Dalian, People’s Republic of China, 16 September 2011 – Despite
worries about the unfolding debt crisis in Europe and concerns about
the US fiscal deficit, business and finance leaders at the World
Economic Forum’s Annual Meeting of the New Champions 2011 are cautious
but optimistic about the outlook for the global economy. “All the
discussions about deleveraging are putting a wet blanket on economic
growth,” James S. Turley, Chairman and Chief Executive Officer, Ernst
& Young, USA, told participants in a panel session on the global
economy on the final day of the Meeting. “I’m not seeing enough focus
on growth.” Added Min Zhu, Deputy Managing Director of the
International Monetary Fund (IMF): “The question is: Where will growth
come from in the coming years?”
Zhu warned that “the whole European situation is in a dangerous new
phase.” The priority is to prevent the sovereign debt crisis from
spreading into the banking system, further undermining confidence.
“There is a way out” through swift coordinated action, he insisted.
“But if we miss this opportunity, it could be risky for everyone.”
While emerging markets are still growing strongly, Zhu noted, they too
have structural challenges to face. “In Asia, what we observed in the
past two years is investment-driven growth substituting for
export-driven growth. You cannot invest forever. The real challenge
for Asia is to move from investment-driven growth to a domestic
consumption growth model. That needs a lot of policy.”
N. K. Singh, Member of the Indian Parliament, agreed that developing
economies have to figure out how to maintain their rapid growth
through this turbulent period. “How to be prosperous in volatile times
is a challenge for political leaders,” he reckoned. Heizo Takenaka,
Director of the Global Security Research Institute at Japan’s Keio
University, warned of two risks that could derail global economic
recovery: increasing commodity prices and the persistent sovereign
debt problems confronting many countries. Still, he said, there is
reason to believe that the current crisis will subside. “New
entrepreneurial business models will emerge,” Takenaka predicted. But,
he concluded, “We need leadership in government and the business
sector.”