Emerging Markets Update

It isn't the financial crisis of 1997 by any means, but the economies in Asia are struggling—again.

The Japanese yen, Indian rupee, and the Indonesian rupiah have depreciated 30 percent on average in the last 24 months. Growth rates for India and Indonesia that were around 9 percent and 7 percent respectively two years ago have dropped off significantly, with India now at half that rate. Two of the once mighty BRIC economies (Brazil, Russia, India, and China) are now included as part of a group of countries (namely Brazil, India, Indonesia, South Africa, and Turkey) that have been dubbed by Morgan Stanley as the "Fragile Five."

This Commentary considers the implications of slowing growth, currency depreciation, debt exposure, and capital egress for emerging markets, in particular India, together with the connected legal issues.