Irrespective of one’s ideological makeup, there is no denying that all human beings seek certain basic comforts in life ranging from food, clothing and shelter to freedom, happiness and the fulfilment of their dreams and aspirations.
Logically, to realise these goals, individuals have to be living in countries that are making deliberate efforts to become more prosperous. The problem for most countries in this regard, though, is that they do no function in isolation.
In fact, as the evidence from the most recent global financial and economic crisis reminds all and sundry, the countries of this world of ours have become more and more integrated in the past several decades. And that growing level of integration ensures that countries’ economic successes and failures are all intertwined.
Hence, the best possible scenario in which countries all over the world could accomplish their individual economic goals is one where global prosperity reins. In as much as history suggests that the gains from global economic growth have not been equitably distributed, circumstances in which the world’s leading economies are becoming stronger still present greater hope for small and vulnerable economies.
It is for this reason that the ongoing difficulties in the euro zone and the slow pace of economic adjustment in the United States should continue to be a major talking point for all countries.
Generally, identifying problems in economies is the easy task. The more difficult issue is finding the right solutions to those problems. Thus far, what we have seen throughout Europe and the United States are various efforts to turn the economic tide around but with little success.
Specifically, neither the Keynesian-type stimulus packages nor the various austerity measures implemented over the past few years have been able to steady the ship and turn those economies around to generate any reasonable level of comfort in the minds of critics and foes alike that the global economy is on its way to stability and/or recovery.
Despite the limited success rate thus far, most analysts would probably agree that the solution to the problems plaguing the global economy lies in the generation of real economic growth. But how exactly should that objective be achieved remains an elusive matter.
A major reason for this sad state of affairs is the failure of policy makers to recognise and appreciate that economies are different and therefore require some unique measures to improve conditions therein.
Further, there is no consensus in the literature on what mix of policies can be considered growth-enhancing. Therefore, countries ought to look rather closely at their own historical experiences and structures to determine what policies can and have worked in periods of greatest prosperity.
And that indeed is the approach that the leaders of Europe, the United States and other leading world economies should be adopting to stabilise and ultimately grow their economies anytime soon as opposed to simply turning to broad economic paradigms.
Admittedly, if the world’s most powerful economies are unable to grow and develop, then, the chances of achieving global prosperity would be severely reduced. And if that happens, small and more generally fragile economies around the world would continue to struggle to keep their economies afloat.
That is the sad but plain truth!
(Dr. Brian Francis is a Senior Lecturer in the Department of Economics at the Cave Hill Campus in Bridgetown, Barbados of the University of the West Indies)