How major economies learn from others to transform themselves (2)

15:05, October 17, 2010      

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NEW MODELS, REFORMS

The German economy was catapulted to overtake France and Britain in the middle of the 20th century partly thanks to an economic model different from the laisser-faire capitalism of Britain and the United States.

The model of social market economy adopted by Germany combined private enterprises with measures of government regulation in an attempt to establish fair competition, low inflation, low levels of unemployment, quality working conditions, and social welfare. It transformed and reshaped the whole social and economic system of post-War Germany.

Japan also owed its economic success and steady economic growth in the 1970s and 1980s to reforms and adjustments of its industrial structure.

It also stepped up technological innovation and started outsourcing thereafter to consolidate its competitive edge in energy and environment technologies and electrical appliances as trade frictions with other developed economies grew.

SOCIAL SECURITY IN GROWTH

The German government worked to prevent social inequality and income gaps through interventions and the setup of a sound social security system.

Germany launched reforms to shake up its pension system, health insurance and unemployment benefits, with the German parliament passing a series of laws and decrees on social security. The well-established social security system also contributed to the stability needed for economic growth.

As an important innovation, Germany encouraged and give employees the right to be involved in certain corporate decisions. They also encouraged employees to hold stocks in the companies they work for.

In Brazil, the ruling Workers' Party adopted a series of economic policies in favor of the poor, such as the Zero Hunger program.

Under the program, Brazil established the Ministry of Social Development and Hunger Eradication (MSDHE) to provide social relief and subsistence allowances to elders aged 65 or above and the disabled, and offer food to the poor.

The MSDHE had a record-high budget of 12 billion U.S. dollars in 2009. Brazil's Institute for Studies on Labor and Society said nearly 3,000 Brazilians were pulled out of poverty in 2004-2008, cutting the nation's poverty rate from 33.2 percent to 22.9 percent.

Source: Xinhua
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(Editor:王千原雪)

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