WE ARE ON THE road to recovery, Dr Warren Jestin, senior vice-president and chief economist at Scotia Economics in Canada, is convinced.Jestin told some of Scotia’s customers and potential clients yesterday that the world economy needed to adjust to the “new normal”.“We are not an economic forecasting group that believes that the world is poised for a double dip. We think that there are ample reasons to expect that growth will continue.
New direction
“But the road to recovery isn’t taking us back to where we were before the recession began. There are some very, very fundamental changes that are going on right now. “[This] is in a way a challenge, but also of enormous opportunity, because every area that we can point to that we will see challenge and perhaps crisis opens up an opportunity for business or a new way of doing things,” Jestin said at a breakfast business forum at Hilton Barbados.He said 2011 was expected to be a year of modest global growth, but that the United States was likely to more quickly climb the growth trajectory, even though the epicentre of the world financial and economic crisis was located there.“The big difference between the United States and Europe and Japan is that the United States would probably regain much of what was lost in the recession this year. But in Europe and in Japan it’s going to be years . . . . And Canada, which seems to have been doing better than the United States, same story as the United States.
[It will] get back what was lost during the recession this year,” Jestin said.He pointed out that China, India and Brazil were “very, very strong” and were outperforming the traditional industrial nations in good and bad economic times by a wide margin. For instance, he said, even though growth in China had fallen by nine per cent last year, it was not enough to drive it into recession compared to negative growth in Russia, Mexico, Canada, the United States, Japan and the Euro zone.“If you believe China is on the edge of a big decline in overall economic performance, then you will be a little happier if you are a consumer of energy or industrial commodities, although if China does go into a big slide, the global environment would probably actually go into the double dip because China has become the major engine of global growth,” the economist added.
Small businesses
Jestin indicated that small and medium entities that were skills-focused, adaptable and which used new technologies were likely to be more successful than big businesses in the future.“Think of this period that we are going into right now [as] one where we move from recovery to renewed expansion, but the pace of growth that we used to think was normal back in 2004, 2005, 2006 is not what would be considered normal,” Jestin added. (SR)
