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Modernizing Multilateralism for a World in Transition

April 20, 2010

World Bank President Robert Zoellick discussed the importance of building and sustaining international cooperation in a changing multilateral world, a world in which, he said, the categories of First and Third World no longer apply. Speaking at an April 14 Director's Forum, Zoellick said dealing with the wide range of intensifying global challenges requires adapting to an ever-changing global economic environment.

"We are now in a new, fast-evolving multipolar world economy—in which some developing countries are emerging as economic powers; others are moving toward becoming additional poles of growth; and some are struggling to attain their potential within this new system.

"Economic and political tectonic plates are shifting," he said. "We must recognize new realities and act on them."

Rapid progress in parts of the developing world, and vast potential in other parts, is changing the face and the future of the global economy, Zoellick said. China, whose economy continues to develop rapidly, last year became the world's largest exporter. A burgeoning middle class in developing countries has introduced billions of people to the global economy. From Southeast Asia to the Middle East to Latin America, developing countries are becoming important sources of capital and global trade hubs.

The developing world, he said, could be the key to recovering from the global financial crisis. "The developing world is becoming a driver of the global economy," he said. "Much of the recovery in world trade has been due to strong demand for imports among developing countries."

One such source for demand is the African continent. Many African countries still import the bulk of their consumer goods and most Africans can barely afford to buy them. But, Zoellick said, changes in African government policies can remove obstacles to domestic entrepreneurship and create an investment climate that shifts production to Africa.

Investments in agriculture in Africa would add jobs and raise incomes, he said, while investments in infrastructure would grow the private sector and help link local manufactures to world markets. Already in the last decade, he said, some $60 billion of private investment has gone into information and communications technology in Africa, where some 400 million people are using cell phones.

Major challenges, from water to migration to disease, require international cooperation. "Developed country interests, even if well-intentioned, cannot represent the perspective of the emerging economies," he said. Therefore, G-20 nations should not be hierarchical or bureaucratic, but operate as a "steering group."

One multilateral challenge is climate change. Developing countries need help financing their clean environment goals, said Zoellick, to increase energy efficiency, develop clean, low-carbon energy technologies even in the poorest countries, and promote solar, wind, and geothermal power.

And people in every corner of the world should have access to viable power sources, he said, such as hydroelectricity from dams. "While we must take care of the environment, we cannot consign African children to homework by candlelight or deny African workers manufacturing jobs," Zoellick said. "The old developed country prism is the surest way to lose developing country support for global environmental goals."

In this changing world of growing interconnectedness, Zoellick said multilateral institutions such as the World Bank must modernize and adapt to the new economic realities by becoming faster, more flexible, and more accountable.

In the last two years, he said, the World Bank Group committed more than $100 billion to developing countries and now it is seeking its first capital increase from shareholders in more than two decades to support its initiatives. Zoellick said more than half of those resources will come from the developing world, through price increases and capital investments.

"We are reforming to sharpen our strategic focus where we can add most value," Zoellick said, focusing on the poor, particularly in sub-Saharan Africa, economic growth, and areas of multilateral cooperation, from agriculture and the environment to water and health and better overall governance.

"We need to find points of mutual advantage, making reciprocal gain possible," he said. "We need accords that every leader can sell at home."

Dana Steinberg, Outreach & Communications
Sharon McCarter, Vice President, Outreach & Communications

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