America and the world in turbulent times

Adrian WooldridgeFebruary 2009

Le Moniteur : 9th-22nd March 1815

The cannibal has escaped from his hideout.

The ogre of Corsica has landed on the gulf Juan.

The tiger arrived at Gap. His miserable adventure will end there, as a vagabond in the mountains.

The monster slept in Grenoble.

Bonaparte advances in great pace, but he will never enter Paris.

Napoleon will be in the city ramparts tomorrow.

The Emperor arrived at Fontainebleu.

His Imperial Majesty entered yesterday in the Tuileries Castle, among his faithful subjects.

Welcome to the White House

Afghanistan, Cuba, Iran, Iraq, Israel-Palestine,

North Korea, Pakistan, Sudan, Somalia,

Venezuela, Georgia

Source: IMF, World Bank, EIU

Globalisation explosion

0

2000

4000

6000

8000

10000

12000

1400019

50

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

World exports

World GDP

1950=100

Volvo: heavy truck orders, Europe:

Third quarter 2007: 41,970

Third quarter 2008: ?

Volvo: heavy truck orders, Europe:

Third quarter 2007: 41,970

Third quarter 2008: 115

Five nightmares

Three inevitable ones1. A larger public sector2. Missed opportunities

3. Mission creep

Two unknowns4. Bash the rich5. Geopolitics/

nationalism

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100

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300

Es

tim

ate

of

po

ten

tia

l ga

ins

in

glo

ba

l in

co

me

(U

S$

, bill

ion

)

Full liberalisation Likely Doha scenario/Central Doha scenario

World Bank

Carnegie

Estimates of potential world gains from Doha

Will they be enough to persuade governments to incur relevant costs?

A global world (1):

The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery on his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or trouble, in their perspective fruits and advantages.

A global world (2):

Most important of all [he] regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restriction and exclusions, which were to play the serpent to this paradise, were little more than the amusements in his daily newspaper.

“So inevitable, and yet so completely unforeseen.”

Alexis de Tocqueville on the French Revolution

Still going strongReal GDP, % change on

previous year

China in the driving seat

Changing global demand

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30

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2007 2025

W Europe N America Asia Lat Am

E Europe Middle East Africa

GDP at mkt exchange rates

US$ trn

America and the world in turbulent times

Adrian WooldridgeFebruary 2009