World system moves towards new order: Singapore official

China View (Link) (September 10, 2009)

The global economic situation appears to be no longer so dire, as with any major shock to the system, there will be profound structural changes that will shift the equilibrium towards a "new world order," a Singapore official said on Thursday.

The economic situation has somewhat stabilized these two quarters, which thanks to the concerted and decisive efforts of many governments and central banks, said Lim Hwee Hua, Singapore's Minister in Prime Minister's Office, Second Minister for Finance and Transport.

Speaking here at a forum dinner, She said that three trends have already begun to take shape towards a new world order, namely rebalancing of the global economy, increased domestic protectionist pressure in many countries, and "global green new deal."

She said that as many economists have observed, a "delicate rebalancing act" of international trade flows would be required for a global recovery.

She said that consumers in the United States and Europe are likely to save more and spend less. On the other hand, Asia, and in particular China, would have to boost domestic and intra-regional consumption so as to reduce their reliance on Western export markets.

"With rising affluence and rapid urbanization, Asia will offer new opportunities for growth." She said, adding that the U.S. dominance will likely be slowly but surely balanced against new powers such as the Brazil, Russia, India and China in a multi-polar world.

She also noted that there have been increasing domestic protectionist pressure faced by many governments since the downturn.

She said that at the G-20 meeting last November, world leaders collectively pledged to promote global trade and to reject protectionism. While this commitment is encouraging, such consensus can in fact be quite fragile and be vulnerable to domestic pressures if the recession is prolonged.

According to Lim, the third trend is the shift towards a more sustainable, low-carbon economy.

China, the United States and South Korea together will be spending almost 400 billion U.S. dollars over the next five to ten years on environmental protection, energy efficiency, transport and water solutions.

"Apart from contributing towards efforts at more sustainable economic progress, these massive investments will also create millions of green-collar jobs and spur business opportunities in these fields," she said.