Contributing Writers: Azad Ali, Tangerine Clarke,
George Alleyn Nelson King, Vinette K. Pryce, Bert Wilkinson,
Lloyd Kam Williams
GENERAL INFORMATION (718) 260-2500
Caribbean L 10 ife, Feb. 8–14, 2019 BQ
By Anis Chowdhury and
Jomo Kwame Sundaram
SYDNEY & KUALA
LUMPUR, Jan. 15, 2019 (IPS)
- In light of the uncertainty
caused by the US-China
trade war, the IMF expects
the US economic growth to
slow from a three-year high
of 2.9 percent in 2018 to 2.5
percent in 2019, while China’s
expansion has already
slowed in recent years, albeit
from much higher levels.
Trump stimulus
dissipates
US President Trump and
the previous GOP-controlled
US Congress claimed to be
breathing new life into the
US economy with generous
tax cuts. The US economy
is now overheating, with
inflation rising above target,
causing the Federal Reserve
to continue raising the federal
funds rate to dampen
demand.
As most families hardly
gained from the tax changes,
US purchases of houses
and consumer durables continued
to decline through
2018. Instead of investing in
expanding productive capacity,
US companies spent much
of their tax savings on a $1.1
trillion stock buy-back spree
in 2018.
Hence, the positive
impacts of tax cuts were not
only modest, but are also
diminishing. Nearly half of
226 US chief financial officers
recently surveyed believe
that the US will go into recession
by the end of 2019, with
82 percent believing that it
will have begun by the end
of 2020. Wall Street’s biggest
banks, JP Morgan and Bank
of America, are also preparing
for a slowdown in 2019.
As if to confirm their concerns,
both the Dow Jones
Industrial Average and the
S&P 500 had their worst ever
December performance since
1931, when stocks were battered
after the Great Crash.
European recession
Meanwhile, the European
Central Bank is expecting
sluggish 1.7 percent regional
growth in 2019. Europe is
close to recession with the
collapse of industrial output
in Germany, France, UK and
Italy.
Germany’s industrial output
fell by 1.9 percent monthon
month in November 2018,
and was in negative territory
in five of the six months before
December. Its GDP fell by 0.2
percent in the third quarter
of 2018. France’s industrial
production fell 1.3 per cent in
November 2018, reversing a
1.3 percent growth recovery
in October from a 1.7 percent
decline in September.
Italy, Europe’s third largest
economy, recorded negative
growth in the 3rd quarter
of 2018 as GDP fell by 0.1
percent in July-September
2018 with weaker domestic
demand.
As the UK remains mired
in its Brexit mess, GDP
growth was dragged down
to 0.3 percent in the three
months to November with
the biggest industrial output
contraction since 2012.
2018 final quarter growth is
expected to be 0.1 percent,
i.e., negligible.
Not preparing for the inevitable?
David Lipton, the first deputy
managing director of the
IMF, warned in early January
2019, “The next recession is
somewhere over the horizon,
and we are less prepared to
deal with that than we should
be . . . and less prepared than
in the last crisis in 2008.”
Although the IMF had
projected 3.7 percent global
economic growth for 2019 in
October 2018, Lipton’s statement
suggests that the IMF
is likely to revise its 2019
growth forecast downward.
There have also been growing
concerns over the continued
efficacy of unconventional
monetary policy since
the 2008-2009 global financial
crisis (GFC). Undoubtedly,
countries now have less
fiscal space than in 2009, and
overall borrowing, including
public debt has risen since.
Reaping what you
sow
The policy blunders since
the GFC have only made
things much worse. The
ideologically driven case for
fiscal consolidation did not
boost investor confidence for
a robust recovery, as promised.
Despite acknowledging
false claims cited to justify
fiscal consolidation, including
the IMF’s admission that
its early advice was based on
faulty calculations, there was
no recommended change in
policy course.
Instead, all responsibility
for recovery was put on
By Idriss Jazairy
Idriss Jazairy Special Rapporteur
of the UN Human
Rights Council on the Adverse
Impact of Unilateral Coercive
Measures
GENEVA, Feb 4 2019 (IPS)
- The count down towards a
tragic outcome in Venezuela
has started. All outside powers
express what they say is a
shared concern for its peaceloving
people that has the misfortune
of sitting on what is
maybe the largest oil reserves
in the world. The problem
is that geopolitics lead groups
of foreign countries to express
different, not to say opposed
recipes as to how democracy
can be restored and happiness
pursued in Venezuela and want
to make their own views prevail
in this divided country.
Divided the country has
been indeed for quite some
time. Of course circumstances
have not been clement, both
political and economic, what
with institutional breakdown,
the collapse in oil prices and
the increasingly stiflling unilateral
sanctions which have
targeted Caracas.
But governance has also
been found badly wanting, in
a context of increasing violence
on all sides. Incidentally,
recent debates seem to imply
there are three sides to the
domestic dispute and forget
the fourth, the millions of
Chavistas themselves who can
only be ignored at the peril of
peace.
When stakes and passions
are high, it’s hard for independent
well-wishers to find
Ariadne’s threat to safety. Of
course, states are not entitled
in international law to inflict
unilateral sanctions to bring
about regime change in other
states.
Change must be the outcome
of an internal process
and preferably a peaceful one.
The UN Secretary General
has offered to facilitate such a
process. Let not sabre-rattling
dim this voice of wisdom. Let
the international community
forget about its polemics.
Yes the socio-economic situation
in Venezuela is in shambles
but let’s not make it worse
by seeking an outright win like
in a boxing match. True the
use of overwhelming military
power may achieve knock-out.
But then pile up, as has been
the case in Iraq, Syria or Libya,
low-level conflict …and durable
high level agony.
I appeal to all outside powers
to give peace a chance by
showing statesmanship at
the Security Council through
unanimously providing the
Secretary General with this
body’s full backing in the pursuit
of the mission he expressed
readiness to undertake to facilitate
the internal change process.
It may look less radical
in the short term but it will
spare lives and livelihoods in
the medium term.
My appeal may be inspired
by wishful thinking. It may
already be a case of « Alea jacta
». It’s a familiar case. We’ve all
seen it happen before.
Idriss Jazairy is quoted in a
New York Times article titled
“Venezuela’s Guaido Courts
Russia; Powers Divided on
Maduro”
OP-EDS
The next recession
is somewhere
over the horizon,
and we are less
prepared to deal
with that than we
should be . . . and
less prepared than
in the last crisis in
2008
Continued on Page 12
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Gloom ahead of world
economic storm
Venezuela
Alea Jacta!
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