Emerging Markets, the Housing Crisis, and Decoupling

The Economist is always a fun source for news, and this article is no exception: http://www.economist.com/displayStory.cfm?story_id=10808782&fsrc=RSS

Just a quick note on a potential problem with this analysis: The sampling and examples given are very China and India intensive. While it is true that China and India are home to about 2.5 billion people, and represent substantial emerging markets, the case for "decoupling" may be different in the rest of the developing world (some 120 countries in East Europe, Sub-Saharan Africa, South America, and other parts of Asia). The discussion of emerging economies it typically limited to around 15-20 countries - including China, India, S. Korea, Singapore, Hong Kong, Malaysia, Taiwan, Indonesia, Thailand, Brazil, Chile, and Turkey - but excluding most of Africa, South America, and East Europe.

What that means is that, on the face of things, those countries in the emerging markets category may be gradually decoupling from the global north, but other countries are still dependent on northern consumer markets for their exports and financial markets to fund their governments. Some of these countries may be indirectly insulated by the decoupling of emerging markets to a certain extent (Chinese aid to Africa is on the rise, and much of South America is pushing for increased regional integration to limit dependence on the US market), but many countries in the global south are still primarily dependent on the US and the EU for their continued growth (Especially East Europe, Central America, Mexico, and most of Africa). Furthermore, much of the "decoupling" tends to occur in resource-extraction industries, rather than agriculture. Consider, for example, that 70% of Indians are still employed in small-scale agriculture and informal rural activities.