Can the World Survive Another Crisis?

Listen to the broadcast on China Radio International

Following the massive financial crisis two years ago, advanced countries have been hit by a new series of shocks, explained Uri Dadush on China Radio International. Europe is struggling with a sovereign debt crisis. Japan—which has the highest government debt in the world—now must overcome a devastating earthquake and tsunami. Political turmoil is spreading across the Middle East and oil and food prices are continuing to rise.

However, the ability of advanced countries to deal with these problems has diminished, Dadush said. The rise in government deficits and debts has greatly reduced advanced economies’ room for maneuvering. With populations aging across these countries, Dadush warned that major political adjustments will be needed, not only to help major economies withstand the next shock, but also to keep budget deficits and debts from spinning out of control.