The Hallucinatory economic balance
The annual meeting of World Economic Forum (WEF) to be held in Davos from 26th to 30th January is going to garner the attention of both the developing and the developed nations. Besides the general business outlook, the issue of economic stability has been under special focus. This year too the balance of factors between the developed and the developing nation requires a deep thinking.
Forty years have passed ever since the WEF came into existence, but issues of the developing countries still go unheard. To answer this, growth rate of developing nations versus the developed nations have to be umpired. Notwithstanding a splendid growth chart of the emerging economies (post recession), the hegemonic forces dominate the market because technology plays a fair role. Despite having the produce transfer, technology transfer remains a bothersome affair.
Countries such as India, Brazil and China have grown at the rate of 8.6, 8.5 and 11.9 percent respectively while the Euro zone economies almost stagnated last year. Greece and Ireland testified as good stories of economic stagnation. But the bigger question remains the same. Can the developing nations still afford to have the same opportunities as the developed nations enjoy? The answer is definitely going to be a resounding, thumping NO.
Athough it is true that after the global meltdown China rose as a new player, but the main challenge is to break the illusion. The dragon even sidelined Japan in its huge rising against United States. But the image of the United States as imperial hyperpower in a unipolar world after the cold war still daunts many. China`s economy valued at $1.33 trillion, ahead of the $1.28 trillion Japan`s economy has to struggle hard to overshadow the huge 14.56 trillion US economy.
Moreover, to continue with a sustainable open economy the policy can’t be same for nations across the globe. Consider this- those who have already run fifty meters in a hundred meter race can’t be at par with those who have just begun the race. For instance, in the open economy various factors have to be taken into account viz. the subsidy factor, the export import barriers, unemployment, and poverty level. If intrinsically, there is no level playing field, it would be close to impossible to alleviate world hunger. United States and the European Union have to remove farm subsidies so that domestic markets can have their fair share.
India has also time and again insisted to rich nations to agree on deep cuts in their farm subsidies adding that global trade agreement was impossible without this. Commerce Minister Anand Sharma on many fore criticised subsidies dispensed by the European Union, the United States and Canada to farmers, saying they denied a level playing field to growers in the developing countries.
The demand of US and other developed countries to open markets more to industrial products in lieu of cutting subsidies will dampen the chance of each player has an equal chance to succeed.
Unless and until the above disparities are addressed, economic balance is bound to remain a hallucination.