Its difficult to exaggerate the quality of this book. Ruchir Sharma searches for the real keys to national development which are often not so obvious or easy to identify.

His whole analysis deals with probabilities rather the pseudo-scientific laws, formulas and equations that have reduced post-war economics to a turgid mess. If the situation is probabilistic then his “Rules of the Road” are perfect guides to policy, pointing countries in the right direction without claiming to understand exactly how the mechanisms work.

His detailed look at development by country quickly disposes of misleading generalizations like BRICS. For example, India and Brazil prove incapable of building infrastructure (unlike China), guaranteeing growth = inflation in both cases, and Russia has yet to manufacture anything that the world wants to buy.

Equally the book is very revealing of the qualitative differences between successful developing nations.

A good example is the contrast on P.166 between South Korea and Taiwan. He says, “Though South Korean has a significantly larger manufacturing sector than Taiwan, it employs a much smaller factory workforce (about 15% of total labour, compared to 25% in Taiwan). It also has one of the most dense robot populations in the world. That means South Korea is doing a lot more with fewer workers and is much more productive than Taiwan.”

Unexpected countries such as Turkey, Sri Lanka and Indonesia are following successful development paths and Sharma is quite happy to evaluate the sociological background to their policies.

In 1948 Sri Lanka received a British ex colonial favoured Tamil immigrant minority elite dominating the Sinhalese majority. This divided country slid into civil war with the Sinhalese eventually recovering power in their own country. Events such as these are ignored by approved economic “science” but Sharma convincingly shows unity in national recovery allowed Sri Lanka to exploit its long standing strengths of a highly literate population and a location on the key shipping routes to India and China.

He quickly disposes of the orchestrated western media view that Turkey is sliding into militant Islam. As he says, “There is almost no support for this worldview in Turkey where – even under the AKP – the state enforces a single moderate interpretation of Islam in schools and through the Religious Affairs Directorate. The vast majority of Turks see religion as a strictly personal matter ...”

The last part of the book looks at the poorest countries and the rich world in an equally enlightening way. As he says, “The boundaries of the Fourth World are defined not by poverty but by the rule of law, or the lack of it”, and he evaluates the way that the flood of liquidity into the rich world forces speculation through taxing savings (interest rates lower than inflation).

Even Rupert Sheldrake gets a mention although Sharma doesn't give this reviewer's favourite Sheldrake Sheep Rolling story. ( )

It is hard to escape popular economic discussions without hearing the name BRIC and developing nations. The very name - BRIC, like brick, suggests that these four nations are monolithic and identical in their intentions and progress of growth and development. This could not be more false.

The author, head of Emerging Market Equities at Morgan Stanley, offers brief vignettes of some developing nations, using both statistics, policy analyses, and an intuitive sense of what nations develop and which ones don't.

Here is a VERY brief summary of what I've learned. The best details are in the full book, but here's a good sample of what Sharma asserts:

-China's meteoric growth is due for a slowdown. Perhaps from 7-10% per annum to 3-5%. Much of the eligible rural population has moved to the cities, and they are moving from a commodity-import economy to a manufactured-goods exchange economy, more on equal footing with the US, and an attempt to develop home-grown sectors.

-India's growth remains unsteady due to the widely varying quality of its infrastructure. The massive population pool may be a boon, but it must be necessary to safeguard against deficit spending and crony capitalism.

-Brazil is another separate case entirely. The cost of living is too high for the developing economy, and the government - with only 4% growth - has invested in social welfare without complementary increases in infrastructure. Even small-scale growth could overwhelm transportation without this necessary increase.

-Mexico is dominated by an oligarchy and a relatively stagnant government. Most Mexicans would rather leave than press for change.

-Russia is contradictory. The per capita income has risen to $13,000, but there is fear of power outages. They have perhaps the worst aging demographic in the Western World. They had astonishing growth in the early 2000s due to oil prices, but the economy shrank by 10% in the crash. Only India and Egypt had higher inflation - another difficulty which should not happen in a slow recovery. Russia's only major international industries are oil and gas, and it needs to diversify.

-The sweet spots of Europe are Poland (which has recovered remarkably well), the Czech Republic, and the Baltic states, which have grown the best in the post-Warsaw Pact era. Some nations like Romania and to a greater extent, Greece, have jack-knifed, but these are doing quite well.

-Turkey is one of the more promising countries in the Middle East.

-Indonesia is one of the rare cases of a diverse commodity economy. The Philippines has potential, if it began to dismantle the oligopolies. South Korea is rapidly rising and well, and may yet become 'the Germany of East Asia', being secure, well-educated, and diverse across a wide variety of sectors.

-Cases like Nigeria show that even one good policy or investment technology opportunity can lead to a mini-boom.

-It is a mistake to assume that all nations can have the years of temporary prosperity of the early 2000s. Careful policy management is necessary. 'After ecstasty, the laundry.'

Anyways. There's a LOT more in here that I've missed. This is a very impressive book and I wish there was more. ( )

Was honestly lead down, expected a lot more imagination, ingenuity or intriguing facts. His predictions of the next Breakout nations are arguable, too much emphasis on GDP Per Capita, sort of contradicts himself when he says historically nations with lower GDP Per Capita don't converge with those of higher and then basis his identification of Breakout Nation on GDP Per Capita, but a lot of truth and common sense in the book. Worth reading once... ( )