OECD states losing power

THIS is likely to be the last year in which developed countries account for more than half of global output, according to the Organisation for Economic Cooperation and Development’s (OECD) annual Perspectives on Global Development report, published yesterday.

The Paris-based organisation, which represents 31 developed countries, said that its members would account for 51 per cent of world economic output this year. It predicts that this share will fall to 43 per cent by 2030.

“The global economy has undergone a structural transformation in the 20 years since 1990 that has shifted the world’s economic centre of gravity away from the OECD and towards the emerging economies,” the report said. It added: “Economic growth has been most visible in Asia, driven by the strong performance of China and India, but it has not been confined to that continent.”

Developing countries already accounted for the lion’s share of global growth prior to the crisis but as it unfolded, global growth has relied primarily on the emerging and developing economies, with nearly half coming from China alone.

IMF chief economist Olivier Blanchard yesterday argued it was in China’s interest to revalue the yuan.