Globalisation and Emerging Economies, a new book from the OECD, examines one of the major reasons for this transformation: international trade. Global trade relative to world GDP grew from 39% in 1992 to 52% in 2005. At the same time, the OECD countries' share of world trade dropped from 73% to 64%. Today, some of the most important economies in the world are not members of the OECD. Brazil, Russia, India, Indonesia, China and South Africa, the so-called BRIICS, are driving this integration of the emerging economies into global trade networks and value chains.
The book provides detailed reviews of each of the BRIICS, though for many readers, the most interesting part may be the description of how the architecture of world trade patterns is changing. Over the last 25 years, only Singapore, Korea and China have joined the core of the world trade network, and only China has become an established member. However, India, and maybe Russia, could displace some of the less central countries such as Singapore, Korea or perhaps even Italy. Australia and Belgium could be replaced in the core group by emerging economies such as Malaysia.
As might be expected, China is doing well in terms of the sheer amount of trade it conducts. But one of the most surprising revelations of the report is that India, Indonesia, Russia and South Africa actually do better than China relative to the size of their economies and those of their trading partners.
With the current crisis leading to new calls for protectionism, Globalisation and Emerging Economies is a timely reminder that it is at least partly thanks to trade in global markets that billions of people have managed to work their way out of poverty.
©OECD Observer No. 272, April 2009