Boom time ahead for Big Five developing countries
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Your support makes all the difference.Unprecedented growth in the world's five biggest developing countries will double their share of the world economy by 2020. Half of the likely increase in the rich countries' exports during this period will go to the developing world.
These dramatic predictions, contained in the World Bank's annual assessment of global economic prospects, imply an upheaval in the way the world does business, as more and more of industry becomes truly international. But the bank's economists reckon that developed and developing countries alike could benefit enormously.
Milan Brahmbhatt, the principal author of the report, said: "The outlook for developing countries looks much more favourable over the next 10 years than in the previous decade." He warned, however, that some countries in Africa and the Middle East whose policies cut them off from international capital and competition risked being left behind.
The World Bank forecasts a further increase in private investment in the developing world from last year's record total of just under $250bn (pounds 157bn). The recent crisis in East Asia would lead to only a temporary pause, according to Uri Dadush, head of the bank's development prospects group.
"Other regions have been relatively untouched by the crisis, and its effects are likely to prove shortlived," he said.
In its annual report, published separately yesterday, the International Monetary Fund emphasised the steps it has taken to be able to respond more quickly to financial crises. The annual meetings of the bank and fund, starting in Hong Kong next week, will review how well the arrangements worked in East Asia.
A senior IMF official said the fund had issued clear warnings about the possibility of a currency crisis, both in private and public, some months before the emergency devaluation of the Thai baht. It had also put together very rapidly its second biggest emergency loan ever to bail out the Thais.
The World Bank's Mr Dadush said the emerging importance of the "Big Five" - Brazil, China, India, Indonesia and Russia, with half the world's labour force but accounting for only a tenth of world output - would transform trade relationships. Their share of world GDP was likely to climb to just over a fifth by 2020. This expansion meant the developing countries would take 50 cents out of every dollar's worth of the OECD countries' export growth.
The growing importance of the Big Five will revive suggestions that they will eventually oust countries like the UK and Italy from the G7, the exclusive club of the world's richest economies.
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