The Economic Times
The Asian tigers have lost their allure. And while growth in both China and India is still expected to be among the highest in the world, the sharp decline in their stock markets — China has fallen a whopping 41% since December 2007 with India a close second at 38% — is a measure of the seachange. Once the darlings of investors worldwide, they have now been forsaken for more attractive alternatives.
In contrast, Brazil and Russia have come from almost nowhere to become the new poster boys. True, their growth rates of 5.8% and 8.5%, respectively, for the first quarter of 2008 may still trail Chindia’s (as China and India are often referred to collectively). But even as stock markets around the world have collapsed, both Russia and Brazil are up in dollar terms — Russia by 1% and Brazil by almost 15% during the period December 2007 to June 25, 2008.
What has changed? The world’s unsatiable appetite for commodities and the vantage position of these two economies as major commodity producers. While Russia’s energy resources — both oil and gas — put it in an enviable position in a world where energy has become the lynchpin on which everything else revolves, Brazil with its unique dominance in both food as well as energy, is even better-placed.