Zoellick Embraces 'Multi-Polar World Economy'

• by Matthew O. Berger (washington)
• Wednesday, September 29, 2010
• Inter Press Service

The speech picked up on some of the themes of the speech he gave in the run-up to the last World Bank/IMF meetings, in April.

'It's time we recognise the new economic parallel,' he said then. 'If 1989 saw the end of the 'Second World' with Communism's demise, then 2009 saw the end of what was known as the 'Third World'. We are now in a new, fast-evolving multi-polar world economy.'

Wednesday he repeated that message, but took it one step further, calling for development economists and policymakers to take this new, multi-polar system into account in their thinking. 'As economic tectonic plates have shifted, paradigms must shift too,' he said.

Zoellick also noted that developing countries are becoming new partners in development work, contributing not only aid but expertise and investment.

'The new multi-polar economy requires multi-polar knowledge. With the end of the outdated concept of the Third World, the First World must open itself to competition in ideas and experience,' he said. 'The flow of knowledge is no longer north to south, west to east, rich to poor. Rising economies bring new approaches and solutions.'

He gave examples such as India providing expertise on dairy farming to African countries and the U.S. learning about high-speed railways from China's example.

A more transparent Bank

Zoellick also focused on increasing the transparency of the Bank and making its data more available to outside scholars and policymakers.

He said the Bank is working to make its research and models more available and user-friendly and regretted that in years past some data was only available by purchase.

This would allow 'researchers civil society and local communities to come up with their own findings and double- check ours,' he said.

A health care worker or parent with a laptop in a village can access information on schools, health, or the history of development in her village and compare what is being done in her village with others, he said.

He also announced that in July the Bank launched a programme enlarging the public's access to its information, which he compared to the Freedom of Information Act in the U.S.

'NGOs regard the new policy as a great accomplishment in that it is the most progressive international financial institution access to information policy to date. By establishing clear request mechanisms and opening up new categories of routinely disclosed information, the Bank significantly broadened its transparency horizon,' the Washington-based NGO Bank Information Center (BIC) said Wednesday.

BIC has also developed what it calls a toolkit to aid civil society in using the Bank's new policy to access documents and data. It will be launched during the Annual Meetings next week and available on their website.

Towards a multi-polar governance?

In addition to his April speech, Zoellick's speech Wednesday took off on themes laid out in a book released by the Bank on Monday.

The book, 'The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World', contends that developing countries have 'come to the rescue' of the global economy, picking up the slack of the advanced economies which were hurt the worst by the financial crisis.

'The developing world is becoming the driver of the global economy. Led by emerging markets, developing countries now account for half of global growth and are leading the recovery in world trade,' Zoellick said Wednesday.

According to the book, growth in developing countries is estimated to reach 6.1 percent in 2010, 5.9 percent in 2011, and 6.1 percent in 2012, while growth in high-income countries is estimated at 2.3 percent, 2.4 percent, and 2.6 percent respectively. This trend would mean the collective size of developing-country economies would surpass that of developed-country economies in 2015.

Five factors account for these trends, according to the Bank: 'Faster technological learning, larger middle-classes, more South-South commercial integration, high commodity prices, and healthier balance sheets that will allow borrowing for infrastructure investment.'

It is expected that this new economic order will mean a reordering of which countries have the most influence at the World Bank and IMF, and this topic — governance reform — is expected to be one of the top orders of business when the world's finance ministers converge on Washington next week for the international financial institutions' annual meetings.

'The governing structure needs improvement,' Patrick Cirillo, deputy chief of operations at the IMF, told reporters here Wednesday afternoon. He said IMF members have committed to making 'substantial changes' by January 2011.

But European countries have been reluctant to agree to reduce their share of seats on the IMF board, despite repeated calls by the U.S. for reform.

At the Spring Meetings in April, the World Bank undertook a reform, but one that many NGOs were critical of. They have contended that the reform, which allotted about three percent more voting power to low- and middle- income countries, included countries that should not have been included in those income categories, including Saudi Arabia and Hungary.

Further Bank governance reform is on the table for five years, says the London-based NGO Bretton Woods Project. They hope the reforms that are agreed this autumn regarding IMF governance are more significant.

© Inter Press Service (2010) — All Rights ReservedOriginal source: Inter Press Service

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