A “new multipolar global economy” just emerging

Global Paradigm Shift: The Wisdom of Robert Zoellick  

Speech by Robert B. Zoellick at Woodrow Wilson Center

FRANÇAIS  ESPAÑOL   

Voltaire Network   

Washington D.C.  

14 April 2010

Bild  by Robert B. Zoellick 

 

“… 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 multipolar world economy

 

  • in which some developing countries are emerging as economic powers;
  • others are moving towards becoming additional poles of growth; and
  • some are struggling to attain their potential

 

within this new system – where North and South, East and West, are now points on a compass, not economic destinies

 

  • The global economic crisis has shown that multilateralism matters. Staring into the abyss, countries pulled together to save the global economy.
  • The modern G-20 was borne out of crisis. It showed its potential by quickly acting to shore up confidence…
  • Economic and political tectonic plates are shifting. We can shift with them, or we can continue to see a new world through the prism of the old. We must recognize new realities. And act on them…
  • Our world will look very different in 10 years, with demand coming not just from the United States but from around the globe. Already we see the shifts.

 

Asia’s share of the global economy in purchasing power parity terms has risen steadily from 7 percent in 1980 to 21 percent in 2008. Asia’s stock markets now account for 32 percent of global market capitalization, ahead of the United States at 30 percent and Europe at 25 percent. Last year, China overtook Germany to become the world’s biggest exporter. It also overtook the United States to become the world’s largest market for cars…

 

  • The developing world is becoming a driver of the global economy. Much of the recovery in world trade has been due to strong demand for imports among developing countries.

 

Developing country imports are already 2 percent higher than their pre-crisis peak in April 2008. In contrast, the imports of high-income countries are still 19 percent below that earlier high. Even though developing world imports are about half of the imports of high-income countries, they are growing at a much faster rate. As a result, they accounted for more than half of the increase in world import demand since 2000…

 

  • We are witnessing a move towards multiple poles of growth as middle classes grow in developing countries, billions of people join the world economy, and new patterns of integration combine regional intensification with global openness.

Bild This change is not just about China or India. The developing world’s share of global GDP in purchasing power parity terms has increased from 33.7 percent in 1980 to 43.4 percent in 2010. Developing countries are likely to show robust growth rates over the next five years and beyond. Sub-Saharan Africa could grow by an average of over 6 percent to 2015 while South Asia, where half the world’s poor live, could grow by as much as 7 percent a year over the same period.Southeast Asia has become a middle income region of almost 600 million people…In the Latin American and Caribbean region, 60 million people were lifted from poverty between 2002-2008 and a growing middle class boosted import volumes at an annual rate of 15 percent.Tectonic plates could shift further. Africa missed out on the manufacturing revolution that lifted East Asia’s economies out of poverty and into prosperity…Africans need the things that Europe and Japan needed after World War Two: infrastructure; energy; integrated markets linked to a global economy; and the conditions for a vibrant private sector…  

 

  • Increased income and growth in the developing world means increasing influence. The old world of fireside chats among G-7 leaders is gone. Today’s discussion requires a big table to accommodate the key participants, and developing countries must have seats at it. Last year’s G-20 Summit at Pittsburgh recognized that change. But it will take more than words on paper…

 

If it is no longer possible to solve big international issues without developing and transition country involvement, it is also no longer possible to presume that their biggest members, the so-called BRICs — Brazil, Russia, India and China — will represent all… In discovering a new forum in the G-20, we must be careful not to impose a new, inflexible hierarchy on the world. Instead,

  • the G-20 should operate as a “Steering Group” across a network of countries and international institutions. It should recognize the interconnections among issues and foster points of mutual interest. This system cannot be hierarchical, and it should not be bureaucratic…

 

The danger of the political gravity dragging countries back to the pursuit of narrow interests is that we address this changing world through the prism of the old G-7; developed country interests, even if well-intentioned, cannot represent the perspective of the emerging economies…

 

A “New Geopolitics of  Multipolar Economy” needs to share responsibility while recognizing different perspectives and circumstances, so as to build more mutual interests… in a world in transition, the danger is that developed countries focus on summits for financial systems, or concentrate on the mismanagement of developed countries such as Greece.

  • Developing countries need summits for the poor. One lesson from this crisis is that effective safety nets prevented the loss of a generation – unlike the Asian crisis in the 1990s. Hearing the developing country perspective is no longer just a matter of charity or solidarity: It is self-interest. These developing countries are now sources of growth and importers of capital goods and developed countries’ services. Developing countries… want to focus on productive investments in infrastructure and early childhood development. They want to free markets to create jobs, higher productivity, and growth. Many are exploring how to use the innovation and efficiency of private markets to help provide and maintain public sector infrastructure and services…

 

But modernizing multilateralism isn’t all about developed countries learning to adapt to the needs of rising powers. With power comes responsibility.

Developing countries need to recognize that they are now part of the global architecture. They have an interest in healthy, dynamic, flexible international systems for finance, trade, movement of ideas and people, the environment— and strong multilateral institutions. Development is no longer just North-South. It is South-South, even South-North, with lessons for all with open minds…

 

  • If the tectonic plates are shifting, multilateral institutions must shift too. The crisis has shown the possibilities of international cooperation, but it has also underscored the need to modernize and strengthen multilateral institutions to reflect a different world. The new world requires identifying mutual interests, negotiating common actions, and managing differences across a much wider spectrum of countries than ever before. It requires institutions that are fast, flexible, and accountable, that can give voice to the voiceless with resources at the ready. It requires institutions that reach out to partners, with humility and respect, ready to learn from others, that can act as global connectors pioneering a new world of South-South and South-North learning and exchange. It requires institutions that can demonstrate real results and can be held accountable when they falter…

 

We cannot predict the future with assurance. But we can anticipate directions –and one is that the age of a multipolar global economy is coming into view.

This is no aberration, no blip.

 

We still live in a world of nation-states. But there are now more states wielding influence on our common destiny. They are both developed and developing, spanning all regions of the globe. This can be all to the good. But the contours of this new multipolar economy are still forming. It needs to be shaped…

 

  • Modern multilateralism must be practical. It must recognize that most governmental authority still resides with nation-states. But many decisions and sources of influence flow around, through, and beyond governments.
  • Modern multilateralism must bring in new players, build cooperation among actors old and new, and harness global and regional institutions to help address threats and seize opportunities that surpass the capacities of individual states.
  • Modern multilateralism will not be a constricted club with more left outside the room than seated within. It will look more like the global sprawl of the Internet, interconnecting more and more countries, companies, individuals, and NGOs through a flexible network…  

 

Woodrow Wilson wished for a League of Nations. We need a League of Networks. It is time we put old concepts of First and Third Worlds, leader and led, donor and supplicant, behind us. We must support the rise of multiple poles of growth that can benefit all.

 

Robert Bruce Zoellick was the eleventh president of the World Bank.He was previously a managing director of Goldman Sachs, United States Deputy Secretary of State and U.S. Trade Representative.

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