Home Economy India, China models for developing nations: World Bank

India, China models for developing nations: World Bank

By Arun Kumar, IANS

Washington : As “new growth poles”, India and China can serve as models for the developing world, particularly Africa, to stimulate inclusive and sustainable growth despite the current financial crisis, says the World Bank.

“While we are witnessing upheaval in the financial markets, we are also seeing new growth poles in India and China,” World Bank Group president Robert B. Zoellick said Thursday.

“And yes, although we have short-term illiquidity, we actually have a lot of money out there looking for someplace to go,” he told reporters ahead of the World Bank-International Monetary Fund (IMF) Spring Meetings here this weekend.

Indian Finance Minister Palaniappan Chidambaram is arriving here later Friday to attend the meetings where world finance ministers and central bank governors will discuss the outlook for the world economy, Doha round of world trade talks and climate change.

“We have to re-energise the international community, donors and clients” to reach the Millennium Development Goals (MDGs), a set of eight globally agreed goals with a due date of 2015, Zoellick said.

Noting that while much of the world is on track to halve extreme poverty, on current trends, Sub-Saharan Africa could miss all the MDGs, he said: “This must not happen”.

Suggesting what he called “A One Percent Solution” to build equity investment in Africa, Zoellick said it would help them “become a complementary growth pole over the next 10 or 15 years, just as China, India, Brazil and others are complementary poles today”.

The allocation of even one percent of the assets of sovereign wealth funds to equity investment in Africa could draw $30 billion to African growth, development and opportunity, Zoellick said.

Asked why prices of rice and wheat have risen so rapidly, and what should be done to get the prices down, he said the medium and long- term answer was to try to increase productivity and supply of food.

Citing India’s example, Zoellick said: “We saw great increases through the green revolution in South Asia and India. We believe that we can have a green revolution in Sub-Saharan Africa, but based on different dimensions.

“In the case of India, it was very much crop varieties and some supporting inputs. In the case of Sub-Saharan Africa, we have to look all across the value chain.”

The World Bank’s priority as it works towards reaching the MDGs is “certainly for those that are the poorest countries”, he said. “At the same time, because a lot of our service is bringing knowledge and learning activities, that is also available for middle-income countries, and these become connected.

“In many of the so-called middle-income countries, you have very large poor populations,” Zoellick noted. “Keep in mind that in China, India – the middle-income countries represent 70 percent of the people living on under $2 a day. So you have a lot of poor in these countries.”

The Group, he said, would be launching Saturday an initiative “to ensure that countries that are rich in resources, which can be drivers of growth, don’t fall short of their potential, lose out to corruption, or even slip into conflict among fortune-hunters.

“Meetings such as this are usually about talk. Words can focus attention. They can build momentum,” Zoellick said. “This is about recognising a growing emergency, acting, and seizing opportunity, too. The world can do this. We can do this. We can have a new deal on global food policy.”