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Wolfensohn: China and India Will Lead the Global Economy by 2050

Former World Bank President at Presidential Conference: India and China will play a significantly larger role in the world economy.
By Elad Benari
First Publish: 6/23/2011, 4:49 AM / Last Update: 6/23/2011, 9:40 AM

Former World Bank President James Wolfensohn said Wednesday at the Israeli Presidential Conference that the world’s emerging market nations, led by Brazil, Russia, India and China, will play a significantly larger role in the world economy over the next 20 to 30 years.

Wolfensohn, who spoke in a panel entitled “Where is the Global Economy Headed?” said that “the power will shift to China and India by 2050 – at that time they will own 50% of global GDP.” He added that this swing to Asia is “turning the world on its head.”

Israel actively trades with both China and India, and a joint committee of the Finance and Industry Ministries recently formed a program to strengthen Israel’s trade ties with both countries.

Israel and China established diplomatic relations in 1992, and at that time the total trade between China and Israel stood at about $50 million. In 2001 the total trade amount was over $1 billion, and this year the total trade stands at $7 billion.

The volume of trade between Israel and India in 2009 was about $3 billion, of which about $1.8 billion was in exports and $1.2 billion in imports.

Wolfensohn also cautioned that Africa’s rapid rise in population, coupled with its poor economic standing, will lead to its economy becoming a “global issue.”

Wolfensohn, who has ties to Israeli electric car company Better Place and the Israel Democracy Institute, was barred two weeks ago from delivering the keynote address at the commencement exercises at the American University of Beirut for his ties to israel.

He also has ties to the Arabs, but to no avail: when the Israeli government uprooted the Jewish residents of Gush Katif in 2005, Wolfensohn personally bought the hothouses of the evicted Jews for millions so they could be delivered intact to the PA.

Also speaking in the panel was Professor Larry Summers of Harvard University, a former Director of the White House National Economic Council in the Obama administration, who took those predictions down a peg. Summers highlighted the strength of the U.S. economy following the economic downturn, saying, “No country in the world has better prospects and a more globally important role than the U.S. It is tempting to write off the U.S. and say that the 21st century will belong to someone else, but the US remains in a global role of strength and importance for the 21st century.

“I don’t minimize the current economic problems it is experiencing,” he added, “but it is still recovering and growing more than most of the industrialized world – the coming years won’t be years of prosperity, but when people look back they will be astonished with how the U.S. recovered and moved forward from a very serious economic crisis.”

The Israeli economy was praised by another member of the panel, former Peru President Alejandro Toledo, the Founder and President of the Global Center for Development and Democracy.

“With a steadily growing economy, you are the clearly the chosen people,” Toledo said. “G-d was very generous with you and gave you no resources and surrounded you with neighbors with many natural resources.” Earilier in the day, Dennis Ross too lauded Israel's economic achievements.