I believe this is an overreaction to crises in some countries like Ukraine, Thailand, Turkey and Argentina. I think the now ruling pessimism regarding the developing countries in general is overblown.
Since begin of this century the emerging markets, especially the giants China & India, have been the engine of the global economy. Most of the growth of the world economy in this period came from emerging countries. I believe, that they will continue doing so. Yes, emerging markets are far more risky than U.S., UK, Germany and other established countries. But the high volatility of their economies, stocks & currencies will be overcompensated by growth rates which are significantly above the economic growth in the U.S. and Europe.
There are 3 reasons for that:
1. Catching-Up Process:
China & Co. have a tremendous backlog demand because per capita income & wealth are much lower than in the western world. But there live billions of talented & diligent people who want to reach the US and European standard. Therefore these people are working hard, saving and investing to be able to expand their living standard in the near future. This is basic human nature.
2. Learning Process
The emerging economies can learn from the advanced countries, they don´t need to make their mistakes twice. This learning process - with the assistance of World Bank and other institutions - helps them to develop agriculture, industrialization and the advance of the service sector (health care, banking, transport, tourism and much more).
3. Technological Progress:
Rapidly falling costs for computers, other electronic devices & further machines (constructing, agriculture & more) along with the brisk evolution in software helps the the emerging markets to quickly modernize their economies and to raise production & efficiency.
These processes are accelerated by the Internet which permits access to trillions of cheap information. Cheap smart phones for instance open people in Asia, Africa & Latin America many business opportunities. Cloud computing (Internet access to huge data centers) reduce the costs of running a modern business significantly.
My favorite emerging country is China. Yes, it is still ruled by the Communist Party, but the high growth rates over more than 2 decades show that the giant is transforming, helped by the 3 processes mentioned above. I also believe in the perspectives of India, in spite of a xenophobic government (restrictions for foreign companies and investments), huge bureaucracy and influence of fundamentalistic religious groups. Latin America & Africa are also transforming and benefitting from the above mentioned factors. Success in one country also is infectious, benefitting economies in the neighborhood.
Thanks to global trade - for instance between commodity rich Brazil and commodity hungry China - and modern communication techniques the whole group could stay the locomotive of the world.