Friday, July 19, 2013

Book Review: Breakout Nations: In Pursuit of the Next Economic Miracles

As business and economics books go, you can divide them into two broad classes: those that try to convince you about a specific strategy or model, and those which try to help you understand the dynamics of a situation and help you reach your own, more informed decisions.

Breakout Nations: In Pursuit of the Next Economic Miracles falls in the later category. And does an excellent job of it to boot.

That is not to say it does not contain any opinions or recommendations - far from it. But Ruchir Sharma keeps the mood more towards discovery than discourse, and that's what makes it so satisfying. The back-flap of the book mentions that Sharma tries to spend one week each month in an emerging market and this certainly shows. The chapters are peppered with personal anecdotes and understanding gained on the ground.

The coverage is wide with chapters and passages dedicated to China, India, Indonesia, Malaysia, Turkey, Russia, and many more. With each, Sharma traces the economic history, combines it with his on ground observations and financial theory and tries to show a path towards what to expect. His forecasts are generally contrarian: China for instance might not stay such a big economic story as the popular press will have us believe, and manufacturing might well shift back to the west.

Indeed this belief that most economic news is a lagging indicator which becomes popular just about the time the reality is about to change is a central thesis of the book. Sharma keeps his feet firmly on the ground as he picks his way from explosively growing China to emerging Africa.

Even if you end up disagreeing with his forecasts the book is a fascinating foray into several economic experiments across the emerging world and makes for a great read if only to gain a better understanding of how the global economic and financial systems work. And in a globally connected world, these are valuable insights indeed.

Recommended.

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