NEW YORK – The Seoul G-20 summit was notable for the increasing political weight of the emerging economies. Not only was it located in one, but, in many ways, it was also dominated by them.
In two crucial areas, macroeconomics and global economic development, the emerging economies’ view prevailed. And an excellent proposal to link the two agendas – macroeconomics and development – emerged from the summit, and should be implemented in 2011.
A key feature of the world economy today is that it is running at two speeds. The United States and much of Europe remain mired in the aftermath of the financial crisis that erupted in the fall of 2008, with high unemployment, slow economic growth, and continuing bank-sector problems. Emerging markets, however, have generally surmounted the crisis. Whereas 2009 was a tough year for the entire global economy, emerging markets bounced back strongly in 2010, while rich countries did not.
Recent data from the International Monetary Fund’s World Economic Outlook tell the story. During 2010, high-income countries are expected to achieve modest annual GDP growth of around 2.7%, while the G-20’s emerging economies, together with the rest of the developing world, are expected to grow at a robust 7.1% rate. Asia’s developing economies are soaring, with 9.4% growth. Latin America is expected to grow at 5.7%. Even sub-Saharan Africa, the traditional laggard, is expected to grow at 5% in 2010.