Emerging Powers and
Global Governance
Rakesh Mohan Executive Director
International Monetary Fund
9th CUTS 30th Anniversary Lecture September 23, 2013
Washington DC
Emerging Powers and Global Governance
I. Background: A Historical View II. Evolution of Global Economic Policy III. Growth of Emerging Markets IV. Changes in Global Economic
Governance
2 Sep 23, 2013 Rakesh Mohan / IMF
Long-term Growth Overview: Per capita income (USA relative to Select Economies)
Source: Bolt, J. and J. L. van Zanden (2013). The First Update of the Maddison Project; Re-Estimating Growth Before 1820. Maddison Project Working Paper 4.
0
5
10
15
20
25
1800 1950 2000 2010
India China Asia Latin America
3 Sep 23, 2013 Rakesh Mohan / IMF
Asian Tigers: Per capita income (USA relative to Select Economies)
Source: Bolt, J. and J. L. van Zanden (2013). The First Update of the Maddison Project; Re-Estimating Growth Before 1820. Maddison Project Working Paper 4.
0
2
4
6
8
10
12
1950 1960 1970 1980 1990 2000 2010
Hong Kong Singapore Japan Taiwan S. Korea
4 Sep 23, 2013 Rakesh Mohan / IMF
China and India: Recent Growth Indicators
1980 1990 2000 2010 2018 CHINA Per capita income (PPP $) 251 796 2379 7553 16231 GDP-PPP (US $ billion) 248 910 3015 10128 22641 GDP-PPP (% of US) 9 16 30 70 107 Growth Rate (Decadal average, %) 7.4 9.8 10.0 10.3 Openness (Exports of goods and services, % to GDP) 10.6 16.1 23.3 30.6 INDIA Per capita income (PPP $) 419 883 1534 3378 5834 GDP-PPP (US $ billion) 286 745 1571 4022 7718 GDP-PPP (% of US) 10 13 16 28 37 Growth Rate (Decadal average, %) 2.9 5.7 5.7 6.9 Openness (Exports of goods and services, % to GDP) 6.0 6.9 12.8 21.9
Source: World Economic Outlook Database (April 2013), IMF; and WDI, World Bank.
5 Sep 23, 2013 Rakesh Mohan / IMF
Gross domestic product based on PPP: Share of world total (%)
64.2 62.8
50.1
44.9
35.8 37.2
49.9
55.1
0
10
20
30
40
50
60
70
1992 2000 2012 2018
AEs EDEs
51.3 48.8
37.8 33.8
15.3 17.1
27.1
31.8
0
10
20
30
40
50
60
70
1992 2000 2012 2018
G7 BRICS
Continuous increase in EDEs and BRICS share in world GDP; EDEs share now equals AEs. And, EDE shares expected to continue increasing … Source: World Economic Outlook Database (April 2013), IMF.
6 Sep 23, 2013 Rakesh Mohan / IMF
Per capita GDP (based on PPP) ($)
20,100
27,778
40,390
50,622
2,293 3,148 7,020
10,292
0
10,000
20,000
30,000
40,000
50,000
60,000
1990 2000 2012 2018
AEs EDEs
21,648
29,694
42,119
52,522
1,782 2,724
7,593
12,184
0
10,000
20,000
30,000
40,000
50,000
60,000
1990 2000 2012 2018
G7 BRICS
…. Given their still low income levels. Source: World Economic Outlook Database (April 2013), IMF.
7 Sep 23, 2013 Rakesh Mohan / IMF
Emerging Powers and Global Governance
I. Background: A Historical View II. Evolution of Global Economic Policy III. Growth of Emerging Markets IV. Changes in Global Economic
Governance
8 Sep 23, 2013 Rakesh Mohan / IMF
Emerging Powers and Global Governance
I. Background: A Historical View II. Evolution of Global Economic Policy III. Growth of Emerging Markets IV. Changes in Global Economic
Governance
9 Sep 23, 2013 Rakesh Mohan / IMF
Industry, value added (% to total)
64% 9%
27%
1990
G7 BRICS Rest of World
43%
20%
37%
2008
G7 BRICS Rest of World
Source: World Developments Indicators Online, World Bank.
10 Sep 23, 2013 Rakesh Mohan / IMF
Industry, value added (US$ billion)
4353
7155
651
3456
0
1000
2000
3000
4000
5000
6000
7000
8000
1990 2008
G7 BRICS
Source: World Developments Indicators Online, World Bank.
11 Sep 23, 2013 Rakesh Mohan / IMF
Exports of goods and services (% to total)
50%
6%
44%
1990
G7
BRICS
Rest of World
33%
17%
50%
2011
G7
BRICS
Rest of World
Source: World Developments Indicators Online, World Bank.
12 Sep 23, 2013 Rakesh Mohan / IMF
Exports of goods and services (US$ billion)
2173
7510
239
3732
0
1000
2000
3000
4000
5000
6000
7000
8000
1990 2011
G7 BRICS
Source: World Developments Indicators Online, World Bank.
13 Sep 23, 2013 Rakesh Mohan / IMF
World Metals Consumption (million tons)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2000
M1
2000
M5
2000
M9
2001
M1
2001
M5
2001
M9
2002
M1
2002
M5
2002
M9
2003
M1
2003
M5
2003
M9
2004
M1
2004
M5
2004
M9
2005
M1
2005
M5
2005
M9
2006
M1
2006
M5
2006
M9
2007
M1
2007
M5
2007
M9
2008
M1
2008
M5
2008
M9
2009
M1
2009
M5
2009
M9
2010
M1
2010
M5
2010
M9
2011
M1
2011
M5
2011
M9
2012
M1
2012
M5
2012
M9
China Rest of world
Source: World Economic Outlook (April 2013), IMF.
14 Sep 23, 2013 Rakesh Mohan / IMF
Mobile cellular subscriptions (% to total)
69%
6%
25%
1995
G7
BRICS
Rest of World
13%
41%
46%
2011
G7
BRICS
Rest of World
Source: World Developments Indicators Online, World Bank.
15 Sep 23, 2013 Rakesh Mohan / IMF
Mobile cellular subscriptions (Millions)
63
797
6
2445
0
500
1000
1500
2000
2500
3000
1995 2011
G7 BRICS
Source: World Developments Indicators Online, World Bank.
16 Sep 23, 2013 Rakesh Mohan / IMF
Population (% to total)
13%
47%
40%
1990
G7 BRICS Others
10%
42%
48%
2018
G7 BRICS Others
Source: World Economic Outlook Database (April 2013), IMF.
17 Sep 23, 2013 Rakesh Mohan / IMF
Demographics: Ages 15-64 years: Shares in total (%)
63.0
67.4
61.9
64.0
58.4
64.9
52
54
56
58
60
62
64
66
68
70
World More developed regions Less developed regions
2000 2050
…. Given their demographic profile in favor of working age population. Source: World Population to 2300, United Nations.
18 Sep 23, 2013 Rakesh Mohan / IMF
Emerging Powers and Global Governance
I. Background: A Historical View II. Evolution of Global Economic Policy III. Growth of Emerging Markets IV. Changes in Global Economic
Governance
19 Sep 23, 2013 Rakesh Mohan / IMF
IMF Quota Shares (%): Top Holders
Source: IFS, IMF.
1950 1980 2000 2012 1 US 32.0 US 21.2 US 17.6 US 17.7 2 UK 15.1 UK 7.4 Japan 6.3 Japan 6.6 3 Taiwan 6.4 Germany 5.4 Germany 6.2 Germany 6.1 4 France 6.1 France 4.8 France 5.1 France 4.5 5 India 4.7 Japan 4.2 UK 5.1 UK 4.5 6 Canada 3.5 Canada 3.4 Italy 3.3 China 4.0 7 Netherlands 3.2 Italy 3.1 Saudi Arabia 3.3 Italy 3.3 8 Belgium 2.6 China 3.0 Canada 3.0 Saudi Arabia 2.9 9 Australia 2.3 India 2.9 Russia 2.8 Canada 2.7 10 Italy 2.1 Netherlands 2.4 Netherlands 2.4 Russia 2.5 11 Brazil 1.7 Belgium 2.2 China 2.2 India 2.4 12 South Africa 1.2 Australia 2.0 Belgium 2.2 Netherlands 2.2 13 Mexico 1.0 Saudi Arabia 1.7 India 2.0 Belgium 1.9
20 Sep 23, 2013 Rakesh Mohan / IMF
IMF Quota Shares (%) : Historical
0
10
20
30
40
50
60
70
80
90
1948 1960 1970 1980 1990 2000 2010
Share in Quotas: AE Share in GDP-MER: AE Share in GDP-PPP: AE
Share in Quotas: EDE Share in GDP-MER: EDE Share in GDP-PPP: EDE
Source: IFS, IMF.
21 Sep 23, 2013 Rakesh Mohan / IMF
IMF Quota Shares (%): Recent Reforms
61.6 60.5 57.6
38.4 39.5 42.4
0
10
20
30
40
50
60
70
2000 2008 Reforms 2011 Reforms/14th
Review (yet to be implemented)
AEs EDEs
46.0 45.4 43.4
10.0 11.5 14.8
0
10
20
30
40
50
60
70
2000 2008 Reforms 2011 Reforms/14th
Review (yet to be implemented)
G7 BRICS
But, only modest increase in EDEs and BRICS share in quotas in IFIs. Source: IMF.
22 Sep 23, 2013 Rakesh Mohan / IMF
GDP and Quota Shares (%)
50.1 49.9
60.5
39.5
0
10
20
30
40
50
60
70
AEs EDEs
2012 GDP Share 2012 Quota Share
37.8
27.1
45.4
11.5
0
10
20
30
40
50
60
70
G7 BRICS
2012 GDP Share 2012 Quota Share
EDEs and BRICS share in quotas well-below their GDP shares Source: IMF.
23 Sep 23, 2013 Rakesh Mohan / IMF
Long-term GDP Projections: GDP at 2005 PPP (USD billion)
1362
9 2123
0
3882
0
1078
7
3326
3
6621
1
4147
1330
1
4338
0
0
20000
40000
60000
80000
100000
120000
140000
2012 2030 2060
US China India 27
353 39
721
6828
5
1972
6
5572
4
1252
12
0
20000
40000
60000
80000
100000
120000
140000
2012 2030 2060
G7 BRICS
Source: Economic Outlook No 91 - Long-term baseline projections Dataset, OECD (June 2012).
24 Sep 23, 2013 Rakesh Mohan / IMF
Long-term GDP Projections: GDP at 2005 PPP (% to World GDP)
Source: Economic Outlook No 91 - Long-term baseline projections Dataset, OECD (June 2012).
22.5
17.8 16.3
17.8
27.9 27.8
6.8
11.1
18.2
0
10
20
30
40
50
60
2012 2030 2060
US China India
45.2
33.3
28.7
32.6
46.7
52.6
0
10
20
30
40
50
60
2012 2030 2060
G7 BRICS
25 Sep 23, 2013 Rakesh Mohan / IMF
G7 and G20 Economies
G7 Countries • Canada • France • Germany • Italy • Japan • UK • US
G20 Countries • G7 plus • Argentina • Australia • Brazil • China • India • Indonesia • Korea • Mexico • Russia • Saudi Arabia • South Africa • Turkey
26 Sep 23, 2013 Rakesh Mohan / IMF
THANKS
27 Sep 23, 2013 Rakesh Mohan / IMF