For much of modern history, economic power and productivity have been centred in the industrialized North, including much of Europe, Canada, the USA, and Japan. In the twenty-first century, we’ve seen a shift in the balance of power as the Global South — nations across Asia, Africa, Latin and South America, and parts of the Middle East — are emerging as the new center of economic gravity and soft power.
Once seen as resource hubs or sources of cheap labour, these days, countries in the Global South are now engines of innovation, consumption, and investment. According to the International Monetary Fund (IMF), these economies already account for nearly 60 percent of global GDP by purchasing power parity and approximately 80 percent of global growth. Based on these numbers, it’s realistic to say that the next economic boom will come from rising southern cities, such as Nairobi, New Delhi, São Paulo, and Jakarta, rather than the traditional global capitals of New York, London, or Tokyo.
For Canada, this transformation presents both an extraordinary opportunity and a defining test. As a G7 economy that is open, stable, and diverse, we are well-positioned to engage meaningfully with these emerging markets; however, doing so will require a conscious shift in mindset, policy, and ambition by both the Canadian government and businesses across all sectors.
The Forces Reshaping the Global Economy
Several forces drive the Global South’s rise. Demographic momentum is shifting as much of the world’s advanced economies struggle with an aging and declining population, while Africa, South Asia, and Latin America experience surges in youth. Africa’s population is expected to double by 2050, and India has now surpassed China to become the world’s most populous country. These young people are future workers, consumers, and innovators who promise economic dynamism for the decades to come.
Urbanization also fuels growth. The fastest-growing cities are now located in the Global South, such as Delhi, Shanghai and Lagos, and by 2030, most urban residents are expected to reside in these areas. As these cities grow, demand for housing, infrastructure, healthcare, and digital connectivity increases, helping to fuel the middle class and drive higher levels of domestic consumption.
However, technology may bring the greatest change. As the Global South continues to grow rapidly, so does its adoption of digital tools. Given their state of growth, they often skip traditional stages. This has been evident with Kenya’s M-Pesa revolutionizing financial inclusion ahead of similar Western systems; India’s digital IDs streamlining services for hundreds of millions of people; and Southeast Asia’s e-commerce linking small enterprises to new markets. Furthermore, enhanced broadband and 5G technology will help drive digital entrepreneurship and reshape work and trade in these markets.
These global demographic, urban, and technological shifts will create significant changes in international trade patterns, with trade between Southern nations now surpassing trade between Northern and Southern countries. New blocs, such as the Regional Comprehensive Economic Partnership (RCEP), are further strengthening these ties, and the world is shifting towards a multipolar order, with new centres of power emerging.
A Moment of Choice for Canada
Canada is now at a turning point. Our trade ties with the U.S. and Europe remain valuable, but the Global South offers new and promising opportunities as it becomes more influential in the global economy. We are well-positioned to form new partnerships there because of our natural resources, multicultural society, stable institutions, strong education system, and research strengths. Most importantly, our diverse population helps us connect with these regions, opening doors to fresh opportunities.
To take advantage of these strengths, Canada must focus on building stronger economic ties in innovation, clean energy, healthcare, and education. Working with emerging markets in these areas can lead to real, shared growth and help Canadian businesses stay competitive. Education and research are also crucial for building connections, whether through academic exchanges, joint research, or innovation labs. These efforts will help train new leaders and entrepreneurs for global success. Involving our diaspora communities through business projects, mentorship, and trade missions can also create opportunities that go beyond what traditional diplomacy can achieve.
As Canada grows its relationship with the Global South, it is essential to commit to fairness, sustainability, and respect. Historically, Western countries have focused on quick profits, leaving developing nations in the South behind, but we can choose a better approach by fostering trust, openness, and mutual benefits. Focusing on partnership and empowerment, especially in climate action and management of our natural resources, allows us to set an example of fair, lasting cooperation. Canada must lead with its technology and values by supporting local innovation, being transparent about our investments and supply chains, and ensuring that our investments deliver real social and environmental outcomes. This will help countries in the Global South grow sustainably and build Canada’s reputation as a leader in responsible development.
Canada Moving Forward
Now is the time for Canada to make a conscious, strategic decision to expand and build relations with the growing, dynamic economies of the Global South through concrete policy initiatives and sustained engagement by both governments and businesses. We have the opportunity to foster prosperity locally and contribute to building a more balanced and inclusive world; however, future growth should be built on collaboration, and success will depend on building connections across cultures and generations.
Canada’s greatest strength is our diversity, and through our diversity, we can connect and lead. With economic uncertainty and shifting global dynamics, we need to develop targeted partnerships, invest in education and research, and engage diaspora communities to build deeper ties with the Global South. We have a significant opportunity to help shape the future and expand our economy, but we need to get better at mobilizing our talent and resources. To benefit from this shift in global economic growth and trade, we must act now
