World Economy Shifting East
What’s the Latest Development?
As rich nations continue to struggle beneath the weight of the global economic slowdown, poor countries are rebounding quicker and outpacing growth in the industrialized world at an unprecedented rate. “The I.M.F. forecasts that emerging economies as a whole will grow by around four percentage points more than the rich world both this year and next. If the fund is proved right, by 2013 emerging markets will produce more than half of global output.” While worries persist about industrialized economies, little fear of a second recession plagues emerging countries.
What’s the Big Idea?
What would more parity in the world economy mean? For finite resources like “geopolitical supremacy, the world’s oil and raw materials, the status and perks that come with being the issuer of a trusted international currency,” competition between nations would increase. Stronger trade links between rich and emerging countries will continue to change global labor patterns, putting downward pressure on wages and displacing existing jobs. Finally, a global economy reliant on emerging economies’ gains is particularly vulnerable to sudden slowdowns.