By Mong Palatino
UPI Asia Online
Column: Peripheries
Daly City, CA, United States, — Identifying the economic woes of the United States is crucial, but we should also understand that other countries are also grappling with bankrupt companies and shrinking economies. Many countries are also implementing their own stimulus plans. Bloggers around the world are discussing the bubble economies, bailout of banks and stimulus plans of their countries.
The global effect of the bursting of the bubble economies in the developed world was sudden and devastating. In Bangladesh there was a housing bubble tied to the country’s reliance on remittances sent by overseas workers. Now that migrant workers are returning home because of mass layoffs in Europe and the United States, the property boom in Bangladesh has come to an end.
Cambodia was also experiencing a property bubble. South Koreans are Cambodia’s biggest investors. Since South Korean businesses have been badly hit by the financial crisis, many of them have already pulled out of their real estate investments in Cambodia.
Elsewhere, Jamaica’s dollar-earning bauxite industry has shed hundreds of jobs already because of the downturn in U.S. car production. The Caribbean financial crisis originated in part from the sharp drop in methanol and real estate prices.
In Antigua, the face of bank fraud is U.S. billionaire Allen Stanford who has been charged with investment fraud. Stanford has considerable investments in the Caribbean. Romania’s lending bubble is familiar because it is almost the same credit bubble which burst in other rich nations.
Brazil’s economy is affected by low consumer spending in the United States and Europe, which are Brazil’s biggest markets for its export industries. Recent reports have shown that Brazil is now the second most affected country by the crisis.
The immediate reaction of many governments to the financial crisis was to rescue the large ailing banks. Bank nationalization schemes have been enforced in some countries, like Iceland and Kazakhstan. Even mainstream U.S. economists are proposing the temporary nationalization of the country’s struggling banks. Trinidad and Tobago banks were rescued not just by their government but also by governments from neighboring countries.
Is nationalization a wise economic decision? Should bankrupt companies receive government assistance? The opinion of bloggers is divided.
Some are open to the idea of nationalizing certain businesses if it can stabilize the economy. Recognizing that orthodox economic prescriptions have so far failed to reverse the declining economy, some writers have expressed willingness to accept bold measures like the nationalization of the banking industry.
But others are vehemently objecting to government initiatives to revive failing companies. They believe the politicization of large financial institutions is counterproductive. Others want the government to euthanize these firms which they blame for creating the global financial mess. It does not help that prominent companies like AIG which received government funding have angered the public by distributing hefty bonuses to their executives.
If bailouts are rejected by many individuals and groups, stimulus plans are demanded by the public. To assure their constituents that something is being planned or done to revive the economy, governments around the world are drafting various economic stimulus packages.
Hungary, Turkey and Indonesia will implement tax reforms. Taiwan has signed a controversial trade agreement with China and several Southeast Asian nations. Hiring street sweepers is part of the Philippine stimulus plan. Mongolia has unveiled a 1.5 trillion tugrik stimulus plan (US$980 million) – but critics claim the program is only intended to cover the budget deficit.
It seems that Russia is relying on “gunpowder economics” for its version of a stimulus plan, as it sold a greater number of weapons last year. Part of Czech Republic's stimulus program involves spending on energy efficiency projects such as heat-proofing public buildings.
China’s central government has announced a four trillion yuan stimulus package (US$586 billion dollars). But some analysts are worried that corruption and poor infrastructure projects will cause the failure of the stimulus plan. In Cambodia, it is the opposition which has suggested a stimulus package. Predictably, the government rejected it.
Malaysia has recently launched its second stimulus program. Named a “mini-budget,” this stimulus plan has generated a lot of discussion, but also criticism, in the country. Spain and Italy have each launched three stimulus packages.
There are analysts who reject the wisdom of “stimulucrats.” They believe that government intervention in the economy is dangerous. They are worried that unrestrained public spending will hurt taxpayers in the long run. But a ruling party which does not offer any rescue plan to revive the economy is certain to encounter defeat in the public opinion polls. It is no longer wise for bureaucrats to promote the self-regulation of markets. The era of big governments will stage a comeback this year.
The economic crisis is now a global contagion. There are global bubbles, bailouts and stimulus plans. The United States has no monopoly on economic hardship and economic thinking in the world. While the economic woes of the United States are understandably the most recognizable, we should also study the economic conditions of other countries.
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(Mong Palatino is an activist and regional editor for Southeast Asia of Global Voices Online. He can be reached at mongpalatino@gmail.com and his website is www.mongpalatino.motime.com)
The global effect of the bursting of the bubble economies in the developed world was sudden and devastating. In Bangladesh there was a housing bubble tied to the country’s reliance on remittances sent by overseas workers. Now that migrant workers are returning home because of mass layoffs in Europe and the United States, the property boom in Bangladesh has come to an end.
Cambodia was also experiencing a property bubble. South Koreans are Cambodia’s biggest investors. Since South Korean businesses have been badly hit by the financial crisis, many of them have already pulled out of their real estate investments in Cambodia.
Elsewhere, Jamaica’s dollar-earning bauxite industry has shed hundreds of jobs already because of the downturn in U.S. car production. The Caribbean financial crisis originated in part from the sharp drop in methanol and real estate prices.
In Antigua, the face of bank fraud is U.S. billionaire Allen Stanford who has been charged with investment fraud. Stanford has considerable investments in the Caribbean. Romania’s lending bubble is familiar because it is almost the same credit bubble which burst in other rich nations.
Brazil’s economy is affected by low consumer spending in the United States and Europe, which are Brazil’s biggest markets for its export industries. Recent reports have shown that Brazil is now the second most affected country by the crisis.
The immediate reaction of many governments to the financial crisis was to rescue the large ailing banks. Bank nationalization schemes have been enforced in some countries, like Iceland and Kazakhstan. Even mainstream U.S. economists are proposing the temporary nationalization of the country’s struggling banks. Trinidad and Tobago banks were rescued not just by their government but also by governments from neighboring countries.
Is nationalization a wise economic decision? Should bankrupt companies receive government assistance? The opinion of bloggers is divided.
Some are open to the idea of nationalizing certain businesses if it can stabilize the economy. Recognizing that orthodox economic prescriptions have so far failed to reverse the declining economy, some writers have expressed willingness to accept bold measures like the nationalization of the banking industry.
But others are vehemently objecting to government initiatives to revive failing companies. They believe the politicization of large financial institutions is counterproductive. Others want the government to euthanize these firms which they blame for creating the global financial mess. It does not help that prominent companies like AIG which received government funding have angered the public by distributing hefty bonuses to their executives.
If bailouts are rejected by many individuals and groups, stimulus plans are demanded by the public. To assure their constituents that something is being planned or done to revive the economy, governments around the world are drafting various economic stimulus packages.
Hungary, Turkey and Indonesia will implement tax reforms. Taiwan has signed a controversial trade agreement with China and several Southeast Asian nations. Hiring street sweepers is part of the Philippine stimulus plan. Mongolia has unveiled a 1.5 trillion tugrik stimulus plan (US$980 million) – but critics claim the program is only intended to cover the budget deficit.
It seems that Russia is relying on “gunpowder economics” for its version of a stimulus plan, as it sold a greater number of weapons last year. Part of Czech Republic's stimulus program involves spending on energy efficiency projects such as heat-proofing public buildings.
China’s central government has announced a four trillion yuan stimulus package (US$586 billion dollars). But some analysts are worried that corruption and poor infrastructure projects will cause the failure of the stimulus plan. In Cambodia, it is the opposition which has suggested a stimulus package. Predictably, the government rejected it.
Malaysia has recently launched its second stimulus program. Named a “mini-budget,” this stimulus plan has generated a lot of discussion, but also criticism, in the country. Spain and Italy have each launched three stimulus packages.
There are analysts who reject the wisdom of “stimulucrats.” They believe that government intervention in the economy is dangerous. They are worried that unrestrained public spending will hurt taxpayers in the long run. But a ruling party which does not offer any rescue plan to revive the economy is certain to encounter defeat in the public opinion polls. It is no longer wise for bureaucrats to promote the self-regulation of markets. The era of big governments will stage a comeback this year.
The economic crisis is now a global contagion. There are global bubbles, bailouts and stimulus plans. The United States has no monopoly on economic hardship and economic thinking in the world. While the economic woes of the United States are understandably the most recognizable, we should also study the economic conditions of other countries.
--
(Mong Palatino is an activist and regional editor for Southeast Asia of Global Voices Online. He can be reached at mongpalatino@gmail.com and his website is www.mongpalatino.motime.com)
4 comments:
It is again Hun Sen who doesn't understand the impact of global financial crisis...he has never accept any reality happening in Cambodia.
He is fooled by his own power ambition.
No, we know the west fuck up with the financial crisis and can't take care of themselves, but we can.
The stimulus plan should be in increasing salary of all public servants to a liveable level such as from $US 45 per moth to US$150 per month. With this level, people can buy their foods and their clothes and some medecine. We cannot compare to US to bail out real estate companies, bank, insurance companies at all. Let them fall so that a new one can be re-established. Areak Prey
Oh shut the fuck up, Ah tomato picker (6:34). We ain't gonna give raise to no idiot to $150/month who can only extort money from poor students.
At any rate, even if we go along with you, this mean we have to increase our spending by about 3 times, and that is impossible because Pouk A Scam Rainxy is all ready nervous to see our budget increased by just 20% this year. They will not want any relief for Khmer people because it will not score political point for them.
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