The economy of America is tottering on the edge of a precipice facing the possibility of another recession. Meanwhile the economies of emerging nations are growing fast. This indicates a change in the global economic scene in which America is not of as great an importance as before. The developing nations are slowly taking over the centre of the stage.
Global financial pundits are converging to find out how to boost up the world economy. Some are talking about splits and break ups. Analyst Edward Harrison of CreditWrieDowns said the world is now breaking away from USA “as the consumer of last resort”. He added that now importance is being given to Russia and China.
In financial parlance this is known as de-coupling. The term is being used by everyone from Wall Street bigwigs to Joseph Stiglitz the Nobel Laureate. Harrison that the baton has been passed on from nations like America to other countries – China, Brazil, Russia, India etc. The growth of world economy will rely much more on these countries than on America and the rest of the developed nations.
The economy of USA continues to be bleak. The growth is a mere 1% to 2% and fears about double dip recession have become real. On the on the other hand the BRIC countries continue to climb up. Brazil is slotted to go up by 7.5 % and Russia, India and China by 4.25%, 9.7% and 10.5% gains in respective order.
The growth of China has become an eyesore for the politicians of America who are looking around for an object on which to vent their anger. But the Obama government is cautious and alert. In a speech ahead of IMF meeting Timothy Geithner said, “We believe it’s very important to see more progress by the major emerging economies to more flexible market oriented exchange rate systems”. There are complaints from the Federal Reserve about the undervaluing of its currency by China prior to the meeting.
While political leaders are trying to cement things, the people are moving away from the economy – de-coupling. People who had once left their native lands for greener pastures in USA are now returning back home. One Indian immigrant, Shobhit Bhagara said that the opportunities today in India are much improved than here in America. Shops are being set up in countries that are poised for growth while America totters.
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