Emerging Economies to Reap From Global Crisis

Because of the global economic crisis, emerging economies will gain more power in global institutions, as the crisis has diminished both financial and political influence for the US and Europe. Emerging economies like South Korea, Brazil, India and China command a greater share of the global economy, and the developing nations must prepare for their new role, advises Dani Rodrik, political economist at Harvard, writing for Business Daily in Kenya. The countries should support new regulations that limit excessive credit during good times and ease tight credit during hard times, promote transparency, enact a tax on foreign currency transactions, create a revenue pool for tackling a range of global problems, and ensure that trade rules are compatible with social goals. “Developing countries should say no to obvious trade protectionism, but they should be willing to negotiate to avoid regulatory races to the bottom in such areas as labour standards or corporate taxation,” Rodrik writes. “This is in their long-term self-interest.” Meanwhile, the developing countries do not want to repeat the mistakes of the West, neglecting the interests of some nations. Cooperation along with fair and consistent rules in trade and finance can benefit all. – YaleGlobal