##mism of emes becomes even more persuasive. the share of advanced economies in the global gdp dropped from 80 per cent in 2000 to 67 per cent in 2010 with a mirror increase in the share of emdcs ( chart 2 ). quite expectedly the share of brics increased more impressively from 8 per cent to 17 per cent2. disaggregated numbers are in annex table - 1. disaggregated numbers are at annex table - 2. bis central bankers ’ speeches chart 2 : share of global gdp ( at current us $ prices ) ( percentage ) by all accounts, the world has recovered from the financial meltdown and the follow on recession much sooner than we had feared at the depth of the crisis. the recovery is all the more remarkable because global income, trade and industrial production fell more sharply in the first twelve months of this crisis than they did in the first twelve months of the great depression. in its latest world economic outlook ( weo – january 2011 ), the imf estimated global growth for 2010 of 5. 0 per cent ; this marks a surprising upward revision from its earlier projection of 4. 8 per cent made in october 2010. emes, contributing nearly half of this growth, have clearly been the engine of this recovery. emes have also been the motive force behind the estimated expansion of world trade at 12 per cent in 2010, an impressive reversal from shrinkage of 11 per cent in 2009. two faqs this post - crisis scenario, marked by the faster recovery of emes, throws up two frequently asked questions relating to emes in the global context. the first is whether emes will be able to sustain global growth at near pre - crisis levels even if advanced economies continue to languish. people who put this question, i believe, are doing so as a rhetoric – to encourage analytical thinking rather than to solicit an affirmative answer. sure, multiple growth poles are a safety - net for the whole world, but to expect emes, by themselves, to lift global growth to former levels will be unrealistic. note that emdcs account for less than half of world gdp even when measured at ppp valuations, and only about a third of the world trade in goods and services. the second question about emes in the global context relates to decoupling. the decoupling hypothesis held that even if advanced economies went into a downturn, emes would not be affected because

of their improved macroeconomic management, robust external reserves and resilient financial sectors. the crisis failed to validate the decoupling hypothesis as all emes were affected, admittedly to different extents. what the crisis, in fact, reinforced is that the economic prospects of advanced economies and emes are interlinked through trade, finance and confidence channels. even as the decoupling hypothesis gained intellectual credence in the pre - crisis years, it was never very persuasive in the face of globalization. in fact, recent research within imf shows that the detrended aggregate output growth of emes has strong association with the aggregate output growth of advanced economies, and that this “ association ” has in fact bis central bankers ’ speeches increased over time, evidencing not only that the coupling is strong but that it is getting stronger. sure, in recent years emes have been less affected by recessions in advanced economies owing to improved policy framework, more effective macroeconomic management and growing intra - eme trade. but over an entire cycle, the economic prospects of emes remain firmly coupled with those of advanced economies. in an increasingly globalizing world, advanced economies and emes are dependent on each other, and going forward, both have big challenges in terms of sustaining growth, containing inflation and reducing unemployment. by far the biggest challenge for emes will be to convert high growth into poverty reduction. against that backdrop, let me proceed to look at some of the issues on the global agenda from the eme perspective. global rebalancing the first issue i want to address from the eme perspective is global imbalances. no crisis as complex as the one we have gone through has a simple or a single cause. we now have a fairly good idea of the multiple causes of the crisis and almost everyone is agreed that one of the root causes of the crisis is the build up of global imbalances. in as much as global imbalances – no matter whether they were caused by a “ consumption binge ” in advanced economies or a “ savings glut ” in emes – were the root cause of the crisis, reducing imbalances is a necessary condition for restoring global financial stability. the post - crisis debate on global imbalances has three interrelated facets. the first is the role of exchange rates in global rebalancing. the second relates to capital flows into emes raising the familiar challenge of managing the impossible