Global Development Horizons 2011: Multipolarity - The New Global Economy
Transition to a new world order with more diffuse distribution of economic power is under way. This first edition of a new World Bank flagship report, 'Global Development Horizons 2011', focuses on three major international economic trends: the shift in the balance of global growth from developed to emerging economies, the rise of emerging-market firms as a force in global business, and the evolution of the international monetary system toward a multicurrency regime. Pursuit of growth opportunities on a global level has meant that the international presence of emerging-market firms in cross-border production, trade, and finance has been on the rise for some time. Emerging and developing counties accounted for 46 percent of international trade flows in 2010, up from 30 percent in 1995. Cross-border mergers and acquisitions originated by firms based in emerging markets represent nearly one-third of global M and A transactions. The risk of investing in emerging economies has declined dramatically, while emerging economies financial assets and wealth have expanded: emerging and developing countries now hold three-fourth of all official foreign exchange reserves. Despite the large, rapidly growing size of emerging economies and the expanding international presence of emerging-market firms, the role of emerging economies in the international monetary system remains relatively insignificant. No emerging-market currency is used to a great extent in holding official reserves, invoicing goods and services, denominating international claims, or anchoring exchange rates. Virtually all developing countries are exposed to currency mismatch risk in their international trade, investment, and financing transactions. But it appears that this too will change in the coming years. Smoothing the transition to a multipolar monetary environment will be high on the agenda of policy makers, who will face major decisions about whether fundamental reform of the rules of the international monetary system is in order. The first edition of 'Global Development Horizons' consists of a hard-copy publication and a companion website (http://www.worldbank.org/GDH2011), the latter of which will include the report s underlying data and methodology, blog postings, and background papers and will incorporate an interactive feature allowing users to explore the scenarios described in GDH 2011. In the future, the site will continue to contribute to international discourse on multipolarity by serving as a repository for related research papers and as a platform for interactive debate among academic, policy, and business institutions concerned with long-term global economic change and its implications for development policy.
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acquisitions advanced economies assets average balance Bank staff calculations Bank staff estimates baseline scenario Bilateral Investment Treaties billion Brazil capital markets China consumption corporate coun country’s cross-border investment cross-border M&A current account demand developing countries developing economies domestic economic growth economy growth poles emerging economy growth emerging economy poles emerging markets emerging-market firms euro area exchange rate expansion exports external factors figure financial crisis fiscal flows global economy global growth greenfield investments growth rates home countries imbalances important income increased India Indonesia institutional international currency international monetary system Korea LDCs M&A activity M&A deals macroeconomic major Malaysia measured ment multilateral multipolar nomic output percent polarity index potential emerging economy productivity regional rency renminbi reserve currency risk role Russian Federation sector share Singapore Source spillovers Thomson-Reuters tion tional trade trend U.S. dollar United Kingdom variables World Bank staff World Bank WDI