Magazine article Newsweek International

Dominique Strauss-Kahn : The Constant Crisis

Magazine article Newsweek International

Dominique Strauss-Kahn : The Constant Crisis

Article excerpt

Byline: Tony Emerson and Barrett Sheridan

The sense of relief at last week's G20 summit was nearly palpable: thanks to their decisive actions over the last year, world leaders had staved off a second Great Depression. But Dominique Strauss-Kahn, managing director of the International Monetary Fund, cautions that "crises never end." NEWSWEEK's Tony Emerson and Barrett Sheridan spoke with him about the knock-on effects of the recession, from war to banking reform.

You recently mentioned the risk that the crisis could lead to war. Why raise that risk now?

The social crisis is still in front of us. That is true for advanced economies, but it is even worse for low-income countries, where the question is not just lost purchasing power or greater unemployment but life and death, starvation and refugees.

Linkages between economies helped to accelerate and spread the crisis. Have we seen the dark side of globalization?

You may call it the dark side if you want, but it is clearly a globalized crisis. The Asian crisis was only an Asian crisis, and the Latin American crisis was only a Latin American crisis. This is really a global crisis. In emerging countries, there was an idea at the beginning of the crisis: decoupling. But after a while they were hit in the same way. Today we have a global economy.

But haven't we seen some degree of decoupling? China is growing at 8 percent this year, India at 5 percent.

But that is not as good as before. You are right to say that 8 percent is huge, but they were growing at more than 11 percent before the crisis. That is not decoupling. And the Chinese authorities themselves saw the need for a stimulus package, so they didn't think there was decoupling.

As the globe recovers, will we return to business as usual, or was this a permanent disruption leading to a "new normal"? …

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