Emerging economies | The Economist
- 5 years ago
On many measures, the emerging economies now have more heft and reach than the developed ones
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The term emerging markets was coined in the 1980s. It was intended as a more appealing way to describe fast-growing countries in what was then known as the third world.
But by the end of that decade these emerging economies were still small in comparison to developed economies such as Germany, Japan, and the United States.
Over the past 20 years, especially the last ten, the emerging economies have grown quickly accounting for a rising share of world output.
In 2008 they finally overtook the developed world accounting for more than half of the world economy if you include
countries like South Korea that have since joined the ranks of the developed economies and if you take proper account of differences in local prices.
This growing clout is most evident in the market for commodities. The emerging economies burned almost 55 percent of all the oil consumed last year their factories and building sites accounted for 65 percent of global copper consumption and three-quarters of the world's consumption of steel.
Their consumer power has also grown they bought over half the world's motor vehicles last year, including vans and lorries, and took out over three-quarters of new mobile phone subscriptions.
Developing countries were once self-reliant but poor. In recent decades, by contrast, cross-border trade and investment of soared in both directions. Last year they accounted for more than half of the world's exports and more than half of America's overseas sales.
Emerging economies have also become more resilient. They have amassed an enormous cushion of hard currency reserves. That insurance may have helped persuade foreigners to invest in their stock markets which have increased greatly in size despite many ups and downs along the way. The emerging economies cannot match the rich world on every measure. For example Japan Europe and America still have few rivals in the emerging world when it comes to public debt which averages 35% of GDP in emerging economies and over a hundred percent in the rich world.
The economic weight of the emerging world is profound but not unprecedented. In 1820 these countries accounted for about 70 percent of the world economy, before industrial revolutions in Europe and America left them far behind. Their recent progress is not then another revolution but rather a restoration.
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Subscribe NOW to The Economist: http://econ.st/1Fsu2Vj
The term emerging markets was coined in the 1980s. It was intended as a more appealing way to describe fast-growing countries in what was then known as the third world.
But by the end of that decade these emerging economies were still small in comparison to developed economies such as Germany, Japan, and the United States.
Over the past 20 years, especially the last ten, the emerging economies have grown quickly accounting for a rising share of world output.
In 2008 they finally overtook the developed world accounting for more than half of the world economy if you include
countries like South Korea that have since joined the ranks of the developed economies and if you take proper account of differences in local prices.
This growing clout is most evident in the market for commodities. The emerging economies burned almost 55 percent of all the oil consumed last year their factories and building sites accounted for 65 percent of global copper consumption and three-quarters of the world's consumption of steel.
Their consumer power has also grown they bought over half the world's motor vehicles last year, including vans and lorries, and took out over three-quarters of new mobile phone subscriptions.
Developing countries were once self-reliant but poor. In recent decades, by contrast, cross-border trade and investment of soared in both directions. Last year they accounted for more than half of the world's exports and more than half of America's overseas sales.
Emerging economies have also become more resilient. They have amassed an enormous cushion of hard currency reserves. That insurance may have helped persuade foreigners to invest in their stock markets which have increased greatly in size despite many ups and downs along the way. The emerging economies cannot match the rich world on every measure. For example Japan Europe and America still have few rivals in the emerging world when it comes to public debt which averages 35% of GDP in emerging economies and over a hundred percent in the rich world.
The economic weight of the emerging world is profound but not unprecedented. In 1820 these countries accounted for about 70 percent of the world economy, before industrial revolutions in Europe and America left them far behind. Their recent progress is not then another revolution but rather a restoration.
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