West must prepare for Chinese, Indian dominance
Pastor Dale Morgan
West must prepare for Chinese, Indian dominance*
Sun Nov 26, 3:39 AM ET
Western nations must prepare for a future dominated by China and India,
whose rapid economic rise will soon fundamentally alter the balance of
power, former World Bank chief James Wolfensohn has warned.
Wealthy countries were failing to understand the impact of the
invevitable growth of the two Asian powerhouses, Wolfensohn said in the
2006 Wallace Wurth Memorial Lecture at the University of New South Wales
at the weekend.
"It's a world that is going to be in the hands of these countries which
we now call developing," said Australian-born Wolfensohn, who held the
top job at the global development bank for a decade until last year.
Rich nations needed to try to capitalise on the inevitable emergence of
what would become the engine of the world's economic activity before it
was too late, he said.
"Most people in the rich countries don't really look at what's happening
in these large developing countries," said Wolfensohn, who is now
chairman of Citigroup International Advisory Board and his own
investment and advisory firm.
Within 25 years, the combined gross domestic products of China and India
would exceed those of the Group of Seven wealthy nations, he said.
"This is not a trivial advance, this is a monumental advance."
Wolfensohn said that somewhere between 2030 and 2040, China would become
the largest economy in the world, leaving the United States behind.
By 2050, China's current two trillion US dollar GDP was set to balloon
to 48.6 trillion, while that of India, whose economy weighs in at under
a trillion dollars, would hit 27 trillion, he said, citing projections
by investment bank Goldman Sachs.
In comparison, the US's 13 trillion dollar income would expand to only
37 trillion -- 10 trillion behind China.
"You will have in the growth of these countries a 22 times growth
between now and the year 2050 and the current rich countries will grow
maybe 2.5 times."
In light of these forecasts, it was clear that Western nations and
Australia were not investing enough in educating the next generation to
be able to take advantage of the coming realignment, he said.
"The fact that not enough of our young people are preparing themselves
with knowledge, experience, residence and language to deal certainly
with China, although India has the benefit of an English language, it
does seem to me that it presents a formidable challenge."
Wolfensohn pointed to both China's and India's recent substantial
investments in Africa as an example of how the two emerging giants were
exercising their increasing clout on the global stage.
"Within the last two weeks the world has been put on notice that Africa
is no longer the basket case that everybody had historically thought it
was but is now front and centre in terms of development by India and China."
The phenomenal rally by the two countries was a return to form rather
than a novelty, he said, as they together had accounted for 50 percent
of global GDP from the 1500s until the industrial revolution reduced
that to between five and seven percent.