ANALYSIS ECONOMY
Eastern promises
The World Economic Forum’s Summit on the Global Agenda 2010.
T
here is nothing that alarms the international community more than the rise of new powers. Step forward China and India. The rise of emerging markets is the biggest trend to impact the global economy, according to a survey of 570 leaders who attended the World Economic Forum (WEF) in Dubai. The global power shift – reflected in the formation of the G20 – will be the top issue over the next 12 to 18 months, experts from the 72 WEF global agenda councils, say. These councils are comprised of leaders from business, academia, civil society and government and are dubbed by Klaus Scwab, WEF founder and executive chairman, as the “intellectual backbone” of the forum.
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One of the main challenges will be making developing economies more responsible and transparent to meet the standards set by developed countries, says Zhan Yunling, director, international studies at the Chinese Academy of Social Sciences. “In the past, global governance was done by the developed countries, through the G8 or G7,” he says. “Now we have the G20. I am not sure if the G20 can meet all of the global concerns, but the fact that the G20 has replaced the G8 means there will be more emphasis on the interests of the developing world.” The emergence of new economies also means the US will no longer be the sole dominant power, hence, the
political balance, or imbalance, is set to change. The survey says inequality and growing income distribution disparity, both in developed and developing countries, is a concern, and this could boil down to bigger conflicts. “There is a big gap between developed and developing countries, which in the future could lead to tensions,” Mari Elka Pangestu, Indonesia’s minister of trade, says. John Lipsky, first deputy managing director of the International Monetary Fund (IMF), says people should not forget that the rapid growth in emerging economies is the only way that poverty will be eliminated and greater equality will be achieved.
Copyright © World Economic Forum/Photo: Norbert Schiller
As economic power shifts from West to East, delegates at the World Economic Forum urged developing countries to respect the earth amid rapid growth.