For decades, the US was the market into which developing Asian economies were keen to sell goods and services. The table has turned substantially.
When President Barack Obama rounded off his Indian trip last year, he gloated over the $10 billion (about Rs 45,000 crore) worth export orders he had sealed. And in Washington, Mandarin was a hot language when President Hu Jintao came calling.
Welcome to a new reality in which India and China are driving the global economy as engines of growth. And the US knows this.
The two Asian neighbours were among the developing economies that not only pulled the global economy out of the recent crisis, but will also lead its recovery in 2011, the World Bank said in a report released on Wednesday.
Developing economies such as India and China contributed a significant 40% to global recovery, riding solid domestic demand that will continue to fuel growth.
However, the global economy as a whole will recoup and stabilise this year and go for an overdrive in 2012, said the report titled, “Global Economic Prospects 2011: Navigating Strong Currents.”
“The world economy is moving from a post-crisis bounce-back phase of the recovery to slower but still solid growth this year and next, with developing countries contributing almost half of global growth,” the report said.
Developing countries as a block are expected to grow by 7% in 2010, 6% in 2011 and 6.1% in 2012, beating growth in high-income countries, which are projected to grow at 2.8% in 2010, 2.4% in 2011 and 2.7% in 2012.
After the bounce-back from the financial meltdown in 2008, 2011 and 2012 will be less eventful in comparison, said the bank.
Among the factors driving the sobriety is a plateauing of domestic demand in developing countries, while the US and European economies struggle with the after-effects of the excesses that led to the global economic crisis this decade, the report observed as it called for greater action among rich countries.
In short, India, China and other developing economies have done their bit and it is for the big boys of the world economy to show their responsibility.