Why have emerging markets never really emerged?

I’ve been thinking a lot about the performance of emerging markets and wanted to open a discussion about why they seem to perpetually stay “emerging” without actually breaking through in a meaningful way.

Take EEM (iShares MSCI Emerging Markets ETF), as an example. This has been around since 2003, and its price history is incredibly underwhelming. The price in January 2008 was about $50. Fast forward to today, and it’s sitting around $39-40. That’s a decline over almost two decades! For context, during the same period, the S&P 500 has more than tripled in value.

What gives? Isn’t the whole idea of “emerging markets” that they’re supposed to be high-growth opportunities with booming populations, industrialization, and expanding middle classes? Why has EEM—and by extension, many of the economies it represents—seemingly stagnated or even regressed?

Am I missing something? Is EEM just a bad benchmark for the “emerging markets story”? Or is the concept of emerging markets itself flawed—are they destined to stay stuck due to systemic issues?