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

EXCLUSIVE: Global crisis spending lacks direction: poll

EXCLUSIVE: Global crisis spending lacks direction: poll

NEW YORK (Reuters) - Two-thirds of people believe "massive government spending" to combat the financial crisis shows a lack of clear direction, according to a poll of nations representing 75 percent of the global economy issued on Wednesday.
The Ipsos/Reuters survey also found that 60 percent of the people in the 23 countries polled say increased government regulation will stifle economic growth, an opinion particularly strong in the United States and emerging market giants India and China.

Clifford Young of Ipsos Global Public Affairs, the international market research and polling company that carried out the online poll, said the survey showed opinions were mixed with a majority still wanting more government action on the economic downturn despite their concerns.
"There's worry and some degree of uncertainty about government actions," Young said. "The general message is we want governments to do something, but not too much, and we don't want to go back to the dark ages."
The survey of 23,000 people, conducted from April 14 to May 7, showed 58 percent don't think the United States has done enough to reinvigorate the global economy, 53 percent believe the European Union needs to do more, and more than two-thirds think China has not done enough. Read more...
http://www.reuters.com/article/ousiv/idUSTRE55211E20090603

China's economy grew 6.1% in the first quarter, a rate most nations would kill for but amounts to "a recession in China,"

6.1% Growth "Is a Recession in China" But "More Optimistic Tone Justified"

(Source TechTicker)
China's economy grew 6.1% in the first quarter, a rate most nations would kill for but amounts to "a recession in China," says Nariman Behravesh, chief economist at IHS Global Insights.
China needs at least 8% growth or more to absorb surplus labor and materials, he explains.
But Nariman is upbeat about China's growth going forward, noting the government's massive stimulus is starting to kick in. A revival of China could serve as a "mini-growth locomotive for emerging markets" generally and especially for commodity producers, he says.

The future belongs to India, not China

The future belongs to India, not China
Spring 2009 Series
On May 12, 2009 an important Intelligence Squared debate will take place in London

Event Information:
All bets are now on China as the nation that will soon rival the USA as the world's other superpower. But hasn't anyone been looking across the Himalayas? India, a democracy of over a billion people, has a rate of growth almost as impressive as China's, a burgeoning middle class, a highly skilled work force and an abundance of raw materials. More important still, it operates under the rule of law not the rule of the politburo. Could it be that India ends up the dominant power of the eastern hemisphere?
The debate will take place at: Royal Geographical Society, Ondaatje Theatre.
http://www.intelligencesquared.com/events.php?event=EVT0181

Speakers for the motion:
Gurcharan Das Gurcharan Das is an author and public intellectual. He was CEO of Procter & Gamble India, and later Managing Director (Strategic Planning) of Procter & Gamble Worldwide, before he took early retirement to pursue the life of a full time writer. He is author of the bestseller, "India Unbound", which has been published in 17 languages and has been filmed by the BBC. He writes a regular column for the Times of India and six Indian language newpapers, and occasional pieces for the Wall Street Journal, Financial Times and Foreign Affairs.

Mark Tully Mark Tully was BBC Delhi correspondent from 1972 to 2004. Since 2004 he has been a freelance journalist, writer and broadcaster resident in Delhi. He is author of five books on India, the latest of which is "India's Unending Journey". He was educated at New School in Darjeeling, Marlborough College in the UK, and at Cambridge where he read history and theology.

Deepak Lal Indian-born classical liberal economist. He is the author of numerous articles on development economics, and his books include "In Praise of Empires: Globalisation and Order" and most recently "Reviving the Hidden Hand: The Case for Classical Liberalism in the 21st Century". He is James S. Coleman Professor of International Development Studies, University of California.

Speakers against the motion:
Lord Powell Charles Powell was Private Secretary to both Margaret Thatcher and John Major, and was a key foreign policy adviser to Mrs Thatcher. He was Chairman of the China-Britain Business Council from 1998 to 2007.

Danny Quah Malaysian-born Head of Department and Professor of Economics at the London School of Economics. He has delivered lectures at the United Nations, the Hay Festival Segovia, the World Science Forum, No. 10 Downing Street, and Khazanah Megatrends Forum, and has had his writings translated into 18 different languages. He is a Governor of the National Institute of Economic and Social Research, and has consulted for the World Bank, the Bank of England, and the Monetary Authority of Singapore.

Sir David Tang KBE Hong Kong businessman and socialite best known as the founder of the Shanghai Tang chain, although he sold his interest in the company in 1998. More recently Tang opened the Cipriani in Hong Kong and the China Tang restaurant at the Dorchester Hotel. He is a frequent contributor to publications such as The Spectator, The Daily Telegraph and the International Herald Tribune.