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Monday, April 06, 2015

'Time US Leadership Woke Up To the New Economic Era'

Larry Summers:

Time US leadership woke up to new economic era: This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system. ... This failure of strategy and tactics was a long time coming, and it should lead to a comprehensive review of the US approach to global economics. ...
Largely because of resistance from the right, the US stands alone in the world in failing to approve the International Monetary Fund governance reforms that Washington itself pushed for in 2009. ...
Meanwhile, pressures from the left have led to pervasive restrictions on infrastructure projects financed through existing development banks, which consequently have receded as funders, even as many developing countries now see infrastructure finance as their principle external funding need.
With US commitments unhonoured and US-backed policies blocking the kinds of finance other countries want to provide or receive through the existing institutions, the way was clear for China to establish the Asian Infrastructure Investment Bank. There is room for argument about the tactical approach that should have been taken once the initiative was put forward. But the larger question now is one of strategy. ...
What is crucial is that the events of the past month will be seen by future historians not as the end of an era, but as a salutary wake up call.

    Posted by on Monday, April 6, 2015 at 01:24 AM in Economics, International Finance, Politics | Permalink  Comments (81)


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