Global Economic News
ILO: 50 Million Jobs Will Be Lost Worldwide in 2009
Jan. 28 (EIRNS)The UN's International Labor Organization (ILO) issued a report yesterday warning that more than 50 million jobs could be lost worldwide by the end of 2009. The crisis could push another 200 million workers into extreme poverty, and bring the total number of "working poor" to 1.4 billionabout half the working population of the planet.
The London Times today described the findings as a "stunning estimate"; Lyndon LaRouche said the ILO projection was actually "optimistic," given the level of physical-economic meltdown already underway internationally.
ILO director-general Juan Somavia admitted, in presenting the report, that "if the recession deepens in 2009, as many forecasters expect, the global jobs crisis will worsen sharply."
IMF Sees $2.2 Trillion in Bank Losses Globally
Jan. 28 (EIRNS)The International Monetary Fund yesterday raised its projection of international banking losses from the current crisis by over 50%from $1.4 trillion, to $2.2 trillion. In so doing, the IMF has gotten a tad closer to the truth. Now, if they add three zeroes to their estimate, they'll be in the right ballpark, since the vast majority of the $1.5-2 quadrillion in outstanding financial aggregates has already gone up in smoke.
Former IMF chief economist Simon Johnson said, with the insight characteristic of IMF officials: "This is an extremely severe downward revision."
'China Shock' Hits Asian Economies
Jan. 29 (EIRNS)The implosion of China's processing trade, due to the collapse of the U.S. and European markets, is bringing down exports all over Asia. While China has big trade surpluses with the U.S. and European Union, it has long had trade deficits with its Asian trade partners, from which it imports the components used for its processing industries. This includes Japan, for which China is its biggest trade partner, especially if trade via Hong Kong is taken into account.
South Korea and Japan are both being hit hard by the contraction of China's imports in recent months. In December alone, Chinese imports fell by over 21%, an indication of how sharply the processing trade will contract in the coming months. Japanese exports to China fell 35.5% in December, and to Asia overall by 36.4%. For South Korea, the situation is even more difficult: The Korea Times reported on Jan. 27 that the "China shock" is "the biggest threat to the Korean economy." Some 23% of Korean exports go to China, its biggest trade partner, but in December, these exports fell 33% year on year.
China is also a big market for the less-developed Asian economies. Since 2006, China has become the third-biggest export market for Thailand, and fourth-largest export market for Indonesia, Singapore, the Philippines, and Malaysia.
Now, all this is going west, as a report published yesterday in the Singapore Business Times documents. China's imports from Asia, which had been growing 22% year-on-year through October 2008, began to fall sharply in November, by 23.8% year-on-year. "The worst-hit economies in terms of sales to China were the Philippines (-52%), India (-51.8%), Taiwan (-42.3%), and Hong Kong (-41.1%). While lower commodity prices may be partly responsible for these declines, China's slowing domestic economy and worsening export outlook is also dragging down demand for Asian exports, especially components for further processing," the Business Times reported. "After all, China's role to Asian exporters is not only as a consumer, but more importantly, the final point of assembly before the product is shipped to the ultimate consumers in the developed world."
Japan's Economy in Free Fall as Output Plummets 9.6%
Jan. 30 (EIRNS)"I've never seen such a steep production fall," Japan's Finance Minister Kaoru Yosano told a news conference, as some December results came out yesterday. "Japan's economy is falling off a cliff," said a security firm economist.
Japan's industrial output fell 9.6% in December, and household consumption was down by 4.6%, while unemployment took its greatest one-month leap upwards in 41 years, to 4.4% from 3.9%.
Short-time and production halts mark the entire auto industry, and the supporting machine-tool industries are being hit just as hard. "The suppliers' earnings are collapsing as quickly as the carmakers," said Andrew Phillips, an auto analyst.
Giant Japanese electronics firms are also being decimated. NEC Electronics announced cuts worldwide of 20,000 jobs. Toshiba, projecting a record annual loss, said it plans to shift its semiconductor production to cheaper locations and lay off 4,500 in Japan. Toshiba also plans to introduce a "work sharing" system so the company can further cut costs without more direct layoffs.