Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Global Economic Prospects, 2007 Managing the Next of Globalization Hans Timmer and Richard Newfarmer World Bank December, 2006 Medium-term outlook Growth in developing countries will remain strong, boosted by improved policies and favorable financial conditions The global economy has reached a turning point, and ingredients for a soft-landing are in place But turning points generate uncertainties, and significant downside risks remain Strong growth in developing economies Real GDP annual percent change Forecast 7.0 6.0 Developing 5.0 4.0 3.0 2.0 1.0 0.0 1980 1985 Source: World Bank 1990 1995 2000 2005 2008 Strong growth in developing economies Real GDP annual percent change Forecast 7.0 6.0 Developing High-income 5.0 Developing ex. China & India 4.0 3.0 2.0 1.0 0.0 1980 1985 Source: World Bank 1990 1995 2000 2005 2008 Growth now broad-based # of developing countries 30 86-96 96-06 25 20 15 10 5 0 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 Average annual GDP growth (%) Growth now broad-based # of developing countries 35 96-06 00-08 30 25 20 15 10 5 0 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 Average annual GDP growth (%) Developing countries’ policies have improved percent 30 1980s 20 2002-2004 10 0 Av. Tariffs -10 Median Inflation Fiscal Deficit Turning point in commodity markets Price indexes, Jan 2003=100 Forecast 330 280 Metals and minerals 230 Crude oil 180 130 80 Jan- Jul-03 Jan- Jul-04 Jan- Jul-05 Jan- Jul-06 Jan- Jul-07 03 04 05 06 07 Tighter monetary policy to contain inflation Percent -- Interest rates 6 United States 3 month t-bill 5 4 3 2 Core inflation 1 Ja n M ay Se p Ja n M ay Se p Ja n M ay Se p Ja n M ay Se p Ja n M ay Se p 0 2002 Source: World Bank 2003 2004 2005 2006 Turning point in global imbalances Current account balance, billions of dollars, 2002 and 2006, 2008 400 2008 2006 2002 200 0 -200 -400 -600 -800 -1000 USA Source: World Bank. Europe Japan Other HIC East Asia & Pacific (ex China) China Europe & Other Central Asia Developing Turning points come with risks Surplus of global liquidity might trigger sudden reversal of credit flows Global imbalance still large and might trigger sudden reversal in capital flows Correction in U.S. housing market might trigger sharper slowdown Disruption in oil supply might trigger renewed upward price spikes The next wave of globalization Over the next 25 years, markets will become more integrated, developing countries will like grow faster, and become a major force in the global economy However, stresses over income distribution and in labor markets could undermine potential growth …and failure to manage environmental pressures entails serious risks Policy responses to these stresses are so far inadequate to the challenges, so new efforts are needed at both the national and multilateral level Developing countries share of trade will rise as global integration intensifies… Exports from developing and developed countries, 2005-2030 US$2001 trln. 30 $27 trln 25 High-income countries 20 15 10 Developing countries 45% 5 22% 0 1980 Source: World Bank simulations with Linkage model. 32% 2005 2030 …and the share of developing countries in global output will rise… GDP of high-income and developing countries (market exchange rates) US$2001 trln 80 $72 trln 70 60 High-income countries 50 40 30 Developing countries 20 31% 10 16% 0 1980 Source: World Bank simulations with Linkage model. 23% 2005 2030 Growth would raise income and reduce absolute poverty Average per capita incomes in developing countries are likely to double.. …and more people from developing countries will enter the ”global middle class” 1400 Number of people (million) Africa 1200 South Asia 1000 Middle East Latin America 800 Europe & Central Asia 600 400 East-Asia 200 0 2000 2030 Growth would raise incomes and reduce absolute poverty Average incomes are likely to double …and more people from developing countries will enter the ”global middle class” …and sharp reductions in dire absolute poverty 1,400 1,200 1,000 Millions of people 28% Other Sub-Saharan Africa 20% 800 12% South Asia 600 8% 400 East Asia 200 0 1990 2003 2015 2030 Managing stresses: uneven benefits At global level, some regions lag, notably Africa Per capita incomes as percent of high-income countries 40 2030 35 30 2005 25 20 15 10 5 0 East-Asia South Asia Europe & Pacific Central Asia Middle East & North Africa SubLatin Saharan America & Africa Carib. Note: Ratio of PPP-adjusted per capita incomes relative to high-income average. PPP is fixed at base year (2001) level. Source: World Bank simulations with Linkage model. Managing stresses: uneven benefits Within-country income distribution could become unequal in coming years 25 Number of countries 20 15 10 5 0 very large large decrease small minimal change Income inequality small large increase Note: Based on changes in the Gini-coefficient: very large >|0.05|, large>|0.03|, minimal change <|0.01| very large Managing stresses: uneven benefits Returns to skilled workers will likely rise relative to unskilled workers Ratio of skilled wages relative to unskilled wages 7 6 2030 5 4 2001 3 2 1 0 EAP Source : Bank staff calculations ECA LAC MENA SA SSA Managing stresses: labor markets …while globalization spurs productivity, tensions in labor markets could become more severe Share of high-income countries’ imports of manufactures originating in developing countries (%) 80 70 Other Asia 60 50 40 China 30 ECA 20 Latin America 10 Middle East Africa 0 1973 1983 1993 2003 2020 Source : For 1973-2003, data from WITS, Bank staff calculations. Projections using the Linkage model for 2020 and 2030. 2030 Managing stresses: labor markets …and may take a different form because of services trade Growth rate of exports of business services 1994-2003 India Estonia Romania China Israel Brazil Argentina Mauritius EU-15 US Canada Barbados Dominica* Australia Norway Ghana Japan 0% Source: 100% 200% 300% 400% 500% 600% 700% 800% Data from IMF Balance of Payment Statistics: Business services are defined as Total services minus Transportation, Travel, and Government Services. Managing 3 stresses: environmental pressures Global institutions and policies are still too weak to deal with severe environmental pressures Carbon emissions are causing global warming Annual carbon emissions (millions of tons) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1990 2000 Source: OECD GREEN model simulations Others Large developing countries High-income countries 2010 2020 2030 2040 2050 Managing stresses: environmental pressures Global institutions and policies are still too weak to deal with severe environmental pressures Carbon emissions are causing global warming … and overfishing threatens major fisheries Trend 1995-2005 110 90 Trend 1950-95 70 50 30 19 50 19 53 19 56 19 59 19 6 19 2 6 19 5 68 19 71 19 74 19 77 19 80 19 83 19 8 19 6 8 19 9 9 19 2 95 19 98 20 01 20 04 10 Realizing the potential of global integration requires an affirmative policy response – domestically and globally Domestic policy must enhance competitiveness and ensure that growth is broadly shared Institutional measures to raise productivity and growth • Removing barriers to integration • Improving investment climate Investing in education Protecting workers – but not jobs Multilateral collaboration Using development assistance to promote integration of lagging countries Removing barriers to the products that the poor produce • Near-term priority: Doha Development Agenda Global trade reform can be pro-poor Percent income gains (losses) by centiles of global distribution if official development assistance were to cease (expressed as difference from baseline scenario of chapter 2) 25.0 Growth incidence Average 20.0 15.0 10.0 5.0 0.0 -5.0 1 11 21 31 41 51 61 71 81 91 Cumulative population ranked by per capita income Realizing the potential of global integration requires an affirmative policy response – domestically and globally Domestic policy must enhance competitiveness and ensure that growth is broadly shared Institutional measures to raise productivity and growth • Removing barriers to integration • Improving investment climate Investing in education Protecting workers – but not jobs Multilateral collaboration Using development assistance to promote integration of lagging countries Removing barriers to the products that the poor produce • Near-term priority: Doha Development Agenda Reinforcing mechanisms to deal with global externalities Global Economic Prospects, 2007 Managing the Next of Globalization Hans Timmer and Richard Newfarmer World Bank December, 2006