– World news compiled by Gazette editors for Phuket’s international community
PHUKET: With Europe’s sovereign debt crisis continuing to unfold, countries around the world are expected to experience an economic slowdown during the year ahead, according to a United Nations (UN) report yesterday.
The UN’s World Economic Situation and Prospects 2012 (WESP) report gives a detailed picture on seven geographical regions and forecasts that growth rates for the next two years will slow down in most of them. The only exception is the African continent which will continue to enjoy growth due to stable commodity prices and foreign investment.
The UN report warned that governments must urgently address high unemployment rates, particularly among youth, as risks of further worsening of the situation in Europe and the United States have increased. The European sovereign debt crisis erupted in Greece last May as a major shock to the global economy, whose multiple negative effects will continue to reverberate around the world.
The report also points out that “failure of policymakers, especially those in Europe and the United States, to address the jobs crisis and prevent sovereign debt distress and financial sector fragility from escalating poses the most acute risk for the global economy in the outlook for 2012-2013.”
The report, which was released by the UN Department of Economic and Social Affairs (DESA), estimates that growth in the European Union (EU) is expected to be only 0.7 percent in 2012, substantially lower than the 1.6 percent growth registered last year. In addition, unemployment throughout the continent will remain near 10 percent in the euro area, having changed very little since September 2009.
Defying the global trend, however, Africa is expected to continue to grow as economists forecast an increase in the continent’s overall growth from 2.7 percent in 2011 to 5 percent in 2012 and 5.1 percent in 2013. This growth will mainly be driven by relatively strong commodity prices, solid external capital inflows and continued demand and investment from Asia.
Nonetheless, the report also noted that growth will vary greatly among countries on the continent due to military conflicts, corruption, lack of infrastructure and severe drought in certain areas. It also warns that unemployment and poverty remain major problems and sources of instability, which have already led to political unrest in North Africa.
South Africa, one of the strongest countries on the continent, is expected to have the largest economic growth this year, with growing demand from Asia, continued fiscal stimulus measures and an increase in consumption driven by rising wages.
Meanwhile, uncertainty looms in the Arab region which has experienced significant political transition and a constant series of civil protests since last year, known as the Arab Spring. Regional growth is forecast to decline from 6.6 percent to 3.7 percent as violent clashes hampered economic activity in several Arab countries. Social unrest also affected trade and tourism revenues, particularly in Lebanon.
However, the report states that generous social spending measures which were implemented in 2011 by several Arab governments, such as Saudi Arabia as a way to alleviate popular protests, helped boost economic growth and the impact of those measures will continue to be felt throughout 2012.
As with Europe and Africa, unemployment remains a key problem in the region. Despite extremely low female participation rates, unemployment rates in the region are among the highest in the world, especially among the educated youth, and the report warns that leaving unemployment unaddressed represents a major risk to stability in the Arab region.
According to the report, growth in East Asia is projected to decline to 6.9 percent in both 2012 and 2013 with its biggest economy, China, also expected to slow down from 9.3 percent to 8.7 percent growth this year. A major deceleration from China would represent a more pronounced slowdown for the rest of the region.
Economic tendencies in the South Asian, Latin American and Caribbean regions continue to be particularly susceptible to the future of developed economies as both the EU and the US are key export markets as well as sources of tourism revenue.
For Latin America, a slowdown in China would also adversely affect the region as it is a major buyer of its commodities and a key investor in South America.
UN economist Rob Vos, during his presentation of the report in Mexico City, said Latin American and Caribbean economies would be hard hit and growth could drop below 1 percent in the region, with Brazil stagnating and Mexico falling into recession along with the United States economy.
PHUKET: Martin Schulz was elected as the new president of the European Parliament on Tuesday, receiving almost 58 percent of the votes. He will replace Jerzy Buzek.
The 56-year old German Member of the European Parliament (MEP) replaced the outgoing President Jerzy Buzek of Poland and will lead the parliament for two and half years until the beginning of the next legislature in July 2014.
“We must grasp the fact that people in Europe have little time for institutional debates because they are too busy worrying about their future, their jobs, their pensions,” Schulz stated in Strasbourg following the vote. “This Chamber is the place where the interests of the people are defended.”
Schulz received a total of 387 votes, more than the 336 votes needed to win an absolute majority under the Parliament’s Rules of Procedure.
President Schulz also warned that “for the first time since it was founded, the failure of the European Union is a realistic possibility”, adding that “our interests can no longer be separated from those of our neighbors; on a shared understanding that the EU is not a zero-sum game, in which one person must lose so that another can win.”
The reverse is true, Schulz continued, “either we all lose – or we all win. The fundamental basis for this is the Community method. It is not a technocratic concept, but the principle at the heart of everything the European Union stands for.”
Nirj Deva finished second place with a total of 142 votes, followed by Diana Wallis who received 141 votes.
PHUKET: The wreckage of a small Turkish military aircraft which went missing over the Aegean Sea on Monday was found on Tuesday morning, the military said. The two crew members are believed to have been killed.
Contact with the trainer-attack type Cessna T-37 jet aircraft was lost at around 4:05pm local time on Monday while the aircraft was conducting a training mission over the Bay of Aliaga in the Aegean Sea, near Turkey’s western province of Izmir. Two crew members were on board.
The military quickly initiated a large search-and-rescue operation to find the aircraft and its crew members, but without immediate success. The operation involved a CN-235 type
— Phuket Gazette Editors
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