Coping with the financial crisis
By Daniel Inman | 5 December 2008
Financial luminaries at the Clinton Global Initiative meeting discuss the current crisis and how best to ensure a recovery.
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As part of the Clinton Global Initiative Asia meeting, six members of the world's financial elite got together to discuss the current financial crisis and how to steer the quickest course through it. In a panel discussion hosted by Thomas Easton, Asia business editor of the Economist, each panelist had a key point to make.
"We're in a post bubble world now," says Stephen Roach, chairman of Morgan Stanley Asia. Although it might have started off as a Wall Street phenomenon, he says, the successive collapse of bubbles – the bursting of the property bubble, followed by the bursting of the credit bubble, which in turn popped the US consumption bubble – is without doubt a problem that is hitting Asia.
"With two consecutive declines of real consumption of more than 3% in the last two quarters, the US consumer is now toast," he says. The result is that Asia, with 45% of its output directed towards exports, is more dependent than ever before on supplying goods to the rest of the world. "There is not a country in the region that is not in recession or slowing down as a result because the biggest end market for its export-led economies is in serious trouble," says Roach.
The outlook among panelists was generally pessimistic, but there was one optimist present. Marc Lasry, chairman and CEO of Avenue Capital Group, admitted that while it is impossible to pinpoint the bottom of the market, it is possible to time the cycle. "If you're comfortable that we're not going into a depression then now is a phenomenal time to buy," says Lasry.
When confronted with the idea that a turnaround might not be so quick, and that the US might experience a Japan style 'lost decade', Lasry replied that governments have forced the banks to recognise their loses "and as a result, the banks will start lending again in the first or second quarter next year after they've taken their hits. And when this happens the consumer will come back."
Laura Tyson, professor of Haas School of Business at the University of California, highlighted the role that governments need to play and pointed to two possible directions. First, since capital markets are "fundamentally broken" they can no longer recognise risk from lack of risk. As a result, the capital market crisis has turned into a panic and governments need to become buyers of assets.
The other role that government can play relates to spending. Since there is a total collapse of private demand, the government needs to make up the difference. And any country that can afford to engage in economic stimulus should be doing it now, she says. "It should be a quick spend out. It should be infrastructure, job creation, and mortgage relief.” She cited China as an early starter in this resolve and Germany as a country notably lacking in such a plan.
We are, she says, heading for an L-shaped recession. If government policy is effective, the recovery might be slightly less horizontal than otherwise.
Government policy was also on the mind of Lou Jiwei, chairman and CEO of China Investment Corp, China's sovereign wealth fund. After informing the audience that it can hardly be China's role to save the world economy, he turned to policy. What concerns him, he said, is the lack of constancy in the policy responses to the financial crisis in developed countries. "If it is changing every week, how can I be confident?" he asks. It is this high degree of uncertainty that has led him to avoid further investment in Western financial institutions.
© Haymarket Media Limited. All rights reserved.
Friday, December 5, 2008
Oil prices hit new multi-year lows
Oil prices hit new multi-year lows
Oil prices sank to multi-year lows during Asian trade Thursday in a market dominated by declining demand and dismal economic news, analysts said.
In afternoon trade New York's main futures contract, light sweet crude for January delivery, fell 93 cents to 45.86 dollars a barrel.
The contract at one point fell as far as 45.30 dollars, its lowest point since January 12, 2005, after closing down 17 cents at 46.79 dollars on the New York Mercantile Exchange Wednesday.
Brent North Sea crude for January delivery dropped 1.19 dollars to 44.25 dollars after dropping to 43.80 -- its lowest point since February 20, 2005.
The Brent contract closed unchanged at 45.44 dollars Wednesday in London.
"This market is trying to find the bottom," said Ken Hasegawa, manager of the energy desk at Newedge Japan brokerage in Tokyo.
Hasegawa said there are no bullish factors in the market, which he sees reaching as low as 40 dollars a barrel.
Oil prices have plunged by about 70 percent since striking record highs above 147 dollars in July, pulled down by a widening global economic slowdown that weighs on demand, analysts say.
The Eurozone, Japan and the United States are in recession, and weak U.S. economic data on Wednesday added to concerns for demand.
The U.S. private sector lost 250,000 jobs in November, the largest decline in six years, according to the ADP National Employment Report survey.
"The macroeconomic backdrop to the oil market continues to worsen," said Barclays Capital analyst Paul Horsnell.
"We are now projecting that global (crude oil) demand will decline in both 2008 and 2009," he added.
The market shrugged off a U.S. Department of Energy (DoE) report showing crude inventories fell by 400,000 barrels in the week ending November 28, confounding market expectations for a 1.4 million barrel increase.
The DoE said petrol stockpiles dropped 1.6 million barrels, in contrast to estimates for a gain of 1.6 million barrels.
U.S. distillates, which include diesel and heating fuel, declined 1.7 million barrels, compared with market expectations for no change.
Photo: Reuters
Oil prices sank to multi-year lows during Asian trade Thursday in a market dominated by declining demand and dismal economic news, analysts said.
In afternoon trade New York's main futures contract, light sweet crude for January delivery, fell 93 cents to 45.86 dollars a barrel.
The contract at one point fell as far as 45.30 dollars, its lowest point since January 12, 2005, after closing down 17 cents at 46.79 dollars on the New York Mercantile Exchange Wednesday.
Brent North Sea crude for January delivery dropped 1.19 dollars to 44.25 dollars after dropping to 43.80 -- its lowest point since February 20, 2005.
The Brent contract closed unchanged at 45.44 dollars Wednesday in London.
"This market is trying to find the bottom," said Ken Hasegawa, manager of the energy desk at Newedge Japan brokerage in Tokyo.
Hasegawa said there are no bullish factors in the market, which he sees reaching as low as 40 dollars a barrel.
Oil prices have plunged by about 70 percent since striking record highs above 147 dollars in July, pulled down by a widening global economic slowdown that weighs on demand, analysts say.
The Eurozone, Japan and the United States are in recession, and weak U.S. economic data on Wednesday added to concerns for demand.
The U.S. private sector lost 250,000 jobs in November, the largest decline in six years, according to the ADP National Employment Report survey.
"The macroeconomic backdrop to the oil market continues to worsen," said Barclays Capital analyst Paul Horsnell.
"We are now projecting that global (crude oil) demand will decline in both 2008 and 2009," he added.
The market shrugged off a U.S. Department of Energy (DoE) report showing crude inventories fell by 400,000 barrels in the week ending November 28, confounding market expectations for a 1.4 million barrel increase.
The DoE said petrol stockpiles dropped 1.6 million barrels, in contrast to estimates for a gain of 1.6 million barrels.
U.S. distillates, which include diesel and heating fuel, declined 1.7 million barrels, compared with market expectations for no change.
Photo: Reuters
Employment in Free Fall, Economy Loses 533,000 Jobs
December 5, 2008
By Dean Baker
CORRECTION: Job loss for the three-month period ending November 2008 was the highest since the period ending February 1975, not since "the months immediately following the end of World War II" as noted in today's Jobs Byte below.
The data hugely overestimate jobs created in new firms, which will be corrected next year.
The economy shed 533,000 jobs in November. This loss, combined with sharp upward revisions to the September and October data, brought the three-month job loss to 1,256,000 jobs, the largest three-month loss in any period since the months immediately following the end of World War II. (The job losses at the start of the recessions in 1949 and 1958 were larger relative to the size of the labor force.) The private sector lost 1,286,000 jobs over this period, as the public sector continued to add jobs at a modest pace.
The job loss was widely spread across sectors, although construction and manufacturing continued to be among the hardest hit. Employment in the construction sector fell by 82,000 in November, or 1.2 percent. The sector has lost 201,000 jobs over the last three months. Employment in the non-residential sector is now dropping as fast as employment in the residential sector, as this bubble has now burst also.
Employment in manufacturing fell by 85,000 or 0.6 percent. The sector has shed 258,000 jobs in the last three months. Production workers have accounted for virtually all of this job loss, with a decline of 253,000 production jobs (2.6 percent of employment). This suggests that firms are keeping supervisory and managerial personnel even as they have mass layoffs of production workers. The job loss was widely distributed across manufacturing sectors.
The employment services sector was an even bigger job loser, shedding 100,700 jobs in the month (3.2 percent of its total employment). This sector has lost 213,500 jobs over the last three months. Employers are dumping temporary employees as a way to keep on permanent staff.
Retail trade lost 91,300 jobs in November (0.6 percent of employment) and has lost 229,100 over the last three months. Transportation lost 31,500 jobs and financial services lost 32,000. Health care is the only sector that continues to expand at a healthy pace, adding 33,800 jobs. Health care has added 87,100 jobs over the last three months.
The actual job numbers are likely somewhat worse than the data in this report. The Bureau of Labor Statistics is imputing more jobs into the data for new firms than it did for the same months last year. The imputation from the firm “birth/death” model for September-November this year is 143,000. It was just 117,000 for the same three months last year. This figure will almost certainly be revised down sharply in the benchmark revision next year, showing an even more rapid rate of job loss for these months.
In addition to cutting workers, firms are also cutting hours. The index of total hours for production workers fell by 0.9 percent in November and is down 2.0 percent over the last three months, the sharpest three-month decline in any period since 1964 when the series began.
The household data are showing an equally bleak picture. The unemployment rate rose to 6.7 percent, with the employment to population ratio falling by 0.4 percentage points to 61.4 percent, the lowest level since March of 1993. The number of workers involuntarily employed part-time grew by 715,000 (11.0 percent) to 7,200,000. This helped to raise the U-6 measure of labor market slack to 12.5 percent, the highest rate since BLS began the measure in 1994.
The effects of the recession continue to be felt disproportionately by men (consistent with job loss in construction and manufacturing) and younger workers. Employment among married men with a spouse present has fallen by 634,000 over the last year, while employment among married women with a spouse present has fallen by 32,000 over the same period. Employment among workers over age 55 has risen by 880,000 over the last year, while employment for workers under age 55 has fallen by 3,242,000.
This report should eliminate any possible doubts about the seriousness of this downturn. The economy is falling at the sharpest rate since the Great Depression. As bad as the employment picture appears in this report, it will almost certainly appear far worse when the BLS adjusts its data in its benchmark revision for the loss of firms not captured by the survey.
Dean Baker is the Co-director of the Center for Economic and Policy Research. CEPR's Jobs Byte is published each month upon release of the Bureau of Labor Statistics' employment report. For more information or to subscribe by fax or email contact CEPR at 202-293-5380 ext. 102, or chinku [at] cepr [dot] net.
December 5, 2008
By Dean Baker
CORRECTION: Job loss for the three-month period ending November 2008 was the highest since the period ending February 1975, not since "the months immediately following the end of World War II" as noted in today's Jobs Byte below.
The data hugely overestimate jobs created in new firms, which will be corrected next year.
The economy shed 533,000 jobs in November. This loss, combined with sharp upward revisions to the September and October data, brought the three-month job loss to 1,256,000 jobs, the largest three-month loss in any period since the months immediately following the end of World War II. (The job losses at the start of the recessions in 1949 and 1958 were larger relative to the size of the labor force.) The private sector lost 1,286,000 jobs over this period, as the public sector continued to add jobs at a modest pace.
The job loss was widely spread across sectors, although construction and manufacturing continued to be among the hardest hit. Employment in the construction sector fell by 82,000 in November, or 1.2 percent. The sector has lost 201,000 jobs over the last three months. Employment in the non-residential sector is now dropping as fast as employment in the residential sector, as this bubble has now burst also.
Employment in manufacturing fell by 85,000 or 0.6 percent. The sector has shed 258,000 jobs in the last three months. Production workers have accounted for virtually all of this job loss, with a decline of 253,000 production jobs (2.6 percent of employment). This suggests that firms are keeping supervisory and managerial personnel even as they have mass layoffs of production workers. The job loss was widely distributed across manufacturing sectors.
The employment services sector was an even bigger job loser, shedding 100,700 jobs in the month (3.2 percent of its total employment). This sector has lost 213,500 jobs over the last three months. Employers are dumping temporary employees as a way to keep on permanent staff.
Retail trade lost 91,300 jobs in November (0.6 percent of employment) and has lost 229,100 over the last three months. Transportation lost 31,500 jobs and financial services lost 32,000. Health care is the only sector that continues to expand at a healthy pace, adding 33,800 jobs. Health care has added 87,100 jobs over the last three months.
The actual job numbers are likely somewhat worse than the data in this report. The Bureau of Labor Statistics is imputing more jobs into the data for new firms than it did for the same months last year. The imputation from the firm “birth/death” model for September-November this year is 143,000. It was just 117,000 for the same three months last year. This figure will almost certainly be revised down sharply in the benchmark revision next year, showing an even more rapid rate of job loss for these months.
In addition to cutting workers, firms are also cutting hours. The index of total hours for production workers fell by 0.9 percent in November and is down 2.0 percent over the last three months, the sharpest three-month decline in any period since 1964 when the series began.
The household data are showing an equally bleak picture. The unemployment rate rose to 6.7 percent, with the employment to population ratio falling by 0.4 percentage points to 61.4 percent, the lowest level since March of 1993. The number of workers involuntarily employed part-time grew by 715,000 (11.0 percent) to 7,200,000. This helped to raise the U-6 measure of labor market slack to 12.5 percent, the highest rate since BLS began the measure in 1994.
The effects of the recession continue to be felt disproportionately by men (consistent with job loss in construction and manufacturing) and younger workers. Employment among married men with a spouse present has fallen by 634,000 over the last year, while employment among married women with a spouse present has fallen by 32,000 over the same period. Employment among workers over age 55 has risen by 880,000 over the last year, while employment for workers under age 55 has fallen by 3,242,000.
This report should eliminate any possible doubts about the seriousness of this downturn. The economy is falling at the sharpest rate since the Great Depression. As bad as the employment picture appears in this report, it will almost certainly appear far worse when the BLS adjusts its data in its benchmark revision for the loss of firms not captured by the survey.
Dean Baker is the Co-director of the Center for Economic and Policy Research. CEPR's Jobs Byte is published each month upon release of the Bureau of Labor Statistics' employment report. For more information or to subscribe by fax or email contact CEPR at 202-293-5380 ext. 102, or chinku [at] cepr [dot] net.
Layoffs swell as global financial crisis drags on
Layoffs swell as global financial crisis drags on
More jobs to be culled: Credit Suisse says it made a net loss of about US$2.5 billion in the two months to the end of November, and announces it would shed another 5,300 jobs. Picture: EPA
SINGAPORE
Friday, December 5, 2008
CREDIT Suisse and Nomura Holdings announced big job cuts yesterday, further evidence the global financial crisis is unrelenting for an industry battered by heavy losses and weak markets.
The 5,300 layoffs by the Swiss bank and a further 1,000 in London by Japan's biggest broker are the latest in the global financial sector which has now seen over 150,000 jobs culled since September when Lehman Brothers filed for bankruptcy.
Of these, more than 50,000 were at Citigroup, which has made more writedowns than any other bank in the world during the crisis.
While the axe had been falling for months in the industry, Lehman's fall sparked carnage in financial markets and reshaped the industry landscape, resulting in job losses from New York to Singapore to Mumbai.
"I dont think people really know what's next. It depends on sentiment, which will in turn drive credit markets, which in turn will weigh on banks or not," said a London-based equities trader.
From the United States to Asian export giant Japan to European powerhouse Germany, the world's top economies are now in recession as the global crisis deepens. They are not the only ones', with Singapore, New Zealand and Hong Kong also joining in.
The losses at banks are increasing.
Credit Suisse said yesterday it made a net loss of about 3 billion Swiss francs (US$2.5 billion) in October and November.
It has already cut 1,800 jobs this year and said this week it would cut 650 investment banking jobs in Britain.
"Investment banking had a significant pretax loss, reflecting the challenging conditions in the financial markets in the quarter and the costs associated with risk reduction," the bank said in a statement.
Credit Suisse's shares jumped eight per cent in European trade in a broader market up 1.6 per cent.
In Asia, Nomura, Japan's biggest brokerage, said the decision to cut as much as 22 per cent of its London staff followed an internal review after the purchase of the Asian, European and Middle Eastern assets of Lehman Brothers.
Nomura had said the purchase of parts of Lehman Brothers would help the Japanese brokerage achieve its profit target despite poor financial market conditions.
"This is a natural move," said Azuma Ohno, a brokerage analyst at Credit Suisse Securities in Japan. "Once Nomura bought Lehman, it cannot continue Japanese-style life-time employment. It needs to be flexible in costs to be profitable."
Australia's top investment bank, Macquarie, is cutting 10 to 15 per cent of its jobs in Asia, two sources said last week.
Banks are axing jobs across Asia and even in countries such as India, where investment bankers were snapped up feverishly in the last few years in anticipation of strong initial public offerings and M&A markets.Reuters
More jobs to be culled: Credit Suisse says it made a net loss of about US$2.5 billion in the two months to the end of November, and announces it would shed another 5,300 jobs. Picture: EPA
SINGAPORE
Friday, December 5, 2008
CREDIT Suisse and Nomura Holdings announced big job cuts yesterday, further evidence the global financial crisis is unrelenting for an industry battered by heavy losses and weak markets.
The 5,300 layoffs by the Swiss bank and a further 1,000 in London by Japan's biggest broker are the latest in the global financial sector which has now seen over 150,000 jobs culled since September when Lehman Brothers filed for bankruptcy.
Of these, more than 50,000 were at Citigroup, which has made more writedowns than any other bank in the world during the crisis.
While the axe had been falling for months in the industry, Lehman's fall sparked carnage in financial markets and reshaped the industry landscape, resulting in job losses from New York to Singapore to Mumbai.
"I dont think people really know what's next. It depends on sentiment, which will in turn drive credit markets, which in turn will weigh on banks or not," said a London-based equities trader.
From the United States to Asian export giant Japan to European powerhouse Germany, the world's top economies are now in recession as the global crisis deepens. They are not the only ones', with Singapore, New Zealand and Hong Kong also joining in.
The losses at banks are increasing.
Credit Suisse said yesterday it made a net loss of about 3 billion Swiss francs (US$2.5 billion) in October and November.
It has already cut 1,800 jobs this year and said this week it would cut 650 investment banking jobs in Britain.
"Investment banking had a significant pretax loss, reflecting the challenging conditions in the financial markets in the quarter and the costs associated with risk reduction," the bank said in a statement.
Credit Suisse's shares jumped eight per cent in European trade in a broader market up 1.6 per cent.
In Asia, Nomura, Japan's biggest brokerage, said the decision to cut as much as 22 per cent of its London staff followed an internal review after the purchase of the Asian, European and Middle Eastern assets of Lehman Brothers.
Nomura had said the purchase of parts of Lehman Brothers would help the Japanese brokerage achieve its profit target despite poor financial market conditions.
"This is a natural move," said Azuma Ohno, a brokerage analyst at Credit Suisse Securities in Japan. "Once Nomura bought Lehman, it cannot continue Japanese-style life-time employment. It needs to be flexible in costs to be profitable."
Australia's top investment bank, Macquarie, is cutting 10 to 15 per cent of its jobs in Asia, two sources said last week.
Banks are axing jobs across Asia and even in countries such as India, where investment bankers were snapped up feverishly in the last few years in anticipation of strong initial public offerings and M&A markets.Reuters
Tuesday, December 2, 2008
World Economic Situation and Prospects (WESP)
World Economic Situation and Prospects (WESP) is a joint product of the Department of Economic and Social Affairs, the United Nations Conference on Trade and Development and the five United Nations regional commissions. It provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. One of its purposes is to serve as a point of reference for discussions on economic, social and related issues taking place in various United Nations entities during the year.
World Economic Situation and Prospects 2009
—Advance release of the Global Outlook 2009—
The world economy is mired in the severest financial crisis since the Great Depression. WESP of 2006, 2007 and 2008 had already warned of the risks for this to happen. All factors analyzed in those reports have now played out and have pushed the world economy into recession.
Growth in world gross product (WGP) is expected to slow to 1.0 per cent in 2009, a sharp deceleration from the rate of 2.5 per cent estimated for 2008 and well below the more robust pace in previous years. While most developed economies are expected to be in a deep recession, a vast majority of developing countries is experiencing a sharp reversal in the robust growth registered in the period of 2002-2007, indicating a significant setback in the progress made in poverty reduction for many developing countries over the past few years. The prospects for the Least Developed Countries (LDCs), which did so well on average over the past years, are also deteriorating rapidly. Income per capita for the world as whole is expected to decline in 2009.
The report analyzes in detail the evolution of the global financial crisis during 2008 and the more fundamental factors that led to its build-up. It further assesses the impact on global economic activity, especially in developing countries. The synchronized slowdown in both rich and poor countries is further evidence that the until recently widely held belief that developing country growth would have been ‘decoupled’ from that in the United States and Europe was dangerously misleading. The report also reviews the policy actions so far taken worldwide in response to the global financial crisis.
The report recommends more forceful fiscal policy stimuli need to be taken in an internationally concerted manner in order to prevent the world economy from falling into a much deeper and more prolonged recession. The WESP further details a number of more fundamental reforms to the international financial system that are needed to reduce risks of a recurrence of such a devastating crisis in the future.
The “Global Outlook” chapter of the UN World Economic Situation and Prospects 2009 was released on 1 December 2008. The full report, including regional overviews and detailed trends in global trade and finance, is due out in early January 2009.
World Economic Situation and Prospects 2009
—Advance release of the Global Outlook 2009—
The world economy is mired in the severest financial crisis since the Great Depression. WESP of 2006, 2007 and 2008 had already warned of the risks for this to happen. All factors analyzed in those reports have now played out and have pushed the world economy into recession.
Growth in world gross product (WGP) is expected to slow to 1.0 per cent in 2009, a sharp deceleration from the rate of 2.5 per cent estimated for 2008 and well below the more robust pace in previous years. While most developed economies are expected to be in a deep recession, a vast majority of developing countries is experiencing a sharp reversal in the robust growth registered in the period of 2002-2007, indicating a significant setback in the progress made in poverty reduction for many developing countries over the past few years. The prospects for the Least Developed Countries (LDCs), which did so well on average over the past years, are also deteriorating rapidly. Income per capita for the world as whole is expected to decline in 2009.
The report analyzes in detail the evolution of the global financial crisis during 2008 and the more fundamental factors that led to its build-up. It further assesses the impact on global economic activity, especially in developing countries. The synchronized slowdown in both rich and poor countries is further evidence that the until recently widely held belief that developing country growth would have been ‘decoupled’ from that in the United States and Europe was dangerously misleading. The report also reviews the policy actions so far taken worldwide in response to the global financial crisis.
The report recommends more forceful fiscal policy stimuli need to be taken in an internationally concerted manner in order to prevent the world economy from falling into a much deeper and more prolonged recession. The WESP further details a number of more fundamental reforms to the international financial system that are needed to reduce risks of a recurrence of such a devastating crisis in the future.
The “Global Outlook” chapter of the UN World Economic Situation and Prospects 2009 was released on 1 December 2008. The full report, including regional overviews and detailed trends in global trade and finance, is due out in early January 2009.
Monday, December 1, 2008
APEC on Global Financial Crisis
Lima, 23 November 2008
ADDITIONAL DOCUMENT DELIVERED BY LEADERS RAISED FURTHER MEASURES TO DEAL WITH GLOBAL FINANCIAL CRISIS
• Declaration of the Leaders of APEC on Global Economy demonstrates the commitment with free markets and openness of economy
• Leaders have refrained from raising new barriers to investment or trade in goods and services in the next 12 months
APEC PERU 2008 Leaders Week Fora modified its agenda to the global financial crisis. This became a predominant topic during the Leaders' Meeting, held on November 22 and 23 at the Ministry of Defense Convention Center. That is why we agreed to issue a statement to be attached to the outcome of the Meeting of Leaders.
The Declaration of the Leaders of APEC on the Global Economy addresses the issue of the financial crisis, sharing experiences to address it in Member Economies. "We have already taken urgent and extraordinary actions," states the document, and then to stress that "taking such actions and will continue to work closely coordinated and integrated to implement further actions to help us deal with this crisis."
One of the challenges facing the APEC is to restore confidence in their economies and maintain the region into a path of long-term growth. Therefore, the Lima Declaration proposes concrete measures, such as the regulation and supervision of financial systems, as well as the need to develop more effective standards of corporate administration, taking into account the importance of Corporate Social Responsibility.
Leaders support the Washington Declaration signed by the Group of 20. They also support the Action Plan for the reform of the financial markets proposed at the Summit of the group. The ways to achieve the desired results are, as expressed the Lima Declaration, "a close macroeconomic cooperation, avoid negative surplus, to support emerging economies and developing countries, and reflect and strengthen the International Financial Institutions."
The document highlights the firm conviction of the Leaders that "the principles of free trade and investment rules and open trade will continue to guide global growth, job creation and poverty reduction", it is also important to mention that the Orders for protectionist measures will not be considered, that only the current economic situation will be exacerbated.
Therefore, the Leaders declared: "we will abstain within the next12 months of raising new barriers to investment or trade in goods and services," expressing his commitment to free markets and openness of the economy.
With respect to the role of multilateral development banks, the text notes that “they play a critical role in assisting the economies affected by financial crisis." In that sense, it is recommended to the International Monetary Fund (IMF) to strengthen its collaboration with other financial institutions. It also decides on the Doha Development Agenda, expressing the expectation of the Leaders for an "ambitious and balanced conclusion" for growth and prosperity of the Economies.
Other topics that are in the document are the Bogor Goals, Agenda of Regional Economic Integration and Structural Reform, key points of the APEC Forum that relate to the search for a Free Trade Area within the Asia-Pacific region, and that are affected by international economic.
Also, the Leaders announced that they will not put aside other important challenges such as climate change, energy security, clean development, combating poverty, hunger, disease and terrorism. This way, the document shows that the Forum will dedicate APEC not only to alleviate the crisis but would also be used to continue with other items on its agenda of international economic cooperation within the framework of integrated actions to face the economic situation.
ADDITIONAL DOCUMENT DELIVERED BY LEADERS RAISED FURTHER MEASURES TO DEAL WITH GLOBAL FINANCIAL CRISIS
• Declaration of the Leaders of APEC on Global Economy demonstrates the commitment with free markets and openness of economy
• Leaders have refrained from raising new barriers to investment or trade in goods and services in the next 12 months
APEC PERU 2008 Leaders Week Fora modified its agenda to the global financial crisis. This became a predominant topic during the Leaders' Meeting, held on November 22 and 23 at the Ministry of Defense Convention Center. That is why we agreed to issue a statement to be attached to the outcome of the Meeting of Leaders.
The Declaration of the Leaders of APEC on the Global Economy addresses the issue of the financial crisis, sharing experiences to address it in Member Economies. "We have already taken urgent and extraordinary actions," states the document, and then to stress that "taking such actions and will continue to work closely coordinated and integrated to implement further actions to help us deal with this crisis."
One of the challenges facing the APEC is to restore confidence in their economies and maintain the region into a path of long-term growth. Therefore, the Lima Declaration proposes concrete measures, such as the regulation and supervision of financial systems, as well as the need to develop more effective standards of corporate administration, taking into account the importance of Corporate Social Responsibility.
Leaders support the Washington Declaration signed by the Group of 20. They also support the Action Plan for the reform of the financial markets proposed at the Summit of the group. The ways to achieve the desired results are, as expressed the Lima Declaration, "a close macroeconomic cooperation, avoid negative surplus, to support emerging economies and developing countries, and reflect and strengthen the International Financial Institutions."
The document highlights the firm conviction of the Leaders that "the principles of free trade and investment rules and open trade will continue to guide global growth, job creation and poverty reduction", it is also important to mention that the Orders for protectionist measures will not be considered, that only the current economic situation will be exacerbated.
Therefore, the Leaders declared: "we will abstain within the next12 months of raising new barriers to investment or trade in goods and services," expressing his commitment to free markets and openness of the economy.
With respect to the role of multilateral development banks, the text notes that “they play a critical role in assisting the economies affected by financial crisis." In that sense, it is recommended to the International Monetary Fund (IMF) to strengthen its collaboration with other financial institutions. It also decides on the Doha Development Agenda, expressing the expectation of the Leaders for an "ambitious and balanced conclusion" for growth and prosperity of the Economies.
Other topics that are in the document are the Bogor Goals, Agenda of Regional Economic Integration and Structural Reform, key points of the APEC Forum that relate to the search for a Free Trade Area within the Asia-Pacific region, and that are affected by international economic.
Also, the Leaders announced that they will not put aside other important challenges such as climate change, energy security, clean development, combating poverty, hunger, disease and terrorism. This way, the document shows that the Forum will dedicate APEC not only to alleviate the crisis but would also be used to continue with other items on its agenda of international economic cooperation within the framework of integrated actions to face the economic situation.
ABAC proposals on global credit contraction
ABAC proposals on global credit contraction
By Azlan Othman and Sonia K
http://www.brunei-online.com/bb/tue/11pic9.jpg
Minister of Foreign Affairs and Trade II (L) receiving the ABAC report from Salleh Bostaman Zainal Abidin, Fauziah Dato Talip and Stephen Ong from ABAC Brunei.
With the Asia Pacific Economic Cooperation (APEC) 2008 in Peru drawing closer in November, the APEC Business Advisory Council (ABAC) yesterday presented their report to the leaders at the Ministry of Foreign Affairs and Trade.
On hand to receive the report on behalf of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam's Government was the Minister of Foreign Affairs and Trade II, Pehin Orang Kaya Pekerma Dewa Dato Seri Setia Lim Jock Seng.
Presenting the report were Salleh Bostaman Zainal Abidin, Fauziah Dato Talip and Stephen Ong who were representing the Chairman of the APEC Business Advisory Council (ABAC), a group comprising some of the most successful and widely recognised names in private business in the Asia Pacific region.
This year's ABAC report addresses issues such as global credit contraction, Acceleration of Regional Economic Integration (REI), Small and Medium Enterprises (SME) and Micro-Enterprise Development, response to food supply and prices and mitigation climate change.
ABAC revealed these specific set of recommendations to address the issues:
The global credit contraction, sparked by the sub-prime mortgage crisis and write-downs by various international banks: Regulation should be activity-based and achieved through informal collaboration among regulatory bodies, within and across APEC Economies;
Acceleration of Regional Economic Integration (REI): APEC Ministers should accelerate work on the Free Trade Area for the Asia Pacific by completing REI studies and exploring all options to achieve the free flow of goods, services, labour and capital within the region;
Small and Medium (SME) and Micro-Enterprise Development: Governments should establish various forms of social and financial support in the development and Information Communication Technology (ICT); introduce intellectual property protection programmes and encourage the use of evolving new technologies;
Response to food supply and prices: APEC should renounce the use of embargoes and other export restrictions as a means of addressing perceived food shortages;
Mitigation of climate change: In order to more aggressively pursue energy efficiency to reduce greenhouse gas emissions, each APEC economy should formulate specific goals and action plans. A peer review mechanism should be established to monitor progress.
Because APEC goals are economic in nature, input from ABAC is a critical consideration of APEC policy-makers.
These and other recommendations will be formally issued to APEC Economic Leaders summit to be held in Lima, Peru.
By Azlan Othman and Sonia K
http://www.brunei-online.com/bb/tue/11pic9.jpg
Minister of Foreign Affairs and Trade II (L) receiving the ABAC report from Salleh Bostaman Zainal Abidin, Fauziah Dato Talip and Stephen Ong from ABAC Brunei.
With the Asia Pacific Economic Cooperation (APEC) 2008 in Peru drawing closer in November, the APEC Business Advisory Council (ABAC) yesterday presented their report to the leaders at the Ministry of Foreign Affairs and Trade.
On hand to receive the report on behalf of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam's Government was the Minister of Foreign Affairs and Trade II, Pehin Orang Kaya Pekerma Dewa Dato Seri Setia Lim Jock Seng.
Presenting the report were Salleh Bostaman Zainal Abidin, Fauziah Dato Talip and Stephen Ong who were representing the Chairman of the APEC Business Advisory Council (ABAC), a group comprising some of the most successful and widely recognised names in private business in the Asia Pacific region.
This year's ABAC report addresses issues such as global credit contraction, Acceleration of Regional Economic Integration (REI), Small and Medium Enterprises (SME) and Micro-Enterprise Development, response to food supply and prices and mitigation climate change.
ABAC revealed these specific set of recommendations to address the issues:
The global credit contraction, sparked by the sub-prime mortgage crisis and write-downs by various international banks: Regulation should be activity-based and achieved through informal collaboration among regulatory bodies, within and across APEC Economies;
Acceleration of Regional Economic Integration (REI): APEC Ministers should accelerate work on the Free Trade Area for the Asia Pacific by completing REI studies and exploring all options to achieve the free flow of goods, services, labour and capital within the region;
Small and Medium (SME) and Micro-Enterprise Development: Governments should establish various forms of social and financial support in the development and Information Communication Technology (ICT); introduce intellectual property protection programmes and encourage the use of evolving new technologies;
Response to food supply and prices: APEC should renounce the use of embargoes and other export restrictions as a means of addressing perceived food shortages;
Mitigation of climate change: In order to more aggressively pursue energy efficiency to reduce greenhouse gas emissions, each APEC economy should formulate specific goals and action plans. A peer review mechanism should be established to monitor progress.
Because APEC goals are economic in nature, input from ABAC is a critical consideration of APEC policy-makers.
These and other recommendations will be formally issued to APEC Economic Leaders summit to be held in Lima, Peru.
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