Bloomberg Businessweek USA 09.30.2019

◼ ECONOMICS BloombergBusinessweek September 30, 2019

China’s Go-Slow

Stimulus

DonaldTrump hascalled theleadersof the

Federal Reserve“boneheads” for not doing

enoughtojuice U.S. economicgrowth—even

thoughtheFedhasalreadycutinterestratestwice

thisyear.Meantime,theEuropeanCentralBank

saysit’sreadytobuyasmuchdebtasit takesto

reflatetheeuroarea.ThatleavesChinaasthe

onlyoneoftheworld’sbigthreeeconomiesthat

isn’tslammingitsfootonthegrowthpedal.It’san

extraordinarypolicyturnaround.

Inpastcycles,anyhintthattheCommunist

Party’sloftygrowthforecastswereunderthreat

ledtoall-instimulus.Thistimearound,evenwith

theChineseeconomyheadedfortheslowest

27

Inrecentyearsgovernmentshavebeenwill-

ingtoadmitwhite,Christianworkersfromplaces

suchasUkraineandBelarus.Butthatsupplyis dry-

ingup.Nowmigrantsfromfar-flungcornersofthe

worldhavebeguntoarrive,challengingthenotion

thatthiscornerofthecontinentcanremainshel-

teredfromWestern-stylemulticulturalism.

Thelaborforceofthe 21 countriesbetween

theBalticSeaandtheBalkanswillshrinkbymore

thana quarterby2050,loppingover1 percent-

agepointa yearoffeconomicgrowth,according

totheInternationalMonetaryFund.IMFDeputy

ManagingDirectorTaoZhangtoldcentralbankers

fromtheregioninJulythattheircountriesmust

startimportingworkerstohelpaddresstheissue.

It’salreadyhappening.InHungary,theEU’s

fastest-growingeconomy,therewere49,500work

permitsheldbynon-EUcitizensin2018,more

thandoublethepreviousyear’sfigure.In 2016

therewereabout7,300.WhileUkrainiansheld

morethanhalfofthem,Vietnamese,Indians,

andMongoliansarenowamongthegroupsgrow-

ingquickest.

Romaniaboostedthenumberofpermitsfor

non-EUworkersby50%thisyear,withSriLankans

andIndiansjoiningChineseandTurkishemploy-

eesatrestaurantsandconstructionsites.InPoland,

crewsofMongolianwomenpaintnewlybuilt

Warsawapartmentbuildings.

InBelgrade,ethnicAlbaniansareworkingalong-

sidelocalstoturntheSerbiangovernment’svision

fora swankynewwaterfrontcomplexintoreal-

ity.Ona recentvisit,PresidentAleksandarVucic

expressedamazementathoweconomicneedwas

trumpinga historyofethnictensions.

SouthKorea’sHankookTire& TechnologyCo.

thismonthdelayeda $295millioninvestmentatits

factoryinHungarybecauseofdifficultiesinrecruit-

ingemployees.About 200 ofitsexisting3,000work-

ersattheplantarefromUkraineandMongolia.

Governmentshaveattemptedtoliftbirthrates

byofferinggeneroustaxbenefitsandotherperks

forwould-beparents,yetata recentdemography

conferenceinBudapest,Orban,Vucic,andCzech

PrimeMinisterAndrejBabisconcededtheyhadn’t

foundthemagicformula.

Andtheydon’tliketalkingabouttheirstopgap

solution.Theycontinuetobeattheanti-immigrant

drum without mentioning the new workers from

farther afield. Polish Prime Minister Mateusz

Morawiecki, who faces elections in October, fired

a deputy minister in 2018 for going “way too far”

when advocating more foreign workers.

In Hungary, the Orban-controlled media dishes

out a daily diet of anti-immigrant news, and the

government maintains a state of emergency over

mass immigration that, in reality, has plunged.

Orban himself touts “ethnic homogeneity” as being

good for business, keeping the country safe.

Attitudes among the public may be thawing. In

the eastern Croatian town of Petrijevci, the local

meat-processing plant hired 17 butchers from

Nepal to fill vacant positions. Residents, many of

whom had never met someone from so far away,

collected clothes for one worker after his luggage

was lost in transit.

Back in Sarud, where old ladies sell home-

grown fruit and vegetables outside their homes,

the Indian workers’ appearance has also shifted

opinion. Margit Demeter, for one, is starting to

doubt what she sees on TV. “We hear a lot of bad

things about migrants, but I can’t say anything

bad about the ones here,” says the 66-year-old.

“We could just as easily be in their shoes. And

what about all the Hungarians who went abroad

to live or work? Are we going to say bad things

about them, too?” �By Zoltan Simon, Jasmina

Kuzmanovic,andMarekStrzelecki

● The U.S. and Europe are boosting their economies,

but Beijing is wary of debt overload

DATA: UNDESA, WORLD POPULATION PROSPECTS 2017

THE BOTTOM LINE Eastern European nationalists are quietly

opening the door to hundreds of thousands of foreign workers to

battle labor shortages that threaten investment and growth.

-1 5

-1 5

-1 6

-1 8

-1 8

-1 8

-1 9

-24

-24%

● World’s fastest

shrinking populations,

2017-2050

Bulgaria

Latvia

Moldova

Ukraine

Croatia

Lithuania

Serbia

Hungary

Poland