Source: FP Romania

The Real Winner of the Crisis is G20Carnegie’s David Rothkopf explains to FP Romania’s Octavian Manea about the geo-strategic consequences of the global economic crisis.

What follows in the next decade? What do the current economic trends tell us about the future?

My sense is that in the next decade we are likely to see a number of concurrent trends. Asia, led by China and India, will lead the world in economic growth--although we will need to be careful of the kind of economic upheavals that often befall rapidly growing developing countries.  Not permanent reversals, but setbacks.  The West, and the US in particular, will see slower growth. The US will remain the world's leading economic power (and also the leading military power) but its strength relative to China and others will be somewhat less.  This may in turn trigger debate about which economic models are best suited to the new century--a debate that will become more furious as the world faces other shocks like we have been through in the past year shocks which will come because so little real reform will be taking place in global markets to avoid "next generation" crises associated with derivatives and other under-regulated global markets.

Which are the main geopolitical consequences of the global economic crisis? Which are the long term winners and the losers of the global crisis?

The U.S. has been setback by the crisis.  Europe too. Japan was already on its heels.  The BRICs have been the big winners.  But two of the BRICs, China and Russia, have seriously flawed political systems and require reform and face real internal tensions.  India is burdened by great internal poverty. Brazil too. And there are a number of big global security challenges such as Iran and the proliferation of weapons of mass destruction which will require US leadership whether people (in the US or elsewhere) like it or not.  So the real winner in the crisis is the G2, a newly central US-China partnership.  The replacement of the G8 by the G20 is another shift that suggests a new leadership group for the international community.

Is the European social welfare-oriented model more attractive today than the Anglo-Saxon model?

Personally, I think the anglo-saxon model needs to evolve or fall from grace.  Something that is more community oriented and accepts the role of government in key areas (and works to enhance the efficiency and effectiveness of governments rather than simply pushing back against them) is essential and so some model that is a little European and a little Asian (more Lee Kwan Yew than Hu Jintao though) seems likely to be embraced.

To what extent is the resurgence of the interventionist role of the state in the societies traditionally based on free markets, an enduring feature of the future economic landscape? Is it temporary or is it here to stay on the long term?

My sense is the return to "interventionism" is overstated.  The bigger issue is how reluctant national governments have been to create the international legal and institutional structures we need to manage transnational issues.  The tension between national governments and the need for effective supranational governance will be the central political-philosophical debate for the 21st century.

Could we speak in the context of the global crisis about some limitations (frontiers) of growth? Have we reached those frontiers especially in the West?

 I am skeptical that there are hard limitations on the frontiers of growth.  I believe in progress and the ability of people to rise to meet challenges that they have the courage to identify.  Are there massive social injustices in the systems we have especially in terms of the just distribution of wealth?  Yes.  Must they be addressed?  Yes.  Will they be?  Yes, but slowly, fitfully as they have been throughout history.  The bottom is rising, but the top is rising faster, much faster so we need to adjust to find a more equitable balance.

What kind of world will 2025 be?

The only thing I know about 2025 is that it will be more like today than we would hope. Change takes time.  It's only 15 years away.  How different is the world today from 1995?  A little in terms of technology and the rapid rise of emerging powers.  But most of the world is the same.  We need to perfect the systems we have rather than hope for magical transformation.