Over the last two years the international financial crisis has deepened into a crisis of the real economy. With the collapse of demand in the US and other markets in the North, the export-oriented economy – the ‘globalized’ model that has reigned for the past 30 years – has begun to unravel.
This has brought stagnation and recession to the model’s most successful examples: the economies of East Asia. Singapore’s economy is expected to have contracted by two per cent in 2009; South Korea, the ‘Asian Tiger’ par excellence, to register zero growth. Japan has not snapped out of nearly two decades of stagnation. In China, millions of jobs in export-oriented industries continue to be lost, even as the economy is said to be on the path to economic recovery.
