Emerging issues

One misdeed can undo years of hard work. Such is the case of the Satyam fraud, which has knocked the Indian business world sideways. Other firms in the outsourcing business (e.g. Wipro, Infosys) are now being tarred with the Satyam brush.

Corruption and fraud risk is everywhere, and as the Madoff case proves, it doesn't matter whether the country concerned is "developed" or "emerging". It is a great shame for India though, as it struggles to put some sort of order into its infrastructure.

Since English is one of its mainstay languages, India should have benefited far more in recent years from global trade. Unfortunately their Chinese neighbours simply pushed (sometimes brutally) ahead with big infrastructure investments that are now paying off.

Satyam is a corporate fraud, pure and simple. But in these stressed times it only takes one accident for capital to start flying back to government bonds (another bubble waiting to pop).