Brave New Wealthy World: Winning the Struggle for World Prosperity

Chapter 7. Structuring Viable Ways to Invest in Poor Countries

The number of savers in the world is growing, and the amount of financial assets they buy each month is rising. They buy predominantly stocks and bonds issued in the rich countries. They would willingly buy stocks and bonds issued in the poor countries if those investments offered competitive yields. When the yields are high enough, savers will bid for emerging markets stocks and bonds, will subscribe enthusiastically to new issues of those securities, and will devote a larger portion of their portfolios to those securities. The small total amount of emerging markets stocks and bonds contrasts sharply with the large amount of good collateral those countries have within their borders. ...