ziad k abdelnour: Emerging Economies – Black Holes or Treasure Troves?

It is often said that there is no gain without risk. The greater the risk, the greater the potential gain; and the greater the potential gain, the greater the potential risk. Investors look to emerging economies because the potential for gain is great; but at the same time, the potential risk is great. Until just recently, the investment world looked to the BRICS group of emerging markets to produce much of the growth for the world economy, and these five emerging markets played every-increasing political roles in the world due to their growing economic clout.

A look at Brazil, the “B” of the BRICS group, gives rise to concern. President Dilma Roussef just lost an impeachment vote against her, and this shows just how far Brazil’s current government has fallen in recent years. Since she took office, President Roussef has faced a host of problems, many of which are the direct result of her and her party’s leadership. The largest of these problems is corruption, which has been the undoing of many regimes in Brazil. Now, the massive Petrobras scandal has destroyed the credibility of the government and, in particular, of President Roussef.

India and China continue to meet expectations, despite China’s recent slowdown and India’s struggle with internal divisions; and Russia continues to play a greater role in many of the leading political and security issues facing the world today, despite its recent economic woes.

Read more: http://financialpolicycouncil.org/blog/emerging-economies-black-holes-or-treasure-troves

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