Ian Bunn | Political & Popular Culture Arts

Ashoka Mody the Indian visiting Professor in International Economic Policy and former Deputy Director in the International Monetary Fund’s Research and European Departments, has published an article on the Project Syndicate titled ‘Misreading the Global Economy’ in which he states “…Consider India, where growth is now running at an annualized rate of 4.5%, down from 7.7% annual growth in 2011. To be sure, the IMF projects that India’s economy will rebound later in 2013, but the basis for this optimism is unclear, given that all indicators so far suggest another dismal year. The emerging economies’ supposed resilience, which has buoyed economic forecasts in recent years, needs to be reassessed. Like the advanced economies, emerging economies experienced a boom in 2000-2007. But, unlike the advanced economies, they maintained high GDP growth rates and relative stability even at the height of the crisis. This was viewed as powerful evidence of their new economic might. In fact, it was largely a result of massive fiscal stimulus and credit expansion. Indeed, as the effects of stimulus programs wear off, new weaknesses are emerging, such as persistent inflation in India and credit misallocation in China. Given this, the notion that emerging economies will recapture the growth levels of the bubble years seems farfetched. Economic forecasts rest on the assumption that economies ultimately heal themselves. But economies’ powerful self-healing capabilities work slowly. More problematic, a misdiagnosis can lead to treatments that impair the healing process. Overly optimistic economic projections based on mistaken assessments of the global economy’s ailments thus threaten recovery prospects – with potentially far-reaching consequences. In Europe, the banks’ wounds must be closed – weak banks must be shut down or merged with stronger banks – before recovery can begin. This will require an extensive swap of private debts for equity. For the global economy, the malaise reflected in anemic trade growth calls for coordinated fiscal stimulus by the world’s major economies. Otherwise, the risk of another global recession will continue to rise.”

Inspired by Ashoka Mody, Project Syndicate ow.ly/lCCay Image source politicalworld ow.ly/lCC3V

Guy Ryder the 57 year old British Director General of the International Labour Organization (ILO) and former General Secretary of the International Trade Union Confederation (ITUC), a leading figure in the Global Call to Action Against Poverty (GCAP) has published an article on Aljazeera titled ‘One idea the world has not tried’ claiming that setting job creation as a number one goal would be a sustainable way out of the economic crisis. Ryder states “We have spent the past five years trying to jump start the global economy. After a promising start, we now seem to be heading in the wrong direction. …Some 200 million people worldwide are out of a job. …Young people are particularly hard hit. Close to 75 million 15-24 year olds are unemployed. Many of them experience long spells of unemployment right from the start, or leave the labour market altogether, often losing their professional and social skills and missing out on on-the-job experience. …There is one idea we have not tried: making job creation our number one priority. We have talked about it, but haven’t really acted on it. … when people have no jobs or are forced to work in poverty, there is less growth, less security and less human and economic development. Add to this the growing income and social inequalities within and across countries, and what you get is a recipe for economic, political and social instability. A shift to inclusive and sustainable development will not be possible if millions of people are denied the opportunity to earn their living in conditions of equity and dignity. That is why our efforts to achieve inclusive, equitable and sustainable development must be anchored in decent jobs. And why it’s time to redouble them now.”

Inspired by Guy Ryder, Aljazeera ow.ly/hnKgB Image source Facebook ow.ly/hnKwk

Kenneth Saul Rogoff the 59 year old American Professor of Public Policy & Economics, and a chess Grandmaster has published an article on the Project Syndicate titled ‘Will Governmental Folly Now Allow for a Cyber Crisis?’ claiming most politicians are congenitally incapable of making difficult choices until risks actually materialise. In the article Rogoff states “When the financial crisis of 2008 hit, many shocked critics asked why markets, regulators and financial experts failed to see it coming. Today, one might ask the same question about the global economy’s vulnerability to cyber-attack. Indeed, the parallels between financial crises and the threat of cyber meltdowns are striking. Although the greatest cyber threat comes from rogue states with the capacity to develop extremely sophisticated computer viruses, risks can also come from anarchistic hackers and terrorists, or even from computer glitches compounded by natural catastrophe. …No economy is more vulnerable than the US, and it is arrogance to believe that US cyber superiority (to all except perhaps China) provides it with impenetrable security from attack. …Unfortunately the solution is not so simple as just building better anti-virus programmes. Virus protection and virus development constitute an uneven arms race. A virus can be just a couple hundred lines of computer code, compared to hundreds of thousands of lines for anti-virus programmes, which must be designed to detect wide classes of enemies. We are told not to worry about large-scale cyber meltdowns, because none has occurred, and governments are being vigilant.”

Inspired by Project Syndicate ow.ly/czr9N image source IMF ow.ly/czr1P