Who’s Getting Out First?
First Published Date : August 6, 2009 ADawnJournal.com
The global financial crisis has been such a major story in the last eighteen months that there can now be few people who do not have op inions on it, and fewer still who do not know what it is. The crisis, it would be fair to say, has cut into just about every nation’s news broadcasts, including even those not heavily touched by the crisis itself. What this has led to in many cases is a widespread “who’s more doomed?” contest, where the damage done to different economies is compared in what has, at times, been a pretty unedifying show of blood-letting. It hardly needs saying that speculating on the level of doom does little to encourage recovery.
Among the top ten economies in the World, there are none which have not been touched by the crisis. It is, after all, a global crisis and affects international trade. Yet some have been more seriously affected than others, with recession becoming depression in more than a few – including top ten ever-presents the United States and United Kingdom. Bank bailouts have had some effect – witness the perkiness of Goldman Sachs after their bailout – but in the countries which were at the forefront of the bailout plan there is less sign of immediate recovery. Does this mean the bailout has failed?
It seems certain that without the money at that time, numerous banks would have gone bust and that the overall effect on trade and employment could have been extremely damaging in the long term. It is also arguable that the extent of the crisis was at its heaviest in countries such as the States and the UK, and that was why such a large bailout was needed at the time. Whether this will see the countries concerned hitting the recovery path with renewed vigour in 2010 depends very much on the continued composed distribution of bailout money, and the lessons of this crisis being learned by banks and governments.
There is also something of a race afoot to see who has dealt best with the crisis and which of the countries which entered a recession has done the best job of pulling out of it. Canada was put forward as a strong contender – and certainly seems to be storming ahead of its closest neighbour the US in terms of getting to the light at the end of the tunnel. Its recovery may not, yet, be as strong as that of Brazil, which has recently announced some very impressive figures. If backed up, these would make the BRIC alumnus a strong contender for the title of “Best Recovery (2009)”.
Finance Minister Guido Mantega announced on July 29 that the giant South American nation is already leaving the crisis behind, with the economy growing at a rate of 4% and set to maintain that level of growth for the year going forward. It is true to say that Brazil’s government took speedy but not reckless action to turn its economy around, and we now must wait for further details to emerge on how successful this has been.