David Prosser: Turning inwards won't benefit any of us
Thursday 27 January 2011
Davos Outlook It would be unfortunate, however, if the polarities observed above were to translate further into confrontation. For while the World Economic Forum is a well-intentioned, collegiate endeavour, it does not reflect the increasing failure of the world's economic superpowers to co-operate for the mutual good.
That spirit of co-operation has rarely existed in the modern world, of course. The competitive instinct of countries – and their governments – engaged in pursuing wealth for their own citizens is not conducive to such collectivism.
Yet two-and-a-half years ago, as the financial crisis threatened to bring the global economy to a standstill, unanimity of purpose was achieved. In the wake of the Lehman Brothers collapse, governments and central banks from around the world worked to prevent total disaster.
For a while, it looked as if that co-operation might continue. The G8, for example, has been replaced by the G20, reflecting the fact that economic power is now shared more widely. There was much talk of the global interest at the first G20 summits after the crisis, alongside acceptance of the need for a common approach on everything from banking reform to correcting global imbalances of capital.
As memories of the crisis have dimmed a little, however, that co-operation has waned. So much so that in Davos, the talk is of how the G20 has effectively been replaced by the G0 – a world in which there is no economic leadership or governance, and in which individual countries are again driven chiefly by the desire to protect their own interests.
That is a mistake. For while there are no doubt grievances on every side of the debate, the global economy remains in too parlous a state – and is too inter-connected – for a return to narrow national interests to suit anyone. From currency tensions, we will move to currency wars, to trade wars and to ever greater protectionism. Turning inward is not the answer to our problems.
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