Caribbean to dominate global savings
WASHINGTON, May 19, CMC – A new World Bank report predicts that in less than a generation, the Caribbean will be among developing countries dominating global saving and investment.
The World Bank’s Global Development Horizons (GDH) report says that by 2030, half the global stock of capital, totaling US$158 trillion (in 2010 dollars), will reside in the developing world, compared to less than one-third today, with countries in East Asia and Latin America and the Caribbean accounting for the largest shares.
The report explores patterns of investment, saving and capital flows as they are likely to evolve over the next two decades.
Titled “Capital for the Future: Saving and Investment in an Interdependent World”, GDH projects developing countries’ share in global investment to triple by 2030 to three-fifths, from one-fifth in 2000.
The report says productivity catch-up, increasing integration into global markets, sound macroeconomic policies, and improved education and health are helping to speed growth “and create massive investment opportunities, which, in turn, are spurring a shift in global economic weight to developing countries.”
It says although demographics will play a “positive role, as dependency ratios are projected to fall through 2025,” financial market development in Latin America and the Caribbean, which reduces precautionary saving, and a moderation in economic growth “will play a counterbalancing role.”
With developing countries on course to add more than 1.4 billion people to their combined population between now and 2030, the report says the full benefit of the demographic dividend has yet to be reaped.