Oxfam calls World Bank report
'inconsistent' By Mattias
Creffier
BRUSSELS - By 2030, 1.2 billion
people in developing countries will belong to a
global middle class, up from 400 million today,
and the increase in wealth will make income
inequality and environmental pressures more acute,
predicts the World Bank in a new report.
The non-governmental organization Oxfam
thinks the report, "Managing the Next Wave of
Globalization", is inconsistent with the World
Bank's position on free trade.
In the next
25 years, growth in the global economy will
be
powered increasingly by
developing countries, notably in Asia, the report
says. Global output will rise from US$35 trillion
in 2005 to $72 trillion in 2030. Overall,
developing countries' share in global output will
increase from about one-fifth of the world economy
to nearly one-third, the report predicts.
Despite an expected increase of the
world's population to 8 billion by 2030, the
number of people with an income below $1 a day
will fall to 550 million from 1.1 billion today.
As more people in developing countries move from
agriculture into better paid manufacturing and
services jobs, the ranks of the middle classes
will triple.
By 2030, 1.2 billion people
in developing countries will earn between $4,000
and $17,000 a year. This would give countries as
diverse as China, Mexico and Turkey average living
standards comparable to Spain today.
However, the wealth increase comes at a
cost, both socially and environmentally. Africa is
most likely to fall further behind because of its
political fragility and vulnerability to
fluctuations in commodity prices.
In
two-thirds of developing countries, the income gap
between the rich and the poor is bound to
increase, the World Bank predicts. That is because
a more integrated global economy offers
opportunities to the well-educated, whereas
unskilled workers have to compete harder and
probably earn less to keep their jobs.
The
pressures in labor markets will be partially
offset by India's and China's hunger for energy,
technology and investment goods. Hence strategic
investments in research, education and lifelong
learning become more important than ever as a
safeguard in a more competitive global economy.
The report proposes increasing development
assistance and lowering trade barriers to products
from developing countries, especially agricultural
and labor-intensive manufactures.
For
Oxfam's Etienne De Belder, the World Bank's policy
guidelines show an appalling lack of consistency.
"Countries that followed the export-driven model
of development which the bank proposes were left
with a social and economical hangover. Just look
at the pauperization in sub-Saharan Africa or the
deforestation in Indonesia."
The World
Bank is not learning from the past and is in a
poor position to give lessons for the future, said
De Belder. "You can't have economical deregulation
and at the same time ask for more rules to solve
ecological and social problems. Local
entrepreneurs in Africa are not ready to stand up
to global competition. As long as the inequalities
persist, there cannot be beneficial free trade
between equal parties."
De Belder added:
"India's and China's successes in boosting exports
and reducing poverty are mainly due to their huge
internal markets. Smaller developing countries
have to look for different strategies."
