TEXT OF COMMENTARY
KAI RYSSDAL: It’s probably not helpful to speculate about why certain commodities cost what they do, but oil at $120-something a barrel can’t be all supply and demand, right? That’s the working premise for a House investigation that’ll start next week into the role speculators are playing in the surging price of crude. Fact is, though, that demand is up — in part because of growth in developing economies. Commentator Fareed Zakaria says that growth speaks volumes about our current economic crisis.
FAREED ZAKARIA: Just when you thought that oil couldn’t get more expensive, the price is now hovering around $125 a barrel.
How did we get to this crazy place? It was just 10 years ago that oil was trading at $20 a barrel. In other words, prices have quintupled in a decade. Had we asked economists and forecasters what would happen in such a scenario they would all have said, two words: global recession.
That hasn’t happened. And it is unlikely to happen just yet. Oil prices are high not because producers are choking off supply, but because consumers — in the United States, Europe, China, India — are increasing demand.
Expensive oil is one facet of the signature trend of our age — global growth. Last year 124 countries around the world grew at over 4 percent. This year, despite the American slowdown, growth in most of those countries remains robust. While we debate the current financial panic and impending recession, our future is not likely to be shaped by crisis and collapse. The real problems we will face will be the consequence of what I call the “rise of the rest” — the rest of the world that is.
Look around, it’s not just oil that is soaring. Almost every commodity is at a 200-year high. Wheat and rice prices have doubled and then kept on rising over the last two years. In some cases, demand is so high that we’re actually running out of stuff. Helium, the gas used in balloons and MRI machines is in short supply globally. And it is the second-most abundant element in the universe.
The problems of growth are, of course, high quality problems. But on this scale they are problems we have never really experienced before. We know how to handle a recession. But how do we handle the rise of the rest? That will be the real challenge of the next decade, long after this recession has turned to recovery.
RYSSDAL: Fareed Zakaria is the editor of Newsweek International. His new book is called “The Post-American World.”
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