Stimulus Package for the Developing World

Although Americans are currently focused on our own economic stimulus, we should also start thinking about an economic stimulus for the developing world.  The reality is that the current economic downturn is affecting the entire world.  As economic activity decreases, demand is dropping around the world for a whole range of products.  We have already seen oil drop from a record high of USD 140 per barrel down to USD 50 (I still can’t believe that I saw a gas station offering $1.50 per gallon!).  Whole industries are seeing the bottom collapse from under them. Even China has seen its manufacturing drop significantly.

The prices of products ranging from steel to agricultural products have all been dropping.  While the US has the privilege of being the money press of the world, with the ability to sell treasury notes at any time to raise funds, smaller countries do not have that ability.  Resource exporting dependent nations, will soon see a large drop in revenues.  This drop will have a reverberating effect through the economies of these countries, leading to large spike in poverty.  We need to be aware, that whatever economic stimulus is put into place needs to have a place for the rest of the world.  If this economic downturn demonstrates anything, it is that we are an interconnected world, whose economies depend upon each other.  I hope that President-elect Obama is considering this as he formulates the US’s economic stimulus.