'Big Five' nations to redraw world economic map<\/p>\n
WASHINGTON (Reuter): The world economy will change
\nfundamentally over the next 25 years as Indonesia, Brazil, China,
\nIndia and Russia assume more central roles in the global
\nmarketplace, the World Bank said on Tuesday.<\/p>\n
The international lending agency said in a report that the so-
\ncalled \"Big Five\" developing economies, which currently account
\nfor less than a 10th of global output and trade, could double
\ntheir share of the world market and surpass the European Union by
\n2020.<\/p>\n
\"We stand at a unique moment in history,\" said Joseph
\nStiglitz, World Bank chief economist.<\/p>\n
The bank said growth by developing countries averaged only 1
\npercent a year between 1820 and 1950, about half the rate of many
\nhigh-income countries.<\/p>\n
But over the past decade, developing countries, led by the so-
\ncalled \"tiger economies\" of Southeast Asia, grew at a somewhat
\nhealthier average rate of 2.6 percent a year.<\/p>\n
In its report, \"Global Economic Prospects and the Developing
\nCountries\", the bank said the outlook for emerging economies was
\nfar more favorable over the next 10 to 25 years.<\/p>\n
\"The next 25 years could witness an unprecedented increase in
\nthe weight of developing countries in the world economy,\" Milan
\nBrahmbhatt, principal author of the report, told a news
\nconference. \"This change would be unprecedented in both its size
\nand speed.\"<\/p>\n
The bank said growth by developing countries should jump to
\n5.4 percent from 1997 to 2006. Over the next 25 years, developing
\ncountries could grow at an average rate of between 5.0 percent
\nand 6.0 percent a year, it said.<\/p>\n
But growth will not be restricted to the Big Five.
\nThe banks said output could double in the rest of Latin America,
\nSub-Saharan Africa, the Middle East and North Africa.<\/p>\n
In the formerly communist economies of Central and Eastern
\nEurope, better conditions in export markets and continued
\nstrength in investment should fuel a rebound in growth to 4
\npercent or 4.5 percent a year over the next 10 years, the report
\nsaid.<\/p>\n
It said there was a risk of backtracking in some regions of
\nthe former Soviet Union, but economies there were stabilizing,
\nand growth could reach 5.0 percent to 6.0 percent by the year
\n2000.<\/p>\n
East Asian countries may have difficulty maintaining the
\nextremely rapid pace of growth of the past decade, but should
\ncontinue to rack up solid gains, the World Bank said.<\/p>\n
The region has been hit by Thailand's financial crisis and $17
\nbillion in loans have not yet restored confidence.<\/p>\n
The World Bank warned that strong growth by industrial
\ncountries over the next year could lead to higher interest rates,
\nwhich may slow growth in private capital flows to developing
\nnations from the rapid pace of the last two years.<\/p>\n
This could hurt countries where capital flows are financing
\nhigh current account deficits and where banks are burdened by bad
\ndebt, it added.<\/p>\n
\"But on the whole, the global picture looks very encouraging,\"
\nBrahmbhatt said.<\/p>\n
The bank said the changes it predicted could have major trade
\nand labor implications for industrial powers.<\/p>\n
Developing nations will become the fastest growing markets for
\nall products and some developed countries could find it harder to
\ncompete in labor-intensive sectors.<\/p>\n
But the World Bank said the rewards for rich and poor would
\nfar outweigh the short- and medium-term costs.<\/p>\n
\"The potential rewards of this expansion will be very large,
\nboth in terms of the growth of important export markets and as a
\nsource of imports,\" Stiglitz said.<\/p>",
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"sponsor": "Okusi Associates",
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