The eye of the recession storm is said to have passed. The world is now slowly recovering from the greatest economic bust since the Depression. The US says it has edged out of the economic meltdown, Australia is said to have survived the recession easiest and earliest.

Anyone who comes from a typhoon-riddled country could attest that the eye of the storm is not the whole of the storm. This means that when the eye of the storm has passed, what follows are lingering elements that are still part of the storm. In fact, most of the deluge occurs after the passing of the storm’s eye.

This, then, is a new definition of the world ‘normal’ for the world economy. The concept of ‘normal’ is now redefined, though at a much lower scale. ‘Unemployment is still rising and much manufacturing capacity remains idle.’ But ‘better’ is always better even if the old can no longer be recaptured.

The G20 says, “A sense of normalcy should not lead to complacency.” This is perhaps the biggest lesson of the global recession. We must always be on guard from hereon, no longer assuming anything. Perhaps, also no longer trusting anything at face value or taking with a grain of salt the optimism of financial markets?

The onus of the recovery rests on policymakers across the globe. They are the ones that will bring back and, eventually, foster re-growth. There are two possibilities from hereon: ‘that the world economy returns roughly to its pre-crisis rate of growth, without regaining the ground lost’ and, more depressingly, ‘that growth stays at a permanently lower rate, with investment, employment and productivity growth all feebler than before.’

Via Economist.com