Discontent hits BRIC nations as economic growth slows
Economic weakness pressures governments amid reliance on growth to ease social tensions
Stretched budgets and sluggish growth are putting emerging market governments on a collision course with rising pressures from recently empowered middle classes for more spending and better services.
From Jakarta to Brasilia, policymakers face the end to an era of abundant global liquidity that helped fuel the fastest expansion in three decades.
In the eight weeks to Wednesday last week, investors pulled US$40.3 billion from emerging market bond and equity funds amid signs the United States Federal Reserve may begin reducing stimulus later this year.
Last year, US$111 billion poured into these asset classes, according to EPFR Global, which tracks money flows. The Fed's plans did not trigger the slump - after a decade of prosperity, the economies of Brazil, Russia, India and China (BRIC) have been slowing since 2010.
Developing countries were punished more during downturns than their European counterparts, because they depended on growth to mitigate social tensions, said Angel Gurria, the secretary-general of the Organisation for Economic Co-operation and Development.
The needs are much more elementary ... when there's a big wind it blows off the roof. This isn't the problem the middle class in the Netherlands face
"The needs are much more elementary and brutal," Gurria, a former Mexican finance secretary, said last week.