Breakout Nations

April 23, 2012
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 indicatorsâfrom income levels, to the number of billionaires in a country, to the pronouncements of local politiciansâSharma 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.