All markets are risky. The emerging markets are those where this is priced in. Emerging markets offer value because people perceive them to be riskier than they are relative to investments closer to home. Risk perceptions can be binary: when something is perceived as safe (AA rated, perhaps, or located in a developed country) further inquiry often ceases. This is sometimes followed by an unpleasant surprise, as with subprime.

And here is another definition: developed countries are those that have learnt how to be fiscally irresponsible and get away with it. It is the emerging countries recently joining the European Union that have started to relax in the knowledge that capital will flood in less discriminately than before. In other words, to graduate from "emerging" to "developed" involves not an improvement in creditworthiness so much as being allowed to deteriorate one's creditworthiness.