EMERGING MARKET BLUES


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While the developed equity markets registered strong gains, emerging market indexes remained weak.
The MSCI EM Index, which tracks these lesser-known markets, has gained just 47 percent since 2009, compared to the MSCI World Index, which gained more than triple that amount during the same period.
The World Bank cites a litany of issues stifling growth: poor business climates, the weak rule of law, poor productivity, and too much debt. According to the bank, these countries’ debt load has risen faster since 2010 than at any time since 1960.
The growing prospect of insolvency could lead to a financial crisis in emerging economies, the bank says. They cut its growth forecast for the sector from 3.4 to 3 percent in 2020.
TREND FORECAST: As emerging market economies further weaken, social tensions will continue to escalate, crime and violence will increase, homeless populations will swell, and masses will risk their lives to immigrate to safe-haven nations. Thus, the anti-immigration and populist political movements among developed nations will gain strength.

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