MARCH 2, 2011.
Get Ready for a Growth Supercycle
Emerging markets could propel a global boom comparable to the industrialization of the United States.
By IAN BREMMER
With the turmoil rattling the Middle East these days, it's easy to miss the rising tide of optimism about the global economy. The good news is coming from multiple sources. A recent CEO survey from PricewaterhouseCoopers, for example, found a sharp spike in the number of business leaders who see strong growth for the year ahead. And for a long-term forecast, a report from analysts at Standard Chartered bank has produced the biggest buzz.
Standard Chartered argues that about 10 years ago, the global economy entered a "new super-cycle" of extended growth, one "driven by the industrialization and urbanization of emerging markets and global trade." The expansion is likely to last for "a generation or more." Forecasts in the report run through 2030.
We've seen this kind of surge before, say the bank's analysts. The first supercycle, driven by the industrial revolution and the emergence of the United States, developed between 1870 and 1913. The second wave, powered primarily by Europe's postwar reconstruction and a rise in Asian exports, ran from the end of World War II until the early 1970s.
The especially good news, according to the report's authors, is that though the third super-cycle will be driven mainly by emerging-market countries, particularly in Asia, "the winners will be global." Caveats apply. Business cycles will ensure the ride won't be a smooth one, and some countries and regions will fare better than others. The report's assumptions depend on "a backdrop of relative peace, or certainly no global war, and stable monetary policies."
.
The argument is compelling. Growth trajectories from China, India and Brazil to Indonesia, Turkey and sub-Saharan Africa speak for themselves. Americans and Europeans should be relieved to hear that other countries can do a bigger share of the world's economic lifting.
Yet, a global economy driven by emerging market states comes with big risks. First, the storm now cutting its way across the Arab world should remind us that emerging markets can be a lot more politically and socially volatile than established powers. Developing states with authoritarian governments can appear stable for decades, but they often come apart quickly.
We're also talking about a global economy that will depend for an ever larger percentage of its growth on countries where policy making is usually a lot less transparent and predictable, investment climates are more vulnerable to the whims of politicians and bureaucrats, and corruption is often endemic. Once confidence grows that an emerging power has actually emerged, and as it builds a larger stake in geopolitical stability and global growth, its interests will become more closely aligned with those of other governments. Its political institutions will mature and operate with greater predictability. In Brazil, for example—where a president regarded as a leftist slowly helped build political consensus in favor of disciplined, market-friendly macroeconomic policy—that process is well underway.
On the global stage, getting from here to there will involve a fundamental shift in the international balance of power. And history shows that transitions on that scale don't come without market-moving conflict. Growth itself can be a force for stability, as in the decades before World War I and immediately after World War II. But as the authors of the Standard Chartered report admit, every supercycle also yields its share of losers. At a minimum, this new supercycle will produce a competition that provokes nationalist passion and politically motivated protectionism in some quarters.
The other big problem is that a global economic growth cycle driven by developing states will generate overnight industrialization on an unprecedented scale, as hundreds of millions of new consumers migrate toward an emerging middle class. Until new energy technologies gain a global foothold, we can only guess at what this surge of activity will mean for competition for oil, natural gas and other scarce commodities, for the quality of the world's air and water, for the politics of climate change, and for the prices we all pay for food and other staples.
Standard Chartered's 20-year forecast may well prove wrong. A similar projection of global growth in 1990 would have included assumptions about long-term production for the Soviet Union, and many of the problems that development will create could cut this supercycle short. But there are plenty of reasons to believe the world could be in for another sustained period of growth.
Mr. Bremmer is president of the Eurasia Group.
Copyright 2011 Dow Jones & Company, Inc. All Rights Reserved
0 comments:
Publicar un comentario