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SINGAPORE : The World Bank has said the current financial turmoil is a good time to review the global economic order. Its latest World Development Report suggests that countries should consider "economic geography" when thinking about national development.
This encompasses three trends - more densely populated cities, shorter distances between workers and cities where they can work, and the opening up of economic borders.
In the United States, 96 per cent of innovations take place in metropolitan areas where talent is concentrated - a phenomenon the World Bank calls economic density.
Its theme of "economic distance" can be illustrated in large countries such as China, where workers are increasingly able to move to cities, like Shanghai, in search of lucrative jobs.
And the World Bank defines "economic divisions" as how well countries are able to enter world markets and break down their economic borders.
So what this World Development Report aims to do is to help people reframe the way they think about urbanisation, geographic development and regional integration, to help countries calibrate the way they develop.
It proposes that focusing national development along these dimensions will help nations gain wealth faster.
In addition, the current economic slowdown provides a good opportunity for countries to rethink their economic strategies.
Indermit Gill, director, Development Economics, The World Bank, said: "East Asia reacted very well to the last economic crisis. Rather than withdrawing into each country or region, what East Asia did was it augmented its global integration with the rest of the world, with a regional integration, which actually proceeded very rapidly since the last crisis.
"And what we really talked about in the report is how East Asia can augment the global integration and regional integration it has done so well with domestic integration at home."
Mr Gill is confident the concept of economic geography will benefit this integration process, and shift from lower to middle income populations.
And in response to concerns that a focus on economic density will lead countries to neglect rural cities, the World Bank said the wealth generated from rich cities can have a spillover effect.
It added that economic growth will always be unbalanced. What is more important is how governments manage this imbalance. - CNA/ms
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