Global Biz

Developing nations to make up half of global growth: World Bank

(Xinhua)
Updated: 2010-10-08 08:15

WASHINGTON - Developing countries are expected to account for half of worldwide growth in the years ahead, but bank lending and high food prices remain stumbling blocks for some developing world economies, according to the World Bank.

"One particular bright spot has been the growth in developing countries. Developing countries are expected to account for about one-half of global growth in several years ahead," said World Bank head Robert Zoellick at a press conference on Thursday.

Related readings:  Robust Chinese economy seen chugging forward  China's economy to grow 9.6% in 2010: ADB  Obama's economy plight  China's economy doing well: World Bank VP

"That's a very different world from the one even ten years ago. Their growth provides an important source of demand for exports in developed countries," he said.

Indeed, consumption and investment are contributing to strong growth in the developing world, which as a whole is forecast to reach 7.1 percent in 2010 and 6.4 percent for 2011, according to the International Monetary Fund (IMF) figures.

Emerging Asian nations as a whole are forecast to reach 9.4 percent this year and 8.4 percent next year, according to the IMF.

Developed economies will pale in contrast, at a 2.7-percent growth for 2010 and 2.2 percent for 2011, the IMF added.

But some developing countries are facing headwinds. While many have regained access to the capital market, bank lending remains weak, and is likely to be negative for this year as a whole.

"That will be particularly harder on smaller countries, poorer countries that don't have as good access to security markets," Zoellick said.

Another issue is that the food crisis of 2008 has never fully gone away for some developing countries.

"Recent price rises ... are a serious cause of concern," Zoellick said. "The rise in wheat prices over the last few months is affecting the price of other staples, due to the increased demand for substitutes."

The World Bank has provided 140 billion dollars in finance for the developing world since 2008, when the global crisis took hold, but Zoellick said that more must be done.

Zoellick reiterated his appreciation for China's economic performance during and after the financial crisis, highlighting its positive spillover effects on the rest of the world.

"I think the Chinese growth has been very important in this recovery, and I think it had a very strong and effective stimulus program," he said.

China's economy is projected to grow 10.5 percent in 2010 and 9. 6 percent in 2011, driven by domestic demand, according to IMF figures.

"China's strong and sustained growth over the past several years has served as a linchpin for global trade, benefiting exporters of commodities and capital goods," said the IMF.

The World Bank chief stressed the importance of new multi-polar economy requiring multi-polar knowledge, with rising economies contributing new experiences to the world.

"Part of the focus since I came to the Bank is recognizing that we are beyond an era of North-South knowledge transfer, but we are in a world of South-South knowledge transfer and potentially South- North," he said.

"China has always, I think, been correct in assuming that there is no one-size-fits-all, that there is not a direct transfer," he added.