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Hayk
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the (possible) future of the world economy
January 15, 2007 - 01:57 PM
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As of now, the recent emergence of India and China is leveling down the ground and closing up the gap between Asian countries and the USA and Europe. While many issues remain unresoved yet, such as subsidy systems and consequences of thereof for European and African countries, in many ways the global economy gets more and more homogenous, with many more products being produced, transported and sold in many more places around the world. And it isn't only the products themselves but also services..
What do you think might happen to the world economy in the next 100 years? What would be the roleof the Internet in that economy?
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Michael
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Re: the (possible) future of the world economy
January 24, 2007 - 09:27 PM
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great question mnopq.
100 years is a long time...
Who knows where it will be in the next 20 or even 10 years?
It going to be interesting isn't as the BRIC economies pick up speed and muscle in on the territory formerly dominated by the US and Europe.
I don't think though that the US will go down with out a fight. THey already making things difficult, not wanting to diminish their agricultural subsidies too much and muscling in on small countries with their Free Trade Agreements
I guess technology will play a big part. It has such a great ability to spread important/vital knowledge quickly and to boost productivity. And to connect people. But it is also so dependent on reliable power generation which is now becoming a global issue for both developing and developed nations.
Who knows?
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Hayk
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Re: the (possible) future of the world economy
January 25, 2007 - 01:14 PM
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Michael,
As the history has shown, the moment China decides to go hyper, there is no stopping of it. China's economy, despite the cooling down of it enticed by the government and even the eventual floatation of yuan, hitherto pegged to the dollar, recorded a huge growth of 10.5% in 2006. This is mainly, but not only, fueled by much FDI and its uncanny amount of trade export of everything starting from electronics to cotton. China's appetite to everything starting from oil to copper to paper to Ferraris witnesses the fact that Chinese growth, in contrary to much effort to slow it down, will not happen any time soon, at least not as much as expected.
India, on the other hand, moves along the same lines. There are predictions that "India could overtake Britain and have the world's fifth largest economy within a decade as the country's growth accelerates." According to the same report, "By 2050 India's economy could be larger even than America's, only China's will be bigger."
At World Economic Forum, held in Davos, Switzerland, discusses possible future scenarios of China, India, together with other burning issues. Most notably, future of internet and possible flight of humans in space. A quite informative BBC Blog covering the sessions and impressions of participants is regularly updated.
Various reports suggest that world economy has nowhere else to go but upwards, "Last year, the world economy grew by 5% its fastest rate for many years, led by the extraordinary boom in China."
Concerning the future of American economy, take a peek at this article, which gives an interesting recounting and explanation as to how America pursuing its half of the globalization contributed to other countries economies and possible future scenarios.
This post was edited on: 2007-01-25 at 01:17 PM by: mnopq
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Michael
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Re: the (possible) future of the world economy
January 25, 2007 - 09:56 PM
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Hayk
I am enjoying your posts very much. That counterpunch article is very interesting.
Its hard to argue with a former Assistant Secretary of Treasury. A very interesting assessment of the results of globalisation.
But is he therefore arguing in favour of protection and against trade?
And is he just lamenting the demise of the US because of nationalist pride?
Personally the idea of a global economy is more appealing than our present one currently dominated by the US.
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Hayk
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Re: the (possible) future of the world economy
January 27, 2007 - 12:36 PM
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Michael,
LKPY-Michael wrote:
But is he therefore arguing in favour of protection and against trade?
I think he is trying to disillusion the American public by showing the negative side of globalization. Whereas what he says is true and backed by a staunch research and factual information, I dont think he is arguing against globalization per se. The message he tries to deliver is that the way globalization is perceived (by American public and by American government) and more improtantly implemented (by American government) is rather erroneous and might have fatal consequences for the US economy. He still implies that if the "knowledge" jobs should have been created as planned , the situation would have been somewhat different. In a classic view of globalization, the "design and innovation" are at a higher end of the chain, thus to be preserved in the First World, for some time at least. And he shows that even that isn't true, while many rather narrow-minded executives, for sake of cheaper opportunities abroad, prefer to outsource this higher end as well, without realising the dire consequences for their companies and the economy in geenral. These consequences, as rightly pointed out in the article, are that at some point of time, the ODMs take over not only technical tasks of manufacturing but also the higher end of manufactueing - design and innovation. And once the know-how is obtained, the ODMs assert their "power" and become less and less dependent on original franchisers and brand-producers.
South Korea, where agglomerations such as Samsung, producing everything from car tyres to cell phones, whose electronic accesories obtain an ever-increasnig quality and thus enjoy a much higher demand. Merely 10 years ago noone in Europe had even heard of Samsung mobiles...
This shows what happens when not only the low-end but also high-end is outsourced without much care and at the detriment of a local economy, without filling in the gap, as promised, with even a higher or more "knowledge" oriented jobs...
And is he just lamenting the demise of the US because of nationalist pride?
I don't think he laments the demise of the US economy just yet... Even though American currency reserves in foreign banks are being perpetually reduced, American dollar is still the reserve currency of the world. He tries to point at the direction US economy heads now and what will be the consequences.
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Oliebol
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Re: the (possible) future of the world economy
February 7, 2007 - 01:21 AM
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mnopq wrote:
Michael,
I don't think he laments the demise of the US economy just yet... .
Interesting, you could also compare the demise of the Dutch in the 1700’s, being the dominated world economy at the time or the British economy in the 1900’s where even though the British economy started its decline after the great war of 1914, it took until the Breton Woods Agreement to really establish the US economy as the dominate world economy, so it may be that the Indian and Chinese economies just parallel for a while before one becomes dominant?
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