Key determinants of success are attracting global talent and increasing participation of women in the economy
The greatest economic hope for the developing world is that its members will ultimately catch up with rich countries.
Beyond the theory of convergence came the notion of the “middle income trap” — a level of GDP per capita beyond which a grouping of countries could no longer progress. This proposed that poor countries would stop converging with rich countries once they achieved middle income status. Countries with experiences consistent with this theory included Thailand, Turkey and large parts of Latin America.
But for large parts of the developing world as we emerge from the Covid crisis divergence from the developed world is the trend of the times. While for the most part of the century commodity prices have been robust, this has not translated into positive developmental prospects for many extractive-exporting countries. Quantitative headline growth does not automatically equate to deeper qualitative growth in countries.
The grouping of countries that are classified as emerging markets is large and varied. So, too are the circumstances of each country.To succeed, emerging markets must now embrace new drivers for qualitative growth. Such measures would include increased labour market reform, driving gains in productivity and embracing the adoption of technology.
Economies that take full advantage of latent talent — both empowering women and attracting from abroad — will thrive in the emerging post-Covid global economy. Promoting women’s education and inclusion into the economy is a primary driver of emerging economies that will enable them to graduate into the ranks of the rich world.