My comment: This comes after the APEC (Asia.Pacific Economic Conference) in Singapore. We all agree that this crisis has changed the face of the world, at least, in economic terms. The answered question now is which global model can work?
I do not pretend to have "the answer", but the are some clues that are gaining ground. 1) The old model based on developed countries drive growth through their consumption while developing economies export either commodities or manufactured goods, and also exports their surplus, that model is exhausted. It will not work any longer. As we talked here long ago, the trend is the average householder in Delhi, in New York, in Tokyo and in Beijing will sare same or near-same wealth and purchase power. That means India and China will drive global consumption. Economic blocs (Latinamerica, Islam, ASEAN, etc.) must grow and become robust enough to have a voice in the international concert. 2) The economic pyramid must restore its natural shape. Along last years and decades, most wealth has been virtual, pure speculative capital based on financial products without tangible wealth at their basement. Only decissive action from governments will turn financial societies into wealth based societies. 3) Stability is more important than fair market value. Even if some prices do not fit fundamentals, people must gain trust on the future. It means predictibility. One cannot make a deal based on foreign trade when currency exchange rates move as much as 10% a year, or above. Then all my profit depends on how a certain currency behaves within next months. It is beyond my skills and my hard work and therefore it refrains me to enter into such business. It cuts growth. 4) The bigger opportunity is where conditions are lower. Development from below. We have to pay higher attention to poles or hubs of development in poorer economies where investments will be more efficient in terms of global wealth.. 5) Protectionism just show lack of skills among decission makers or weakness to face domestic politic pressure, and therefore lack of credibility. The bigger loser is going to be the protectionist economy that again and again loses skills and competitiveness. APEC seeks post-crisis growth drivers http://news.xinhuanet.com/english/2009-11/10/content_12424235.htm Peace and best wishes. Xi --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
