World Bank Report: No World Currency., Projecting trends up to the year 2025 Options

[André]

Projecting trends up to the year 2025, the Global Development Horizons report began by noting that “sweeping changes are afoot in the global economy” with the “growing clout of emerging markets … paving the way for a world economy with an increasingly multipolar character”.

In the postwar era, the global economic order “was built on a complementary set of tacit economic and security arrangements between the United States and its core partners with developing countries playing a peripheral role,” shaping their policies with an eye to “benefiting from the growth dynamism of the developed countries”.

That era has well and truly passed. The report found that while economic growth over the next 15 years would be substantially lower than the levels reached in 2010, “emerging economies will … expand collectively by an average of 4.7 percent per year (more than twice the developed world’s 2.3 percent rate) between 2011 and 2025”.

As a result, the report estimated that by 2025 six major “emerging economies”—Brazil, China, India, Indonesia, Korea and Russia—would collectively account for more than half of all global growth. Centres of global growth would be distributed across developed and emerging economies, giving rise to a “multipolar world”.

These shifts will have far-reaching implications for the global monetary system. According to the report, “the most likely scenario … is a multicurrency system centered around the US dollar, the euro and the renminbi [the Chinese currency, also known as the yuan]. Under that scenario, the dollar would lose its position as the unquestioned principal international currency by 2025, making way for an expanded international role for the euro and the burgeoning role for the renminbi.”

The report all but ruled out an alternative scenario for a single multilateral reserve currency administered by the major powers because this would “require countries highly protective of their national monetary policy to relinquish full control”. In other words, such a scheme for a global currency would founder on the rocks of the national interests of the major powers, just as did a similar proposal by John Maynard Keynes, the leader of the British delegation in the negotiations that set up the IMF in 1944.

http://www.wsws.org

[amazed!]

Well they have to have a market where the currency traders can play. (IMG:style_emoticons/default/whistle.gif)