Fascinating investigation

Breakout Nations by Ruchir Sharma; Penguin Books; Price: Rs.599; 292 pp Why are some societies and nations just, egalitarian and prosperous while the majority aren’t? In a world awash with money yet paradoxically afflicted with poverty, injustice, inequality and inhumanity, India-born New York-based Ruchir Sharma, manager of the emerging markets and equities portfolio of the global investment banking corporate Morgan Stanley, addresses this anomaly and related questions with engaging clarity and insight. The outcome is this lucidly recounted investigation into the development prospects of nations written almost like a detective novel. Little wonder Breakout Nations is riding high on The New York Times and other bestsellers lists worldwide. Contrary to popular belief, the socio-economic phenomenon known as globalisation which has transformed the old world — separated by impervious borders — and reshaped it into a new integrated global economy, didn’t drop out of the sky one fine day. This phenomenon has its origins in the new technologies boom in Silicon Valley, USA following which huge fortunes were made by daring entrepreneurs such as Bill Gates, Larry Ellison and other information technology (IT) pioneers. The unprecedented success of Silicon Valley entrepreneurs prompted the rise of a new tribe of venture capitalists and investment bankers who were, and still are, ready to bankroll and invest in young IT — and later other business — entrepreneurs not only in the US and OECD countries, but around the world. The huge fortunes made by IT entrepreneurs and venture capitalists inspired American banks flush with funds to break out of their traditional role of lending working capital to industry and transform into multipurpose financial enterprises and investment banks,  investing for profit in promising firms, businesses and companies, especially in high-potential emerging (formerly under-developed) nations. Thus was born the hazily defined phenomenon now known as globalisation. Breakout Nations was conceptualised after the author had a casual encounter with the heir- apparent of a typical post-liberalisation nouveau riche Indian business family, who after learning that Sharma was a New York-based investment banker looking for investment opportunities, remarked, “Well of course. Where else will the money go?” But given the patchy record of emerging nations in harnessing the $1 trillion (Rs.5000,000 crore) per year flowing into them, and emerging markets beginning to be regarded as “the problem children of the financial world” as early as the mid 1990s, the answer wasn’t as obvious as the young man believed. So the author hit the road (“for the last 15 years I have typically spent one week every month in a particular emerging market”), to investigate and predict which will be the nations of the future to break through the 7 percent GDP growth ceiling which had cabined, cribbed and confined developing nations during the 20th century. The outcome of his peregrinations which begins with an overview of the much hyped BRIC (Brazil, Russia, India, China) nations is a fascinating melange of travelogue, politics, economics and sociology interspersed with  revealing personal encounters and anecdotes which provide telling insights into how and why some nations prosper and…