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

Multimedia US Defense Secretary: Iraqi Forces Lack 'Will to Fight'

Ash Carter criticizes Iraq's reaction to Islamic State; National Security Advisor Susan Rice echoed Carter's concerns in an interview on CBS More

Boko Haram Surrounds Havens With Land Mines

Chad and Cameroon say huge numbers of land mines planted by Boko Haram fighters along Cameroon's border with Nigeria are a danger to people, livestock and soldiers More

Women Activists for Peace Cross Korean DMZ

Governments of Koreas give international delegation of women peace activists permission to pass through heavily fortified boarder, but some critics say symbolic crossing only benefits Pyongyang More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs