(1) The meltdown of global financial markets has left the world in crisis, with some of the most successful nations now haunted by financial instability, facing surged unemployment and country recession.
(2) The economic situation of countries which we have previously witnessed as one of the rapid economic development nations in the world such as Japan and South Korea, as well as new emerging nations such as Russia, China, India and Brazil are facing hiatus in their nation development.
(3) Our country Malaysia, being one of the nations under the developing and emerging economies, has also been severely affected by the present crisis, although we were not directly involved with the dealings that have led to this unsustainable situation.
(5) The current world economic crisis was caused mainly by a combination of world macroeconomic imbalances and severe weaknesses in the US and Western financial system.
(6) Whilst many countries struggle with the current world financial crisis, many companies on the other hand, are in dire straits and may go bankrupt anytime.
Global Unemployment Surged
Global Unemployment Surged
(7) In the past decade, many populations such as Poles, Latinos, and Chinese from rural areas immigrated voluntarily to other countries; many South Asians work in the Gulf with no resentment but one objective – to survive and earn a living.
(8) However, the sharp turn in the global economy recently sees the global economic meltdown hitting the contemporary world badly, causing many to lose their jobs.
(9) According to International Labor Organization’s (ILO) latest report, ILO revised upwards the worldwide unemployment projections from 210million to 239 million in 2009. ILO’s updated projections of working poverty reviewed approximately 200 million workers worldwide will join the ranks of people living on less than USD 2 per day.
(10) Many of them are working in multinational companies, both local and abroad.(11) If they were laid off by their current company, the flow of remittances from rich nations to poor countries, which used to be quite resilient during past few economics crisis, will create another incessant impact and effect in the future. And this laid off will also bring a significant consequences and repercussion on the workforce in all labor market sectors worldwide, apart from social issues.
(12) If ILO claimed such number of unemployment representing the worst performance on record in terms of employment creation worldwide, how do we ensure that the employment losses and human hardship are under control? And especially since the depth, breadth and duration of the crisis are still uncertain. Inequality and poverty are still the main concerns of many countries.
(13) Depth and breadth of the financial crisis couldn’t be solved as they have affected all countries worldwide especially when the unemployment rate, imports and exports have each surged and dwindled tremendously over a short period.
Care for Macroeconomics
(14) We need to respond and react to the world crisis and press on the dimension of globalization. It is imperative for us to understand and realize the dimensions and cause of the problem.Care for Macroeconomics
(15) Unemployment, inequality and poverty rate has increased drastically due to the impact of the financial crisis, and due to the world’s developments being underpinned by ‘solid’ progress in banking & financial industry.
(16) Both political and economical analyses have to be carried out and executed. Otherwise, it is hard for us to restore growth on a strong footing. The study and revision of the relationships between nations, among nation, market and society, between globalization and de-globalization, in the aspect of issues or subjects concerned with people within society, and economics, politics, sociology and geography have to be taken to a more detailed level.
(17) If subprime crisis or the housing bubbles were the root cause of today’s economic and financial disaster, why don’t we study, examine and revise our past policies?
(18) If efficient-markets hypothesis (EMH) model, an economic model applied and practiced in the financial industry especially in US and Europe for the past 30 years, has crashed and brought us to the present state of crisis, how do we restore and reform the financial situation worldwide? We hope to take an econometric approach to the problems of the current financial disasters in order to reveal more about the cause, as EMH has been applied for the past 30 years.
(19) If Dynamic stochastic general equilibrium (DSGE) models helped guide deliberations at several central banks, shall each country study and examine the models then?
De-globalize in a Globalized World?
De-globalize in a Globalized World?
(20) Fiscal policies and public policies that attempt to respond to the crisis so far have contributed little to the world, as global monetary issues have been bombarded after the subprime crisis. How regulators and politicians rally the disorganized, imbalance and unhealthy financial system, are doubtful and vague now. We need to reexamine public and fiscal policies we have been implementing for so long, to identify new short and long term policies.
(21) Early this month, the hospital industry of USA agreed to accept a cut of $155 billion in their expected revenue, after meeting with the country’s vice president Joseph Biden. Will de-globalization ease the present dire financial crisis?
(22) G8 summit meeting in Italy early this month declared: “Social and employment policies are a crucial pillar in the context of a new global framework”. What then are solutions to address human dimension of this crisis? How about the effects, impacts, and burden of the unremunerated work, which is particularly headed by women? Will they bring any positive results?
Imponderable Future
(23) We are facing an imponderable future. This uncertainty ‘encourages’ those who have saving to not commit to new capital projects. Subprime crisis deflated the housing bubbles. Does that mean we have previously ignored the control of housing properties, and let the prices boom to the likings of property tycoons? Is free market really free? How do we safeguard the financial stability worldwide? Do we need to switch our gears now?
(24) The world is actually engaged in fisticuffs now. Not a boxing-match in boxing ring, but rather the fiscal policies worldwide, in each nation and between nations. Housing bubbles deflated; banking and financial systems crashed. We have many renowned economists, and none of them is telling us what to do next. Nobody can envisage the consequences of the crisis, and nobody has the idea how to fix the rusty financial system.
Note: This article can also be found in Hewo.com BloggerStation.
Note: This article can also be found in Hewo.com BloggerStation.
