The Rise and Fall of Nations: Ten Rules of Change in the Post-Crisis World

by Ruchir Sharma

Pundits of the 1950s and ’60s paid very little attention to Asia, and when they did pay any mind they celebrated the prospects of the Philippines and Burma, both rich in metals, gems and other natural resources. They pitied China and India, and into the mid-1960s many economists dismissed Taiwan as a “basket case” devoid of natural resources, lacking in capital, with a corrupt and discredited government presiding over a largely illiterate population.2 The world took a similarly dim view of South Korea, seen by commentators in the United States as a “hopeless and bottomless pit,” a frontline Cold War state into which Washington was dumping foreign aid dollars with little prospect of generating any economic turnaround. Donors spoke of pouring money down the Korean “rat hole.”3 These assessments misfired on every salient point—wrong on the future of continents and of countries. Since the 1970s, Asia’s average income has been catching up to the West, but Latin America has fallen behind. Argentina continued to tread water, and Venezuela hit the wall when oil prices collapsed in the 1980s. Within Asia, Burma faltered even before the government fell in a 1962 coup that created the failed military state which the generals later renamed Myanmar. The Philippines followed Burma down the tubes three years later, when the kleptocrat Ferdinand Marcos and his equally corrupt wife took power. Meanwhile, their less-noticed Asian neighbors, led by Taiwan the “basket case” and South Korea th...