American and Asian Economies: In It Together

David McCormick at Asia Society on Dec. 16, 2008. (Elsa Ruiz/Asia Society)
David McCormick at Asia Society on Dec. 16, 2008. (Elsa Ruiz/Asia Society)

NEW YORK, December 16, 2008 - Undersecretary of the Treasury for International Affairs David McCormick argued at the Asia Society that the threat posed by the current financial crisis is lessening now that countries have begun cooperating to counter its effects.

"While the outlook for 2009 is exceptionally challenging," McCormick said, "the coordinated actions of US policy-makers and many of their international counterparts have decreased the chances of systemic collapse that appeared all-too-possible several months ago." He went on to add that in his opinion recent events discredit the notion of "decoupling," which posits that the growth of Asian emerging markets is somehow independent of growth in the more developed world.

McCormick proceeded to state a number of challenges the current financial crisis will create for US-Asian economic relations, and the policymakers in both regions who address them, in the years ahead. McCormick said there was no doubt that a credit crunch was causing a dramatic slowing in global growth as consumer demand and business investment weaken.

McCormick recommended that poorer countries, because they are more vulnerable to the effects of the slowdown, get more of a say in international financial institutions like the International Monetary Fund, which will almost certainly be granted a greater role in solving global economic problems.

During a Q & A session moderated by Charles Kaye, Asia Society trustee and co-president of Warburg Pincus LLC, McCormick discussed the need for new financial structures to deal with new economic realities and the importance of China during the financial crisis.

Excerpt: David McCormick on lessons emerging markets can take from the current crisis (2 min., 50 sec.)


Listen to the complete program (1 hr., 4 min.)