Emerging Markets - Is Today the Best Predictor of Tomorrow?

Abstract

In recent decades capital markets around the world have developed faster than ever before. This is true whether we look at their size or the sophistication of the services that they provide. However, if the emerging markets are to play a significant part in the future capital market development, there are two critical questions that need to be answered. First, will the growth of the emerging markets observed over the last 25 years extend into the next few decades? Second, what are the prospects that these emerging markets will mature? This short article addresses these questions. It provides an overview of the growth of emerging markets and highlights the difficulties that emerging markets are likely to face in the future, unless appropriate measures to stimulate the development of good governance, legal and regulatory frameworks are introduced.