Governments all over the world are finding it difficult to deliver on promises made to their electorate due to soaring oil prices and slowing global economic growth. Indeed, economic conditions have changed since last year and it is becoming harder to fulfil all the promises made to working families, entrepreneurs, corporations, local governments, meet the infrastructure needs of the future generations and save the planet.

We have had a great run of economic growth since the Asia credit crisis and the burst of the Internet bubble. We believed that this time we would be safe from recessions; Alan Greenspan, former chairman of the US Federal Reserve, would see to it. Even now, voices rise to claim that we will be alright; the increasing consumerism of China and India is continuing to pull the train of the world economy. We have shifted our adoration toward new idols.

If this could only be true. But history shows that it is unlikely to be the case. In the last 100 years alone, a chain of economic crashes shine vividly in our mind as reminders of caution, to name just a few: 1929, 1939, 1973, 1979, 1989, 1990 in Japan, 1998, 2000. Booms regularly end in busts, happy times end in tears.

Many things can go wrong that have not yet been factored into our forecasts: the calamities that are afflicting China, for example, could end up igniting inflation and depressing output; the rising cost of food in the less developed inland areas of China and across the rest of Asia could trigger social unrest of a grand scale; the shortage of drinkable water could result in increased public spending and even border conflicts in the interest of gaining access to water.

Every nation needs to think outside the box. The degree of interconnectedness of our worldwide economic and financial systems, our reliance on overseas markets and overseas manufacturing capacity, our dependency on international capital markets, to which China is a major contributor, make it illusory to believe that we can be shielded from booms and busts. No intellectual model of reality can capture all relevant factors, including what Nassim Nicholas Taleb calls "Black Swans": high-impact, hard-to-predict, and rare events beyond the realm of normal expectations.

What should governments do in that case? There is not much they can do. It’s up to us, simple citizens to guide these decisions. Are we going to fight for our individual share of a shrinking pie? Or are we going to act differently?

Not everything is bad about difficult times. These are times of personal growth, times of bonding in the face of adversity, time of self-restriction for the benefit of others. One feels naturally ashamed of splurging money and wasting scarce resources when it is clear that family, friends and neighbours will receive less for it. It is also a time where faith in the future becomes critical.

An enormous change is now required from all the nations of the world, and in particular from the developed nations. As it becomes apparent how interconnected the world is, we need to realise that humanity is one single, integrated nation, with multiple provinces. Each province has its own strengths, weaknesses, needs and aspirations. But all are part of one. Our solidarity and self restraint have to now be conducted for the benefit of all including those who do not speak the same language that we speak, do not share the same beliefs, have a different colour of skin or concepts of etiquette, who inhabit countries we have never visited.

Page 1 of 2 :: First | Last :: Prev | 1 2 | Next