Which Countries Are Participating?
It seems like there are some countries with all the money and others that have none. That might not be so far from the truth; at least, until recently. Currently, there are six “emerging economies” which are likely to “account for more than half of all global growth by 2025.” These are not necessarily the ones we might have expected though. They are: “Brazil, China, India, Indonesia, South Korea and Russia.” It thus looks like Asia has much of which to be proud. This news further indicates how there has been a definite shift in economic power. This will result in these six economies being able to assist the “lower income countries,” via “cross-border commercial and financial transactions.”
Global Impacts
What affect will all of this have on the world monetary system? Apparently it is unlikely to face domination of just one currency and in an unprecedented move, expenditures have “eclipsed” in developed economies. There has also been an increase in expenditure on infrastructure which could help “propel global economic growth and contribute some 24 percent of the world gross domestic product in 2012,” according to chief European economist from Citigroup, Michael Saunders. Developed countries can now also do well vis-à-vis this year’s investment boom but they will be slightly negatively impacted by the success of the emerging economies which has led to a shift in which “the centers of economic growth are distributed across developed and developing economies – it's a truly multipolar world.” In addition, there is the opinion that “multinational companies from developing countries are becoming a force in reshaping global industry, with rapidly expanding South-South investment and FDI inflows.” This is going to require fast action from international financial institutions if they want to keep up with these ebbs and flows.
Increased Cooperation
Due to these changes that are happening, it is going to look more and more crucial that economies around the world will simply have to work with each other in order to “reduce the risks of economic instability.” So there is work to be done. It’s no longer the case that just a couple of top western economies are running the show. Emerging economies are fast learning the tricks of the trade and battling for top global monetary positions.
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