The developing countries keep the world going

The developing countries, led by the industrialised nations of Asia, are playing a fast growing role in the world economy and may soon overshadow the developed triangle of US-EU-Japan. Actually they have already overtaken them in key sectors. According to the UNCTAD’s Handbook of Statistics 2012 the share of emerging countries in “the most heavily exported manufactured products – including computer equipment, telecommunication equipment parts, valves, tubes, diodes, transistors, and office equipment parts and accessories – came to more than 60 per cent of the world total for the calendar years 2010-2011. That was a gain of more than 30 percentage points compared to 1995-1996”. The United Nations Conference on Trade And Development (UNCTAD) was established in 1964. It promotes the development-friendly integration of emerging countries into the world economy. UNCTAD’s self-definition  states that it “has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development, with a particular focus on ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development”. The fact that the developing economies of Asia, South America and Africa have gained a paramount importance in global affairs has also greatly increased the role of UNCTAD. The organisation is now considered an undisputed authority on world affairs related to economic development. Let’s return however to the growing part developing nations play nowadays. World trade In 2011 developing countries’ exports of manufactured goods accounted for up to 40.4% of the global total. Chinese exports are world champions in the crucial sectors of computer equipment, telecommunications equipment and parts and office equipment and accessories, accounting for around 60% to 70% of the total in the two-year period of 2010-2011. The corresponding percentage during 1995-1996 was around 30% to 35%. Today, practically most of the products used all over the world in the above mentioned crucial sectors are “Made in China”. Shipbuilding is another huge sector where developing countries have excelled. South Korea, China and India built between them 65% of the total tonnage constructed in the period 2010-2011. The relevant figure for the period 1995-1996 was only 27.5%. The main destinations of ships were Singapore, China, and Hong Kong (China), as well as “open registry” countries such as Liberia, the Marshall Islands, and Panama. Exports of ships and other floating constructions mainly for the energy sector have grown very rapidly during the last 10 years, even during the financial melt-down of 2008-2009. Growth The fast economic growth of the developing economies over the past two years has, on balance, compensated for the downturns or stagnation in a number of developed countries. In this way the developing world, with its cheap exports and growing imports is helping the developed countries to recover from their still raging credit and real economy crisis. Last but not least developing economies contribute greatly to the inward and outward flows of foreign direct investments (FDI). In the year 2011 $685 billion were invested in the developing economies by foreigners. The same developing countries themselves invested abroad another $385bn. In total, the international FDIs in and out of the developing world contributed with more than one trillion dollars to global economy’s development. There is no doubt that without the resilience of the developing countries the world economy would have dived into an abyssal vicious cycle after 2008, without obvious possibilities for a way out.