Blog # 12-Asia Propels Recovery But Vulnerable to Euro Crisis

Lagarde, with the International Monetary Fund, traveled to Asia a few days ago where she met with numerous officials of the Asia. She discussed future plans with many nations such as Asia, Japan, Russia, and has future plans to visit with Canada and Latin America. Lagarde addressed the issues that the global economy will face and the issues that Europe will face alone. China being in a crisis not too long ago was bailed out by the International Monetary Fund, with this help they have been able to “propel,” and successful create jobs as well as bring a half a billion people out of poverty which is remarkable. Japan as well was faced with economic failure and had to be supported by the IMF in order to seek relief within their society. They too have seen great prosperity and have propelled out of their economic crisis. The social issue is that many Asian and European countries are still faced with economic failure and need to be supported by other countries to prevent a global economic failure. Russia is an example of a European country faced with economic failure and need to proceed with the proper procedures to try to get out of this economic crisis. Lagarde stated, “In our increasingly interconnected world, no country or region can go it alone. We are bound together by our economic success—or failure,” she warned. Many European countries have not found relief in this trying times when their economies are face with the continuing downward spiral of jobs, tastes and preferences, depreciating currencies, as well as inflation. As countries are faced with these issues it puts economic stress on surrounding countries that then spread to countries all over the globe. When If Japan and China don’t contribute to the cause of the IMF and try to help out their neighboring countries they too will be faced with the everlasting threat of economic distress. Although their economies are doing well now, this doesn’t leave out the factor that the loss of exports to these suffering European countries will not be felt in the near future.

Lagarde made a very impactful statement when she said that the world is increasingly interconnected. Just because one country is doing well doesn’t mean that they will continue with that prosperity if their neighboring countries are suffering with debt that they cannot get a hold of. Looking at the history of the economic crisis, Latin America was faced with adversity when its economy started to fail due to the financial crisis in Asia including Thailand. Decreases in jobs, income, and higher inflation in one country only mean the same effects in another if the problem is not dealt with. All of these issues are social issues within our world that are forever a nuisance. Once again, we can see how our economies have such a massive affect on our social beings. Our economies dictate how we spend and use our money which affects how everyone lives on a daily basis.

Link to Article: http://www.imf.org/external/pubs/ft/survey/so/2011/CAR111111A.htm