2011 Summary can be downloaded HERE - FT Live

The Global Economic Outlook
12
Lord Meghnad Desai
Emeritus Professor, London School of
Economics and Political Science
While 1992-2007 was a long boom period for the world economy, post 2007 the economies are reeling under the
pressure, as we move into the fourth year of slow down
Previous recessionary cycles indicate that recessions typically last for 8-10 years, and as per the current trends,
the developed economies will not be able to catch up before 2015
Although, a profound transformation is being witnessed in the global economy with shift in tectonic plates,
the centre of economic gravity is shifting from mid-Atlantic to Central Asia, and now further moving
Eastwards
During the growth period, the emerging economies over-saved and actually funded the consumption of the
under-saving developed economies. This is not sustainable anymore
Savings from the emerging economies need to be deployed efficiently and given limited opportunities in the
developed economies, there is a need to facilitate trade among intra emerging economies as the next lever of
growth
On the current sovereign debt crisis: no sovereign debt is actually sovereign, and there are no risk free assets
now. This can only work in a closed economy. Internationally, the monetary systems need to be revamped and
alternate means of payments and store of value should also be looked at