I've come to the conclusion it's about corruption, really, at the end of the day. What I mean by that is of course there's different degrees of corruption. Every country has some corruption, but in the emerging markets the corruption goes all the way to the top, so therefore the population does not have faith in government structures, in law and order, because if you have corruption, in essence you don't have the rule of law; you have the rule of people. And that's really what separates a poor from a rich country, because there's no shortage of money.
There's absolutely no shortage of money in this world, plenty of money. The problem is is where that money is willing to go, and as we've learned from the debt crisis now -- we were just talking just recently to people about Malaysia, Indonesia, [Thailand], the crisis and everything -- if you really dig down deep enough, the problem is law and order. If someone lends money to a company or to a country and does not get paid back, they're not going to come again, or at least they're not going to come in a long while, and that's one of the reasons why I'm strongly against debt forgiveness for the poor nations of the world, because that's the worst thing you can do to a nation is allow them to get away from their debts and obligations.
It's a very bad lesson, because it means that for the future they will try and do that again, and eventually they'll have no credibility again, and no capital will go to that country.
You'll find much more if you go to the linked piece. And, sadly, Mobius' thoughts about corruption and debt forgiveness still rings true six years later.
Remember, when money managers invest money in a country they're putting their clients' (and hopefully their own) cash to work. When Do Gooders and World Savers demand your government "invest" money or "forgive" debt, it's your money at stake -- not theirs.