The global power equation is shifting as emerging economies develop a greater capacity to compete against more advanced countries, said session Chair Klaus Schwab, Founder and Executive Chairman, World Economic Forum, reminding participants of the key point made by Palaniappan Chidambaram, Minister of Finance of India, at lunch earlier in the day. Many argue that domination by the US as the sole superpower is giving way to a multi-polar world, Schwab said.
Worries about the rise of China and India are intensifying fears of job losses due to outsourcing and trade, explained Robert F. Bennett, Senator from Utah (Republican), USA. This has become a major issue in the ongoing American presidential election campaign, he explained.
“The perception is that 'Fortress America' is the way to deal with this challenge, that we must be afraid of the Chinese and Indians, and that we must move to protect our own jobs.” Added Stephen S. Roach, Chairman, Asia, Morgan Stanley, Hong Kong SAR: “This view of the world is abhorrent, but it captures the pulse of a large cross-section of a lot of American middle-class workers.”
Concerns about the impact of globalization are not unique to the US, added Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries; Co-Chair of the India Economic Summit. “Economics are at the centre of concern for everybody,” he observed.
These anxieties would likely deepen if the global economy slows down sharply. In the aftermath of the credit crunch triggered by the sub-prime mortgage crisis, the US could fall into recession in 2008, Roach predicted. “The US consumer is in serious trouble,” he said.
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