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With growth slowing dramatically across emerging economies, is it a sign of things to come?

Thailand has fallen back into recession, Mexico's economy is shrinking again, Russia is growing at just 1.2% - the pace of the slowly recovering West. Brazil's growth was less than 1% last year, while the country that many have their eyes on is India, which is struggling with a pace of growth that is more reminiscent of the pre-1980s era than the rapid expansion of the past decade.

Of course not all emerging economies are in the same boat. For instance, the Philippines has grown faster than expected in the second quarter, by 7.5% from a year earlier. But, there are a number, especially the large emerging economies, which are slowing. And that raises the question as to whether the emerging market growth story is over, with investors pulling at least some of their money out from these countries.

Economic growth in the past decade was supported by a commodity boom and a lot of US consumption that turned out to be based on cheap but ultimately unsustainable debt. As the so-called commodity super-cycle moderates and the US consumer buys at a more moderate level, growth will slow around the world.

It's not necessarily the end of the emerging market growth story though. Countries across Asia now have their own middle class consumers after a period of rapid growth in incomes.

And, put into perspective, emerging economies are still forecast to grow by 5% or more by the International Monetary Fund in the next couple of years, barring a crisis. Growth may have slowed from the heady days of 7%-plus growth, which was more than double America's in the late 1990s and 2000s, but it's still a decent clip.

One of the reasons for the slowdown is that developing countries now have less room to "catch up" than before. For the first time ever, emerging economies now account for more than half of the world's GDP, according to the IMF. So, countries like China, India, Russia and others produce more of the world's output than rich countries like the US, UK, Germany. It implies that these developing nations have caught up to some extent and growth will slow unless they innovate like the richer countries.

After all, it has been two decades since the early 1990s when China, India and the former Soviet Union opened up and integrated with the world economy. This propelled the world into a phase of greater globalisation where terms like offshoring came into vogue and trade surged - exports of goods almost doubled from 16% of world GDP to nearly 30% by the late 2000s. Foreign investment and money also poured into cheaper and fast-growing emerging economies as they opened up.

Developing countries could have done a lot more to strengthen their economies during the good times. But, it's often during the bad times that there is an impetus for reform, including supporting industrialisation and the middle classes. The protests across the world from Brazil to the Middle East have some of their roots in what hadn't been done by their governments during the boom times.

Take India - a country very much in the spotlight as its currency has fallen at the fastest pace since the 1991 balance of payments crisis.

Two key indicators as to whether India has improved the foundations for its economy are how much it produces and sells overseas. Industry makes up only about a quarter of GDP and hasn't increased since the 1990s. India has also barely increased its exports, accounting for just over 1% of global markets. When compared to China, which accounts for 11% of global exports, or Indonesia where industry accounts for nearly half of GDP, India has lagged in its industrialisation and penetration of global markets.

During the good times, India's long-standing impediments to growth - a low average level of educational attainment and poor infrastructure that impede manufacturing - weren't addressed. Growth is now at its slowest pace in a decade at about 5%, and that isn't enough to significantly lift average annual incomes of only $1,500, which is a fraction of the average $10,000 for emerging economies.

More worryingly, according to Morgan Stanley, Indian companies have borrowed too much. They estimate that one in four companies can't cover its interest payments. This is all adding to the worries over the large current account deficit and draining confidence from its currency as investors fret about the ability of the Indian government to manage when the era of cheap money ends. I wrote about this when the rupee began its plunge a few weeks ago.

This year could see the world economy expanding at the slowest pace since the 2008 crisis. There's no financial crisis this time, but for countries like India, there could be one brewing if the economy continues on its downward trajectory.

As Warren Buffett remarked about the vulnerable banks during the 2008 financial crisis: "After all, you only find out who is swimming naked when the tide goes out."

India will hope that it's not one of them.