Mr Wolfensohn was President of the World Bank for ten years.
Mr Wolfensohn says Australia has the unique opportunity to be the 'natural link' between the West and Asia, through not just Australia's proximity to Asia, but also its knowledge of the region and to welcome Asians to live here.
He world was looking at a change in terms of resource ownership, not seen in 200 years.
Presenter: Sen Lam
Speaker: James Wolfensohn, former President of the World Bank
WOLFENSOHN: I think the interesting thing is, that what is going to happen between now and 2050 is that the weight of global of power in terms of economic power, will shift significantly to Asia, and that by 2050, we can expect that China and India together, will have between 45 and 50 percent of global economic power and that Asia will have somewhere between 55 and 60 percent of global economic power. And that is something that my generation was not trained for, and my guess is that many of my contemporaries and people that come after, both in China and in Asia, and in the West are also unclear on this massive change.
LAM: Will this transfer of wealth from the West to the East, will it be gradual and trauma-free where the West is concerned, given that this transfer of wealth is largely driven by China, with its vastly different values and different form of government?
WOLFENSOHN: Well, I don't think it's going to be trauma-free largely because, if you think about your own individual position. If you see other people getting richer, possibly at your expense, your reaction is not one of welcome. If you multiply that by billions of people, it's probably not going to be immensely welcomed either. But the truth is, that with some bounces, some changes, some lacking of a smooth ride, it is inevitable, in my judgement that you will have this transfer going to Asia. It is really the view of those that are empowered with the knowledge and the understanding of what is happening. Just to give you an idea, the sort of changes that are happening - If you look just at the student bodies in western universities, and may I say, including Australia - Australia has a significant income, I think in the order of 15 to 18-billion dollars a year, which comes from education, and the significant part of that, comes from education of Asian students. The reverse is not true, and neither Australia nor the United States is sending anything like the number of students to study in Asia, that we have coming here.
LAM: So what do you make of the Learn Mandarin Debate - that Australians by and large are not well-schooled in Asian languages. How crucial is this - shall we call it - "cultural preparation"?
WOLFENSOHN: Well my own view is that it IS crucial. I think it's not just an Australian issue, I think it is an issue for the West, that we should learn more about the cultures of Asia, and in the case of China, we should have Mandarin as one of the major languages, along with French and German and Latin. Apart from anything else, it makes it a hell of a lot more interesting when you go to places, to have some idea of what they stand for. And that we need to have not just languages for our people here, but we need at the governmental level, to make sure that the people that are in the department of foreign affairs and the trade departments, also have this background.
LAM: Do you think Australia's multiculturalism will go some way towards this end - to helping?
WOLFENSOHN: Well, I think that that is a huge plus. I was yesterday sitting in a street in Melbourne, and became very conscious, in Collins Street actually, of the fact.. I estimated that around ten percent of the people that were passing me by, were of Asian backgrounds. When I was at university fifty years ago, we unfortunately had a White Australia policy. And Thank God it's changed and we can have people from Asia that are here, participating in the way that you are, even, that can in a natural way, have Australia participate in the developments in Asia. And I think that is perhaps the best thing that I've seen that is obvious, in terms of Australian developments since I left here.
LAM: What about India? What's India's role in the Asia century?
WOLFENSOHN: Well, I think the concensus would be that until the quarter century, if you like, 2025, you will have a significant lead, in terms of China over India. But by 2050, it's going to be one, which I believe and most economic models would predict, is a period in which India will more than catch up. So the leadership in the world will be between China and India and the United States. And you'll have a Europe, which combined might be at that sort of level, but again, below what we see in China and India.
LAM: And in terms of economic adjustments, what will this mean for developing countries in the Asia-Pacific region, this Asia Century?
WOLFENSOHN: Well, I think it's going to mean that it is a century of greater resources, that other Asian countries will follow in terms of education. I think the number three country now, in terms of students studying abroad, is Korea, and it follows China and India. There is a significant Korean push - by the way, not just in music schools, which started in the United States - but in a much broader base, and the laggards I fear are going to be in other parts of the world.
LAM: What about middle powers like Australia? What sorts of changes, even in mindset, do we need to make? Do we, for instance, need to adopt the Asia habit of saving?
WOLFENSOHN: Well, I'm not sure that that would be a bad thing, but that's not just because of Asia, that's because it's probably a sensible thing to do, when you have big shifts in economics. But I do think what you can have in Australia, is a unique opportunity to be a bridge between the West as we've known it, in Europe and the United States, and Asia. This opportunity to train, not only Australians in the issues of economics and the issues of culture and the issues of history of Asia, but also to welcome Asians to live here, could establish Australia in the very unique position - that with a western democracy, with a proximity to Asia and a growing knowledge of Asia, that it could be a natural link between the Asian world and the old Western world. It's my hope and my prayer really, that that could be the way Australia develops.