The Rise and Fall of Nations

May 1, 2016
This efficient, positive guide for the practical observer and investor shows how to choose healthy emerging markets. After the 2008 global financial crisis, impermanence is the watchword, writes Sharma (Breakout Nations: In Pursuit of the Next Economic Miracles, 2012), the head of emerging markets and global macro at Morgan Stanley Investment Management. Since no one seemed to have been able to predict the 2008 meltdown, and the most-hyped emerging nations of Brazil, Russia, India, and China (BRIC) have now fallen into being considered a "bloody ridiculous investment concept," the author urges the use of skepticism, short-term planning (five or six years), and reliable data in trying to grasp forces of change. His "rules," developed over "25 years on the road" with a team of researchers, encompass the factors of growth in some "fifty-six postwar emerging economies that managed to sustain a growth rate of 6 percent for at least a decade." In each chapter, rather than moving country by country, Sharma tackles one of these factors. He looks at demographic data in order to get a sense of the makeup of the available workforce (falling birthrates are prompting countries to add incentives for having babies, such as in Singapore, France, and Chile, along with increasing the retirement age and attracting migrants), and he considers whether a new political leader will be able to enact reforms (e.g., Brazil's Lula da Silva), investigates areas of income inequality (e.g., billionaires in India), and examines state spending and how to make the most of a country's "geographic sweet spot" (e.g., Korea, Taiwan, Vietnam). Sharma discusses investment in factories, the measurement of food prices, and the importance of ignoring the "hype watch" and of keeping an eye on the locals to determine when a country is in crisis or recovery. The final chapter is a rather bold assertion of which countries might be considered "the good, the average, and the ugly." Evenhanded, measured, sage advice on the global economy.

COPYRIGHT(2016) Kirkus Reviews, ALL RIGHTS RESERVED.

Starred review from May 15, 2016

Sharma (head of emerging markets & global macro, Morgan Stanley Investment Management; Breakout Nations) offers ten rules in evaluating global economic growth since the 2008 financial crisis. Negative factors include a stagnant or shrinking labor force, stale leadership, rent-seeking "bad" billionaires, too much government spending, a too strong local currency, high private sector debt, and popular press hype. The author explains that geography can be a positive for progress if an advantageous location is exploited through openness and trade. Sharma also finds prolonged development in countries where investment is made in productive assets combined with low inflation. In a concluding chapter, he conducts a quick survey of where his principles currently point to advancement. Sharma presents a wealth of data and insights into the economic condition of the post-2008 world that he says is increasingly marked by deglobalization. Some of his conclusions may seem jarring but are always thought provoking, such as that past population control measures are now causing labor shortages and that economic forecasting beyond five years is rarely accurate. VERDICT This articulate work is highly recommended to all readers interested in global economics. [See Prepub Alert, 12/14/15.]--Lawrence Maxted, Gannon Univ. Lib., Erie, PA

Copyright 2016 Library Journal, LLC Used with permission.