The two countries together will account for 38 per cent of the global gross investment
statesman news service
KOLKATA, 3 JUNE: In less than a generation, global saving and investment will be dominated by the developing world with India&’s share in global investments expected to almost double by 2030. No other country except China will be investing more than India globally, says the latest edition of World Bank&’s Global Development Horizons (GDH) report.
The report, titled “Capital for the Future: Saving and Investment in an Interdependent World”, explores patterns of investment, saving and capital flows as they are likely to evolve over the next two decades.
Among the developing countries, China and India are expected to be the largest global investors. The two countries together will account for 38 per cent of the global gross investment in 2030. In fact, developing countries’ share in global investment is projected to triple by 2030 to three-fifths, from one-fifth in 2000. This is expected to change the landscape of the global economy and make the world&’s economies more integrated than any time in history. Productivity catch-up, increasing integration into global markets, sound macroeconomic policies, and improved education and health are helping speed growth and create massive investment opportunities, which, in turn, are spurring a shift in global economic weight to developing countries, the World Bank report says.
By 2039, India will reach its maximum ratio of working to non-working age population with 2.2 working person for every non-working one. But already by the mid-2020, when most of the other developing countries will experience less favourable demographic trends, India will be one of the economies with the highest ratios of working to non-working population. This, jointly with its large population and growing incomes, are the key explanations of why India will become a powerhouse in global savings and investment, says the report.
For the case of India, the report says, without additional efforts in education, the proportion of the population with low or no education would decrease but would still be close to 60 per cent, by 2030. Policy makers in India and in many developing countries have a central role to play in boosting private savings through policies that raise human capital, especially for the poor.
The good news is that, unlike in the past, developing countries will likely have the resources needed to finance huge future investments for infrastructure and services, including in education and health care.