Emerging Markets Reshape Global Economy: Sharma's Analysis

Pranjal Sharma explores how emerging markets in Asia, Africa, and Latin America are transforming the global economy, challenging Western dominance and promoting equity.

Recently, we came across an interesting analysis by Pranjal Sharma in Sunday Guardian Live that examines a key global economic shift where "growth" economies—emerging markets in Asia, Africa, and Latin America—are not only catching up to "legacy" economies (predominantly Western nations) but are also redefining the rules of the global economy. Sharma’s expertise, spanning decades in economic analysis, globalization, and technology, shapes his view that this power shift represents more than a redistribution of wealth; it's a structural reorganization with lasting implications.

Economic Transformation: The Rise of Growth Economies

Sharma highlights the rapid ascent of growth economies, noting that while legacy economies grow at a modest 1-4% annually, growth economies such as India, China, and Brazil consistently exceed these rates, with some expanding at 5-7% or higher. According to World Bank data, emerging markets have contributed over 60% of global GDP growth over the last decade, underscoring their increasing influence. Sharma’s view reflects a belief that this economic expansion is structurally changing global dynamics, challenging the West's traditional dominance and opening a path for emerging markets to become self-sustaining powerhouses.

Having authored books on the technological transformations of economies, like India Automated, Sharma’s analysis is steeped in understanding how digitalization enables rapid industrialization in emerging markets, allowing them to bypass certain stages of traditional economic development. Sharma observes that these countries are no longer merely “producers for legacy economies,” but are becoming full-fledged economic entities with the capacity to set their own terms, reshaping industries, production, and technological advancement in their regions.

Globalization and Protectionist Responses from Legacy Economies

The article identifies a paradox in globalization: initially driven by Western economies to open up global markets, it's now being reconsidered by those same economies. Facing competitive pressures from tech-savvy and increasingly powerful growth economies, legacy economies are retracting from globalization. A case in point is the European Union’s recent decision to impose tariffs on Chinese electric vehicles—an effort to protect its automotive industry, which Sharma interprets as a protective rather than progressive measure. Sharma’s analysis implies that such protectionism responds to fear of economic displacement, with legacy economies at risk of alienating their global partners.

Sharma’s insights here are likely influenced by his years on the World Economic Forum’s Global Agenda Council, where he engaged with policymakers on adapting to globalization’s changing landscape. He sees the rise of protectionist measures not only as an economic issue but also as a symptom of resistance to the new multipolar world order. For Sharma, legacy economies’ resistance risks isolating them from the very global networks they once dominated.

The Power of New Alliances: BRICS and Beyond

The article highlights that growth economies are building powerful new alliances. Sharma cites BRICS as a key example—an alliance now expanded to include nations from Africa and the Middle East—representing a collective stand against what emerging markets perceive as the "financial bullying" of legacy economies. Sharma views BRICS as a fundamental shift in global power dynamics, signaling the rise of a multipolar world where emerging markets wield significant influence. The recent inclusion of the African Union in the G20 further supports his argument that emerging markets are increasingly setting the agenda for equitable economic development.

Sharma’s emphasis on alliances like BRICS ties to his broader vision, which he explores in his recent book The Next New: Navigating the Fifth Industrial Revolution. There, Sharma advocates for a decentralized economic landscape where collaboration among growth economies can drive sustainable, equitable progress. His view of BRICS as a cooperative bloc signals his belief that such alliances are not just tactical responses but are reshaping the global economic order. For Sharma, BRICS embodies a world where new economic players are no longer subordinate to Western powers but active agents in defining the rules of global trade.

Legacy Economies: Adapt or Be Left Behind

The author concludes with a critical observation: legacy economies are at a crossroads. Sharma suggests that their current strategies—focusing on protectionism and economic defensiveness—may hinder their influence in the evolving global landscape. Emerging markets, through technology and alliances, are challenging traditional systems and advocating for a fairer global economy. Sharma, whose work as an advisor on digital and economic policy includes efforts to align public and private sector strategies with technological advancements, views the digital leap of growth economies as an opportunity that legacy economies are reluctant to recognize.

He notes that legacy economies’ reluctance to embrace a more decentralized and inclusive order could lead to marginalization. Sharma’s career as an economic advisor and public policy strategist shapes this viewpoint; he has consistently argued that economies thrive when they are open to change, especially in a digitally accelerated world. His work advising India’s public service broadcaster and strategizing on media digitalization informs his belief that adaptability and innovation are keys to maintaining relevance in a world increasingly shaped by growth economies.

Sharma’s Vision: Toward an Inclusive Global Economy

Ultimately, Sharma’s article is both a forecast and a prescription. His call for legacy economies to engage constructively with emerging markets aligns with his longstanding focus on sustainable and inclusive growth. In Sharma’s vision, the future of global economics hinges on collaboration and mutual respect rather than competition and control. His public discourse on global platforms like the Davos forum consistently advocates for emerging markets’ voices to be included in setting international economic standards, a principle that underpins his analysis of this global economic shift.

Conclusion

Pranjal Sharma’s article is a compelling analysis of the global economic rebalancing, viewed through the lens of an experienced observer of globalization, technology, and policy. He sees growth economies as not just catching up but actively reshaping the global economy, moving toward an era of multipolarity and collaboration. Sharma’s career has centered on understanding and enabling economic evolution, a perspective that informs his suggestion for legacy economies: adapt to this new, interconnected order, or risk being sidelined by an era defined by innovation, alliances, and equitable growth. Through this analysis, Sharma offers a clear and nuanced perspective on the transformative potential of growth economies, grounded in both his deep professional experience and his optimistic outlook on an inclusive global economy.