20
Changing Growth Poles and Financial Positions
TABLE 1.1
Global Development Horizons 2011
Multidimensional polarity index, top 15 economies, 2004–08 average
Economy China United States Euro area Japan United Kingdom Korea, Rep. Russian Federation India Singapore Canada Australia Malaysia Turkey Mexico Saudi Arabia
Real index 26.20 20.33 10.86 5.59 5.51 5.41 4.79 4.62 4.30 4.08 3.27 3.12 3.07 2.94 2.94
Economy Euro area China United States Russian Federation Canada United Kingdom Korea, Rep. Australia Brazil Norway Saudi Arabia Turkey India Singapore Poland
HBS index 47.34 41.54 30.51 25.60 22.61 22.49 20.49 20.26 19.48 19.25 19.18 19.17 19.14 19.11 18.76
Economy
PPP index
China United States Euro area Japan Russian Federation Korea, Rep. United Kingdom India Singapore Canada Saudi Arabia Turkey Mexico Malaysia Australia
63.70 51.26 40.15 28.15 26.02 24.57 24.01 23.38 22.95 22.92 21.33 21.33 21.27 21.19 21.14
Sources: World Bank staff calculations based on data from IE Singapore, IMF DOT, IMF IFS, World Bank WDI, and WIPO Patentscope databases. Note: HBS = Harrod-Balassa-Samuelson; PPP = purchasing power parity. The shaded region indicates potential, as opposed to current, poles, with the cutoff determined by the fi rst signifi cant break on the index (from below). The multidimensional index was generated from the fi rst principal component of trade-, finance-, and technology-weighted growth shares, normalized to the maximum and minimum of the 1969–2008 period. Real, HBS, and PPP-adjusted indexes indicate growth rates calculated from, respectively, GDP data in real 2000 U.S. dollars, nominal local currency converted to U.S. dollars at current exchange rates and defl ated by U.S. prices, and 2005 international PPP-adjusted dollars.
China’s tremendous growth spillover effects also have been documented by studies employing other approaches (Arora and Vamvakidis 2010a). Other emerging economies that are potential growth poles include India and Russia—two of the BRIC economies—along with several other fast-growing emerging markets, such as Korea, Malaysia, Singapore, and Turkey, some of which are included in the group of Next-11 emerging countries (O’Neill et al. 2005). Although identification of these countries as potential poles is not surprising given their economic size, it is notable that several large developing economies do not feature as potential poles in the 2004– 08 period—Indonesia, for example—and that countries such as Poland and Russia enter several notches higher than their economic sizes alone would suggest. Furthermore, Latin American economies—such as Brazil and Mexico—tend to appear in lower positions than would be expected by their economic size, as their patterns of international engagement means that
the spillover effects from their growth are limited. Finally, some regional economic heavyweights, such as the Arab Republic of Egypt and South Africa, do not appear in table 1.1, because they are relatively small economies at the global level, and their growth spillovers tend to be contained within their respective regions. Th is does not, however, rule out the possibility that such economies may serve as regional growth poles (box 1.2). Also evident is the highly uneven distribution of growth polarity when measured at the global level—the top three countries (China, the euro area, and the United States) account for almost 80 percent of total global polarity, as measured by the real index for 2004–08. This metric has an interesting parallel in economic geography, where a small fraction of physical space often accounts for a disproportionately large share of economic activity. And like regional growth poles, growth polarity here appears to follow a power law relationship (a relationship that has been termed Zipf’s law).