The following is a guest post by Angel Gurría, Secretary-General of the Organisation for Economic Co-operation Development. The opinions expressed are his own.
The world’s economic center of gravity is changing. Global GDP growth over the last decade owes more to the developing world than to high-income economies. If these trends continue, by 2030 developing countries will account for nearly 60% of world GDP on a purchasing-power parity basis, according to OECD calculations.
While high-income countries have been languishing in the worst recession since the 1930s, China and India have continued to power ahead. This is not a single stand-alone event, but a sign of an important structural transformation in the global economy, a process we call “shifting wealth.”
The tangible signs of shifting wealth are widespread. In 2009 China became the leading trading partner of Brazil, India and South Africa. The Indian multinational Tata is now the second most active investor in sub-Saharan Africa. Over 40% of the world’s researchers are now based in Asia. And by 2009, developing countries were holding USD 5.4 trillion in foreign currency reserves, nearly twice as much the amount held by rich countries.
Some commentators talk about these new trends with trepidation. But the “rise of the rest” is not a “threat to the west:” overall, the newfound prosperity in the developing world represents an enormous opportunity for citizens in the developing and developed world alike. Improvements in the range and quality of their exports, greater technological dynamism, better prospects for doing business, a larger consumption base – all these factors can create substantial welfare benefits for the world.