Power to The Poor.(poorer nations leading global economy)(Statistical Data Included)

The engines of the world economy are now found in the most unlikely places. They are humming in China, which makes sophisticated, high-tech goods so cheap that others are scrambling to keep pace. In Russia, the latest sign of capitalist horsepower is a new law that allows businessmen to gain legal title to their own offices, stores or factories for the first time since 1917. In India last spring, all quotas on imported goods were abolished, and citizens are now free to buy as many new foreign watches, T shirts or luxury cars as they can afford.

Even a year ago, few would have dreamed that China, Russia and India would emerge as global economic locomotives. They are still big, bulky states, still shaking off the torpor of fading socialist dreams, and a bit behind the times in a triumphantly capitalist era. But look at the numbers now: the production of goods and services is expanding by 7.5 percent in China, 5.5 percent in Russia and 4.5 percent in India this year. By contrast, the United States, Europe and Japan, the engines of the capitalist world, are wallowing in or near recession. Were it not for China, India and Russia, which account for two fifths of world population and one fifth of its output, global output would likely be shrinking instead of rising by maybe 1 percent this year. "It's a topsy-turvy world, isn't it?" says William Cline, research director of the Institute of International Finance in Washington. "But there it is. They are the leaders now."

The story of how the gift of growth has passed, temporarily at least, to three emerging giants reveals the complexity and quirkiness of global business. The common assumption that the post-communist world was merging seamlessly into a standard economic model doesn't hold up to scrutiny. Right now there are half a dozen stages of development. China, India and Russia occupy a middle ground. They are already far more connected to the global economy than the poorest economies, like those in sub-Saharan Africa, which export only a few raw materials or farm goods, and import little more than used clothing, the odd truck and surplus food. Their growth depends on factors like the weather and the snail like pace of change in subsistence cultures. For the foreseeable future, most of them will keep falling behind, as their economies just barely keep pace with the growth of their populations.

Russia, China and India are in control of their destinies. Their average incomes are five to 10 times higher than incomes in the poor countries. They participate vigorously in world trade, although Russia less than the others. They, in fact and theory (theory for the most part, in India's and Russia's cases), are open to foreign investment. Their cultures cherish education, hard work and at least the goal of honesty in business and government--qualities essential for rapid economic growth. One final parallel: China, India and Russia are just getting started on the capitalist road, and it is always easiest to sprint when coming off the start line.

The economies in Japan and Hong Kong got going right after World War II. The other Asian tigers, such as Taiwan, South Korea and Malaysia, joined the race in the 1960s. China climbed onto the course only after 1979, and very cautiously at first. India gave up on socialism, and Russia on communism, only in 1991. Now the three big latecomers are enjoying a period in which intelligent imitation of their predecessors can yield decades of very rapid growth.

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