From global tourism to manufactured products, and from industrial processes to modern technologies order, the re-convergence of emerging markets and their economic dynamism are re-shaping the world, and they are simultaneously shaking it.
The rise of emerging markets constitutes the biggest peacetime shock to the global system in a long time, perhaps since the Industrial Revolution spawned the Western ascendancy of the last 250 years. While the quest for certainty tempts us to extrapolate recent economic and political trends into the future, history and experience suggest we should retain a more cautious perspective. The emergence of China as a global power, for example, and of new regional powers, such as Brazil, Turkey, and India, is a fact. But we cannot predict how they will integrate into a global system still characterised by strong US and European interests, or how the latter will accommodate them.
We can say with certainty that the financial crisis and its aftermath are accelerating the Great Re-convergence between emerging and advanced Western economies and that the economic consequences of the crisis will take many years for Western nations to overcome. The current existential crisis in the EU and the Eurozone in particular could have far-reaching implications not just for the region but also for the global economy. Less well understood, and less obvious, though, are the political and economic shockwaves generated by the West’s predicament that are reaching into the emerging world too.