The New Resilience of Emerging and Developing Countries: Systemic Interlocking, Currency Swaps and Geoeconomics

The vulnerability/resilience nexus that defined the interaction between developing and advanced economies in the post-WWII era is undergoing a fundamental transformation. The aim of the paper is to analyse the nature of this transformation and its impact on the role and place of Emerging and Developing Countries (EDCs) in the global economy. The current debate is dominated by two approaches: on the one hand econometric studies that examine the decoupling hypothesis, and on the other structural explanations that are focusing on the dominant role of the US. The paper attempts to advance this debate by focusing on the EDCs agency and in particular their resilience-enhancing policies. We conclude that the EDCs 'new resilience' and the conditions of ‘systemic interlocking’ that currently define the relations between emerging powers and advanced economies, increase the EDCs leverage and policy space in the global economy. Furthermore, although a new series of EDCs crises cannot be ruled out (for instance as a result of monetary tightening in the US), their potential global economic and geoeconomic consequences make them too dangerous an outcome for advanced economies.