Diplomatic Courier: What should rapidly developing economies and emerging markets do in the economic crisis?

Mirtchev, A. (2009, Fall). What should rapidly developing economies and emerging markets do in the economic crisis? . The Diplomatic Courier.

Diplomatic CourierDr. Alexander Mirtchev, President of Krull Corp., member of the Board of Trustees of the Kissinger Institute on China and the United States at the Woodrow Wilson International Center for Scholars, and a Board Director of the Atlantic Council of the United States, analyzes the recovery strategy pursued by rapidly developing and some emerging markets through and beyond the economic crisis. Dr. Mirtchev suggests that there are new geopolitical balances imposed by the multiple dimensions of power projection by an increasing number of power centers that characterizes the twenty-first century. These multidimensional balances are aptly illustrated by the consideration that the recovery of certain economies, including China, India and Brazil, although still patchy and uneven, would in general be quicker than some of the developed economies. He delineates the commonalities and distinctions in the recovery approaches noting that certain rapidly developing economies are incorporating the effect of regional and global systemic imbalances as well as their own domestic strategic priorities, in their anti-crisis agendas and ambitions. This would prompt, in Mirtchev’s view, a reassessment of recovery-oriented global economic security cooperation, with the quicker-recovering economies pursuing opportunities for a better positioning within global institutions and platforms, such as the IMF and G20. The success of rebalancing will be signaled by and inextricably linked to the formulation of respective government exit strategies, combined with appropriate structural reforms and creating the preconditions for “engineered” economic growth in specific industries like mining, power generation and agribusiness. The choice of this type of strategic directions would indicate a reinvigorated international focus by certain emerging markets, which seek to secure, at advantageous terms, the requisite resources for growth. However, a rebalancing of this magnitude is likely to entail global economic security implications. For example, there are doubts that some countries will contain their expansionist strategies within the existing rules-based system largely governed by WTO, which could result in globalization falling victim to the “thousands cuts” of small protectionist measures. The concomitant symptoms of the fragmentation of the global market and the tendency toward the formation of various regional and international “economic blocs” can affect the stability of the current single-dimension network of international trade relations, as well as geopolitical balances and global economic security.