February 2007 New Powers for Global Change? Economic and Human Development of Emerging Economies CHRISTINA HACKMANN Introduction While the fast pace of global economic growth has benefited almost all developing countries over the last years, emerging economic powers such as China and India are often referred to as the main contributors to global GDP in the developing world. Bearing in mind the achievement of the Millennium Development Goals(MDGs) by 2015, the question remains, however, if the economic momentum in these countries will translate into human development. Every year, the Human Development Report(HDR) that is published by the United Nations Development Programme(UNDP) measures whether human development has improved to the same extent as economic growth and serves therefore as a good source to analyze if the new emerging powers of the Global South are dedicated to accelerate it. This fact sheet examines HDR findings for a group of“new powers”, namely China, India, Brazil, Mexico, South Africa, Egypt and Nigeria. It will become clear that economic growth does not necessarily translate into human development. Facts on Economic Growth For China and India, mostly referred to as the two biggest“new powers”, annual economic growth rates show strong and steady improvements, ranging over the last five years between 8 to 10% in China and 4 to 9% in India(see Table 1). While average economic growth for Egypt, South Africa and Nigeria over the past 5 years is still substantial, the growth performance in Mexico and Brazil is rather disappointing. It should however be noted that economic growth in Nigeria shows an unstable and erratic pattern which raises questions of sustainability. Table 1: Economic Performance of Emerging Powers: Annual GDP Growth(%) 2000 – 2005 ‘00‘01‘02‘03‘04‘05 Ø China 8.4 8.3 9.1 10.0 10.1 9.9 8.9 India 4.0 5.3 3.6 8.3 8.5 8.5 6.7 Brazil 4.4 1.3 1.9 0.5 4.9 2.3 2.1 Mexico 6.6 0.2 0.8 1.4 4.1 3.0 1.8 South Africa 4.2 2.7 3.7 3.0 4.5 4.9 3.6 Egypt 5.4 3.5 3.2 3.1 4.2 4.9 3.8 Nigeria 4.2 3.1 1.6 10.7 6.0 6.9 4.7 Source: World Bank, World Development Indicators, http://devdata.worldbank.org/data­query/, retrieved 11/29/2006). Measuring GDP(Gross Domestic Product) at purchasing power parity(PPP) takes into account the cost of living in the analyzed countries and therefore makes it easier to compare them with each other. Here again China and India lead the way with the highest GDP/PPP increasing faster than any other of the analyzed countries. As can be seen in Table 2, the GDP/PPP for Brazil, Mexico and South Africa are much lower, and are increasing at much more modest rates. This is even truer for Nigeria’s and Egypt’s economies which would fit into China’s economy 50 and 30 times, respectively. 1 If we take into account the considerably different population sizes of the countries under consideration and measure GDP/PPP in US$ per capita it will make the picture even more diverse. For instance, South Africa has the highest GDP/PPP in US$ measured per capita. This 1 United Nations Development Programme: Human Development Report 1999-2006 http://www.infoplease.com/ipa/A0874911.html retrieved 10/30/2006.