Reports of global economic recovery could be misleading. Indicators showing steady rises – in income, trade, stock markets or employment – focus on averages and mask growing divides between rich and poor both between and inside nations. Recovery built on “unstable foundations” could “sow the seeds of the next crisis,” warns Dominique Strauss-Kahn, Managing Director of the International Monetary Fund. He adds that tensions of renewed global economic crisis could even lead to civil wars. A report from the IMF modeling unit recommends an array of measures: debt relief and additional bargaining power for workers; revised tax codes; an end to artificial controls on currencies, including China’s renminbi; and governments taking steps to prevent overheated economies and inflation. Every nation has an interest in taming long-term imbalances and lasting recovery requires global cooperation.
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