Berlin pushes the purchasewith des cleanvehiclesThe task is immense but the path is narrowStock markets are still in hue and to diaIt would have been easier to listen to usThe whole being valued at 65 billion a yearFor the CEO of Bourbon the indicators are indeed well orientedEstablished physicians are less concernedInvestors they do not snapped his titlesThat this time may include measures of magnitudeAnd it is again the left which has benefitedThe current global recession is not only the result of a financial panic. She is also the result of the more fundamental uncertainty about the future direction of the global economy. Consumers give up buy home and auto both because the decline of exchanges and the value of real property was a blow to the State of their finances, but also because they do not know in which direction to turn.
Business investment decisions are even more difficult. Companies are reluctant to invest at a time when the application is in free fall and where they are exposed to unprecedented risk premia on their loans. They also are confronted with major uncertainties.
Economic recovery will depend in large part to a clearer vision of the direction that will make future economic changes. Lighten this vision is largely the task of Governments. After managing confused and misguided by the Bush administration, unable to give precise information to the policies of energy, health, climate and finance, the elected President Barack Obama will start to define a path for the future of the economy American.
The US economy is not the only piece of this equation. A global vision of a sustainable recovery is necessary and includes the participation of China, the India of Europe, Latin America, and, Yes, even in Africa, long at the margin, but today player of the world economy.
A few things emerge clearly. First, the United States cannot continue to go into debt from abroad as they have done these past eight years. Net exports of the United States will have to increase, meaning that net exports of China, the Japan and other surplus countries will lower accordingly. Necessary adjustments involve a significant rebalancing of the current account of the United States, approximately, $ 700 billion or about 5 of GDP.
China trade surplus could reduce by half this amount about. This means that China's GDP will have to be more focused on domestic consumption, 5-10, and less on net exports. Fortunately, China has undertaken to promote a strong expansion of domestic consumption.
Second, the decrease in consumption in the United States must be partly offset by an increase in US investment. But companies will not invest unless a clear political direction to the economic plan. Obama has focused on the need for a "green recovery", i.e. based on sustainable technologies and not simply on a rebound in consumption.
The American auto industry should be revived to produce cars with low carbon emissions, either rechargeable by connection or equipped with a fuel cell hybrid cars. Either of these technologies depend a national electric network based him also on low carbon energy production. All of these technologies will require government funding at the same time private investment.
Third, the economic recovery of the United States is not credible without a strategy to put order in the Government's finances.
George w. Bush's economic policies was to reduce taxes, on three occasions, while increasing the expenses of war. The result of this policy is an abyssal deficits even worsen in the coming year (to perhaps reach 1,000 billion) under the combined weight of the recession, the bailout of the banks and tax incentives in the short term. Obama must implement a tax program in the medium term to restore the finances of the State. This program will include the end of the war in Iraq, the increase in the taxation of the rich and the progressive introduction of new taxes to consumption.
Fourth, the poor regions of the world must be seen as opportunities for investment and not as a threat or places to ignore. At a time where the main businesses of production of goods of equipment American, European and Japanese are by overcapacity, the World Bank, the European Investment Bank, the Bank of import-export from the United States and the African Development Bank, and other funds for public investment, should finance expenditure related to the creation of infrastructure on a large scale in Africa.
As long as long-term and low-interest credits will be awarded, the recipient countries can settle their debt substantial income increase as a result of these investments. The benefits would be considerable, both for Africa and for rich countries, which would find opportunities for their businesses and their skilled workers. These loans should of course be the subject of a concerted global initiative, at a time where even the safest companies are struggling to find funding for the next day, and twenty-five years even more!
In the case of traditional economic cycles, the countries are only to find the means of their recovery. This time, a global cooperation is needed. The relief will require important adjustments of trade imbalances, technology and Government budgets.
These large-scale changes will have to be coordinated, at least informally if not imposed, in the major economies. Each country will have to seize the direction of the necessary changes to the national and global levels, and all nations must cooperate in the development of new sustainable technologies and joint funding of global responsibilities, such as increased investment in infrastructure in Africa.
Today, global and cooperative political leadership is more important than ever. Fortunately, the United States made a huge step forward electing Obama. It is now time to act.
