A new lease of life for the Brics

Emerging markets are having a surprisingly good crisis. Their long-predicted rise will now continue.

Xi Jinping © AFP via Getty Images
The world will soon be under new leadership © Getty
(Image credit: Xi Jinping © AFP via Getty Images)

One of the first things markets decided about the Covid-19 crisis was that it would hit emerging markets hardest. It’s not hard to see why that made sense. Fragile health systems could easily have been overrun. Slums and shanty towns make it very hard to self-isolate or socially distance. Corrupt, rackety governments would not be able to respond and debt ratios would rip out of control as economies and tax systems collapsed. It is, in general, much easier for rich countries to deal with an emergency than poor ones – they have more money.

But the first judgement is not always the correct one. And as the crisis hopefully starts to ease, that verdict is looking less convincing. Many of the emerging markets might struggle in the short term, but in the medium term they are likely to emerge as the big winners for three reasons.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.