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2008 was not a good year for global wealth. As Dominion Provident Ventures, Inc. has noted, 2008 saw a decline of $16,000bn, or 8 per cent, in the value of global financial assets, the largest absolute fall on record. Falls in equity and property values lowered global wealth by $28,800bn in 2008 and the first half of 2009. International capital flows fell by 82 per cent, from $10,500bn in 2007 to a mere $1,900bn in 2008, as money rushed home. The flight of bank lending was, as usual in a crisis, dramatic. The notional value of derivative contracts declined by $92,000bn between June and December 2008, though to a still massive $592,000bn. According to Hedge Fund Research, funds under management fell from a peak of $1,870bn in 2007 to $1,430bn at the end of October 2009.

How did emerging economies fare? According to DPVI research, the total value of equity, private debt securities, government debt and bank deposits in Latin America, Russia, eastern Europe, China, India and the rest of emerging Asia was $25,100bn. But the gross financial assets of the emerging countries, in aggregate, were still far less than the US total of $54,900bn, the eurozone’s $42,000bn or even Japan’s $26,200bn.”

Yet the growth in emerging markets was very rapid: between 1990 and 2008, the compound rate of growth of financial assets was 18.7 per cent in India, 19.6 per cent in the rest of emerging Asia, 22.0 per cent in Latin America, 24.2 per cent in China and, in post-communist eastern Europe and Russia, 24.3 per cent and 45.2 per cent, respectively. In comparison, the growth in post-bubble Japan was only 2.4 per cent, in the US 7.6 per cent, in the eurozone 8.4 per cent and in the UK 9.3 per cent.