Global financial meltdown update

A pair of articles of interest in the Financial Times this morning:

Global unemployment and poverty are set for a “dramatic increase” in the coming year as the world economic crisis deepens, according to a new report.

Projections by the International Labour Organization, a UN agency, on global employment trends predict that on a worst-case scenario, recorded unemployment could rise by more than 50m from baseline 2007 levels to 230m or 7.1 per cent of the world’s labour force by the end of 2009.

In the same scenario the number of people in “working poverty”, earning less than $2 a day, could rise to 1.4bn or 45 per cent of all workers, from 1.2bn in 2007.

This would leave as many people below the poverty line as there were in 1997, wiping out all the gains over the past decade and marking “a return to a situation in which more than half of the global labour force would be unemployed or counted as working poor.”

Juan Somavia, ILO director-general, said its message was “realistic, not alarmist”. “We are now facing a global jobs crisis…Progress in poverty reduction is unravelling and middle classes worldwide are weakening. The political and security implications are daunting.”

Global crisis "could cost 50m jobs" (Financial Times, 28 Jan 2009)

Economists and some policy-makers displayed little confidence that the fiscal stimulus programmes in many advanced countries would be very effective in mitigating the degree of decline in global output in 2009 and no hope that a coordinated strategy would be agreed among rich and poor countries.

The political and business leaders gathered in the Swiss mountain resort would be “very foolish” if they assumed that the crisis was over, [News Corp. chairman Rupert] Murdoch said: The “binge” the western word had been on had come to an end, he added, leaving people around the world “depressed and traumatised” by the damage done to their personal wealth.

Davos kicks off amid deep gloom (Financial Times, 28 Jan 2009)