While European and Japanese economies are getting stuck, burdened by the
problems of their public debts, global growth is resuming; and could, if it
were to continue to come in at a record pace, give them an unexpected solution.
In Japan, due to the earthquake and tsunami, we expect a decline in
production of 3.7% in 2011; in France, growth will not reach 2%; in Spain,
growth will be only 0.8 in 2011 and 1.6% in 2012; in Greece and Portugal, a
recession is coming.
Elsewhere, all is well in China, lasting growth close to 10% per year; in
India, Taiwan, Vietnam, Indonesia, it will exceed 7% per year for several
years; in Russia, it will exceed 4,5% per year over the next four years; in
Africa, it will be 5% per year between 2011 and 2015, in particular through
huge investments coming from Asia; and Mexico is on a slope of 4.6%,
spectacular recovery, after a decline of 6.5% in 2009; Brazil continues on a
higher rhythm; the countries known as « emerging Europe », that is to say,
those of Eastern Europe and the Baltic countries, are also experiencing
growth in excess of 4.3% per year in 2011 and 2012; and even, in Lithuania,
since 3 months, of 14.7% in yearly average.
In total, global growth is back with a significant rate of 4.5% per year,
which will allow the world’s production to regain, before the end of this
year its 2008 level, lost with the financial crisis.
Even more, in the next ten years, the purchasing power of people in emerging
countries will grow from less than 7 trillion dollars to over 20, or twice
that of the United States. The emergence of these huge new middle classes will
create new demand for products from the West, particularly those related to
new technologies, agriculture, clothing, furniture, tourism,
intellectual services of all kinds.
Even, in the United States, though unemployment still exceeds 16%, and the
housing market remains paralyzed, growth of industrial production is 5.7%;
and soon will be added the effects of very promising new innovations: social
networks, cloud computing, genomics.
Europe, the old Europe, can also claim it: if it undertakes the urgent
reforms in education, innovation, taxation, and if it becomes an exporter
again, it can join the wave of global growth.
Then, the share of public debt in domestic production will decrease
mechanically; and inflation will do the rest. Everything is still possible.
But will the lenders have confidence long enough in the borrowers so that
the weight of their debt is thus reduced by the single effect of growth? Or,
tired of waiting for always promised reforms, will they demand repayment on
schedule, resulting in a return of the crisis in Europe first, then
elsewhere in the world? Will the tsunami of debt prevail over that of
technical progress?
Everything therefore depends on the credibility of long-term projects. These
are not the ones that politicians prefer.