Tag: World Bank

Where Have All he Statesmen Gone?

A good question to ask here in the US.  We NO longer have statesmen we have old farts that want to hang on o their prestige of Congress for as long as possible…..it is NO longer what is right for the country and its people but rather what is right for those paying their political tabs for them.  These bloodsuckers will lie, distort and misinform the voter just to remain in their ivory towers and in doing so have crapped all over the ideal that is America.

But how do we know what a REAL statesman looks like?  Since we have NO one capable of demanding that title ….,what should we look for?

I advice…..look to ICELAND!

Icelandic president, Olafur Grimsson…….

A combative former leader of a now defunct left-wing party, he became a symbol of resistance after the 2008 collapse of Iceland’s banks by taking the unprecedented step of refusing to sign into law government bills on repayment of money lost in the crash to its larger European neighbors.

In doing so, Grimsson, 69, emboldened a presidential office that had up until then played a mainly ceremonial role and put himself at loggerheads with the centre-left government as well as international creditors.

Grimsson, who, unlike the government, opposes joining the European Union, won 52.8 percent of the vote in Saturday’s election to beat his closest rival, television journalist Thora Arnorsdottir, 37, who won 33.2 percent, the final tally showed on Sunday.

When the North Atlantic nation’s top banks collapsed in the space of a week in 2008, the country adopted a strategy to compensate local savers but not overseas ones, the bulk of which were British and Dutch depositors with so called Icesave online accounts.

These countries later demanded repayment of about $5 billion they spent compensating domestic savers, triggering a fierce international row. Twice, deals with the Icelandic government were agreed only for Grimsson to refuse to sign them, sending the unpopular bills to defeat in public referendums.

By effectively vetoing the agreements he broke well over half a century of political tradition and staked out a claim for a much more active and powerful presidential office, a course he has pledged to continue.

Now that is a statesman!  His concern is for the people and the country not what the World Bank wants or the IMF….is it self-serving?  Probably, but the people see a man fighting for them and not the international financial giants that are controlling the rest of the world….

Grimsson makes the politicians in the US look like the pathetic tools that they are…..we can only hope that one day there will be a real statesman that will rise in the US………

Economically–What Is What?

Before I start–Am I the only one that listening to the BS being spread about the economy?  Just wondering.

Geithner testified that the financial system was “starting to heal,” Treasury Secretary Timothy Geithner said Wednesday that major banks had raised $56 billion since stress tests showed several in need of more capital — a sign of emerging investor confidence.

Sounds good right?  But how good can it be when this was offered about the world economies?

AS reported by Bob Davis of the Wall Street Journal:

Steep declines in the economies of three of the U.S.’s biggest trading partners — Mexico, Japan and Germany — underscored the severity of the global recession and put pressure on major industrialized nations to revive moribund global trade talks

All three countries depend on exports to the U.S. But they have nose-dived as U.S. consumers cut back purchases of autos, electronics and other goods mass produced abroad. For the first three months of 2009, U.S. merchandise imports declined about 30% to $352.5 billion compared with the same period a year earlier. Mexico’s ties to the U.S. are particularly strong because of the North American Free Trade Agreement, and Mexican auto production in the first quarter fell 41% from the year before.

Okay, everything well and good…but if you believe in globalization, how can the US economy be in a rebound?  Who is Geithner bullshitting?  The investors, Congress, the American people, just who?

I realize that economics is about as interesting to most as watching flies mate, but ignoring the facts can only make one more vulnerable.

As of the closing of the markets on 21 May 09, in the 2 days after Geithner made is confidence statement the markets have lost 350+ points…..that does not sound like the investor is too sure of the markets to me.

World Recession Continues

As the recession continues in the US, the world is not doing so well either.  The International Monetary Fund’s updated World Economic Outlook, released Wednesday, predicts world economic growth of negative 1.3 percent this year, marking “by far the deepest global recession since the Great Depression”. Not since the 1930s has the global economy undergone a collective contraction.The IMF predicts that the world economy will grow by 1.9 percent in 2010. Advanced economies will stagnate, with average GDP growth of exactly zero. These estimates may prove optimistic, especially given the Fund’s repeated revisions of the 2009 figures. In any case, IMF Chief Economist Olivier Blanchard acknowledged that there would be no rapid recovery from the current economic crisis. He noted that, historically, wherever recessions are preceded by financial crises they are more severe and longer lasting.

The IMF is not the only source for doubt.

The global financial crisis could become “a human and development calamity” for many poor countries, the World Bank said, urging donor nations to speed delivery of money they have pledged and consider giving more.

Developing countries, its main constituency, face “especially serious consequences with the crisis driving more than 50 million people into extreme poverty, particularly women and children,” the bank said Sunday.

Ministers attending the IMF-World Bank meetings said they saw signs that the world economy is stabilizing, but it will take until mid-2010 for the world to emerge from the worst recession in decades. They said stimulus packages, bank recapitalization and other actions taken by governments and central banks to deal with the crisis are beginning to show results.

World Bank Is Not Optimistic

In the lead-up to the G-20 summit in Washington, the World Bank released figures this week confirming that the global economy is rapidly heading into recession. Its global outlook predicted a growth rate of just 1 percent for the world as a whole in 2009 and a contraction of 0.1 percent for the high-income countries.

As if to confirm the forecast, Germany officially entered recession yesterday for the first time in five years, after announcing its second consecutive quarterly contraction—0.5 percent in the third quarter. EU figures to be published soon are expected to show the entire eurozone is already in recession after a 0.2 per cent drop in GDP from April to June. Japan’s third quarter figures to be released next week are also likely to show a second successive contraction.

The Organisation for Economic Cooperation and Development (OECD), which covers the world’s major industrialised economies, issued similar gloomy forecasts yesterday. The OECD predicted contractions in 2009 of 0.9 percent, 0.1 percent and 0.5 percent for the US, Japan and the eurozone, respectively. OECD economist Jorgen Elmeskov told the Financial Times that the “mess” stemmed from a financial crisis that was engulfing rich and poor countries alike.

World Bank President Robert Zoellick said on Tuesday that developing countries were increasingly seeking financial assistance. He said that his organisation expected that lending would more than double from $13.5 billion last year up to $35 billion this year. He noted that “countries that had very good, sound macro-economic programs [like] Mexico, Indonesia” were worried about getting financing and seeking World Bank assistance.

The global financial crisis has already witnessed large withdrawals by foreign investors from developing economies—fuelled both by fears of growing risk and to shore up balance sheets at home. The World Bank expects private capital flows into developing countries to almost halve, from $1 trillion last year to around $530 billion in 2009. Even this investment will not be evenly spread, with countries like China and India absorbing the largest share.

The World Bank also highlighted the rapid decline in international trade—a key indicator of a global slump—forecasting a large contraction of 2.5 percent in world trade volumes for 2009. This is a precipitous fall from an expected growth of 5.8 percent this year and of nearly 10 percent just two years ago in 2006. Alongside plunging oil prices, the World Bank predicts that prices for non-oil commodities will fall by 23.2 percent in 2009.

Falling demand, collapsing commodity prices and the international credit crunch are all impacting most heavily on the world’s poorest countries and thus on hundreds of millions of people who are already poverty stricken. The World Bank estimates that every one percent decline in the growth rate of developing countries pushes an additional 20 million people into poverty. On the basis of the World Bank forecasts, that means an additional 40 million people will join the world’s poor next year.

As with the IMF, everyone has a hand out for cash. I ask one more time, where will all this money come from? Who will be the benefactor?

Latin America’s Food Crisis

Even a year ago, few people would have predicted that a global food crisis would make headlines as one of the major concerns for the future of the world. Yes, critics of agrofuels warned that food shortages and price hikes would result from the headlong rush to divert land from food to fuel production. And climate change experts predicted that global warming would hit small farmers—who even in today’s world of industrialized agribusiness still produce much of what we eat—the hardest. Agricultural economists alerted the world to the dangers of leaving the food supply to a highly concentrated international market.

But all these threats seemed nascent, not imminent.

So what happened? How did we get to a full-blown crisis, with children who before were fed going to sleep hungry, with rioters banging empty pots in the streets, with mud cakes standing in as dinner?

The answer involves all the dire warnings above. How they have played out depends in part on where you are. The interplay of pests and policies, drought and dollars, futures and farmers has always made agriculture a hard call for both almanac writers and policymakers. But international trends and a case-by-case analysis show common culprits.

In the Western Hemisphere, two countries—Haiti and Mexico—reveal the forces that are leading societies into a crisis that could become permanent if deep changes aren’t made to our food and agriculture systems.

The standard explanation for the global food crisis rests on the convergence of the demand for food crops due to agrofuels, the hike in gas prices, urbanization, increased demand from emerging economies, climatic changes, and environmental deterioration from erosion and pollution.

All of these factors have played a part in the crisis. Agrofuel development has been mandated well into the future, although it may be slowing down as criticism mounts. A recent report by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) blames biofuels in part for price hikes. The report concludes, “Governments need to carefully consider the impact of bio-fuels on the poor.” Gas prices are likely to remain high. With so much food moving around under free trade policies this will continue to affect the price and access.

With agribusiness corporations posting record highs (like Cargill, ADM saw profits soar from $363 million in 2006 to $517 for 2007) and investors salivating over “ag-flation” windfalls, it’s clear that what’s a crisis for some is a bonanza for others. That in itself should be a clue that the structural problems with the global food system do not lie in poor yields, “inefficient” small farmers, or climatic disasters. It’s manipulated prices; faulty trade, aid, and promotion policies; distribution and wrong priorities that are starving the world’s most vulnerable inhabitants.

Oddly enough, international solutions do not address these fundamental issues. Policy prescriptions from the wealthy countries and international financial institutions emphasize hand-outs and more free trade. They tend toward increasing, not diminishing, developing country dependence on imports and aid, and further lining the pockets of the companies that are fleecing the public.

The World Bank’s proposals include: “calling on the international community to make up the $500 million food gap required by the UN’s World Food Program to meet emergency needs,” increasing its loans for agriculture (promoting the same model that led to the loss of food sovereignty in developing countries facing today’s food crisis), “expanding and improving access to safety net programs, such as cash transfers, and risk management instruments to protect the poor” and strengthening free trade through “advocacy on the negative impacts of policies such as export bans, which create price spikes in importing countries, and the high levels of trade tariffs and subsidies in the developed world.” World Bank President Robert Zoellick, IMF Director Dominique Strauss-Kuhn, and former WTO President Pascal Lamy have all used the food crisis to argue for a reinvigorated Doha Round of the WTO to deepen the free trade system. This constitutes an offensive against measures that question the international markets which helped cause the food crisis.

The mass media portrays “food riots” in Latin America—demonstrations in the streets of Haiti, women banging on empty pots in Lima, cries for an affordable tortilla in Mexico—as ominous signs of instability. Instead they should be seen as wake-up calls to fix our most vital link to each other and to life itself—the food system.