Developing world key to future prosperity: OECD
Developing world key to future prosperity: OECD
PARIS (Reuter): Rich nations may feel their jobs and wages are
threatened by emerging economies of the developing world, but
their gains from new and lucrative markets will far outweigh the
costs, the OECD has said.
If China, India and Indonesia maintain their rapid economic
growth rate of six percent a year, by 2010 their total output of
goods and services would almost double to 60 percent of the
output in the developed world.
In a report on Tuesday on "linkages" between those countries
once written off as doomed to permanent poverty and the
traditionally rich nations, the Organization for Economic Co-
operation and Development saw in such projections the seeds of
global wealth.
"This rapid expansion and growing weight in the world market
will provide a fresh impetus to OECD growth through trade in
goods and services," the economic think-tank said.
That message was a cheering one for the 25 OECD nations, whose
current economic upturn is paltry when set against the
spectacular growth of many Asian countries and whose unemployment
problem remains a tough nut to crack.
The "Linkages" report argued that developing countries'
expansion and growing weight in the world market will provide a
fresh impetus to OECD area growth through trade in goods and
services.
An expected explosion in the middle-class population of China,
India and Indonesia to 700 million people by 2010 from 100
million today should bring a particularly lucrative market.
It said the OECD nations needed to pursue linkage strategies
to tie major developing nations into the international market-
place and thus commit them to globally accepted "rules of the
game" on trade and investment.
The threats to the Western world are few.
However, it is true that some industries such as clothing and
footwear have been hurt by competition from cheaper labor in
developing nations. This has raised the question of how the West
can adapt production systems and make their labor markets more
flexible to meet that challenge.
The OECD report also sounded some alarms on the aggravation of
global problems that continued high-speed growth in developing
nations could pose.
Rapid industrialization, urban development and rising living
standards carry downside risks of pollution, population strains
and increased demands on scarce commodity resources.
Without new policy initiatives, global emissions of carbon
dioxide will triple by the middle of the next century, the OECD
said, noting that China will probably become a larger source of
energy-related emissions than the United States, and India.