Can A Bad Situation Have Good Effects?
“Absolute Truth” well science maintains there is there is no such thing like that, but from the current global financial crisis it is evident that there is no absolute free market. Truth is always relative, just like freedom.
It is important to look for positive points to find a way out of the financial crisis, apart from philosophic controversy.
All countries, whether separately or collectively, are working hard to contain the crisis, or at least to reduce losses, despite the gloomy picture of the global economy and the pessimistic atmosphere blanketing the entire world.
Although it is difficult to speak about positive points while the entire world is facing such a crisis, there must be some positive aspects.
The first of these positive effects is that the financial crisis ushers in an end to the domination of the sole magnate in international financial relations, which was a major cause of the crisis.
Wall Street was the world’s most powerful investment house, just a few months ago, where investments used to pour from the East and the West. Now Wall Street means bankruptcy, and investors in fear of losing their money do their best to avoid it.
At present, there are regions in Europe and Asia, including the Gulf region, emerging as hubs of huge investments, which will bring about more stability to the world financial system. This shift is important for restructuring international relations in the post-crisis stage.
The second positive result of the financial crisis revolves around redrafting laws and rules that regulate global financial institutions, especially the International Monetary Fund (IMF), World Bank (WB), and the World Trade Organization (WTO) whose membership could not have been possible without a green light from Wall Street.
The previous rules governing economic relations were appropriate for the post-Second World War era and during the Cold War, but are no longer suitable for the globalization age and the emergence of new and influential economic powers on the map of international relations.
For instance, in China, foreign currency reserve reached $1.9 trillion at a time the US budget deficit amounted to $1 trillion, in addition to the progress achieved by Europe in the light of its single currency.
The third positive point is related to the change in the world investment map and the opportunities to be provided by the emerging investment hubs, which offer guarantees and opportunities for world capitals.
This potential change will coincide with restructuring of commercial relations, which will be done through the WTO that will allow specialization on the basis of the production priorities of each country.
This will offer middle east countries rare opportunities to take advantage of the possible outcomes of this crisis.
Fourth, the next global financial and banking system will be strictly regulated and supervised by applying the measures of control, transparency and global governance.
The last of the positive effects of the crisis would be the absence of giant financial institutions, which dominated stock markets in the world for long decades.
This in turn would allow new institutions to emerge and take over, which lays the foundation for a new sharing system in international financial and economic work.
In short, a bad situation may sometimes have good effects, and what is required now is to draw lessons from this crisis and the subsequent losses suffered by most countries.