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How slow is global GDP growth? Is the world on the edge of recession?
Well, we are limping into the second half of the year, and the IMF has downgraded its expectations of growth. I don’t think the downgrades for Europe and the U.S. were a big surprise, but I think the Asian and emerging markets downgrades raised a few eyebrows. We’re not in a global recession, which would technically be an average GDP growth rate of below 3 percent. But it’s going to be a close-run thing in 2013, I think.
Mario Draghi, the chief of the European Central Bank, has done a lot of good, hasn’t he?
Since Mr. Draghi first said he would do whatever it took to save the euro, markets have been rallying pretty strongly as you know. But we’ve been here before, Tom. Although Mr. Draghi’s plan is technically strong, it’s economically unsound. I think markets will rue this rally as they have previous ones.
You just wrote a book about emerging markets. How should we adapt to a booming Asia?
Asia will continue to expand very quickly, but I want to raise some controversial issues. I don’t think Asia is going to be the future in the way people assume. I think many countries, especially China, cannot repeat the performance of the last 10 years without root-and-branch political and institutional reform. This is key to whether China will rule the world. And I don’t think it will, to be honest.