NEW CHAMPIONS RESOLUTIONS TO FINANCIAL CRISIS
TARIQ AHMED SAEEDI, email@example.com
Oct 13 - 19, 2008
In a recently concluded annual meeting of new champions 2008 of World Economic Forum, many participants recognized Asia as next economic growth laden continent. With US$ 2 trillion foreign reserves, particularly China was focused buzzword. However, it was clarified simultaneously that China's economic wealth did not guarantee its economic hegemony over the globe. Yet anxiety in global financial indices makes one thing definite that leadership has started shifting and process of economic power abdication is slyly unfolding its shape. And, sooner than later, world will witness anew economic world order to be ruled overtly by champions who strategically hush up their business identities in host countries.
New champions meeting of WEF is an annual feature and organized separately from WEF annual meeting to establish podium for cooperative leadership. An independent international organization, WEF strives to motivate state executives, young enterprisers, and politicians to come forward and brainstorm resolutions for better global, regional, and industrial outlooks. Although it is difficult to ascertain specific successful global repercussions of this get together, at least companies from all over the world have been primary beneficiaries by building corporate network during dialectics. That is why every year thousands of participants throng the forum to exchange science of economics with each other.
With participation of Pakistani representatives of House of Habib, Dawood Group, HBL, MNAs, two day annual meeting of new champions, held in Tianjin, China end of September, witnessed around 1400 participants from 80 nations. Over 350 different corporate participants, 25 technologists, 250 young global leaders, and 60 scientists flanked with politicians and mayors during the meeting.
It was not known whether the forum was helpful in aligning capital for Pakistan, but as this platform was attended by many corporate executives, surely it would have registered representation that may help rapport building. Local companies in individuality must definitely have gained access to business leads. While media reported favorable response of foreigners towards the country, no concrete consequence was effectuated as a result of partially state sponsored entourage.
Neither any investment was pledged nor did foreign company express its intention of market entry. As said, perhaps, only goodwill gesture to nation was shown during sessions.
New champions meeting is not an event as mega as WEF, but diversity of mindsets and participating opinions makes it big. Leaders of nations and state heads attend WEF and basically this attendance differentiates it from any other world conference.
The discussion in two day meeting revolved around current global financial crisis and predicted prospects of turnarounds of economies. Financial pundits attended the meeting dubbed in unanimity recent global crisis as transformation of globalized age. They raised their concerns about greatest challenge posed by the crisis to global economic growth. Faster growing economies are urged to move forward to compensate liquidity crunch in global financial market, invest trust in developing economies, and develop alternative sources to proscribe freefall of financial system.
Chiefly distrust unravels episode of financial mayhem across the world. Greatly debilitating financial structure of USA, EU, Britain, etc., the far reaching financial turmoil instigates reluctance of investors. Since banks are disgruntling in lending to each other, liquidity squeeze is frighteningly brewing. Further aggravated by capital outflows, the crisis is worsening, pushing state money for rescue of sinking financial indices. The root causes are numerous, but main driving agent was born ever since USA mortgage market expanded excessively its public exposure. Indiscriminate sanctions of mortgages on concessionary interest rates (sub prime mortgages) increased ratio of bad debts or non performing loans. This notion supports the view that epicenter of global financial crisis was USA.
Baseless is an argument that Pakistan can swerve off financial disturbance implications as the national economy-though assumingly unlinked-has evident linkage with global financial system, it can not easily save its skin from contagious effects. Presumably rapid flight of portfolio investments from the country was a first symptom of this effect. Despite political uncertainty accounted for the outflows, world situation could not be overlooked. It is worthwhile to recall that investment exposure to developing economies was catching its pace till last few years.
Along with discussing negative aspects of recent turmoil, champions meeting brought also under discussion possible positive ramifications of transformational process. The participants believe financial crisis will give way to emerging business leaders like India and China. New corporations will emerge on the scene to take the lead. Both economies have distinctions of large consumer market and capital enormity.
Inflation has become real world issue and maintaining balance between economic growth and inflation has posed serious challenge alike to small and big economies. For developing economy the loss of misbalance could be irrevocable. And it is drastically affected with spiral of inflation. As far as Pakistan is concerned this exacts high management skills. As food inflation peaks to historical level of 25 percent and risk of slowing economic growth is just ahead economic managers have entered in to skill-examination period. They have to control rising cost of import as well as growth retreat. The forum recommends economic growth driven by domestic consumption, investment, and exports.
While the forum boasted of its efforts to create community that has concern for developing and improving state of the world, wannabe global economic leaders were quizzed during entire long hauled two day session. Innovative ideas or multilateral thinking- mainly for which new champions meeting embarked on-for economies susceptible to financial crisis slipped off discussion.