Tuesday, May 1, 2012


The Philippines is one of three Asian countries poised for an economic “breakout” according to a new book written by Morgan Stanley emerging market guru Ruchir Sharma.

He suggested that focusing too much on the BRIC countries – Brazil, Russia, India and China – the stars of emerging markets in the last decade, is old news.

Sharma, head of emerging market equities and global macro at Morgan Stanley predicts that the next countries investors will flock to are Poland and the Czech Republic in Europe and the Philippines, Indonesia, Thailand and Sri Lanka in Asia.

Sharma urges investors to look closely at “break-out” nations.

“As an era of easy money and easy growth comes to a close, China in particular will cool down,” the book description says.

“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,” he predicts in his new book, "Breakout Nations: In Pursuit of the Next Economic Miracles” (Norton Books, 288 pages) that was released earlier this month.

Sharma says Poland and the Czech Republic are the "sweet spots" in Europe.

His "breakout nations" picks in Asia are the Philippines, Indonesia and Thailand. All three suffered a lot in the 1990s when China devalued its currency and took away a lot of their manufacturing base.

"Now the opposite is happening. China's currency is appreciating a lot and Chinese wage inflation is picking up. These economies can benefit from the fact that their currencies are quite competitive and we could see some manufacturing return to these economies, which are also well run now," Sharma explained.

According to Kirkus Review, Sharma “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 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. 

It’s a must-read 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,” the critic continued. 

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