The world economy is more out of whack than at any time in a generation. The Pacific nations of the future now look like countries of the past. Hot money from Asia, and money from the region's old families, helps drive U.S. stock and bond prices, giving Americans an unwarranted sense of invincibility. Europe's movement toward a single currency has triggered its own business and financial boomlet--and given the Continent, too, a sense that it is impervious to distant shocks.
Yet for the vulnerable, Asia's quake has been devastating. Last year's emerging-market models--Latin America, Central Europe, and Russia--are suddenly being repackaged as developing nations again. The label reads: Beware. There's even talk of a new North-South divide--rich nations amassing wealth, poor ones living behind tariffs and viselike exchange controls. Again!
If globalization stands for anything, it certainly is not this. In our view, globalization has always been about expanding wealth, not reallocating it. What, you might ask, is going on?
There's no doubt that the world economy is under more strain than it has been since the oil shocks of the 1970s. But look even slightly below the surface, and what seems like fragmentation is more certainly stress cracks from dynamic, radical change. The driving forces of revitalization--international markets coupled with highly efficient technology--are more at work than ever.
Take two reports in this issue from places as dissimilar as Asia and France. Our Special Report, "The Stars of Asia," highlights leading reformers already well into creating a new regional economy. Nation builders such as China's Zhu Rongi and political reformers like Korea's Kim Dae Jung are of course everyone's choice. But how many people know India's N.R. Narayana Murthy and Tokyo's Kenji Eno, gritty entrepreneurs who drive grass roots change? They are now Asia's best hope.
In "France: A Quiet Revolution," we examine a more subtle but similar remake under way in Europe's most statist country. The French have been willing to pay a price for social harmony and the French way--to the point of shrinking the workweek to 35 hours and offering fat subsidies to state companies. But behind these crowd-pleasing handouts there's a dynamic shareholders' rights and high-tech entrepreneurial movement underway. Even leaders of government-employee unions are quietly caving in.
BUSINESS WEEK's writers find these stories because we share a common belief that technology and globalization are truly changing the world. Our "Asian Stars" team, led by Hong Kong Correspondent Mark L. Clifford and Asian Editor Sheri Prasso, spent three months evaluating players who could make a difference. New York Editors Frank Comes, Christopher Power, Duane Anderson, and Pete Engardio aided the search while Photo Editor Michael Hirsch and Art Director Jay Petrow designed this special.
Paris Bureau Chief Gail Edmondson and Europe Editor Joan Warner, working with European Edition Editor Rose Brady and Art Director Chris Silver, designed our French cover after watching the way Socialist government mandates didn't seem to stick. "It's really misleading to paint the good-guy entrepreneur against the evil statist forces," says Gail. "The government is not against reform, but it has to move very strategically, very carefully."
Careful, informed reporting about a world whose chaotic parts may not be so dissimilar after all.