Bremmer: Europe Vulnerable; India Ready To Rise

July 29, 2014

ETF.com: Are there any other elections in the world you have your eye on, where a reformist leader—like Modi in India—might draw significant investor enthusiasm?
Bremmer: That would be the case in Brazil if Rousseff lost, but I don't think that's going to happen. So no, I think India is really the big upside election in the emerging markets this year. It's gone. He won in spectacular fashion. Not only does he have absolute majority in the Lower House, which hasn't happened in decades, but he personally is just such a hard worker. He's much more transparent, much more efficient. He's putting people like that around him. That's a really dramatic change.

ETF.com: So you have a favorable view on India at this time?
Bremmer: Definitely.

ETF.com: When you consider everything going on geopolitically, what's your biggest concern at the moment that can potentially derail global economic growth?
Bremmer: In the near term, it's absolutely Russia-Ukraine. Because if this crisis blows up and if the Ukrainians try to take the Russians out, and they have some success locally—again, the Ukrainians are calling these guys terrorists, they just knocked down a plane. I don't think they'll get American military support.

But nonetheless, if they feel emboldened, they get tougher sanctions—I think the Russians will then go after them formally. If that happens, you could see Europe get pushed back into recession. That's clearly the notion that we are moving towards much more aggressive sanctions, even if only incrementally against a country as powerful as Russia economically. That's absolutely the biggest danger out there.

ETF.com: Are there any regions or countries that are sheltered from any fallout from the current geopolitical tensions? Is there a safe-haven country?
Bremmer: The United States is relatively sheltered because all these things hit the Europeans more than America. Most of the Western Hemisphere is pretty sheltered. You look at Mexico, you look at Canada, you look at Brazil—where are the geopolitical effects that really hit them?

Of course, if the global economy falls, the global economy falls. But the geopolitical problems we're talking about are in Eurasia, they're in the Middle East, they're in Asia. They're really not in the Western Hemisphere. That makes the United States less interested in resolving them, of course. But it does also redound well to folks who are investing in this part of the world.

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