‘A long, hard haul’

The world is undergoing a fundamental economic shift, with the United States and other Western nations in decline and a number of developing countries on the rise.

Gwyn Morgan

The world is undergoing a fundamental economic shift, with the United States and other Western nations in decline and a number of developing countries on the rise.

This was Gwyn Morgan’s assessment of the future during a presentation Wednesday evening as part of Red Deer College’s Perspectives: Canada in the World series.

The former CEO of Canadian energy giant EnCana Corp. described how the United States, the United Kingdom and many other nations have been spending beyond their means for years — both with respect to consumer goods imported from manufacturing countries, and oil and gas obtained from energy-producing countries.

In 2008, the U.S., the U.K., Spain, France, Italy, Australia, Greece and Portugal accumulated a current account deficit of $1.3 billion.

Meanwhile, China and the world’s oil exporting countries had a combined current account surplus of $1.2 billion.

“Money going from West to East,” summed up Morgan.

The United States is now struggling with an $8 trillion national debt, with this figure growing by more than $1 trillion a year.

Thirty-nine American states are technically bankrupt, he added.

“And there’s no prospect of turning it around.

“My perspective on the United States is that they’re in for a long, hard haul,” said Morgan, adding that the U.K. isn’t much better off.

China and India led the world in growth in 2008, and this year are among the only countries to continue moving forward. He listed Indonesia, Brazil and Vietnam as other nations poised to benefit from the economic shift.

“They will be the leaders of what will be the 21st century world order.”

Morgan said global economic imbalances have existed for the past decade. During this period, manufacturing and energy-producing countries have become bigger and bigger debtors of the United States, buying up U.S. treasury bills and other American assets.

This situation can’t continue, he said, with the U.S. and other Western nations nearing the time when they will be forced to balance their budgets and reduce energy consumption.

“That is going to be a very long and painful period,” said Morgan.

Canada is better positioned to deal with the new world order than most of its Western counterparts. Residents here are big consumers with a high standard of living, but the country is blessed with geological endowments that make it a resource exporter, said Morgan.

The threat to Canada, he suggested, is its huge trade volumes with the United States. Consequently, diversification of our economy and trade patterns are critical.

Opportunities might even exist, he added, noting how Canada’s relatively low tax rate and high quality of life make it an attractive option for companies looking to relocate their head offices out of the United States.

During a question-and-answer session that followed his presentation, Morgan offered assurances that the struggling natural gas industry — which Alberta is so dependent upon — will improve.

Energy prices always rebound faster than expected, he pointed out, because drilling activity grinds to a halt when the numbers are low and sets the stage for future shortages.

Morgan, who grew up on a farm near Carstairs, is well-positioned to assess the shifting global economy. After stepping down from EnCana in 2005, he joined the board of international banking and financial services firm HSBC Holdings, and also became chairman of SNC-Lavalin Group, a global engineering and construction company.

Now living on Vancouver Island, he told his Red Deer audience that he’s visited more than 75 countries.

Morgan was honoured as Canada’s Most Respected CEO and Canada’s Outstanding CEO of the Year in 2005.


Just Posted

Red Deer group looking to keep roads safe for cyclists

A Red Deer cycling group is concerned about road safety after multiple… Continue reading

Smoke and pets do not mix

Take care of your pets during the smoky weather

Former Red Deer lawyer sentenced

Charges included possession of stolen property

Man causes mischief with axe in Ponoka

Arson and attempted break and enter charges laid

WATCH: Raising money for kids at the Gord Bamford Charity Golf Classic

Former NHL players, Olympians, pro rodeo circuit members and musicians teed off… Continue reading

Oilpatch fears delays as U.S. judge orders further review of KXL pipeline route

CALGARY — Potential delays in the completion of the Keystone XL pipeline… Continue reading

‘Queen of Soul’ Aretha Franklin dies at 76

NEW YORK — Aretha Franklin, the undisputed “Queen of Soul” who sang… Continue reading

Arrests in Burnaby, B.C., as order against Kinder Morgan protest camp enforced

BURNABY, B.C. — The RCMP arrested protesters Thursday as officers enforced a… Continue reading

‘Hot and dirty work:’ Commander describes fighting massive Ontario wildfire

BRITT, Ont. — From a helicopter flying over a smouldering swath of… Continue reading

Calgary Fire Department logs record opioid overdose calls in July

CALGARY — The Calgary Fire Department says there were a record number… Continue reading

RCMP in Burnaby, B.C., say Kinder Morgan protest camp to be dismantled

BURNABY, B.C. — The RCMP arrested protesters when officers enforced a court… Continue reading

Study: Smokers better off quitting, even with weight gain

NEW YORK — If you quit smoking and gain weight, it may… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month