It might be a vast oversimplification to say that the entire world is in an economic crisis, but this statement is frighteningly close to accurate. Every day news publications report on the failing economies of multiple countries all over the world that are being forced to adopt severe austerity measures in an attempt to recover.
There certainly are countries whose economies are not only surviving but flourishing. But those countries are few and far between. An economy is no longer limited to the country that it once belonged to. Now there is one global economy. This means that the instability (or stability) of one country affects everyone that it does business with. Eventually, one country’s problems will upset other countries.
But this ripple effect takes time, and this is the only good thing about this slow domino effect is that countries that are relatively far removed have the opportunity to learn from the mistakes from other countries.
One of these success stories is Latin America. Not a country but an entire continent, many of the countries in Latin America are still developing, they have the time to learn from the mistakes of the more developed struggling countries.
In a recent article in Bloomberg Business Magazine, Chilean President Sebastian Pinera admitted that he wants to diverge from the common economic growth tactics that got so many of the European Union countries into their current financial situations.
Believing that a major factor in Europe’s economic recession is a more “hands on” government, Pinera wants to divest from big government and instead opt for the minimalist version.
The economic path of each country acts like an experiment. Although it is possible to learn from the mistakes of other countries, no two countries are ever in the same position. With different resources available to different countries, as well opposing styles of governing by leaders, no two countries can ever have the same problems.
Chile’s proclamation to depart from ways that are not working for Europe is certainly an analytical and wise move, but Chile’s and Greece’s situations, for example, are incomparable. Until very recently, Greece had a very strong social and economic safety net in the EU. Only now that they have left the EU and readopted their former currency can they become even remotely comparable to a developing nation surrounded by other developing nations.