US economic decline forges New World Order

Agence France-Presse | Oct 4, 2009

The crisis is redrawing the world map of economic power as the influence of US consumer spending declines and major emerging markets like China and India take the lead, finance chiefs said.

“One of the legacies of this crisis may be a recognition of changed economic power relations,” World Bank president Robert Zoellick said Friday in Istanbul ahead of annual meetings of the World Bank and the International Monetary Fund.

“Recent forecasts show that China and India are helping to pull the global economy out of recession…. A multipolar economy less reliant on the US consumer will be a more stable world economy,” he added.

Consumer spending accounts for around two-thirds of economic activity in the United States — by far the world’s biggest economy — and experts say lower spending could have radical effects on the US’s world standing.

The IMF on Thursday forecast emerging and developing economies would grow 5.1 percent in 2010 — in contrast with just 1.3 percent in advanced economies.

China’s economy was projected to grow by 9.0 percent next year and India’s by 6.4 percent — far ahead of 1.5 percent expansion in the US economy.

“The American engine is not as strong as it was before,” IMF managing director Dominique Strauss-Kahn said in a speech in which he called for emerging markets to be given more say in the IMF’s decisions.

“Emerging economies are becoming more and more the real partners,” he said.

In a BBC World debate on the crisis held in Istanbul, Niall Ferguson, a professor of business administration at Harvard Business School in the United States, said: “The crisis has accelerated a shift from west to east.”

“That means rebalancing not only economically… but rebalancing geopolitically, which I think makes some people nervous,” Ferguson said.

“For the foreseeable future the US will be growing at a much lower rate while China is in fact growing at a much faster rate,” he added.

The shift is having far-reaching effects around the world.

In Latin America, IMF economists said the crisis is affecting countries differently depending on whether, like Mexico, they are more closely tied to the United States or, like Brazil, they have more links with China.

“If it was not for China we wouldn’t have seen positive growth in the second quarter in Brazil,” Ilan Goldfajn, chief economist at Brazilian bank Itau Unibanco, said at an IMF-organised conference in Istanbul.

Goldfajn said the world would now start to “rebalance towards Asia.”

Marek Belka, head of the IMF’s European department, cautioned however that for European countries, “demand from Asia is not enough — the recovery rests on the shoulders of European consumers and investors.”

This upheaval is changing institutions too, with the G20 group of developed and emerging economies turning into the main forum for international economic policy and strengthening the IMF as a guarantor of global stability.

The IMF has bailed out countries around the world in recent months and its members have tripled its lending resources to 750 billion dollars (515 billion euros).

Strauss-Kahn has more ambitious plans yet and is seeking more funding to strengthen the IMF’s role as a global lender of last resort.

“Our ultimate goal is financial and economic stability,” he said in a speech in Istanbul at which he outlined plans to even out global economic imbalances.

The G20 summit in the US city of Pittsburgh last month also agreed to give more voting shares to emerging and developing economies in the IMF and the World Bank — a reflection of the shift in economic power.

The World Bank’s Zoellick has also argued that developing countries in Southeast Asia, Latin Amercia, the Middle East and Africa should be seen as future “engines of growth” rather than recipients of charity from rich nations.

In a recent speech in Washington, Zoellick said: “The old international economic order was struggling to keep up with change before the crisis…. It is time we caught up and moved ahead.”

Dangers of Genetically Modified Foods

scoop.co.nz | Oct 5, 2009

By Edem Srem

Sad to say, Genetically Modified foods have been introduced to the African Market. It is now up to African consumers to reject them. This will save lives and cost for the treatment of the side effects of consuming Genetically Modified foods.*

The history of controlling the food industry in the world by the then American Government in 1973 under President Nixon started by introducing the “Food for Peace” programme which was led by Henry Kissinger, Nixon’s Secretary of State and National Security Adviser.

According to the New African Magazine, Kissinger controlled absolutely the US foreign policy and summarized his activities as “Control oil and you control nations, control food and you control the people”. His idea of capturing the worldwide food industry started with the introduction of what was termed as the gene revolution.

The revolution did not succeed until 1990. a member of the South African consumer movement, Andrew Taynton explains that whereas natural breeding techniques select plants or animals with desirable traits and cross breed within a species to create better crops or animals, genetically modified are developed in laboratories by splicing genes from unrelated species into the host organism.

For instance, bacterial genes can be spliced into food crops and it will reproduce itself in each cell in the plants. Also scientists are now transferring anti-freeze genes from fish to tomatoes to keep it longer in the cold. There is also the splicing of pig genes into rice and daffodils to corn. All these have devastating effects, because of its imprecise processes.

The main effects of consuming genetically modified foods includes; allergies, new toxins, new diseases, antibiotic resistance and change in nutritional values. One other thing which needs to be mentioned is the “V Gurts” Varietal Genetic Use Restriction Technology which is popularly called the “Suicide Seeds” or terminator technology.

One expert believes Africa is in great danger now as genetically modified seeds are made in forms of herbicides and pesticides. These are normally exported to Africa and the Caribbean. The centre for Disease Control of the United States says that at lease 80% of food related illnesses are cause by viruses or pathogens that scientist cannot even identify.

Prince Charles, the heir to the British Throne, was once reported to have stated that “growing genetically modified crops in the developing world represents the biggest environmental disaster of all time”.

With the realities of climate change, it is just an option to reject these kinds of foods on the market. More revelations have been made by Dr. Arpad Pusztai, when he found out that rat fed on genetically modified potatoes had smaller livers, hearts, testicles and brains.

It was also revealed that their immune systems have been damaged with a lot of structural changes in their white blood cells, making them vulnerable to infections and other diseases as compared to rats which were fed on normal organic foods. The same changes occur in humans who also take genetically modified foods.

Thus, the whole world could be exterminated if nothing is done to stop it. We have all become lab rats in mass human experiment with huge risks. The risks will be too late to detect and save the world especially Africa because it will take longer times to find the antidotes. By then the genetically modified companies would have made their money.

Apart from South Africa which has started growing genetically modified crops, the remaining African countries must reject and fight against governments who want to adopt the technology. Ghana should also try to establish strict checks on imported foods, seeds, herbicides and pesticides to control, if not to stop the spread of the genetically modified crops in the country.

The solution is to accept nuclear foods which are done through induced mutations. World examples of induced mutations include; Tek Bankye which has been developed by the Kwame Nkrumah University of Science and Technology in collaboration with the IAEA. The Biotechnology and Nuclear Agricultural Research Institute has carried out researches that show that the Tek bankye yields as high as 17.84 tons per acre.

Kenya has also developed a high yielding and drought resistant wheat. Hopefully all Africans, especially, Ghanaians would reject genetically modified foods for a sustainable environment and good health.

The Psychedelic Transhumanists

The Psychedelic Transhumanists. Courtesy of Leary – Philip H Bailey, McKenna – Courtesy of Erowid, Mark Pesce – Mark Pesce, Erik Davis – Andy Miah. Background photo by Paul Downey

Blind faith in technological progress as salvation is called into question, especially as regards the illusion of, and desire for, absolute control.

h+ Magazine | Sep 29, 2009

By Michael Garfield

Transhumanism in a fortune cookie: the familiar human world is just one point along a continuum of evolution, and we have an unprecedented capacity to participate in that process. And yet, the future being as slippery as it is, there are as many visions for how this might occur as there are visionaries to guess at it. Computer scientists tend to have one transhumanism; genetic engineers, another. However, coherent themes emerge for those who have taken it upon themselves to make a sweeping survey of human inquiry, integrating a keen reading of the vectors of our technology with postmodern insight into the nature of mind.

Some of these thinkers have been catalyzed by the psychedelic experience — in a way, the most informative window into a world beyond the human that we have yet discovered. They understand the message of psychedelics and the message of technology to converge on the horizon of a deeper reading of reality that recognizes mind and matter as dimensions of the same truth — a truth for which language has ill-prepared us.

Among the ranks of these “psychedelic transhumanists” are legendary rebels like Timothy Leary, wise fools like Terence McKenna, cultural commentators like Erik Davis and Mark Pesce and avantpsychopharmacologists like David Pearce. Hailing from disparate knowledge domains, they all share a hyperliterate intelligence that is, in its own way, rigorous. Their arguments are not necessarily subject to the conventional scientific method, but they are not so easily refuted.

Their common vision shares much with the rest of the transhuman community, including an embrace of technology and science as both potent and inevitable; an evolutionary model of the universe and humanity; a sense of the human organism as something that can be tinkered with and expanded; a recognition of drugs as a technology that can dramatically reinvent identity, and a playful challenging of fixed boundaries. In many ways they demonstrate the seed of transhumanism in this moment by exemplifying self-revision and the reevaluation of assumptions as an open ended and ongoing process. And along the way, they tatter the mechanistic control fantasies we have held onto in spite of our most sophisticated inquiries.

Among these visionaries, we find a general agreement on the emergence of machine intelligence, but from a less dualistic perspective than most in the transhuman sphere — leaning towards a deeper and more balanced recognition of both inner and outer realities. They tend to critique philosophies that consider mind a mere epiphenomenon, or that fail to recognize the role of the speculator in speculation.

They see technology as ideas, and ideas as technology. They question our fanatical efforts at control via the runaway complexity of progress, and remind us of the stubborn persistence of the unconscious, the body and the other. They remind us to see the evolution of humanity and beyond as much in terms of qualia as quanta, and paint the future as more sensitive to psychological, spiritual, ethical, and biological concerns than those on the hardboiled tech edge.

The distinctions between this vision and the more common idea of a technological singularity are easily distilled. In their own words, presented as a “virtual conversation” of transcripts and correspondences, here are the core messages of a transhumanist vision informed by the psychedelic experience.

Full Story

IMF seeks role as “global central bank”

IMF Gets New Role of Serving the G-20

WSJ | Oct 5, 2009

By BOB DAVIS

ISTANBUL — International Monetary Fund Managing Director Dominique Strauss-Kahn is using the IMF’s annual meeting here to campaign for turning the fund into a kind of global central bank with at least $1 trillion for lending developing nations in a crisis.

But a very different reality is taking shape: The IMF is essentially being turned into the staff of the Group of 20, an organization of industrialized and developing nations that doesn’t have a headquarters, staff or rules for membership. With the leaders of the G-20 effectively functioning as the board of directors of the global economy, they need the IMF’s help to carry out their role.

While the IMF’s new assignment was discussed at the G-20 leaders’ summit in Pittsburgh recently, it was more fully fleshed out — and widely endorsed by non-G-20 countries — in Istanbul over the weekend. It was also backed by finance ministers from some of the world’s largest industrialized countries and won a nod from an IMF policy committee that convenes at the annual meeting. And while Mr. Strauss-Kahn would like the IMF to do more, he too has embraced the emerging G-20 role.

Related

IMF Stakes Claim To Be Everybody’s Central Bank

Essentially the arrangement is designed to answer problems faced by both the IMF and the G-20. The IMF has long responded to requests from its largest shareholders — such as pressing China over currency issues at the behest of the U.S. But the assignments were often met by grumbling among IMF staff and led developing countries to see the IMF as a tool of U.S. foreign policy.

Significant now are the breadth of the G-20 move and the fact that it is seen as truly multilateral — coming from a larger group of major countries. And it addresses a continuing political failure: The IMF’s biggest shareholders often ignore its advice.

Now the G-20 will handle the politics of the global economy, largely by member countries peer-reviewing each other’s policies — and by pressing countries to stick to their pledges. In the case of China, that means relying less on exports — and by implication letting its currency appreciate — and in the case of the U.S., cutting its long-term debt.

For the G-20, relying on the IMF’s staff also could relieve political pressure, in this case from nations that aren’t members of the club. Egyptian Finance Minister Youssef Boutros-Ghali, who chairs the IMF’s policy committee, said, “What’s the role [at the G-20] of the [IMF’s] other 165 nations? That’s two billion people” being left out. He said he thought those members would be satisfied if IMF staff working for the G-20 went through the IMF’s regular channels — such as presenting documents for review to the fund’s executive board, which represents all IMF members.

But Israeli central banker Stanley Fischer, a former IMF deputy managing director, said deeper change is needed. Eventually, he said, the G-20 should become the governing board of the IMF and have the responsibility of representing the IMF’s other members.

The G-20 finance ministers plan to start figuring out the precise procedures during a November meeting in Scotland.

Among tasks already assigned to the IMF is the analysis of plans by G-20 nations to boost growth and monitoring whether nations are carrying them out. Along with the Financial Stability Board, an organization of central bankers and regulators, the IMF will perform similar work on regulatory proposals. The G-20 is also counting on the IMF to develop early warnings of asset bubbles and other major problems.

European Central Bank governing-council member Axel Weber was skeptical of Mr. Strauss-Kahn’s goal of turning the IMF into a global lender of last resort. But Mr. Strauss-Kahn said he had made progress in winning support, pointing to a policy-committee recommendation that the IMF should “review its mandate.”

Over a half-million children in medical emergencies from drug prescriptions every year

A study found nearly a half-million youngsters a year require medical treatment in the U.S.

Associated Press | Oct 4, 2009

Children suffering reactions to drugs

By Lindsey Tanner

CHICAGO – More than half a million U.S. children yearly have bad reactions or side effects from widely used medicines that require medical treatment and sometimes hospitalization, new research shows.

Children younger than age 5 are most commonly affected. Penicillin and other prescription antibiotics are among drugs causing the most problems, including rashes, stomachaches, and diarrhea.

Parents should pay close attention when their children are started on medicines since “first-time medication exposures may reveal an allergic reaction,” said lead author Florence Bourgeois, a pediatrician with Children’s Hospital in Boston.

Doctors also should tell parents about possible symptoms for a new medication, she said.

The study, which appears in October’s issue of the journal Pediatrics, is based on national statistics on patients’ visits to clinics and emergency rooms between 1995 and 2005. The number of children treated for bad drug reactions each year was mostly stable during that time, averaging 585,922 a year.

Bourgeois said there were no deaths resulting from bad reactions to drugs in the data she studied, but 5 percent of children were sick enough to require hospitalization.

The study involved reactions to prescribed drugs, including accidental overdoses. They were used for a range of ailments including ear infections, strep throat, depression and cancer. Among teens, commonly used medicines linked with troublesome side effects included birth control pills. Bad reactions to these pills included menstrual problems, nausea, and vomiting.

Children younger than 5 accounted for 43 percent of visits to clinics and emergency rooms; followed by teens aged 15 to 18, who made up about 23 percent of the visits.

Similar numbers of hospitalized children – about 540,000 yearly – also have bad reactions to drugs, including side effects, medicine mix-ups, and accidental overdoses, recent government research suggests.

The new report indicates children at home are just as vulnerable.

Michael Cohen, president of the Institute for Safe Medication Practices, said a common problem involved giving young children liquid medicine. Doses can come in drops, teaspoons, or milliliters, and parents may mistakenly think those measures are interchangeable.

Cohen said doctors should be clear about doses, and parents should be sure before leaving the pharmacy that they understand exactly how to give liquid medicine.

IMF takes on bigger role, seeks more funds

AFP | Oct 4, 2009

By Veronica Smith

ISTANBUL — The International Monetary Fund took on a bigger global role Sunday as its 186 member nations accepted the mantle of guiding a lasting economic recovery from the 20 largest economies.

The IMF’s steering committee endorsed the Group of 20 summit plan for sustainable growth after the worst economic crisis in decades, including an increase in voting rights of at least five percent for under-represented countries.

At their Pittsburgh summit a little more than a week ago, the G20 largest rich and emerging-market economies, asked the IMF to help them shape a robust global economy and reform the fragile financial system.

The International Monetary and Financial Committee (IMFC), representing all members, backed the plan at a meeting in Istanbul ahead of the annual meetings of the IMF and World Bank that open Tuesday.

The panel vowed to maintain stimulus support of growth “until a durable recovery is secured” and take further steps as needed “to revive credit, recover lost jobs, and reverse setbacks in poverty reduction.”

IMF chief Dominique Strauss-Kahn said that with the IMFC meeting, “we are off to the right start — building on the commitment to sustain cooperation and extending it to a far broader group of countries.”

He said the meetings offered “a unique opportunity to reshape the post-crisis world, to usher in a new era of collaborative global governance.”

Timothy Geithner, the US Treasury secretary, said the United States, effectively the only member with veto power in the Washington-based institution, is looking to the IMF “to play a key role in assisting the assessment of G20 economic and financial policies.”

Not all were satisfied with the IMF steering committee’s approval of the G20 request for a shift in the allocation of quotas, or voting power, to mainly developing countries.

“There will be no ‘new IMF’ without a more representative and democratic governance structure,” said Argentina’s finance minister, Amado Boudou.

“To achieve this goal, the voice and representation of developing countries, including the poorest, must be significantly increased,” said Boudou, who also represents Bolivia, Chile, Peru, Paraguay and Uruguay on the IMFC.

International aid agency Oxfam director Bernice Romero agreed, calling the quota shift “shameful,” and adding that “rich countries are still making decisions for the rest of the world.”

China’s deputy central bank governor, Yi Gang, said successful governance reforms, including a “significant” quota realignment, were key to “the capacity of the fund to deliver” by enhancing its legitimacy and effectiveness.

Strauss-Kahn called for a “substantial increase” in resources from members after the IMFC opened the door for action to reduce so-called global imbalances blamed for the current crisis.

The IMF managing director said the fund’s new Flexible Credit Line had provided important support to emerging-market economies amid the global economic crisis, with Mexico, Poland and Colombia signing up earlier this year.

But the credit line, offered at a fee for access to the fund’s reserves, is limited in scope and concerns only a certain category of countries, the former French Socialist finance minister said.

“Now we need to reflect and think about an extension of this idea of insurance” to fix the so-called global imbalances where some countries accumulate huge reserves and others build up huge deficits, he said.

“If you want to avoid countries, including China, to build such big reserves, contributing to global imbalances, we need to find another system,” he said.

An IMF pool of reserves that members could tap could serve as an international guarantee against financial shocks, he said.

“The communique opens the door for the IMF to think about it, and I think it’s very important for the post-crisis world because it’s one possible way to contribute to solving this global imbalances problem.”

In a speech Friday in Istanbul, Strauss-Kahn appealed for more resources so the fund could become a credible global lender of last resort, suggesting a trillion dollars or more may be needed.

EU ‘homeland security’ lacks democratic oversight, says watchdog

EU Observer | Oct 2, 2009

by LEIGH PHILLIPS

Civil liberties monitors worry about the lack of participation of European and national parliaments in the development of the security sector (Photo: The Blackbird)

EUOBSERVER / BRUSSELS – As European ‘homeland security’ sector stakeholders meet this week in Stockholm, a civil liberties watchdog is warning that decisions on the expansion of this lucrative new sector, hived off from public view and with minimal democratic scrutiny, are being made by the very companies that will ultimately profit from from them.

On Tuesday and Wednesday, security research stakeholders from across the continent met in Stockholm for the annual European Security Research Conference under the aegis of the EU presidency, currently held by Sweden.

The conference, the “major place to meet and discuss the creation of a security research area in Europe,” according to the Swedish EU presidency, takes place as a new report from UK-based civil liberties monitoring group Statewatch, brings to light how the very companies that will profit from the bloc’s €1.4 billion European Security Research Programme (ERSP) are the ones that are participating in its design and implementation.

The seven-year ERSP, launched in 2007, has the twin aim of delivering brand-new high-tech security technologies to Europe – from advanced profiling systems to unmanned aerial drones – and, explicitly, to foster a rapid growth in this lucrative sector in order to not let US companies steal a march on their European rivals.

While civil liberties campaigners say that there is nothing wrong in principle with genuine, civilian-led efforts to deal with crime and catastrophic events, the report says that at every step of the development of a European security research strategy, there has been no democratic oversight.

The group claims there is a clear conflict of interest as the design of the ERSP has been “outsourced to the very corporations that have the most to gain from its implementation,’ highlighting defence giants Thales, Finmeccanica, EADS, Saab and Sagem Défénsé Sécurité.

In the three different stages of the development of the ERSP, these multinational corporations have dominated the process while MEPs, national politicians and civil society have been all but excluded, the report shows.

‘Democratic sheen’

In 2003, a “Group of Personalities” (GoP) was convened as an advisory body essentially to conceive the first principles for European security research.

The GoP was composed of the EU commissioners for research and information society and as observers the commissioners for external relations and trade, along with the high representative for EU foreign and security policy, Nato representatives, the Western European Armaments Association and the EU Military Committee.

Also represented on the GoP were the CEOs or senior directors of eight multinational corporations, including Europe’s four largest arms manufacturers – EADS, BAE Systems, Thales and Finmeccanica – and IT firms – Ericsson, Indra, Siemens and Diehl.

Four MEPs were present, “adding a democratic sheen to the process,” according to the report, two Christian Democrats, a Socialist and a Liberal, but one, Karl Von Wogau was also an advisory board member with Security and Defence Agenda, an arms industry think-tank and lobby group.

The GoP’s 2004 report stated that there was a strong case for subsidising the development of a European security sector, as it was falling behind the United States, noting that the US Department of Homeland Security budget includes “around $1 billion dedicated to research.”

The report went on to say that as a result, Washington was “taking a lead,” which could be worrisome for the EU if the US was able to “impose normative and operational standards worldwide.”

But this is also problematic because “US industry will enjoy a very strong competitive position.”

Parallel to this first stage, the commission in 2004 established the €65 million Preparatory Action for Security Research, which funded 39 security research projects. Ahead of this, the commission issued no green paper on security research, which is the norm for setting out possible policy options, and no public debate.

20-year vision

After the GoP was wound up, the commission established the European Security Research Advisory Board (Esrab) in April, 2005, which moved on from first principles to setting the agenda for security research.

Similar to its predecessor, the Esrab included many of the same “stakeholder experts,” including seven of the eight corporations that had sat on the GoP – EADS, BAE Systems, Thales, Finmeccanica, Ericsson, Siemens and Diehl.

But there was no consultation of the European or national parliaments as to its make-up. The nominations instead came from EU ambassadors, the European Defence Agency and, again, unnamed “stakeholder groups”.

In March 2007, the commission set up the European Security Research and Innovation Forum (Esrif), with a wider remit than the Esrab, going beyond research to development needs and to produce a 20-year vision for the sector.

Here too, the 65 members of the Esrif plenary were selected in the same way as the Esrab without parliamentary input, no members of the European Parliament, and no representation from civil liberties or privacy organisations.

But while MEPs were shut out of the process, representatives from some non-EU member states were welcomed aboard, including from the Counter-terrorism Bureau of Israel’s National Security Council.

Moreover, Esrif was subdivided into 11 working groups with an additional 595 security research stakeholders, of the total 660 individuals participating, 66 percent came from defence and security contractors, again including EADS, Finmeccanica, Thales and the Aerospace and Defence Industries Association of Europe.

Three MEPs took part in the working groups and nine individuals from civil society, although again none from civil liberties groups.

Esrif’s report, a “roadmap” for security research until 2030 was to be presented at the European Security Research Conference in Stockholm this week, but the roadmap, a 300-page document, has been delayed for one to two months.

The report says that the failure to separate the development from the implementation of the ERSP and the appointment of industry-dominated stakeholder groups to develop the policy they will eventually get paid to carry out “represents an unlawful act of maladministration.”

The commission says that the Esrif is in fact “neither a commission body nor a commission-driven exercise,” a statement Statewatch calls “astonishing” as it “suggests that the commission has effectively outsourced the strategic development of a €1.4 billion EU research programme to a wholly unaccountable, informal group.”

‘No legal basis’

But the report authors suggest that in fact the real reason the groups have been informal is due to the absence of a legal basis in the EU treaties for the commission to establish advisory bodies dealing with security and technology issues.

“Instead of seeking to legitimise the commission’s activities in this area, the EU and its member states have chosen instead to give a dubious mandate to an informal body.”

The report author says that as a result, the conclusions favour a high-tech blueprint for “a new kind of security”, one in which “peacekeeping and crisis management missions make no operational distinction between the suburbs of Basra and the banlieues,” a surveillance society where the type of aggressive systems used to make war are used domestically and along frontiers as well.

The ESRP is promoting the development of a range of technologies that could engender systematic violations of fundamental rights, according to the report, including militarised border controls, surveillance and profiling technologies, the widespread collection and analysis of personal data, automated targeting systems, satellite and space-based surveillance, and crisis management’ tools.

“It is not just a case of “sleepwalking into a surveillance society,” said the report’s author, Ben Hayes, “it feels more like turning a blind eye to the start of a new kind of arms race, one in which all the weapons are pointing inwards.”

MEPs integral

The European Commission, for its part, feels that the people behind the report are getting worked up over very little, as the Esrif is only an advisory body and not the organ that actually crafts policy.

“The Esrif cannot design a [security research] strategy, this is up to the commission,” the commission’s acting enterprise spokesperson, Jonathan Todd, told EUobserver.

“Esrif is a Cars 21-type process in a larger format – involving industry, research, users, MEPs, civil society,” he added, referring to the Competitive Automotive Regulatory System for the 21st Century, a high-level expert group that brought together all the main stakeholders in the car sector, including consumer and environmental organisations, to advise the commission on future policy.

Cars 21 was also criticised by lobbying transparency campaigners during its existence for its dominance of the European Car Manufacturers Association (ACEA).

The commission countered the suggested that the European Parliament was not getting a look in, with Mr Todd saying: “MEPs are an integral part of Esrif.”

“From the beginning we were conscious as regards civil liberties and believe that all what is happening has to happen transparently,” he said. “We are not in favour of a ‘surveillance society’.”

World Bank welcomes New Economic Order from the ashes of crisis

China and India set to become established global powers

Euro and renminbi tipped to join dollar as reserve currencies

Observer | Oct 4, 2009

by Larry Elliott in Istanbul

The wrenching financial crisis of the past two years will provide the catalyst for a profound change in the global economy – which, according to the man running the World Bank, will see China and India become established centres of power, the dollar eclipsed as the sole reserve currency, and Latin America, south-east Asia and Africa emerge as new sources of growth.

But as he surveys the wreckage caused by what the bank and its sister organisation, the International Monetary Fund, agree is the most severe crisis since the devastation caused by the second world war, Robert Zoellick is surprisingly upbeat about the future.

Asked by the Observer how he envisages the global economy in 20 years’ time, Zoellick says: “There will certainly be a larger role for the emerging powers, there will be multipolar sources of growth, there will be more south-south trade between developing countries.

“The crisis gives us the opportunity to hasten this process. If we are concerned about the past reliance for growth on the US consumer, we have to make sure consumers in developing countries have enough finance to buy.”

Zoellick says that, while this does not mean the end of the US as a big player on the world stage, it has brought the curtain down on the unipolar world that followed the collapse of communism 20 years ago.

Developing countries were on the rise before the credit crunch and, as the latest snapshot of the global economy released last week illustrates, their position has been strengthened by their ability to keep growing as the west teetered on the brink of a 1930s-style Depression.

“We have reached a tipping point in global economic affairs,” says Stephen King, chief economist of HSBC. “While there are some encouraging signs of recovery in the developed world, the real economic action is taking place elsewhere. For both cyclical and structural reasons, the emerging nations are set to dominate world economic activity in the years ahead.”

America, Zoellick says, can no longer rely on the dollar ruling the roost. The euro and the Chinese renminbi are candidates to become reserve currencies.

Tellingly, this year’s annual meetings of the Bank and Fund take place in Istanbul, the point where Europe meets Asia and for almost two millennia a melting pot for cultures and religions. The view of both Zoellick and Dominique Strauss-Kahn, managing director of the IMF, is that there is a discernible shift in power and influence eastwards.

“These annual meetings take place at a defining moment in global governance,” Strauss-Kahn says. “We have experienced unparalleled economic co-operation in the last 12 months. It has never happened in history.”

While noting that there is a risk of the consensus vanishing now the immediate threat of economic meltdown has receded, Strauss-Kahn says it is the will of world leaders to continue collaborating in the years ahead. The days of the G7 – an elite gathering of policymakers from the US, Britain, Japan, Germany, France, Italy and Canada – are over. Power has shifted to the G20, which includes the G7 plus a number of leading developing countries such as China, India, Mexico, Brazil and South Africa.

John Hawksworth, head of macro-economics at PricewaterhouseCoopers (PwC) in the UK, says political influence will result from the increased economic clout of the big developing countries. Within two decades, he says, China may have overtaken the US as the world’s biggest economy once the lower cost of living is taken into account. “The E7 [Emerging Seven] – China, India, Brazil, Russia, Turkey, Indonesia and Mexico – could be a lot bigger than the current G7,” he adds.

PwC estimates that the global economy will double in size by the end of the 2020s to $143tn (£90tn) at today’s prices, with the E7 accounting for almost 40% of GDP and the G7 30%. “The E7 is already not that far behind the G7 and that process has been accelerated by the current crisis, which has hit the developed world harder than the big emerging economies,” says Hawksworth.

Like Zoellick, he thinks the dollar will no longer be the dominant currency. “The dollar, the euro and the renminbi will form a basket of currencies. The world will be different. The recession has accelerated that process.”

The IMF and the World Bank are still set in their original mould, he says. “Voting shares are going to have to change and it will be a gradual process. But it is possible that there will be a Chinese head of the fund or bank by that time.”

Such an outcome would symbolise the changing of the guard. There has been a gentlemen’s agreement that the head of the World Bank should be chosen by the Americans, the single biggest shareholder in the two institutions, while the managing director of the fund is picked by the Europeans. Zoellick is a former US trade representative; Strauss-Kahn was once France’s finance minister.

“There is an inevitability about this [shift in power to Asia],” says Hawksworth. “You can already see it in the business world, as witnessed by the HSBC decision. The centre of economic gravity is shifting and will continue to shift.”

Zoellick says the spread of prosperity to the poor parts of Asia, Latin America and Africa will be accelerated by investment in infrastructure, social safety nets and manufacturing.

Critics say the bank and the fund have too rosy a view of the future. One threat, recognised by the IMF, is that the 3.1% growth pencilled in for 2010 following the first year of global economic contraction since 1945 will prove a false dawn. Once the artificial stimulus of public borrowing wears off, the fear is that a rationing of credit by enfeebled banks will prevent the private sector from taking up the baton.

Another issue is the willingness of the old world to cede power. The IMF and World Bank were set up at the Bretton Woods conference in 1944 and their governance still reflects the dynamics of the 1940s. Reforms are being undertaken, but they are neither radical nor rapid enough to satisfy campaigners.

Peter Chowla of the Bretton Woods Project, a London-based NGO, says the changes amount to a “lick of paint on rotten foundations”.

Finally, there are those who believe the determination of the bank and fund to return as quickly as possible to the high levels of growth seen earlier this decade ignores the elephant in the room – that, by 2029, traditional fossil fuel stocks will be running dry.

Andrew Simms, head of policy at the New Economics Foundation thinktank, says: “One major thing that will describe the landscape in 2029 is that we will be beyond the point of peak oil. That will be the trigger for so many dominoes to fall.” Decisions made in the next few years, he adds, will be critical. “There is the risk of enormous knock-on effects on trade and food supply, with the food price volatility of the last year looking like a vicar’s tea party.”

He believes food security will replace gross domestic product as the yardstick of success, and there will be an emphasis on the new “three Rs” – reduce, repair, recycle.

In one respect, Zoellick, Strauss-Kahn and Simms are in full agreement: decisions taken in the next two or three years will shape the next two or three decades.

“We are balanced on a knife edge,” Simms says. “The potentialities are wonderful; the probabilities deeply disturbing.”