Jim O'Neill, Columnist

Emerging Markets Mock the Pessimists

Remember how this time last year a lot of analysts were predicting that 2014 would be a bad year for emerging markets? Didn't really happen, did it?

December 3, 2014 at 5:01 AM UTC

By Jim O'Neill

Jim O'Neill worked for Goldman Sachs Group Inc. from 1995 until 2013, serving most recently as chairman of Goldman Sachs Asset Management, and as the firm's chief economist from 2001 to 2011. Before joining Goldman Sachs, he was head of global research at Swiss Bank Corp. O'Neill is the creator of the BRIC acronym, which was derived from his thesis that Brazil, Russia, India and China would dominate growth in emerging markets. He is a member of the boards of the Brussels-based policy-research centers Itinera Institute and Bruegel. He earned a degree in economics from Sheffield University in 1978 and a doctorate from the University of Surrey in 1982. He lives in London.

Here comes the sun.
Photographer: Guang Niu/Getty Images

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Remember how this time last year a lot of analysts were predicting that 2014 would be a bad year for emerging markets? Didn't really happen, did it? Now I hear economists saying the reckoning they'd expected has only been postponed. It'll happen next year instead. It's possible, but I wouldn't bet on it.

In this discussion, one crucial fact is both obvious and usually forgotten: The so-called emerging markets are all quite different. They don't move in unison. Take the impact of cheaper oil. Just as in the advanced economies, it's good news for some (the equivalent of a tax cut) and bad news for others (the equivalent of a cut in income). It's unhelpful to generalize. Many of the world's star performers in 2014 were emerging-market economies. The same will be true in 2015.