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BRIC will rule the world, but not that soon – former WB boss
Published: 08 February, 2010, 03:19
Edited: 02 May, 2010, 22:54
TAGS: Asia, Russia, Crisis, Regional development, Currencies, Russia and the global economy
For 40 years the US was the dominant economic power, but today China and India are emerging and there is a complete change internationally, former World Bank president James Wolfensohn told RT at Davos.
“If you take a view in 10-20 years, there is no question that China and India will become dominant powers, China first and later India. By 2030-2040 the US will rank, perhaps, #3 to those two. But the US is still a hugely important power, not just because of the economics, but because of technology and income per capita, which is still far in excess to China and India, and because of its political leadership,” stated Wolfensohn. “We are not going to see a change that is too dramatic. But you certainly will find the emerging powers will want a greater share of discussion in the global scene and in particular the BRIC countries, and of the BRIC countries in particular, China and India.”
Answering a question about the role of the IMF and the World Bank in helping smaller countries overcome the great economic downturn, Wolfensohn stated that these organizations were “giving a great deal of money to come and help to solve the problem.”
“I rather feel the IMF and the World Bank emerge stronger as a result of this, because people came to realize you cannot live without them,” he said.
Wolfensohn believes the management of these organizations is already changing due to the fact that “it is no longer the US-dominated World Bank and the EU-dominated IMF. All this is now subject to examination, and in particular, the role of China and India, Brazil and Russia are becoming very important.”
Wolfensohn thinks it would be hard for emerging economies to pick up the slack from the US and EU economies, but that this would change rather quickly.
“All BRIC countries, China, India, Russia and Brazil together, are less in terms of GDP than the United States, maybe less than half of the US,” explained Wolfensohn. So “China and India alone cannot rescue the world economy at the moment.”
As for the probability of Russia becoming Europe’s biggest economy by 2020, Wolfensohn said it takes “the government and the Russian people to understand that to compete internationally, it is not enough just to have hydrocarbons, timber and natural resources. That gets back to the educational system, to the management system, to the system of incentives, to the move away from centralized government to a more diversified structure.”
Though Russia [in comparison to China and India] has some intellectual advantages it should pursue, said Wolfensohn, “high tech does not create lot of employment.”
Besides the issue of employment in the world’s biggest country, Wolfensohn also named such problems as ageing population, educational system, the incentives system, the judicial system and corruption as issues that need to be addressed urgently.
07.02.2010, 21:16
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Face it the partys over. Time for the Brits to bottle American colonial air before its all gone.
The India US relationship has been again one of the biggest strategic miscalculations by the US, only paralleled by the enablement of Chinese industry for a fast buck, which in the end turned out to be the tail wagging the dog, and the enablement of global terrorism to fight the Soviets, which again came back to haunt them. The US worked hard to enable India with its policy of trying to get India to balance out China. But it did not really understand that in creating a strong entity, the entity is also free to be outside your sphere of influence. India has taken the present well, and enjoyed the fast start enabled in part by the US. But the facts are that India is charting its own course. Like China, India will quite happily deal with the west, a trading relationship. It will quite happily source weaponry from anyone, including its long standing supplier Russia. The real truth is that the US thought it had India as a chess piece to play with. The reality now is that both India and China have the US as a chess piece to play with. It is not that India or China want conflict, what they want is to be left alone to decide their own futures. That is indeed what unifies all the BRIC countries. The analysis on borders and wars is all precipitated by a US thinking, that continually only exists in terms of a military analysis. However the real power stems from an economy, the BRIC economies will win through. Their principles of autonomy and free trade will win through. The US will face a choice, turn into an increasing militarized state, trying to bully the world, or go back to a thriving business economy. The former will lead to disaster for the US, as their military capabilities become increasingly countered and their costs rise. The second one is good for the US, but it dictates a realization that the US must fit into the world in a equitable way. BRIC doesn't need to be an alliance, a union, it just needs to be a precipitation of economic and balanced military strength.
The USA as a economic power will vanish in thin air in few weeks . This is also the case with Europe. These two economic blocks are supported by International criminals, Saudis and OPEC. In the name of global trade US$ and Euro currency is allowed to be carried as cash. The 90 % US$ and 94% of US$ 100 dollar bills are circulated internationally by drug cartels, CIA agents, facilitating sex slave trade, money laundering , Under invoicing of imports and over invoicing of exports etc. USA and europe by printing IOU's in the form of cash Euro and US$ and are enjoying the world resources with no value added work by their citizens. With electronic money transfers and ATM's every where if world governments ban the carriage of Physical currency across political borders , the US$ 880 billion which funds the international crime will flow back to US in a matter of weeks. USA currency will fall on par with Rouble in no time. All governments will get a income of 160 Billion US$ at 15 % VAT and GST in taxes since the black market will vanish. Till that time US$and Euro will remain in trade encouraging corruption and crime and will be defended as sovereign money by corrupt leaders who are main beneficiary of cash in US$ and Euro