Even as developing countries like India and China gain prominence in the global arena, they are not yet in a position of dominance or control, according to Union finance minister P Chidambaram. Speaking at a session of the India Economic Summit, organised by the World Economic Forum (WEF), Confederation of Indian Industry (CII) and Department of Industrial Policy and Promotion (DIPP) here today, he said that power has not shifted to developing countries but what has shifted is their ability to compete.

He identified three factors that give economic power to a country — knowledge, control over financial resources and material resources — and said that in each of these areas developed countries have an edge over developing countries.

In the area of knowledge, advanced economies have built such knowledge based and driven societies that they are able to attract the brightest minds from anywhere in the world, who want to be at the cutting edge of research. This gives them a competitive advantage which is hard to overcome, he pointed out.

The world’s best financial centres are located not in India and China but in New York and London, through which the advanced economies control the financial resources of the world, which are essential to build productive capacities. “As long as the advanced economies control this, they have an edge over developing countries,” he said.

Control over oil and gas — which gives control over energy — is the other major factor for economic progress and this too is in the hands of the advanced economies, even though some of the control has shifted to West Asian countries in recent years.

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