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World Bank welcomes New Economic Order from the Ashes of Crisis -- Guardian

• 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.

Continues: http://www.guardian.co.uk/business/2009/oct/04/world-bank-po...

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SteveMT's picture

World Bank: US economic power 'is declining'

"Well then we can't give you any more money!"
Zoellick is following the money trail. (me talking)

World Bank President Robert Zoellick
10:28 GMT, Sunday, 4 October 2009 11:28 UK
Mr Zoellick says a more balanced global economy would be more stable

US economic power is declining as a result of the financial crisis, the head of the World Bank has said.

"One of the legacies of this crisis may be a recognition of changed economic power relations," said World Bank president Robert Zoellick.

The US, the world's biggest economy, has been in recession for almost two years, while emerging economies like China and Brazil have grown.

This may help bring about a long-term rebalancing of the world economy.

'Changed relations'

"A multi-polar economy less reliant on the US consumer will be a more stable world economy," Mr Zoellick said.

He was speaking in Istanbul before meetings of the the World Bank and International Monetary Fund (IMF), where there is some discussion about how to reorganise the leadership of the bodies so that they better reflect the diversified world.

For example, China recently got a permanent chair on the IMF's 24-seat policy-making committee.


New World Order...

Wow! that's fantastic! Just what we need...global fascism

SteveMT's picture

The World Bank is going broke in less than a year.

The sooner that happens the better. If they need a loan go to the House of Rothschild, not us!

World Bank could 'run out of money' within 12 months
The World Bank is close to running out of money, its president, Robert Zoellick, has disclosed.

Edmund Conway, Economics Editor in Istanbul
8:36PM BST 02 Oct 2009

The Bank, whose job it is to support low-income countries, has had to hand out so much cash in the wake of the financial crisis that its resources could run dry within 12 months.

“By the middle of next year we will face serious constraints,” said its president Robert Zoellick, as he launched a major campaign to persuade rich nations to pour more money into the Washington-based institution.

He conceded that such a task was likely to be extremely difficult, given the difficulties facing countries in the wake of the developed world’s biggest recession since the Second World War. However, Mr Zoellick, speaking at the opening of the IMF and World Bank annual meetings in Istanbul, said the Bank needed a capital increase of as much as $11.1bn (£6.9bn) to keep functioning. He said he hoped that its shareholders, including the UK and other leading nations, would decide on resources before its spring meeting next April.

The money would be shared between the International Bank for Reconstruction and Development – the key part of the bank, which lends to poor nations – and the International Financial Corporation (IFC), which lends to companies.

Mr Zoellick said: “We recognise that all countries are under budgetary strain and it is not an easy time to be asking for these things”.