selm3 canuto
Post on 02-Apr-2016
236 Views
Preview:
DESCRIPTION
TRANSCRIPT
Recoupling or Switchover:Developing countries in the global economy
Otaviano CanutoVice President and Head of Network
Poverty Reduction and Economic ManagementThe World Bank
Cyclical Coupling and Trend Decoupling
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
World Output Growth 1961 - 2012(% Change)
AdvancedDeveloping Countries
Source: World Bank WDI and DEC Interim Forecasts April 2010.
Pace of recovery in production mixedacross developing regionsindustrial production, ch% (3m/3m saar)
Source: World Bank data
-40
-30
-20
-10
0
10
20
30
40
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10
Latin America
Europe and Central Asia
East Asia and Pacific
South Asia
Beyond China and India…
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
< -6% -6 to -4 -4 to -2 -2 to 0 0 to 2 2 to 4 4 to 6 > 6%
Freq
uenc
y
Frequency Distribution of GDP Growth in 2009 - Developed and Developing
GDP Growth in 2009 (%)
Developing countries (122). Median growth: +2.13%.
High Income OECD (25) Median growth: -3.72%.
Legacy of the crisis on growth trends of advanced economies
-20
0
20
40
60
80
100
120
-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7
Pre crisis trend
Actual output
Source: IMF WEO April October 2009. Output = logarithm of real GDP per capita. 100 equals trend in year 7. First year of crisis at t = 0. Years on x axis. (Example: Korea 1997).
Output Loss
7
G20 Countries: General Government Debt to GDP Ratios (2000 – 2015)
Source: IMF, Fiscal Monitor, May 2010
Household Balance Sheet Deleveraging
-7.5
-5
-2.5
0
2.5
5
7.5
10
12.5
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
United States: Personal Savings Rate and Current Account Balance (as % of GDP)
1960 - 2009:3
Personal Saving Rate
Current Account Balance
10Source: US Bureau of Economic Analysis
Jobless recovery in advanced countries
Source: IMF, World Economic Outlook, April 2010
Decomposition of the CumulativeChange in the Unemployment Rate during theGreat Recession
Growth interdependence
C
B
Developing countries(growth rates)
Advanced countries (growth rates)
A
A B Reverse coupling B C Locomotive switchover
AC0AC1
DC0
DC1
Toward a locomotive switchover?
Share of global GDP - PPP (%)
13
0
20
40
60
80
1980 1985 1990 1995 2000 2005 2010 2015
Advanced economies Emerging and developing economies Developing Asia
Source: IMF (WEO, April 2010)
Scope for autonomous growth versusgravity forces toward a low-growth path
I. (Overall) low degree of leverage [public and private balance sheets in good shape]
II. Technological convergence gap
III. Trade, structural change and global rebalancing of demand and supply
IV. Social trickle-down of growth
V. Natural resources as a blessing or a curse
I. Potential pitfalls on the way to leveraging developing-country balance sheets
• Public sector management capacities and appropriate governance mechanisms
• Increased leverage and higher financial fragility
• Crowding-out by debt issues from developed countries
• Higher overall costs of finance
• Risks of asset market bubbles
Signs of monetary tightening in some emerging market countries
Sources: JP Morgan and DECPG (World Bank) staff calculations
3.95
4.00
4.05
4.10
4.15
4.20
4.25
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10
Emerging Europe
Latin America
Emerging Asia (right)
Official interest rate (GDP-weighted regional averages, percent)
Private capital flows to developing countries: at the start of a new boom-bust cycle?
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Private Debt Flows
Portfolio equity flows
Foreign direct investment
Private Capital Flows to Developing Countries 1970-2010 (percent of GDP)
Source: World Bank data and staff estimates; Institute for International Finance. 17
II. Convergence gap and non-rival use of existing technologies
• Obstacles to more rapid technology diffusion: Information asymmetries and uncertaintiesComplementary factors: reliable infrastructure; access to finance; educated labor force Institutional factors and investment climate Institutional barriers to competition
• On the other hand: global changes have favored technology transfer
III. Trade and structural change as vents for surplus labor
• Lewis type of structural change and growth performance
• Lumpiness in products, space , and time
• Rising international trade and recent technological changes have facilitated structural change
• Cases of “moving on”, after “breaking in”
Over-absorption in Advanced Economies supported growth-cum-structural-change in Developing
Countries
Source: IMF staff estimates (WEO, April 2010)CHN+EMA: China, Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan Province of China, and Thailand; DEU+JPN: Germany and Japan; OCADC: Bulgaria, Croatia, Czech Republic, Estonia, Greece, Hungary, Ireland, Latvia, Lithuania, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Turkey, and United Kingdom; OIL: Oil
exporters; ROW: rest of the world; US: United States.
0%
20%
40%
60%
80%
100%
1996 1998 2000 2002 2004 2006 2008
BRICs Other LMICs USA Other HICs EU 25
Share of world trade for developing countriesshare of world imports in percent
Source: World Bank, UN-COMTRADE.
Over one third of developing countries exports go to other developing countries – and rising fast…
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
Share of Developing Country Markets in Developing Country Exports
1962 - 2008
22
Approaching one quarter of developing countries’ manufactured exports go to other developing
countries…and rising
0.0
5.0
10.0
15.0
20.0
25.0
1973 1970 1980 1990 2000 2007
Intra-Developing Countries' Manufactured Exports
(% of total manufactured exports)
Rising South-South Trade:including low-income countries
24
0 10 20 30 40 50 60
Europe & Central Asia
Middle East & North Africa
Sub-Saharan Africa
South Asia
East Asia & Pacific
Latin America & Caribbean
export growth in LICs due to GDP growth in major import markets, 2000-2008 (%)
BRIC
Other LMICs
USA
EU25
Other HICs
Source: Canuto, O. et al, Export-led growth v2.0, Economic Premise n.3, Feb 2010
Towards an export-led growth v2.0?
• Export-led growth still limited in geography and sector coverage
• Present level of imbalances is relatively recent• Weight of oil prices in global imbalances• Global imbalances are concentrated in a few
countries• It suffices to have domestic absorption rising
faster than output in developing countries as a whole
• Policy interests around exchange-rate realignments
Most developing country exports are negligible compared to OECD imports
0
5
10
15
20
Sao
Tom
e an
d …Co
mor
osM
arsh
all I
sland
sSt
. Vin
cent
and
the …
Solo
mon
Isla
nds
Sier
ra Le
one
Haiti
Togo
Nepa
lGu
inea
Geor
gia
Mal
iSw
azila
ndZi
mba
bwe
Mac
edon
ia, F
YRCu
baBo
livia
Hond
uras
Guat
emal
aUz
beki
stan
Cost
a Ri
caM
oroc
coAz
erba
ijan
Rom
ania
Ukra
ine
Chile
Indo
nesia
Mal
aysia
7 more account for another 4.5%
Cumulative Developing Country Exports in 2007(As Percent of OECD Imports)
130 developing countries account for 2.5% of OECD imports.
One country (China) accounts for 10.5% of OECD imports
Global Imbalances are concentrated in a few countries
-1.5
-1
-0.5
0
0.5
1
1.5
2
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Current Account Balances(Percent of World GDP)
OECD *
Rest of World
* Ex. Korea
-0.5
0
0.5
1
1.5
2
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
Rest of World Current Account Balances(Percent of World GDP)
Developing Countries ex. China
Non-OECD High Income
China
LPI 2010 – performance varies around the world
Source: Connecting to Compete, World Bank, 2010No data
Logistics friendly
Logistics unfriendlyPartial performersConsistent performers
G20 use of selected temporary trade barriers
0
500
1000
1500
2000
2500
3000
3500
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
China as exporterDeveloping economy as exporter (non-China)Developed economy as exporter
By import source, 1997-2009, unique product-exporter combinations
Source: Global Anti-dumping Database; World Bank.
Whither the prices of natural resources?
31
0
20
40
60
80
100
120
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Crude Oil Price: 1900-2011(constant 2008 $/bbl)
Forecasts
Source: Through 1900-2009: BP Statistical Review of World Energy and through 2010-2011: World Bank estimates
Source: World Bank
V. Natural resources as a blessing or a curse
20.0
30.0
40.0
50.0
60.0
70.0
80.0
AFR LAC MNA All ECA EAP SAS
Developing Countries: Commodity Exports Share (%) in 2003-07 *
* As % of merchandise exports. Simple averages for country groups. Source: World Bank World Development Indicators.
To conclude…• Yes, there is a scope for a switchover where
developing countries as a whole take on a greater role as global locomotive and move global growth forward, offsetting forces toward a negative recoupling deriving from less buoyancy in advanced countries.
• Nevertheless comprehensive homework in terms of domestic policies and reforms will be fundamental to accomplish that mission
top related