 |
 |
China has already started actively raiding the maquilas along the Mexican border with the U.S., posing a stark challenge to that country and the rest of the developing world. Courtis points out that 25% of all foreign direct investment into emerging markets currently goes to China; India, by comparison, gets 1%. That concentration is one reason why Latin America is slipping deeper into poverty after showing signs of improvement until 1997, suggests Naím, who once served as Trade and Industry Minister for Venezuela. When he looks to his former homeland, he sees "a new vintage" of oil disruption that could show up elsewhere: "Venezuela could be the first of several oil-producing countries to disrupt supplies not because the government decides, but because there's a mess in the country." Naím sees a positive though vulnerable development in the professional economic team and determined policies of the new Brazilian President, Luiz Inácio Lula da Silva. But what matters is whether "financial markets give him the benefit of the doubt and restore the financing his country desperately needs." The worry for Brazil and much of the developing world, Naím says, is that "the world will be too busy."
Tyson, the top economic advisor in the first Clinton Administration, already senses distraction in Washington. "When we listed our reasons for deficit reduction back in 1993, at the top of the list was the need for the U.S. to have credibility, because it was so dependent on the rest of the world for capital," she says. It's now dependent on the world for more than that. With bigger U.S. deficits now "baked into the cake," Hormats says, "we could find fighting terrorism from a base of a $300 billion-plus deficit harder." Yet Bush could fairly marshal the same basic arguments for an economic stimulus from Washington as he has for the war on Iraq: If not the U.S., who? If not now, when?
A quick end to any war in Iraq would be a big help to the world economy, especially if Iraq's oil assets remain largely intact. But Naím warns that the war's full impact won't be felt until 2004. And global economic courage could be even more sensitive to another major terror attack. "At the end of the day, governments don't know how to change confidence," says Naím. Terrorists do. That well-established fact reminds us, as if we needed reminding, how much harder it is to build than destroy.
|
