TheSun 2009-01-30 Page12 Economic Outlook Just Gets Worse and Worse

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  • 8/14/2019 TheSun 2009-01-30 Page12 Economic Outlook Just Gets Worse and Worse

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    newswithout borders12 theSun | FRIDAY JANUARY 30 2009

    Economic outlook just

    gets worse and worseLONDON: The world faces itsworst recession since the SecondWorld War, with the UK on courseto be bottom of the internationalgrowth league among the majoradvanced economies, according tothe latest forecasts from the Inter-national Monetary Fund.

    The British economy will shrinkby 2.8% this year, says the IMF, withdire implications for jobs, houseprices and the public finances. Asrecently as November, the IMFforecast a relatively mild downturnof 1.3% in the UK.

    In its latest World Economic Out-look, the IMF now sees economic

    activity contracting by around 1.5%in the US, 2% in the eurozone, and2.5% in Japan. Two of the brighteststars in the economic firmament,China and India, have seen theirgrowth forecasts slashed, to 6.75%and 5% respectively. The globaleconomy as a whole is perilouslynear to shrinking, with a mere 0.5%growth predicted the lowest sincethe 1940s. We now expect theglobal economy to come toa virtual halt, said OlivierBlanchard, the IMFs chiefeconomist.

    The International LabourOrganisation said globalunemployment and povertyare set for a dramatic in-crease in the coming year.The UN agency added thatin a worst-case scenario, re-corded unemployment could

    rise by more than 50 millionfrom the 2007 level to a totalof 230 million, or 7.1% of theworlds labour force, by theend of 2009.

    The scale of economic de-cline forecast for Britain by theIMF suggests that the joblessfigure would exceed three mil-lion within a year, surpassingpeaks last experienced in the1980s.

    Yesterday, the Institute for FiscalStudies said Britain faces a 20 bil-lion (RM1.1 trillion) a-year doublewhammy of tax rises and spend-ing cuts to restore public financesto order it will take until 2029 forgovernment debt to recede to lev-els seen before the credit crunch.It warned taxes would rise andspending would be cut whoeverwins the next election.

    As Gordon Brown spoke of thedeep world recession, the reportsadded to jitters among LabourMPs. They are starting to expressconcern that the governments bliz-zard of initiatives are cutting little

    ice with the public and are urgingBrown to find new language toexplain his measures.

    One senior Brown ally said: Heneeds to use simpler language toexplain the measures we are tak-ing. He keeps repeating phraseslike global recession, but that istoo much jargon. He needs to say,Were facing prob-

    lems. The whole world is facingproblems. But were helping to sortit out. The average man is not go-ing to understand our message if itcontains too much economics.

    Opposition parties seized on thedouble blow to Browns efforts toreassure his MPs. George Osborne,the shadow Chancellor, said:Gordon Brown cannot answer thesimplest question of all: if Britainis well prepared as he claims, whyare we facing the worst recessionin the world?

    Vince Cable, the Liberal Demo-crats Treasury spokesman, claimedthe IMF report exposed Browns lie

    that Britain is well placed to dealwith the recession, because it facesa bigger slowdown than Europe andthe US. The Prime Minister likes topretend Britain is simply the victimof a global crisis, but many of theUKs problems are clearly homegrown, he said. The Independ-ent

    BANGKOK: Thailands foreignminister said yesterday he hadagreed in principle to allow theUnited Nations refugee agency UN-HCR access to 78 boat people fromMyanmar recently detained in thekingdom.

    Boatloads of the Rohingya mi-nority, who a UN official said facevery difficult circumstances inMyanmar, wash up on Thai shoresin rickety vessels each month try-ing to escape poverty and hardshipback home.

    Thailand has recently been ac-cused of cruelty toward the group,including beating new arrivals andsending them back to sea with fewsupplies.

    The foreign ministry will discusswith security bodies this afternoon,and when we reach agreement wewill give the answer to UNHCR sothat they can send a representativeto meet them, Kasit Piromya told

    reporters.I have agreed in principle.A Thai court on Wednesday con-

    victed 66 of the 78 Muslim Rohingyawho arrived on the western coast aday earlier to five days in detentionfor illegal entry. The 12 others were

    teenagers who were too young tobe tried.

    The UNHCR has been pressingthe Thai government for access toarriving Rohingya since reportsof mistreatment emerged earlierthis month, and yesterday the UNbodys representative in Thailand,Raymond Hall, met Kasit.

    We have asked for access to aspecific group of people and we arewaiting for the formal reply, butI have received every indicationthat it is positive and I expect wewill get an official reply, Hall toldreporters.

    He said he also hoped the gov-ernment would carry out a trans-parent investigation into reports theRohingya were mistreated here, andhighlighted the plight of the Muslimethnic group living in Myanmar.

    It is a population that lives un-der very difficult circumstances ... itis a population which I would say

    are stateless, Hall said.A Myanmar government officialyesterday denied that there wereany Rohingya in Myanmar, despitereports that up to 700,000 of theminority live in its western regionsnear the border with Bangladesh.

    An elderlycoupleoutside astore inLondon. IMFpredicts thatthe joblessfigure inBritainwouldexceeddthree millionwithin ayear.

    Thailand agrees to give UNaccess to boat people

    Obama savoursstimulus winbut fights loomWASHINGTON: Handing USPresident Barack Obama hisfirst big win, the divided USHouse of Representatives onWednesday approved a hugestimulus bill he touted as vitalto saving the US economyfrom collapse. But the US$819-billion (RM2.9 trillion) measurepassed without a single votefrom Obamas Republicanfoes, frustrating his high-pro-file hunt for bipartisan supportafter campaign promises todrain Washington politics ofdecades of bile.

    Still, Obama said he wasgrateful after the Houseapproved the measure bya vote margin of 244-188,with 11 Democrats joiningRepublicans, and that he

    was willing to make changesto the legislation as it movesthrough the Senate.

    I hope that we can con-tinue to strengthen this planbefore it gets to my desk, thepresident, who has pushedthe Congress to pass a finalmeasure by mid-February,said in a statement.

    But what we cant dois drag our feet or allow thesame partisan differencesto get in our way. We mustmove swiftly and boldly to putAmericans back to work, andthat is exactly what this planbegins to do, he said.

    Republicans, who lackedthe votes to block the billin the House but have sig-nificantly more clout in theSenate, promised not to be

    merely the party of no andsignaled they would keepfighting for tax cuts as thebest remedy.

    Fast-acting tax relief willcreate more jobs in Americathan a lot of slow-moving gov-ernment programmes, HouseMinority Leader John Boehnersaid before the Republicansrival bill went down to defeat266-170.

    We want to work with thepresident. Weve made clearto him that hes reached outand were reaching out tohim because at the end ofthe day, the American peopleneed a plan that works, saidBoehner.

    Democrats noted thatBoehner had instructed histroops to vote against themeasure on Tuesday, hoursbefore Obama wooed Re-publican support in separateclosed-door meetings withparty members in the Houseand Senate. Todays vote is

    a victory for the Americanpeople, said House SpeakerNancy Pelosi, who predictedthe plan would help createor save three-four million USjobs.

    After the US Senatepasses its version of the bill,the two chambers will namea conference to work outa final compromise measurethat, if passed by both sides,would go to Obama. TheHouse vote came hours afterObama made a last-minutecall for Republican votes,demanding bold and swiftaction to resurrect US jobsand arrest the US economysbrutal downward slide.The Senate plan includes:

    US$87 billion (RM313 bil-

    lion) increase in the federalshare for Medicaid, the jointstate-federal health insur-ance plan for the poor. Stateshave complained they arestruggling to pay their shareof the programme becauseof lost tax revenues in therecession.

    A US$25 billion (RM90billion), 10-year injection toCobra the ConsolidatedOmnibus Budget Reconcilia-tion Act that allows workerswho lose their jobs and thushealth insurance to keep theinsurance. The Democratic-ledproposal calls for the govern-ment to pay 65%of Cobrapremiums for people who losttheir jobs after September.Last week a report from the

    Commonwealth Fund foundonly 9% of people who areeligible for Cobra actuallysign up, mostly because it isso expensive.

    US$17.9 billion (RM64.4billion) for health informationtechnology such as electronicmedical records and elec-tronic prescribing. Doctorswhose patient list is madeup of at least 30% Medicaidpatients will get a bonus of85% of their costs. Hospitalswith 10% Medicaid clientswill get a bonus that has yetto be calculated. A similarplan would apply to providersto Medicare, the insuranceprogram for the elderly.

    US$1.1 billion to study thecomparative effectivenessof various medical testsand treatments throughthe Agency for HealthcareResearch and Quality and theNational Institutes of Health. Agencies

    These so-called Rohingyasare Bangladeshis who left theirstate for a better life, trying toget sympathy from Westerncountries by claiming to beRohingyas from Myanmar,the official who asked not tobe named told AFP.

    Human rights watchdogshave said the group is largelyshunned in Myanmar, withthe military junta long denyingthem citizenship and com-mitting religious persecution

    against them.Thai officials have said theyare worried about the influx ofmigrants into the kingdom,but have denied any abuseagainst the boat people.

    Kasit told reporters that they

    plan to bring up the Rohingyaissue at a summit in Thailandlate next month of regionalgrouping the Association ofSoutheast Asian Nations.

    All levels will discuss howto solve this, as there is a hu-man trafficking group sendingRohingya to work in Indonesia,Malaysia and Thailand.

    Accusations of mistreat-ment surfaced earlier thismonth after nearly 650 Ro-hingya were rescued off India

    and Indonesia, some claimingto have been beaten by Thaisoldiers before being set adrifton the high seas to die.

    Hundreds of the boat peopleare still believed to be missingat sea. AFP

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