A garment factory in Vietnam (Photo: VNA) London (VNA) – In a recent article,The Economist said a few emerging markets will still grow this year, includingVietnam.
It noted that this year could be a good one for whateconomists call convergence. This normally takes place when poor economies growfaster than rich ones, narrowing the income gap between them. This year will bea bit different. Few emerging markets will grow at all – perhaps China, Egyptand Vietnam. But because advanced economies will probably retreat even faster,the gap between them will narrow, the article said.
The article mentioned the World Bank’s new book - “GlobalProductivity: Trends, Drivers, and Policies”, in which the bank uses analgorithm to sort through many combinations of countries, looking for groupsthat seem to be converging with each other.
Based on the productivity performance of 97 economies since2000, the bank identifies five clubs. The three gloomiest groups comprisefairly poor countries. A fourth contains some big ones of unfulfilledpotential, such as Argentina, Brazil, Indonesia, Mexico and South Africa.
The most successful club spans all today’s advanced economiesas well as 16 emerging markets, such as China, India, Malaysia, Thailand andVietnam.
According to the book, poorer members tend to grow fasterthan the rich ones, at a pace that would halve the productivity gap betweenthem every 48 years.
The authors of the World Bank’s book worry that the COVID-19pandemic will inhibit investment, shorten supply chains and breed insularity,all of which could hamper convergence.
But they also note some potential silver linings. Crises, forinstance, can encourage structural reforms; the lack of upkeep of outdatedcapital during dark times can hasten its replacement with newer technologies inthe recovery, according to The Economist./.
It noted that this year could be a good one for whateconomists call convergence. This normally takes place when poor economies growfaster than rich ones, narrowing the income gap between them. This year will bea bit different. Few emerging markets will grow at all – perhaps China, Egyptand Vietnam. But because advanced economies will probably retreat even faster,the gap between them will narrow, the article said.
The article mentioned the World Bank’s new book - “GlobalProductivity: Trends, Drivers, and Policies”, in which the bank uses analgorithm to sort through many combinations of countries, looking for groupsthat seem to be converging with each other.
Based on the productivity performance of 97 economies since2000, the bank identifies five clubs. The three gloomiest groups comprisefairly poor countries. A fourth contains some big ones of unfulfilledpotential, such as Argentina, Brazil, Indonesia, Mexico and South Africa.
The most successful club spans all today’s advanced economiesas well as 16 emerging markets, such as China, India, Malaysia, Thailand andVietnam.
According to the book, poorer members tend to grow fasterthan the rich ones, at a pace that would halve the productivity gap betweenthem every 48 years.
The authors of the World Bank’s book worry that the COVID-19pandemic will inhibit investment, shorten supply chains and breed insularity,all of which could hamper convergence.
But they also note some potential silver linings. Crises, forinstance, can encourage structural reforms; the lack of upkeep of outdatedcapital during dark times can hasten its replacement with newer technologies inthe recovery, according to The Economist./.
VNA
