This week, Project Syndicate catches up with Jim O’Neill, Chair of Chatham House and a former chairman of Goldman Sachs Asset Management and UK Treasury Minister.
Project Syndicate: At the end of last year, you named US President Donald Trump’s unpredictability (including his propensity to lie to prevent stock markets from falling) and the possibility of a Chinese growth slowdown (especially significantly weaker consumption) as two key sources of risk for emerging economies. Now that the COVID-19 crisis has highlighted – and intensified – both of these risks, how would you revise your outlook for emerging markets for 2020? What actions should these economies take to boost their resilience in the face of the current crisis?
Jim O’Neill: I think that any outlook for any part of the world economy, including so-called emerging markets, depends on progress in the fight against COVID-19, especially the rapid development and deployment of antigen and antibody tests, the introduction of contact tracing (so that we can put blunt social-distancing behind us), and ultimately a vaccine or cure. Only then can some kind of economic recovery occur, and the damage to emerging economies be limited.
That means that the most crucial measures will be taken not just by these countries, but by all of the G20 economies: their leaders must agree to finance the required efforts – research and development of diagnostics, therapeutics, and a vaccine, as well as the implementation of contact tracing. They must also contribute to expanding the financing facilities of the World Bank and the International Monetary Fund.
In assessing emerging-market countries’ prospects, one should also watch whether Asian economies that appear to have gotten COVID-19 under control – especially China – show continued evidence of recovery. If they do, they might continue to perform better than economies elsewhere in the world, as they have since early March.
We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are O'Neill's picks:
by Gregory Zuckerman
I especially enjoyed this book, not least because Simons’ obsession with financial markets appeared to begin with the currency markets, which is where my own professional career developed. Zuckerman’s interesting perspective on some of the great periods of foreign-exchange madness made me a bit sentimental. And, of course, reading about the journey of a remarkably successful investor is exciting, because, as many don’t seem to realize, achieving such success is extremely difficult.
by Hans Rosling with Ola Rosling and Anna Rosling Rönnlund
I actually read this before it was published in 2018, partly because I had the honor of reviewing it for Nature magazine, which I had gotten to know through my work on AMR. It is a very uplifting book, which highlights the progress humankind has made. It is a great read during this stressful time. In fact, I will undoubtedly reread it at one point during the coming weeks of lockdown.
by Jeanine Cummins
This is a moving work of fiction, based on the very real and difficult journey Latin migrants take through Mexico to the US, which includes travel on the infamous Mexican freight trains, known as la bestia. The story is equal parts gripping and horrifying, with most of the protagonist’s family being brutally executed by a Mexican drug cartel. Like one of the reviewers, I couldn’t put it down.
From the PS Archive
O’Neill argued that US attempts to kneecap the Chinese economy are both misguided and potentially self-defeating. Read more.
O’Neill argued that stubbornly low corporate investment justifies policy intervention by Western governments. Read more.
Around the web
In a four-episode series for BBC Radio 4, O’Neill examines the prospects of the so-called MINT economies (Mexico, Indonesia, Nigeria, and Turkey). Listen to the podcasts.
In a commentary for Chatham House, O’Neill explores what lessons can be learned from the COVID-19 crisis to create a better social and economic model. Read the article.