Before we decided to launch Manatee Global Advisors, we worked in the public, private and academic sectors; advised governments, political parties and corporations from around the globe. We quickly noticed two somewhat surprising realities. While many economists could accurately describe a market’s performance in the short term, they failed to anticipate major changes and developments – mostly because they were triggered by events outside the market. This was mostly because economists tend to neglect political and social realities in their forecasts. At the same time, we encountered a similar habit in politics, where economic realities were ignored just as easily. We thought this to be bewildering, since politics, society, security and economics are more intertwined than ever and nowhere more than in the so called emerging markets or what we as Manatee Global Advisors refer to as fragmented economies, economies in which politics still maintains more prerogatives over the markets than in the consolidated economies of the OECD-world.
Having spent some time in developing countries, witnessing their promises and prospects but also their deficiencies and political pitfalls first-hand, we realised that their story was by no means as straightforward as the tale of the BRICS would like to have it. At the same time, we heard and shared the complaint by many analysts in banks and corporations that the term emerging market is too vague. Those markets are not emerging – they were in fact part of the globalised economy for decades, even though they lacked integration with each other. And though they do harbour enormous economic potential, their growth is so unevenly distributed that they create shifts of their own. Some countries create an economic pull effect for entire regions and still push parts of their own periphery into dependence or crisis. These economies are fragmented, characterised by strong centres and peripheries that either fall behind or have yet to unfold their potential.