Financial Crisis and the Need for Greater Global Effort

  • 19 October 2008

Following a short respite from the ongoing economic crisis around the world, and a spike in some international stock markets, caused by a variety of measures to confront the financial crisis at the international level, the situation has returned to its previous state and the downslide has again gripped the global markets. This attitude of the markets highlights the crucial fact that the crisis has deep roots and has had wide-ranging impacts, despite all the measures taken to confront it recently by any nation individually or a group of states collectively. Additionally, the fallout of this crisis would plague the world economy for a long time, as has been predicted by various economic analyses and indicators.

French President Nicolas Sarkozy recently stated that it would be a grave mistake to view the financial crisis as a passing phase, as economists are pointing towards some major fundamental problems that are causing this crisis. Therefore, it is important that while alleviating the impact of the crisis the root causes should be addressed, in order to ensure a stable environment for global economy that could grow and prosper so that the crisis does not recur in the future. In this respect, some economist are taking the financial crisis as an opportunity to vindicate their position against capitalism and have started directing harsh criticism at the concept of 'free market' itself. This pattern of thinking does not help in treating the situation, but is counterproductive to the time and effort devoted to ideological debates based on historical and political conflicts. The problem does not lie with the ideal of 'free-market economy,' but in its practice that has deviated from its philosophical moorings. Therefore, the implementation of this concept needs change rather than the concept itself.

As long as the economic predictions point toward the perpetuation of the crisis, rescue efforts would take time to take effect. It is important for the international mobilization to continue confronting and actively interacting with its developments with the same thrust. Moreover, all concerned parties must enforce cooperation and elaboration on the international arena to establish the most suitable formulas to treat this crisis especially after its negative impacts extended to the entire world and that make the successful rescuer effort an international interest.

Beyond doubt, the crisis is highly complex and dangerous, but the world is capable of confronting it through cooperation. The most important lesson according to experts is that the international finance system is in serious need of reform, and it is quite comforting that this lesson is resonating in international circles, and would facilitate the task of revision, reformation and the formulation of restoration efforts.