Economic

Do you ever find yourself wondering where you spent all your paycheck? You are not alone. For so many of us it seems that no matter how much we make we still don't have enough money left at the end of the month to put away towards our retirement, emergency savings or even a well deserved vacation! This article will teach you how to finally break that viscous cycle, budget your money and save.

source:eHOW

A GLIMMER OF HOPE

• BCI soars 44.1 points quarter-on-quarter to above 100-point threshold
• All eight sub-indices higher quarter-on-quarter
• Only one sub-index - expected production - rose year-on-year
• Lower inventory levels and wage pressures, increased hirings.

source:malaysian institute of economic

Executive Summary

The road to global recovery appears to be sluggish and uneven, facing many daunting challenges along the way. Both the World Bank and the IMF are projecting the world economy to slide into a deeper recession in 2009. In Jul'09, the IMF revised its global economic forecast to -1.4 per cent in 2009 ('08: 3.1%), while the global contraction in 2009 is estimated at -2.9 per cent by the World Bank. According to the latest IMF revision, the US ('09: -2.6%) will experience a less severe recession in 2009 compared to Europe which may face a deeper one ('09: -4.8%). The IMF projects the world economy to recover to around 2.5 per cent growth in 2010, with the US recording a meagre 0.8 per cent growth in 2010, slightly higher than the previous zero per cent growth forecast..

As the external sector tumbles, Malaysia's GDP contracted by a steep -6.2 per cent in 1Q09, following a stagnant 0.1 per cent growth in 4Q08. As external demand nose dived, Malaysia's exports dipped sharply in 1Q09, while investment was severely affected as well. Given the deteriorating global economic prospects, a second stimulus package amounting to RM60 billion (about 9% of GDP) was unveiled in Mar'09. Although the second package appears larger, the actual direct spending is only RM15 billion (or 25% of total) to be spent over a two-year period. The recurring concerns have been the speed and efficiency of implementation and the potential leakages. A notable point is the greater attention given to retrenched workers and unemployed graduates. With the second stimulus package, the fiscal deficit is estimated to rise to 7.6 per cent of GDP in 2009, up markedly from 4.8 per cent in 2008.

In a move to make Malaysia more attractive to investors, liberalisation measures have been announced. Starting 22 Apr'09, 27 services sub-sectors were fully liberalised to foreign investors, on the premise that Malaysia lacks expertise and local investments in many of these sub-sectors. Among the sectors opened up are computer and related services, health and social services, tourism services, transport, recreational, business services and shipping. On 30 Jun'09, the long standing 30 per cent bumiputra equity requirement for newly listed companies was removed, making investment conditions less restrictive. This will bring Malaysia's equity market closer to regional benchmarks, but the impact remains to be seen since there are many factors influencing investment decisions

Monthly indicators up to May'09 are still losing momentum markedly, but the rate of decline has eased slightly in some sectors. Industrial output registered a sharp contraction in May'09 (-11.1% year-on-year), but subsiding from a steeper fall (-17.9% ) in Jan'09. Exports have yet to show any stabilising signs, nose diving by -29.7 per cent in May'09, while imports dipped -27.8 per cent. Thanks to reduction in local oil prices and slower rise in food prices, inflation has eased to 2.4 per cent in May'09, down from 3.9 per cent in Jan'09. Inflation will likely subside further in tandem with the softening economy. .

In the wake of the deteriorating global economy and its adverse effects on domestic conditions, Bank Negara reduced the Overnight Policy Rate (OPR) by 50 basis points to 2.00 per cent on 24 Feb'09, the third time in five months. Bank Negara has slashed 1.50 percentage points from 3.50 per cent since Nov'08 and cut the statutory reserve requirement (SRR) to 1.0 per cent, effective Mar'09. Bank Negara has noted that lower rates could hurt savers and those who rely on incomes from deposits. The latest policy meeting on 26 May'09 has decided to leave the policy rate unchanged in view of the persistent effects of the crisis amid early signs of stabilisation in some indicators.

Consumer and business confidence has improved in 2Q09, possibly influenced by the measures taken to support the economy. These include the fiscal stimulus packages, the historically low interest rates, and the recent liberalisation measures. Both the Business Conditions Index (BCI) and the Consumer Sentiments Index (CSI) have passed the 100-points threshold that separates expansion and contraction. The BCI, which is based largely on firm-level information, has gained 44.1 points to stand at 105.2 points in 2Q09, up from 61.1 in 1Q09, indicating that business confidence has regained some strength. Likewise, the CSI has notched up 26.9 points to 105.8 points in 2Q09, up from 78.9 points in 1Q09. Despite the still sharp declines in monthly indicators, the rise in sentiments could have been propped up by the perception that recent measures would stabilise the economy.

TThere are glimmer signs that the global downturn has stabilised somewhat, but the recovery is expected to be sluggish and uneven. The healing from the current crisis will be difficult compared to previous ones because of the synchronised nature of the downturn. It will take time and huge resources to revive the deeply entangled US financial sector while policy options are running out. The weak external sector will impede a faster recovery, and the lower commodity prices are not helping either. Banks are becoming more cautious as bad loans could rise soon, limiting the flow of funds to firms. The services sector will be the pillar of strength amidst a glum manufacturing sector. It is certain that Malaysia's growth will slide into a technical recession in the first half of '09, as it takes the hit from the knock-on effects of a flagging global economy. Malaysia may not regain more strength until the global economy is back on track, which is going to be at a disappointingly slow pace.

In view of the deep declines in macro indicators, the fragile business and consumer confidence, and the still dismal sectoral indices, we have revised Malaysia's growth forecast for 2009 downwards to -4.2 per cent, from -2.2 per cent earlier. If exports and FDI shrink severely, the downturn could be more damaging. We have also downgraded the 2010 growth forecast to 2.8 per cent, from 3.3 per cent previously, in anticipation of a gradual or a ''u-shaped'' global recovery.

source:Malaysian Institute of Economic Research

Abstract

This paper examines whether the climate policy options policymakers are contemplating are compatible with core principles of the world trading system set forth in the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO), and Appellate Body decisions. The authors argue that border measures—both import restrictive measures and export subsidies—contemplated in US climate bills and the climate policies of other countries stand a fair chance of being challenged in the WTO. Given the prospect of foreseeable conflicts with WTO rules, the authors suggest that key WTO members should attempt to negotiate a new code that delineates a large “green space” for measures that are designed to limit GHG emissions both within the member country and globally. By “green space,” the authors mean policy space for climate measures that are imposed in a manner broadly consistent with core WTO principles even if a technical violation of WTO law could occur. To encourage WTO negotiating efforts along these lines, the authors recommend a time-limited “peace clause” to be adopted into climate legislation of major emitting countries. The peace clause would suspend the application of border measures or other extraterritorial controls for a defined period while WTO negotiations are under way.

source:http://www.economics-ejournal.org

WASHINGTON – Using better-than-expected jobs numbers to press his top domestic priority, President Barack Obama is arguing that overhauling the health care system is essential to the country's economic well-being.

Republicans countered that the high unemployment rate — 9.4 percent in July — shows how families and businesses are struggling and that Obama's reliance on a large government role in expanding health coverage is the wrong approach.

A net total of 247,000 jobs were lost last month, the fewest in a year and a drastic improvement from the 443,000 that vanished in June as the U.S. tries to pull out from the worst recession since World War II.

"We've begun to put the brakes on this recession and ... the worst may be behind us," Obama said in his weekly radio and Internet address Saturday. He cited Friday's Labor Department report that showed a dip in unemployment, but said, "We must do more than rescue our economy from this immediate crisis. We must rebuild it stronger than before."

He added: "We must lay a new foundation for future growth and prosperity, and a key pillar of a new foundation is health insurance reform."

It's a pitch that comes as the Democratic-controlled Congress struggles to write a health care plan that meets Obama's goals of expanding coverage to millions of uninsured while reining in exploding costs.

"So far they have produced a measure that they cannot sell even to their own members," Senate GOP leader Mitch McConnell said in a jab at majority Democrats. "The only thing bipartisan, so far, is the opposition."

With lawmakers embarking on a monthlong summer break, opponents and supporters of various proposals under consideration are waging fierce campaigns. Obama is redoubling his effort to explain his positions to a public that polls say is becoming increasingly wary he can deliver on his promise to revamp health care.

The president argued that Congress was close to finalizing "real health insurance reform" but, as he has for weeks now, he warned against listening to opponents who he said were spewing misleading information and outlandish claims to defeat "the best chance of reform we have ever had."

Obama was getting a boost from Secretary of State Hillary Rodham Clinton, who as first lady led the failed effort in the 1990s to overhaul health care.

In an interview with CNN set to air Sunday, Clinton called Congress' latest work on the issue "a very healthy process," though she acknowledge serious differences in viewpoints that must be bridged.

Even so, she said: "I actually agree that at the end of the day, with all of this negotiation and back and forth, you know, we're going to come up with something" and "my hope is that it's going to be meaningful enough to make a difference ... on the cost side."

Countering the Democratic position, Bob McDonnell, the Republican nominee for Virginia governor, argued that the new Labor Department report was "yet another reminder that families and small businesses are struggling as unemployment remains high."

In the GOP's response address, McDonnell sought to draw distinctions between Republicans and Democrats on economic and health care policy.

"As Republicans, we believe you create jobs by keeping taxes and regulation low, and litigation at a minimum. Americans succeed when government puts in place positive policies that encourage more freedom, and more opportunity," he said.

McDonnell also said that, unlike Democrats, Republicans are committed to helping the uninsured — "not through nationalizing the system with a costly government-run plan, but rather by supporting free-market incentives and helping small-business owners make coverage more accessible and affordable, and ensuring that Americans can keep their individual private policies."

source:http://news.yahoo.com/s/ap/20090808/ap_on_go_pr_wh/us_obama_health_care

The first economist in the true meaning of the word was the Scotsman Adam Smith (1723-1790). He defined the elements of a national economy: products are offered at a natural price generated by the use of competition - supply and demand - and the division of labour. He maintained that the basic motive for free trade is human self interest. The so-called self interest hypothesis became the anthropological basis for economics. Thomas Malthus (1766-1834) transferred the idea of supply and demand to the problem of overpopulation. The United States of America became the place where millions of expatriates from all European countries were searching for free economic evolvement. In Europe wild capitalism started to replace the system of mercantilism (today: protectionism) and led to economic growth. The period today is called industrial revolution because the system of production and division of labour enabled the mass production of goods.


source: wikipedia.org

Dark Victory
Walden Bello with Shea Cunningham and Bill Rau
Third World Network
ISBN: 983-9747-10-X 148 pages 14x21.5cm
Third World: US$6.00
Others: US$9.00

Hunger and malnutrition stalk the countries of the South. Over the last twenty years, as the populations of Third World countries have increased, so too has mass poverty on a grotesque scale.

In this fiercely critical study of Western aid giving. Walden Bello offers a persuasive argument that recolonisation of the Third World has been carried out through agencies of the international Banks. Bello argues that the Reagan administration came to power with an agenda to 'discipline the Third World' and the consequences of such a policy has resulted in lower barriers to imports, the removal of restrictions on foreign investments, privatisation of state owned activities, a reduction in social welfare spending, wage cuts and devaluation of local currencies. Recipients of any lending from the World Bank, or any other Western agency, have been forced to accept such policies, with disastrous consequences.

Contents

About the Author and his Associates
Acknowledgements
Foreword by Susan George
List of Acronyms

1 Introduction: the Great Reversal Springtime of Freedom.....or Time of Troubles?
Global Rollback
Conspiracy or Ideology?
Dismantling the Activist State
Barbarians at the Gates

2 Challenge from the South Southern Sunrise
State and the Market in the Third World
Diversity and Unity

3 Liberalism and Containment
Liberalism and Anti-Communism: the Peculiar Mix
The Collapse of Containment Liberalism

4 Reaganism and Rollback The Worldview of Reaganism
The Reaganite View of the South
The Vulnerable South
Harnessing the World Bank
Selling SALs
The Debt Crisis and the Globalization of Adjustment

5 Adjustment: the Record A sorry Record at Best
Explaining Stagnation: 'Macro-Shocks' or Structural Distortions?
The Southeast Asian Case
Prescription for Stagnation
Mexico: Model Reformer?
Chile as an Economic Laboratory
Ghana: Beacon for Africa?

6 Adjustment: the Costs Misery: a Global Survey
Questionable Evidence
Adjusting the Environment
Intensified Resource Extraction in Chile
Adjustment and Deforestation in Costa Rica
SAP and Ghana's Environment
Intesifying the Philippine Environment Crisis

7 Adjustment: the Outcome
Ending the Creditors' Crisis
The New South

8 Resubordinating the NICs
From Allies to Targets
Penalizing Success: the Case of South Korea
Unilateralism
Universalized GATT as a Weapon
'The One and Only Path'

9 Adjusting America
Political Economy of the New Deal
State Collapse of the Social Contract
Reaganism: from Ideology to Policy
The Coming of the 'Service Economy'
NAFTA: Securing a Cheap Labor Preserve
The Third Worldization of America
Accelerating Decline
The 'Human Capital' Question
US Capital and Global Adjustment

10 The Dark Victory
Shutting out the South
Protracted War
The 'Islamic Threat'
Heading off Disaster

11 Epilogue: the Battle for the 21st Century
The Faces of Barbarism
No Room for Nostalgia
Checking Capitalism's Logic
Cooperation and Competition
Internationalizing Cooperative Organization
The Struggle for the Future

Notes and References

Appendix: Tables
1: IMF and World Bank Stabilization and Structural Adjustment Loans, 1980-1991
2: Rates of Poverty and Indigence in Selected Latin American Countries
3: External Accounts of Selected Third World Countries, 1982 and 1991
4: Voluntary Export Restraints and Related Measures Imposed by the US, 1980-1991
5: Shares of US Family Income Going to Various Fifths, and to Top 5% 1973-1991
6: Changes in Distribution of US Net World, 1962-1989
Glossary
Selected Readings
Index

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults.^[1][2]

Many economists have offered theories about how financial crises develop and how they could be prevented. There is little consensus, however, and financial crises are still a regular occurrence around the world.