subject: Shifting Balance In Global Economy [print this page] A few traditional metrics like the shares of major economies in global GDP, manufacturing, and trade suggest that there has been a marked change in the configuration of the world economy, especially over the last decade.
Over the last 20 years sustained growth of a number of large emerging economies, especially the BRICS economies, has resulted in an increase in their share in the global GDP. As a consequence, the value addition in the world economy has been moving away from advanced countries towards what have been termed emerging economies. The decline in share is particularly marked in the case of the EU. The shift towards Asia has been significant and, within Asia, away from Japan to China and India. The fivefold increase in share of China in the global GDP has placed it as the second largest economy in the world. The increase in share of India, though less dramatic, is nevertheless of an order that places her as the fourth largest economy in PPP terms.
The reduction in share of advanced economies, particularly from 2005, has been accentuated by the slowdown that followed the subprime crisis in the United States, the crisis in the eurozone in 2010, and the near stagnation in Japan for nearly two decades on the one side and the significantly higher rate of growth in low and middle income countries (particularly the large countries like India and China) on the other.
From the perspective of whether there has been a catch up (or convergence) in per capita incomes across a larger set of countries, it is seen that the standard deviation of per capita income (at PPP constant 2005 dollars) of 131 countries from 1980 to 2009 continued to increase for most of the period since the mid-1980s (indicating divergence rather than convergence), except in the last two three years. This indicates that despite a reduction in the share of advanced countries, the inequity between the developed and developing countries might have increased for most of the time period. To register for Indopac Summit 2012 click http://hpe.asia/register.html
As far as India is concerned, it has achieved faster growth from the 1980s. Not only was this growth higher compared to its own past, it was also much faster than that achieved by a large number of others countries.
Indias rank in per capita GDP showed an improvement from 117 in 1990 to 101 in 2000 and further to 94 in 2009, out of 131 countries for which comparable data are available for all points in time. China improved her rank from 127 to 74 during the same period. Underlying the relative decrease in share of advanced economies in the global GDP, there has been a marked shift in the location of manufacturing. This process was on in the 1990s too but got accelerated in the current decade. Again, the rise in share of China is particularly significant while other emerging economies, namely Brazil, India, Indonesia have also moved up in terms of their share in world manufacturing value added.
Indopac Summit is a potent platform that discusses out various issues of economic significance leading to a healthier sight for investors. Investors and Business representatives that would take part in the Summit would find the deliberations by top international economists and political leaders very useful to chart out the future growth plan in India and in other Asia Pacific region countries. Indopac Summit will take place between 2nd and 3rd October at Taj Mahal Hotel in New Delhi. To read more articles click http://hpe.asia/blog/
