A figure which germinates the threat of social unrest

It was a year ago, an eternity. At that time, the word "recession" was wisely stationed in economic history books. The prospective experts, not questioned that the magnitude of the "slowdown" is announced on the planet. One of their favourite themes was that of "decoupling": would you see the major emerging countries to emancipate themselves for good for the guardianship of the industrialized world In particular, were China and the India, to demonstrate their ability to fly their own wings, regardless of the blows of depression of the West Would they, similarly, to become new engines of global growth

Rarely economic concept will be known if brief existence. In the beginning of 2009, the verdict is final: the decoupling lived. Beijing and New Delhi must admit that their economic fate is closely linked to that of the rest of the world. With 38 of its GDP depending on exports, China has a pressing need of us consumers, Europeans and Japanese. These being in point, China's exports have experienced their first decline in seven years in November. And according to the World Bank, the growth of the Middle Kingdom, which caracolait to 11.9 beginning 2007, should fall 7.5 this year. A figure which germinates the threat of social unrest. The more vulnerable exporting firms already put the key under the door.

The mechanism of transmission of the India crisis is different, because exports represent only 22 of GDP in the largest democracy in the world. Its growth is therefore less directly correlated to the monthly of the Wal-Mart and other sales Carrefour figures. But the return of the overcautiousness financial markets down the Bombay Stock Exchange by 60, while the rupee first of 20 in one year. It is all the Indian building which now worries investors. Which did not have large poorly to pack up, since they had built a few plants on the spot, preferring to take share in companies. The withdrawal of foreign capital was involved in an economy already in need of liquidity, the interest rate is very high to combat inflation. Today, even the giant Tata has been reduced to seek funds from the general public rather than banks.

A excess of enthusiasm was succeeded as unreasonable pessimism. What appeared until then as constraints overcome the dilapidation of infrastructures, the chronic indebtedness of the Indian State, the extreme slowness of the process of decision suddenly became unbearable in the eyes of investors. The Mumbai attacks have nothing arranged: in addition that they recall that diplomatic tensions remain strong in the region, they acted as a developer of the carelessness of the authorities, unable to anticipate the disaster despite concurring indices and slow in their responses.

This shift is therefore essentially based on psychological causes. This is what makes the violence. It is also what should encourage not to dramatize the gravity. Because Indian democracy has shown its strength in the past. Today, the leaders of the countries have little hesitation on how to get out of the rut. Some reforms are necessary. Many will, of course, political courage, as the dismantling of subsidies that cost about 3 of GDP. But the India too tasted, in recent years, to the delights of the vigorous growth, including rediscovering its international reach, to not seek to find the path. Whatever the verdict of the ballot box next spring, the future leaders of the country will know how to put the India on foot. And they will be able to rely on seasoned entrepreneurs to be actors of this resurrection.

In comparison, China will have to engage in unknown terrain. It is built over three decades, on a non-standard mechanism: plant of the world, it has concentrated its efforts on a bloated offer concern little demand. It was both distant, growing, and appeared relatively inexhaustible. Cannot continue on this path with the global crisis: Beijing will have to activate its internal demand. That means a change of attitudes and a new adaptive capacity of the productive apparatus. Same challenge in financial matters. Banks remain controlled by the State, which translates into a serious bias credit: it is better to be a company on good terms with the party to obtain funds. In times of crisis, it is urgent to economic rationality in the system and encourage really innovative or powerful economic actors. If China has been able to develop on a paradox apparent without liberalism real capitalism, the global crisis could sound the end of this schema.