Emerging Economies Catching Up Faster Than You Might Think

Six emerging economies could account for half of all global economic growth by 2025. As a result, global wealth and power are shifting fast, concludes a World Bank report, and new financial structures and regulations could follow. The report, described by Don Cayo of the Vancouver Sun, points to trend for emerging economies: Trade has expanded among them and their share in trade has climbed to 45 percent; they hold more than 60 percent of exchange reserves; investment risk has dropped and they recovered quickly after global economic crisis. “Emerging market multinationals are becoming a force in reshaping global industry, with rapidly expanding South-South investment and FDI inflows,” notes Yifu Lin, World Banks’s chief economist. “International financial institutions need to adapt fast to keep up." China and Korea tend to rely more on exports while Brazil and Mexico build domestic consumption. Greater wealth boosts investment in research and development as well as potential innovation. – YaleGlobal