Global Barter Stimulus for Global Economy

 

Ifay F. Chang, Ph. D.

TLC Information Services

PO Box 944, Yorktown Heights, NY 10598

 January 26, 2009

 

The world is experiencing an unprecedented global financial and economical crisis, which is threatening to lead many countries into a deep depression. All the major economical powers are seriously affected hence each country has earnestly rushed to devise an immediate stimulus program to pump her economy to avoid a depression. No doubt, any stimulus is better than no stimulus but the effectiveness of each stimulus program seems to be unpredictable due to the global scale of this current economical crisis and the complex interdependency of all the major economical powers, namely the major international trading partners. In this paper, the author thinking outside-of-a-box is proposing a global cooperative stimulus program to bring the global economy back to vitality. The central thesis of this program is to achieve the following main objectives immediately and cost-effectively. The first one is to eliminate the credit problem now infested in global and domestic financial institutes, which is stifling all economical activities, most critical of all, the international and domestic trade and property financing. The second objective is to restore confidence quickly and globally to revitalize the international trades among major trading countries, which is the essential means to stimulate the economy of all trading partners, hence the global economy. The third objective is to buy time and offer an opportunity for the world manufacturing and services industries to adjust their over-capacity problem and transform the industries to meet the real global needs in elevating the standard of living. The author calls this proposed program, The Global Barter Stimulus Program. (GBSP for short)

 

The GBSP proposes that the major international trading countries, such as G20 members, immediately convene to develop a stimulus program by simply pledging to barter goods and services from each other in a magnitude (dollar value) equal or more than 110% of the 2007 or earlier trading figures. This government-backed pledge has three goals:

1. Stimulate a growth economy for each participating country by mutual support,

2. Stabilize jobs in manufacturing and services by providing credit and liquidity to finance manufacturing and trades and but time for transformation if needed, and

3. Restore confidence in businesses, home buyers and consumers worldwide by engaging in a cooperative global economical stimulus program that has the potential to be sustained.

 

Like many international cooperative programs, there will be differences in opinions rooted in self-interest. However, this global economical crisis is so severe; hopefully many countries would be more willing to participate to share the benefit of a rapid global recovery than to risk a long self-destructing economic scenario. In fact, this crisis may be an opportunity to bring countries together to soften the resistance of dealing with some of the global issues such as conservation of energy, global warming, product safety, work environment, epidemic disease control, etc. etc. United States being the biggest international trading partner is in a right position to initiate and lead this Global Barter Stimulus Program, which can be a more effective High Level Governmental Solution to the world’s economy than engagement in micro-managing various domestic stimulus packages. This crisis also presents an opportunity for the United nations to the initiative to foster an effective Global Barter Stimulus Program.

 

The GBS program can be kicked off via a summit meeting of the top fifteen or twenty trading partners in the world.

( http://www.census.gov/foreign-trade/statistics/highlights/top/top0811yr.html )

The organizing country prepares and sends an agenda and a proposed preliminary document of understanding on how to participate and administer the GBS program (GBSP Document) to all invited participants. Each participating partner may bring a delegate including other not invited country/partner as an observer.

 

Prior to the meeting each invited GBS partner/country is requested to prepare a Barter List (category, dollar amount, specific requirements and possible trading partners) which lists essentially what goods and services each country pledges to barter with what goods and services from another country if certain specific conditions are met. The lists will be shared among all trading partners and made publically accessible. During this meeting, first invited partners review, discuss, revise and approve the GBSP Document, then begin discussions and negotiations to barter until each country has bartered most of her listed barter categories with other countries. The end result of the bartering and the pledges guarantees a positive economical projection.

 

The GBS process should be made as transparent as possible as an effective stimulus program; press and observers are invited so the process may be televised globally for the benefit of the world. The GBS trade lists with government pledges are the essence of the Global Economical Stimulus. Each participating country will fulfill her pledge, hence will stimulate each partner’s domestic economy; collectively the GBS partners will stimulate the world economy. GBS not only will stimulate the near-term global economy but also will provide opportunities for participating partners to plan for growth in a cooperative way hence allowing a GBSP to be sustainable yearly to achieve long-term benefit.

 

Footnote:

A physical venue may be needed for this program. For example, the $450M Bird's Nest in Beijing may be an appropriate structure to house such a program so that a meaningful Global Bartering Stimulus will lead to a sustainable global economical growth and world development.

           

 

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