Back to the Truth in GOP

The period of 10-15 years we left behind is bonanza years for emerging economieswill be referred to as. If it is necessary to define this period by inspiring from our own history, it is possible to use the term “Tulip Age”. As the level of development in that production engine in the world are no longer alone in China in a difference stage, Brazil, Russia, Turkey, by making projections containing very high growth rates for countries such as India suggests that this group of countries is the new engine of the world economy. At the point reached today, we witness that the stagnation has started in almost all of this country group. In particular, Brazil, Turkey and Russia took place in the economic success stories of corruption scandals and political uncertainty. It is possible to make financial reading of this in the currencies of countries that rapidly lose value.

When it is necessary to carry out an economic philosophy on a typical emerging economy model in this period, it is possible to say that these countries do not have such important growth stories. The high growth rates recorded were not due to increases in productivity, but due to an increase in commodity prices or domestic demand supported by the increasing public debt of the public / private sector.

In this process, it would not be equitable to draw a dark picture for all developing countries. At this point, it is useful to mention especially China and other East Asian countries. These countries have become an important power with the global firms they have issued and their middle classes. But these countries still have not been able to implement some vital transformations for their economies. For example, India has a considerable workforce, especially in the field of information technology, but the education level of most of the country is still low, leading to reduced productivity. In China, the one-party regime is ongoing, and it is obvious that the country will take steps to become a developed country with this political architecture. The uncertainties brought by this regime at the same time are too large to be ignored.

The effects of the difficulties that developing countries will have to face are quite evident in the financial markets. Capital flows have turned negative since 2013. Likewise, valuations in the stock markets are significantly below when they encounter those in developed countries emerging from the global crisis.

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