The Axis of the Underestimated.(Thaksin Shinawatra, Luiz Inacio Lula da Silva; Vladimir Putin )

Sharma is co-head of global emerging markets at Morgan Stanley Investment Management.

There is no apparent link between them, they have shown up on three different continents and not one of them was expected to change the course of his nation. Yet there is an uncanny similarity in the way that Thai Prime Minister Thaksin Shinawatra, Brazilian President Luiz Inacio Lula da Silva and Russian President Vladimir Putin have presided over the three most impressive turnaround stories in emerging markets. They are elected leaders who understand that economic success is a prerequisite for political progress, and that economic reform will go nowhere if it is not popular. Now they are emerging as leaders of a rather unlikely "axis of reform."

In recent years, economic reform has often been pursued by technocrats, aloof elitists who were turned out by their constituents at the slightest dip in economic indicators. This is why Fernando Henrique Cardoso's heir apparent lost to Lula in the 2002 Brazilian elections, which made clear the growing need for a new breed of developing-world leaders. Initially, Lula's victory brought fears of an economic "axis of evil" in Latin America, with left-wing leaders such as Hugo Chavez in Venezuela and Lucio Gutierrez in Ecuador joining Cuba's Fidel Castro in power. Lula came to office with a loose agenda that included the threat of debt default, then surprised the world by showing a clear grip of the benefits of economic orthodoxy, along with the street credentials to secure public trust. Lula is enacting right-of-center reforms, and there is talk that other Latin American leaders may follow.

Thaksin is in a similar mold. He came to power on a strong nationalistic platform and contempt for the "Bangkok elite." Many foreign investors who feared his campaign rhetoric now see that it only makes his reforms more likely to stick. Thaksin is creating a balanced- growth environment, with domestic demand contributing a greater share of economic growth than the export cycle. Thailand's runaway economic growth is having a powerful ripple effect: Philippine President Gloria Macapagal Arroyo has called Thaksin a model, Singaporean officials express admiration and analysts see traces of ...