After the storm

EMERGING MARKETS

As 2007 and 2008 brought the global credit crisis, mayhem in the financial sector and indiscriminate devaluations of stocks regardless of their actual strength or otherwise, emerging markets companies could have been forgiven for thinking they had travelled back in time to the previous decade.

Yet this time around, it was not Asian tigers, Latin American monetary policy or Russian borrowing at the heart of the problem. Instead, Western governments, companies and consumers had become overburdened with debt while the Western banking system was now paying the price for being all too complicit in allowing that situation to come about. On the other hand, emerging markets governments, central banks and companies now appear to be substantially better equipped to ride out periods of economic and financial volatility precisely because of their chastening experiences in the 1990s. Th...