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Developing world to dominate global investments by 2030

31st May 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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In less than 20 years from now, emerging economies will have the most “economic weight” as they come to dominate global investments, a World Bank Global Development Horizons report has found.

The ‘Capital for the Future: Saving and Investment in an Interdependent World’ report, released this month, states that, in 17 years, half of the $158-trillion global capital will reside in the developing world, compared with the less than one-third currently recorded.

East Asia and Latin America would account for the largest share of this stock, it states.

China and India will become the largest investors – together accounting for 38% of the global gross investment by 2030 – while developing countries’ combined share in global investment will triple to three-fifths, up from the one-fifth recorded in 2000.

The report, which explores patterns of investment, saving and capital flows, attributes the “structural shifts” to changing demographics, as the world’s population will increase to 8.5-billion by 2030, from 7-billion in 2010.

Emerging countries are expected to add 1.4-billion people to the global population by 2030, expanding its relatively youthful population, while the advanced economies will undergo “rapid ageing”.

“Productivity catch-up, increasing integration into global markets, sound macroeconomic policies and improved education and health are helping to speed up growth and create massive investment opportunities, which, in turn, are spurring a shift in global economic weight to developing countries, says World Bank senior VP and chief economist Kaushik Basu.

“We know from the experience of countries as diverse as South Korea, Indonesia, Brazil, Turkey and South Africa the pivotal role investment plays in driving long-term growth,” he concludes.

Edited by Martin Zhuwakinyu
Creamer Media Magazine Managing Editor

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