The End of Emerging Markets?
By James Crabtree,
The story of the coronavirus has so far been told mostly from the perspective of rich countries, but its harshest effects will still likely be felt by the world’s poor. Africa’s cases rose by nearly half in a single week in April, while India’s numbers continue to tick up. Some of the world’s worst outbreaks are taking place in nations such as Brazil, Ecuador, and Turkey. The pandemic’s epicenter could easily return to Asia or move onward to Latin America.
Beyond this public health emergency lies a devastating economic threat. Only bold action from the U.S. Federal Reserve has staved off what would almost certainly have been a rolling series of financial crises for emerging markets in the aftermath of March’s record $83 billion in capital flight. But the pandemic now threatens a more profound shift, bringing an end to the very idea of emerging markets—namely fast-growing poorer countries able to make rapid strides towards development, becoming the darlings of financial investors in the process.
Photo courtesy of Omni Matryx.