Dambisa Moyo, the high-profile economist and author, spun a fairly grim picture of globalization and its discontents Monday at the Investment Management Consultants Association annual conference.

Her first point was to question the benefits of globalization itself. Dividing the world into roughly a pre-globalization time period (1950 to 1980) and post globalization (1980 to 2007), GDP growth per annum has fallen among most of the developed world, while accelerating among the developed world.

Here is her chart of the globalized world,


And here, her chart on the developed world,

A major theme was that democracy was no longer a prerequisite for economic development. “Consider Chile, Taiwan, China…these countries show growth and democracy are not interrelated. It is becoming more difficult to convince leaders that democracy is a driver for growth.”

In fact, many emerging markets are turning to China for lessons on how to succeed economically – and it’s not by embracing an open democracy. Though Moyo suggested that it would be difficult for smaller emerging markets, without the advantages of China, to match China’s success.

Protectionist economic policies are on the rise as well, she said, pointing to capital controls that were implemented in places like Cyprus, India and Brazil, as well as growth in one-year taxes and expropriations in Europe and declines in cross-border flows. Meanwhile, there has been a trend toward more regional-based trade agreements.

“Governments are taking on a much bigger role in established countries,” she said.  Among the ten largest employers in the world, seven are governments. The largest employer in the world is the United States Department of Defense, with 3.2 million people, followed by China’s army with 2.3 million. In third place? Walmart, which employs 2.1 million.

This is a vulnerability to smooth global economic development, Moyo says. What do you do when Walmart’s biggest challenger is Amazon, which has only 85,000 employees? The dislocation of labor from technological innovation will also be pronounced in emerging countries, where much of the wealth that has been created has come from the manufacturing industry and therefore vulnerable to the kinds of efficiencies technology can bring to bear.

What kind of investment opportunities does Moyo see? Nigeria, Indonesia and Mexico are three current spots with opportunity, she suggests. Africa in particular is full of potential. Twenty countries in Africa now have credit ratings, there are 20 established stock markets in the continent, and 85 percent of the stocks being traded there are not commodities.

The evolution of the global economy won’t be a “linear transition” for many countries, she said. “But for managers interested in a growth story there is an upside in that part of the world.”