West to East Current Global Economic Trends Essay
- Length: 6 pages
- Sources: 6
- Subject: Economics
- Type: Essay
- Paper: #4371462
Excerpt from Essay :
West to East
Current Global Economic Trends and Their Lasting Effects: The Value Shift to the Eastern Hemisphere
Since the beginning of the Modern Age, when global commerce first became a reality, the Western Hemisphere has had a much greater share of the world's wealth and value capacity than the eastern half of the world. This was centered in Europe, at first, and could arguably said to persist even as far back as the Ancient Greeks and Egyptians, who were able -- along with successive nations and cultures living around the Mediterranean -- had many disparate trading partners with vastly different goods. The Mediterranean, however, actually served to connect the Eastern and Western worlds, and trade was still limited to those civilizations that actually bordered this interconnecting sea. It was Europe's spread into the New Worlds of what are now North and South America that led to Western domination of the global economy, and in many ways that marked the beginning of the economic Modern Age.
Though this presents an oversimplified view of a complex global history, the continued effects of Europe's spread throughout the Western Hemisphere can be easily seen today. The most Europeanized countries -- the United States, Canada, and even South Africa serve as examples -- are among the wealthiest along with many European countries, as these have had consistent and strong patterns of fairly balanced trade between them for centuries. Now, however, the economic tides are shifting, and one must question what the effects of this shift will be.
Growth is now occurring at a much faster rate in the Eastern half of the world than it is in the Western, both due to large trade imbalances with Western trading partners (notably the United States) and a rapid growth in the amount of trade occurring between countries in the Eastern Hemisphere (Hoge 2004; McRae 2008; McWarner 2009; Chaddha 2010). The long-term implications of thus shift are difficult to predict with any real specificity or certainty, but some trends and trajectories see quite clear. By reflecting on the history of the Western world's economic dominance and examining the reasons behind the economic shift to the East that is occurring right now, it seems likely that several nations in the Eastern half of the world will eventually emerge as the new superpowers, with Western countries as dependent on the East as the East has been of the West, and with many other countries in both hemispheres remaining largely impoverished and struggling to catch up with the developed world.
These things are all starting to happen now, as a matter of fact, and sometimes in not-too-subtle ways. The United States, which is exemplary of the Western world because it is, as of now (or relatively recently) the only real superpower and the country most thoroughly Westernized in terms of losing its manufacturing industry, is wholly dependent on many Asian countries for the provision of raw materials and finished goods, and on Middle Eastern countries for fossil fuels. There is a massive trade imbalance, with the United States (and certain other Western countries) importing far more than they export (Bloomberg 2005).
This imbalance leads to the rather dangerous phenomena of economic "coupling," where countries becomes do dependent on trade from another specific source that a disturbance in that source causes a rippling effect on the "coupled" countries (Schlesinger 2009). Thus, the tumble that the United States economy took several years ago was able to trigger a major hiccup in economies of its major trading partners, as it suddenly became less feasible for the United States to import as many goods as in previous years (McReae 2008; Schlesinger 2009). In addition, the United States is "coupled" to Eastern countries that provide an increasing proportion of consumer goods and certain services via telecommunications (Schlesinger 2009). Though the United States is in less relative danger from the failure in a single economy as it has multiple trading partners, this might not be the case in the long-term.
The negative effects of globalization that have left many countries impoverished and stripped of their natural resources, the destruction of many indigenous ways of life, and/or subjected to ongoing civil wars and infighting can definitely be seen happening now, and it is likely that these trends will continue into the new economic era, as well. Though the Eastern world's economy is picking up as a whole, there are several countries -- most notably India and China -- that are far outstripping their immediate neighbors (Bloomberg 2005). The Eastern Hemisphere is not advancing evenly, that is, just as the Western Hemisphere did not over the past several centuries. Instead, the dominant powers in the Western Hemisphere essentially forced their neighbors into economic partnerships.
This is most likely what will occur in the Eastern Hemisphere as well, and there is already some evidence that this is occurring. Though trade is occurring in large and ever-increasing amounts between many Asian countries, a majority of the goods in this trade are moving in one direction -- out of major powerhouses like China and India -- while cash is moving in the opposite direction (Hoge 2004; Bloomberg 2005; Chaddha 2010). For now, the more developed countries in the Eastern world still have fairly abundant natural resources as they have not been tapped to the same degree as the Western world's; eventually, increased production will start to make these resources scarce and there is little doubt that the powerful nations will look to the weaker nations as resource wells, again repeating the pattern that unfolded in the Western world. This promises to increase the problems of globalization.
Though the beginnings of certain trends can already be seen at work, leaping from these to truly long-term predictions is no small feat. There are many differences between the economic climate of today and that of the past four or five hundred years; resource allocation and economic opportunities facing the world now are much different than they were when brand new markets were being discovered, new trade routes being mapped, and untapped resources that could essentially be taken for free were plundered. The world now knows itself, so progress will take place in a different shape for the Eastern world, but this does not mean that certain general trends and threats will somehow cease to exist -- they just might be shaped differently.
As Prime Minister of Russia, Vladimir Putin already made a call for a shift in the world economic order, signaling his desire for the economic tidal change in favor of the East to be fully acknowledged, with Russia's part in the future progress of the world made explicitly known (Schlesinger 2009). Russia has already been a dominant power, and the world has seen quite recently how it used that power on its neighbors, and it seems likely that this country will again be an economic driver in the global system. Increased centralization of economic and thus military and political power could very easily lead to tense alliance formed among certain nations while relations grow more tepid and even tenser with other regions of the world. This centralization is certainly taking place, as China passed first Germany and then Japan to become the world's second largest economy in the matter of two short years (McRae 2008; Chaddha 2010). Russia isn't growing as quickly, but it started stronger and also has much friendlier relations with China than much of the world.
At the same time, this centralization of economic value and power that has come a part of the economic shift might be at the early stages of slowing somewhat, just as the shift itself might actually be slowing if just a little. Though China would like to maintain its large trade imbalances, the international community is clamoring more and more heavily (and possibly more effectively) for true trade balances among the countries of the global economic system, to sustain truly long-term growth for all concerned (Warner 2009; McRae 2008; Schlesinger 2009). If emerging Eastern economies heed these warnings and history's lessons, these lessons might not be repeated.
More likely, however, is that continued trade imbalances will create even greater "coupling" between countries that will eventually result in another major global crash, and it is also likely that the Eastern part of the world will emerge from this in a much stronger position relative to he Western powers of the current (and perhaps increasingly the bygone) era (Schlesinger 2009; Chaddha 2010). Insisting that consumers should be able to buy what and from whom they wish -- and there is, of course, a great deal of truth and principle in this assertion -- countries that have major export imbalances with other nations will continue to prosper as the consuming nations weaken, completing the shift n a way that creates imbalance and assures the eventual shift away from these countries again (Warner 2008). The global economic road forward, that is, is likely to be a bumpy one with some twists and turns…