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Home > Blogs > Anthony Harrington > Don’t think G20, think G160+, says World Bank

Don’t think G20, think G160+, says World Bank

G20 summit 2010 | Don’t think G20, think G160+, says World Bank Anthony Harrington

Inevitably the constant focus in the world’s media on the G20 group of countries puts the world’s richest and most powerful nations so much in the spotlight that the rest of the world is kind of blanked out, as if what poorer countries do economically does not really matter. A salutary antidote to this view was provided by World Bank managing director Ngozi N. Okonjo-Iweala in a speech at the World Bank-Korea Conference on Post Crisis Growth and Development in early June. Okonjo-Iweala gave his speech just a day before the G20 met in Korea. Sadly, there wasn’t much evidence from the G20 event to indicate that the points he made scored some hits, but one can always hope. The G20 had their minds firmly on the eurozone crisis and the tottery nature of the PIIGS sovereign debt, for obvious reasons. But the World Bank managing director’s speech had relevance here too, for his theme was very much about global economic growth outside the mainstream.

He began by pointing out that in 1961, the host country for the Conference, Korea, joined the International Development Agency (IDA), the arm of the World Bank which helps the 79 poorest countries on the globe. Twelve years later, in 1973, Korea graduated from the IDA and was judged to be able to manage its affairs unassisted. Within three years it had joined the ranks of donors to the IDA. In January 2010 it became the first ever country to advance from being one of the original recipients of IDA aid, to becoming a member of the DAC, the Development Assistance Committee of the OECD. The point Okonjo-Iweala wanted to hammer home was that aid is not an end point, but an enabler and there is now a proven route from being an aid recipient to being in the forefront of those judged best able to provide aid.

In fact, he pointed out, with the developed economies facing at best “fiscal consolidation” as they seek to reduce their huge deficits, the economic resilience of emerging economies is going to be crucial if the world is going to get back on track.
“[Asia’s] share of global output in purchasing power parity terms has tripled in less than two decades, increasing from 7 percent in 1980 to 21 percent in 2008. The region’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. And the share of developing countries as a whole in global output in purchasing power parity terms has increased from 34 percent in 1980 to 43 percent in 2010. We know almost half of global growth now comes from developing countries. The statistic alone illustrates the changing dynamics of the world economy…”

The population of sub-Saharan Africa grew from 672 million in 2000, to 820 million by 2008, putting Africa on a path to rival India and China in terms of population densities. Increasingly, he noted, companies investing in low-income countries are reaping disproportionately higher returns by comparison with investments in traditional markets. It is time to widen the focus beyond the G20. The G160 matter, and business and politicians need to act on this realisation, he concluded.

Further reading on emerging economies and developing nations

Tags: developing countries , G160+ , G20 , global imbalances , trading , World Bank , world's poor
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