Inclusiveness will require changes in mind-sets, policy responses, and institutions—international and domestic. The goal is to make the rise of the developing world as comprehensively beneficial as possible, even as major transitions compel shifts in relative prices, dramatic changes in economic structure in both advanced and developing economies, and changes in the distribution of income and wealth.
The convergence process, if successful, will triple the size of the global economy in the next 25 to 30 years—by a much larger multiple if our baseline is the start of the convergence process, 1950, instead of today. Attempting this journey without adjusting the world’s use of natural resources will result either in growth grinding slowly to a halt or, worse, in catastrophic failure after an environmental or ecological tipping point. Environmental sustainability is essential to accommodate the rise of the developing world.
This article first appeared in the International Monetary Fund’s Finance & Development publication. To access the entire article, please click here.
The views expressed in this article are the author’s own and do not necessarily reflect Fung Global Institute’s editorial policy.