Monday, January 21, 2019

Shouldn't the system be changed if it is bad?

"Poorly managed globalization has led to nationalist 'take-back-control' movement and a rising wave of protectionism that is undermining the 70-year-old US-led international order," wrote former Prime Minister of Britain Gordon Brown. At the height of the global financial crisis "North America and Europe comprised around 15% of the world's population, but accounted for 57% of total economic activity, 61% of investment, around 50% of manufacturing, and 61% of global consumer spending." Now, "Some analysts predict that Asia will account for 50% of global economic output by 2050." Still very far. The real fear is "The future of technological dominance and global economic power." "The year 2018 marked the return of the import tariff," wrote Prof PK Goldberg. "Until 2018, global trade seemed like an unstoppable and irreversible force" but there were "behind the border" restrictions, along with "frustrations with the current trading system that the World Trade Organization (WTO) has failed to resolve". As a result, in the last few years, "populism has gone global, upending the politics of countries as diverse as Hungary, Italy, the Philippines, and the US," wrote Prof S Edwards. "Venezuela offers a textbook example of how populism can take hold." Venezuela is in an economic crisis forcing millions of people to flee the country, wrote E Melimopoulos. "There are people dying because we don't have the right medicines in the country, or food, or we don't have security in the streets," said Venezuelan citizen Rosina Estrada. "There are many similarities between Latin America's experience with populism and that of advanced economies today," but "Unlike in Latin America, the Fed and the ECB cannot be forced to finance governments' fiscal expenditures." "US President Donald Trump's 'America First' trade policy came into full bloom in 2018, and it was an ugly sight to behold," wrote Prof D Rodrik. "Existing rules are not up to the challenge of accommodating countries like China, where economic practices are very different from those of the US or Europe," but "Trump's unilateralism and mercantilism are bad for the world economy". So, let China break all the rules but Trump is bad if he responds. Extraordinary.`Naturally, the Chinese are happy to echo this view. "By actively reducing its external surplus, China has demonstrated that it is not a mercantilist power, but rather a responsible global stakeholder pursuing balanced and sustainable long-term growth," wrote Min and Yanliang. "Nationalism, populism, nativism and protectionism exploit people's sense of being left behind and excluded from the system," wrote  M Froman. By accusing Trump and other leaders all these experts are accusing the people for electing them. Why not talk about changing the system?

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