Emerging powers including China, India and Brazil are leading the way out of global recession, and they expect the wealthy world to take notice. As leaders from the Group of 20 (G20) bloc of leading economies begin a two-day summit Thursday in Pittsburgh, Pennsylvania, these countries will be hoping to capitalise on their greater economic clout.
The G20's own prominence - taking a bigger role in the last year than the Group of Eight (G8) industrial nations - remains a sign of that new swagger. It will be the third time since November that G20 leaders have met to consider how to reshape the world financial order.
China and Brazil have said they will push for a greater voice in international financial bodies. Both want the G20 to make moves toward increasing the voting rights of developing nations to 50 per cent in the International Monetary Fund (IMF) and the World Bank.
"Developing countries can be vital parts of a global economy with multiple poles of growth," World Bank President Robert Zoellick said this week.
There is some reason to gloat. The big developing economies are growing stronger as wealthier nations struggle to recover from their deepest recession in decades. China's economy could grow at 8 per cent this year and India's more than 6 per cent.
Brazilian President Luiz Inacio Lula da Silva stressed this week that his country has overcome the financial crisis. Finance Minister Guido Mantega noted that Brazil will have the smallest deficit of any country in the G20.
"There is no turning back. The road is open for us to be one of the most important countries in the world," Mantega said.
That doesn't mean the emerging powers have not suffered. Chinese exports tumbled as US consumers stopped spending, and China's economy was in part propped up by a massive domestic stimulus package. Mantega said that Brazil suffered a loss equivalent to 2.5 per cent of its gross domestic product as a result of the crisis.
Zhang Xiaojing, an economist with the Chinese Academy of Social Sciences, said that China deserves more input on the world stage, but he cautioned against pushing too hard. "Though our economic weight has dramatically increased in recent years, China is not yet a global economic locomotive and leader," Zhang told the official China Daily newspaper. "Our high dependence on foreign trade has shown our economic fragility."
China was right, he said, to call for more input for emerging economies: "The global financial architecture should represent the changing economic geography."
The emerging countries are bringing a whole host of their own concerns to the G20, as well as to a summit of leaders at the United Nations earlier in the week.
Indian officials said they will push industrial nations not to indulge in protectionism or approve far-reaching reforms of financial regulations that could adversely impact the developing world. Many poor countries have suffered from plunging private investment in the last year.
"We are concerned that in the guise of improving regulations, they should not be putting in place rules that end up discriminating against developing nations," India's Planning Commission Deputy Chairman Montek Singh Ahluwalia said this week.
Ahluwalia, who will be assisting Prime Minister Manmohan Singh at the Pittsburgh summit, said there was a realisation now that the worst was over in the global economy. The issue now was how fast the contagion of the global meltdown could be overturned.
India is expected to make a serious pitch at Pittsburgh for an early and successful conclusion of the Doha round of trade talks, which it feels would greatly help in quickening global economic recovery. China will bring similar trade concerns, especially after the United States imposed a tariff on tyre imports just one week before the G20 summit.
Vice Foreign Minister He Yafei warned Tuesday that the US tariffs would damage the mutually beneficial trade relationship between the two economic powerhouses.
"The (tariffs) will certainly impact trade between China and the US because we have a huge trade volume," He said. The tyre tariffs were "clear examples of protectionism." He said that participating nations in the G20 summit in Pittsburgh should promise not to erect new protectionist trade measures.
GERMAN PRESS AGENCY
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