ROBERT SIEGEL, host:
We often talk about how the financial crisis has led to a worldwide recession. Iceland has nearly gone bankrupt; factories in China are shutting down; even Toyota has announced its first operating loss since 1941. So, our Planet Money team wondered, are there any places you can go and not feel like the economy is collapsing around you? Here is what NPR's David Kestenbaum found out.
DAVID KESTENBAUM: If you look at a globe, it can be hard to believe that this is truly a planetary recession. There are so many countries and at the beginning, didn't this just look like a problem with some U.S. mortgages? Well, there are some countries that are less affected.
Mr. IAN BREMMER (President, Eurasia Group): Yeah, sure there are, and I think that they're some of the most interesting places.
KESTENBAUM: Ian Bremmer is president of Eurasia Group, a consulting company.
Mr. BREMMER: One would be the Persian Gulf.
KESTENBAUM: Yes, he says, oil prices have gone down a lot, but the Gulf States still make a profit - unlike, say, Venezuela.
Mr. BREMMER: Venezuela actually runs a deficit when oil gets under $90 a barrel. In the Gulf States, you basically stick a straw in the sand; the oil comes out. It's a lot cheaper.
KESTENBAUM: That is one way to survive in a downturn. Produce something the world absolutely, positively cannot do without. You can be a one-trick pony. It's just got to be a good trick. Another way to escape the global crisis would be to live somewhere totally isolated. And for sure, you could go to some remote village in the Amazon or to the mountains of China and find people who haven't heard the words subprime mortgage, and haven't been affected by this whole thing. But it turns out most countries depend on other countries for something. Cambodia, for instance, sells us a lot of pajamas. Ken Rogoff, an economist at Harvard, says if he had to pick one major economy not as affected as it might be, it's India.
Mr. KEN ROGOFF (Economist, Harvard University): India is a relatively closed economy. It has much more trade restrictions, really, than any other big economy in the world. It's much harder to import anything. If you want to import a laptop there, there are all sorts of papers to fill out. Putting money into India is incredibly complicated.
KESTENBAUM: So despite the fact that your tech-support guy may be in Bangalore, India is somewhat insulated economically, though isolation is not a strategy Ken Rogoff recommends.
Mr. ROGOFF: They have a lot of poor people in India. It's a country with a population more than four times the United States, and a good two-thirds of them really still live in poverty, and a lot of that has to do with cutting themselves off from the world.
KESTENBAUM: This story would be a lot easier if there were some book that just listed how the economies of the world are doing. And oh, there is one: "The "World Economic Outlook," published by the International Monetary Fund. The report lists one country with a bright forecast: Liberia. GDP is predicted to jump from 8.6 percent growth to 14.3 percent in 2009. But they're a special case. Liberia is coming out of civil war. Charles Collins is deputy director in the IMF's research department. And even though the IMF produced that report, don't believe the numbers, he says. Most are being revised downward.
Mr. CHARLES COLLINS (Deputy Director, IMF Research Department): We are expecting most industrial countries to contract quite severely in 2009 - in fact, the largest synchronized downturn, really, in the post-war period. We can not find a parallel since the Second World War.
KESTENBAUM: I suppose on one hand, that's sort of to be expected. On the other hand, is trade really such a big deal that we all get dragged down together?
Mr. COLLINS: This is a massive crisis, and it's a crisis with many different tentacles, many different channels of transmission. Many countries are being affected by the drop in demand for their manufactured exports, but other countries are being affected by the drop in commodity prices. Other countries are being affected by the drop in availability of financing. So, if it don't get you one way, it will get you another way.
KESTENBAUM: Trade ties us together, so do the financial markets. People and institutions in one country investing in another, lending to each other - well, they used to lend. I asked Ken Rogoff at Harvard if he thought the crisis would have spread so far, so fast, a decade ago. And he laughed, because we had a crisis 80 years ago that also went global very quickly.
Mr. ROGOFF: The Great Depression was very similar in that the United States was the epicenter. We had this incredible boom, the roaring '20s. And we handled it very badly, and it collapsed, and we really took down everybody else with us.
KESTENBAUM: Even 80 years ago, the world was tied together by trade, and many countries were linked financially - not through mathematically complex derivatives, as they are today, but because they had pegged their different currencies to the same thing: gold. David Kestenbaum, NPR News.
SIEGEL: And you can learn more about how the global economy is measured at our Planet Money podcast and blog. That's at nrp.org/money.