Global economic shift eastward presents opportunities and challenges for Global South, says Shaktikanta Das

Livemint - Economy · 30 Sept 2026 · 2 min read
Prelims · Economy Mains · GS3 Economy High relevance

Shaktikanta Das highlighted the eastward shift in global economic gravity, urging Global South nations to strategize around food security, trade, energy, and jobs to leverage emerging opportunities amidst geopolitical and economic uncertainties.

Key points

Eastward economic shift: The global economy's center of gravity is moving eastward, with the Global South increasing its footprint in global economy and geopolitics, reshaping future trade and business practices.

Global South challenges: Das identified five critical areas for Global South economies: food security, trade diversification, energy transition, macroeconomic stability, and job creation, requiring strategic policy focus.

Geopolitical impacts: Conflicts in West Asia have escalated energy prices and inflationary pressures, disproportionately affecting energy-importing Global South nations, straining fiscal budgets and forex reserves.

Energy transition: Diversifying energy mix with renewables and biofuels is essential to reduce vulnerability and enhance energy security, necessitating global coordination and technology transfer within the Global South.

Trade barriers: Rising protectionism and trade restrictions limit access to wealthy markets and advanced technologies for low- and middle-income economies, emphasizing the need for trade diversification and domestic competitiveness.

[GS3-Economy] Fiscal deficits in emerging markets are expected to widen by 2026, particularly for energy-importing countries, highlighting the need for fiscal and structural reforms to maintain macroeconomic stability.

Job creation: With 1.2 billion young people entering the workforce in the next decade, higher investment is critical to generate employment, especially in rapidly urbanizing areas of the Global South.

Way Forward: Global South nations should prioritize renewable energy investments, enhance trade diversification through regional partnerships, and implement structural reforms to boost job creation and macroeconomic stability.

Key terms

Global South

A collective term for developing, emerging, and less-industrialized economies, often located in Asia, Africa, and Latin America. These nations face disproportionate impacts from global shocks but are increasingly influential in global growth and geopolitics, necessitating coordinated policies for sustainable development.

Energy Transition

The shift from fossil fuel-based energy systems to renewable and low-carbon sources like solar, wind, and biofuels. For the Global South, this transition is critical to reduce import dependence, enhance energy security, and align with global climate goals under the Paris Agreement.

Macroeconomic Stability

A condition where an economy experiences steady growth, low inflation, and sustainable fiscal and external balances. For emerging economies, maintaining this stability is challenging amid global shocks, requiring prudent fiscal and monetary policies to avoid debt crises.

Trade Diversification

The strategy of expanding export markets and product ranges to reduce dependence on a few sectors or trading partners. For Global South economies, this mitigates risks from protectionism and geopolitical tensions, fostering resilient trade ecosystems.