The Secrets of Stability

26 دسمبر 2009
By Fareed Zakaria
Political and economic stability have each reinforced the other. And the third force that has underpinned the resilience of the global system is technological connectivity. Globalization has always existed in a sense in the modern world, but until recently its contours were mostly limited to trade: countries made goods and sold them abroad. Today the information revolution has created a much more deeply connected global system.
Managers in Arkansas can work with suppliers in Beijing on a real-time basis. The production of almost every complex manufactured product now involves input from a dozen countries in a tight global supply chain. And the consequences of connectivity go well beyond economics. Women in rural India have learned through satellite television about the independence of women in more modern countries. Citizens in Iran have used cell phones and the Internet to connect to their well-wishers beyond their borders. Globalization today is fundamentally about knowledge being dispersed
This diffusion of knowledge may actually be the most important reason for the stability of the current system. The majority of the world\\\'s nations have learned some basic lessons about political well-being and wealth creation. They have taken advantage of the opportunities provided by peace, low inflation, and technology to plug in to the global system. And they have seen the indisputable results. Despite all the turmoil of the past year, it\\\'s important to remember that more people have been lifted out of poverty over the last two decades than in the preceding 10. Clear-thinking citizens around the world are determined not to lose these gains by falling for some ideological chimera, or searching for a worker\\\'s utopia. They are even cautious about the appeals of hypernationalism and war. Most have been there, done that. And they know the price.
In fact, the most remarkable development in the last few years has been the way China, India, Brazil, and other emerging markets have managed their affairs prudently, taming growth by keeping interest rates up and restricting credit in the middle of the bubble—just as an economics textbook (and common sense) would advise. Instead it was the advanced industrial world, which had always lectured everyone else about good political and economic management, that handled its affairs poorly, fueling bubble after bubble, being undisciplined in the boom, and now suffering most during the bust. The data reflect this new reality. By 2014 the debt of the rich countries in the G20 will be 120 percent of GDP, three times the level of debt in the big emerging-market countries. The students of the global system are now doing better than their teachers.
There is now significant domestic demand in countries like India. The government has massive resources in China. And these nations now trade a great deal with each other. China has overtaken the United States as India\\\'s largest trading partner. This power shift may prove the longest-lasting legacy of the crisis of 2008. How the established countries deal with it, and how they handle their own economic woes in the midst of many competing economic centers, will be their primary challenge in the next decade. If they cannot adjust, then the world might not remain so stable after all.
(Courtesy NEWSWEEK)