The World Economy Faces the Uprising of Developing Nations.

Uprising of So-called “Second Class” Nations—

Three years ago, India, Brazil and South Africa received an approval to make or export copies of branded medicines to fight AIDS from the World Trade Organization (WTO). The approval came after these nations overcame challenges by European and U.S. pharmaceutical giants claiming they were supporting poor nations who had suffered from the HIV epidemic.

The so-called second-class nations were also hand-in-hand in dampening the effort to hold a conference by advanced nations at the WTO Cancun Meeting in Mexico last year. Last April, Brazil filed trade complaints with WTO against the U.S. for its direct subsidy to its cotton farms, putting the U.S. in hot water.

In the wake of some triumphs over powerful economies, these second-class economies jumped into battlefield in an effort to widen its influence on the world trade market. Given the fact that the combined population of China and India alone topped 2.2 billion, it is hard to ignore their purchasing power.

The International Herald Tribune (IHT) pointed out, “Once considered the underdogs, they are striving to get the upper hand in the trade market, whose attempt could have been possible by rapid economic growth in China and India.”

Alienating So-called First-class Economies—

These developing nations have formed a type of alliance equipped with producers and consumer markets for mutual benefits. The case in point is China’s ability to produce goods and its new middle class consumers, India’s ability to develop software, and South American nations’ oil, mineral, and agricultural resources.

Forty percent of the total exports of these nations are consumed among themselves with an annual increase of 11 percent. China, which has been importing resources from these developing countries, is now at the center of investing its capital in these nations. The direct investment from China on them is estimated at $35 billion (about 40 trillion won).

In fact, their alliance has helped themselves to alienate the U.S., which has suffered from its skyrocketing budget deficit in the warfare against Iraq. The IHT predicted, “China and India would never want to rely on America.”

Goldman Sachs, a global investment banking firm, estimated that by the year 2050 China would become the largest economy in terms of gross domestic product (GDP), outgrowing the U.S. which would be the second biggest economy. Following are India (the third), Japan (the fourth), and Brazil and Russia (the fifth).

Jin Lee leej@donga.com