Chrystia Freeland

Get ready for the next wave of globalization. The emergence of the emerging markets is old news, of course: after all, Tom Friedman discovered that the world was flat back in 2005. But even as much of the developed world is struggling with weak consumer demand and stubbornly high levels of unemployment, the emerging market countries are writing a new chapter in the story of the global economy.

We are accustomed to thinking of our economic relationship with the countries Fareed Zakaria describes as “the rest” as a two-way exchange between west and east or north and south: western companies setting up call centers in India or manufacturing their goods in China, for instance; and, more recently, savings-rich emerging market economies, especially China, investing in US treasuries, or Russian oligarchs buying London mansions.

That was Globalisation 1.0. In the next stage, some of the biggest deals and some of the most important capital flows will be between emerging markets, with no need to stop-over at Heathrow or JFK. Forget the last decade’s race-to-the-bottom rivalry between Wall Street and the City of London to be the world’s financial capital; the new motto of the moneymen, as one Manhattan banker put it to me this week, is “Mumbai, Dubai, Shanghai or goodbye.”

One place you can watch Globalisation 2.0 gathering pace is on the 49th floor of the ‘C’ tower in the high-tech high-rise complex the locals call Moskva City, on the banks of the Moskva river, half a mile downstream from Russia’s White House, where Prime Minister Vladimir Putin is currently installed. The fancy modern furniture (the “Ziricote veneer,” a sign informs visitors, is “sourced in Chile”) and contemporary art are standard New York hedge fund decor. But Stephen Jennings, the 50 year-old New Zealander who receives visitors here, is betting on a world that by-passes the west altogether.

Jennings is a founder and CEO of the Renaissance Group, a Moscow-based financial company with ambitions to be the premier investment bank for intra-emerging market capital flows. As Jennings put it, he wants Renaissance “to provide the plumbing”.

“The U.S… is kind of tapped out,” JetBlue founder and former CEO David Neeleman told Chrystia at this past week’s Google Zeitgeist conference. That’s why the serial entrepreneur decided to start his latest venture, Azul Airlines, in his native Brazil. Neeleman said air traffic in Brazil is expanding at three times the rate of GDP, nearly 27% a year, and that his airline is flying to cities that haven’t seen air service in years. Hear what he has to say about this and the JetBlue flight attendant who flew off the rails:

Whenever he visits Brazil, Neeleman is struck by the country’s optimism and enthusiasm, what he calls “that emerging markets buzz.” He does concede that Brazil faces some bottlenecks with infrastructure — Azul had to buy a field next to one Brazilian airport and use it as parking lot in order to keep pace with its growth — and bureaucracy — he’s pushing to reform the government agency that oversees airports — but Neeleman thinks Brazil is a safe haven for investors.

Earlier this week at the Google Zeitgeist conference, the company’s chairman and CEO Eric Schmidt said there was a divergence between his sector and the rest of the economy. While high-tech firms are currently receiving new investments, rolling out new products, and hiring new workers, the broader economy is at a standstill. “The damage that was done by the recession was much more severe than people acknowledge,” Schmidt said.

As the head of one of Silicon Valley’s most profitable companies and an ally of President Obama, Schmidt defended the White House from the charge that it is anti-business. He said recent events like the financial crisis and the BP oil spill showcased the need for government regulation of the private sector.

That said, the Google chief argued his own industry “should be as unregulated as possible,” given the pace of change and the plurality of options available to consumers.

On Wednesday, Chrystia sat down with legendary hedge-fund manager George Soros to ask him about his views on nearly every major economy.

They started with Asia. Soros said Japan was right to intervene in the foreign-exchange market to try to drive down the value of the yen, saying the country suffers from a grim combination of deflation and political paralysis. Here’s the video:

Soros pointed out that it took Japan twenty years to get past a crisis similar to the one facing the U.S., i.e. a real-estate bust followed by a banking crisis. It “will take a long time to work off the excess consumption” in the states, he said.

The pre-election economic treats that President Barack Obama handed out this week included several intended specifically for business: research and development tax credits, for instance, and the small-business tax breaks he is pushing to introduce in the face of Republican congressional opposition.

But these familiar sweeteners won’t be nearly enough to reverse one of the most significant estrangements of the first two years of the Obama administration — the rift between the White House and business.

Two years ago, candidate Obama was the darling of the CEO class: Hedge fund titans, Silicon Valley entrepreneurs and even registered Republican chief executives from the Midwest flocked to his banner. Today, America’s business leaders — even those who raised millions for him in 2008 — have turned on their president: “Socialist” is among the nicer epithets some use when describing Obama.