A proxy for the contest between American and Chinese capitalism will take place in developing countries, where institutions are manifestly not coping with the economic recession triggered by Covid-19. Guy Ryder, the agency’s director-general, said: “Millions of businesses around the world are barely breathing. They have no savings or access to credit.” Without help, “these enterprises will simply perish.”Unlike China, the U.S. and other developed nations, these countries do not have capital and credit-creating institutions that can continually generate funds. To finance a virus-induced recession, developing countries can rely only on their monetary savings and capacity for debt, which will quickly be depleted. This process is so ingrained in American society that it is taken for granted, and the purpose is all but forgotten.

Source: Wall Street Journal August 11, 2020 17:37 UTC