Global issues such as the economic downturn were traditionally dealt with within the G7 or G8, within strong, wealthy countries who had the ability to bail the rest of the world out. Well, in the last few years, the tables have turned and its now stalwart, energy rich emerging countries such as China and India that the world is looking to. In fact, the International Monetary Fund has approached Asian nations Japan and China to contribute substantially to the bailout fund, aimed at helping lesser developed countries out of the financial crisis.
At the recently concluded G20 summit in Washington, the global community made a clear resolve to broad base the decision-making structures of international finance to include major emerging markets like India and China. A clear signal that emerging Asia has arrived on the global political and economic stage.
“Today’s summit was significant because of the people present. A new world economic order is developing that is more dynamic and more inclusive than any we have yet seen,” Dominique Strauss-Kahn, managing director of the International Monetary Fund told the Deutsche Welle.
In addition to the emerging economies broader global platform and voice, the larger economies have also invited India, China and Brazil to be admitted quickly to another global body called the Financial Stability Forum, which was created after the emerging markets crises of the 1990s. Global leaders also abstained from raising protective trade barriers for the next 12 months, a move many Asian economies feared.
The International Monetary Fund has forecast a recession in most advanced economies in 2009. The 15 countries in the euro zone this week officially slipped into recession, and the United States is likely to follow suit.
That means powerhouse emerging economies in Asia, the Middle East and Latin America are likely to be the key pillars of economic growth next year. China’s economy, though slowing, is still forecast to grow at an 8.5-percent clip next year. India will grow between 7 and 7.5 percent, the Deutsche Welle continued.
