Paradigm shift in global economic structure by 2030: OECD

The Organisation for Economic Co-operation and Development (OECD), in its

recent report has said that the aggregate economic weight of developing and
emerging economies is about to surpass that of the countries that currently make
up the advanced world. The report titled “Perspectives on Global Development:
Shifting Wealth” said that developing nations like India will together account for a
share of 60% of global economy by 2030 and that this shift has been accelerated
by the financial meltdown of 2008. OECD nations, including the US, France and
Germany currently account for more than 50% of the World’s GDP.

2000 2010

OECD Non- OECD Non-

member member member member
Other Other
countrie economi countrie economi
40% 49%
s es s es
60% 40% 51% 49%

2030

Non-
OECD m em b
member Other er
countrie 57% econo
s m ies
43% 57%

SOURCE: OECD
The global GDP growth over the last decade owes more to the developing world
than high-income economies. As the graph below shows, the growth rates of
developing countries have picked up significantly since 2000. During the period
from 1990 to 1999, while the World average GDP growth was around 2.9%, the
growth of advanced economies stood at 2.7% and that of emerging economies
stood at 3.3%. Since 2000, while the growth of advanced economies fell down to
1.8%, the growth of emerging economies almost doubled to 6%. During last
seven years (2003 to 2009) the divergence in growth rates between advanced
and emerging economies has increased even more.

Tracking Growth Rates: Emerging and Advanced

Economies
10.0

8.0

6.0
In Percent

4.0

2.0

0.0
90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09
-2.0
19

19

19
19

19

19

19

19

19

19

20

20

20

20

20

20

20

20

20

20
-4.0

World Advanced economies Emerging and developing economies

SOURCE: IMF

Among the major challenges afflicting developing economies, the OECD has
identified poverty reduction and growing inequalities as a major challenge. It said,
while the number of people in the world living on less than a dollar-a-day has
fallen by almost 500 million, since 1990, most of these reductions have mainly
been concentrated in China. Other countries have made progress but at a pace
insufficient to counter the effect of population growth. It however, expressed hope
that rapid growth rates would propel the governments in developing countries to
boost public spending on social protection.