I also can say got 2 senario , market will either go up or go down. Worst minister I ever see.
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One scenario, two outcomes
Tony Tan: Future may be either robust or rough, depending on how issues are handled
By William Choong, Senior Writer
GENEVA: The past 25 years have seen good economic growth but the coming decades may be a rough ride if policy challenges facing the global economy are not managed well, Dr Tony Tan said at a conference in Geneva yesterday.
Sketching a sombre economic picture, the deputy chairman and executive director of the Government of Singapore Investment Corporation said there was a growing potential for more 'severe economic dislocations' that could lead to stress and conflicts.
RELATED LINKS
CLICK FOR DR TAN'S FULL SPEECH
Speaking to 400 participants at Global Strategic Review (GSR) 2008, a conference organised by the London-based International Institute for Strategic Studies, Dr Tan noted that global macroeconomic conditions in the past 25 years had been benign, thanks to falling inflation and rising economic growth.
Major political transitions - such as the fall of communism, the integration of Eastern Europe with the West, and the formation of the World Trade Organisation - had reinforced such positive trends.
Looking to the future, Dr Tan presented a near-term scenario and two possible outcomes, each dependent on how global policymakers manage a slew of challenges.
In the near term, he said debt deflation and de-leveraging in the United States and other major developed economies would exert downward pressure on growth in many economies.
'Policy responses so far have tried to minimise the likelihood of a Japan-like deflationary spiral, but the adjustment could take a couple of years and be very painful,' said Dr Tan.
At the same time, growth in emerging markets will remain relatively robust. This has several implications, he added. Global growth will become more dependent on emerging economies, which will displace the G-7 as the world's largest economies in the next 20 to 30 years.
Economic growth will lead to the rapid expansion of the 'middle class' in these countries that will demand more goods and services. This will likely put upward pressure on commodity prices and strain the world's store of natural resources and the environment.
If policymakers manage such 'issues and tensions' effectively, Dr Tan noted, a benign scenario could emerge. This would be marked by robust economic growth, led by emerging markets, and moderate inflation.
On the flip side, if major policy challenges are not addressed, a deeper debt deflation and de-leveraging in the US and major European economies could weaken the global financial system further, leading to 'Japan-like' stagnation, Dr Tan noted.
'A vicious deflationary cycle with falling house prices, failing financial institutions and weaker growth could then ensue. With weaker employment and income growth, protectionism could rise medium term, especially in the US and Europe,' he said.
Such a scenario is now more likely than ever, he added, with a growing majority in developed countries disenchanted with stagnating real wages and growing income inequality.
Another significant risk would be the return of inflation, said Dr Tan.
Global tensions could rise as countries compete for natural resources, especially food, energy and water, he added.
Countries like Venezuela, Iran or Russia could use the supply of energy as diplomatic weapons, as the world has seen 'vividly in recent weeks', he said.
Unless international frameworks for cooperation and global management of food, energy and water resources are developed, the potential for conflict and instability will rise, Dr Tan warned.
The GSR is an annual meeting held to discuss pressing geopolitical issues. This year, participants - who included World Bank president Robert Zoellick and Iraqi Foreign Minister Hoshyar Zebari - discussed issues such as Russia's re-emergence, climate change and the revolution in military affairs.
[email protected]
======
One scenario, two outcomes
Tony Tan: Future may be either robust or rough, depending on how issues are handled
By William Choong, Senior Writer
GENEVA: The past 25 years have seen good economic growth but the coming decades may be a rough ride if policy challenges facing the global economy are not managed well, Dr Tony Tan said at a conference in Geneva yesterday.
Sketching a sombre economic picture, the deputy chairman and executive director of the Government of Singapore Investment Corporation said there was a growing potential for more 'severe economic dislocations' that could lead to stress and conflicts.
RELATED LINKS
CLICK FOR DR TAN'S FULL SPEECH
Speaking to 400 participants at Global Strategic Review (GSR) 2008, a conference organised by the London-based International Institute for Strategic Studies, Dr Tan noted that global macroeconomic conditions in the past 25 years had been benign, thanks to falling inflation and rising economic growth.
Major political transitions - such as the fall of communism, the integration of Eastern Europe with the West, and the formation of the World Trade Organisation - had reinforced such positive trends.
Looking to the future, Dr Tan presented a near-term scenario and two possible outcomes, each dependent on how global policymakers manage a slew of challenges.
In the near term, he said debt deflation and de-leveraging in the United States and other major developed economies would exert downward pressure on growth in many economies.
'Policy responses so far have tried to minimise the likelihood of a Japan-like deflationary spiral, but the adjustment could take a couple of years and be very painful,' said Dr Tan.
At the same time, growth in emerging markets will remain relatively robust. This has several implications, he added. Global growth will become more dependent on emerging economies, which will displace the G-7 as the world's largest economies in the next 20 to 30 years.
Economic growth will lead to the rapid expansion of the 'middle class' in these countries that will demand more goods and services. This will likely put upward pressure on commodity prices and strain the world's store of natural resources and the environment.
If policymakers manage such 'issues and tensions' effectively, Dr Tan noted, a benign scenario could emerge. This would be marked by robust economic growth, led by emerging markets, and moderate inflation.
On the flip side, if major policy challenges are not addressed, a deeper debt deflation and de-leveraging in the US and major European economies could weaken the global financial system further, leading to 'Japan-like' stagnation, Dr Tan noted.
'A vicious deflationary cycle with falling house prices, failing financial institutions and weaker growth could then ensue. With weaker employment and income growth, protectionism could rise medium term, especially in the US and Europe,' he said.
Such a scenario is now more likely than ever, he added, with a growing majority in developed countries disenchanted with stagnating real wages and growing income inequality.
Another significant risk would be the return of inflation, said Dr Tan.
Global tensions could rise as countries compete for natural resources, especially food, energy and water, he added.
Countries like Venezuela, Iran or Russia could use the supply of energy as diplomatic weapons, as the world has seen 'vividly in recent weeks', he said.
Unless international frameworks for cooperation and global management of food, energy and water resources are developed, the potential for conflict and instability will rise, Dr Tan warned.
The GSR is an annual meeting held to discuss pressing geopolitical issues. This year, participants - who included World Bank president Robert Zoellick and Iraqi Foreign Minister Hoshyar Zebari - discussed issues such as Russia's re-emergence, climate change and the revolution in military affairs.
[email protected]
:o 
