'We are a banana republic'

By Pepe Escobar

BANGKOK - With a playful smile, Paul Krugman says China will inevitably become the world's No 1 economy, depending on the criteria one applies, "by 2020 to 2040". You can't be too careful when it's early evening, but the internal clock says it's early morning US East Coast time, you crave for breakfast, but soon have to address a US$250-a-plate dinner. Krugman adds - to the despair of many a neo-con - that a multipolar world is also inevitable, the poles being the US, the European Union, China and India (not Russia). But China has to watch out for environmental constraints and address its pressing water problem ("they say that the Yellow River never reaches the sea".)

Professor Paul Krugman, currently enjoying the status of being the Mick Jagger of political/economic punditry, is in Bangkok to address a seminar on how Thailand should position itself in the global economy - although he's also careful to point out he's no Thailand specialist; he does not even know exactly what "Thaksonomics" means - a reference to Thai Prime Minister Thaksin Shinawatra's policies. He says Thailand has not experienced a "searing recovery like Malaysia or even Argentina" and "has not returned to the growth rate of 1996, before the Asian crisis". But "it could be a lot worse". Thaksin would take that as an endorsement.