The World Bank predicted on Wednesday that rapid globalization could spur faster economic growth in the world, especially in developing countries in the next 25 years, but will also bring growing income inequality and potentially severe environmental pressures.

According to the report Global Economic Prospects 2007: Managing the Next Wave of Globalization, growth in developing countries will reach a near record seven percent this year.

In 2007 and 2008, their economic growth will probably slow down, but will still likely exceed six percent, more than twice the rate in high-income countries, which is expected to be 2.6 percent, said the report.

On how globalization will shape the global economy over the next 25 years, the report's "central scenario" predicted that the global economy could expand from 35 trillion U.S. dollars in 2005 to 72 trillion dollars in 2030.

"While this outcome represent only a slight acceleration of global growth compared to the past 25 years, it is driven more than ever before by strong performance in developing countries," said Richard Newfarmer, the report's lead author and economic advisor in the Trade Department.

"And while exact numbers will undoubtedly turn out to be different, the underlying trends are relatively impervious to all but the most severe or disruptive shocks," he said.

Broad-based growth in developing countries sustained over the period would significantly improve the problem of global poverty, experts said.

"The number of people living on less than 1 dollar a day could be cut in half, from 1.1 billion now to 550 million in 2030. However, some regions, notably Africa, are at risk of being left behind. Moreover, income inequality could widen within many countries, compounding current concerns over inequality between countries," said Franois Bourguignon, World Bank chief economist and senior vice president of Development Economics.

But the World Bank report also warned that continuing integration of markets will make jobs around the world more subject to competitive pressures.

"As trade expands and technologies rapidly diffuse to developing countries, unskilled workers around the world -- as well as some lower-skilled white collar workers -- will face increasing competition across borders," explained Uri Dadush, director of the World Bank's Development Prospects Group and International Trade Department.

"Rather than trying to preserve existing jobs, governments need to support dislocated workers and provide them with new opportunities. Improving education and labor market flexibility is a key part of the long-run solution," he said.

But the report also said globalization is likely to bring benefits to many. By 2030, 1.2 billion people in developing countries -- 15 percent of the world population -- will become the "global middle class," up from 400 million today.

This group will have a purchasing power of between 4,000 dollars and 17,000 dollars per capita, and will enjoy access to international travel, purchase automobiles and other advanced consumer durables, attain international levels of education, and play a major role in shaping policies and institutions in their own countries and the world economy.

However, the next wave of globalization will also likely intensify stresses on the "global commons," which could jeopardize long-term progress, the report warned.

Nations will have to work together to play a larger role on issues involving global public goods -- from mitigating global warming, to containing infectious diseases such as avian flu, to preventing the decimation of the world's fisheries.

According to the report, global warming is a serious risk. Rising output means that annual emissions of greenhouse gases will increase roughly 50 percent by 2030 and probably double by 2050 in the absence of widespread policy changes.

To avoid this, policies will have to promote "clean" growth so as to limit emissions to levels that will eventually stabilize atmospheric concentrations.

Moreover, poor countries will need development assistance to adapt to coming environmental changes, including support for their participation in the carbon finance market.

The authors concluded that the challenges of rapid globalization put new burdens on both national policymakers and international officials.

Nationally, governments need to ensure that the poor are incorporated into the growth process through pro-poor investments in education, infrastructure, and support mechanisms for dislocated workers. They need to support and invest in workers -- all the while promoting rather than resisting change.

Internationally, the report called for stronger institutions for tackling threats from the global commons. It also called for more and better development assistance. Reducing barriers to trade is vital as well, since it can create new opportunities for poor countries and poor people.

"Revitalizing the Doha round of world trade negotiations and concluding an agreement that benefits the poor is urgent," said Mr. Dadush.

Source: Xinhua