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    To identify breakout nations it is key to travel with an eye toward DC: World Bank, The book titled Breakout Nations focuses on the factors regulating the development of nations. It talks about the pace of development when the economic and. Request PDF on ResearchGate | On Jan 1, , Victoria L. Rodner and others published Ruchir Sharma, Breakout Nations ().

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    Breakout Nations Pdf

    The argument of Breakout Nations is that the astonishingly rapid growth over the last decade of the world's celebrated emerging markets is. Breakout Nations: In Pursuit of the. Next Economic Miracle. Sharma, Ruchir. ( ) W. W. Norton & Company, New York, London. “If the local prices in an. Breakout Nations - Ruchir Sharma - Ebook download as PDF File .pdf), Text File .txt) or read book online. Security Analysis.

    Posted on , by luongquocchinh. Which countries will rise to challenge them? To identify the economic stars of the future we should abandon the habit of extrapolating from the recent past and lumping wildly diverse countries together. We need to remember that sustained economic success is a rare phenomenon. As an era of easy money and easy growth comes to a close, China in particular will cool down. Other major players including Brazil, Russia, and India face their own daunting challenges and inflated expectations.

    The chapters on China, India, Russia and Brazil are lack depth and these are totally ou Due to tremendous hype about this book, I read it but I was surprised that it is nothing but some random notes on various economies of the world.

    The chapters on China, India, Russia and Brazil are lack depth and these are totally outdated. For example: About Brazil: The author says that Brazil cannot grow because the cities are conjested and the it doesn't invest in infrastructure.

    The writer seems to neglect the geographical and the climatic conditions of Brazil. How can a nation have cemented roads all the year long in the middle of siteian forest? If the restaurants in Sau Paulo are costlier than those in Paris, then it doesn't mean that the economy of Brazil is in danger. With a per capital income of USD Then when should a country focus on Education and the Medical needs of its people? Brazil started investing in welfare when the per capital increased from USD Does it still need to wait?

    The author feels that the Brazilian real is overvalued due to which its exports have suffered. But Brazil still continues to be the largest exporter of Iron Ore.

    Large iron and manganese reserves are important sources of industrial raw materials and export earnings. Thus, respected economists say that the country won't be deeply affected by the current world economic crisis. Such comparisions are driving an informed reader, insane.

    About China: If China builts a magnetic train from the middle of Shanghai to the airport and if the train is not overcrowded, it doesn't mean that China has made a wrong investment in infrastructure.

    Author mentions that China is today, what Japan was in s. He neglects the size of two countries and also neglects that fact that Japan was never cheap in technological products but China was able to deliver cheap tech. Japan never invested in the African countries but China has.

    The total for the three decades: Adam Przeworski of the University of Chicago and New York University has pointed out very similar evidence for the postwar era: There are democracies in India and Indonesia. Many economists. We found that in the s. Despite widespread concern that China already has too many hotels. By some estimates China already has a 25 percent share of the global luxury market.

    In the last decade China began to widen development from the southeast coast to the interior. The suppressed Chinese consumer does not exist. In China the bomb would be triggered by the slump in job creation and explode in the form of labor unrest.

    China bulls respond to that argument by pointing out that domestic consumption in China is falling as a share of GDP. Chinese consumption is growing fast. For the last thirty years Chinese consumer spending has increased at an average annual rate of almost 9 percent.

    China continues to replace the United States or Europe as the leading market for one major multinational company after another: It is also a full percentage point faster than the average rate in Japan. Over the past decade investment grew at an annual rate of 15 percent. Louis Vuitton now boasts seventeen stores in cities beyond the major urban centers of Beijing and Shanghai.

    The statistic is correct. The scale of this expansion is hardly unusual or limited to luxury goods. In short. No one gains if the slowdown comes hard and fast. The idea that Beijing has somehow starved its consumer class also defies the widely available and well-known evidence of a consumption boom.

    Chinese men are rethinking themselves in a new. Other factors. Japan has averaged just 1. And it still has a long way to go before it achieves anywhere near the level of modernization that Japan had reached in the mids. Back in the early s Japan was forced by the United States and its other leading trading partners to revalue the exchange rate as it was running large trade surpluses. A slower China means a less disruptive China. Many economists viewed revaluation as a natural step.

    The slowdown of China will lower the trajectory of a star that has altered the arc of human progress. While China has also moved toward greater exchange-rate flexibility—the yuan has risen in value steadily since —it has done so more gradually than Japan. At the time. Compared with Japan in the s. China is the equivalent of a company with revolutionary technology: By the end of the s the value of the yen had risen by 80 percent against the dollar. Japan was downloading billions of dollars to hold the value of the yen at to the dollar.

    China started its modernization drive in from a much lower base than Japan. Over the next fifteen years GDP growth downshifted—first to 5 percent. If China moves to a 6 to 7 percent growth path in the coming years. Again the comparison to Japan is telling. China is also less heavily urbanized and is aging less rapidly. But it will hardly be a cataclysmic event for the global economy. So the shock will be partly psychological: After all.

    Those who bet everything on riding the coattails of China growing at 8 percent or better will face a much nastier surprise. There were many versions of the tale. The magician reappears. The rope starts to dance like a cobra and climbs to a great height.

    Magic societies have offered hefty rewards. Then limbs. The magician bows to applause and calls for the boy.

    He grows impatient. The mischievous boy assistant scrambles to the top of the rope and disappears. India has.

    It has more than 5. Indian stocks move up and down more closely in sync with the global emerging-market average than the stocks of most other countries do. In recent years visitors have been returning from India in a similar state of awe.

    All of that is real. When historians dug into the origins of the Indian rope trick. At least until the last months of This is an incredibly diverse country in which youths still have a choice between world-class engineering schools and Maoist rebellion. Until the s the Indian government was still working hard to rally the nation against the dangers of overpopulation. Sheer size and diversity make it possible to assemble almost any picture of India. The conventional view is that India will be able to put all those people to work because of its relatively strong educational system.

    Foreign analysts vie to predict how fast India will rise as an economic power. The state of Uttar Pradesh. India now risks falling for its own hype.

    Many outsiders were just as confident before the recent signs of trouble. By the average Chinese will be thirty-seven years old. Many Indians now see demographics as a critical advantage in competition with the nation it regards as its chief rival: Every society is complex. President Calvin Coolidge. Singh could not force reform on a political class and culture that had grown deeply complacent. China is not the only possible model for India.

    Singh helped open India to global trade in the early s. But to assemble a composite picture of India that looks just like s China. Critics said that his low-key. With no independent political base of his own. India does indeed look much like China of the s.

    While for decades China summoned the will to produce a new round of landmark economic reforms every four to five years. By many indicators. Culturally and politically India has far more in common with the chaos and confusion of modern Brazil than with the command-and-control environment that defines China. Singh owes his position entirely to Congress Party president Sonia Gandhi.

    India was in crisis. When Singh was tapped to become prime minister in A man of few words. The early signs of an unraveling have begun to emerge under the administration of Prime Minister Manmohan Singh. In addition Singh lowered import tariffs from an average of 85 percent to 25 percent. People tend to be on the move. There is something to this—India is rife with contradictions. To Indians who have seen it. Indians and Brazilians are a lot more like the Italians than like the Germans.

    These societies tend to be family oriented. If this description sounds questionable to businessmen or tourists who know Brazil and India as open.

    Prime Minister Singh is fond of remarking that whatever can be said about his country. I feel it all the time when I visit these countries. The most popular soap opera in Brazil in recent times has been A Passage to India. The spoken word is often flowery and vague. In an environment this familiar. High-context societies believe deeply in tradition. Of course Brazil and India are far from the only high-context cultures—this style of social interaction is typical in much of Asia and Latin America.

    Widespread corruption is an old problem. Prime Minister Singh. It was easy enough for India to increase spending in the midst of a global boom. Since The political elites of India and Brazil share a deep fondness for welfare-state liberalism.

    India may meet the same fate as Brazil in the late s. Top government officials told me that such cronyism is just a normal step in development. Indians and Brazilians are only loosely aware of their connection. If the government continues down this path. In Google downloadd a California-based social networking site called Orkut. Inspired by the popularity of the employment guarantees.

    One of the key mistakes made in Brazil was indexing public wages to inflation. In politics there is also a distinct Indo-Brazilian connection: Under the current regime of drift in India. As investment dries up. Indian companies should not need to chase growth abroad. Lately Indian businessmen have been regaling one another with accounts of a leading politician from Mumbai who is known to have amassed huge wealth through property deals.

    Investment by Indian businesses has declined from 17 percent of GDP in to 13 percent now. But in India the moves suggest that many companies are going abroad in part to avoid the problems of doing business in the home market. India is approaching the point that Latin America and parts of East Asia hit in the s.

    Supply falls behind growing demand. There are lots of stories that dramatize the spread of a graft-driven inflation threat in India. Lately businessmen in Delhi and Mumbai have been complaining ever more bitterly that the cost of starting new businesses in India has gone up dramatically over time because of the sharp increase in the number of demands for government payoffs.

    The first stirrings of deep middle-class discontent appeared in as many urban Indians started to rally behind social activist Anna Hazare. Overseas operations of all Indian companies now account for more than 10 percent of overall corporate profitability.

    In more than a third of Indian households had. In and the first part of When emerging nations start spending too little on investment at home. At a private screening of. At a time when India needs its businessmen to reinvest more aggressively at home in order for the country to hit its growth target of 8 to 9 percent foreign investment is well below the required totals.

    Given the potential of the domestic marketplace. This information provides a quick bellwether for the balance of growth. One of the secrets of the successful East Asian growth stories was that Japan.

    Lately the enterprising moguls are getting replaced on the billionaire list by a new group: A Better Class of Billionaires? In the global media India is closely associated with its dynamic technology entrepreneurs.

    When the producer asked if he was taken with the leading lady. India has always been top-heavy with billionaires. But this misses the retreat inward. If a country is generating too many billionaires relative to the size of its economy. India needs to create a society governed more by rules than by the personal connections that put potentially productive assets like land. Russia has one hundred billionaires. To avoid a crisis. In this category India outranks China with one and Japan with zero.

    But wealth at the top is exploding. A rule of the road: Creative destruction lies at the heart of a prospering capitalist society. Comparing the changes in the list of top-ten billionaires in India and China reveals how differently each economy is developing. Healthy emerging markets should produce billionaires. The Dow index of the top-thirty U. Nepotism rules in Bollywood.

    Turnover at the top has been slowing.

    This is the only way to explain the fact that in the last fifteen years China has generated much more growth. This is emblematic of a creeping stagnation at the upper echelons of the elite. That is not to say that the charges were baseless. Crony capitalism is a cancer that undermines competition and slows economic growth. Ever since the passage of the antitrust laws.

    It is also telling that the man who held the title of richest man in China in the year —discount-appliance king Huang Guangyu—is currently in jail on insider-trading and corruption charges.

    A Portrait. India lags behind only Russia and Malaysia in terms of the wealth of its billionaires as a share of the economy. To an extent the strategy is succeeding. China faces widespread labor strikes and protests against corrupt local officials. Back in the comparable figure was just 68 percent. That is why the United States confronted the problem and moved to take down the robber barons by busting up their monopolies in the s. Nine out of the top-ten Indian billionaires on the Forbes list are holdovers from the list.

    In the ruling Congress Party the situation was more extreme: The rejection rate dropped to 50 percent amid the boom of the last decade. The definition of the in-group is shifting from the national to the state level. The reason family dynasties can survive in a country so aggressively inclined to vote against incumbents is that the politicians never quit politics.

    Voters look less and less to the central government for answers to their problems. This continuity at the top persists despite the growing hostility of Indians to incumbent politicians. Voter turnout runs 10 percent higher for regional elections than for national elections. The Congress Party suffered its first losses in a national election in the chaos of the late s as a multiparty democracy took root. To this day the Congress Party remains highly centralized.

    The Gandhis are the only national brand in Indian politics. Often these are regional parties with a provincial focus. In Tamil Nadu. In these places the Congress Party and its major national rival. In many states political competition amounts to a merry-go-round. Traditionally Parliament poses for a big photo-op before general elections. As Indians come to see themselves first as citizens of Bihar or Tamil Nadu. Indians became the least loyal voters in the world. They just wait for the next election and stage a comeback.

    In India state governments matter because they control more than half of all government spending. Southerners saw themselves as harder working.

    As central power fades. It is important to remember that during centuries of Mogul and British rule.

    The complexity of regionalization is a big reason why the future economic growth of this country is so tough to call. The North-South Divide The center of economic dynamism is shifting from the South and parts of the West to the major population centers of the central and northern heartland. Soon thereafter things began to change. Predictably this produced a certain arrogance in the southern states.

    The rise of the rest in India resulted from a number of factors. India was never a single nation-state. Between and the average economic growth rate of the southern states decelerated from 7 percent to 6. Even at the height of Mogul power in the seventeenth century. If the corruption issue has discouraged many businesses from investing. Back in incomes in the most-developed states were 26 percent higher than those in undeveloped states.

    India is again starting to look like a commonwealth of states with distinct identities and waning national consciousness. The most striking example comes from Bihar. Bridges and roads got built. Now its economy is growing at an 11 percent rate. He forced the police to start pursuing crooks.

    Kumar and other new leaders are taking the simple steps required to start growing from a poor base—particularly building new roads and wireless telecom systems.

    Breakout Nations: In Pursuit of the Next Economic Miracles

    To an extent. In China the rich southern states experienced a boom for three decades. Lawless Biharis even started to pay their taxes.

    Andhra Pradesh. Literacy rates are rising faster in the North than the South. Bihar started to function. The global commodities boom has also worked to the advantage of these regions. The economy in six Indian states grew faster than 10 percent in In a recent analysis Credit Suisse showed that over the last twenty years many Indian states have undergone rapid growth spurts. The southern states have also seen a decline in the competence of their leaders.

    He has also implemented a law under which the property of a corrupt public official can be seized. Meanwhile India as a whole was going the opposite way. Some southern Indians explain this away by saying that they already had their big boom. In a state government known for throwing up every possible bureaucratic obstacle to getting any project done. This helps explain why Congress is now the governing party in only two of the ten major Indian states.

    Kumar parted the sea of paperwork through which state engineers had to swim just to build a bridge. To punish these characters in a state with a nonfunctioning judiciary. One is the rise of the Hindi-language press. Madhya Pradesh. While most multinationals have avoided entering the Hindi heartland. Even within cities. This is India at its tradition-minded extreme.

    It appears to be a nation without much sense of modern aesthetic. The growing wealth of the Indian hinterlands finds expression in many ways.

    Walk in any door. The CEO of a large Korean consumer company recently told me that while Chinese consumer tastes are growing more homogeneous. In recent times the premium that advertisers pay to appear in English-language papers has fallen from 1. If you parachuted into the center of any town or village in India. Urban residents of poor states are now as likely to have mobile phones as are residents of rich states.

    It was a striking sign of modernity arriving in Bihar. In China. Beauty parlors mushroom at every corner. Among increasingly brand-conscious young men in northern India it is popular to flaunt the red band of Jockey underwear over low-waisted denim jeans.

    As Beijing relocates members of the Han Chinese majority—who constitute 90 percent of the population—to minority regions. In rural Bihar. Car sales are increasing faster in the North than in the South.

    In India that generally meant the cities and the South. In China everyone is learning to speak Mandarin. Brand managers need to think of India as a United States of Europe and deal accordingly with the problem of selling goods in a nation where even the dates and names of the holiday seasons—as well as the peak seasons for brand advertising—shift state by state.

    This has allowed the new consumerism to penetrate the most rural and traditional corners of the country. In India there are mainly regional snacks. The roster of festivals covers everything from the harvests in January and August to religious celebrations of gods and goddesses.

    The growing sense of Chinese nationalism. I say. Many are celebrated in some states but not others. As of It was often possible to hire a stand-in to undergo the sterilization for a measly sum.

    Gandhi struck back and imposed emergency rule that hot June. In the last decade. Even into the s the new government kept urging Indians to embrace population control as a civic duty. The shelves of Indian libraries groan with research reports that argue for the inevitable wonders of this demographic dividend. After two. A common crack at the time. Candidates were then pressured to undergo the fifteen-minute surgery by roving sterilization teams. The program required every government employee to identify at least two candidates who had fathered two or more children.

    During the s and s the growing population was seen as a threat to the economy. The catchiest advertising jingle of the decade was a public-service ditty that went like this: On the advice of family and close confidants. The government tried to break down the widespread resistance by offering volunteers a free radio. The Congress Party lost the election. For the last five years government spending has been growing at a 20 percent annual pace.

    For now the demographers rule. China was able to convert its growing labor force into an economic miracle by encouraging a rapid mass migration of inland farmers to the more productive coastal cities. The development of this habit—deficit spending in good times as well as bad—was a major contributor to the current debt problems in the United States and Western Europe. Over the last decade. A recent survey by the consulting firm Aon Hewitt shows that salaries of urban workers are rising faster in India than anywhere else in Asia.

    Consulting trends like these should be treated with the amused detachment they deserve. The Gandhi family has continued to show its trademark sensitivity to the poor.

    India Is a Political Chameleon. Over the past decade the share of the Chinese population living in urban areas rose from 35 to 46 percent. The growth in demographic analysis as a global industry is striking. These are exactly the factors that have prematurely choked growth in other emerging markets.

    The great Indian rope trick may be impossible. Lesser versions of the rope trick—with no one disappearing into the sky and no falling body parts—are still impressive enough to keep audiences riveted to the show. No other large economy has so many stars aligned in its favor. The recent case of national overconfidence could give way just as fast to a healthier sense of urgency.

    It was only in the last decade that India came to see itself as the next China.

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    Indian policy makers cannot assume that demographics will triumph and that problems such as rising crony capitalism and increased welfare spending are just sideshows instead of major challenges. Only now is the southern sense of superiority over the North giving way to a newfound respect. These include some of the most dynamic urban areas. In China twenty-three cities have grown from a population of one hundred thousand to more than a million since But destiny can never be taken for granted.

    The wild card for India is its freewheeling democracy. Rising population helps drive growth when people are moving to higher-paying and more productive factory jobs in the cities. Even if they were ignoring the basic dynamics of how demographics. India has only six cities in this explosive growth category.

    Almost every major emerging-market currency has strengthened against the dollar over the last decade. Brazil is a top exporter of every commodity that has seen dizzying price surges—iron ore. If there is a divine hand here. Foreign money-flows into Brazilian stocks and bonds climbed heavenward. The flood of foreign money downloading up Brazilian assets has made the currency one of the most expensive in the world. Brazil is the un-China.

    Hotel rooms cost more in Rio than on the French Riviera. But Russia. Wages were pegged to inflation but were increased at varying intervals in different industries. Those who make this comparison are referring only to the fact that they are the biggest players in their home regions. Economists have all kinds of fancy ways to measure the real value of a currency. On a recent visit I spent twenty-four dollars downloading a Bellini for a girl from Ipanema. In early the major Rio paper. Prices rose so fast that checks would lose 30 percent of their value by the time businesses could deposit them.

    Brazil had just put together a four-year run of 4 percent growth. There is no better example of how absurd it is to lump all the big emerging markets together than the frequent pairing of Brazil and China. Since the early s the Brazilian growth rate has oscillated around an average of 2. This is not the profile of a rising economic power.

    But even taking into account the fact that it is harder for rich nations to grow quickly. It may not be entirely fair to compare economic growth in Brazil with that of its Asian counterparts. O Globo. It spends too little on roads and too much on welfare. Brazil has pushed reforms only in the most dire circumstances. China has been pushing too hard to keep its currency too cheap to help its export industries compete.

    While China has introduced reforms relentlessly for three decades. But by the s. Brazil has long since entered a zone that should be considered excessive.

    Fearful of foreign shocks. Each new president came in with a plan—typically a different version of the same plan—which was basically to freeze prices and introduce a new currency. The cruzeiro yielded to the cruzado. Obsessed until recently with high growth. As soon as they were paid. Hyperinflation finally came under control in Those high rates have attracted a surge of foreign money.

    Brazil lost its way and succumbed to the populist appeal of trying to lock in a comfortable lifestyle: This is not how Brazil used to be. While China is just starting to ponder the creation of a welfare state. China is only now beginning to consider a shift in spending priorities to create social programs that protect its people from the vicissitudes of old age and unemployment.

    Brazil has battled inflation ever since by maintaining one of the highest interest rates in the emerging world. A former executive of a major U. The average student in. The arteries of the labor pool are just as clogged. If the nation invests too little in its schools and is producing too few highly skilled workers. New manpower is not available as freely as earlier.

    Check my emphasis on the word 'Almost'. Due to the migration of villagers into the cities, the housing price in the cities have gone up very high.

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    Now, just consider, how can an upmarket residential price go up because of the labourers? Does he mean to say that the laborers have converted the upmarket areas into slums and that the rich doesn't have space to live? This is partially true because Chinese economny is export oriented and it must keep the production cost low. But who has prevented China to employ the people from Mongolia? Secondly, lot of Chinese industries have already started migrating to Vietnam, Combodia and even Africa.

    Author has totally forgotten this fact. Has any nation prevented it from doing this? Isn't this a world-wide phenomenon? This happens everywhere.

    Why single out China? About India: Agreed, that there is a regional market in India but that doesn't mean that the global brands do well only on certain big cities in India. It is surprising that the author has linked the local politics to influence the choice of people over commodities. The consumer tastes of India cannot be as homogenous as other countries but the global brands have same acceptance everywhere in India.

    Even a child in India knows that there is more undocumented money in India than on the Govt. If you closely study the GDP of Indian states, you will find a comparable growth.

    Look at the per capita of Bihar.

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