Recent figures have shown that the trade from developing country to developing country (South-South) has now exceeded developing country to developed country (South-North) – see chart from The Economist. The World Bank reported that in 2002 developing countries bought only 40% of total developing country exports with the remainder going to developed nations. According to the World Bank this figure is over 50% today but is not surprising when you consider the following:
– Developing countries have been growing at fast rates
– Between 1991 – 2011 developing countries share of world trade doubled from 16%-32%
– Developing countries have also been major borrowers
– Developing countries have had major foreign investment especially BRIC countries
– As developed nations struggle in the aftermath of the GFC developing countries have taken over more of their export markets.
But there is still a lot of interdependence – developed countries are of great importance to developing nations. The Euro crisis has had an effect on trade to and from developing countries and although trade between developed countries has increased it has been that with developing countries that has grown considerably greater.