February 02, 1999
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| February 02, 1999 | atimes.com | |
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| Global Economy Davos snow job (Jan. 29, 1999, Asia Times Online Editorial) ''Responsible Globality'' - what a title and what a semantic abomination. But be that as it may, as the participants in this year's Davos World Economic Forum trudge through snow half a meter deep to attend one or another of 300 conference sessions, few - we suspect - expect enlightenment on how best to ''manage the impact of globalization,'' which is the forum subtitle. Disagreements, as the IMF/Worldbank October 1998 Washington confab showed, run deeper than the Davos snow, with no convergence of views between the Anglo-Saxons, on the one hand, and the continental Europeans and the Japanese, on the other, anywhere in sight. Well, never mind. Most WEF attendants know from previous years' experience that the real fun is elsewhere, away from the seminars, in after-dinner parties or impromptu press statements, as the world's star economists, government ministers and finance wizards reduce their wisdom to sound bites and issue their fearless forecasts of gloom or prosperity to come. Here are the first of this year's goodies: Fred Bergsten, Institute of International Economics and former APEC Eminent Person: - As the U.S. current account deficit rises to $300 billion, the dollar will fall by 10 - 15 percent this year, to 100 yen and 1.25 - 1.30 euro. Ken Courtis, chief economist, Deutsche Bank, Tokyo: - Low interest rates, tax cuts and pump-priming will revitalize demand for commodities; so buy the commodity currencies, the Australian and Canadian dollars. Ruediger Dornbusch, famous MIT economist: - The U.S. economy and markets will achieve a soft landing; Japan will be more of a problem than China. Eisuke Sakakibara, ''Mr. Yen'', vice minister for international affairs, Japanese Ministry of Finance: - Japan will recover after mid-year. And so it goes. But in any case, if those guys can do it, so can we. Here are our fearless 1999 forecasts: - Japan will recover, as will South Korea; Thailand will remain far behind. - China will hold on to the current yuan value, but will experience severe financial crisis by mid-year. - The U.S. economy and markets will continue to do just fine. - Socialist governments in Europe will mess up their economies; growth will be anemic, and a European financial crisis is in the offing. But such forecasts are all a bit too serious. If the world stops turning, just get off before it does. | |||||||||
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