Global Growth and Recovery

Unctad’s annual report on Trade and Development (TDR) for the year 2000, released on September 19, has a cautionary tale to offer on the prospects of global growth, in spite of the ongoing boom in the US economy and the recent turnaround in crisis-ridden Asia. The concerns are based on the economic imbalances amongst the G-7, the sustainability of which remains suspect, both in terms of past experience and the logical possibilities. Given the integrated markets under globalisation, a setback in the levels of activity in industrialised countries would automatically reverse the process of recovery in crisis-ridden Asia which, as pointed out in the TDR of 1999,¹ could turn out to be unsustainable even otherwise. The report casts doubts on the trajectory of the S-E Asian economic recovery which is laden with growing income and wealth disparities. The recovery is considered hardly viable, not just because it is bereft of social harmony but also with its macro-economic implications in terms of the sustainability of the growth process. Concerns are thus voiced in the two press releases offered along with the TDR 2000 over the ‘Janus-faced world economy’ (with the fair-weather technology boom counterposed by the challenges of an unbalanced global growth) and also on the future of the ‘Asian winter of discontent’.²

Growth rate of output in the US has been at an annual average of 4.23 per cent over 1997-99 and is expected to continue around the same rate during 2000. This contrasts with the poor performance of the EU and Japan, with the respective annual averages for 1997-99 at 2.5 per cent and .007 per cent. Prospects for 2000, even with an optimistic forecast, are not much higher for these countries in the G-7.