Geo-Delphos

The elected president Barack Obama called to the Congress to take urgent decisions to relief the pain of million workers caused by the economic crisis, describing the situation of the economy like a recession.

Germany has been declared itself in recession, its Gross Domestic Product (GDP) was reduced to 0.5% in the third trimester. According the Statistics Federal Office, this might be the first technical recession of the main European economy in five years.

 In Japan, the figures show that the country lived in three months its second deficit in the commercial balance, with a fallen of 7.7% in the exports.

More than half of the Italians (53.7%) are insatisfied with its economic situation, though they were before the global financial crisis. This perception in some zones of the south of Italy reaches 64.2% according to the National Institute of Statistics (ISTAT).

Spain the fifth economy of the Euro zone, took off in the mid 90´s  becoming an example for the rest of the EU. Spain will close 2008 with the entrance in a period of recession and with a timid positive growth of 1.3 % that hits the 3.7 % with which it opened the year.

After two trimesters of negative growth, (0.2 % during third and 0.3 % in the quarter), Spain enters into a technical recession that according to the forecasts of the European Commission, will be extended until March of the next year.

The Spanish GDP will again be contracted in 0.1% during the first trimester of 2009 and from then Spain will recover the rate of positive growth until arriving at the 0.5% in 2010 in interannual terms. Spain is one of the main investors in Latin America.

As we see, all great world-wide economies, are affected. For example, the global economic crisis in the automotive industry is damaging the European and the US companies. Many manufacturers have had to announce cuts in the production and correct to low his forecasts of growth.

After announcing a reduction of his goals, the German manufacturer of Daimler automobiles, the owner of Mercedes-Benz, communicated that he will interrupt the production on his 14 German factories by a term of up to four weeks, from mid December until mid  January, according to DPA agency.

That decision could mean that about 150,000 employees would have to accept long christmas vacations this year, and if the situation does not improve, Daimler does not discard to adopt harder measures in 2009. In The US by the other hand, the automotive General Motors, who is in hardships, will return to reduce its production, and is fighting against the millionaire losses that imply the fall on its sales. They have already said that, if the government aid does not arrive soon, it would be on theverge of madness, this will mean million of dismissed.

Although the international economic crisis has not increase the unemployment in Brazil, the workers of the automobile industry and other industries begin to draw up strategies to face the strong recession that affects the sector The Brazilian great problem is that the lack of international credit ends up asphyxiating  the small banks, producers and investors, who must face an increase in the cost of the money. And this could bring some consequences, mainly in the market of export and import”, alerted the Secretary of Labor, Carlos Lupi.

The commerce, with the US, Europe and Asia, in any case will be diminished due to the contractions of those economies product of the crisis, then it is incomprehensible that some South American governors consider that the crisis will not have effects in their respective countries.

Although some experts can agree that the financial crisis has found Latin America well prepared to face it than it was when it registered several years of maintained economic growth, with an annual average of 5% and 6%, the countries fear the fall of raw materials prices and the access to the credit flow.

One thing is to be well prepared and another is to adopt the necessary decisions avoiding the crisis effects on the local economies and therefore in the common citizen.

Nevertheless, in South America the governments adopt decisions, as if this situation were not happen to its economies, and apparently the populists pressures can more than the logic. This is going to be bread for today and hunger for tomorrow, This would be transformed into pressures and social conflicts. For example let us see some of them:

Recently in Chile the government approved a 10% increase to the public sector, indeed when the price of Cooper is in its worst level and perhaps the country is already expending the reserves obtained by hest prices of the red metal during the past few years. Although the demands can be very fear, today world-wide economic reality, says  that it is not  time for great wage readjustments,because in one way or another this will affect the inflation and increase the unemployment. That is to say, in Chile, or in other countries that adopt the same decision, there will be better wages but more dismissed. If the wage adjustment would happen today, many companies would be forced to close because they could not grant two digits readjustments, suffering the consequences of a greater unemployment, therefore it is a populist decision .

On the other hand, we have the case of the Argentine Government, who approves the statization of the pensions The history has demonstrated that the pensions administered by the State died soon or are they are used for other purposes. There is a big risk, the money who belongs to all the Argentineans could be used for paying the excessive debts of Cristina Fernandez´s government, who has country in the worst risk ranking of Latin America and therefore it is not an interest country for the investors, by its lack of security and regulations.

That is to say the Argentineans, probably will not be able to get retirement because they will not have funding to receive for pensions.

In Mexico, in national numbers already it is spoken of 10 million of Mexican suffering poverty. It is going to affect them the  return of the mexicans from the US, because they are going to demand jobs, more basic services, among other necessities that from now on must be seen, because the arrival of the mexicans from US. is already around the corner. There is necessary to consider the pressures to raise the wages, that would entail bankruptcies of companies.

Venezuela, without doubts, is affected by the low price of the oil that already lost two thirds of its value registered in July, when the barrel broke the historical record of US$147. Probably their citizens will not have the basic elements of subsistences, with a government who jeopardizes a great amount of money in armament.

According to the economist Sebastián Edwards, Mexico and Central America will also undergo a prolonged recession. During many years, its economic destiny was related with the United States economy. These bonds got increased with the signing of bilateral treaties of free commerce with the United States, so there is a high possibility of a negative growth in 2009 and, perhaps, in the first half of 2010, when the United States fall in recession.

All this reality, does not fits with the idea that the Latin Americans are every day happier, with high hopes in the the future and with great and increasing levels of critic on its societies. The democracy consolidates partial and slowly, without changing its condition of imperfection, according to the report of Latin Barometer published in Santiago on 14 of November 2008.

The reality, for Latin America can be another one, and their defrauded societies will be able to generate social conflicts that put in check the security of the governments and therefore the region. The harmful effects of the crisis are coming and we must be prepared to responsibly assure the governability and the social peace, both necessaries to leave the crisis. (Nov 2008)

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Tags: crisis financiera, gobierno, recesión

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