Back in 1992, Standard and Poor’s downgraded Canada’s triple A credit rating to AA+ amid concerns over its fiscal health. But in just six years, the budget was balanced and Canada won its prized AAA rating back within a decade. How did they do it, and what can the United States, Italy, Greece, Portugal, Spain, Hungary and many other indebted nations learn from Canada?
India’s growing anxiety over China’s presence in South Asia and South East Asia is a reflection of its “inferiority complex” and “loud jealously”, wrote a commentary on Chinese state-run news agency Xinhua on Thursday.
Credit rating agency, Fitch, yesterday downgraded Portugal to junk status because of its “large fiscal imbalances, high indebtedness across all sectors and adverse macroeconomic outlook,” adding that it could be cut again.
Portugal yesterday suffered a double blow after the downgrade, just as a nationwide strike closed all public services due to growing frustrations over austerity measures that are pushing the country further into recession.
Over the last 25 years, the share of poor people in developing countries has been cut by half, while impressive development successes have been witnessed in countries once thought beyond help, thanks to effective developmental aid. But, while these results are promising, much remains to be done.
WASHINGTON, DC – Even skeptics admit it: effective aid works. In the last 25 years, the share of poor people in developing countries has been cut by half, and the last decade has witnessed impressive development successes in countries once thought beyond help.
China’s central bank announced today that it will reduce the reserve requirement for banks, a key sign that the government is easing the tight credit controls meant to curb inflation and surging property prices.
Recent data has show that the world’s second largest economy is cooling down. China’s inflation declined sharply in October, export growth has slowed, and HSBC announced yesterday that China’s preliminary purchasing managers’ index fell to 48 points, an indication of a contraction in spending.
In an ominous sign of things to come, Germany yesterday failed to secure buyers for 35 percent of its 10-year bonds put up for sale, sending borrowing costs higher and heightening fears of over Europe’s debt crisis.
Germany’s auction yesterday was one of the country’s worst bond sales since the launch of the euro, with the Bundesbank forced to buy large amounts of the bonds to ensure the auction would not fail.
Fears that contagion had spread to Europe’s largest and strongest economy, Germany, was clearly evident yesterday.
Poverty rates are on the rise in the Western world, as recession, rising fuel costs and austerity cuts to social welfare benefits, take their toll on the most vulnerable people. But rather than trying to alleviate the problem, most continue to perpetuate the cycle even further.
The European Anti-Poverty Network (EAPN) has warned that the austerity packages introduced by European governments desperate to reduce their deficits are responsible for rising levels of poverty and social exclusion.
The International Monetary Fund has stepped up as a lender of last resort, as it increased the firepower of its lending instruments and extending a six-month liquidity lifeline to indebted eurozone nations.
According to the IMF, the Precautionary and Liquidity Line would act as “an insurance against future shocks and as a short-term liquidity window to address the needs of crisis bystanders.”
The set of measures, said the IMF, are intended to “bolster the flexibility of scope” of its emergency facilities for countries facing liquidity problems.
The mounting problems that continue to plague the US and the eurozone has left many people worried. These problems have also led to numerous paradigm shifts that could potentially alter the face of the entire global economy. With uncertain times ahead, what we can do is to monitor developments, learn from them, and ultimately adapt.
Growth in Asian economies may be slowing due to weakening external demand, but the World Bank says Asian economies have the room to use fiscal stimulus to protect their economies from an escalation in the European debt crisis that may have substantial spillovers in the region.
