Global economy shrugs off terrorist attacks
The war on terrorism has had minimal effect on global, national and regional economies, according to a panel of economists and business leaders, and the U.S. economy has weathered the storm well.
The panelists spoke to about 75 guests at the Global Business Dialogue, sponsored by the World Affairs Council of Pittsburgh and the World Trade Center of Pittsburgh. They discussed the state of the world economy after Sept. 11, and concluded that aside from a few flare-ups - notably Argentina and Japan - the world's economies are not slipping.
"The war on terrorism has not had a terribly detrimental effect on the U.S., and has not had a dramatic effect globally," said Jonathan Hill, economist with PNC Financial Services Group.
Hill said the "fairly mild" recession the United States is experiencing has not spread worldwide, though our more-dependent trading partners have been affected. He noted most economists are predicting a turnaround by midyear.
The United Kingdom, China and even Europe have avoided steep economic downturns, said Hill, and the rate-cutting actions of the Federal Reserve have been successful. He said the fact that crude oil prices have remained stable helped steady the global economy.
But Hill said Argentina could slip into an actual depression if it doesn't take the drastic step of floating its currency. And Japan, which was in a recession before Sept. 11, will be in recession for a few years to come.
"There was a global recession happening even before Sept. 11," said Ellen Frost, of the Institute for International Economics in Washington. She also called the World Trade Organization an engine that helps foster globalization of economies.
"There is a crisis of legitimacy in many governments where terrorism festers," she said, adding there is an economic aspect, too. "When you look at those crowds of angry young men denouncing the United States, the first thing you should ask is, 'Why aren't they at work?'
"There is a major problem of youth unemployment in those countries, feeding that anger. "The more that we can nudge those cultures into the global economy, it will help them to turn away from the technology of death."
David McCormick, executive vice president and general manager of global markets with FreeMarkets Inc., said, "Globalization is not a nice thing to do; it is a necessity." He noted 38 percent of his company's revenue comes from abroad.
"Global commerce is expanding at a dynamic rate," he said, but he added that globalization creates a backlash.
"In the short term, there are winners and losers, with some local companies losing their business to international firms," said McCormick. He added the backlash also exists in other countries, where the influx of the American culture is being blamed for negatively influencing native cultures.
The Global Business Dialogue, which was held at the Union Trust Building, is touted as the first in a series of events to help senior business executives assist the Pittsburgh region to become a greater player in the global marketplace.
