President George W Bush's post-September 11 package provided a stimulus to an already faltering economy. Astonishing gains in US productivity, despite last year's recession, have the economic motor on track to sustain recovery. But Bush is also running deficits.
The major risk factor is Bush's unilateralist approach.
A lot of influential people - many of them at last month's special World Economic Forum in New York - are frankly terrified at Bush's "almost declaring war on Iraq, Iran and North Korea".
There is potential for outright disruption to Western oil supplies if Bush takes action without building a supportive constituency among previous Islamic allies of the US.
Bush's protectionist dance on steel tariffs, farm subsidies and airline bailouts does not augur well - palpably annoying the usually sanguine Federal Reserve chairman Alan Greenspan, the World Trade Organisation and the US's trading partners.
Economists debated long and hard about the recession's shape: Would it be a drawn out L shape, a shorter U shape or a quick bounce back to growth as a V shape?
Merrill Lynch believes sustained recovery is "virtually assured" as companies recover from the huge rundown in inventories, capital expenditure and export activity.
The OECD and IMF have forecast a return to modest economic growth of 0.7 per cent in 2002, but believe it might reach an annualised rate of 4.4 per cent in the December quarter. But the IMF warns concerns about personal security, rising unemployment, continuing low corporate profitability and cyclical downturns in some sectors could keep growth at moderate levels for a while.
We're pumping for the global growth option.
Australia It did not take the Rugby World Cup fiasco to prove New Zealand's relationship with Australia is at a disastrous all-time low.
New Zealand is becoming Australia's "branch economy" as Finance Minister Michael Cullen forthrightly asserts. But Head Office does not want us onboard until we play by its rules, its securities legislation and stock exchange laws.
Australia uses its opportunities to politically distance itself from New Zealand on issues like negotiating a three-way free trade deal with the US.
It will take a major repair job - led by business - before Australian Prime Minister John Howard and Helen Clark can push the Closer Economic Relations further.
Business Roundtable chair Murray Horn has written to his counterpart, Business Council of Australia's John Schubert, to try to reinvigorate the relationship.
It will be a long slog.
Australian strategist Alan Carroll thinks it patently absurd that the two nations do not combine business forces. Carroll and New Zealand businessmen like Nigel Gould and Stephen Tindall are pulling together a scheme to increase biotech and information and communication technology (ICT) investment Downunder.
At Government level, Australia is still grumpy over Anzus and New Zealand's recent Defence cuts - senators bang on that New Zealand doesn't "pull its weight in the region".
But Australia does not have that much to scoff about. Its stance on the Tampa refugees has rebounded. Its ability to play a leadership role in the Asian region has been compromised. Like New Zealand it risks becoming a marginal player on the periphery of the OECD club of industrial nations.
Australia's economy has been favourably out of sync. Despite September 11 and slowing global growth it hummed along last year at 3.7 per cent stoked by strong commodities prices and a low Aussie dollar. It is predicted to peg back to 3.2 per cent - 3.3 per cent in 2002.
Japan When Reserve Bank Governor Don Brash quit the bank's holdings of Japanese bonds three weeks ago, he knew only too well that Japan was a basket case.
A country so firmly in the grip of deflation that Deutsche Bank Japan, headed by New Zealander John Macfarlane, says it could possibly trigger a one-in-a-century global economic crisis.
Asset values have collapsed. The land the Emperor's Palace stands on was worth more than the state of California 12 years ago. It's now worth less than Indiana.
The Nikkei Index has rallied - but it all seems like smoke and mirrors.
The Bank of Japan has cut interest rates practically to zero, but the Government still fails to take firm remedial action.
The OECD reports that Japan's economy slowed rapidly last year as ICT exports slumped. Domestic consumption softened, despite four years of falling prices, leading to a 3 per cent decline in GDP.
A weak yen has not stopped exports falling. Household and business confidence is falling, and the IMF warns persistently low equity prices have added to concerns about financial system stability.
Expectations are little better for 2002.
The critical issue for Japan is when will it axe its European-style social welfare net. The population is aging, pension companies have significant unfunded liabilities, the returns have been cut from 2.5 per cent to 1.5 per cent. But Goldman Sachs estimates the unfunded deficit could be as high as 80 trillion yen. Net result - crisis.
China China has economic growth to die for, averaging 8 per cent annually.
It is the world's fifth largest trading nation, and with its acceptance to the World Trade Organisation stands to become the world's largest economy.
It is not yet ready to take up the US's mantle as the world's economic engine - a role that Japan was supposed to fill until it went belly up a decade ago.
China still has many Third World characteristics and is going through huge restructuring on its path from rigid central planning by diehard communists to a relatively free market economy.
Its rapid growth, popularity with international investors and low-cost base is putting pressure on Asian neighbours' economic growth, encouraging the "hollowing out" of industrial heartlands that started with Japan in the early 1990s. As Fortune Magazine puts it, China is exporting deflation.
As the price for WTO membership, China has to slash import tariffs, enforce intellectual property rights and become more open, which can only be a good thing for trading partners like New Zealand.
As the Asian Development Bank points out, China is still plagued by "market distortions, strict regulations, limited access to finance and public service, and high operating costs due to rent seeking and bureaucratic procedures of some local governments."
The most critical issue is the change of political leadership: Who will take over from President Jiang Zemin and Premier Zhu Rongji and whether they will pragmatically follow down the free-market path.
Hosting the Olympics gives China a great incentive to stay on track.
New Zealand companies should continue to follow the partnership model to boost exports and investments.
Britain Britain has never considered itself part of Europe.
Even Baroness Margaret Thatcher,76, is now pushing for Britain to join Nafta.
Why? Because Britain so consistently outperforms the continent's sluggish "eurosclerotic"growth levels.
After expanding by 2.4 per cent in 2001, the Economist Intelligence Unit forecasts growth will slow to 1.6 per cent this year. The National Institute of Economic and Social Research picks a more buoyant 2.1 per cent. Falling oil prices, recovering US equity markets and growing household demand contribute.
Despite this the British manufacturing sector officially entered recession in the final three months of 2001, partly because of a sharply contracting ICT sector.
The Bank of England is cautious about raising interest rates, holding the official cash rate firm at 4 per cent last month.
The smart money is on interest rate rises this year to curb burgeoning inflation.
