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The Rise of the Rest

With the merge of globalization and glocalization, the gap of economic growth between developed and emerging countries is diminishing substantially. The G7 nation’s total GDP in 2000 was 133% of that of the EAGLEs (Emerging and Growth Leading Economies). In 2016, the EAGLEs frog leaped the growth by 128% of the G7’s. If the trend continues, this figure will hit 138% by 2020 and the projected GDP growth of the EAGLEs will outperform that of the G7 by two times within 2050 (G7 – US$bn 73,787 vs E7 – US$bn 145,349).

The EAGLEs although has a dynamic definition based on the projected contribution to the world economy with reference to the G6 countries (G7 minus USA), it is considered as of utmost importance for foreign investment and global market for innovation. The E7 countries are the frontrunners of global economies and the EAGLEs are considered as the next frontier economies.

The EAGLEs have been lucrative destinations for foreign investment and innovation portfolio. The developed countries are now wrapping up the labor intensive manufacturing industries and adopting value-additive production process through smart factory and Internet of Things (IoT). These manufacturing plants, and design & research hubs are being shifted to these EAGLE countries for Greenfield investment. Government and corporations are finding it more suitable to leverage the low-cost advantage and availability of cheap labor from these emerging markets. Rather than stagnating into high debt and accompanying slow growth of the developed countries, investors are now finding the EAGLEs’ healthy growth and manageable fiscal deficit more business-friendly.

But low-income bracket and high rate of unemployment pose a great challenge for the economies. The EAGLEs are now hitting the ‘sweet spot’ of consumer growth after 2017 for the people earning more than US$10 per day. Additional threats come as structural problem and comparatively expensive market trading especially in the Latin America. The Asian countries are facing the challenges of authoritarian government, political instability, terrorism and technological adaptation between fourth industrial revolution and innovation.

To encourage the booming economic growth of the EAGLEs, the developing countries should help identify the determinants of external shock that may undermine the potential growth. Profound, lasting transformation in the global economy is achievable through craftsmanship of the developing and emerging countries. The monumental shift of this world economy can achieve a steady and balanced momentum if market liberalization, political stability and infrastructural & institutional support are ensured. In addition, moving beyond the boundaries can help the foundering global economy stay afloat. Meanwhile, corporations and governments capable of meeting the interests of the Western democracies need to effectively supply optimum business, and conducive regulatory environment to the new bourgeois of Asia, Africa, and beyond – so that the EAGLEs can move to the next level of economic advancement.