Brasília – The board of directors of the World Bank has listed Brazil, alongside five other emerging economies, as the ones responsible for redefining the global economic framework in the near future. According to a report issued this Tuesday (17th) in Washington, by 2025, the economies of Brazil, China, India, Russia, Indonesia and South Korea will account for over half the global growth.
The report, entitled Global Development Horizons 2011 – Multipolarity: The New Global Economy, informs that emerging nations, Brazil included, will grow by 4.7% on average a year from 2011 until 2025.
“As economic power shifts, these successful economies will help drive growth in lower income countries through cross-border commercial and financial transactions," the document states.
Although they will remain important to the global economy, advanced countries should only grow by 2.3% on average during the same period. “The fast rise of emerging economies has driven a shift whereby the centres of economic growth are distributed across developed and developing economies,“ said the World Bank’s chief economist and vice president for Development Economics, Justin Yifu Lin. “It’s a truly multipolar world.”
In order to become established as a growth pole, however, Brazil must face challenges, such as improving access to education. “. Human capital and ensuring access to education is a concern in some potential growth poles, particularly Brazil, India, and Indonesia,” the report claims. “Minimizing educational gaps and ensuring access to education is crucial,” claims the World Bank.
To the World Bank, eventual measures adopted in Brazil should encourage domestic technological adaptation, innovation capacity and knowledge generation. According to the report, the shifts in economic and financial power balance will be reflected in sectors such as the investment market, mergers and acquisitions.
“Emerging market multinationals are becoming a force in reshaping global industry, with rapidly expanding South-South investment and FDI inflows,“ said Lin. “International financial institutions need to adapt fast to keep up.”
According to the report, the growing role and influence emerging market companies in global finance and investment may lead to the establishment of a multilateral framework foro regulating cross-border investment.
The World Bank also projects that by 2025, the international monetary system will no longer be dominated by one single currency. “Over the next decade or so, China’s size and the rapid globalization of its corporations and banks will likely mean a more important role for the yuan (the Chinese currency)”, said the lead author of the report, Mansoor Dailami.
*Translated by Gabriel Pomerancblum
