A "momentous and gigantic shift" in the global economy over the next 25 years will make developed countries dependent on today's emerging economies, said Antoine van Agtmael, founder and Chief of the investment firm, Emerging Markets Management.

Mr. van Agtmael, who delivered a presentation for his newly published book titled "The Emerging Markets Century" at United Nations Headquarters in New York on 17 January 2007, said that before the industrial revolution, China and India were the world's first and second largest economies. Since then, a number of countries in the West, and the United States in particular, have taken centre stage in the global economy, but the world is now experiencing "the second great shift".

Ten years ago, people in the United States and Europe had not heard of many brands manufactured in Asian countries, but today they are becoming household names, said Mr. van Agtmael, who has served in the World Bank and the International Finance Corporation. He recalled that 25 years ago people he talked to thought "it was a crazy idea" to invest in Third World countries. However, investors have increased profits 37 per cent every year for the past four years by including emerging markets in their portfolios, he said, adding that these markets today own 75 per cent of the world's foreign exchange reserves.

The development of emerging markets was causing the biggest shift in the global economy and power balance of today, Mr. van Agtmael said. He countered Thomas Friedman's idea that "the world is flat"-meaning globalization interconnects countries by creating a level playing field on which their economies can equally compete-arguing that the world is tilting toward emerging markets. "This is a shift that will change everything, from how the United States will deal with Iran or China, to how we invest", he remarked. "This is the trend that will define our age."

The main actors of this shift are world-class companies based in Asia: Yue Yuen, a Taiwanese company based in China produces one sixth of the world's sports shoes; the Korean electronic manufacturer Samsung makes 15 million phones a year, making it the third largest mobile phone maker in the world; and the Chinese company Lenovo has taken over the IBM Thinkpad Computer Division. "I don't think we quite understand yet how important this shift is", said Mr. van Agtmael.

Emerging markets currently account for 20 per cent of the world's economy, and in the coming 25 years Mr. van Agtmael predicts that this figure will grow to 50 per cent-an increase of more than 1 per cent every year. This shift, however, entails both risks and opportunities as emerging markets begin to dominate the global economy, he said, pointing out that issues like climate change should be of concern. He also noted that the United Nations could play an important role as mediator between the previously dominant countries and the leaders of the new world economy.