From Overseas Press

Look and learn from developing world

(Agencies)
Updated: 2010-05-26 10:09

The world's developed nations should follow the example of the developing word and boost growth if they are to avoid a "lost decade," World Bank chief Robert Zoellick said in a newspaper column published on Tuesday.

Writing in the Financial Times Zoellick urged leaders of developed nations to take note of developing countries who are introducing regulatory reforms to encourage private sector growth and ensure a stable recovery.

"They (developed countries) need to seize opportunities from growth in developing countries to avoid their own lost decade."

"Last year as developed economies focused on Keynesian changes in demand, Asia-Pacific economies were advancing reforms especially in services to generate higher growth," Zoellick wrote.

"As developed economies focused on financial regulation and a broader regulatory movement, Asians were considering how deregulation might foster innovation and jobs," he added.

The World bank has forecast growth in developing countries of about?six percent this year and next -- more than double that of high-income nations.

Zoellick pointed to countries throughout the developing world that have improved their growth prospects by investing in infrastructure to raise productivity.

According to a World Bank study of 4,000 Indian companies, reforms in banking, telecoms and transport have helped improve productivity, Zoellnick said.

"To avoid a decade-long work-out with political and economic risks the world needs stronger growth in developing and developed countries. We are seeing a shift towards a new multi-polar global economy, with better prospects in developing countries than in developed ones," he wrote.

Zoellick urged European policymakers, currently battling a debt crisis, to look to the developing world to make sure they learn the correct lesson from the financial crisis.

"The 750 billion euro package to defend the euro buys time. But it is not enough. So far, the world has focused on fiscal contraction and debt, but these are only half the story," Zoellick wrote.

"The world and Europe also need a return to robust growth. Without it the fiscal adjustments will be more painful and the politics more unmanageable."