As China, and to a lesser extent India and Latin America, continue to flex their muscles, the American financial debacle is very likely to hasten the demise of the unipolar world that rose from the ashes of the Cold War. However refuseniks of unfettered capitalism elsewhere should refrain from rejoicing too soon. They should instead keep an eye on the response of their local political, business and opinion leaders.
Wall Street’s meltdown has clearly exposed the flaws and fallacies of the anti-regulatory ideology. Ironically, it could also provide a lifeline for the aid industrialists from the International Monetary Fund (IMF) and the World Bank (WB) whose “expertise” has never been so widely the source of contempt, with the exception of few countries like Mauritius, where the WB has even been welcomed to set up office.
Leaders who invariably outsource their thinking unwittingly reveal their incompetence. Alternatively, the words, however presumptuous, of Singapore's Lee Kuan Yew aired on CNN – I am not following any prescription given to me by any theoretician … I work from first principles, what will get me there – typically underpin the leadership behind any iconic country, business or institution for that matter.
To put it bluntly, if a country is really willing to cope with global capitalism, neither the IMF/WB drivel nor any other “adviser” will help. The best consultants may be required for technical assistance, but never for strategy development or a turn around. Vision, foresight and capacity to implement regularly updated policies “will get us there”. Sound macroeconomics (monetary stability and fiscal discipline) are key but without smart microeconomics (synergy between households, businesses and markets) to complement, everything is nothing.
Toxic policies driven by crony capitalism and greed merely inflate bubbles that are bound to burst. Capitalism itself is not the problem but, left unchecked, its excesses can be devastatingly contagious.
