Developing Nations Must Produce More for Global Recovery to Happen

Summary

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WASHINGTON -- Before we get too giddy about any U.S. economic "recovery," we should remember that the preceding economic collapse was global. No recovery can succeed unless it, too, is global. Will that happen? The world can no longer rely for growth on free- spending Americans, who are overburdened by debt and sobered by trillions of dollars of losses on homes and stocks. Without a substitute for American buying, any global revival will be feeble, because the United States needs export-led growth and other countries must somehow offset their lost sales to our market.

Developing countries would seem to be the obvious replacement for American spending as the world's economic motor. These countries already account for nearly half of global economic output, estimates the International Monetary Fund. China (11.4 percent), India (4.8 percent) and Brazil (2.9 percent) alone represent nearly a fifth. By comparison, the United States is also a fifth.

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Developing Nations Must Produce More for Global Recovery to Happen

All these societies have huge needs for housing, consumer goods, health care and more. Except as a job creator, export-led growth doesn't make much sense. Logically, these countries should produce more for themselves a...

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