As they wait for the results of tomorrow’s US elections, most investors and business communities in emerging markets around the world are rooting forJoe BIden. Nobody denies that the COVID-19 pandemic has been largely responsible for this year’s net outflows of $25.8bn and $9.2bn from emerging-market equity and bond funds respectively, but there is nevertheless a broad consensus that most EMs will have an easier ride under an administration that is less in thrall to Trump’s ‘America First’ mantra.
The Biden camp is certainly making the right noises. Although he may not be about to extend the hand of friendship to Beijing, Biden is equally unlikely to escalate the US-China trade war any further than it already is. He has also indicated that he would make significant changes to US foreign policy, and many take this to mean that he would immediately reverse Trump policies on Iran, climate change and the World Health Organization.