Question

Please provide a detailed answer with justifications to the following question:

How do you think developed nations need to react to the fast-growing economies of the emerging counties?

Answer 1

The developed nations must react to the fast growing economies of the emerging countries. The developing countries like India and China has a very high rate of economic growth, after 30 or 40 years we may expect the shift of economic power from the West to East. The china and India has human capital in abundance so this is crucial factor determining the economic growth of these countries. A recent World Bank report says that the developed world will remain in a sluggish growth rate of % and while the developing nations are forecast to grow by %. After three or four decades after the G7 countries(US, UK, Germany, France, Japan, Italy and Canada) will be challenged by the E7 countries( China, India, Russia, Brazil, Mexico, Turkey and Indonesia). These countries will benefit from economic catch up, low labour costs, technology transfer and population growth. China is now a world leader in GDP in terms purchasing power parity, by 2050 India may be able to overtake U.S in terms of PPP.