underperform, why Poland and the Czech Republic find themselves in the "sweet spot" of Europe, why the coming slowdown in China will feel like a recession and why Indonesia's new "efficient corruption" counts as an improvement over the old way of doing business. Sharma drills down even further, noticing and explaining the significance of the price of a hotel room in Rio, a single electromagnetic railroad in China, the road conditions in Vietnam, the decibel level of late-night revelry in a Turkish club, the popularity of Korean soap operas, jammed traffic in Jakarta or dangerous street crime in Johannesburg. Confining his predictions to the near future, Sharma refreshingly comes across as that rare thing Harry Truman once sought: a "one-handed economist" willing to stake his reputation without resort to "on the other hand" equivocation. For investors looking to place their bets and for general readers looking to understand the global economic landscape in the wake of the Great Recession.

Kirkus Reviews