February 4, 2010
Stephen Sackur moderated this panel discussion. He initiated a very interesting talk about the future of capitalism, changes in geopolitics, the role of international institutes, and national political systems.
Hernando De Soto reiterated his view that the current crisis is the result of the abolishment of the basic principal of capitalism: openness of information about property rights. In his view, the derivatives market was the most dangerous financial invention, increasing risks in the economy.
Anders Aslund does not worry about the future of capitalism, as emerging countries are moving in the right direction. He believes that the crisis in Russia is forcing the country to return to more democratic development. Interestingly, the same trend is being observed in the US.
Tony Brenton mentioned that among the 20 richest countries in the world, 18 are democratic. Their economic success indicates that the democratic path is the most effective. The biggest problem in current international relations is that there are no institutions in the global security sphere.
Yasheng Huang noted that state capitalism can stimulate a high rate of economic growth but cannot guarantee increased productivity. Brazil has historically served as a good illustration of this thesis. The current rapid growth in China is different in nature, as it is accompanied by significant liberalization. Of course, China is not a fully democratic country now, but the trend is positive. India is another example of how a democratic country can grow rapidly. He does not think that a serious conflict between the US and China is possible. Rather, he thinks that problems may appear in relations between China and India.
Kishore Mahbubani stated that the US is not in absolute decline, but the relative share of the country’s GDP in global output is shrinking dramatically. The US is making the same mistake as the Soviet Union: it is spending too much money in the military sector. The West, in his view, is acting in a fundamentally dishonest fashion. For example, Asia is not represented in the IMF relative to its demographic and economic power, and the West is not showing a willingness to share power. However, he believes that Asia will remain open to the rest of the world, staying pragmatic and patient in its relations with the West.
James D. Wolfensohn also admits that the G7 is shrinking in relative terms. He made an appeal to think about Africa, which has a population of 2 bln. However, he is not optimistic about the future of this region.
Daniel Yergin noted the high interdependence between China and the US. He does not believe in a multi-polar world, but rather thinks that eventually the world will be separated into two superpowers and small, non-important countries.
Bobo Lo thinks that the US remains the biggest power in the world in almost all respects (technology, wealth and military strength). He agrees that the world is represented unfairly in international institutions.