The numbers say progress. The behaviour says otherwise.

In 2024, India's economy expanded by 7.2%, according to government estimates. Indonesia grew above 5%. Vietnam, Bangladesh and several African economies returned to steady expansion after pandemic disruptions. Debt ratios stabilised across major emerging markets. Inflation, while still elevated in many countries, began easing from crisis peaks.

Yet across these same economies, a different pattern emerged. Young professionals sought exit visas rather than promotions. Middle-class households cut spending not on luxuries but on protein and education. Trust in institutions stagnated or declined, according to surveys from the Edelman Trust Barometer and World Values Survey. Governments won elections without enthusiasm, often through fragmented opposition rather than genuine mandate. In some countries, protest activity fell—not because contentment rose, but because disengagement deepened.

This divergence between economic indicators and social behaviour is no longer anecdotal. It is measurable, repeatable and structural. Growth is returning. Confidence is not.

COVID-19 did not merely interrupt economic activity. It fundamentally altered the relationship between states and citizens across the Global South. Emergency powers normalised intrusive governance. Fiscal expansions widened public balance sheets without strengthening service delivery. Informal labour, comprising 60-90% of employment in many developing countries, absorbed shock after shock with minimal state support. Public systems in health, transport and administration were pushed to breaking point, and the cracks became visible to everyone.

By 2024, many governments could plausibly claim macroeconomic repair. What they could not claim was restored legitimacy. Across emerging markets, data from the World Values Survey, Edelman Trust Barometer and regional polling organisations show a consistent pattern: trust in government and institutions remains substantially below pre-pandemic levels, even in countries where GDP has recovered or exceeded 2019 levels.

The reason is simple. Citizens experienced the crisis not as a shared national effort but as exposure to fragile health systems, arbitrary enforcement, rising prices without wage protection, and the stark reality of how thin the social floor actually was. The pandemic revealed what statistics had long obscured: that economic resilience, as measured by headline indicators, had not translated into human security.

Traditional macroeconomic analysis assumes a linear chain: growth generates employment, employment improves welfare, welfare produces legitimacy. That chain has fractured. In many Global South economies, growth now coexists with chronic service delays, informalisation of work, declining real purchasing power for essentials, and visible inequality in access to state resources.

Citizens notice this divergence. They adjust their behaviour accordingly. Rather than protest, which requires belief in responsiveness, they withdraw. Rather than demand reform, they hedge through migration, informality or political resignation. Rather than trust institutions, they transact with them transactionally. This behaviour is rational. It reflects a calculation that systems are durable but fundamentally indifferent to individual welfare.

That is the credibility gap: when institutions persist and even expand, but belief in their fairness or effectiveness erodes. When compliance must be enforced rather than earned. When citizens conclude that the system works, just not for them.

Political instability rarely begins with sudden collapse. It begins with quiet recalibration of expectations and behaviour. When citizens stop believing that effort is rewarded fairly, productivity suffers through minimal compliance rather than strikes. When young people see blocked pathways, emigration accelerates, draining human capital. When households expect price shocks to become permanent, consumption patterns harden defensively. When trust evaporates, states must rely increasingly on coercion rather than consent.

None of this registers immediately in headline economic indicators. But it reshapes economies from within. The Global South is where these dynamics appear first and most visibly because margins are thinner. Food, fuel and housing absorb 40-60% of household income in many developing countries, compared to 20-30% in wealthy economies. Public services are more consequential in daily life when private alternatives are unaffordable. Demographics skew younger, expectations run higher, patience runs shorter.

What emerges is not revolutionary upheaval but structural fragility. These are societies that appear stable on conventional metrics but lack resilience when stressed. This fragility manifests in brain drain, capital flight, informal sector expansion, declining civic participation and erosion of social cohesion. These are slow-moving processes that economic models treat as externalities, yet they fundamentally determine whether growth proves sustainable or self-consuming.

This Outlook challenges the separation between economic and social analysis by treating belief, time perception, trust and opportunity as economic variables. Behaviour responds to these factors long before markets do. To operationalise this approach, four composite indices are constructed using publicly available data:

Human Intelligence Index: Measures whether growth, price stability and institutional quality reinforce or undermine one another. Combines GDP per capita trends, inflation volatility, corruption perceptions, and government effectiveness scores to assess whether macroeconomic performance translates into institutional credibility.

Human Priorities Index: Assesses whether states invest more in human capacity or coercive control. Compares spending on health and education relative to military and internal security expenditure, weighted by development level and threat environment. Reveals governments' revealed preferences about citizen welfare versus control.

Fiscal Stress Index: Evaluates whether surface stability masks medium-term vulnerability. Incorporates debt servicing costs, reserve adequacy, external financing dependence, and fiscal balance trends to identify countries where current calm may prove temporary.

Youth Opportunity Score: Examines whether educational expansion translates into realistic economic futures. Combines youth unemployment rates, underemployment indicators, education-job mismatch data, and migration intention surveys to assess whether young people perceive viable pathways within their home countries.

None of these indices are perfect. All are revealing. They provide early-warning signals that conventional macroeconomic indicators miss, detecting erosion of social foundations before it cascades into economic crisis.

Applied to twenty large Global South and emerging economies, the initial results are instructive. Some countries, like Vietnam and Indonesia, combine moderate growth with relatively high scores on institutional alignment and youth opportunity, suggesting more sustainable trajectories. Others, including several major economies, grow faster but score poorly on trust indicators and fiscal resilience, indicating potential fragility beneath surface stability. A few maintain order primarily through repression or emigration pressure valves rather than genuine social compact.

The most striking finding is not which countries score highest, but how frequently GDP performance diverges from human experience indicators. Countries with similar growth rates display radically different confidence trajectories. States with strong export performance show weak domestic legitimacy. Fiscal repair after crisis does not automatically restore social cohesion or trust.

This helps explain puzzles that confound conventional political economy analysis: why electorates tolerate stagnation, recycle discredited elites, or support authoritarian populists without apparent enthusiasm. The answer is not voter ignorance or cultural pathology. It is constrained choice within systems where exit seems more viable than voice, where transactional survival replaces civic engagement.

The central question for emerging markets in the late 2020s is not whether economies can grow. Most can, given global demand patterns and commodity cycles. The question is whether growth remains socially credible: whether citizens perceive economic expansion as including them, whether institutions deliver services that justify taxation and compliance, whether young people see futures that make staying preferable to leaving.

States that restore trust through genuine service delivery improvements, fairer resource prioritisation and meaningful youth economic inclusion may defy pessimistic forecasts. Those that rely solely on headline macro repair while neglecting institutional credibility risk slow decay punctuated by sudden ruptures when patience exhausts.

The Global South is not inherently unstable. It is sensitive by design. Younger demographics, thinner margins, more consequential public sectors, and less accumulated institutional capital all contribute to this sensitivity. That sensitivity makes these societies early indicators of broader patterns that eventually reach wealthier economies as well. The breakdown of the growth-legitimacy link observed first in emerging markets in the 2020s may be a preview of challenges facing advanced economies in the 2030s as their own social contracts come under stress.

This Outlook reads that sensitivity not as weakness but as signal. The next major disruption to the global economic order is unlikely to begin in bond markets, central banks or finance ministries. It will begin when large populations quietly, without dramatic declarations, conclude that existing systems no longer meaningfully include them, that compliance and effort no longer yield proportionate returns, that exit or withdrawal offers better prospects than voice or participation.

That shift is already underway in multiple countries. The Mind Economy framework exists to make it visible before it becomes irreversible.

The challenge facing the Global South in the remainder of this decade is not achieving growth. It is ensuring that growth buys stability: that economic expansion translates into social confidence rather than coexisting with quiet disengagement. The difference will determine which societies build sustainable development and which merely defer their reckonings.