A Review of Ruchir Sharma's Breakout Nations

Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma
My rating: 5 of 5 stars

What is much better than a book that sensibly cautions against taking the conventional wisdom without regular review?. Ruchir Sharma has taken on the assumption that the BRICs are guaranteed to dominate world affairs (economic and political) for the medium term. That the BRICs have grown at an unprecedented scale is not in dispute but perhaps some caution should be taken in the assumption that the four have an easy and guaranteed path to the attainment of high income levels that would eventually dwarf the US and European economies.

History alone suggests that high growth as maintained by these countries tends to be episodic and is often difficult to maintain. Forecasts and claims that the BRICs story growth story of the early years of the millennium is bound to continue should be carried with more caution than analysts acknowledge. The primary claim is that all the BRICs benefited from a surfeit of cheap money from the more developed economies and may be unable to repeat their performance in the future.

More interesting is the author's finding that there are other countries whose prospects are far better than individual members of the BRICs group. Granted, not all of these Breakout Nations have large populations or huge internal markets but they have the basics right. In this group are Turkey, South Korea, Taiwan and Indonesia.

Among other profound conclusions, the author sensibly advises that it is more prudent to analyze the prospects of individual countries without relational on bogus quantification and indices that aggregate different countries.