A massive and coherent economic stimulus must take place soon to counter the global economic downturn, UN experts said in a report published yesterday in Doha.
The UN called for “massive economic stimulus packages that are coherent and mutually reinforcing on a global basis, and linked with sustainable development imperatives” in its Report on World Economic Situation and Prospects 2009 presented at an international ministerial conference on development financing in the Qatari capital.
The packages “should come on top of the liquidity and recapitalization measures already undertaken by countries in response to the economic crisis,” the report added.
UN economists also proposed “stronger regulation of financial markets and institutions, adequate international liquidity provisioning, an overhaul of the international reserve system and a more inclusive and effective global economic governance, to prevent against any future repetition.”
The report made dire projections for economic growth across the globe next year, with an overall drop in per capita income and developed nations most affected by the global financial crisis.
Developed countries will see a 0.5 percent decline in output, compared with an average growth of 5.3 percent in transition economies and 4.6 percent in developing countries.
World growth will most likely not exceed one percent next year, compared to 2.5 percent this year and rates varying between 3.5 and 4 percent in the four previous years.
US growth will decline by one percent, with the euro zone declining by 0.7 percent and Japan by 0.3 percent. Growth in India, Brazil and Mexico is slated at 7 percent, 2.9 percent and 0.7 percent, respectively.
“But given the great uncertainty prevailing today, a more pessimistic scenario is quite possible,” the report said.
“If the credit crisis continues and confidence is not restored in the financial sector in the coming months,” UN experts explain. “This would bring economic growth in developing countries down to 2.7 percent, dangerously low for their ability to sustain poverty reduction efforts and social and political stability.”
The US has already launched an economic recovery plan worth US$700 billion and China, the world’s fourth-largest economy, has initiated an unprecedented 4 trillion yuan (US$590 billion) stimulus package.
But steps to inject money in the banking system and lower interest rates have failed to restore confidence.
“With limited space for monetary stimulus, fiscal policy options are needed to reactivate the global economy,” the report said.
It said the total cost of US government action in the face of the financial meltdown has reached US$7 trillion, and that the figure could be around US$11 trillion globally.
Rob Vos, the UN’s Development Policy and Analysis Division chief and lead author of the study, said a fiscal stimulus of the “same order of magnitude” may be needed to keep the world economy from shrinking next year.
But the figures may not be as high as US$7 trillion or US$11 trillion because “those are commitments rather than money actually spent,” he said.
“A stimulus of around one to two percent of GDP across the world should be enough to stave off negative growth,” Vos said.
“Maybe not for 2009 but in 2010 there could be a recovery [if the stimulus package goes ahead] unless markets fall further in the meantime.”
Lauding a “fiscal stimulus to be provided in an internationally coordinated fashion,” the UN economists in the report perceive the crisis as “an opportunity to align fiscal stimulus packages with long-term sustainable development goals,” calling for public investment in infrastructure, food production, health, education and renewable energy sources.
They suggest further scrutiny of reasons behind the weakness of the global financial system, which uses the dollar as its reserve currency.
“With net indebtedness of the United States still growing — to about US$2.7 trillion at the end of 2008, up from US$2.5 trillion in 2007 — a disorderly adjustment of global imbalances and a hard landing of the dollar remain major downside risks,” the experts said.
“In that case, investors might again embark on a ‘flight to safety,’ but this time away from dollar-denominated assets instead of to them, pulling the US economy down further, and the global economy with it,” they said.
Japan has deployed long-range missiles in a southwestern region near China, the Japanese defense minister said yesterday, at a time when ties with Beijing are at their lowest in recent years. The missiles were installed in Kumamoto in the southern region of Kyushu, as Japan is attempting to shore up its military capacity as China steps up naval activity in the East China Sea. “Standoff defense capabilities enable us to counter the threat of enemy forces attempting to invade our country ... while ensuring the safety of our personnel,” Japanese Minister of Defense Shinjiro Koizumi said. “This is an extremely important initiative for
The nation’s fastest supercomputer, Nano 4 (晶創26), is scheduled to be launched in the third quarter, and would be used to train large language models in finance and national defense sectors, the National Center for High-Performance Computing (NCHC) said. The supercomputer, which would operate at about 86.05 petaflops, is being tested at a new cloud computing center in the Southern Taiwan Science Park in Tainan. The exterior of the server cabinet features chip circuitry patterns overlaid with a map of Taiwan, highlighting the nation’s central position in the semiconductor industry. The center also houses Taiwania 2, Taiwania 3, Forerunner 1 and
MORE POPULAR: Taiwan Pass sales increased by 59 percent during the first quarter compared with the same period last year, the Tourism Administration said The Tourism Administration yesterday said that it has streamlined the Taiwan Pass, with two versions available for purchase beginning today. The tourism agency has made the pass available to international tourists since 2024, allowing them to access the high-speed rail, Taiwan Railway Corp services, four MRT systems and four Taiwan Tourist Shuttles. Previously, five types of Taiwan Pass were available, but some tourists have said that the offerings were too complicated. The agency said only two types of Taiwan Pass would be available, starting from a three-day pass with the high-speed rail and a three-day pass with Taiwan Railway Corp. The former costs NT$2,800
FIRST TRIAL: Ko’s lawyers sought reduced bail and other concessions, as did other defendants, but the bail judge denied their requests, citing the severity of the sentences Former Taipei mayor Ko Wen-je (柯文哲) was yesterday sentenced to 17 years in prison and had his civil rights suspended for six years over corruption, embezzlement and other charges. Taipei prosecutors in December last year asked the Taipei District Court for a combined 28-year, six-month sentence for the four cases against Ko, who founded the Taiwan People’s Party (TPP). The cases were linked to the Core Pacific City (京華城購物中心) redevelopment project and the mismanagement of political donations. Other defendants convicted on separate charges included Chinese Nationalist Party (KMT) Taipei City Councilor Angela Ying (應曉薇), who was handed a 15-year, six-month sentence; Core Pacific
RSS