Sharma, Ruchir. Breakout nations – in pursuit of the Next Economic Miracle, W.W. Norton & Company, New York, 2012. Hardcover, 292 pages

Rating:  8.5/10

It’s a rather curious coincidence I should read in the same week two books published by W.W. Norton & Co., both written by authors with a surname ‘Sharma’. The comparison stops there, Breakout nations by Ruchir Sharma is a wonderful book, well written, giving an overview of the emerging world.

Ruchir Sharma is head of Emerging Market equities and Global Macro at Morgan Stanley Investment Management. In that capacity, he has travelled a week every month over the past fifteen years to different emerging markets – sometimes shaking hands with Vladimir Putin, sometimes flying in helicopters in Brazil. He travels extensively by road, an essential condition to understand a country better. He has been a writer for as long as he has been an investor – contributing to Newsweek, the Wall Street Journal and the Economic Times. This is an enviable resume, and Ruchir Sharma makes full use of his life in sharing with the readers his understanding and insights of the places he visits.

I began the book by reading chapters on Russia (In Russia, there’s room only at the top), Eastern Europe (The sweet spot of Europe) and India (the great Indian hope trick), having lived in that geography myself. Those chapters convinced me that the author understands those countries well (and by extrapolation understands the other emerging countries as well). The book covers China, Turkey, South Korea, the fourth world (frontier markets) among others.

Though it may sound like compilation of country surveys, the book is an interesting read. Ruchir Sharma offers rules such as: Rulers who have outlived their usefulness (such as Putin) are dangerous since they are looking less to prove themselves and more to protect their position. (Mexico) If a country generates disproportionate number of billionaires then something is wrong. (Russia) Population of second city must be at least one third of the first city; otherwise it indicates an unbalanced economic growth. (Indonesia). Data is presented often, but it flows with the text without obstructing.

The book makes one understand the process of global investing, and how a small shareholder investing in a mutual fund may contribute to the process of international monetary flows. Ruchir Sharma’s country-by-country study which presumably is the basis of his company’s investment decisions, made me feel more optimistic about stock markets working as a tool for global development.

Verdict: An essential book to improve understanding of the emerging and frontier nations.