Who’s the Bottom Half Now?

Until not so long ago, many of the countries now known as the emerging markets were the world's economic laggards. We wonder: Which of these categories is the only one where the emerging market economies do not yet account for more than a 50% global share?

A. Exports
B. Cell phones
C. Foreign exchange reserves
D. Car sales
E. Government debt

A. Exports is not correct.

In 2010, for the first time, the emerging market economies collectively accounted for slightly more than 50% of global exports. That is almost double the 27% share reached a mere two decades ago, in 1990. Meanwhile, their import share is not far behind. It now reaches 47% of the global total.

Similarly, for the first time ever, emerging markets in 2010 managed to attract just over half of all foreign direct investment inflows in the world.

B. Cell phones is not correct.

With 82% of all cell phone subscriptions, people living in emerging markets account for almost as large a share of cell phone users as they represent of the global population.

Their share of global commodity consumption does not rank far behind, reaching 75% of all steel, 65% of all copper and 55% of all oil consumption.

C. Foreign exchange reserves is not correct.

In order to inoculate themselves against the vagaries of global financial markets, emerging market countries — which, following a financial crisis centered in Asia, saw their growth severely stunted in the late 1990s — are keen to accumulate significant foreign exchange reserves. At 81%, their share of foreign exchange reserves is about as large as their share of the global cell phone market.

D. Car sales is not correct.

While cars are not yet affordable for the average citizen of the developing world, these markets now account for just over half (52%) of all motor vehicle sales. This compares to less than a quarter (22%) of all global sales as recently as 2000.

Close behind is the 46% share of global retail sales that are now occurring in emerging market countries, indicating a further shift away from the dominance of the Western world.

E. Government debt is correct.

According to data compiled by The Economist, developing countries account for only 17% of all outstanding government debt. Emerging markets thus account for a far smaller share of the mountain of global public debt than their global population share of 87% would suggest.

For now, emerging markets' share of all financial assets is estimated to reach a quarter of the global total. However, considering global market dynamics, as well as the fact that this is double the share of just ten years ago, one can fairly assume that these countries will move up rapidly in this particular global league table as well.

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