Libmonster ID: UK-1224

In 2009, the book "The World After" was published in Paris.: An unprecedented crisis "(Pigasse M., Finchelstein G. Le monde apres: Une crise sans precedent. P.: Plon, 2009). Its authors - Mathieu Pigasse, Vice-president of the Lazare Frere Bank, and Gilles Finkelstein, President of the Jean Jaures Foundation-analyze the current global financial crisis and the new configuration of the world economy emerging after it.

The book examines and analyzes in great detail the causes that led to the global crisis. But the main purpose of this book is to suggest measures that developed countries should take to overcome the crisis.

According to the authors, the main prerequisites have been formed over the past 20 years-from the fall of the Berlin Wall in 1989 to the global financial crisis in 2008. Note that this is the period of the triumphant march of globalization on the planet, and the first decade-with the undeniably dominant role of the United States.

These 20 years, according to Pigasse and Finkelstein, are associated with three illusions. The first is the belief in a model of economic growth based on debt growth (p.13). The second illusion is that economic liberalization, the rejection of state regulation and complete market freedom were imposed on all countries as a universal solution. The apogee was the lack of regulation of the international financial system. The third illusion was the belief that one country - the United States - could dominate the world unchallenged. But all three illusions were shattered (p. 14).

A new world configuration is created. Trends towards its development have taken place before, but the crisis has intensified them. Developed countries are going through difficult times ("the decline of Europe" is a very hackneyed term). The United States is beginning to lose its position as a superpower. Their growth model was hit in the heart. At the same time, the power of emerging market countries is growing, with "we (developed countries) we still underestimate the scale, speed and violent force of this phenomenon " (p. 16).

In the chapter "BRICO's Decisive Breakthrough", the authors analyze the increased role of emerging markets in the" new world " - the emerging global economy after the crisis. Speaking about these countries, French authors use the term BRIC (BRIC and Others, where BRIC is Brazil, Russia, India, China and "others" are Turkey, Mexico, South Africa, Nigeria, Indonesia, Vietnam, as well as countries mainly included in the Group of 20) (p. 117). BRICOS will account for 100% of global population growth in 2008-2025 (p. 117).

Of course, in the short term, emerging market economies will have to face additional challenges due to the global economic crisis. However, the authors are convinced that difficulties - at least economic ones-will not prevent emerging market countries from moving forward irresistibly. The authors do not hide their concern when they say that these countries have two indisputable engines of growth - their power and dynamic development. According to the authors, the share of emerging markets in global production increased from 38% in 1985 to more than 50% in 2008. The average annual growth rate of these countries exceeded the growth rate of developed countries-members of the OECD by 1.8 points (and in the last 10 years, 1999-2008, by 3 points). The BRIC countries ' share in world exports increased from 25% in 1995 to 40% in 2008 (p. 121).

According to French authors, over the past 5 years, investment in the economies of emerging markets has increased faster than in the West. M. Pigasse and J. Finkelstein estimate a high rate of accumulation in emerging markets (about 35%) as a guarantee of future income for the factor of production-capital, along with the accumulation of foreign exchange reserves and increasing the role of national welfare funds in these countries (p. 122). Another source of income - natural wealth (land) - is also concentrated in emerging market countries with large mineral reserves, although they are unevenly distributed among them.

In 2025, the world's population may reach, according to their estimates, 8 billion. human. The key to future incomes for the factor of production - labor - is demographic growth, as well as the young population with an increasing level of education every year. While the population of Europe is projected to shrink by 130 million by 2025, the population of emerging market countries, especially those in the East, will increase (p. 123). Future rents on all factors of production-labor, capital, and land-will be concentrated in emerging market countries (p. 123).

"Thus, a new balance of power in the world is emerging: we (the developed countries - N. C.) were the engine of growth for countries with emerging markets, but now the situation is the opposite" (p. 124). The authors predict that India will surpass Italy in terms of GDP in 2014, France in 2016, Germany in 2021, Japan in 2026.China will overtake Germany in 2010, Japan in 2015*, and the United States in 2035 (p. 125). This may happen sooner or later, but the main thing is that the increasing role of the BRIC countries in the global economy is an irreversible process (p. 125).

Pigass and Finkelstein write that the role of investors from emerging markets is increasing in the acquisition and purchase of companies from Western countries, part of the funds of national welfare funds is invested, and TNCs from these countries are also investors. If the petrodollars of the 1970s were channeled into Western bank accounts and portfolio investments, then in the last decade they were used for the following purposes:-

* China has already overtaken Germany in 2009.

page 75

The funds of national welfare funds are used for direct investment, for the acquisition of a sufficiently significant block of shares. The authors speak about this with caution.

Ernst & Young, a consulting firm, published a study titled" Emerging Markets and Emerging Companies "in 2007 titled" Globalization 2.0." In 2000, among the world's 1,000 largest companies, there were 100 companies from emerging markets; in 2007, there were 221 of them, and 8 were among the top twenty (p. 132). Firms from Eastern countries participate in multinational mergers and acquisitions, buying up Western companies. French authors call this process the "conquest of the North" (p. 132). The metallurgical company Mittal Steel, registered in the Netherlands but owned by Indian Lakshmi Mittal, acquired the Luxembourg firm Arcelor; India's Tata Motors acquired the English automobile company Jaguar; India's Reliance Communications acquired 30% of the shares in Dreamworks, a company owned by Steven Spielberg (p. 135).

Of course, the French authors clearly exaggerate the success of emerging market countries in order to mobilize the efforts of developed countries to get out of a difficult crisis situation.

Among the recommendations to developed countries, the authors mention the following: further deepening of international economic integration, investment in large-scale projects, including R & D, debt restructuring of small borrowers. The authors emphasize that they are opponents of protectionism, but at the same time note that the preservation of the national identity of enterprises is an important issue.

The book by M. Pigasse and J. Fiickelstein is certainly interesting and relevant, it was published hot on the heels of the events described. It analyzes in great detail and with high professionalism the causes of the crisis (the collapse of the mortgage loan market in the United States, the debt of households and companies, the lack of regulation of the financial sector), and the mechanism of the crisis itself.

At the same time, the authors are characterized by a certain bias towards emerging market countries and their companies. The authors recommend limiting their penetration into Western markets and consider their rise as a phenomenon fraught with danger.

It follows that representatives of developed countries often view globalization as a one-way street, where only they should be allowed to pass freely.

N. N. TSVETKOVA, Candidate of Economic Sciences


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