Mature economies increasingly behave as if they were emerging ones. If you look closely, they are.
When dealing with emerging markets, you always have a problem: figuring out which country is really your subject matter. When does an economy leave utter hopeless poverty and get on the - always bumpy - road towards affluence? When, during its rather rocky past decades, did Cambodia enter the emerging market category, for instance? Or Morocco? Or Colombia?
(Drawing the line at the political transition is always tempting, but often wrong: think about the hopeless early years of the European post communist countries, or, the ultimate example from the other side: China and the Gulf states. The first bunch went through more or less free elections, but did not really get onto the emerging path until the mid-90’s, while the second lot clearly embarked on the typical rapid structural change pattern that characterises the emerging markets, but with, let’s put it this way, no landmark events towards democracy.)
Maturing emerging markets pose similar problems: when do they leave this category and become ‘developed economies'? Isn't it ridiculously silly, for instance, to treat Singapore and South Korea as emerging markets? Or, from the other side of the category: are Portugal and Greece really ‘mature’?
Maybe the term emerging market is not useful after all. At least by the mid 2000’s the line was already blurred: everyone was going through some form of rapid structural change, institutional reforms, and those who did not - we learn these days - should have done exactly that. Was the debate about the role of government in the economy in Germany really that different from that in Central Europe? Was the economic strategy, and the consequent structures, that different in Dubai from Switzerland? Was the role of the financial sector in Iceland really on another planet compared to, say, the UK? And, was the structural dynamics due to the new technologies that different in the US than in India?
Arguably, in all of the above examples, there are large differences between the two sides. But are those large enough, distinct enough, to justify a different category? Or is there, instead, a continuum of behaviours that are associated with integration into the emerging global economy and the adoption of a technology-intensive economic development path?
Thus we end up sceptical about the usefulness of the term emerging market during the past decade, at least retrospectively. But then, consider the behaviour of the mature economies during the current crisis. The ineffectiveness of the policy measures. The lack of proper data. The immature reaction of the political class. The depth of the social consequences. The unanchored systemic risk. And most importantly, the wildly uncertain future. Who is the emerging market now?