Seventeen years from now, half the global stock of capital, totaling $158 trillion (in 2010 dollars), will reside in the developing world, compared to less than one-third today, with countries in East Asia and Latin America accounting for the largest shares of this stock, according to the latest edition of the World Bank’s Global Development Horizons (GDH) report, which explores patterns of investment, saving and capital flows as they are likely to evolve over the next two decades.
Developing countries’ share in global investment is projected to triple by 2030 to three-fifths, from one-fifth in 2000, stated the report, titled ‘Capital for the Future: Saving and Investment in an Interdependent World’.
With world population set to rise from seven billion in 2010 to 8.5 billion 2030 and rapid aging in the advanced countries, demographic changes will profoundly influence these structural shifts.
“Global Development Horizons is one of the finest efforts at peering into the distant future,” the World Bank’s senior vice president and chief economist Kaushik Basu said, adding that Global Development Horizons does this by marshaling an amazing amount of statistical information. “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.”
In less than a generation, global investment will be dominated by the developing countries. And among the developing countries, China and India are expected to be the largest investors, with the two countries together accounting for 38 per cent of the global gross investment in 2030. “All this will change the landscape of the global economy, and Global Development Horizons analyses how,” he added.