velasco145_Amarjeet Kumar SinghAnadolu Agency via Getty Images Amarjeet Kumar Singh/Anadolu Agency via Getty Images

The Submergence of Emerging Markets

Despite what many think, the world as a whole has become vastly more equal, thanks to decades of rapid growth in China, India, and other emerging economies. But that welcome trend will be in danger if emerging markets enter a sustained slowdown, as now seems likely.

LONDON – It was an off-the-record, online conversation about the state of the world. Nobel laureates, former government officials, and hedge-fund managers held forth on geoeconomics, warfare, artificial intelligence, green investments, how to avoid the next pandemic, and other lofty topics. But here’s what struck me: two hours into the discussion, no one had yet uttered the phrase “emerging markets.”

China came up, of course, but only in relation to what might happen to Taiwan if Donald Trump returns to the White House. India’s alleged growth miracle last year went unmentioned. Turkey was mentioned only in the context of Middle East politics. South Africa? Nope. Brazil? Remind me: where exactly is Brazil?

What a contrast to the mood only a few years ago. I remember a dinner at the annual World Bank/International Monetary Fund meeting, during which a half-dozen European finance ministers stared into their salads and feigned patience as a minor official from the People’s Bank of China received all the questions from the assembled investors. Back then, everyone wanted to talk about emerging markets. Their growth kept the world economy afloat when the economies of rich countries tanked in 2008-09 and again in 2020.