Future Perspectives and Policy Implications

By the middle of 2012, more than 3 years have passed since the outbreak of the 2008 global financial crisis. Although some countries in the European Union are still in deep financial trouble, it is time to reflect upon what happened during the past few years and what can be learned from this crisis for future preventive actions. In January 2012, the International Monetary Fund announced that the global recovery was threatened by intensifying strains in the Euro area; thus, financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated (IMF 2012). The Euro area economy was expected to go into a mild recession in 2012. The effects of bank deleveraging on the real economy may surface again, and the impact of additional fiscal consolidation may heighten. Even growth in developing economies that had traditionally remained resilient was expected to slow down because of the worsening external environment and a weakening of internal demand (IMF 2012). The global investment prospects continue to be clouded by the significant uncertainties with the sliding economy. In contrast to this, China has emerged stronger from the global financial crisis and its continuous internal markets growth has increased trading within the four Greater China economies. In addition, the economic crisis has provided an ideal opportunity to accelerate the integration of the ASEAN Economic Community in Asia (Thangavelu 2009). In this chapter, we first present the prospects of these four economies and then describe their potential challenges in the future. The prospects and challenges are meant to provide points of thought for discussion and do not represent an exhaustive list. This chapter finishes with some policy implications.