Fareed Zakaria on the current era of Globalization

Fareed Zakaria is an editor at Newsweek International magazine, he writes on Foreign Affairs. Some time ago I read a very nice article by him on the India Rising story.

He wrote in the article:

India's growth is messy, chaotic and largely unplanned. It is not top-down but bottom-up. It is happening not because of the government, but largely despite it. India does not have Beijing and Shanghai's gleaming infrastructure, and it does not have a government that rolls out the red carpet for foreign investment—no government in democratic India would have those kinds of powers anyway. But it has vast and growing numbers of entrepreneurs who want to make money. And somehow they find a way to do it, overcoming the obstacles, bypassing the bureaucracy. "The government sleeps at night and the economy grows," says Gurcharan Das, former CEO of Procter Gamble in India.

I feel the problem with the government is that there is no competition. Anyways I digress....

The reason for the post is yet another article I read today and this time Fareed talks about how despite of the current wars fought by the US and Israel, the world economy is still growing and how Bush is pre-occupied by Iran, Iraq, Afghanistan, North Korea, Israel, Lebanon...... and what are the problems ahead.

The highlight of the article is where he explains how the Markets are smart:

Markets are supposed to be smart. What are they telling us? That the current era of globalization is more powerful, widespread and resilient than many people realize. Today we are living through something practically unique—simultaneous growth worldwide. The United States, Europe and Japan are all doing well, but so are China, India, Brazil, Turkey and a whole slew of former Third World countries. Their rise is powering the new global order. Emerging markets now account for 30 percent of the world economy and for 50 percent of global growth last year. One important benefit has been that advanced industrial nations have maintained extremely low interest rates for almost two decades, enabling some countries—such as the United States—to grow faster than many experts predicted. This could not have happened without two global deflation machines, China and India, which keep prices low in goods and services, respectively.

Quite true, as the world is flattening and globalization will become a norm, the competition and inequalities in the world become will also become more prominent yet some countries/economies will continue to thrive irrespective of the neighborhood bombs and border wars. As Fareed writes in his article "There is no way to turn off this global economy, nor should one try."