Class 13 (The Final Class)

Today’s class focused on the emerging markets, specifically the BRICS nations that started the entire phenomenon of developing nations becoming competitive players in the global economy. The original term was coined by Goldman Sachs in 2001, but these BRICS nations are not what they used to be and some of them certainly did not live up to the promises Goldman Sach’s saw in 2001.

Brazil was a disappointing “rising star” to be included in the emerging economies list, due to their roller coaster economy. India has proven to be a strong contender in the BRICS battle and has risen to global status through investment in strong STEM education and a stable government leading them to the top. China is the most interesting emerging economy as they carved their path under a dictatorship. And lastly, Russia, is sort of a question mark right now. Their commodities and oils allowed them to make the original list, but they have no safeguards and very high risks when it comes to regulations, which can put a bad taste in many investors mouths.

So what is the point in discussing emerging market trends? Why do we care about these “promising” economies and where they may go in the next 10-20 years? Some care because they see these markets as major competitors for outsourcing labor and begin to share views of populism as they close their borders and protect their home markets. Others care because these economies can be very good predictors on where the world is headed. Investors will put their money where they see the most success - buying low and selling high. Emerging markets with promise can be the perfect place to begin for these high pay offs. It is also interesting to study these emerging countries to see if there is a pattern between economic and political regulations to success of a country. There are arguments that free market economies with democratic political systems lead to the highest success rate, and there are people out there who will argue there is no correlation, quoting Chinese success as their main argument.

Regardless of the trends or fears that people may have, it is hard to say that studying emerging markets is a “waste of time” because at the end of the day, these markets really can predict the future of our global economy, so it’s worth paying attention.