Global economic and financial crisis: implications for trade and industrial restructuring in South Asia

Abstract

The world is witnessing an economic crisis following the sub - prime mortgage in the United States . While exact reasons are yet to be known at a fundamental level, the crisis could be ascribed to the persistence of large global imbalances, which, in turn , is the outcome of long periods of excessively loose monetary policy in the major advanced economies during the early part of this decade. The crisis threatens to undo the economic development achieved by many countries and to erode people's faith in an open international trading system ( Lamy , 2009 ). Reported in WTO ( 2009a ), " The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly 9 percent in volume terms in 2009 , the biggest such contraction since the Second World War . "