Transition to a new world order with more diffuse distribution of
economic power is under way. This first edition of a new World Bank
flagship report, Global Development Horizons 2011, focuses on
three major international economic trends: the shift in the balance of
global growth from developed to emerging economies, the rise of
emerging-market firms as a force in global business, and the evolution
of the international monetary system toward a multicurrency regime.
Pursuit of growth opportunities on a global level has meant that the
international presence of emerging-market firms in cross-border
production, trade, and finance has been on the rise for some time.
Emerging and developing counties accounted for 46 percent of
international trade flows in 2010, up from 30 percent in 1995.
Cross-border mergers and acquisitions originated by firms based in
emerging markets represent nearly one-third of global M&A
transactions. The risk of investing in emerging economies has declined
dramatically, while emerging economies’ financial assets and
wealth have expanded: emerging and developing countries now hold
three-fourth of all official foreign exchange reserves.
Despite the large, rapidly growing size of emerging economies and
the expanding international presence of emerging-market firms, the role
of emerging economies in the international monetary system remains
relatively insignificant. No emerging-market currency is used to a
great extent in holding official reserves, invoicing goods and
services, denominating international claims, or anchoring exchange
rates. Virtually all developing countries are exposed to currency
mismatch risk in their international trade, investment, and financing
transactions. But it appears that this too will change in the coming
years. Smoothing the transition to a multipolar monetary environment
will be high on the agenda of policy makers, who will face major
decisions about whether fundamental reform of the rules of the
international monetary system is in order.
The first edition of Global Development Horizons consists of
a hard-copy publication and a companion website
(http://www.worldbank.org/GDH2011), the latter of which will include
the report’s underlying data and methodology, blog postings, and
background papers and will incorporate an interactive feature allowing
users to explore the scenarios described in GDH 2011. In the future,
the site will continue to contribute to international discourse on
multipolarity by serving as a repository for related research papers
and as a platform for interactive debate among academic, policy, and
business institutions concerned with long-term global economic change
and its implications for development policy.
The days of U.S. global economic dominance are numbered. A report
recently released by the World Bank predicts that by 2025, a
multi-polar world will emerge in which economic clout is spread across
developed and emerging economies.
— Pereira, Forbes
The bank said in its 'Global Development Horizons 2011'
report that global growth over the next 15 years is likely to mirror
the current recovery, with emerging and developing countries growing
faster than more advanced counterparts. The bank projects emerging
economies to grow an average of 4.7% a year through 2025, more than
double the 2.3% forecast for advanced economies.
— R. Crittenden, The Wall Street
Journal
The report, 'Global Development Horizons
2011—Multipolarity: The New Global Economy,' anticipates that
the dollar will be joined by the euro and the renminbi as dominant
international currencies. The Chinese government is already easing
currency controls and has taken other steps to help the renminbi become
a fully convertible reserve currency, which would make it easier for
foreign companies to finance projects in China.
—Motoco Rich, The New York Times
By 2025, the United States, the euro area and China will
constitute the world's three major 'growth poles', the
World Bank said, providing stimulus to other countries through trade,
finance and technological developments and thus creating global demand
for all of their currencies, not just the dollar.
— Somerville, Reuters
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