Students Scientific Conference

Solution for possible upcoming world crisis

Sławomir Bychawski

Supervisor: Agnieszka Pach-Gurgul, Ph.D.

Banská Bystrica

2019

Title: Solution for possible upcoming world crisis

Author: Sławomir Bychawski

Abstract: Surfeit of the developed economies can lead to the lower growth of a consumption level.

Because of the lower demand the world is up to face a very possible stagnation in the developed

economies what we can see already in some of them. While the monetary policy instrument –

interest rates are on the historical lowest level, we do not really have the tool to stimulate the

investments and demand to grow. Public debts of developed countries are still high after the 2008

crisis so we cannot rely on higher government spending. Another threat for the developed world are

increasing inequalities between 1% of the richest and the poor people. Society in the times of crisis

or bad economic situation make a protests and riot. Possible solutions proposed in a paper are

different but can be used together or separately.

First of them is program on the international level similar to the Marshall’s Plan or the

Regional Policy in the European Union directed to support developing countries with their growth.

Investing in the infrastructure of the developing countries shall trigger the local economies to grow

and become a trade partner for the developed economies. This strategy will fill the gap in the global

demand increasing the investment, government spending and future consumption level when the

developing economies have the resources to purchase goods and services from the developed

economies.

Second solution is to create a competition for the oil lobby industry and to increase spending

on the new technologies. Main step would be to ease the barriers of entry on the market for the new

technologies. Enable a next industry revolution to come would solve a problem of the demand gap

increasing the investment and consumption by new energy production techniques, new transport

techniques and new products.

Content:

This paper aims to provide solutions and theoretical explanation of possible ways the world

can take, however the topic is very wide including the humanitarian problems, economic situation

of developed and developing countries and ways to overcome racial and ethnical clashes. Not from

today we know the world is splited for two regions with many differences between. The Global

North rich in capital and dominating in the worlds economy, politics and almost every aspect of

global life. The North point the trends and objectives of the whole world. The Global South is poor

in capital but on its lands lives majority of the worlds population. Differences between those two

regions are too deep to point them all in this article, but it is possible to find a solution to make the

differences in development smaller and so both sides can take a profit from it. The question of this

article is if the world can save itself just because of its greed?

Lets look on the developed economies of the global north, because the decision belongs to

them to do any changes in a current situation or not, as they are stronger in this comparision. Before

the western world will do anything, they need to analyse and calculate if the efforts are necessary

and profitable for them. As the developed states leads the world, should they change anything?

Should we react?

In the years of 2010 - 2017 for high income countries the GDP growth was averagely 1.97%

while for the low income countries it was 5.19%1. Statistics of the two worlds main representants

show how bad the situation is for the developed economies. In the same period the average for the

European Union was only 1.27% and for USA 2.15%, while in India the GDP growth average was

7.26% and in China 7.95%. It shows that in future the developing economies will overcome the

global leaders like the USA, the European Union or Japan. HSBC predicts that until 2030 China

will be the first economy in the world and India will come on the third place knocking down Japan

and Germany2. The explanation of the differences in GDP growth between the developed and

developing economies lies between many in the stage of development, population growth and an

economic theory of lower demand in the surfeit economies. From the beginning of the XXI century

the situation in the population growth did not change and is still in favor of low income countries

with the indicator on the level slightly above 2.5% annually when high income countries vary from

0.6% to 0.8%3. Such trend in the population growth has an impact on the future growth of economy

which becomes stronger with every inhabitant who will take part in the local economic relations,

who will work and consume.

The answer for the lower economic growth in developed economies we can find also in the

basics of microeconomy which gives an effect on the macro scale. Theoriticaly for the production

there are four components, those are Consumption, Investments, Government Spending and Export

Netto. Gossen’s Law says that utility is falling with each next consumed product of the same kind.

Developed economies like United the States or Western Europe are saturated what means high

majority of households have already the basic necessary products to live. Regarding to the Gossen’s

Law if household in the developed economies purchase furniture or household appliences they will

1 World Bank data. 2 <https://business.financialpost.com/news/economy/china-will-overtake-the-u-s-in-less-than-15-years-hsbc-says>

[access 26.02.2019]. 3 World Bank data.

get less utility on buying new furniture or products than household in the developing world, because

they already have it. It is not necessary for household in Germany to buy a second or third washing

machine and the utility of the purchasing would be much less than the utility of buying the washing

machine by the household in developing economy which does not have the washing machine yet. In

this case the developing economy household will report higher demand for the products than the

developed economies household. Because of the saturity in the global north and sometimes even

surfeit the households will demand less than the households in developing world where the needs of

basic products are still not fulfilled. Throughout the years after the second world war, economies

like the United States, Western Europe, Japan and generally the global north were purchasing such

products, new technologies and solutions because before they did not have it too. Nowadays after

they equipped themselves they report lower demand for such goods and the economies tend to slow

down in the growth of GDP in time.

Strategy of developed economies is a stability which indicates a stable GDP growth. Indeed

it is stable but it is also low comparing to the developing economies. Sometimes it seems like a

stagnation which is really dangerous for the economy when transforms into the recession. An

example for such a situation is seen in Japan when after 4 decades of fast growth after the war the

indicator felt down from 5.4% in 1990 to 0.9% in 1992 and -1.8% in 19984. Japan still struggle

with low demand and aging society. Central bank of Japan sets the interest rate lower and lower

since 1991 to stimulate the economy and yet it is slightly below 0 on the level of -0.1%.

Nonetheless Japan consumption is not yet to rise, the inflation rate was below 0% for over 10 years

since 1994 and it vary around 0% until now5. Because of the real inflation rate became higher than

the nominal inflation rate. Japan since 1996 is kept in the liquidity trap what keeps the consumption

on such a low level. The high government spending and reducing tax rate did not help. The GDP of

Japan is now on the lower level than in 1995 which only shows a scale of the problem of stagnation

threatening the developed economies6. Actual Germany expect a stagnation or even recession in the

upcoming years7.

The whole world struggle with the problem of increasing inequalities among the society.

There are rich and poor but in time the most rich 1% of people hold bigger and bigger share of a

total capital in the world. Only in the USA in 2007 1% of the richest held 33% of the nation

4 Blanchard O., Makroekonomia p. 732, Wolters Kluwer Polska Sp. z o.o., Warszawa 2011. 5 Ibidem p.733. 6 <https://tradingeconomics.com/japan/gdp> [access 27.02.2019]. 7 Gennen Birgit, Mekrel doesn’t want to tell Germans the good times may be over, Bloomberg 2019.

<https://www.bloomberg.com/news/articles/2019-03-28/merkel-doesn-t-want-to-tell-germans-the-good-times-may-be-

over?srnd=premium-europe> [access 28.03.2019].

treasure8. The income level of the richest 1‰ was 220 times bigger than the income of less wealthy

90% of society9. Such inequalities in a hard times can cause a serious troubles especially to the

owners of the capital. The history shows that the bad economic situation can cause the rise of

radical voices in the society and those lead to the revolution or war. In the history indeed there was

such a situation that the inequalities in the society and huge differences between those who owned

the capital and those who did not cause the revolution and created the movement of communism.

The consequences were tragic and a lot of people lost their lives. Nowadays the inequalities still rise

and yet we see the consequence of it in the largest scale of migration of people from Middle East

and North Africa to Europe to find a better life. Mix of the culture of immigrants and locals cause

the ethnics issues and terrorist attacks and those are also in the end the consequences of differences

in standard of life in developed rich countries and the developing states.

Definitely the world will change in the next decades, the most likely in favor of fast

developing states such as China and India. Nowadays developed countries probably will be living in

peace in European continent as a relicts of the past greatness in stagnation such as Japan and

Germany presently. The leadership of the world will be slowly overtaken in the natural peaceful

way. It would probably happen as the trends lead the world this way unless the Western World

reacts. It is highly unwise to lead once great empires and not to adapt any solution to avoid the dark

scenario. According to the trends and actual situation the Western world needs to react. In the past

the developed economies did many things to hold the leadership and yet the geopolitics will also be

used to secure the future share of a cake.

Economies of West stay in wealth and in stable GDP growth also because of the trade they

do between each other. According to the theories of economic growth the desired situation is with

the open economies for trade. Trade creates wealth and allocates resources more effectively, than

with the closed economies, implicating growth and development. We know that already from the

classic theories of Adam Smith and David Ricardo. Considering that developed economies will

become connected more and more in time, they will finally forge one globalized village with the

stable quantity of trade between each other. The situation which developed world is going to will

lead to the fixed consumption and financial stagnation. Since 1996 to 2015 the demand in the

developed economies is decreasing relatively to the demand reported in the developing

8 Stiglitz J., Cena nierówności – W jaki sposób dzisiejsze podziały społeczne zagrażają naszej przyszłości?, p.67.,

Wydawnictwo Krytyki Politycznej, Warszawa 2015. 9 Ibidem.

economies10. Average annual consumption growth between 1996-2015 in the USA was 2.48% and

for Europe only 1.35% while the indicator in India reached 6.55% and in China 9.02%.

Chart 1.

Source: World Bank data.

The western world will need new markets to sell their products so they can still develop faster than

the predictions say. There is an example of such situation in history when after second world war

the United States had a huge surplus in production but Western Europe was still destroyed after the

war and could not be a partner for trade. What the USA did was pump the capital and necessary

goods in to fire the European engine and rebuild the strong economies so they can trade again

with11. Selling goods to Europe allowed the United States to stay the biggest economy on earth and

develop for the next half of the century. How did it really work?

Marshall’s plan meant to rebuild Europe so the European countries have resources again to

purchase American products they needed after war. The USA needed that also because otherwise

they would have no market to sell their products and they would not grow as fast as they could

have. What the USA did was actually an investment. The USA would never spend so much money

if they did not have an interest in it. If they would not help to rebuild Europe after the war it could

have caused lower oversupply, higher unemployment rate and slow development12. The European

10 World Bank data. 11 Kowalski K., Plan Marshalla – Uwarunkowania i skutki gospodarczo-polityczne, p. 170., Wydawnictwo

Uniwersytetu Łódzkiego, Łódź 2014. 12 Ibidem p.136-137.

-2

0

2

4

6

8

10

12

14

Annual consumption growth in % (1996-2015)

USA

EU

India

China

recovery plan had a big impact on the Western European poor and instable countries in that time.

The funds the USA provided to rebuild Europe was not enough but worked as a trigger for Europe

to grow. It was very important for the USA so the communism idea would not spread to western

Europe. Those who supported the idea of Marshall’s Plan believed that improvement of life

standard European citizens will decrease a political support for communism. First part of the plan

was to make the countries independent of the constant aid sent from American continent. That

included building up European export again so they can reach financial stability and support

necessary import. The second part meant to integrate European economies so the trade could work

easily. It was the obligate rule for the Marshall’s Plan to be accepted by the Congres of USA.

Another example in history is when the European Union created and developed its European

Regional Policy. Wealthy countries of Western Europe started to filling the gaps in development of

their neighbors to create more equal partners they could trade with and grow using their countries as

a cheap labor source and markets to sell their products. We can see in time how much the European

rich countries invested to create a trade partner and how a developing partner could report a large

demand for the products allowing a rich country grow faster. European Regional Policy aims for

cohesion of the states in the EU so all the economies are closer to the European GDP per capita

average. The Union as all countries negotiate a budget and a financial perspective every 7 years.

Funds given for the EU budget by each country depend on their development. Germany as the

biggest economy in Europe is a net payer and only in 2016 payed 12.9 bln EUR more than it

received. Poland is a developing economy in Europe and still catch up with the west. As the biggest

net receiver Poland got from EU budget in 2016 7.1 bln EUR more than it payed13. The result of

such policy in the long term gives resources to the small economies to grow faster like the spark in

the Marshall’s Plan.

Investment Program

In the globalized economy the solution for lowering demand can be such a program offered

on a global scale from the developed economies to the developing economies. On the conditions

like democracy, obeying rules of the international society and of course a willing of participation in

such a program, specially created for this purpose an international organization ruled by the

developed economies could offer the funds for the less developed economies as a spark for their

economy to grow. The program would significantly improve a standard of life in beneficiary states.

13 <https://www.ednh.news/eu-payers-and-receivers/> [access 28.02.2019].

Trade would rise between the developed and developing countries. As a stable contribution of

developed states for humanitarian aid is not working towards faster development of the economies,

such program would be more effective.

Would really a development program help to increase a standard of life in the beneficiary

states? The positive effect of the program would be marked if the indicators are higher than it would

be without it. It is unwise to say that a program always has a positive effect if an economy would

reach the higher standard of life without implementation of the program.

Quantifiable method of standard of life can be measure by an indicator GDP per capita PPP.

It measures GDP per capita comparing to the price level and how much really inhabitants can buy

for given amount of money. Below chart shows the GDP per capita PPP current international dollar

value.

Chart 2.

Source: World Bank data.

All the mentioned in the chart countries did belong previously to the same group of countries under

control of USSR. All of those took different path of transformation but as its shown they were

starting from closer distances to each other than they finished in 2008. In 1995 there were 3 groups

of the countries. First is above 10 thousand $ and it is Czech Republic and Slovenia. Second group

is between 5 and 10 thousand $ which are Estonia, Poland, Slovak Republic and Serbia. The last

group is Albania and Bośnia and Hercegovina. On the chart it is shown that until 2004 the

differences between the groups are still mostly the same. After 2004 accession to the EU and

absorbing a capital and EU funds for investments the differences started to become larger.

0

5000

10000

15000

20000

25000

30000

35000

GDP per capita PPP current international $

Poland

Czech republic

Slovak Republic

Estonia

Serbia

Bośnia and Hercegovina

Albania

Slovenia

Countries from the third group which is Albania and Bośnia and Hercegovina did develop in the

same old slower trend of growth together with Serbia which was appointed before to the second

group of higher developed countries than the group third. The accession and using EU resources to

invest in economies allowed countries to grow faster than with the previous trend like those who did

not access and were developing with the old speed. To make it more clear the table below will

clarify that accessing to the EU gave countries a spark as it was given with the Marshall’s Plan for

the Western Europe.

Table 1. Annual average growth of GDP per capita PPP (current international dolar) in %.

Poland Czech republic Slovak Republic Estonia Slovenia

1995 - 2004 6,1 4,4 6,4 9,7 5,7

2004 - 2008 8,4 7,5 10,9 11,8 7,0 Source: World Bank data.

All the countries noticed an average annual growth of GDP per capita PPP after accessing

the euporean structures comparing to the ten years average before the accession. Bringing another

country which joined EU in 2013 also got a higher average growth of GDP per capita PPP than in

the years before accession. Annual average growth of Croatian GDP between 2010 and 2013 was

2.9%. Accession to the EU in 2013 allowed Croatia to increase the indicator between 2014 and

2017 to 4.8%14. If we look on data of Marshall’s Plan effects, we would see that in the period of

time 1948-1951 when the plan was implemented in all beneficiary countries industry production

improved by 36% and agriculture production rose 11% above the level of 193815. Presented data

show that accessing the European Union had an impact on the countries GDP per capita PPP growth

and that implicate a higher standard of life for its inhabitants. The proof of successful is that the

economy like Poland with one of the largest inflation rate in the world, devastated by the system of

central planning can rise just in nearly 25 years to the economy with 70% GDP per capita PPP of

the European Union in 2017 using such cohesion programs like European Union offers16.

For what will the developed countries count when introducing the investment program is if

it is profitable for them. Creating a partner to trade with is their main economic goal so the

investment give them expected profit. The Marshall’s Plan on one of its main goals had to rebuild

the Europe so the can have a partner to trade with. A next table present a trade value between USA

and Europe which shows that it highly increased during implementing the Marshall’s Plan.

14 World Bank data. 15 Ibidem p. 210-211. 16 <https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=sdg_10_10&plugin=1> [access

28.02.2019].

Table 2. Value of OEEC countries trade in 1938-1952 (mln USD)

Rok Imports OEEC countries from USA Exports OEEC countries to USA

1938 1 378 482

1946 3 323 612

1947 5 072 750

1948 4 405 938

1949 4 296 794

1950 3 135 1 179

1951 4 422 1 768 Source: Kowalski K., op. cit. s. 215.

The trade between USA and Europe significantly rose comparing to the pre war times. The USA

also did placed a spark in European engine which grew to a fire again and European inside trade in

1951 rose high as 67% above the level in 1948, exports was 66% higher while imports increased

only 19%17.

Throughout the years the isolated middle eastern Europe economies like Visegard group

containing Poland, Slovakia, Czech Republic and Hungary after 1989 became a partner in trade for

yet developed Europe as well. The European Regional Policy secured the economies which grown

very fast catching up with rest of Europe. Now destination of 30% of total Visegard states exports

goes to Germany. In the same time German exports to the V4 group is larger than the USA, China

or even so close connected France or Italy18.

Those two examples of investment programs show that the trade between developed

countries providing the capital and developing countries receiving the aid would also work in favor

of the developed countries who would have new partners to trade with and new markets to sell their

products.

As the past history shows and as the present experience tells, such a program leads the

economy to grow very fast so it can become an important partner in trade. In time as the developing

economy grows and becomes a developed, it will start to report a demand for the products from yet

developed states which struggles with the demand gap in their countries. It would cause the further

development of the economies in stagnation and increased trade as the developing economy is not

yet saturated. The advantage of a such solution is that it creates wealth for the rich country and

increase the standard of life for people living in the poorer lands. One of the biggest trouble in the

Marshall’s Plan was that the lack of resources slowed down the recovery of Europe after war which

for example had to import the coal. The situation in favor for such program is that the developing

economies are mostly rich in resources19. Using the knowledge the world got from the past

17 Ibidem p. 217. 18 <http://wise-europa.eu/en/2018/06/26/visegrad-groups-role-in-eu-after-brexit/> [access 28.02.2019]. 19 Africa holds 30% of remaining Earth’s resources.

programs, it would be responsible promoting to create integration association from the countries

close related which would accelerate the growth.

Is it worth it?

Each year the world donate the poorer countries or those in need with a great value of food,

medicines and cash given to the non-profit NGO’s (Non Government Organisation). In 2017 the

humanitarian aid was valued for 27.3 bln USD. Those are remarkable funds which save lives

everyday through the levels of organizations leading to its end beneficiary20. The table below shows

how much did cost the Marshall’s Plan each year of its implementing. Share of the given foreign aid

did vary in 1947-1951 between 1.5% to 2.7% of US GNI21.

Table 3. Funds given by Marshall’s Plan comparing USA and EU budget

IV.1948 - VI.1949 VII.1949 - VI.1950 VII.1950 - VI.1951 VII.1951 - VI.1952

Aid funds in mln

USD 5 953 3 553 2 406 1 486

Aid funds in mln in USD 2019

56 784 33 891 22 950 14 175

Source: Self made based on Kowalski K., op. cit. s. 215.

Calculating yearly costs into the 2019 prices based on inflation rate it is annual average current cost

of 31 949,9 mln USD which is 0.000016%, just a little dust of current US GNI share22. US

department of Defense 2019 budget is great as 686 bln USD, which means an average year of the

Marshall’s Plan would cost only 4.657% of amount of money given to the US department of

Defense in 2019. Comparing to 2017 the budget for Pentagon rose by 13%23.

More actual data of an investment program cost is given by European funds. Only in 2017

EU expenditures were on the level of 154.2 bln USD24. It is much higher value than just calculated

by inflation rate Marshall’s Plan but also European policy works on a bigger scale of 28 countries

with much more developed institutions. Comparing of the expenses of the highest developed

integration association in the world which EU is, those are only 3.87% of USA budget for 201725. Is

the idea of investment program better than constant humanitarian aid sent to the poor countries? It is

<https://www.aljazeera.com/indepth/interactive/2016/10/mapping-africa-natural-resources-161020075811145.html>

[access 28.02.2019]. 20 Global Humanitarian Assistance Report 2018 s. 9. 21 Kowalski K., op. cit. s. 207. 22 World Bank data. 23 Office of Management and Budget, Budget of the United States Government, Fiscal Year 2019, s.33. 24 European Commission, <http://ec.europa.eu/budget/graphs/revenue_expediture.html> [access 28.03.2019]. 25 Office of Management and Budget, op. cit. s. 117.

shown that for sure it is more costly nowadays, however it doesn’t give the effects of development

and investment program does. The standard of life is stable low in the poor countries while it rises

in integration association. The costs are affordable for the international community to create a better

conditions for development and a perspective future for poor countries. Growth of trade inside of

less developed countries and with the introducers of the program would pay back the expenses of

the program in the future. After the investigation it can be accepted that the solution of creating an

investment program for developing countries by developed countries is possible and would have a

good effects for stagnation in the developed states.

Second solution – a revolution?

A different solution for lowering demand of developed economies is not trying to deal more

with less developed economies but to create another source of higher demand onshore again.

Regarding to the theory of utility we used before, we get the lower utility consuming more and

more of the same product. It was also conducted that developed economies grown after the second

world war using a creation of high technologies, new solutions for daily life and a demand for them.

Since a very long time there is no new breaking inventions which will change our way of life, new

solution, new way of working or using different source of power. There are brand new models of

the same technology we were using decades before. There are new cars still using the same source

of power26. New self-phones still doing its work as it was decades ago with just some new

additional features. The progress in this technology is huge but it is still the same technology. The

TV changed a lot from a big box without the colors to the flat flexible screen but still showing the

same tv-shows and movies. The utility is the same for a consumer who sees a little improvement

which in reality gives him the ability to use again the same technology. The consumer in a

developed economy can see that and he or she will not change a car or a flat screen every time the

company launch a new model to the market. He already has the ability to use the technology

without a need of buying a latest model. That is why the demand in the developed economies will

become less once they equip in the needed goods. There are such times in the close history which

show us effective solution on this surface and it is called an industrial revolution.

The industrial revolution according to Jeremy Rifkin comes with implementing a whole new

technology in two sectors of our lives27. The first is the way of transportation and many see it in the

new technologies such as Hyperloop, the electric or Hydro-fuel vehicles or commercial orbital

26 Debut of the first electric vehicle was in 1889 in USA in favor of creator William Morrison.

<https://www.energy.gov/timeline/timeline-history-electric-car> [access 28.02.2019]. 27 Rifkin J., Trzecia rewolucja przemysłowa, p. 11, Wydawnictwo Sonia Draga, Katowice 2012

space flights. Second sector is an energy system. Improvements in the sector or using the whole

different source of power would help us to start using a more effective, more safe and clean energy.

Implementation of new technologies in the two mentioned sectors would cause increased global

trade and deeper global integration. Idea of the third industrial revolution in the next 4 decades

includes development of modern infrastructure which would cause creation of hundreds of

thousands new entrepreneurships and hundreds of millions new work places28. Side industry would

react and improve used technologies to catch up with the technology leaders or if they do not, then

the competition will do it for them. The new industry revolution would be a remedy for problems of

slowing down developed economies stimulating investments. Those new technologies would cause

a high level of demand from households, because it would give them a new solutions and the utility

of having them instead of the old technologies would be much higher than just another version of

the same technology giving the same effect at the end. The industrial revolution could cause a huge

investments programs led by governments or private companies. Countries rich in capital could

afford the new products and they would create the high speed growth again. Some say that the

development of technology is so fast now and it would be so confusing if it goes even faster.

However there are so many examples when the engineers could have create a new technology but

were stopped because of lack of sources or a strong lobby which the new technology would threat

in the future. The biggest threat for the next industrial revolution is the interest of the small groups

of people who earn money on the actual industries and does not want to change it. Some people can

say that such huge investments can be very costly and they are right.

The solution in this section for the new industrial revolution is to create an international

treaty to move the funds to the new created international organization of science and technology

which goal would be to create and implicate the new technologies. The organization would create

the competition to the oil industry lobby which either would change and keep the future profits from

creating and implementing the new technologies and energy sources or having losses in the time to

finally disappear in favor of the industry revolution. Empirical data point that during XIX century

because of the industrial revolution Europe for the first time took a leadership in GDP as a

continent29. Progress in GDP growth was remarkable and was 48% of a global production30.

Conclusion

The answer for the question of this article is unfortunately positive. Observing the past and a

present times it is right that the world can save itself just because of its greed. All developed

28.Rifkin., op. cit., p. 11-16. 29 Skodlarski J., Matera R., Pozycja Europy w gospodarce światowej na przestrzeni XX wieku, p. 15. 30 Ibidem.

countries should notice that after introducing a development program in poor countries the

humanitarian aid can be also smaller what means in the future the investment has its positive sides

as for the doner and for those who use the funds. No other reasons can make the richest countries to

help the others unless they also have an interest in it. Empirical data shows that the trade increase in

between less developed countries and also towards developed states. Using the first solution

developed states can show that they care about safety, hunger, diseases in the third world and they

wish them stop by introducing a truly effective solution instead of constant humanitarian aid which

is always not enough until the people there can start to live on their own. Implementing such aan

investment program would be introduced together with cooperation of interested states as it was

with Western Europe. From 70 years there is no war between them and it would be also a

remarkable outcome in some regions in the world improving a standard of life and allowing a

further develop. Both solutions can be introduced together which would make an effect stronger and

the global north could avoid the recession with higher possibility and develop faster than just with

one solution. The worst solution especially for developed economies in such situation as current is

not to take any action as it would be equal to give up the leadership and hegemonic in future.

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