[ccebook.cn]The World in 2010

Leaders
The hard slog ahead
Nov 13th 2009
It will be a year of small advances for the West, argues John Micklethwait; better that, though, than
big retreats
Tate London
“The commercial storm leaves its path strewn with ruin,” Alfred Marshall, a Victorian economist, once observed
of financial crises. “When it is over, there is calm, but a dull, heavy calm.” That sounds a pessimistic way to
approach 2010, a year which promises recovery. But think again. Not only does subdued growth seem the
most likely path next year; it is enormously better than the alternative—heading back into the storm. This is a
year in which politicians, especially in the West, will do better to err on the safe side, and not just with the
economy. Both America and Britain in particular could see some fairly storm-tossed politics.
A weak, jobless recovery should set the scene in many countries. In 2009 world output probably shrank by
more than 1% (on a purchasing-power-parity basis)—the first time since 1945 that the global economy
actually got smaller. By the second half of the year all the world’s big economies had stopped shrinking, and
optimists hope this will build into a sharp v-shaped bounceback. Sadly, the signs point towards a more gradual
recovery (see leader, “Not so fast”).
True, there will be patches of perkiness in the emerging world. During this crisis India and especially China
have powered ahead; there are even worries about a Beijing bubble, of rising house and share prices, helped
by the undervalued yuan. Others have done well too. An increasingly confident Indonesia may well replace
sluggish, kleptocratic Russia in the club of emerging superstars: the BRICs could become the BICIs. But even
in the emerging world much of the growth will still come from government stimulus, rather than sustained
private demand. And these economies, though growing fast, are not big enough to haul up the rest of the
world.
The American consumer, who selflessly provided so much of the demand in the previous boom, will surely
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