For the first time in world history Africa looks rich, says Niall Ferguson

Historians in the News

For 500 years world history has been dominated by the economic ascent of the West. Now there is an epic shift taking place, one which is witnessed only once every half millennia, says Niall Ferguson, a professor of history at Harvard University. The era of western economic and political influence is waning, and will end within our lifetime, he says. The economies of the east have reawakened and East and West are converging in a competitive-dependency which has profound implications for Africa and for those who wish to exploit her mineral wealth.

Hastening the decline of Western economic and ideological hegemony is the recent financial crisis which has seen the levels of public debt held by the developed (and developing) world, rise to unsustainable levels. Cumulatively, public debt levels now top $41.2trn, according to the Economist magazine, with Japan and the US bearing the lions share. In the US, public debt as a share of GDP will soon pass 80% and will reach 100% within the decade, a level not reached since the second world war. "There are few bigger problems than this," Ferguson told the assembled audience of miners and financiers at Cape Town's recent Mining Indaba.

Addressing this debt through the normal mechanisms of cutting expenditure or raising taxes is not that simple. To stabilise its debt to GDP ratios Japan would have to make fiscal adjustments to the tune of 9% of GDP. The US needs to do 8%, and has achieved 3% so far, according to the OECD. Reducing it further would require unpopular levels of fiscal responsibility....

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