As the dust starts to settle from the aftermath of the global recession, countries, such as the USA and UK have began their potentially long journeys on the road to recovery. Even so, there is one burning question on the minds of Western organization leaders, regulators and politicians. Will the impact of the Excellent Recession shift the economic balance of power from West to East?
In order to address this question, we need to have to analyse the impact of the global recession on the public finances, newly proposed taxes and regulatory regimes of the UK and USA. Furthermore, an assessment of the emerging market economies is needed, with a particular focus on India and China (members of the BRIC group).
Firstly, the public finances of the UK and USA have plummeted in the last year. According to the Office for National Statistics, the UK's government deficit reached a staggering 7.1% of GDP for 2008/9. The International Monetary Fund has forecasted that US government deficit would hit 10% of GDP for 2009/2010.[1] This will inevitably bring cuts to government spending on education and training, thereby reducing the effectiveness of the workforces for both countries in the long-term.