mdmrjsds

Emerging Market Investing: Really an Ex-Communist Play?

I agree with your analysis to a point. If you free people from tyranny, even into lesser tyranny, their natural creativity will generate wealth. However, I think this is a short term burst. In other words, I disagree with this statement
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A country doesn’t have to have the United States’ rule of law and rewards for individual initiative, it just has to move solidly in that direction to improve the lot of its people and provide an opportunity for investors.
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I think the initial burst will fall in upon itself unless there is rule of law. What every emerging country you named has in common is high levels of corruption. What that means is no one can count on their persons or property being safe. A corrupt official can be bribed to take it from them at any time. How much long term wealth will be created under those conditions? How much investment?

So the returns you showed will falter unless the oligarchy running each of those countries allows their power, their control, to be challenged, allows people who aren't rich and powerful to become rich and powerful. Maybe.

The other point is that these countries are starting from such a low base that the return on investment is distorted and gives an overly optimistic picture. The economy of Australia with 20 million people almost produces as much as India with 1.3 billion (800 billion vs 1 trillion). And the economy of Canada with 30 million people produces over half as much as China with 1.3 billion people (2 trillion vs 3.0 trillion). The numbers are from memory, from the CIA factbook or world bank.