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Developing countries are catching up

Credit: ranepa.ru

The biggest part of the gross product is provided by developing countries rather than developed ones, Alexander Knobel, director of the RANEPA Center for International Trade Studies, said at the Sanctions and Trade Wars: A New Reality panel discussion held as part of the Gaidar Forum on Wednesday, January 16. The forum is organized by the Russian Presidential Academy of National Economy and Public Administration (RANEPA).

“Structural changes in the global economy have happened recently and they have been not discussed widely. In the late 20th century and early 21st century, developing countries began to catch up with the developed ones. Thirty years ago, developing countries produced only 40% of the gross world product, while developed countries produced 60% of GWP. Now it is the other way round with developing countries producing 60% of GWP,” the expert said.

International trade regulations have changed, and the world is currently on the verge of global changes, Knobel said, adding that Russia will feel them too.

“We are witnessing the cheapening of the ruble, which is caused by the anticipation of new sanctions. However, sanctions also have some positive effect: we managed to achieve a budget surplus thanks to them. In all, sanctions are unpredictable, while the consequences of trade wards can be forecast,” Alexander Knobel concluded.

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