THE WORLD ECONOMIC OUTLOOK BY IMF

In the newspaper “The Hindu” today, I read an article by Mr C R L Narasimhan. He had written about the World Economic Outlook (WEO), a report that was released by International Monitory Fund (IMF) on 16^th July 2012. The heading of the article “Not a robust picture” itself is self-explanatory. As per the IMF release:

·         Though the global recovery from the last depression is continuing, it is still very weak.

·         The economic growth in the Eurozone is close to Zero

·         Germany & France posted positive growth but at very low levels

·         France will grow @ 0.5% in 2012 which will be 1 % for Germany for the year

·         Greece, Portugal and Spain registered negative growth

·         The growth is there is US but it is too low and as a result, the unemployment there has not come down at all.

·         Emerging economies such as India, Brazil & China are registering slower growth as compared to the past

·         The world economy will grow this year by 3.5%

·         US will grow by 2% this year

·         China’s growth will come down to 8% from 8.2 % which was  forecasted in April this  year

·         India’s growth will come down to  6.1% % from 6.9% predicted in April 2012 

IMF is advising emerging economies to be ready to use both economic and macro prudential policies to respond to a complex environment.  It adds that the capital flows are likely to be highly volatile, and exports to the developed economies will be very subdued. 

There isn’t much to cheer.  For us in India, it could be another bad year. When you add to it the policy paralysis that we are undergoing on account of the non-cohesiveness in UPA coalition Government, you will realize that we cannot expect anything normal in this year too. That would make it two years of drudgery in a trot.  The Monsoon deficit this year of about 30% across the country, would only add to the agony for us. 

Ladies & gentlemen tighten your belts and live on! 

The same paper also reports on news released by Tax Justice Network in The Observer recently which makes very interesting reading.  In a report prepared by James Henry, a former McKinsey Chief Economist, it is said that the elite global super rich of the world has stashed  up  black money of $ 20 Trillion  in private banks in Switzerland and Cayman Islands. This money is being looked after by banks such as Credit Suisse, UBS and the investment bank, Goldman Zachs. As per Mr Henry’s estimates,  about 92000 people (0.001% of the world population) owns $10 Trillion of the same. The guestimate is that the black money amount could be anywhere between $20 trillion and 31 trillion. 

Where did the money flow out from? As per the report, it is from the developing world. It reiterates that the capital that had flown out of the developing world since 1970 would be more than enough to pay their debts to the rest of the world. 

What does it all say? Though there are many isms that rhetorically state economy to be inclusive for everybody, in practice, it is all a big lie. The inequality only had increased in the world with the money and power resting in the hands of very few people. 

Regret that the news is not all that good. But that’s the way it is. What do you want of it?  It is up to you….. Work hard, deceive, kill and loot. In any case, nothing makes any sense….. Cheers then!