Transcript Key Trade Development Issues: New Realities in the Geography of the World Economy

Key Trade & Development
Issues: New Realities in the
Geography of the World
Economy
Dushni Weerakoon
Institute of Policy Studies of Sri Lanka
Key Developments in the Global
Economy
• Combined output of emerging economies
accounted for more than half of world GDP in
2005 (PPP)
• Other wide ranging indicators:
–
–
–
–
Account for 45% of world exports
Consume a half of world’s energy
Account for 4/5th of growth in oil demand
Hold 70% of world’s foreign exchange reserves
2
Rich economies no longer dominate
global economy
• Emerging economies exerting impact on
developed world
• Influence seen in different ways
– High oil prices alongside low inflation
globally
– Result of productivity growth in countries
such as China
3
Emerging economies showing rapid
growth
• Annual growth of nearly 7%
– Growth rates much wider now
– Economies more integrated globally
• Faster growth spreading more widely
offers possibility of sharp reduction in
poverty globally
4
Developments not without problems
• Gains unevenly distributed
• Rise in emerging economies altering
power relations
• Room for ‘protectionist’ policy stances
to grow
• Economically more powerful emerging
economies better placed
5
What are options for smaller
economies?
• Link bilaterally to one or more of bigger
economies (e.g. ISFTA)
– Sharp increase in exports
– Significant inflow of FDI linkages
– Growing intra-industry links in sectors such as
automobiles
– In turn, draw in more FDI from 3rd countries such
as China
6
Strategic options for developing
countries?
• More difficult unilateral trade reforms
done for the most part
• At multilateral levels, concerns are to
ensure a fair global trading system
• Links to integration via South-South
trade needs to be developed
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