The old concept of “Third World” no longer applies and rich countries cannot impose their will on developing nations that are now major sources of global growth, World Bank chief Robert Zoellick says.
In a speech setting the stage for World Bank and IMF meetings in Washington next week, where emerging economies will play a bigger role, Zoellick cautioned against falling back into patterns of self-interest.
He said the economic progress in developing countries had profound implications for global cooperation, multilateralism and the work of institutions such as the World Bank.
“Economic and political tectonic plates are shifting,” Zoellick said in prepared text of a speech to the Woodrow Wilson Centre. “We can shift with them, or we can continue to see a new world through the prism of the old. We must recognize new realities. And act on them.”
The meetings next week are expected to approve the first capital increase for the World Bank in 20 years. While rich industrial countries have been the biggest contributors to the World Bank and long dictated how the money is spent, emerging market countries will have a bigger role.
Zoellick said he worried that the incentive among countries to cooperate will fade as the global economic recovery gives way to a fast-evolving multipolar world economy in which some developing countries are becoming economic powers.
“Already we feel gravitational forces pulling a world of nation-states back to the pursuit of narrower interests,” he said.
The shifts in the world are not only in China and India, he said. Sub-Saharan Africa would grow by an average of over 6 % to 2015 while South Asia, where half the world’s poor live, could grow by as much as 7 % a year over the same period.
“We are now in a new, fast-evolving multipolar world economy … where North and South, East and West, are now points on a compass, not economic destinies,” he said.
But with more global clout comes added responsibility, Zoellick noted, cautioning developing countries.
He said sharing responsibilities in a new international system will not be easy as world trade and climate negotiations, which have revealed deep fissures between developed and developing countries, have shown.
Pointing to climate challenges, Zoellick cautioned that developed countries cannot impose “a one-size fits all” model on developing countries. “They will say ‘No,'” he said.
“We need to move away from the binary choice of either power or environment,” he said. “Climate change policy can be linked to development and win support from developing countries for low carbon growth but not if it is imposed as a straitjacket,” Zoellick added.
While he did not refer to it, the World Bank this week approved funding for a massive coal-fired plant in power-strapped South Africa despite environmental concerns by developed countries.
The United States, Britain and the Netherlands abstained from supporting the project by South Africa state utility Eskom, even though it used the same “clean technology” as in developed countries, because of environmental concerns and told the Bank it needs to do more to promote clean energy sources.
Zoellick said the developed world has prospered through hydro-electricity from dams, but some critics think the developing world should not have the same access to power sources used by developed economies.
“For them, thinking this is as easy as flicking a switch and letting the lights burn in an empty room,” he added. “The old developed country prism is the surest way to lose developing country support for global environment goals.”
While the world needs to take care of the environment “we cannot consign African children to homework by candlelight or deny African workers manufacturing jobs,” he added.
Zoellick said the World Bank too must be open to change.