Global economy to grow at 4.1pc rate in 2008

From Fazle Rashid | Published: August 15, 2008 00:00:00 | Updated: February 01, 2018 00:00:00

NEW YORK, August 14: A growth rate below 3.0 per cent is considered a period of economic recession by the International Monetary Fund (IMF). The global economy will grow at the rate of 4.1 per cent in 2008 and will drop to 3.9 per cent in 2009, predicts IMF. The global economy grew by 4.5 per cent in the first quarter of 2008. Then it began to sink.

But much of this hinges on oil price in the international market. The oil price rose more than $2.0 a barrel yesterday. With no sign of calm in Russia's conflict with Georgia, the price of oil may jump further. Russia is a major supplier of gas and oil to Europe. The supply is bound to disrupt. Europe will then again look to the Middle East for the supply of oil.

The United States intervention in Georgia will further compound the woes of the global economy. President Bush has dispatched American troops to Georgia to minister relief and to shield the beleaguered president Mikheil Saakashvili. President Bush demanded that Russia abide by the cease fire brokered by France or risk its place in the diplomatic, political, economic and security structures of the 21st century, the New York Times reported today.

A Pentagon official echoed President Bush stating the relief operation was intended to show Russia that 'we can come to the aid of a European ally and we can do it at will whenever and wherever we want'. The warnings are not likely to subdue Russia. The US secretary of state who will be in Georgia to mediate a peace did not join the war of words. She looked grim on tv channel NBC and ruled out solution of the problem by military means. She avoided combative tone.

"We expect Russia to ensure that all lines of communication and transport including sea ports, roads, airports and air space remain open for delivery of humanitarian assistance for civilian transit. We expect Russia to meet its commitment to cease all military activities and we expect all Russian forces that entered Georgia to withdraw from that country', President Bush was quoted as saying.

American flurry of activities began after it was accused of inaction by Georgia and its people. European officials warned of the risks of appeasing Russia.

"I am talking about the impotence and inability of both Europe and the United States to be unified and to exert leverage and to comprehend the level of threat", said a Georgian official who was present at the talks between French President Sarkozy and Saakashvili of Georgia. Ms Rice called her Russian counterpart to tell him about the US relief operation.

President Bush is frustrated over the fact that Vladimir Putin whom he calls a close friend remained unmoved by the calls of moderation. The most Condi Rice said was "this is not 1968 and the invasion of Czechoslovakia, where Russian can invade its neighbour, occupy a capital, overthrow a government and get away with it. Things have changed", she said.

Russian foreign minister Lavrov in an angry reaction warned the Bush administration that it risked a breach with Russia by throwing its support so strongly behind Georgia and its president.