1. They Beat Rich Countries to the Punch on Inflation
When inflation spiked after the pandemic, who moved fastest to raise interest rates? Not the Federal Reserve. Not the European Central Bank. It was emerging market central banks in Latin America and Eastern Europe who acted first and most aggressively. While developed countries were still debating, emerging markets were already tackling inflation head-on. Turns out, they learned from past crises—and applied those lessons faster than anyone else.
2. They Managed COVID Budgets Better Than the U.S. and Europe
Here's a stat that will surprise you: After COVID-19, fiscal discipline was actually stronger in emerging markets than in advanced economies. While wealthy nations let their budgets balloon and stayed there, emerging markets moved faster to repair their finances. The stereotype of fiscally reckless developing countries? It's outdated. Today, they're often more disciplined than the so-called "developed" world.
3. Their Emergency Savings Have More Than Doubled
In 1982, the typical emerging market had enough foreign reserves to cover just over three months of imports. Today? More than seven months. That's like going from living paycheck-to-paycheck to having a robust emergency fund. This dramatic improvement in financial cushioning is why we don't see the currency crises and economic meltdowns that used to plague emerging markets.
4. They're Winning by Refusing to Pick Sides
In the new Cold War between the U.S. and China, the smartest players aren't choosing Team America or Team China—they're playing both. Countries like Vietnam, India, and Mexico are diversifying their trade partnerships and reducing dependence on any single superpower. What looks like "sitting on the fence" is actually a brilliant strategy: maintaining flexibility and maximizing options while others demand loyalty.
5. They're Leading the Digital Payments Revolution
When you think of tech innovation, you probably think of Silicon Valley. But some of the most transformative advances in financial technology are happening in Kenya, India, and Brazil. Mobile payments in Kenya. Digital infrastructure in India processing billions of transactions. Fintech innovation in Brazil. These aren't just copies of Western models—they're often better, designed for populations that never had clunky legacy banking systems to begin with.
THE BOTTOM LINE
Emerging markets have quietly transformed from crisis-prone economies into reformed, resilient, and globally relevant players. The old stereotypes don't fit anymore. It's time our mental models caught up with reality.
Templeton global macro investment specialists. (2025, August). Reformed, resilient, and relevant: the evolution of emerging markets.
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