And now for the bad news
- 24 Jan 07, 01:05 PM
Ok, after my upbeat blog entry just now, I want to post a second piece on the economy, just so that you can't accuse me of running through the snow wearing rose-tinted glasses.
Globalisation is good for you, that's the unspoken assumption of most of the business leaders here, regardless of whether they hail from the West or developing countries.
But many discussions here now revolve around what's happening to the losers of globalisation.
Laura Tyson, economics professor in Berkeley, points to recent research that suggests that most of the benefits of globalisation have gone to the top 10% of society.
Unskilled and low-skilled workers are not faring that bad either, because they mostly do jobs that have to be done on the spot.
It's the middle classes that are smarting, if the research got it right, she says.
As I write this, a panel of experts is discussing just these issues. Economics professor Robert Shiller (who famously and correctly predicted that the stockmarket bubble of the late 1990s was about to burst) just warned of a backlash from the middle classes who are increasingly worried about job security.
Economic power is shifting, new giants are emerging. The bottom line says that this is a good thing, for both developed and developing countries. Let's not forget, the past decade of low inflation and interest rates has been brought to us courtesy of the cut-price imports from China et al. And without these exports, millions would still live in abject poverty in places like Malaysia, China and India.
But a good bottom line hides a lot of personal pain of those who lose out, because it does not take into account income distribution.
The solution? Beats me. But here in Davos hundreds of very clever - err, and very rich - people are discussing the impact of these inequalities, and what to do about them.
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