Gordon Brown: We need greater global cooperation – before it's too late
There's a danger we're already sowing the seeds of the next great financial crisis. We need better global coordination to address the biggest transformation of the world economy in history. In our interdependent world, only concerted action across continents can tackle these challenges.
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In the last 20 years, 2 billion men and women have joined the ranks of industrial producers, tripling the size of the world’s industrial economy. In the next 10 to 15 years, this revolution will be augmented by at least 2 billion people joining the ranks of the world’s middle-class, tripling its current numbers. So the recent shift in producer power will soon be matched by a coming shift in consumer power, and we will see and feel this transformation powering through our lives and shaping our fortunes with an irresistible force.Skip to next paragraph
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The world’s biggest market, for instance, will no longer be in America but in Asia, and it will grow to around 40 percent of all consumer spending, twice the size of the American market, and substantially bigger than the German market (4 percent) and the British market (3 percent).
So who will be the biggest beneficiaries of these changes? With the right opening up of trade, European and American brand names, with high value added, and technology-driven, niche and custom-built products and services, could be providing us with engines of growth and employment as demand for these products and services rises in Asia (as well as in other areas with increasing consumer power, like Brazil, Turkey, Indonesia, and parts of Africa).
Yet without enhanced international cooperation, the West will not be in the best position to take advantage of these changes. Indeed, unless we enshrine market access in a global agreement, we will lose out on some of the greatest economic opportunities for rising standards of living we have ever seen.
Without global agreement, everyone is at risk
And global coordination is necessary for other reasons, too. The world has been too ready to unlearn the lessons of the financial crisis, and there is a danger that we are sowing the seeds of the next financial crash. Without agreement on global financial standards — and currently, individual continents and even countries are going their own way – finance will be in a race to the bottom, with the good financial centers at risk of being undercut by the bad and the bad by the worst.
And, of course, if present trends continue, if markets remain closed to certain countries or operate randomly and in an unfettered way, the world will become structurally more unequal – India, China, Indonesia, Brazil, and Russia will see inequality grow, and Africa will become more isolated.