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The rapid growth of emerging economies has led to a shift in economic power. The aggregate economic weight of developing and emerging economies is about to surpass that of the countries, which currently make up the advanced world.
According to 'Perspectives on Global Development: Shifting Wealth', a new publication from the Organisation for Economic-Cooperation and Development (OECD), the economic and financial crisis is accelerating this longer-term structural transformation in the global economy. Longer-term forecasts suggest that today's developing and emerging countries are likely to account for nearly 60% of world GDP by 2030.
While the 1990s was a lost decade for much of the developing world, growth rates picked up significantly in the 2000s, with the number of developing countries beginning to converge strongly with the affluent OECD countries.
Since 1990, the number of people in the world living on less than a dollar-a-day has fallen by over one quarter, approximately 500 million. So far, however, these reductions have mainly been concentrated in one country: China. Other countries have made progress but at a pace insufficient to counter the effect of population growth. Poverty reduction still represents a major challenge for the developing world. Inequality in many rapidly growing developing economies has also been increasing.
Due to their rapid growth and sheer size, India and China influence the key macroeconomic variables that matter for poor countries: interest rates, the price of raw materials, and wage levels for low-skill jobs. They also have major impacts on global trading and investment patterns.
Overall, shifting wealth is good news for development and good news for the global economy. "Growth in the developing world is an opportunity for the global economy to shift up a gear, which is confirmed by the role some emerging economies are playing in the current economic recovery", Mr. Gurria commented.