What does it take to balance the global books?

Dubai: How does the world come out of a situation in which 1.4 billion of the 6.7 billion global population live on less than $2 (Dh7) per day, 59 million remain unemployed and 40 million more are joining in seeking jobs in the next few years?

There is no straight answer to this. However, some experts tried to shed some light on what's been going on and what may be a way out of this quagmire.

"There are lots of unanswered questions in what led the world to this situation," Sharan Burrow, president of the International Trade Union Confederation, Belgium, said at a press briefing.

In seeking a solution to the problems of the financial crisis, she said governments should invest in jobs and rebalance the global economy to spur domestic consumption while maintaining the minimum wage and providing social protection.

"Investment in jobs, jobs and jobs ... invest in society, economy, job creation and develop domestic demand," she said.

"There is a ‘business as usual' mentality among many global leaders," she said, adding that it needs to be changed.

However, Asian countries, particularly China, have been lucky, says Laura M. Cha, deputy chairman of the Hongkong and Shanghai Banking Corporation.

Lucky Asia

"We've been lucky. Asian countries have recovered from the financial crisis faster and better," she said.

"China has maintained eight per cent growth in economy and year-on-year it could grow up to 8.5 per cent, backed by a huge stimulus package."

Cha said that despite falling exports, China managed to increase industrial output by 16 per cent in October by increasing domestic demand.

"With the huge stimulus package, the government [of China] has maintained job creation, investment in infrastructure and industrial production," she said.

"Although exports did not increase, higher industrial output was absorbed within the domestic market as domestic consumption went up."

She said China also benefited from a non-convertible currency "that has worked well."

She said the country needs financial reforms to facilitate foreign participation.

"Bank lending could pile up, creating a large pool of non-performing loans which the country had just managed to clean up," she said.

Howard Gieve, an economist, said he's not sure how the economic recovery of the world shapes up.

"It's still not clear how the economic recovery would shape up globally. While in some countries, the momentum is picking up, in some the pace of growth is slower, especially Europe and the UK," he said.

However, Howard Davies, director of the London School of Economics and Political Science, said he sees clear signs of economic recovery globally.

"There are clear signs of economic recovery for most parts of the world," he said.

Individual recovery

"All the countries went down together with the crisis. However, they are coming out in different ways.

"I see quite a patchy recovery ... some countries coming out faster while others recovering slowly.

"We see weak recovery in Europe while [some] emerging markets, especially Asia, are recovering faster."

He said the funds and capital flows would be critical and need to be monitored.

"We are seeing some dramatic capital flows ... that could potentially create mini bubbles," Davies said.

To sum up — there's no straight line to recovery. Each country has to deal with it in its own way.