By Cathy Rose A. Garcia, Choi Jin-joo
Europe’s sovereign debt crisis and a slowing U.S. economic recovery are some of the downward risks for the world economy, according to noted American economist Laura Tyson.
Tyson, a member of U.S. President Barack Obama's Economic Recovery Advisory Board, talked to The Korea Times by phone Tuesday on prospects for the world and U.S. economy, trade protectionism and the gender gap among countries.
``I’m not so concerned about a double-dip recession. But another financial uncertainty is because of what's going on in Europe, sovereign debt and bank debt. We can't rule out any uncertainty... The U.S. outlook is coming from a slow recovery, not a double-dip recession. There are many indicators that are firming up, consumer confidence is up and the fourth quarter is looking stronger,’’ she said.
The overall pace of the U.S. economic recovery has been slower than expected, although in the third quarter, it grew by 2.5 percent at an annual rate, buoyed by strong consumer spending and U.S. exports. High unemployment is still a big concern. The $787 billion fiscal stimulus package will end next year, and it is unlikely there will be another stimulus package.
``Spending is over. The only real question is what will happen to the Bush-era tax cuts and the debate on the long term unemployment benefits... It is unlikely there will be another stimulus package,’’ she said.
With the Republicans reclaiming majority of the House of Representatives during the November elections, there are concerns about how the Obama administration can pass its measures through Congress.
``(The Republicans) have run on a platform of big government is bad, and big deficits are not good. But they are not at all clear about what they would do, what their agenda will be. There are a lot of the new freshmen in Congress, but it's not clear how much power the Republican leadership has on them. They ran as independents. So it's hard to predict. There may be a stalemate,’’ Tyson said.
As uncertainties remain in the global economy, there are worries over a possible rise in trade protectionism. But Tyson does not believe there will be a risk of more trade barriers.
``You are in Korea, and you might have heard about what happened with the Korea-US FTA. It's unfortunate. The governments are continuing to work on that. But I don't think the appetite for FTAs in the U.S. Congress is that great. But it's too early to tell.... Trade protectionism is often a result of huge trade imbalances. It can't be affected by currency adjustments. I'm not predicting more trade protectionism,’’ she said.
Considering the global economy has been through the worst financial crisis in decades, Tyson said it is important to recognize how ``little protectionism’’ has happened.
At the time of the interview, Tyson admitted she was still recovering from a bout of laryngitis, but she is committed to attending the 2010 Global Women’s Leadership Conference at The Shilla Hotel, Nov. 29 and 30.
``It’s going to be a really short trip. I have to go back for a board meeting... It’s such a shame,’’ she said, adding there will be not much of a chance to explore Seoul.
A professor at the Haas School of Business at the University of California at Berkeley and a former economic adviser during the Clinton administration, Tyson will be giving a keynote speech at the session on ``Women & Global Economy: The Outlook and Opportunities for Business.’’
One of the biggest and most important issues to be discussed at the conference is the gender gap around the world.
In Korea, the level of gender equality leaves much to be desired. The World Economic Forum’s Global Gender Gap Index showed Korea ranking 104th out of 134 countries in 2010, a slight improvement from 115th in 2009. Among Asian countries, Korea’s ranking lagged far behind the Philippines (9), Sri Lanka (16), Singapore (56), China (61), and Japan (94).
``It's simple. You look at the numbers in the US and there are more numbers of women enrolled in undergraduate courses than men, also with master's degrees. If you don't find ways to utilize women's talents, that's human talent and it will affect efficiency and economic growth,’’ Tyson said.