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
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.
Presented by

Matthew O'Brien

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

How a Psychedelic Masterpiece Is Made

A short documentary about Bruce Riley, an artist who paints abstract wonders with poured resin

Join the Discussion

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

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

How a Psychedelic Masterpiece Is Made

A short documentary about Bruce Riley, an artist who paints abstract wonders with poured resin

Videos

Why Is Google Making Skin?

Hidden away on Google’s campus, doctors are changing the way people think about health.

Video

How to Build a Tornado

A Canadian inventor believes his tornado machine could solve the world's energy crisis.

Video

A New York City Minute, Frozen in Time

This short film takes you on a whirling tour of the Big Apple

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we save the night sky?

More in Business

Just In