BRIC economies have proven equally vulnerable to economic shocks as their more-developed counterparts in recent years, finds survey; investors warned to be aware of emerging markets' 'limited resilience' to global risks
February 20, 2012
– The emerging economies of Brazil, Russia, India and China have proven vulnerable to economic shocks along with their more-developed counterparts in the last four years, according to a survey by risk consultancy firm Maplecroft, Reuters reported Feb. 19.
"With hopes for a global economic recovery resting with the BRICs, investors and business seeking new high-growth, high-risk markets need to be aware of their limited resilience to global risks," Maplecroft CEO Alyson Warhurst said in the survey. "A country's resilience to external and internal shocks is built up over time, so as the BRICs political risk environment improves we might see resilience strengthen, but our results reveal this is yet to happen."
The survey also found that public policies have not kept pace with growth, increasing risks such as terrorism and climate change.
The company categorized India, Russia and 39 other countries as high risk, citing poor governance, corruption, and terrorism.
China was classfied as medium risk because of the relative unlikelihood of political unrest. Brazil was also ranked medium risk because of its political stability and track record of solid governance.
The primary source of this article is Reuters, London, England, on Feb. 19, 2012.