World Bank welcomes New Economic Order from the Ashes of Crisis -- GuardianSubmitted by declarationofre... on Sun, 10/04/2009 - 15:02
• China and India set to become established global powers
• Euro and renminbi tipped to join dollar as reserve currencies
• Other developing economies predicted to flourish in recovery
The wrenching financial crisis of the past two years will provide the catalyst for a profound change in the global economy – which, according to the man running the World Bank, will see China and India become established centres of power, the dollar eclipsed as the sole reserve currency, and Latin America, south-east Asia and Africa emerge as new sources of growth.
But as he surveys the wreckage caused by what the bank and its sister organisation, the International Monetary Fund, agree is the most severe crisis since the devastation caused by the second world war, Robert Zoellick is surprisingly upbeat about the future.
Asked by the Observer how he envisages the global economy in 20 years' time, Zoellick says: "There will certainly be a larger role for the emerging powers, there will be multipolar sources of growth, there will be more south-south trade between developing countries.
"The crisis gives us the opportunity to hasten this process. If we are concerned about the past reliance for growth on the US consumer, we have to make sure consumers in developing countries have enough finance to buy."
Zoellick says that, while this does not mean the end of the US as a big player on the world stage, it has brought the curtain down on the unipolar world that followed the collapse of communism 20 years ago.
Developing countries were on the rise before the credit crunch and, as the latest snapshot of the global economy released last week illustrates, their position has been strengthened by their ability to keep growing as the west teetered on the brink of a 1930s-style Depression.
"We have reached a tipping point in global economic affairs," says Stephen King, chief economist of HSBC. "While there are some encouraging signs of recovery in the developed world, the real economic action is taking place elsewhere. For both cyclical and structural reasons, the emerging nations are set to dominate world economic activity in the years ahead."
America, Zoellick says, can no longer rely on the dollar ruling the roost.