US economic power is part of a healthier global order



It is one of the most oft-used clichés of globalisation: "When America sneezes, the world catches a cold." Amid the 2008-2009 American financial crisis and recession, commentators and pundits dusted off that favourite saying as global markets felt the pain of America's storm.

But the 2008 financial crisis was no mere sneeze. It was a heart attack. America's financial system went into cardiac arrest, ultimately shocked back to life by drastic mega-billion dollar government intervention. So, if an American sneeze elicits a cold elsewhere, then a heart attack surely ought to have had devastating consequences for the world economy, especially for less developed markets. It didn't.

From China to Brazil to South Africa to India and most of the world's leading emerging economies, America's crisis only briefly halted their steady drumbeat of growth. Both China and India re back to near 10 per cent growth, and the emerging markets machine continues to rumble forward, now accounting for nearly half of global GDP.

Indeed, as the author Fareed Zakaria rightly pointed out in a recently updated version of his celebrated book, The Post-American World, it was inaccurate to call the crisis that began when the US financial system nearly collapsed in 2008 a "global" one: "For China, India, Brazil and Indonesia, this has not been much of a crisis. It has resulted in an acceleration of the power shift," Zakaria writes.

He notes that this story is not about American decline, "but the rise of the rest". He is right. On US campuses and in newspapers, there is too much hand-wringing about the "decline of America". While the economy is bruised, it's still worth remembering that the US economy is nearly three times the size of its nearest competitor, China. It boasts states with economies the size of many countries. If California were a country, it would have the ninth largest economy in the world. At least five other US states - New York, Texas, Florida, Illinois and Pennsylvania - have economies that would rank them in the top 20 of countries.

Let's take this even a step further. There is much justifiable talk of the rise of Turkey these days. Turkey's entire economy is roughly equivalent to the US defence budget. Indeed, the US defence budget itself is larger than the entire economies of all but 18 or so countries around the world. This is a powerful economic machine.

But, what if the US economy really does sneeze, and wheeze, and limp along with a bad head cold rather than a dramatic heart attack? What if America enters a Japan-style "lost decade" of sluggish growth and heavy indebtedness? Or put more clearly: what happens when the world's largest economy, one that accounts for a little more than a quarter of global GDP, stumbles for a decade?

This is not an unreasonable scenario. Lawrence Summers, the former head of President Barack Obama's Council of Economic Advisers, wrote in the Financial Times this month that America is already "halfway to a lost economic decade." Carmen Reinhart, a leading economist, suggested in an interview with CNN that "I don't think the next six years look great." Mr Summers also mentioned the dreaded "J" word: Japan.

Few major economies want to hear the Japan comparison. Japan has just completed what might be called its second straight "lost decade". Japan's 1980s "cheap credit and over-priced asset party" ended with a stock and real estate crash and it has never fully recovered, limping and wheezing its way through the 1990s and on through the first decade of this millennium.

Thus, the world faces the prospect of America slipping quietly into a "lost decade" of sluggish growth - of America sneezing and wheezing and coughing, but not facing a crisis moment. What will this mean for the world?

Japan's growth throughout the 1970s and 1980s bolstered many of their Asian trading partners. Japan's demand was a boon. But Japan's lost decade in the 1990s did not stop the Asian tigers from rising. In some cases, countries such as South Korea and Taiwan even benefited from the Japanese slowdown, stealing away market share in key industries. The same may happen with an American "lost decade".

A World Bank report in late 2009 noted that Latin American countries - the most exposed to American contagion - did not feel severe effects from the American crisis. The same goes for other emerging markets. So, perhaps the world will shrug off a steady American economic decline over the next five years.

This is partly because the global economic pie is not a fixed size. As "the rest" rise, it grows. Thus, America controlled a quarter of the world's GDP in 1970 - roughly the same as today. But the pie is much bigger. Global GDP has tripled since 1970 and Asia today accounts for a quarter of global GDP. The pie is not only larger, but it is more balanced.

Will there even be a "lost decade" after all? American corporations are sitting on large piles of cash. The problems with the economy have as much (perhaps more) to do with business confidence as with fundamentals. That could change.

To be sure, the world is better off when America grows and produces and innovates. But if the declinists prove correct, then the cliché of "when American sneezes" will truly be tested once and for all. Or perhaps the world will be too busy to notice: emerging markets will be growing their middle classes, oil-rich Middle East states will be bolstering ties to Asia, and Chinese investments will flow across Africa and Latin America. And that sneezing $14 trillion (Dh51.4 trillion) economy would still be the envy of most countries around the world.

We can put the cliché to rest: an American sneeze might not breed a global cold after all.

Afshin Molavi is a senior fellow and co-director of the World Economic Roundtable at the New America Foundation, a non-partisan think tank in Washington DC

Call of Duty: Black Ops 6

Developer: Treyarch, Raven Software
Publisher:  Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5

Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
Rating: 4/5
Singham Again

Director: Rohit Shetty

Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone

Rating: 3/5

Kill%20Bill%20Volume%201
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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

COMPANY%20PROFILE%20
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Company%20profile
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
Rating: 2/5
 
UAE central contracts

Full time contracts

Rohan Mustafa, Ahmed Raza, Mohammed Usman, Chirag Suri, Mohammed Boota, Sultan Ahmed, Zahoor Khan, Junaid Siddique, Waheed Ahmed, Zawar Farid

Part time contracts

Aryan Lakra, Ansh Tandon, Karthik Meiyappan, Rahul Bhatia, Alishan Sharafu, CP Rizwaan, Basil Hameed, Matiullah, Fahad Nawaz, Sanchit Sharma

The specs

Engine: 2.0-litre 4-cylturbo

Transmission: seven-speed DSG automatic

Power: 242bhp

Torque: 370Nm

Price: Dh136,814

Pupils in Abu Dhabi are learning the importance of being active, eating well and leading a healthy lifestyle now and throughout adulthood, thanks to a newly launched programme 'Healthy Lifestyle'.

As part of the Healthy Lifestyle programme, specially trained coaches from City Football Schools, along with Healthpoint physicians have visited schools throughout Abu Dhabi to give fun and interactive lessons on working out regularly, making the right food choices, getting enough sleep and staying hydrated, just like their favourite footballers.

Organised by Manchester City FC and Healthpoint, Manchester City FC’s regional healthcare partner and part of Mubadala’s healthcare network, the ‘Healthy Lifestyle’ programme will visit 15 schools, meeting around 1,000 youngsters over the next five months.

Designed to give pupils all the information they need to improve their diet and fitness habits at home, at school and as they grow up, coaches from City Football Schools will work alongside teachers to lead the youngsters through a series of fun, creative and educational classes as well as activities, including playing football and other games.

Dr Mai Ahmed Al Jaber, head of public health at Healthpoint, said: “The programme has different aspects - diet, exercise, sleep and mental well-being. By having a focus on each of those and delivering information in a way that children can absorb easily it can help to address childhood obesity."

MATCH INFO

Manchester City 1 Chelsea 0
De Bruyne (70')

Man of the Match: Kevin de Bruyne (Manchester City)

 

 

Disclaimer

Director: Alfonso Cuaron 

Stars: Cate Blanchett, Kevin Kline, Lesley Manville 

Rating: 4/5

COMPANY PROFILE

Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed 

Fund-raising tips for start-ups

Develop an innovative business concept

Have the ability to differentiate yourself from competitors

Put in place a business continuity plan after Covid-19

Prepare for the worst-case scenario (further lockdowns, long wait for a vaccine, etc.) 

Have enough cash to stay afloat for the next 12 to 18 months

Be creative and innovative to reduce expenses

Be prepared to use Covid-19 as an opportunity for your business

* Tips from Jassim Al Marzooqi and Walid Hanna

The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

Electoral College Victory

Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate. 

 

Popular Vote Tally

The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.

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Cricket World Cup League 2

UAE squad

Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind

Fixtures

Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE

Nayanthara: Beyond The Fairy Tale

Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni

Director: Amith Krishnan

Rating: 3.5/5

The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Power: 268bhp / 536bhp
Torque: 343Nm / 686Nm
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
On sale: Later this year
LIKELY TEAMS

South Africa
Faf du Plessis (captain), Dean Elgar, Aiden Markram, Hashim Amla, AB de Villiers, Quinton de Kock (wkt), Vernon Philander, Keshav Maharaj, Kagiso Rabada, Morne Morkel, Lungi Ngidi.

India (from)
Virat Kohli (captain), Murali Vijay, Lokesh Rahul, Cheteshwar Pujara, Rohit Sharma, Ajinkya Rahane, Hardik Pandya, Dinesh Karthik (wkt), Ravichandran Ashwin, Bhuvneshwar Kumar, Ishant Sharma, Mohammad Shami, Jasprit Bumrah.

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Dubai World Cup factbox

Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)

Most wins by a jockey: Jerry Bailey(4)

Most wins by an owner: Godolphin(9)

Most wins by a horse: Godolphin’s Thunder Snow(2)

Rooney's club record

At Everton Appearances: 77; Goals: 17

At Manchester United Appearances: 559; Goals: 253

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5