The slowdown of emerging markets adds more worries on the global markets. Brazil had negative GDP growth in the first two quarters this year with a 12-year high inflation rate. The Chinese economy is also slowing down. Russia is suffering from low oil prices and about 40% of its economy relies on its oil industry. The Indian economy is also slowing down. I think there are three changes that have to be made for their future success. Firstly, the countries have to reform their economic structures. Some economies rely too much on investment and some rely too much on only a few industries. Secondly, a wealth redistribution needs to be done in order to secure social stability. When an economy is growing rapidly, the gap between the top and the bottom is widening at the meantime. A wide gap is a cause of social unrest. For sustainable economic growth, a stable society is a must. Thirdly, an improvement of financial markets is necessary. A well-functioning financial market can help companies grow faster and reallocate resources to the industries which have fast growth rates. Moreover, good financial markets can signal future performances.
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