View On Globalisation and Reforms

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View On Globalisation and Reforms

• Johnny Munkhammar
• The Hague, The Netherlands
• 2006-11-23

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About the Speaker

• Program Director at Timbro, a free-market
  institute
• Author of European Dawn, www.timbro.se/europeand
  awn
• www.munkhammar.org

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The Free Market and Success

• Growing global economy and real improvements
• Globalisation is the spread of free economy the
  more, the better
• Europe in need of free-market reform
• Long-term challenges demography, services, rapid
  change

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A Better World Than Ever

• Growing global economy a plus-sum game
• Sharply decreasing extreme poverty
• Doubling of life expectancy in poor countries

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Growth Saves Lives
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The Booming Asia
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Rising International Trade
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and Foreign Direct Investment
FDI as a share of global GDP (per cent)
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Developing Countries Grow Faster
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Globalisation - Causes and Effects

• Fewer barriers to trade, investments and
  entrepreneurship
• Larger markets, more people in the global
  workforce
• Increased production, specialisation and
  competition
• Change speeds up in goods, services,
  investments and policies

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Globalisation 2025

• G8 USA, China, Japan, Germany, India, UK,
  France, Russia
• EU share of global economy 15 , US share 25
  
• Extreme poverty hardly existing
• Hundreds of millions more Chinese and Indians in
  global workforce

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What Countries are Successful?

• Globalised poor countries 5 , non-globalised 1
  during 1990s
• Economic freedom and economic growth
• Eastern and Central Europe 1986 and 2006
• Low taxes higher economic growth
• Free labour market more jobs

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The Road to Prosperity

• How we got rich The Netherlands and Sweden
• Agriculture, industry, services
• More globalisation is needed!

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Western Europe Did the Opposite
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The Anti-Social Model

• High taxes low growth, fewer jobs
• Interventions in labour market - unemployment
• Public monopolies poor welfare services
• Worst problems Young and immigrants

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Protectionism or Reform?

• Economic patriotism shutting out the world
• or reform and openness

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The Nordic Model the Solution?

• There is no Nordic Model
• Big government problems
• Free market - success

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Long-Term Trends

• Services society
• Demographic situation
• Wages and profits

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The More Services, The Wealthier
GDP
GDP
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Fewer People Working?
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The Direction of Reform
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Lower Tax Higher Revenue
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Main Reforms

• Private welfare services and social security
• Lower taxes, particularly on work
• Free retirement age, private pensions
• De-regulated labour market
• The EU a Union of liberation, not regulation!

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Obstacles and Opportunities

• Many people dependent on the state
• Hidden taxes
• Fear of the future
• Populists and reactionaries
• But others did it! Strategy!

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European Dawn in Global Light