The world economy is nowhere near recovery from the last economic implosion in 2007-08, even as governments and their economists would want us to believe so. While articles about the lingering crisis are scant, one could read through.
1. Growth rates in the Gross Domestic Product (GDP) of the centers of global capitalism are still very low. Germany’s GDP growth in 2014 is at a low 1.6 percent, Japan at -0.1 percent, the US at 2.4 percent, the UK at 2.9 percent, and Switzerland at 1.9 percent. Even the so-called emerging economies or the BRICS are already reeling from the crisis with low growth rates: Brazil 0.1 percent, Russia 0.6 percent, and South Africa at 1.5 percent. While both India and China registered GDP growth rates of 7.3 percent in 2014 – China’s growth rate was 9.0 percent in 2011 – its impact on the world economy is not as significant as the centers of capitalism namely, the US and the European Union.
2. Interest rates, the main intervention mechanism being used by governments, and acceptable under neoliberal economics, remain low. US interest rate is at 0.500 %, Japan at 0.000%, Europe at 0.050%, and Switzerland at –0.750% This is a sign that industries are not expanding and are in no need for additional capital, and thus, not taking loans even with very low, zero, or negative interest rates. Governments in the centers of capitalism, which are the main purveyors of neoliberal economics, are engaging in pump priming through infrastructure projects, even if this is not within the neoliberal framework, in a failed attempt to stimulate economic activity.
3. Stock prices in the US, Europe, the Middle East and Asia have lost value year on year. Inflation rates are also low even as monopolies control prices. This means companies have no choice but to lower prices. Germany’s inflation rate is at 0.9%, Japan at 2.7%, US at 1.6%, the UK at 1.5%, and Switzerland at –0.0%.
4. Oil prices, which reached an all time high of $144.78 in June 2008 due to speculation, is currently at a low $29.04 a barrel on the New York Mercantile Exchange. http://www.macrotrends.net/1369/crude-oil-price-history-chart
Brent North Sea crude for April delivery slumped $1.21 (3.6 percent) to $32.18 a barrel in London. Analysts blame the oversupply of oil for the slump in prices and there are talks to freeze the output to January 2016 levels. But there appears to be no consensus in sight for oil producers.
What is the cause of the oil glut? In the absence of any supply shock, which emanates from the sudden discovery of rich oil reserves that flood the market, there could only be one explanation: the major oil consumers are not using much oil. Oil is still the main source of energy that fuels industries. If production is not at peak levels, the consumption of oil would also be not that much, thus the glut.
How does the crisis affect ordinary citizens? Official unemployment figures may be low but the quality of jobs has suffered so much. Part time jobs, odd jobs, contractual work, low wages with scant benefits, if any at all, affect majority of peoples of the world. Poverty, aside from wars, is also causing the refugee crisis affecting Europe. This has caused European governments to once again tighten its borders.
Locally, the Aquino government, as well as its predecessors, has been boasting of the supposed higher GDP growth rates of the country. But growth rates are all about incremental increases and not the total value of the economy. The US, Europe, Japan, and even China and India, are way bigger economies than the Philippines. Worse, behind these growth rates are the lowering of the quality of life of majority of Filipinos, widening gap between the rich and the poor, poor quality of jobs, the growing informal economy, and the meager wages that could no longer provide families with living conditions befitting humans. Contractual employment has become so prevalent that a new term has evolved among workers and rank and file employees: “endo” or end of contract after five months.
It is most unfortunate that most candidates for president and vice president, as well as for the two houses of Congress, have declared that they would pursue the neoliberal economic program of the Aquino government and its predecessors. These are the very same policies that have caused the crisis and have been perpetuating it.
But there is hope. More and more peoples all over the world are engaging in various forms of protests and strikes. It’s time for the peoples’ voices to ring louder. (bulatlat.com)