During the 1997 Asian financial crisis, countries such as China and India escaped mostly unscathed from economic devastation. But with global recession now looming large, they too will fall prey to the current economic crisis, says this year's Nobel Economics Prize winner.
"Nobody will benefit from the (present) financial crisis. It will affect every country," Paul Krugman, professor of economics at Princeton University, told The Jakarta Post on Monday evening in Stockholm.
But Krugman, a columnist for The New York Times, was quick to point out the present crisis would not reach the levels attained in the 1930s, during the Great Depression.
"We are in better shape than in 1930," Krugman told reporters after delivering his Nobel Economics Prize lecture at Stockholm University.
Sparked in 2007 in the United States by the sub-prime mortgage crisis, the present crisis is now spreading across the globe. The fallout is already being felt in the U.S., with 2 million jobs lost and major financial institutions going under within the past year. Analysts warn the U.S. unemployment rate could reach an alarming 10 percent this year if no effective stimulus measures are put in place.
Asked about his views on the Bush administration's bailout plans for failed U.S. corporations, Krugman said he did not oppose them.
"I am not against the bailout program," Krugman, an outspoken critic of the administration, said.
He added the U.S. and other countries would take a while to recover from the downturn, depending on how long the crisis drew out and what measures global economies took.
The global economy, Krugman went on, could be plunged into recession for more than two years if no strong measures were adopted.
"We could easily be talking about a world economy that is depressed well into 2011 and even beyond," he said.
Krugman won the 2008 Nobel Memorial Prize in Economic Sciences for his theory on international trade patterns. He will receive the 10 million kroner (US$1.4 million) prize from Swedish King Carl XVI Gustaf on Wednesday.
The prize, officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was originally not included in the Nobel Prize categories. It was added to the list in 1968.
Krugman's fellow Nobel laureates include Yoichiro Nambu, Makato Kobayashi and Toshihide Maskawa for their achievements in physics; Osamu Shimomura, Martin Chalfie, Roger Y. Tsien in chemistry; Jean-Marie Gustave Le Clezio in literature, and Harald Zur Haussen, Francoise Barre-Sinousse and Luc Montagnier in physiology or medicine.
The 2008 Nobel Peace Prize will be awarded this Wednesday in Oslo, Norway, to former Finnish president Martti Athisaari for his efforts in promoting peace on three separate continents, including in the previously restive Indonesian province of Aceh.
| 
|
|
|
|
|
|
|