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

Cows are stronger than Brown: They can survive recession

As Gordon Brown announces the UK is following the US in recession, saying it was caused by ‘complete market failure’, data shows that cattle ranching is experiencing double-digit growth in the US.

So, if you’re looking for a job and you’re worried the British financial services sector will shrink over the coming two years, why not try work on a cattle ranch, where growth and peace of mind are guaranteed.

Recession hits tech and telecommunication companies

Sony posted a loss for the first time in 14 years

 

 

The tech and telecommunication sectors took a big blow in teh past 24 hours as company announcements showed the vulnerability of such sector.

Sony was the first company to start the round of negative announcements as it posted its first loss in 14 years. 

Nokia then followed. It said that its sales were set to go down by 10% in 2009. This means that the mobile phone market will get smaller and more competitive in 2009.

But, possibly the worst result of the day was Microsoft which announced it is going to axe 5,000 workers for the first time since 1975. This is 5% of Microsoft’s workforce. 

It was Samsung’s turn early this morning when it posted its first quartlerly loss ever. This sent its shares in Seoul down 4%.

However, Google saved the day posting financial results that beat analysts’ expectations.

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.

Malta’s economy to grow just 0.7% in 2009, unemployment to soar to 7.4%, says Commission

The economy is exppected to grow by just 0.7% after that it grew by 2.1% in 2008, said the European Commission today in its economic forecast for 2009.

Unemployment in the southernmost state of the EU is expected to top 7.4%, up 0.9% from 6.5% in 2008.

Deficit is however expected to decrease to 2.6%.

A detailed report compiled by the Commission shows that consumption shall fall while tourism is set to falter in 2009, the export market of semi-conductors, which constitutes the lion’s share of Malta’s exports, shall also take a hit this year. 

When treating inflation, the Commission points out that the Maltese will expect lower food prices in 2009, but the increase in water and electricity rates is set to push inflation, limiting its downward push.

‘The severe economic downturn will have a profound impact on labour market developments and public finances’, said the Commission as it predicts that the European economy will fall by 1.8% during 2009.

The Maltese Government had forecasted a growth of 2.5% in its last budget, presented in November 2008.

This means that with the worsening of the global situation, the European Commission is now expecting Malta to grow much less than it had predicted just less than two months ago.

Economy and democracy take a hit in Singapore

Desperate times call for desperate measures, says a friend of mine. Singapore’s senior minister Goh Chok Tong seems to agree.

The Financial Times in fact reports that the southeast Asian state is ready to tap into its cash reserves in order to fund investment into the economy. Singapore’s economy is expeced to go down by 3% this year.

However,  the artcle also reports that the government is also prepared to tighten laws making public protests a criminal act in a bid to curb efforts of a major Singapore opposition party.

This is shameful. You do not invest in the economy while dvesting people of their freedom of expression.

It is time civil society and states speak out in favour of democracy in Singapore.

Tesco starts tweeting

British retail giant Tesco started tweeting through its US arm Fresh & Easy, The Telegraph reports:

A sample Twitter exchange from earlier this week involves a customer called “songrytr” noting that stock levels had seemed “a little sparse” on recent visits to his local branch, to which Fresh & Easy responds that levels tend to be a bit low at the end of the year due to shipping schedules.

Though perhaps not gripping correspondence, Twitter does help to establish loyalty by giving customers an active way of communicating with the company’s management.

When will situation improve? It may take 2 – 3 years – argues steel giant

Steel giant Nippon Steel today argued that the global steel industry may well take two to three years to recover from the current economic downturn, Reuters reports.

The company’s announcement comes as one of its top clients, Toyota, is seeking to reduce its orders for steel.

So, with the car industry and steel industry feeling the brunt of the global economic downturn, which sectors should an investor eye?

The Baring Global Agriculture Fund and fund manager Managing Partners’ British Property Opportunities Fund are two options, argues William Kay in an article appearing on today’s The Sunday Times.

He also reminds readers to start thinkng aobut their retirement plans early as research shows that one in every four of today’s 55-year-olds in the UK is expected to live till 95.