The Global economy since the early 21st century has shown a momentous shift towards Asian Drivers in the global market. In particular due to the rapid growth of China and India. This shift whilst imperative to the economy has caused impeding effects on the growth and development of developing economies, particularly those economies in the south such as Latin America and Sub-Saharan Africa (SSA). Referring to the term “Driver” in relation to the emerging Asian economies it signifies the distinctive and significant impact, which these emerging economies are likely to have on the global economy. The economic processes of these Asian drivers have the ability to drastically transform the global economic, political, social interactions and have a major impact on the environment (Messner, 2007). The emergence of the Asian drivers in the global market poses huge challenges for the rest of the developing world, presenting both threat and opportunity. (Messner, 2007). An example of this as pointed out by Jenkins, Peters and Moreira seen in Figure 1 is the growth of Latin America trade with china, which dates back as early as the 1990’s. During 1999-2005 China’s imports from Latin America increased sevenfold while its exports to the region more than tripled. The result was decreased inflation rates, the Latin American economies were far more open than decades earlier and exchange rate policies were adopted that avoided overvaluation (IDB, 1997). In comparison to this some Latin American countries have been exposed to increased competition from China in third markets resulting in increased attention for foreign direct investment due to China’s low labor costs. Recent findings have shown that China could be the world’s largest exporter of the next decade (OECD, 2005).
This report will address a series of key points in relation to impacts on the developing world by these emerging Asian economies As pointed out by Kaplinsky and Messner’s introduction to the special...