How to Ascend after Declining?
The state of the global economy is now more troubled than what most pundits had predicted. The great recession of 2007-09 has left permanent scars and the global recovery has lost steam. In the industrialized world, the Eurozone is struggling to save its common currency and avert an even larger debt crisis. Across the Atlantic, although things are looking slightly better, the United States still faces damaged household balance sheets, depressed consumption, and persistent unemployment. In the developing world, the remarkable role that emerging markets have played as alternate engines of global growth is no longer certain. And this is truly worrisome because in the years that followed the recession, developing countries came to the global economy’s partial rescue, helping advanced economies from slipping into an even deeper recession.
In 2010 and 2011, developing countries grew 7.3 and 6 percent respectively, compared to the 3 and 1.6 percent growth of high-income countries, according to the World Bank’s latest Global Economic Prospects. Nevertheless, growth in several major developing countries like Brazil, China and India is significantly slower than earlier in the recovery, mainly reflecting a tightening of monetary policy to combat rising inflationary pressures but also the low-growth path in advanced economies. As a result, developing countries are now expected to grow only 5.4 percent this year.
You have embarked on a long train ride in Africa. The train is in bad shape, the ride is bumpy and breakdowns frequent. You wonder when you will arrive at destination or if you ever will. But after a tortuous first half of the trip, the train is starting to gain speed. There are still a number of unnecessary stops but the destination is now in sight and passengers are becoming upbeat. Just as the train is about to enter the station you are overtaken by three trains, which had been accelerating even faster.
After the Second World War, advanced economies began an ambitious process toward capital account liberalization, which prioritized the liberalization of trade, the maintenance of fixed exchange rates, and a commitment to current account convertibility.
The state-owned operator of Indonesia’s Tanjung Priok Port is taking major steps to decrease congestion at the country’s main gateway. The company, Pelindo II, recently announced it will increase storage fees at the port to discourage shippers from leaving containers there for long periods of time. It has also said it will install a new information technology system to better monitor and direct traffic at the port.
Sub-Saharan African countries bucked the slowdown in the global economy and grew at a robust pace in 2011 (
A troubling phenomenon is occurring in large, emerging economies: the gates are closing. Governments, skittish about global economic trends, are introducing new policies to limit imports and exports. The aim is to protect domestic industry in tough times, but the tools they are using threaten to make their economic problems worse.
A luxury liner, out on a peaceful vacation trip, encounters a small rock causing the huge vessel to sink. Chaos erupt and the captains abandon the ship, failing to manage the unfolding crisis and resulting in unnecessary deaths of passengers. One cannot help but compare this sad incident with the state of European economic affairs. As the 
We are used to thinking of landlocked countries as victims of geography. We worry that Ethiopia, Mali, Rwanda and Zimbabwe, among others, cannot benefit fully from flows of trade, tourism and knowledge. But do these countries use policies to improve connectivity and offset the handicap of location?
