Copying and distributing are prohibited without permission of the publisher
Market View: Will the crisis act as a "tipping point" for emerging markets?
09 October 2008
Dickon Harris asks whether there are any grounds behind claims that the credit crisis will be a tipping point for emerging markets, and if so, which countries look set to be hit hardest.
risk analysis emerging market
Last week World Bank president Robert Zoellick issued a
number of warnings about the need for the G-7 to improve its
decision making process, stating: "The G-7 is not working", and
called for Brazil, China, India, Mexico, Russia, Saudi Arabia,
and South Africa to join the present group to serve as, "a
better group for a different time".
Among his most worrying prediction was that events in the
financial markets in the last two months could act as a
"tipping point" for emerging markets as they struggle to retain
foreign direct investment.
Zoellick says: "The events of September could be a tipping
point for many developing countries. A drop in exports,
as well as capital inflow, will trigger a fall off in
"Deceleration of growth and deteriorating financing
conditions, combined with monetary tightening, will trigger
business failures and possibly banking emergencies. Some
countries will slip toward balance of payments...
You must be logged in to view this page. If you are already a registered user please log in. Alternatively, you can request a free trial or subscribe.
Already have an account?
Subscribers have unlimited access to all current and archive content. Start your
subscription today - click on the button below.
Taking a free trial will give you access to the latest news and analysis for seven days
(excluding some surveys and articles). Start your free trial today.