ISLAMABAD – The complex interaction of trade, capital, information, and technology is leading to a new global convergence, for better and for worse, says the International Monetary Fund(IMF).
Kemal Dervis of the Brookings Institution said the surge in information enhances human lives-improving health, education, and communication. Trade and financial integration have underpinned strong growth and job creation and helped narrow the gap between rich countries and poor.
But, as we have seen from the prolonged global financial crisis, our interconnectedness carries grave risks of contagion as well as benefits.
Small economies can bring down large ones, and a disaster in one country has ripple effects around the world. The September 2012 issue of Finance and Development looks at different aspects of interconnectedness, globally and in Asia.
He said the world economy is going through a major structural shift, with emerging markets rapidly catching up to advanced economies. As the world becomes ever more multipolar and interdependent, multilateral solutions are needed to fight the risks and reap the rewards of integration, Dervis says in Finance and development magazine.