These are trying times for capitalism. The world economy is sputtering, and its driving force, the U.S., has officially entered into recession.
By David Schutt, Managing Editor
December 2001
Institutional Investor Magazine
Terrorists have struck at the heart of Wall Street and urged fellow Muslims to discard secularism in favor of fundamentalist religious principles.
Watching their exports shrivel and their citizens suffer, restive developing countries can’t help but question the wisdom of creating free and open markets. Judging by what our writers uncovered in this month’s issue, however, capitalism’s allure remains strong.
In Iran an intrepid entrepreneur, Parviz Aghili, who fled the country after Islamic fundamentalists tossed out the Shah, is creating the nation’s first private bank since Ayatollah Khomeini took charge in 1979. Tiny Karafarinan Credit Institution received government approval in September and is already attracting a steady flow of deposits. As Contributing Editor Colin Barraclough points out in “Persian Gulf” (page 57), many of Iran’s ruling clerics, prodded by President Sayed Muhammad Khatami, now concede that the stagnant, state-controlled economy needs a measure of private enterprise if it’s to provide a decent life for the country’s citizens.
Even as they battle tough domestic economic conditions, Mexico and Poland are steadfastly pushing to tighten their ties to the free-market economies of the U.S. and Western Europe, respectively. In an exclusive interview beginning on page 38, Mexican President Vicente Fox tells Contributing Editor Lucy Conger how important it is, in the wake of the September 11 terrorist attacks, to reestablish the free flow of Mexican goods across the border to the U.S. Meanwhile, in an interview with European Editor Tom Buerkle (page 48), Polish Finance Minister Marek Belka details how hard his government is working to meet the requirements for joining the European Union.
In France, a country with a Socialist prime minister, the tug of capitalism also remains strong. Cr,dit Agricole, which started in 1894 as a lender to farmers and has run for much of its history without much devotion to profits, is planning to go public. Chief executive Jean Laurent relates to Paris-based Staff Writer David Lanchner that France’s biggest retail bank needs to expand globally to create the products its increasingly sophisticated - and largely rural - clientele desire.
Capitalism’s benefit to humanity may inspire argument in some quarters, but its adaptability is beyond reproach.
