Global economic meltdown hits the poor hardest
Saturday, 1 November 2008
From Fazle Rashid
NEW YORK, October 31: The slogan of haves and havenots, which reverberated in 50s and 60s has reappeared again. This mouthful of slogan was heard with uninterrupted frequency in poor developing countries. This time it is being heard in the heart of the capitalistic world. The meltdown in the global economy has not affected the Wall Street executives and their likes in Europe but workers are without work forcing them to cut on their spending.
The US Fed Reserve and the International Monetary Fund (IMF) have both been accused of creating the classes of haves and havenots. If you create a class of emerging markets that are really protected and close to the developed countries there is a danger that the second class citizens are marked out more clearly, said Simon Johnson, a former chief economist of the IMF.
The same paper quoted Raghu Rajan another former chief economist of the IMF as saying "those inside the club and those outside the club". He, however, said discriminatory policy of the Fed and IMF will have limited impact on those excluded from the favour.
The policy-makers are calling it a " boundary problem ". The hazard of helping some countries while leaving others more in needs of infusion has been evident. The Fed and IMF have created two protective walls to shield emerging markets in need of dollars.
Analysts expressed grave concern over the Fed and IMF's decision to throw a protective cordon around some economies could further aggravate the challenges facing those outside the charmed circle. The claim of Pakistan which needs cash infusion urgently has been ignored, they noted.
The impact of the global financial crisis are continuing to squeeze companies and impede investments, prompting more lay-offs and austerity.
The economy has taken a turn for the worse said a market watcher.
Consumption has caved in signally more bad days ahead. The fundamentals around the consumer are all negative and there are no signs of any help anytime soon from anywhere.
The recession bell is ringing louder. The decline in consumer spending which has been estimated at 3.1 per cent has been steeper than earlier anticipated. The unemployment rate will be close to 7.5 per cent. The economists remain uncertain about how severe and protracted the recession will be.
Six US state governors lent their total support behind the call for federal government assistance to Detroit motor industries. Chrysler and General Motors are in negotiation for mergers. This could eliminate thousands of jobs. Ford says despite fall in sales it could still fend for itself. Mazda, the giant automaker of Japan is in talks with Ford for some kind of alliance. Volkswagen another giant automakers warned that the economic crisis now raging will worsen further in 2009.
American Express bank has announced it would cut 10 per cent of its workforce in a string of cost-cutting measures. A severe shortage of export credit will further reduce exports from Latin America already hit by softening of commodity price. The British bank, Barclays, instead of taking help from the government, has turned to Qatar and Abu Dhabi for cash infusion.
Meanwhile, Japan has unveiled a stimulus package of Y5000bn, second in two months, to stall the impact of the credit crunch. European economic confidence saw its biggest fall to date in October as the global crisis generated the bleakest outlook since early 1990s, a survey revealed. The European Central Bank (ECB) will next week announce a cut in the interest.
NEW YORK, October 31: The slogan of haves and havenots, which reverberated in 50s and 60s has reappeared again. This mouthful of slogan was heard with uninterrupted frequency in poor developing countries. This time it is being heard in the heart of the capitalistic world. The meltdown in the global economy has not affected the Wall Street executives and their likes in Europe but workers are without work forcing them to cut on their spending.
The US Fed Reserve and the International Monetary Fund (IMF) have both been accused of creating the classes of haves and havenots. If you create a class of emerging markets that are really protected and close to the developed countries there is a danger that the second class citizens are marked out more clearly, said Simon Johnson, a former chief economist of the IMF.
The same paper quoted Raghu Rajan another former chief economist of the IMF as saying "those inside the club and those outside the club". He, however, said discriminatory policy of the Fed and IMF will have limited impact on those excluded from the favour.
The policy-makers are calling it a " boundary problem ". The hazard of helping some countries while leaving others more in needs of infusion has been evident. The Fed and IMF have created two protective walls to shield emerging markets in need of dollars.
Analysts expressed grave concern over the Fed and IMF's decision to throw a protective cordon around some economies could further aggravate the challenges facing those outside the charmed circle. The claim of Pakistan which needs cash infusion urgently has been ignored, they noted.
The impact of the global financial crisis are continuing to squeeze companies and impede investments, prompting more lay-offs and austerity.
The economy has taken a turn for the worse said a market watcher.
Consumption has caved in signally more bad days ahead. The fundamentals around the consumer are all negative and there are no signs of any help anytime soon from anywhere.
The recession bell is ringing louder. The decline in consumer spending which has been estimated at 3.1 per cent has been steeper than earlier anticipated. The unemployment rate will be close to 7.5 per cent. The economists remain uncertain about how severe and protracted the recession will be.
Six US state governors lent their total support behind the call for federal government assistance to Detroit motor industries. Chrysler and General Motors are in negotiation for mergers. This could eliminate thousands of jobs. Ford says despite fall in sales it could still fend for itself. Mazda, the giant automaker of Japan is in talks with Ford for some kind of alliance. Volkswagen another giant automakers warned that the economic crisis now raging will worsen further in 2009.
American Express bank has announced it would cut 10 per cent of its workforce in a string of cost-cutting measures. A severe shortage of export credit will further reduce exports from Latin America already hit by softening of commodity price. The British bank, Barclays, instead of taking help from the government, has turned to Qatar and Abu Dhabi for cash infusion.
Meanwhile, Japan has unveiled a stimulus package of Y5000bn, second in two months, to stall the impact of the credit crunch. European economic confidence saw its biggest fall to date in October as the global crisis generated the bleakest outlook since early 1990s, a survey revealed. The European Central Bank (ECB) will next week announce a cut in the interest.