MercoPress. South Atlantic News Agency

Economist predicts slow recovery from the crisis and major shift in world power

Enrique Iglesias, former president of the Inter American Development Bank

The Secretary General for Ibero-America and former president of the Inter American Development Bank, IDB, Enrique Iglesias warned Monday that exiting the current global crisis will be “much slower than was anticipated” and will give greater emphasis to “more government and less markets”.

Furthermore on the long run it will bring a redistribution of world economic and political power.

Iglesias forecasted the crisis will give birth to a new economy, a new society and a new network of international relations.

“The crisis is particularly deep and most unpredictable, and nobody anticipated its magnitude or the international reaction it would trigger”, added the Uruguayan economist.

He warned that “arrival point” will not mean “departure” and called on everybody to be prepared because he insisted, “recovery is going to be much slower than was anticipated at first”

Iglesias also pointed out that Europe will have great difficulties in overcoming the crisis and keeping the welfare state, because “its situation is complicated”.

The banker defended his prediction that the crisis will give place to a new economy, arguing that in this new period markets, governments, globalization and the financial economy “have lost prestige”.

That is why it is imperative to address the “necessary reforms and adjustments” so that the three (markets, governments and globalization) become more compatible in a “much more orderly system” and in an environment that will see “more government presence and less markets” with a greater inter-action among them.

Iglesias underlined that from the crisis a new society will emerge, with a greater presence of middle classes and a new scenario for international relations in which “we will see the greatest and most important shift in power in the history of humanity”.

Finally he praised Latinamerica and Asia for leading the world recovery, something which would have been unthinkable “just a few years ago”.