Green, inclusive growth urged for sustaining development

When Astrid Skala-Kuhmann encouraged her BRICS audience to change their mindset and think beyond monolithic labels, she did not mean to ignore the differentiation of world economies.

"We have all witnessed the economic rise of emerging economies as their growth rates have persistently outpaced those of industrialized economies over the past two decades," she said. Skala-Kuhmann added that being still to a large extent dependent on demand from the latter, emerging economies are facing "a battle on two fronts": slower growth in the industrialized west and the challenge of tackling the negative side-effects of their own breakneck growth.

The director of Global Partnerships -- Emerging Economies of GIZ, a German federally-owned enterprise, made the comments at a gathering in Haikou, capital city of south China's island province of Hainan, for the three-day Emerging Economies Economic Policy Forum, which runs from Friday to Sunday.

"Emerging economies and increasingly industrialized ones are asking whether they are pursuing the right growth model, and how to balance economic, social and environmental considerations in the transformation of their economy towards a prosperous, well-off society," she said.

"We should all change our mindset and abstain from sorting countries into the categories of developing, emerging and industrialized economies," said Shala-Kuhmann, "I am positive that this will help us better find adequate country-specific solutions to present and future challenges in this interconnected world."

Former Goldman Sachs Chief Economist Jim O'Neill invented the term "BRIC", referring to a group of emerging economies, including Brazil, Russia, India and China, that shared certain characteristics, such as big domestic markets, fast and sustained economic growth rates. South Africa was later added to the group, which became known as BRICS.

She agreed that the practice has been useful in attracting investors and setting up a starting point for highly relevant policy processes.

"However, once we look at the specifics of individual policy challenges, the boundaries between developing countries, emerging as well as industrialized economies become blurred," she added, citing examples of youth unemployment and the debt crisis in Europe.

"And all of a sudden, Europe finds itself looking at those experiences of developing and emerging economies and can draw lessons from it," she said.

"Not only do we need to discard our thinking in terms of categories of developing, emerging and industrialized economies," Skala-Kuhmann said, "we also need to discard our thinking in terms of any kind of hierarchies inherent in those terms: not everything always works better in an industrialized economy than in an emerging or even developing economy."

Her remarks came as the growth of emerging economies decelerated sharply since the 2008 global financial crisis, with their average growth down from 8.5 percent in 2010 to 5.5 percent in 2012.

During the period, the alluring market supported by the high-leverage, high interest margin and high welfare in the industrialized economies collapsed, which has promoted the developed economies to readjust their industry policies and structures.

Echoing Shala-Kuhmann, experts attending the forum believed that there is broad consensus that emerging as well as industrialized economies need to rethink their growth concepts, of which inclusive green growth is a highly desirable outcome.

"If we have established that industrialized and emerging economies have common problems, albeit in varying constellations of countries, then the next step to take is to jointly capitalize on the full set of opportunities resulting from our manifold global connections, in order to drive forward the great transformation to inclusive green growth," Shala-Kuhmann suggested.

Long Yongtu, China's former chief negotiator for WTO entry, shared the views. He believed that categorizing global countries of nearly 200 into developed, developing, emerging and BRICS simply according to GDP and per capita GDP will not help solve development problems.

"If we continue such practices, failing to shift to green and inclusive growth and recategorize the world by the environment and social equity standards, the goal for emerging economies to achieve development in the next ten years will be a mission impossible," he said.

"Let's forget the tags of developed, developing, emerging and BRICS. Let's sort global countries with criteria like green, inclusiveness, equality and people's well-being," he suggested.

The three-day forum, which focuses on "Growth, Transformation and Reform -- Emerging Economies in the Next Decade," has attracted hundreds of scholars and officials from home and foreign countries, including Russia and Germany.