OTTOABASI ABASIEKONG
The Global Economic recession started mid-2007, minimally but due to poor regulation and management of the initial impact of the mortgage crisis in the USA .It escalated and affected various economies that are free market economies, contesting the George W. Bush Jnr era that preached free market economies across the world.
Economics studies, have taught us that a true free market economy, is free of Governmental influence, collusion and external interference. It is also a system of allocating resources based on the interaction of Market forces such as Demand and Supply.
The concept of the Free Market economy has made Government subject to the forces of global competition, even though it is meant to interfere when they may be hitches or strains in the economy.
The Market (Banks, Stock Market, Securities and Exchange) can be described as the heartbeat of the economy, dictating the flow, currency rates, expenditure patterns, reserves of the economy, the purchasing power parity of the nation, interest rates that guide the operations of the markets and shares and also the investment profile and guide for the Public private sector.
So the poor regulation of the Market economy sector in various vital economies like the United States of America, United Kingdom, and Nigeria led to an unprecedented Global economic crisis that led to the loss of thousands of jobs in the banking sector and other sectors of the Economy.
Vladimir Putin (Prime Minster of Russia) Addressing over 250 Global Political and Economic Leaders at the 2009 Davos World Economic Forum representing 100 countries ,said that the collapse of the Financial System in the United States, was a failure of capitalism, which affected Europe and even Russia calling for responsibility from the Leaders of Capitalist Market Nations.
Also at the Conference Jose Manuel Antonio Barroso in an interview (European Commision Chairman), blamed the economic crisis on the irresponsibility of leaders in the USA and Europe in managing their Financial institutions, and also called for openness in the economies with regulations.
The call for Responsibility in Governance across the Capitalist driven economies like the Usa,Uk, France, Germany, etc. is crucial and vital to any economic recovery from the crash and collapse of the Financial systems in the Major capitalist market nations .
The Capitalist market crisis has rapidly spread to emerging markets and had raised a lot of fears of a systemic risk to the international financial System. It shook investors confidence in the market, affecting the Banking and stock market systems of the USA, UK, France, India and even Japan.
Now is the time for Full Responsibility and action to curtail the excesses of the financial markets, Prime Minister Gordon Brown of UK, took responsibility for the failures of the UK economy and promised fiscal discipline and effective reforms and regulations of the UK market economy if voted back into power on May 6, 2010(Unfortunately Lost).
President Obama of the USA in his speech to mark one year since the collapse of Lehman Brothers Bank, Said his economic reforms programme will give the Central Bank and the Federal Reserve new powers over huge financial firms, to seize the banks and financial firms whose collapse could threaten the US economy in the future.
Currently Greece another emerging capitalist market economy, is facing a challenge of survival following due to an acute economic crisis, that has adversely affected the Greek financial system and has sent warning signals to other countries not to lose control of their fiscal positions and the confidence of the markets.
The International Monetary Fund (IMF) has warned the Global economic crisis rocking the market economies is an indication for the market economies to make more progress in developing communicating credible medium term fiscal adjustment strategies.
From the analysis of Citi Chief Economist Willem Buiter, the market economies have a problem with huge budget deficits resulting from the financial crisis, which have put public debt on an unsustainable trajectory and doubts are growing that the political will exist for the nasty medicine to be swallowed.
Prof Joseph Stiglitz the Nobel-prize winning Economist said the US and other market economies had failed to fix the underlying problems of their banking systems after the credit crunch and the collapse of Lehman Brothers which affected the International Financial Market.
George Soros on the economic crisis and the market economies, states clearly that the right regulations applied by Market economy Governments will help recover the economies from the decline and deteriorating effect of the Global economic crisis.
This year’s Global Economic Forum in Davos, ended sadly with no consensus on how to improve the economy. There was a growing conflict between bankers, regulators and politicians that posed a great hurdle to achieving sustainable recovery from the Global economic crisis.
Swiss Economic Minister Doris Leuthard at the conference, chided the assembled business leaders and politicians for indulging in more talk than action. She accused bankers of trying to ‘Wriggle out of their responsibilities’ while regulatory reform was ‘hurting toward the abyss’.
The Big Challenge For Pres Obama of the USA, Chancellor Merkel of Germany, The UK Prime Minister Mr David Cameron,Pres Sarkozy of France, and other key market economy leaders in the World, would be to do the right regulations that will lead to a sustained economic recovery.
For Nigeria ‘Africa’s Leading Nation’ it will take Responsibility on the part of the Political and Market leaders to set proper and sectoral reforms for the Nigerian Economy to maintain the resilience it shows presently.
Nigeria now needs proper financial and economic regulations, it will no longer be ‘Allow the Market to play and decide the economic tempo’ but ‘Set the tempo and guide for economic and market interplay’ that will set the pace for reaching the goal of Vision 2020 which is to be positioned as a leading player in the International economy. For this to be achieved, sincerity in economic analysis, and transparency on the growth level and economic projections must not be compromised.
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