Emerging countries, the way out of economic crisis
“Economic recovery is everywhere and is much faster than we could imagine,” says economist Veronique Riche-Flores, from Societe Generale. Equally optimistic, International Monetary Fund (IMF) has revised upwards in April, the forecast for global growth this year, which should be 4.2%.
But after the worst crisis since World War II, this improvement hidse different realities, two summaries of data: a restart of consumption in the euro area (estimated growth of 1%) and continued growth in Asia (8.7 %), driven by growth in China (10%). U.S. figures (3.1%), emerging countries like India (8.8%) and Brazil (5.5%), but also African (4.7%) are significantly better than those of the old continent.
Warnings, therefore, have multiplied. “The main challenge for the G20 is to develop a strategy and a timetable of measures to stimulate the global economy, so as not to undermine the recovery, while providing fiscal and financial stability over the medium term”, says economist and Eswar Prasad was quoted by Le Matin.
In turn, the IMF chief, Dominique Strauss-Kahn, recommend EU leaders to focus on boosting growth, “because otherwise” debt problems will be much more difficult. ”
Nobel laureate Joseph Stiglitz, recently warned that Europe could face a “catastrophe” if that would implement “a coordinated plan of austerity” while European countries announced plans more or less drastic.
Finally, salvation may come as a result of combined effects of the decline of the euro that European exports increases, and the increasing dynamism of emerging countries, whose domestic demand has started to show encouraging signs.
Rich countries, only 43% of the world economy in 2030
“For the first time, economic growth in emerging countries turns out to be a catalyst for the return of industrialized countries,” said Veronique Riche-Flores.
The crisis has accelerated its spread from that country to another, according a report published last Wednesday by the Organization for Economic Cooperation and Development (OECD). Similarly, economic recovery and could send her chain.
According to new estimates, the richest countries in the world are in 2030, only 43% of the world economy, leaving the emerging place. “For the first time, developed countries have less than half of world industrial production, credit insurer Euler Hermes says, for this” big break “reflects a” rapid industrialization “of the rich.
But to achieve a more balanced global growth, it is also necessary to change monetary policy in China (Yuan is undervalued) and implement structural reforms in China and countries like Germany and Japan that still depend heavily on exports and the need to ensure that growth will be driven more by domestic consumption.
Rich countries and also the emerging ones will have to agree to a special tax for the banking sector at the summit in Toronto (Canada). This has already created dissension within the G20. While the United States, Germany, France and Britain already have projects in this respect, host countries like Canada, Brazil, Australia and India will not pay for their mistakes banks of foreign financial institutions. Under these circumstances, the Heads of State and Government should try to find a compromise in Toronto, to please everybody.11