Key Trade & Development Issues: New Realities in the Geography of the World Economy Dushni Weerakoon...
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Transcript of Key Trade & Development Issues: New Realities in the Geography of the World Economy Dushni Weerakoon...
Key Trade & Development Issues: New Realities in the
Geography of the World Economy
Dushni Weerakoon
Institute of Policy Studies of Sri Lanka
2
Key Developments in the Global Economy
• Combined output of emerging economies accounted for more than half of world GDP in 2005 (PPP)
• Other wide ranging indicators:– Account for 45% of world exports– Consume a half of world’s energy– Account for 4/5th of growth in oil demand– Hold 70% of world’s foreign exchange reserves
3
Rich economies no longer dominate global economy
• Emerging economies exerting impact on developed world
• Influence seen in different ways– High oil prices alongside low inflation
globally– Result of productivity growth in countries
such as China
4
Emerging economies showing rapid growth
• Annual growth of nearly 7%– Growth rates much wider now– Economies more integrated globally
• Faster growth spreading more widely offers possibility of sharp reduction in poverty globally
5
Developments not without problems
• Gains unevenly distributed
• Rise in emerging economies altering power relations
• Room for ‘protectionist’ policy stances to grow
• Economically more powerful emerging economies better placed
6
What are options for smaller economies?
• Link bilaterally to one or more of bigger economies (e.g. ISFTA)– Sharp increase in exports– Significant inflow of FDI linkages– Growing intra-industry links in sectors such as
automobiles– In turn, draw in more FDI from 3rd countries such
as China
7
Strategic options for developing countries?
• More difficult unilateral trade reforms done for the most part
• At multilateral levels, concerns are to ensure a fair global trading system
• Links to integration via South-South trade needs to be developed