Download See the PPT presentation here

View On Globalisation and Reforms
Johnny Munkhammar
The Hague, The Netherlands
2006-11-23
About the Speaker
• Program Director at Timbro, a free-market
institute
• Author of ”European Dawn”,
www.timbro.se/europeandawn
• www.munkhammar.org
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
A Better World Than Ever
• Growing global economy; a plus-sum game
• Sharply decreasing extreme poverty
• Doubling of life expectancy in poor
countries
Growth Saves Lives
The Booming Asia
Rising International Trade…
…and Foreign Direct Investment
FDI as a share of global GDP (per cent)
22,8
25
20
15
8,6
10
6,8
5
0
1982
1990
2003
Developing Countries Grow Faster
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
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
What Countries are Successful?
• Globalised poor countries +5 %, nonglobalised –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
The Road to Prosperity
• How we got rich – The Netherlands and
Sweden
• Agriculture, industry, services
• More globalisation is needed!
Western Europe Did the Opposite
Austria
Tax pressure, per cent of GDP
60
Belgium
Denmark
50
Finland
France
40
Germany
Britain
30
Greece
Ireland
20
Iceland
10
Italy
Luxembourg
0
Netherlands
1965
1985
Year
2005
Spain
Sweden
USA
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
Protectionism or Reform?
• ”Economic patriotism” – shutting out the
world…
• …or reform and openness
The Nordic Model – the Solution?
•There is no ”Nordic Model”
•Big government – problems
•Free market - success
Long-Term Trends
• Services society
• Demographic situation
• Wages and profits
The More Services, The Wealthier
GDP
GDP
Fewer People Working?
The Direction of Reform
Lower Tax – Higher Revenue
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!
Obstacles and Opportunities
•Many people dependent on the state
•Hidden taxes
•Fear of the future
•Populists and reactionaries
•But others did it! Strategy!
European Dawn in Global Light