The Financial Crisis: Charting a Global Recovery

The Financial Crisis: Charting a Global Recovery

June 22, 2009—New World Bank analysis of the global economy paints an unprecedented picture: global output falling by 2.9 percent and world trade by nearly 10 percent; accompanied by plummeting private capital flows, likely to decline from $707 billion in 2008 to an anticipated $363 billion in 2009.

As the world enters what appears to be an era of markedly slower economic growth, the World Bank’s annual Global Development Finance (GDF) report, released today, updates the outlook for the global economy, and explores the broad approach that will be necessary to chart a worldwide recovery.

“Extraordinary measures by governments around the world have helped save the global financial system from complete collapse, but the economic recession in the real sectors persists,” said the World Bank’s Justin Lin, Chief Economist and Senior Vice President, Development Economics. “To break the cycle, we need bold policy measures, including restoration of domestic lending and global capital flows.”

Lin was speaking at the Annual Bank Conference on Development Economics, underway in Seoul, where experts have gathered to discuss the financial crisis. He emphasized the key role that developing countries—the engine of future global growth—can play in the global recovery, as well as the grave development emergency posed by the impact of the crisis on poor, vulnerable countries.

Deepening global recession

As capital became increasingly hard to come by, and uncertainty soared about future demand, there was a sharp decline in production of manufactured goods, and in global trade in these goods. The level of industrial production in rich countries has dropped by 15 percent since August 2008, and that in developing countries, excluding China, by 10 percent. Read news... Permanent URL for this page: http://go.worldbank.org/XNOU707YR0

Wereldbank verwacht: lagere groei in Oost-Azië

Wereldbank: lagere groei in Oost-Azië
7 april 2009, 10:26 uur | FD.nl

(Bron Het Financieële Dagblad)
De opkomende economieën in Oost-Azië groeien dit jaar veel minder hard dan in de voorgaande jaren . Door een 'pijnlijke toename' van de werkloosheid en een daling van de lonen kunnen miljoenen mensen in de regio niet aan de armoede ontsnappen. Volgens de prognoses van de Wereldbank vertraagt de economische groei in Oost-Azië dit jaar tot 5,3 %, tegenover 8 % in 2008 en meer dan 11 % in 2007. Als China buiten beschouwing wordt gelaten, valt de groei nog 'veel lager' uit, stelde Wereldbankeconoom Vikram Nehru in een toelichting.
China is dan ook het enige lichtpuntje dat de ontwikkelingsbank in Oost-Azië ontwaart. Volgens de Wereldbank kan het economisch herstel daar al in de tweede helft van dit jaar inzetten. Lees artikel...
http://www.fd.nl/artikel/11370893/wereldbank-lagere-groei-oost-azie

Statement of World Bank Senior Economist Eric le Borgne at the Launch of the East Asia and Pacific Half-Yearly Update
Statement by Eric LE BORGNE, Senior Economist, World Bank Office in Manila
Pasig City, April 7, 2009
PHILIPPINES-Battling the forces of global recession. Download PDF
http://siteresources.worldbank.org/INTPHILIPPINES/Resources/PHILIPPINESBattlingtheforcesofglobalrecessionFINAL.pdf

Chance Of A Bottoming Out In China Provides Ray Of Hope On An Otherwise Gloomy Horizon, Says World Bank’s Review Of East Asian And Pacific Economies
http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22131602~pagePK:34370~piPK:34424~theSitePK:4607,00.html

Tokyo, April 7, 2009 – As countries in the East Asia and Pacific region prepare themselves for an expected surge in joblessness resulting from the global slowdown, a ray of hope may be emerging with signs of China’s economy bottoming out by mid-2009, says the World Bank's latest half-yearly assessment of the region's economic health.
The latest East Asia and Pacific Update, titled Battling the Forces of Global Recession, says a recovery in China – fueled largely by the country’s huge economic stimulus package – is likely to begin this year and take full hold in 2010, potentially contributing to the region’s stabilization, and perhaps recovery. But with China still heavily reliant on exports to world markets that continue to contract, the Update warns that a truly sustainable recovery in the East Asia and Pacific region ultimately depends on developments in the advanced economies.

Battling the forces of global recession, Download PDF
http://siteresources.worldbank.org/INTEAPHALFYEARLYUPDATE/Resources/550192-1238574864269/5976918-1239010682147/update_april09_fullreport.pdf

Crisis Reveals Growing Finance Gaps for Developing Countries

Crisis Reveals Growing Finance Gaps for Developing Countries
Research shows poorer countries are short of $270- $700 billion for 2009

Washington, March 8, 2009 — Developing countries face a financing shortfall of $270-700 billion this year, as private sector creditors shun emerging markets, and only one quarter of the most vulnerable countries have the resources to prevent a rise in poverty, the World Bank said.
In a paper for next Saturday’s meeting of the Group of 20 finance ministers and central bank governors, the World Bank said that international financial institutions cannot by themselves currently cover the shortfall -- that includes public and private debt and trade deficits -- for these 129 countries, even at the lower end of the range. A solution will require governments, multilateral institutions, and the private sector. Only one quarter of vulnerable developing countries have the ability to finance measures to blunt the economic downturn, such as job-creation or safety net programs.“We need to react in real time to a growing crisis that is hurting people in developing countries,” said World Bank Group President Robert B. Zoellick. “This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis. We need investments in safety nets, infrastructure, and small and medium size companies to create jobs and to avoid social and political unrest.”
The global economy is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential. World Bank forecasts show that global industrial production by the middle of 2009 could be as much as 15 percent lower than levels in 2008. World trade is on track in 2009 to record its largest decline in 80 years, with the sharpest losses in East Asia.

For more information read:
Swimming Against the Tide:
How Developing Countries Are Coping with the Global Crisis (235k pdf)
http://siteresources.worldbank.org/NEWS/Resources/swimmingagainstthetide-march2009.pdf

For more information on the World Bank please visit:
www.worldbank.org

The Doing Business project...Download Free Reports

The Doing Business project...
provides objective measures of business regulations and their enforcement across 181 economies and selected cities at the subnational and regional level.

Compiled with the help of 6,700 business experts and government officials around the world, "Doing Business 2009" analyzes how difficult it is to comply with 10 different sets of business regulations that affect company lifecycles, from startup to closure. The World Bank's research team examined the number of procedures required to start a business and the ease and cost of transactions such as obtaining construction permits, hiring workers, getting credit, paying taxes, enforcing contracts and declaring bankruptcy. Each category is given equal weight to create an overall "ease of doing business" index and ranking.
http://www.doingbusiness.org/

Doing Business 2009 -- Full report now available for download! Azerbaijan was the top reformer in doing business, while Eastern Europe and Central Asia led the world’s regions in regulatory reforms, according to Doing Business 2009. Download the entire 211-page report to learn more about reforms and other changes to the business environment in 181 economies.
Download full report (PDF, 4.7MB) or by chapter
Also available in Arabic (PDF, 9MB), French (PDF, 5MB) and Spanish (PDF, 5MB)
http://www.doingbusiness.org/documents/fullreport/2009/DB09_Full_Report.pdf

Study: Singapore is No. 1 spot in the world for small businesses
The U.S. ranks third in a World Bank survey of the friendliest regulatory environments for startups and small companies. (Source CNN Money, read Article)

With the world in economic turmoil and the quest for a new 21st century economy gainig momentum, these reports provide (this report) very usefull information for business people, start ups, entrepreneurs, innovators and inventors who want to be part of the new business wave.
A hundred years ago a wave of innovation happened, almost 50 years ago a new wave started in California in what later became Sillicon Valley. The spirit of these entrepreneurs and innovators is still very much alive but lots of them today are simply looking for the best places to set up business.

For our Dutch readers we would like to point out that The Netherlands is not even in the first 20 of the best places to do business.