News / Africa

Developing World Investment to Rise

2013 edition of Global Development Horizons report sees large investment growth in developing world.
2013 edition of Global Development Horizons report sees large investment growth in developing world.

Multimedia

Audio
  • Listen to De Capua story on Global Development Horizons report

Joe DeCapua
The developing world is poised to become a major player in global investment. The World Bank says in fewer than 20 years half the global stock of capital will be in developing countries. That compares to about one-third today. The bank has released the latest edition of its Global Development Horizons report.


The World Bank forecasts, by 2030, “developing countries’ share in global investment is projected to triple” to nearly 160-trillion dollars. Chief Economist and Senior Vice-President Kaushik Basu said that “demographic changes will profoundly influence structural shifts.”

“Population will increase from the current roughly seven billion to eight-point-five billion at the end of 2030. Some societies will be well advanced in the process of aging. The demographic bulge in different countries will progress at different paces. And the big question that should concern us all is what will happen to the major drivers of growth and development, namely savings and investment – and in particular, infrastructural investment.”

The report is being released during – what Basu called – troubling times. He said there is a “decoupling between the world of finance and the real economy.”

“By most financial indicators we are doing better, distinctly better, actually, than a year ago. But if you look at the real economy, including the news that came from Europe, the recession is prolonging. Europe is probably into the longest stagnation since 1945. There is a trap lurking at every level of income for every country. Policymakers have to be aware of that,” he said.

He admitted that long-term economic forecasting can be difficult. However, he said that the Global Development Horizons report reveals “a host of interesting trends.”

“By 2030, we are also being told that China and India will be the largest investors in the world. Developing countries will account for 47 to 60 percent of global capital flows in 2030. This is an amazing shift from the current roughly 23 percent,” he said.

That’s expected to continue until the late 2030s, when another region will rise.

“At that stage,” he said, “the demographic dividend will be on the rise in sub-Saharan Africa. A lot of our global attention will no doubt turn to the great opportunities that will happen in sub-Saharan Africa.”

The report paints a scenario of deeper financial market development there. It adds that foreign investors will become much more willing to invest in the region. Also, sub-Saharan Africa will have a much younger labor force than many other parts of the world.

“By 2030, for every dollar that will be invested in the world 60 cents will be invested in developing countries. This is a dramatic change with respect to the past. For almost four decades, from the 60s to the 90s and 2000, the investments were only 20 cents to the dollar. So this is a major change,” said  Maurizio Bussolo, lead author of the World Bank report.

Bussolo added that by 2019, total investment share in developing countries will overtake the total investment by developed nations.

“This is happening even though we foresee the investment rates coming down across all the regions. This is because growth will decelerate from [a] very high level and there will be a lot of churning within countries where investment will shift toward service sectors from agricultural and manufacturing.”

The report also says that “unlike in the past, developing countries will likely have the resources needed to finance massive future investments for infrastructure and services, including education and health care.”

Education is described as the best opportunity for policymakers to increase the earning capacity of its poor citizens.

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs