Paris -The heads of the G20 developed and developing countries, who gather next weekend in Toronto, will confront a global economy in the midst of a multi-speed recovery, with emerging market nations eclipsing a still convalescent, debt-ridden Europe.
"The recovery is evident everywhere and is going ahead much more rapidly than could have been imagined at the height of the (financial) crisis," said economist Veronique Riche-Flores of Societe Generale bank.
The International Monetary Fund in April lifted its 2010 global growth projection to 4.2%.
But the pace at which the world is emerging from the deepest recession since World War II varies markedly from region to region. While Asia roars ahead, with growth averaging 8.7%, powered by a 10% pace in China, Europe flounders at 1.0%.
The US economy is averaging growth of 3.1%, Africa 4.7%, and emerging market powerhouses Brazil, 5.5%, and India, 8.8%.
In such a climate, analysts have argued, Group of 20 leaders will be under pressure to forge a strategy enabling countries to wind down economic stimulus measures according to a schedule that preserves both fragile momentum and financial stability.
Courting disaster
The head of the International Monetary Fund, Dominique Strauss Kahn, has warned European leaders in particular that failure to promote vigorous growth will exacerbate their debt problems.
Nobel Prize winning economist Joseph Stiglitz put it more bluntly. Europe, he has said, would be courting "disaster" if tried to implement a coordinated economic austerity drive.
Europe's best hope would seem to lie in the weakening euro, which serves to boost exports, and healthy demand that is becoming apparent in fast-growing emerging market economies.
"For the first time, growth in emerging markets is turning out to be a driver of recovery in the industrialised world," said Riche-Flores.
The Organisation for Economic Cooperation and Development, in a report issued last week, predicted that developing countries would account for nearly 60 percent of global economic output by 2030, marking a major shift in activity away from traditional industrialised powers.
"The new configuration of global economic and political power means that the affluent countries can no longer set the agenda alone," the report argued, welcoming the emergence of the Group of 20 developed and developing nations as a shaper of global economic governance.
Experts at credit insurer Euler Hermes have noted that technologically advanced countries now account for "less than half of the world's industrial production."
Other analysts have stressed the need for greater balance in the world economy, with export-dependent heavyweights such China, Japan and Germany encouraged to prop up growth through increased domestic consumption.
- AFP