51 million jobs set to be lost as world growth reaches near standstill

Data released today shows that around 51 million jobs are at stake as the world will register only 0.5% growth in 2009, the worst rate since the end of World War II.

The International Labour Organisation said today that the global unemployment rate will shoot up to 7.1% with developing countries taking the hardest hit.  North Africa, the region irregular immigrants depart from to reach Europe, has the highest unemployment rate in the world – 10.3%.

Meanwhile, the International Monetary Fund announced that global economic growth will reach a halt growing by just 0.5%.  ‘A sustained economic recovery will not be possible until the financial sector’s functionality is restored and credit markets are unclogged’, said the IMF.

The United Kingdom, one of Malta’s major trading partners and a major source of its tourism industry, is expected to experience one of the deepest recessions when compared to other countries, the report says.

Job losses deepen Monday blues

Companies all over the world announced thousands of job losses today as a survey among US private sector companies suggests that the situation will only get worse.

Caterpillar, producer of heavy machinery such as bulldozers, announced that 20,000 of its employees will face the sack is it made more than a third less profit for the last three months of 2008.

Six thousand employees will be fired from electronics producer Philips.

In the UK steel maker Corus announced 2,500 job cuts while France is considering a stimulus plan to help airlines purchase planes that will in turn save Airbus.

All these job cuts are affecting both skilled and unskilled workers. This means that there are more unemployed individuals with tertiary education than before. Writing on the Wall Street Journal, Dawn Jordan, former vice president of operations at Bank of America writes:

I know my education will be key in landing my next job, but it didn’t prevent me from losing my last one. And it doesn’t carry any guarantees about the job after that. Given the growing number of intelligent, experienced workers being laid off everyday, I can’t help but wonder, what besides education and experience is needed to increase job security in today’s workplace?

Meanwhile UK Prime Minister Gordon Brown called for a new world order after the crisis. This is already happening with Kuwaiti firm Noor Financial Investments forming ventures with Russian gas giant Gazprom

Photo of the Day: Cars-in-waiting

 

Cars waiting to be sold in the UK

This picture, taken from The Guardian, shows Nissan cars waiting to be sold in the UK. Demand for cars globally has plummeted forcing producers to cut production. In the UK only, car production was halved in December 2008. As a result, global steel production fell for the first time in ten years.

Meanwhile, Fiat continues its rise with rumours suggesting that it might merge with French carmaker Peugeot.

Global problems require social solutions

I’ve had problems logging onto the internet all morning but, finally, I managed.

I am still energised by the extremely important role the inernet played yesterday during President Obama’s inaguruation. It was fantastic seeing people comment on Twitter and Facebook and watching the inauguration live on Cnn.com/live. 

However, as soon as I came back to check the market’s reaction following Obama’s inauguration speech, I found that that the outlook on Wall Street was still bleak. Why?

Wall Street thrives on results. But, so far, we have only seen rhetoric coming from Obama. So that might be a reason. However, I think there’s more than what meets the eye.

Let’s assume that financial markets are places where people meet to take decisions. Now, we all know that the best decisions are informed-decisions. So we need informaton in order to take decisions.

Are we sure the kind of information markets are receiving is enough? I don’t think so. The current crisis is proof of wrong decisions taken on wrong information.

This means information needs to change. How? Social media might be the answer.

In fact, the World Economic Forum, which groups more than 2,500 experts from al over the world is this year using MySpace and YouTube to get the reactions of normal people ahead of a summit with a special title: Shaping the Post-Crisis World.

The post-crisis world should be based on greater social itneraction. We are already witnessing the beginning of change. But more needs to be done.

Bank posts biggest loss in British history

CNBC just announced that Royal Bank of Scotland, one of the major banks in Britain, has posted a $30 billion loss for 2008.

This is the biggest loss in Britian’s corporate history.

“If the banking system collapses, every single one of us would see the obvious problems. The economy would come down with it,”  said Alistair Darling, Britian’s Chancellor of the Exchequer.

This news comes as the UK government prepares to take over as much as 70% of the bank in a bid to rescue it. This is part of a £300bn rescue package that was announced this morning.

Some sectors of the press are however already doubtful whether this second bank bailout will be successful.

Professor Peter Spencer from York University however argues, “We must not lose sight of the fact that they [bank bailouts] have prevented the collapse of the monetary system.” Were this to happen, this would spell disaster for the whole global economy.

Ambrose Evans-Pritchard however states that “this does not mean that recovery is imminent’.

I do not envy anyone who has to deal with this financial mess.

Britain’s economic fall is deepest since 1931 – experts argue

Britain may be experiencing the worst economic decline in peaceful times since 1931, argues a report to be released by Ernst & Young Item club next week which was seen by The Times today.

Unemployment in Britian is expected to hit the 3.25m mark, the same report says.

Meanwhile, the British government prepares to bail out its banks with a further £100 billion, The Times says. 

The past hour in news was not, however, all doom and gloom.

Barclays is in fact set to report a £6 billion pre-tax profit next month, The Telegraph says. The bank had announced 2,100 layoffs earlier this week.

Obama will solve the global financial crisis in a day – Amnesty

It will take Obama just one day to solve the global financial crisis and 20 days to reverse climate change, says an advert by Amnesty International released today.

Impossible? Amnesty International agrees, but it also says that Obama’s pledges on human righs are not impossible to achieve launching an online petition and checklist to this end.

 “We’re not asking for the impossible from Barack Obama, just that the USA makes a clean break with the past and begins to stand up for human rights,” Amnesty International’s UK director Kate Allen told The Guardian.

You can see the checklist and sign the petition here.

Uncle Sam says: Buy a car!

American car web site Edmunds.com is offering $10 million of its advertising space for adverts encouraging Americans to buy cars, AdAge.com reported yesterday.

The ad, which will run for 90 days, argues that this is a great time to buy a car in the US as there are huge discounts available.

Jeremy Anwyl, CEO of Edmunds.com argued that his company felt impelled to show its support to the American car industry. ‘We’ve got to shock people into the market,’ he said.

20% less vacancies for UK graduates in 2009

The year 2009 will be an annus orribilis for graduate job seekers in the UK.

Data published today in fact shows that vacancies for graduate job seekers in the UK will go down by a fifth, The Independent reports.

This means there will be 7,000 jobs less for students graduating this year, argues The Telegraph.

‘There is understandable panic on campus that this is shaping up to be one of the worst years of the last two decades to be graduating from university,’  says Martin Birchall, managing director of market research company, High Fliers Research, in comments to the BBC.

The Independent also got in touch with Wes Streeting, President of the National Union of Students who said, ‘these figures will be extremely worrying for those who are preparing to graduate in 2009. But it isn’t just graduate jobs which are at risk from the credit crunch. Many students have to work part-time to finance their studies and we may see more of them having to drop out if they lose these jobs.’

Major Olympics 2012 sponsor raises concern over its future

‘Let’s see how far we’ve come’, says the song of an advert by Nortel Networks, a Canada-based company and sponsor of the next Olympic Games. It could ahve not gone farther than tomorrow as reports suggest, had it not filed for bankruptcy protection ahead of a gigantic interest payment which is due tomorrow.

The company, which employs 30,000 staff spread over 30 countries, said this move was part of a process of reorganisation aimed at making it stronger.