Saturday, January 06, 2007

Dancing with Giants

The full title of the report written for the World Bank reads 'Dancing with Giants: China, India, and the Global Economy.'

Chapter six of the report is on 'Partially Awakened Giants: Uneven Growth in China and India.'

The world has to dance with the two emerging giants of Asia, China and India who are now principal drivers of the global economy. What happens in these two huge markets affects the rest of the world from increasing oil prices to the environment that we live.

The World Bank report rings the alarm bells for a more pressing problem; the income gap between the haves and the have-nots.

Globalisation and technology has created new opportunies and the rich are getting richer while the impact at the lowest level of poverty is not seeing the same level of rise. In both countries, there has been a marked geographic unevenness in the economic growth process.

The harder these countries try to reduce the gap by creating more economic growth, the bigger the problem of high and rising inequality.

In order to maintain political and social stabililty in these countries and avoid spillover effects for trade and growth of the rest the world, China and India will have to reduce the inequalities by focusing on the dimensions that create or preserve unequal opportunities.

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