The global economy is emerging from the financial crisis as a patient
might emerge from a sickness, with some signs of recovery but other causes
for concern. This week, the patient received comprehensive
health evaluations from the World Economic Forum and the World Bank. The prognosis is rather gloomy, particularly for
WEF warns that a world racked by economic disparities and weak global
governance--and "in no position to face ... new shocks"--confronts a
litany of risks including currency and commodity volatility, growing
pension liabilities, and fiscal crises stemming from the tension
between increasingly wealthy and influential emerging economies and
debt-saddled advanced economies. The report adds that a "rapidly rising
global population and growing prosperity are putting unsustainable
pressures on resources," with demand for water, food, and energy
expected to rise by 30 to 50 percent over the next two decades.
World Bank, meanwhile, predicts that "high-income" countries like the
U.S. will grow by under three percent through 2012 while developing
countries will grow at more than double that rate, though they face
risks like tense European financial markets and rising food prices.
Overall, the report indicates that global economic growth will slow
down in 2011.