world crisis

The world in crisis

The world ruling classes are in a state of complete panic with Germany’s Angela Merkel remarking that bankruptcy for entire states is now not so far fetched.
Job losses, bank collapses and manufacturing slowdowns are appearing in all major sectors of the world economy.
Obama’s stimulus package of 787 billion dollars was soon followed by the threatened collapse of insurance giant, AIG, which has now to be bailed out as they can’t let what’s described as a ’cornerstone’ of the US economy go down.
The last few months have seen the sharpest contraction in US growth since the crisis of 1973 with GDP in the last few months of 2008 declining by 6.2%. The data for 2009 seems to be much worse with figures constantly being marked down. With record lows expected in consumer spending figures the US is also facing a huge haemorrhaging of jobs – unemployment rose by 2.6 million since 2008 with 1.9million of those jobs lost in the last 4 months alone. This represents the greatest decline in employment since 1945. With 12 million now jobless, half a million a month now and increasing, more and more americans are having to subsist on foodstamps.
The world’s 2nd biggest economy, Japan, is declaring it’s worst results for 35 years. Japan’s industrial output dropping by 20% this quarter alone while exports have fallen by a shocking 40% and unemployment reaching an all time high of over 6%. The Japanese government have just signed a new freetrade agreement with other ASEAN countries but that hasn’t stopped the accusations of protectionism going back and forth between various asian countries.
Australia’s economic prospects are hugely dependent on Japan as the Japanese market is the biggest destination for Australian exports. One of Japan’s largest companies, Toyota, has announced their first operating losses since the 1930’s.
The collapse of the USA and Japan is having an effect on the Chinese economy. It’s expected that unemployment across south east asia will reach 97 million this year, which is an obscene figure. 600,000 firms closed in the last year in China. The government has responded like many others with a stimulus package totalling 586 billion. China is a net exporter but faces a 17.5% drop in demand for it’s products with figures for this quarter expected to be much worse. Indonesia has put tariffs on Chinese goods which hugely increases tensions in the region. These tensions are playing out on a wider scale too with the US and China throwing similar accusations at each other.
The 3rd largest economy in Asia is the Indian which is still, like China, declaring growth. Although the predicted 8% growth has been revised downwards to 5% by some commentators who also expect that these figures will fall even more in 2009. There are calls from sections of the Indian ruling class for measures to stimulate growth but the Indian economy is limited to mainly domestic demand.
If we take a brief look at Brazil their industry figures just released show a 12.4% drop since december alone with exports down by a massive 29%. Governments across South America, like elsewhere, are slashing interest rates massively.
In the EU and the region from the EU heart to Russia there are massive problems. The World Bank, The European Development Bank and the EU bank for reconstruction have given a 24 billion loan to Hungary and others but the Hungarian government has announced that they need at least ten times as much. Even the Russian economy which is a huge exported of Oil and Gas now believes that even a rise of Oil prices to 55 dollars a barrell won’t keep their economy out of danger.
From Ireland through the UK all the way over to the Baltic states and down to Spain, Portugal and Greece the bankruptcy of states has ruling classes in a state of absolute fear.
We can’t allow ourselves though to be overwhelmed by the scale of the crisis and give in to the fear that has infected the whole world ruling class and the majority of working class people worldwide who are fearful of losing jobs and homes. The ruling classes are getting away with cuts in places like Ireland, not because of their strength, but because of the weakness of the opposition forces. People want to fight back and their fear can easily, as we have seen here in Ireland, translate into militant actions. Socialists need to give a lead and show that we have answers to the questions people are asking, we have an alternative vision of society that everyday matches the conclusions that more and more people are reaching for.
Capitalism won’t collapse, it needs to be pushed over. The crisis is an opportunity. We have a chance to escape once and for all from this madness. The world economy is set to contract for the 1st time since 1945. The ruling class has to increase the rate of exploitation of workers in order to get profit rates up again and start the entire ridiculous process going again.
We can and must stand up give voice to the massive anger that’s out there. It’s time to say no more!