The winners and the losers of the crisis
The most severe crisis since the Great Depression has revealed the winners and losers in different areas – from the States to economic theories.
A distinctive feature of the current economic crisis is impact on the synchronous world. Wave of negative consequences from the collapse of Lehman Brothers has swept across the globe. The subsequent recovery of economies of different countries is also more or less coincided.
Recession and financial crisis exposed the strengths and weaknesses of economic models, institutions, individuals, and theories.
Economists, who believed in the theory of “disengagement”, in accordance with which the economy of several developing countries are less dependent on the economies of developed and they will not affect the crisis in the U.S., were wrong. Nevertheless, China continues to show impressive growth rates. According to the latest consensus forecast, this year the Chinese GDP will grow by 8,3% compared with 9% in 2008
Without a doubt, one of the reasons for this is Beijing possibility to act quickly and decisively, without wasting time on political debate. “The unprecedented global economic crisis has brought huge losses to the Chinese economy. However, we accepted the challenge and confidently cope with difficulties,” – said in September, Prime Minister Wen Jiabao.
Democratic India is also having good times in coping with the crisis. It is expected that its GDP will grow this year at 6.2%. The growing economic strength of China and India helps to explain why the clear winner in this crisis can be called the summit of “twenty” in which representatives of the fast growing developing countries sat the same table with leaders of major developed economies.
But while most developing economies feels relatively well, there are exceptions. Mexico struck not only by the crisis in the U.S., but by epidemic of influenza A/H1N1, and falling oil production. Many rapidly developing economies of Eastern Europe were unable to support growth, when the crisis erupted. Russia had fallen victim depending on commodity prices and the inability to develop the domestic industry.
Low-income countries were even more distressed after the crisis has reduced the volume of trade, investment and aid to the poorest countries. The World Bank estimates that the number of people living in extreme poverty will be increased by 90 million
Europe suffered less than all
Nevertheless, Germany, Japan and France get a consolation prize for being out of the recession they have managed to escape in the II quarter of this year – before the United States and Britain, who suffer from the fall in consumer demand of its citizens. France can get a special medal for sustainability. It is expected that French GDP will fall this year by 2%. At these times it is quite a decent result.
On the stock market there are winners and losers, and sometimes quite unexpected. Shares of technology companies after the collapse of Lehman Brothers were among the market leaders: they are pushing up the hope that after the stabilization of the economy in 2010, they will receive substantial profit. Oil companies were among the losers, they shattered a sharp drop in oil prices.
Banks earn during crisis
Worst of all had shares of financial companies. But the fact that banks have lost the location of investors, does not mean that the bankers – the main victims of the crisis. On the contrary: never before has a single sector in the world did not receive such an amount of state funds, which quickly allowed him to return to profitability.
The generosity of the state in the form of subsidies to consumers wishing to recycle an old car and buy a new, more efficient, experienced automakers. That is why their shares have not been in such distress, as could be.
Left-wing Parties criticizes capitalism, suddenly found themselves among the losers from the crisis. Their slogans shamelessly stole the governments of all political spectra. “We find ourselves in a situation where even right-wing parties can speak for active state intervention in the economy”, – said the chief economist at Unicredit Marco Annunziata. In September, Germany’s Left Party in the elections has shown good results, but the center-left, represented by the Social Democrats have lost a significant portion of the vote. Their leader, Frank-Walter Steinmeier called the outcome of the vote “a bitter day.” For the first time in 11 years, the Social Democrats had to go into opposition.
Annunziata is quite sure that international trade has won a lot of the crisis. “There was a lot of fear that free trade will fall victim to the crisis – he said. – But the opposite happened: international trade has been under protection, and now it is – the engine of economic recovery.”
The market can not regulate themselves
But state officials, whose work behind the scenes did not enjoy much love, unexpectedly found that in their hands – the fate of large banks.
looks like the IMF is clear winner here, which has assumed a new role of world policeman and fireman. Thus, it is proved that the long-term care is bearing fruit.
Scandinavians have the best model of the economy
The world’s attention attracted the Scandinavian economic model – due to the fact that Sweden and Finland have largely failed to protect its citizens from the crisis. These countries are known for their generous social welfare system. In addition, they had learned from the experienced in the early 1990’s. banking crisis.
Radical Anglo-Saxon model of capitalism out of fashion, but the Scandinavian model clearly can not be recorded in the number of losers, “says Sixten Konkman of the Etla Research Institute in Helsinki. However, in the long run, its success depends on whether the economic activity of the State to bring sufficient funds for their redistribution. “Well-developed social security system softens blow, but raises the risk that you will not be able to again achieve economic growth and will prove to be burdened for a long time (budget) deficit,” – says Konkman.
Finally, the growing national debt in many countries has created a large new group of potential victims of the crisis – the younger generation. There is a risk that it was he would have to pay the bills, paying higher taxes.