Global Economic News
Britain: Record Increase in the Inflation Rate
Jan. 19 (EIRNS)The rate of inflation in the UK for December, as measured by their consumer price index, increased more than 50% over that of November, jumping a full 1%, "the biggest amount on record," from 1.9% to 2.9% in one month. The retail price index (which includes home prices) showed an even bigger increase, jumping from 0.3% to 2.4% in the same month, according to the Office of National Statistics.
Since March of 2008, the Monetary Policy Committee of the Bank of England has pumped an unprecedented £200 billion ($300 billion) into the system, in its "quantitative easing" bank bailout program.
Euro-Austerity Is Killing Greek Farmers
Jan. 19 (EIRNS)The first to be sacrificed by the austerity imposed on Greece by the euro and the rating agencies, are the farmers. Calling on the Greek government for financial aid, over 5,000 farmers brought their tractors to form roadblocks in the center and northern part of Greece, shutting off several border posts. Last week, farmers started obstructing the major roads in the central area of Greece, Thessalonica, and Eastern Macedonia.
Five hundred tractors blocked the road connecting Athens to the large northern city of Salonica. The closure of border posts with Bulgaria, such as the one at Promachonas, Greece, provoked the anger of Bulgarian authorities. Bulgaria is now threatening to demand compensation for Bulgarian truckers and an intervention of the EU Commission.
Farmers demand immediate financial aid to compensate for the drop in prices of cereals, cotton, maize, olive oil, fruit, and milk. They are also asking for lower prices in fertilizer, seeds, and agro-chemicals, and a special discount price on electricity and gasoline, plus a three-year moratorium on their debts to the agricultural bank. In short, everything!
Chinese Economist Says Stimulus Packages Help Create New Cities
Jan. 19 (EIRNS)In an interview with China Daily on June 8, Lu Zhongyuan, the vice-president of the Development Research Center of the State Council and a leading economist, underlined that China is now moving into a period of growth propelled by internal demand, including the development of new cities in the central and western parts of the country. Lu noted that China did not choose to become a low-income export country, but was forced into that situation by the multinational companies. "The international division of labor is led by multinational companies in developed countries. Only if its pattern changes can we solve the problem of China exporting a lot," Lu said..
Lu also stressed that urbanization, which will help to boost domestic consumption, is continuing at a rapid pace, but now is spreading to areas outside the traditional coastal "hothouses." Many of the migrant workers, who will no longer have jobs in the traditional coastal low-wage export industries, will find work in the growing cities closer to their homes, Lu said. Much of the Chinese stimulus package has gone to transportation, particularly to the building of railroads, which will bring these new urban areas into the mainstream of the Chinese economy.
The new urbanization was also noted in a Financial Times article on Jan. 19 by James Kynge, FT's former Beijing bureau chief, who has just been assigned to a new FT "China Confidential" newsletter. The article notes that in the first 10 months of 2009, "lower-tier cities" accounted for a sharply growing portion of total investment. The FT profiled eight cities which were becoming hubs in this transition.
Shuangliu, a city near Chengdu in southwest China, has become a leader in the commercialization of agriculture. Jingzhou on the Yangtze River is an emerging transport hub. Heyuan, far upstream on the Pearl River in Guangdong Province, is benefitting from some of the wealth accumulated from the coastal region. Shouguang in Shandong province is a center for vegetable production. In Inner Mongolia, China is building an entirely new city, Ordos, which is located near a village that provided workers for a small coal mine in the area.