They have no voice and no representation in the work of the G20 or in the institutions which it chooses to set up to further its agenda. This is at variance with the principles of multilateralism and international cooperation that have prevailed since the end of the Second World War. Over time, this could easily weaken not  8  Mervyn King: Speech at the University of Exeter, January 19, 2010. 9  The Financial Stability Board has been established to address vulnerabilities and to develop and implement strong regulatory, supervisory and other policies in the interest of financial stability. It comprises the G20, five other countries and international institutions and standard-setting bodies. 10  International Monetary and Financial Committee – the policy steering committee of the International Monetary Fund. BIS Review 22/2010  5  only the G20 process, but also the IMF as it will be perceived as increasingly guided and controlled by the G20. I referred earlier to a recent speech by the Governor of the Bank of England and I wish to do so again where he states: “Looking further ahead, the legitimacy and leadership of the G20 would be enhanced if it were seen as representing views of other countries too. That could be achieved if the G20 were to metamorphose into a Governing Council for the IMF, and at the same time acquire a procedure for voting on decisions.” Needless to say, I agree with him, as did the Managing Director of the IMF in a recent interview.
According to various estimates, about 5% people at working age have already left Poland. For Estonia, this figure stands at as much as 10%. In the global economy of the 21st century, technological progress and lower transportation costs have allowed for the business processes or their parts to be easily moved between countries (a phenomenon frequently described as business process offshoring). The relative role of crucial factors behind long-term development prospects is thus changing. In the 21st century, the key factor conducive to economic growth will be knowledge – broadly understood as a country’s intellectual capital – and this country’s ability to drive innovation. If businesses in a given country fail to change their product and service profiles to achieve greater value added, they will find themselves pushed out of the market by companies from countries with low manufacturing costs. This applies to a number of markets, products and services only recently considered as subject to the international competition, one glaring example being the off-shoring of services offered by radiologists from the US to India 6 . China has already become the world’s leading exporter of computers and their components or telecommunications equipment 7 . I believe that it is just a matter of less than twenty years for China to achieve a similar position in the automotive industry, mainly because Chinese companies have mastered network-based cooperation.