Emerging Power: Developing Nations Now Claim the Majority of World GDP

For the first time since the 1800s, the developing world has surpassed the developed one
More
ChinaUS2.jpg
(Reuters)

Don't tell Niall Ferguson, but the rest have eclipsed the West.

As Chris Giles of the Financial Times points out, in 2013, so-called "emerging markets" have accounted for more than half of world GDP for the first time since Britain industrialized over two centuries ago. And the catchup growth isn't nearly finished yet. As you can see in the chart below from the Financial Times, the majority of global growth the rest of this decade will happen in the developing world. India and China alone will make up almost half of it.

0a536f8a-cd42-11e2-90e8-00144feab7de.jpeg

Why have poorer countries made up so much ground the past three decades? In a word, ideas. Indeed, whether we can trust them or not, the ideas of economists are, as Keynes said, more powerful than is commonly understood. The disastrous postwar experiment with communism in China and statism in much of the rest of the developing world, among other things, prevented them from growing anywhere near as much as they could. But starting in 1978 in China, they have ditched these ideological anchors for more market-oriented approaches that have let them catch up to where they should have been all along -- and fast. Now, that doesn't mean policy is perfect; just that it's much, much less imperfect than it used to be. That's all it takes to become a growth miracle. (And that's why Scott Sumner thinks North Korea could grow faster than any other country in history if it reforms).

A world where every country has industrialized is one that will look like the world before any country had industrialized. The center of economic gravity has and will continue to shift east.

It's a brave, new, old world.
Jump to comments
Presented by

Matthew O'Brien

Matthew O'Brien is a former senior associate editor at The Atlantic.

Get Today's Top Stories in Your Inbox (preview)

The Remote Warehouse Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Where the Wild Things Go

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.

Video

Adults Need Playtime Too

When was the last time you played your favorite childhood game?

Video

Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.

Video

The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air

Writers

Up
Down

More in Business

Just In