The report, The Day After Tomorrow: A handbook on the future of economic policy in the developing world, released Monday notes that almost half of the global growth is currently coming from developing countries. “As the rich world puts its house in order, developing countries are becoming a new pulling force for advanced economies,” it states. [break]
Presenting the major highlights of the study, Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management (PREM) and co-editor of the book, stated that developing countries will move global growth forward while high-income countries remain stagnant.
The report among others estimates the growth in developing countries to reach 6.1 percent in 2010, 5.9 percent in 2011, and 6.1 percent in 2012, while it will remain 2.3 percent, 2.4 percent, and 2.6 percent respectively for high-income countries.
The study attributes the difference in situation to factors like faster technological learning, larger middle-classes, more South-South commercial integration, high commodity prices, and healthier financial conditions in the developing countries.
But at the same time, it suggests developing countries to take advantage of their relatively healthier fiscal positions to foster inclusive growth. It mainly urges them to better target social programs, give more emphasis on providing same opportunities to the people, and foster business environments that facilitate the creation of formal jobs.
The study has tagged South Asia as the region of the world that better withstood the crisis and the first to return to the growth path. “But poverty continues to mire the region with some 600 million living on $1.25 a day. So the challenge is to make recovery stronger, inclusive and sustainable,” reads the statement.
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