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BW Businessworld

Cooperate For Growth

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Michael Spence received the Nobel Prize in economic sciences in 2001. In The Next Convergence, he envisions the future of economic growth in a multispeed world and the convergence between the developed and developing worlds — a trend the author says is distinguished from the trend of divergence in the past, between countries whose economies began growing with the industrial revolution and experienced growth following World War II and the rest.

The book has four parts. The first is about emerging economies, where Spence gives interesting examples such as how South Korea in the 1970s and 1980s pursued an unpopular policy — encouraging technological giants such as Samsung, while abandoning traditional manufacturing as a growth engine. The next three parts raise difficult questions on growth and discusses the evolution of the global economy in its current state, including the implications of the recent financial crisis. The author boldly takes on political systems and discusses climate change initiatives and growth challenges for developing and developed countries.
That said, Spence refrains from being prescriptive, pushing the book closer to being a work of economic history than a volume for policy mandarins. Some bits are puzzling, though. For instance, the author chooses to gloss over the social cost of growth in China. But he ends on an optimistic note on how global cooperation is critical to ensure a stable future for the world.

(This story was published in Businessworld Issue Dated 21-11-2011)