Fragmentation of World Economy and Countries of Asia and Africa

Since February 2022, many authors assume that fragmentation of world economy is underway with the emergence of blocs due to geopolitical factors. According to International Monetary Fund (April 2024), there are three blocs: Western bloc, Eastern bloc headed by China (including Russia) and a mass of “non-aligned” countries. The author evaluates effects of fragmentation on world trade, flows of foreign direct investments (FDI), GDP growth rates, with special focus on fragmentation impact on Asian and African countries and their growth prospects. Instead of such terms as offshoring and reshoring, a new term, “friend-shoring” (FDI flows redirection to friendly countries) is employed. In fact, American FDI flows to China in 2022-2023 diminished, with FDI flows directed to “friendly” countries. Still, among “non-aligned” countries there are countries, to which Chinese FDI flow and where some stages of global value chains (CVCs) are relocated. Lengthening of GVCs takes place. The reduction of exports and FDI flows to Asian countries shows that fragmentation has a certain negative impact on world trade and international capital flows. Still, countries-intermediaries gain from it, their exports grow. Though some authors made projections that there would be a negative effect of fragmentation on GDP growth in Asia, in 2023 Asian countries were world leaders by GDP growth rates, India in the first place, but also Vietnam, Indonesia, China. And in some EU countries GDP shrank in 2023. Evidently, there is a boomerang effect of sanctions. And development of multipolar world is one of the main results of fragmentation

Development economics · Economic geography · Economics · Geography · Political science · World economy · Computer Science · Economic Issues in Ukraine · Global Financial Crisis and Policies · Russia and Soviet political economy