Emerging Markets: an arbitrary term?

I was in and out of various lectures for work, quietly listening to long talks given by various economists and researchers who have been widely published – experts in the field. While sitting there, I became irked by the constant use of the phrase ’emerging markets.’ Perhaps the coffee break needed to come sooner, but the more it was used, the more I felt it was completely arbitrary. It covered too many economies; too many nuanced markets and structures.

The term covers the newly industrialized economies as well as the BRICS* countries which have large, important markets. Brazil is the dominant economy of Latin America. China holds over $1 trillion of US public debt (third only to the Social Security Trust and the Fed). The phrase has been a part of my economics education practically since day one. However the countries grouped within that term have never graduated from being ’emerging’ to, well, fully emerged even as their markets and economies have developed and improved. Why not?

What exactly do they have to do to become ’emerged’? Is this a Western bias? The more I thought about, the more irked I became.

Then I wondered, is this a dumb question?  Perhaps there was a simple formula I didn’t know about: certain standard of living + certain GDP + certain amount of cross-border capital flow and trade, etc. I hesitantly turned to a colleague during the conference and said, “Well this question is somewhat elementary, but when do emerging markets grow beyond that name?” He didn’t have an answer.

Still musing about it days later, a quick Google search led me to an article by The Economist published in 2008. It argued that it was time to retire the phrase ’emerging markets’. And yet, here I am, four years behind and still questioning the same damn phrase.

The phrase was coined by Antoine van Agtmael in 1981. The Economist writes, ‘He was trying to start a “Third-World Equity Fund” to invest in developing-country shares, but his efforts to attract money were being constantly rebuffed. “Racking my brain, at last I came up with a term that sounded more positive and invigorating: emerging markets. ‘Third world’ suggested stagnation; ‘emerging markets’ suggested progress, uplift and dynamism.”’ [1]

It was an advantageous term, especially within the context of his work. However, since its creation three decades ago, I think the term has also just become a convenient way to separate ‘us’ from ‘them’. We, the Western economies, so developed, so totally not in crisis, and the “emerging markets”, poor darlings, with so much to learn from us.

I’ve decided to delve into a little research to see exactly what the differences are between those countries with developed economies and those still considered ’emerging’.

Since I have started this blog, I realize it takes me much longer to publish a post than the original timeline in my head. Knowing this, I hope to develop this question over the reasonable timeline of the next month or so, to be continued as necessary. Research recommendations are always welcome.

*Brazil, Russia, India, China and South America – an acronym often used to define those countries with more emerged ’emerging markets’.


1. “Acronyms BRIC out all over,” The Economist. September 18, 2008. http://www.economist.com/node/12080703?story_id=12080703


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