A 'Personal Finance columnist' in the Washington Post explores what she sees as the "next generation of markets" (H/T Paul Kedrosky). Her observations ignore why these countries are undeveloped in the first place. There are a few basic determinants for development (as paraphrased from Brink Lindsey's Against the Dead Hand):
- Stable government (of which democracies provide the most peaceful transitions and in which countries in civil war have none)
- Private property rights
- Free trade
- Availability of foreign investment
To assume that the countries she cites in the Middle East and Africa will result in growth simply as a result of time would be foolish. A better starting point would be to look at the
Heritage Institute's Economic Freedom Index or the
World Bank's Doing Business guides. While I think it's clear that there are some pretty interesting developments in a few specific countries, the dangers of investing in them should not be discounted as development at its core creates turbulence and therefore politically can result in a two steps forward, one step back type progress. On the other hand, it also seems pretty clear that some countries have only stepped back for the past few decades - Zimbabwe being an obvious case in point. If Zimbabwe and Venezuela prove anything at all, it is that countries do have a choice of whether or not to integrate with the world economy. With oil at a historical high, it is also dangerous to believe that this bonanza will go on forever.
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