The plenary session at the Economic Forum in Krynica
10.03.2010
MARR as the organiser of the plenary session at the 19th Economic Forum. 11th September 2009 – “The world after the Crisis. New economic deal”.
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Participants in the discussion organised by the Malopolska Regional Development Agency included: Edmund Phelps, Nobel Prize winner; Peter Schliff, economist; Francis Bailly; European Global Accounts, GE International; Wolfgang Clement, President of the EU-Russia Forum; Jacek Rostowski, the Polish Minister of Finance, and Krzysztof Rybiński, economist.
The globally renowned economist discussed the crisis and the future of macroeconomics. According to professor Phelps, what we will see in 20-30 years is a relative decrease of the American economy in relation to the global economy. “I think, however, that the USA will keep providing new ideas and innovative solutions to the world economy,” the Nobel Prize winner said. He also emphasised the fact that Eastern Europe has great capability to keep up with the developed countries.
Peter Schiff, one of the few economists to have predicted the current crisis, said “I think that the US dollar will cease to be the reserve currency, well before 2030”. In his opinion the USA is now borrowing billions, trillions of dollars to keep up with consumption. “If Barack Obama’s administration continues the policy known in Poland from the period before the collapse of the Soviet Union – a centrally planned policy, state interference in the free market – and if we keep going in this direction, then I don’t know how the US is going to look in 20 years. Maybe they will become a Hispanic country,” Schiff warned.
Francis Bailly emphasised the three most important, in his opinion, world challenges: ecological energy, health protection and change of business ethics. Wolfgang Clement said that changing social systems will be of crucial importance as demographic changes are very serious. “Today, we have pension systems designed for people with an average life span of 70 years, but this span has now been stretched by over 10 years. The results – a growing number of pensioners – are appearing only now” – in his opinion, this is the biggest challenge.
According to Jacek Rostowski, the Polish Minister of Finance, democracy will be an important factor supporting economy. We are now observing a rapid economic growth in China, but according to Minister Rostowski, in a few years it will turn out that only democracies are economically effective.
Krzysztof Rybiński, an economist, expects a successful end to the fight against the crisis, although he says that it will not be easy. In his opinion, there is chance that government interventions will be successful, which means that the world will go out of the recession without a great inflation.
Session participants forecast that the importance of American economy will diminish in the next 20 years. In their opinion, the USA will be threatened by China and Russia, as their currencies will grow in importance. Some countries have been criticised for excessive protectionism, which means that public money is being frittered away.