Dealing with global stresses
The Hindu, 30 december
The more analytical portions of the recently released World Bank publication, "Global Economic Prospects 2007: Managing the next wave of globalisation," deal with the state of the global economy over the next 25 years. The key findings, though not novel, need to be emphasised. By 2030, the global GDP is expected to more than double its size in 2005, growing to $72 trillion from $35 trillion, with the developing countries providing the impetus. Many other studies by global organisations, academics, and think tanks have also arrived at similar conclusions by extrapolating current economic growth rates of China and India. The Bank, however, has gone farther and worked out the likely costs of such globalisation-led growth. In its view the next wave of globalisation will intensify stresses on the "global commons", the environment as well as public goods that are the responsibility of all countries. Clearly the only way out is for nations to work together in mitigating global warming, containing infectious diseases such as the avian flu, and preventing the decimation of the world's fisheries. The rapidly integrating markets will enhance the competitive pressures in the job markets, with unskilled workers and less skilled white-collar workers becoming particularly vulnerable.
It is very likely that the average incomes would rise faster during the next 25 years than they did between 1980-85. The World Bank estimates that 1.2 billion people in developing countries — 15 per cent of the world population — will belong to the "global middle class," up from about 400 million today. With the purchasing power ranging from $4000 to $17000 per capita, they will have access to international travel, advanced consumer durables, and higher education. India and other developing countries will play a significant role in the global trade in goods and services, which is expected to treble to $27 trillion by 2030. Developing countries, which account for 40 per cent of manufactured imports of developed countries, will have their share increased to almost 65 per cent by 2030. The challenges of globalisation at the national level consist in minimising the consequences of iniquitous growth and containing potentially severe environmental pressures, while at the international level they lie in strengthening the global institutions.
The more analytical portions of the recently released World Bank publication, "Global Economic Prospects 2007: Managing the next wave of globalisation," deal with the state of the global economy over the next 25 years. The key findings, though not novel, need to be emphasised. By 2030, the global GDP is expected to more than double its size in 2005, growing to $72 trillion from $35 trillion, with the developing countries providing the impetus. Many other studies by global organisations, academics, and think tanks have also arrived at similar conclusions by extrapolating current economic growth rates of China and India. The Bank, however, has gone farther and worked out the likely costs of such globalisation-led growth. In its view the next wave of globalisation will intensify stresses on the "global commons", the environment as well as public goods that are the responsibility of all countries. Clearly the only way out is for nations to work together in mitigating global warming, containing infectious diseases such as the avian flu, and preventing the decimation of the world's fisheries. The rapidly integrating markets will enhance the competitive pressures in the job markets, with unskilled workers and less skilled white-collar workers becoming particularly vulnerable.
It is very likely that the average incomes would rise faster during the next 25 years than they did between 1980-85. The World Bank estimates that 1.2 billion people in developing countries — 15 per cent of the world population — will belong to the "global middle class," up from about 400 million today. With the purchasing power ranging from $4000 to $17000 per capita, they will have access to international travel, advanced consumer durables, and higher education. India and other developing countries will play a significant role in the global trade in goods and services, which is expected to treble to $27 trillion by 2030. Developing countries, which account for 40 per cent of manufactured imports of developed countries, will have their share increased to almost 65 per cent by 2030. The challenges of globalisation at the national level consist in minimising the consequences of iniquitous growth and containing potentially severe environmental pressures, while at the international level they lie in strengthening the global institutions.
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