RECESSION: Currency Defense Drops on Ringgit, Won on Exports

By Ye Xie and Bob Chen
(Bloomberg)
March 9 2009

Asian central banks are abandoning a six-month campaign of defending their currencies, reversing course to cheapen exports that are falling the most in a decade.

Policy makers from India to Malaysia to Taiwan are letting their currencies depreciate after South Korea gave companies an edge by allowing the won to weaken 19 percent against the dollar this year. Shipments from South Korea, Indonesia, Taiwan and Malaysia fell 17 percent in January to $79 billion, twice the drop of April 1998, when the Asian financial crisis was wiping out a third of the region’s economy, according to data compiled by Bloomberg.

“Export markets have been forced to let their currencies weaken to try and keep up with the competitive depreciation in the won,” said Dwyfor Evans, a strategist in Hong Kong at State Street Global Markets LLC, which has $12 trillion under custody.

The won, India’s rupee and Taiwan’s dollar will decline against the U.S. dollar by 12, 13 and 6 percent, respectively, by the end of June, according to Stephen Jen, a Morgan Stanley currency strategist. Goldman Sachs Group Inc. says Singapore’s dollar will depreciate 3 percent by April. Malaysia’s ringgit will slip 5 percent by Sept. 30, says Calyon, a Credit Agricole SA unit in Paris.

Devalued currencies may throw a lifeline to exporters getting clobbered by South Korean competitors. Oppenheimer & Co. predicts Taiwan-based AU Optronics’s share of the global market for liquid-crystal displays in television sets and computers will drop to 15 percent this year, from 16.8 percent in 2008. The company posted a record loss of NT$26.6 billion ($764 million) for the fourth quarter.

Outperforming Taiwan

Its South Korean rivals, Samsung Electronics Co. and LG Display Co. will boost their combined LCD share to 44.9 percent, from 41.9 percent, Oppenheimer said in a research report to clients last month. Shares of those two companies have outperformed their Taiwan competitor by at least 21 percentage points since Sept. 30.

“There will no longer be meaningful interventions to prevent Asia-outside-Japan currencies from falling,” Jen said in a March 2 report from London. “There’s a genuine change in the currency policies of many Asian economies. A severe contraction in the trade surpluses clearly affects the relative supply and demand for dollars in these countries.”

Central banks intervene when they buy or sell currencies to influence exchange rates.

‘Stable’ and ‘Functioning’

Malaysia’s Bank Negara bought ringgit four months ago, helping it strengthen 4.5 percent against the dollar in December. The central bank said March 5 that the currency is now “stable” and “functioning on its own.” The ringgit fell 6.8 percent this year to 3.7203 today as it slipped toward the 3.80-per-dollar peg abandoned in 2005.

The Philippines won’t intervene to shore up the peso, Deputy Governor Diwa Guinigundo said March 4 as it approached the lowest level since Dec. 5. The peso ended a three-month slide in November after the central bank drew down its reserves by 2 percent the previous month, the biggest drop since 2005. The currency declined 2.5 percent to 48.620 per dollar this year.

Foreign reserves in India barely changed in February at $239 billion, indicating the central bank didn’t sell dollars to prop up the currency as the rupee shed 4.7 percent in its worst monthly performance since October.

Adnan Akant, foreign exchange chief in New York at Fischer Francis Trees & Watts, which oversaw $22 billion as of December, predicts Singapore’s central bank will widen its trading band to let the currency fall when policy makers hold their biannual meeting in April. He’s selling the city-state’s dollar, which depreciated 6.5 percent this year to S$1.5442 per greenback.

‘Engine’ for Growth

South Korea was the catalyst for the shift away from defensive intervention. After spending 22 percent of foreign reserves from August to November to stem won losses, South Korean Finance Minister Yoon Jeung Hyun said Feb. 25 that its weakness may be an “engine for export growth.”

The won’s 17 percent slide this year versus Asian counterparts is its steepest annual start since 1995, when Westpac Banking Corp. started to track the value of the currency on a traded weighted basis.

China’s $585 billion stimulus plan may halt or reverse Asian currency losses by spurring growth across the continent. Christy Tan, a currency strategist at Bank of America Corp. in Singapore, said the region’s economies and currencies are ready for a recovery.

‘Positive Implications’

“Asia as a whole continues to enjoy rather healthy trade surpluses,” Tan said. “We have an above-consensus forecast for China growth at 8 percent. That’ll probably have positive implications for the Asian currencies going forward.”

Malaysia, Southeast Asia’s second-largest oil and gas producer, has had trade surpluses every month since 1997. Singapore’s current account surplus will fall to 15 percent of its economy this year from 24 percent in 2007, according to forecasts of economists surveyed by Bloomberg News.

Akant said China’s stimulus will have limited impact because that country “can only help itself, but not enough to help all non-Japan Asia.”

The region is twice as dependent on exports as other parts of the world. Excluding imported components, international sales account for two-thirds of Singapore’s $161 billion gross domestic product, almost half of Malaysia’s $181 billion and Thailand’s $246 billion and a third of Taiwan’s $356 billion and South Korea’s $970 billion, according to Credit Suisse Group AG.

Malaysia’s exports fell the most in 15 years in January, down 27.8 percent from a year earlier after slipping 14.9 percent in December, the trade ministry said March 6.

Falling Exports

A Taiwan government report today showed exports fell 28.6 percent last month from a year earlier, following January’s record 44 percent drop, according to economists surveyed by Bloomberg News.

Taiwan, Singapore, Hong Kong and South Korea, once called the Asian Tigers, have entered recessions as Westerners cut spending on cars, TVs and semiconductors.

Singapore’s Chartered Semiconductor Manufacturing Ltd., the world’s third-largest maker of customized chips, said in January it may report record losses of between $142 million and $152 million in the first quarter and will cut 600 employees, 8 percent of its workforce.

The export-fueled “boom is going bust,” said Henrik Pedersen, the London-based chief investment officer at Pareto Investment Management Ltd., which oversees $46 billion. “The countries will survive, but not without a big adjustment in their currencies. They don’t mind seeing their currencies weaker.”

Leveraged to Growth

Singapore’s economy contracted at an annualized 16.4 percent rate in the fourth quarter, the most in at least 33 years. It will shrink another 3.5 percent in the first quarter, according to the median prediction in a Bloomberg survey of four economists. Taiwan’s gross domestic product is forecast to slow 2.7 percent this year, following a record 8.4 percent decline in the final three months of 2008.

“There’s a realization that the region is leveraged to global growth,” said Paresh Upadhyaya, who helps manage $50 billion in currency assets as a senior vice president at Putnam Investments in Boston. “Exports and industrial contraction are worse than the Asian crisis in 1997, 1998. They may have to debase their currencies.” He said he has “underweighed” the Taiwan dollar, the won and other Asian currencies since January.

After the bust of the housing bubbles in the region and the devaluation of Thailand’s baht prompted investors to flee the markets in 1997, industrial production in South Korea declined 13.5 percent in July 1998, from a year earlier. This past January, output dropped 25.6 percent, the statistics office said March 2.

Lower Interest Rates

Central banks from Indonesia to the Philippines are also weakening currencies by lowering interest rates. Though intended to boost growth, rate cuts also dim the appeal of their assets. The Reserve Bank of India reduced its benchmark repurchase rate to a record low of 5 percent from 5.5 percent on March 4, and from a seven-year high of 9 percent in September.

Investors are shunning emerging markets amid concern that the global recession will hurt these countries more than bigger economies. A combined $643 million evaporated in the South Korea, Taiwan and Thailand stock markets on March 2 alone, the most in three months, according to Calyon. The MSCI World Index fell 24 percent this year, compared with 14 percent for the MSCI World Index of developed nations.

“The same-old demand won’t come for the next five, 10 years,” said Scott Ainsbury, a money manager at FX Concepts, the world’s largest currency fund at $12 billion. “People may underestimate how far these currencies can fall.” Ainsbury said he’s selling the Taiwan and Singapore dollars and the won.

Worst Performers

The weaker won helped Seoul-based carmaker Hyundai Motor Co. increase U.S. sales 4.9 percent this year, while Toyota Motor Corp. in Tokyo, the world’s biggest auto manufacturer, saw sales drop 36 percent in the same period. The won depreciated 12 percent versus the Japanese yen this year, following a 40 percent drop last year.

So far in 2009, the won is the only Asian currency among the 10 worst performers in emerging markets, according to data compiled by Bloomberg. Hungary’s forint dropped 23 percent versus the dollar and Colombia’s peso lost 13 percent.

Central banks started to support currencies after the credit freeze that followed the collapse of the subprime mortgage market in August 2007, prompting foreign investors to withdraw funds. The defense intensified when Lehman Brothers Holdings Inc. collapsed in September, sending financial assets into a tailspin.

Foreign Reserves

As policy makers propped up exchange rates last year, foreign reserves in South Korea, India, Malaysia and Indonesia decreased to $589 billion on Dec. 31, from $745 billion on June 30.

For now, central banks have stopped fighting the depreciation.

South Korea’s foreign reserves were little changed at $201 billion in February as the won slumped 10 percent against the dollar, its worst month since November. The won also declined 19 percent this year against China’s yuan and 14 percent against Taiwan’s dollar on concern that a possible credit contraction would starve the nation of dollars needed to pay debts.

Weaker currencies alone won’t spur recoveries as the global recession deepens, said Mark Dow, a money manager at Pharo Management LLC, a New York-based hedge fund with $2 billion under management.

The International Monetary Fund sees a “serious risk” of a contraction in the worldwide economy this year and will probably cut its 0.5 percent growth estimate in April, Managing Director Dominique Strauss-Kahn said on March 3.

“If you lose your job and buy a flat-screen TV just because it’s 70 percent off, I bet your wife won’t be happy,” said Dow, who is selling currencies of Malaysia, Philippines, Taiwan and South Korea. “Price doesn’t matter. It’s a mistake for Asia to devalue their currencies. The thinking is wrong, but it’s happening.”

• Currency Defense Drops on Ringgit, Won on Exports
• Bloomberg

RECESSION: 35.7 trillion' lost by recession

The global crisis wiped a staggering $50 trillion (£35.7 trillion) off the value of financial assets last year including $9.6 trillion (£6.8 trillion) of losses in developing Asia alone, the Asian Development Bank has said.

"This is by far the most serious crisis to hit the world economy since the Great Depression," said ADB President Haruhiko Kuroda.

But he predicted Asia would be "one of the first regions to emerge from it".

In a study commissioned by the Manila-based lender on the impact of the financial crisis on emerging economies, it estimated the value of financial assets worldwide - currency, equity and bond markets - to have dropped by $50 trillion (£35.7 trillion) in 2008.

It said developing Asia was hit harder - losing the equivalent of just over one year's worth of gross domestic product - than other emerging economies because the region has expanded much more rapidly. In Latin America, losses were estimated at $2.1 trillion (£1.5 trillion).

According to the study, the figures provide clear proof of the close connections between markets and economies around the world, leaving few, if any, countries immune to financial or economic fallout. A recovery can only now be envisaged for late 2009 or early 2010, it said.

A sprawling region, developing Asia includes 44 economies from the central Asian republics to China to the Pacific islands. The bank had earlier projected the region's growth to slow to 5.8% this year from an estimated 6.9% last year.

The worldwide downturn has hit export-driven economies particularly hard. From South Korea to Taiwan to Singapore, exports have plunged by double digits in recent months as American and European consumers spent less on cars and gadgets.

Kuroda said the impact of the crisis could result in a spike in unemployment, slower growth rates and depressed stock markets.

Tight liquidity and credit could also hit small and medium enterprises, while a drop in remittances from overseas workers, which has been fuelling domestic consumption in countries like the Philippines and Indonesia, could remove important social safety nets, Kuroda said.

'£35.7 trillion' lost by recession

The Press Association

SAVINGS WITH MALAYSIAKINI: Every penny, every cent.

Every penny: 10 ways to save money in the house, garden

February 20, 2009

By DEBBIE ARRINGTON

Sacramento Bee

Tight times require some creativity and common sense. There are dozens of ways to pinch pennies around the house, starting with simple things like turning off the lights when you leave a room (all those watts add up) or dialing down the thermostat.

In the garden, conservation pays dividends threefold in saving money, water and time. It makes the fruit of your efforts that much sweeter.

Here are 12 more ways to save around the home and garden.

1. Plant vegetables: Under optimum conditions, one $1.99 packet of tomato seeds can produce 750 pounds of tomatoes. A half-ounce of lettuce seeds is enough to grow 12,000 heads; a typical $2 packet may contain 1,000 seeds. That's a lot of green for not much coin.

2. Make-it-yourself containers: You can make your own growing pots for seedlings out of newspaper. Try this idea courtesy of the California Garden Clubs' Kids Growing Strong program.

You need a page of black-and-white newspaper, a half-liter plastic water bottle and tape (cellophane or masking tape work fine). Cut a 5-inch strip of newspaper lengthwise (that's about 22 inches long).

Use the bottle as a mold. Place the bottle sideways on the sheet with about 11/2 inches of paper extending past the bottom of the bottle. Roll the newsprint around the bottle into a cylinder. Secure the end with a little tape. Fold the edge over the bottle bottom and secure with tape.

Slide the newspaper off the bottle and you have a 31/2-inch-tall pot. Fill with potting mix and plant a seed. Place pot in a tray or saucer and add water. When ready to transplant in the garden, you can put the whole pot in the ground; the newspaper will dissolve, just like the peat pot.

3. Compost Talk: about turning trash to treasure. Composting recycles garden rubbish and kitchen scraps into nurturing fertilizer.

4. Be fertilizer-savvy: Your plants aren't fickle about brand names; they'll grow with the cheap stuff. When shopping for fertilizers, look at the numbers (the nutrients, not the price) on the side of the box. A typical balanced fertilizer will have a "grade" such as 10-10-10 (denoting the percentages of available nitrogen, phosphate and potash, respectively; the major nutrients needed for plant growth and development). Buy by the grade.

5. Coffee-ground mulch: Used coffee grounds make great mulch for roses and other blooming plants, especially those that love acid soils such as camellias or azaleas. Ask your favorite barista for used grounds in quantity at your neighborhood coffee place.

6. Newspaper mulch: Recycled newspaper is another effective mulch in the vegetable and flower garden. The USDA's Natural Resources Conservation Service recommends using a quarter-inch-thick layer of newspapers around plants. Use primarily black-and-white pages; color inks may harm sensitive plants. A layer of newspaper — which may take several months to break down — helps regulate soil temperature and conserve moisture; that saves water and time weeding.

7. Caulk: That's money slipping through those cracks in your home. By properly sealing your home from the elements, you stop heat loss. That means lower energy bills. Look at the weather-stripping around windows and doors, too. According to experts, up to 20 percent of your home's heat is lost through unopened windows.

8. Cold-water treatment: Wash your clothes in cold water. You'll save energy and money every load.

9. Bottle your own water: Instead of buying bottled water at $1 or more per gallon, refrigerate tap water in a glass bottle or non-PET (polyethylene terephthalate) plastic container. Filter the water first if you prefer.

10. White vinegar: Grandma was right: vinegar makes a great cleaner. At under $2 a quart, it's cheaper and safer to use than many commercial cleaners. For glass cleaning, combine one part vinegar to three parts water and put it in a mister. Vinegar is very effective in removing rust and lime deposits. It brightens aluminum and (when mixed with salt in a paste) can remove tarnish from copper. Soak showerheads and sink aerators in a half-cup of vinegar mixed with a quart of water to unclog holes and improve water flow. (But keep vinegar away from bleach; the combination can create noxious fumes.)

11. Baking soda: Another natural wonder that removes odors as well as grime. Dissolve four tablespoons (a quarter-cup) of baking soda in one quart of water for a general household cleaner. It's very good for floors and counters in the kitchen or bath. Mixed with salt, use it to clean enamel, ceramic or glass baking dishes, or to remove coffee stains from cups and countertops. It also works well on removing soap scum.

12. Turn down the thermostat: For every 2 degrees lower in winter, you'll save an estimated 10 percent on your heating bill. Put on a sweater and add another blanket to the bed.

Every penny: ways to save money in the house, garden
Mail Tribune, OR

RECESSION WITH MALAYSIAKINI: New zealand still is

New Zealand still in recession

WELLINGTON,
Feb 18 (Reuters)

New Zealand's recession has gone into a fifth quarter, but the government will limit new spending to keep deficits and borrowing contained, the finance minister said on Wednesday.

Bill English said the economy was performing closer to the "downside" scenario presented in the Treasury department's December forecasts following a further deterioration in the global outlook.

"We are now in our fifth quarter of economic contraction," he told a parliamentary committee in a scheduled appearance to discuss December's economic and fiscal update.

"The factor that has altered since (then)...is that our trading partners are headed into deeper recession than was forecast."

The recession, New Zealand's first in a decade, started in the first half of 2008 and most analysts expect it to continue at least through to the middle of 2009.

The Treasury's December forecasts showed no growth before mid-2010, budget deficits growing to 4.5 percent of GDP by 2011, and gross debt rising to more than 30 percent of GDP by 2011 from the current 19.5 percent.

English said the growth numbers of some major trading partners were looking "pretty awful", adding it was too early to say whether the global situation is bottoming out.

He reaffirmed the country's banking system was sound and supported by the central bank's various facilities and government guarantees. Continued...

RECESSION WITH MALAYSIAKINI: Community gardening

WALES:
Long waits for plot allotment
growing take off

by Ben Glaze

PEOPLE in Wales hoping to grow their own vegetables could have to wait until 2018 to secure an allotment, an investigation reveals today.

Nearly 3,000 green-fingered residents want a patch at 366 council-run sites across the nation as cash-strapped shoppers seek to provide their own food during the recession.

All plots operated by Welsh local authorities, totalling more than 7,000, are taken, with 86 residents in Monmouthshire facing between a three and nine-year wait to start growing their own turnips, carrots and potatoes.

Today’s figures were uncovered by Plaid Cymru Sustainability spokeswoman Leanne Wood, who tends an allotment in the Rhondda Valleys.

The South Wales Central AM said last night: “I’ve spoken to allotment holders and people on waiting lists for allotments all over Wales.

“Councils are supposed to provide enough allotment land, yet these figures show that there is growing demand which most councils are failing to satisfy.

“Local food growing has so many benefits: People get good exercise, good quality cheap food and it enables us to stay in close contact with nature, which has benefits in terms of mental health.

“The climate crisis adds further impetus to expand local food growing projects. Plaid has campaigned for more growing land for our communities for some time, and these figures show the need to continue that campaign.”

The flourishing popularity of farmers’ markets and organic produce across Wales has sparked interest in allotment owning and renting.

They cost about £25 a year to rent. But despite rising demand, just four of Wales’ 22 local authorities plan to increase allotment provision in their counties.

Ms Wood said: “Local food growing has a proud history in Wales, but at the moment it is disorganised and lacks a clear focus.

“I am calling for the Welsh Assembly Government to put together and fund a national strategy for local food. A good start would be a dedicated member of staff in each authority who could co-ordinate local food growing and organise community gardening projects.

“We could then promote allotment gardening and teach young people how to produce food and work with the land.”

Plaid-run Caerphilly council plans more allotments at Ystrad Mynach, and Cardiff, which has the biggest waiting list with more than 800 allotment enthusiasts queuing for two years for plots, included greater provision in its development plan, while Bridgend, Conwy, Newport and Pembrokeshire were considering allocating extra space.

The Vale of Glamorgan, Rhondda Cynon Taf, Torfaen, Powys, Flintshire and Neath Port Talbot councils ruled out creating more provision.

In Swansea, where 400 residents wanting one of the council’s 335 plots can wait for up to seven years, the council failed to disclose any plans it has to provide more.

Radio 2’s resident allotment expert Terry Walton, who has a regular slot on Jeremy Vine’s BBC Radio2 lunchtime phone-in and tends a patch in Rhondda, said: “We need people with placards to picket council offices demanding more allotments.

“Demand has completely outstripped what has been available for many years and most local authorities are sitting on their hands and doing nothing.

“Where there are these enormous waiting lists, people should pressurising councils into providing more.”

Mr Walton, who has had an allotment for 52 years, has noticed the changing demographics of allotment-tending over the past five decades.

“It’s more of a family affair now, it’s no longer the flat cap brigade aged over 65,” he said.

“A lot of younger people have got fed up with supermarket prices and want to grow organic produce, going back to the countryside idea.”

[Long waits for plots as allotment growing takes off
WalesOnline, United Kingdom]

RECESSION WITH MALAYSIAKINI: Job growth heads down the gurgler

Job growth
heads down
the gurgler

By Ed Logue
February 09, 2009

THE outlook for employment growth has slumped to its lowest level in 20 years as the deteriorating economy continues to bite staffing expectations and profit growth, a survey finds.

The Dun and Bradstreet (D&B) business expectations survey slumped to its lowest indicator of employment growth since it began in 1988, with 24 per cent of firms expecting to shed staff in the June quarter.

The survey found 60 per cent of executives forecast declining profits in the June quarter and 53 per cent predict falling sales.

Ten per cent of firms expect to lower their investment in capital.

D&B chief executive Christine Christian said Australian executives were feeling the effects of the global economic slowdown flowing through to the Australian economy.

"There is no doubt that businesses are facing a significantly heightened risk environment in 2009," Ms Christian said.

"As a consequence, an unwavering focus on business fundamentals and proper cash flow management is absolutely critical to maintaining the sustainability of Australian firms.

Interest rates were ranked as the primary influence on a firm's operation in the June quarter by 55 per cent of respondents, with 67 per cent of retail executives ranking rates first, the survey said.

This was despite the Reserve Bank of Australia (RBA) lowering the cash rate by four percentage points since September to a 45-year low 3.25 per cent.

Only 19 per cent of executives ranked fuel costs as their main concern on operations compared with 33 per cent the previous survey. During the period the cost of fuel dropped significantly to around a $1.00 to $1.20 for a litre of petrol.

D&B economic consultant Duncan Ironmonger said Australian firms were expecting an "exceptionally challenging" 2009 due to the economic slowdown.

"The prompt and substantial fiscal stimulus packages from the federal government and the record sharp reductions in interest rates by the Reserve Bank should offset a significant amount of the impact that the world financial crisis and global recession are having on Australian firms," Dr Ironmonger said.

"Lower oil prices are helping to contain household and business costs and the lower value of the Australian dollar is encouraging exports and domestic spending.

"Consequently, the worst expectations of Australian businesses may not eventuate."

[Job growth heads down the gurgler
NEWS.com.au, Australia]

RECESSION WITH MALAYSIAKINI: Bankcruptcies Climb

Japan’s Machinery Orders Slide,
Bankruptcies Climb

By Jason Clenfield
Feb 9 2009

Orders for Japanese machinery fell for a third month in December and bankruptcies increased as businesses scrapped investment plans amid a collapse in exports and deteriorating earnings.

Bookings slid 1.7 percent from November, when they fell 16.2 percent, the sharpest drop since the survey started in 1987, the Cabinet Office said today in Tokyo. Corporate bankruptcies rose 15.8 percent to 1,360 cases in January, the eighth monthly increase, Tokyo Shoko Research Ltd. said in a separate report.

A wave of firings and canceled spending plans by Japanese manufacturers has heightened the risk of a prolonged recession, as fallout from the global slowdown ripples through the domestic economy. Nissan Motor Co., Japan’s third-largest automaker, said today that it will cut 20,000 jobs after predicting a loss this fiscal year as the global recession cripples car sales.

“Falling exports are forcing companies to cut jobs and earnings forecasts, so it’s not really the time to increase capital spending,” said Hirokata Kusaba, a senior economist at Mizuho Research Institute in Tokyo. “We’ll see a further slowdown in orders, which will be a big drag for the economy.”

The Nikkei 225 Stock Average fell 1.3 percent at the close in Tokyo. The yen traded at 91.19 per dollar at 3:38 p.m. from 92.13 before the machinery report was published. The currency’s 18 percent gain in the past year has compounded exporters’ woes by eroding the value of their sales made abroad.

Japan’s current-account surplus narrowed 92 percent in December as exports slumped, the Finance Ministry said today. Overseas shipments fell a record 35 percent, causing the surplus to shrink for a 10th month, the report said.

Record Decline

Economists predicted an 8.6 percent drop for monthly machinery orders, which signal capital spending in the next three to six months. Bookings slid 16.7 percent in the fourth quarter, a record decline.

Companies surveyed by the government said they expect bookings to increase 4.1 percent in three months ending March 31, a prediction that economists including Richard Jerram say is unrealistic.

“It seems highly unlikely to me,” said Jerram, chief economist at Macquarie Securities Ltd. in Tokyo. “Profits are going down so quickly.”

Manufacturers are likely to delay or halt investment in capacity because of the slump in demand, the Bank of Japan’s chief economist said today. The economy is deteriorating at a pace unseen in the past half century, Kazuo Momma, head of research and statistics at the central bank, said in a speech.

Nissan, Toyota

Automakers are bearing the brunt of the decline. Nissan expects a net loss of 265 billion yen ($2.9 billion) for the year ending March 31, compared with its October estimate of 160 billion yen in net income. Toyota Motor Corp. last week said its loss this fiscal year, the company’s first in seven decades, may be three times bigger than initially estimated.

The International Monetary Fund last month said Japan’s economy will shrink 2.6 percent this year, the bleakest projection for any Group of Seven economy except the U.K. Gross domestic product probably shrank an annualized 11.7 percent last quarter, the worst contraction since the 1974 oil crisis, economists predict a government report will show next week.

The export slump is forcing manufacturers to fire thousands of workers. Panasonic Corp., Hitachi Ltd. and NEC Corp., all of which are forecasting losses for the current fiscal year, announced a combined 39,000 job cuts in the past two weeks.

Camera maker Nikon Corp. slashed its profit forecast by two thirds last week and said it will cut 800 jobs this quarter and scale back construction of a plant.

Rising Unemployment

Layoffs by manufacturers drove the unemployment rate to 4.4 percent in December from 3.9 percent the previous month, the biggest jump in 41 years. A separate report today showed an index of sentiment among Japanese merchants rose to 17.1 in January from a record low of 15.9 a month earlier.

Japan General Estate Co., a property developer, Nakamichi Machinery Co., a Japanese construction machinery trader and Marui Imai Inc., a department store operator, all went bankrupt in the past two weeks.

Borrowing costs for companies are rising as they struggle to raise funds amid a global credit crunch. Bank lending rose 4 percent in January from a year earlier, the central bank said today, as companies who can’t raise money in the markets turn to lenders for financing.

The Bank of Japan, having cut its key rate to 0.1 percent, is trying to spur lending by purchasing shares and corporate debt from banks.

“The funding problems will, unfortunately, continue to weigh on companies through fiscal 2009,” which begins April 1, said Mari Iwashita, chief market economist at Daiwa Securities SMBC Co. in Tokyo. “It’s unavoidable that an increase in bankruptcies and deteriorating profits will lead to higher credit costs.”

[Japan’s Machinery Orders Slide, Bankruptcies Climb
Bloomberg]

SINGAPORE WITH MALAYSIAKINI: recession hit migrants face ruinous debts, abuse

Singapore:
recession hit migrants
face ruinous debts, abuse

by Melanie Lee
Reuters
Feb 8 2009

Ship welder Mohammed Ali came to Singapore to earn money to support his family in Bangladesh. Little did he know that an economic storm brewing continents away would kill his humble dream and leave him incarcerated in a cage.

After taking out almost $6,000 (U.S.) in loans to pay employment agency fees to work in Singapore, Mr. Ali was soon laid off when the economy soured and shipyard work dried up.

What happened to him next was unimaginable.

His employer locked him and 100 other workers in an outdoor cage to prevent them from complaining to the authorities about their unpaid salaries.

Labourers from Bangladesh gather outside a coffee shop in Singapore (Vivek Prakash/Reuters)

Come rain or shine, Mr. Ali was trapped like an animal for the next three months. His ordeal ended in September when a local advocacy group, Transient Workers Count Too, found out and informed Singapore's Labour Ministry.

Mr. Ali, who is now living at a metro station and surviving on one free meal a day, is eager to go home.

“Come to Singapore is no good, I want to go back to Bangladesh. There got mother, father, sister, brother to help me. Here I have no one,” Mr. Ali said in broken English.

Singapore's construction, shipyard and manufacturing industries were once red hot, hiring almost 800,000 migrants in 2007. But as the economy slid into recession, demand for labour dived and major projects were cancelled or delayed.

And it's not just Singapore.

Human rights groups say many of the world's estimated 100 million migrant workers are in dire predicaments as economic woes in the Gulf, Singapore and Taiwan lead to mass layoffs of labourers from countries such as Bangladesh, China, India, Pakistan, the Philippines and Sri Lanka.

Layoffs of these migrant workers may raise unemployment and poverty in their home countries as they return without jobs – and often with hefty debts. It could also slow economic growth in countries such as Bangladesh, the Philippines and Sri Lanka, which are deeply reliant on remittances sent home by migrant workers.

“Typically, migrants are the last hired and first fired,” said Patrick Taran, senior migration specialist at the International Labour Organization.

“The countries to be worried about are those that are marginalized poor countries, who have a significant number of their work force population overseas and for whom even a modest decline in remittance earnings and increased returns in people have a proportionally larger impact on their communities,” he said, citing Bangladesh and Haiti as examples.

Although there is no definite figure as to the number of migrant workers expected to lose their jobs from the economic crisis, anecdotal evidence and estimates from aid agencies show a significant number will be affected.

Gary Martinez, head of Migrante, an organization of migrant workers from the Philippines, said he expects about 100,000 Philippine workers to be laid off. Already many have lost jobs.

One in 10 of the Philippines' people work abroad in construction, shipping and domestic service. They sent home an estimated $16-billion in 2008.

Sri Lanka's Minister for Foreign Employment Keheliya Rambukwella said recently that he expects at least 10,000 Sri Lankans to lose their jobs in the Middle East, a shadow on the horizon for a country where worker remittances are the second largest foreign exchange earner after garment exports.

As a result of the economic slowdown, the World Bank said it expects remittances, the lifeblood for millions in the developing world, to moderate significantly over the next two years, and that remittances in 2009 will fall almost 1 per cent. Global remittance flows stood at $283-billion last year.

But as their economic health declines, the social well-being of migrant workers is also under threat.

“It's all gone now and I am drowning in neck-deep debt,” said Vangie Paticeria, who lost her job in Taiwan in December and chose to return home to the Philippines.

Mr. Ali, who paid for his Singapore trip by borrowing money from his siblings, finds himself in a similar situation. Unable to pay back his brother and sister, they in turn are not able to pay back money lenders.

Others, choosing to remain in host countries, find themselves having to perform illegal tasks, accepting lower pay and taking on riskier jobs.

“The economic downturn and its impact on migrants exposes how vulnerable they are,” said Nisha Varia, acting deputy director of the women's rights division at New York-based Human Rights Watch.

“It increases everybody's desperation and desperation is the recipe for exploitation,” Ms. Varia said.

Jolovan Wham, executive director of the Humanitarian Organization for Migration Economics, a charity that helps migrant workers in Singapore, said he has seen the number of jobless migrant workers seeking aid more than triple last year.

Complaints range from lack of medical treatment to unpaid salaries and poor work conditions.

Monerul Monto sold his shop in Bangladesh to work as a labourer in Singapore, where his monthly salary would have been equivalent to about a year's salary back home.

Now that he has lost his job, Mr. Monto can't go home because the few dollars a day he might earn doing casual work in Singapore is far more than the wages he could earn in Bangladesh to repay his debts.

“I go back Bangladesh, I dead. Why? No money there. I have to stay Singapore and work, but here no work. How?” he said, leaning forward and whispering desperately: “Sister, if you know of any job, please tell. I will do anything.”

[Recession-hit migrants face ruinous debt, abuse
Globe and Mail, Canada ]

related story

Migrant workers, first victims of world recession
AsiaNews.it, Italy

STIMULUS WITH MALAYSIAKINI: What people want

It was said some 70% of the first RM7 billion stimulus package had been disbursed through 4,667 projects in the package for education and health that had been awarded. It is an effort by the government to stimulate economic activities. It wasnt far back when many asian countries including Malaysia had to go through extensive economic downturn late 90's. I thought the economic interventions then were much bolder and penetrated deep into the economic web. And people are still talking about it and about Mahathir.

This particular economic turmoil is far different because it is worldwide and it hit harder. Yeng ai chun assembles some interesting comments by readers as Najib opens up the stimulus package. Lets read further.



What people want
from the government

The star online
by yeng ai chun
sat 31st jan 2009

Many of those who responded to what the Government should offer under the stimulus package are asking for an income tax-free year and tax exemption for buying locally-made goods.

They also asked the Government to improve public transportation and reduce the country’s dependence on foreign workers in order to create more jobs.

While some outlined ideas to help the economy, not all was in ringgit and sen, but issues on good governance, integrity and transparency were also mentioned in Deputy Prime Minister Datuk Seri Najib Tun Razak’s blog.

Since Najib posted the entry on Jan 22 to ask for ideas on what to be included in the second stimulus package, 210 comments had been left on his blog – www.1malaysia.com.my.

A reader, Md Dashirul, said the Government should start improving the public transportation system since it was labour-intensive and would create more jobs, thus spurring the economy.

Many readers felt that there should be an allocation for better transportation to alleviate traffic congestion in the Klang Valley.

A reader, Vincent TKL, said it was mindboggling that a person who was retrenched or unemployed was still expected to pay taxes for his last drawn salary or compensation.

The country’s dependence on foreign workers were also mentioned by NKKHO and he suggested that there should be a cap on the number of foreign workers a company could hire to provide more job opportunities for the lower-income group.

Another respondent, Bangsa-Malaysia, said the actual effect of any stimulus package would be minimised by virtue of the rampant corruption that was endemic in the government administration and private sector.

He added that Malaysia could not afford to keep wasting its precious resources on corruption and cronyism and that such practices must stop.

Transparency International Malaysia (TI-M) president Tan Sri Ramon Navaratnam who e-mailed a reply to The Star, said it was important that the total stimulus package be released urgently before the next Budget to forestall and pre-empt the effects of the coming economic downturn.

beritadarigunung

GARDENING WITH MALAYSIAKINI: critical for nations survival

In assessing the possible impacts that the widespread financial and economic crises may have on the nation’s economy, Prime Minster Hon. Dr. Denzil Douglas has stressed the importance of subsistence farming to protect nationals in the case of a deepened recession in the larger economies.

Dr. Douglas told SKNVibes that small-scale gardening is one definite way of reducing the domestic reliance on high-priced food and that a movement toward large-scale farming can undoubtedly reduce the nation’s dependence on imports.

“There is no question about it that if we are able to grow most of what we are eating here then it could impact on the importation of food which continues to be a challenge to us and which of course will be exacerbated at this time of crisis when money is going to be short. We have a situation where one can be encouraged to grow what one is eating and as a result of that one does not have to go into the supermarkets to get such food supplies.

“If you are producing on a higher level,” he added, “you may be able to make a relationship with the small grocer. We would also have situations where we try to establish relationships with larger farmers and the hotels to ensure that there is a reliability of produce.”

“The Government, through the Ministry of Agriculture, in an effort to enhance this new thrust, will provide the necessary packing and sorting facility so that small farmers can take their produce there, prepare, package and appropriately store them and even have them for sale to those who may wish to consume.”

PM Douglas explained that the government initially launched its Food Security/Backyard Gardening programme in September 2008 during the Independence Agricultural Exhibition, as it was recognized that there was a growing need for the nation to produce enough food to satisfy the local market. He informed that with the aid of the Taiwanese Embassy, the Government would be able to move the agricultural drive to “a higher level”.

“The Taiwanese Embassy is just about to start a major commercial farm. I link that with food security and the backyard gardening because it is expected that farmers who potentially would have gained some experience from the backyard type of farming would now be able to simply demonstrate that skill by taking a small area in that agricultural zone to do their farming.

“The Embassy will prepare farmers with irrigation, equipment and even seedlings. And so we are asking small farmers who have an interest in that area to simply turn up there after going through the necessary checks and join the pool of small farmers who can really apply their experience and their own initiatives in the development of our food security plan.”

Douglas underscored that there are several public education programmes including a radio show from the Ministry of Agriculture which reminds the public of “what we are producing, what we can produce and how the Department of Agriculture can assist in this regard”.

The Prime Minister further stated that there has been a concerted effort to link the new agricultural thrust with fitness and healthy diets so that “we can have the best in terms of our own preparations for healthy living. Of course linking agriculture with health is one of the ways by which we are packaging the initiatives in agriculture with the public”.

By VonDez Phipps

GLOBAL RECESSION WITH MALAYSIAKINI: Asian businesses in UK to lead fight

Interestingly, somewhere else had witnessed serious manoeuvre by businesses to cushion global recession. A lot of things can be done. It has been said that a country with big portion of small and medium enterprises will be able to cope recession better. Businesses in Malaysia, where do we go from now? Lets follow what Rita has for us.


Asian businesses in UK
to lead fight in global recession

by Rita Payne

eTurboNews
Oct 27, 2008
LONDON

This has been a turbulent year rocked by what some analysts have called the biggest financial crisis since the Great Depression nearly 80 years ago.

However, the latest edition of Asian Who’s Who International was launched at a glitzy event here in London with encouraging words of hope from leading members of the business community. The editor’s note summed up the prevailing mood: “ I firmly believe that Asian businesses in the United Kingdom will lead the fight against the global recession and come out as winners.”

Awards were handed out in several categories and individual stories of the winners were inspirational and heart-warming. The award for “Asian Leadership in Charity” went to Gautam Lewis, who was abandoned in Calcutta in India at the age of three after contracting polio. He was rescued by Mother Teresa’s missionaries, adopted by a female nuclear physicist with dual UK and Irish nationality and grew up in Britain. Among other things he became a music manager looking after some top British pop stars. He took up photography, trained as a pilot and is now spearheading a campaign to eradicate polio in India and worldwide.

The title of “Asian of the Year” went to Ranjit Singh Baxi, a businessman and recognised expert in the recycling business. The award was presented by Lord Swraj Paul a past winner of the title. In his address, Lord Paul said, “If anyone can withstand the credit crunch it will be the Asian community.”

A new addition to the awards this year was one for “Asian Leadership in Music and Culture,” which was won by Channi Singh, a singer who has become an idol for fans of Bhangra music in the UK and around the world.

Speakers paid tribute to Jasbir Singh Sachar, who founded the Asian Who’s Who directory in 1975 at a time when a large influx of Asians from Asia and Africa were beginning to make their mark in the United Kingdom.

Mr. Sachar recalled the difficult early days. “They worked hard in factories, sold newspapers in their corner-shops and were not shy of doing any menial job for their survival.”

The Asian community has come a long way since then with ever-increasing numbers playing a leading role in fields as diverse as economy, politics, travel, tourism, religion, entertainment and arts. Their enterprise and determination could now play a key role in helping to overcome the current economic downturn. As their success and influence continues to grow, Asian Who’s Who International has become an essential point of reference for people within the community and outside.

beritadarigunung

RECESSION WITH MALAYSIAKINI: optimism

We have been warned on what to come out of this recession. Workers had been retrenched, and more will be before the end of the year. To see foreign workers at strategic places; KLIA, petrol pumps, bus stations, etc, make hearts twitch. Of course, the government has laid out plans to cushion recession. We heard Orang Siam had pushed Rohingya migrants back to sea on engineless boats and without food. Singapore it seems will send Malaysian workers back home. These are scenarios within recession. Of course, lets be optimistic about it all and read jenny's piece.

Optimism:
Where did it go and
can we get it back?

by jenny haworth
news.scotsman.com

THE Great Depression gave us the jet engine and the electric razor, and the First World War provided the inspiration for some of the most moving poetry ever written.

It is only necessary to look at the innovations and creativity born out of hardship to realise times of difficulty can have positive results.

Historically, depressions have forced businesses to step up their game to survive, and some of the world's best literature has come from the minds of tortured souls suffering through hardship.

It is also claimed that difficult times can pull communities together, enabling people to forge stronger relationships, which in turn leads to more permanent satisfaction than that created by the quest for greater wealth and the desire for the latest gadget or fashion item.

According to experts, the current recession and anxiety could bring benefits that should make us positive, and fill us with optimism.

Mark Desvaux, an expert in social change, thinks the recession will help remind people what really makes them happy.

"When people are so consumed by money it can add great perspective to have to deal with a financial crisis," he said.

"We can all get tied up with chasing the golden pound during the boom times, so that we start to lose sight of what happiness is all about."

He added: "I think that during hard times the poor get poorer but the rich get even poorer."

Desvaux thinks we will see "community mobilisation", similar in some ways to the war effort.

"When something like a war happens, the entire country mobilises itself. In times of hardship we get community mobilisation.

"When times get hard like this, we can do small things on a local level that can make a difference. When times get hard, people pull together."

David Varson, a positive psychology coach, agrees that people could rediscover what brings happiness.

"People set themselves goals, maybe for career advancement and better salaries, but when they get there they are disappointed," he said.

"Instead they find that if they focus on their values in life they are happier. This involves becoming more mindful of what you are doing each day – the moment-to- moment experience.

"Perhaps spending a bit more time with your family, or just enjoying the time you have with them more."

Innovation

The Great Depression altered consumer demand and forced the pace of innovation. Businesses had to innovate or die. The same is likely to happen again. In the US new developments included the car radio, the supermarket, the cotton tampon, and the Monopoly board game. In Britain inventions such as television and radar led to a boom in consumer goods that arrived out of the austerity of the 1930s.

Creativity

The best literature has been written in times of hardship, often by people who are miserable. This has also been the case with other creative arts such as music and theatre. James Joyce, Virginia Woolf, George Eliot, all wrote in climates of adversity. Dostoyevski would hardly have written Crime and Punishment if he did not live in the troubled political and social context of 19th century Russia. Wilfred Owen could not have composed his moving war poetry without experiencing the torment of the First World War.

Stronger community spirit

It is not unusual to hear nostalgic comments about society pulling together during the war, forming a strong bond of community spirit to cope with the difficulties life presented. Indeed, last year research in the British Medical Journal reported that happiness can spread from person to person through societies, almost like a virus. In a study of 5,000 individuals it was found that happiness spread through close relationships such as friends, siblings and next-door-neighbours.

Less materialistic society

During the past decade of wealth many people have wanted for little. However, there is little to suggest that has made us happy. Once a child has one computer games console, he will probably want the upgraded model when it comes on the market. Fashion has changed rapidly during times of prosperity, enticing people to spend to fit new trends. The current economic downturn could cut the cycle of materialism that breeds dissatisfaction.

Good for the environment

The environment will benefit if we have less money to spend on foreign travel or long car journeys. Instead of holidaying overseas there is already some evidence that there is a growth in holidays closer to home. As well as helping cut greenhouse gas emissions from plane journeys, this could boost local economies.

Focus on the little things

Without large quantities of spare cash, people may have to get their satisfaction from small things in life. Research has suggested these can often bring greater happiness than material wealth. It could be spending time with family and friends, catching up on a hobby such as gardening or reading, or just sending a letter to a friend.

New US president

Barack Obama has just become US president, bringing fresh hope to the world. The inauguration of the new president has been welcomed across the globe for his stance on the economy, world conflicts and climate change. Now he has the tough task of not leaving us disappointed.

Lots to look forward to

Scots have so much to look forward to that it is difficult to imagine we can be miserable for long. The Year of Homecoming will bring a host of activities, and who can fail to be excited living in the country that hosts the best international arts festival in the world, has some of the most incredible wild landscapes and a culture that has spread events such as Burns Night across the globe.

It won't last forever

There is not a single expert who has suggested the current economic climate will be permanent. Depressions, we are told, are always cyclical. There will be another boom, and with light at the end of the tunnel, it is difficult to remain miserable for long.

Many are worse off

It may sound like the sort of cliche spoken by parents trying to get children to finish their plate of food at dinner time, but there are many who are worse off than us.

We are fortunate to live in a country with a welfare state that will not allow widescale descent into poverty.

Signs of world-leading projects

There are already signs of invention in Scotland that could help to pull us out of the recession. One example is in the area of renewable energy. Tidal and wave projects that could not only make Scotland rich, but also give us a secure and cheaper energy supply. Just yesterday a new world-beating scheme was given the go ahead, in the form of a large wave farm off the Western Isles.

Good for our diet

Digging for victory is not everybody's cup of tea but some people may respond to the current economic difficulties by getting out into gardens and allotments to grow their own vegetables. This would help provide a healthy diet. It would also cut down on food miles, benefiting the environment. Already there have been reports of a take off in demand for allotments in Scotland.

More exercise

One way to cut down on a costly expense is to leave the car at home and walk instead. Environmental groups say leaving the car at home is not only healthy, it makes the streets safer and benefits the environment.

Wealth does not equal happiness

There is evidence to suggest happiness is not linked to financial wealth but to relationships with loved ones and friends, religious involvement, parenthood, marital status, age, and proximity to other happy people. There have even been suggestions that financial wealth should not be used as a measure of success of a nation, but instead public happiness should be the basis. Research has shown that although on average richer nations tend to be happier than poorer ones, beyond an average GDP/head of about £11,000 a year, average income makes little difference to the average happiness.

Resilient

Humans are resilient because they respond well to adversity and do not dwell on misery. Whether out of determination, boredom or strength, they respond by taking action to improve their situation. According to expert Mark Desvaux, people go through phases, starting with denial, then anger, then depression, and finally it leads to action. "It's then that you start to get perspective and you realise there are still people far worse off than you. We start to act because otherwise we will just shut down."

Copenhagen

This year there will be a landmark conference in Copenhagen that should help nations globally reach a deal to tackle climate change. This could help provide the first step towards a solution to one of the biggest threats to the future of the planet, and help lift anxiety about the issue from many shoulders.

Face to face interaction

People are likely to spend more time chatting face-to-face in times of financial difficulty, even if just to save on the phone bill. Experts say this can also stem from a greater tendency to borrow from neighbours, rather than to buy a new item. This can rekindle friendships and lead to a tighter community.

Equaliser

To a certain extent the credit crunch is acting as an equaliser. With most people in the same boat – worried about money and the future – it is no longer a social stigma to refuse a dinner invitation and suggest a home cooked meal at a friend's house instead. According to social change expert Mark Desvaux, "People don't have to try to keep up a facade of the high and affluent. It almost becomes unfashionable to spend money."

Greater empathy

With neighbours and friends losing jobs and struggling to cope, people are likely to develop a greater sense of empathy, according to Mark Desvaux. "People start to hear of friends in situations of difficulty and as a result it brings empathy back into people's lives."

Comedy

Bizarre as it seems, comedy regularly comes from hardship and is also enjoyed by audiences in situations of difficulty. Stand-up has even become a hit in Gaza in recent years. This suggests that people like to be cheered up in times of adversity, even in a war zone. This is likely to lead to increased creativity.




beritadarigunung

RECESSION WITH MALAYSIAKINI: changing disaster recovery landscape

Businesses have been urged not to reduce spending on disaster recovery and business continuity, despite the impact of the economic downturn.

Many experts believe that the current business climate makes a coherent disaster recovery plan more important than ever before, as John Robinson of Inoni states in a recent article on continuitycentral.com.

According to Mr Robinson, "recession amplifies risk" and should put renewed emphasis on business continuity plans among enterprise leaders.

However, many organisations mistakenly assume that a business making less money will therefore need to spend less on disaster recovery.

The industry expert describes this reasoning as "convenient but invalid", stating that although the landscape for risk assessment and protection has clearly changed, businesses are also likely to be less resilient in the wake of the financial crisis.

As a result, disaster recovery systems should not be considered a luxury or a "dispensable overhead", but are in fact an essential tool for ensuring business survival in troubled times.

"We need to be more aware of the new risks we face and ensure we have the information we need to negotiate them," Mr Robinson comments.

Nicholas Tan, general manager of IBM Singapore's general business division, recently identified several typical flaws in the attitudes of smaller enterprises towards disaster recovery.

Writing in the Business Times, he concedes that it may be "human nature" for small firms to save money by neglecting to develop a business continuity plan.

However, he also believes that no company can really afford to be without some form of disaster recovery planning in the event of a power outage or other technological upheaval.

"Stop and think about what it would cost your small or mid-size business to be without power or IT systems for 24 hours," Mr Tan states.

The IBM expert also claims that recent developments in technology are making disaster recovery in the small business sector more accessible and straightforward than ever before, even for the inexperienced risk planner.

"Affordable and feature-rich software, server and storage technologies mean that businesses can start small, establish a base level of disaster recovery, and build on it over time," he explains.

Mr Tan disputes the claim that "only big companies can afford it" when it comes to disaster recovery.

Like Mr Robinson, he stresses that business continuity is not a luxury confined to the large enterprise sector, but something that all organisations should regard as essential.

"Today's new hosting models and cost-effective off-site backup and recovery systems mean peace of mind is available for companies of any size," Mr Tan explains.

Alan Calder, chief executive of IT Governance, believes that business continuity forms an essential part of an enterprise's IT security profile. He claims that neglecting this area can have potentially fatal consequences for businesses of all kinds.

In a recent article on securitypark.net, he states:"Those organisations concentrating on a search for cost cuts in their risk and business continuity management activities are, in effect, accelerating their own possible demise."

[ el ]

RECESSION WITH MALAYSIAKINI: how Britain compares to its rivals

With Britain officially in recession, how does the country stack up against other major world economies?

Britain: The economy was flat in second quarter, with 0pc growth, and shrank by 0.6pc in the third quarter. Official figures on Friday show it is now in recession after contracted by a bigger-than-expected 1.5pc in the final quarter of 2008. Unemployment stood at 6.1pc at the end of November.

United States: The US economy grew by 0.7pc in the second quarter and contracted by 0.1pc in the third quarter. Fourth-quarter numbers are expected to show the economy shrank by 1.2pc. Unemployment stood at 7.2pc in December.

Japan: The Japanese economy shrank by 1pc in the second quarter and by a further 0.5pc in the third quarter. The fourth quarter is forecast to show a 2.75pc decline as the country's export manufacturing industry suffered from the global downturn. Unemployment stood at 3.9pc in November.

China: The Chinese economy grew by 9pc, on an annual basis, in the third quarter and by 6.8pc in the fourth quarter. Forecasts for a 6.8pc rise for the year in 2009 could come under pressure as the markets for China's exports contract. Unemployment stood at 4pc at the end of December.

Germany: The German economy is already in recession, declining by 0.4pc in the second quarter and 0.5pc in the third quarter. Forecasts show it shrank by between 1.5pc and 2pc in the fourth quarter, as like Japan, manufacturing exports were badly hit. Unemployment stood at 7.6pc in December.

France: The French economy shrank by 0.3pc in the second quarter but recovered to rise 0.1pc in the third quarter. Economists estimate it shrank by 1pc in the final quarter. Unemployment stood at 7.3pc at the end of the third quarter in September.

All figures except Britain from BNP Paribas and Bloomberg.

[amy wilson]

ECONOMY WITH MALAYSIAKINI: worst is ahead

Morgan Stanley Asia Chairman Stephen Roach said that the worst of the current recession is still ahead for investors and consumers and the economy won't likely be made better by the deficit spending plan by the new U.S. President Barack Obama.

"There is no V-shaped recovery coming for us," Roach told CNBC. "The worst is ahead for the real economy in the United States. Past spending excess has pushed up the consumer portion of the GDP to 72 percent. It is down one point now by my calculations."

Roach said government spending will not help and that more layoffs and bank write-offs of toxic assets are forthcoming.

Further declines in consumer spending may well occur, with only 20 percent of the decline, felt at Christmastime by retailers, behind us now.

Unemployment also is likely to rise. "We are at 7.25 now," said Roach. "The odds are we will pierce 9 percent. What type of recovery are we going to have? A weak one. A subdued recovery. The growth rate will be so weak that the unemployment rate keeps climbing."

Roach said there may be a temporary tick up in economic confidence due to the inauguration of the new president of the United States.

"The switch in the president is important in getting confidence back," said Roach. "But beyond that, it's a crapshoot."

Roach said this current economic crisis is now a year-and-a-half old. Yet, the government keeps offering the same old solutions.

"The response has been one liquidity injection or one capital injection after another. But we just don't seem to be getting out of this hole. The toxic assets have a scope and breadth beyond what the authorities have conceded or contemplated," Roach said.

Not every economist agrees with this gloomy view. John P. Hussman of the Hussman Funds in a note to investors said that the markets are starting to show a return of cautious optimism.

"I do view stocks as relatively undervalued, but we have to be aware of the historical tendency for markets to overshoot on the downside in difficult conditions," said Hussman.

[koprowski]

Economic slump began earlier than thought

Census data from 2005-07 show signs of widespread downturn

By STEPHEN OHLEMACHER
THE ASSOCIATED PRESS

WASHINGTON -- Things really are bad all over -- and they had gone bad even before the housing and finance industries crashed and sent the economy into a tailspin.

New census data show that throughout the first half of the decade, the slumping economy touched nearly every community in the country. Incomes dropped while poverty and unemployment rose in the vast majority of the nation's cities and towns.

Small and medium-sized cities in the Midwest, already suffering from an ailing auto industry, were hit the hardest, with unemployment rates doubling or tripling in communities throughout Michigan, Ohio, Indiana and Illinois.

The numbers weren't as bad in other parts of country, but no region was spared, with incomes dropping as home prices escalated. The result: an unsustainable housing market that ultimately fueled the current economic crisis.

"For a while we were on a binge of living beyond our means," said David Wyss, chief economist at Standard and Poor's, the credit rating service. "We were financing our spending habits by treating houses like giant ATMs."

The data, which are being released Tuesday, constitute the first detailed economic, social and demographic information for small- and medium-sized cities since the 2000 Census. It was collected from 2005 through 2007, providing a middecade snapshot of every community with at least 20,000 residents.

The data come from the American Community Survey. Census takers interview 3 million households a year for the survey, which produces annual data for geographical areas with populations of 65,000 or more. For areas with at least 20,000 people, the survey produces three-year averages.

The new numbers explain why the housing bubble burst and why the economy was such a big issue in this year's presidential campaign. They also explain why voters soured so much on President George W. Bush's handling of the economy, even before the current financial crisis.

The years covered by the report include the housing market at its peak. Incomes had started to rise while poverty and unemployment rates had begun to fall, after the recession earlier in the decade.

But in the vast majority of the United States' cities and towns, economic conditions never fully reached the prosperity that marked the beginning of the decade.

The Associated Press analyzed economic data from the 2,000 or so cities and towns across the nation with populations of 20,000 or more, comparing the 2005-07 data with figures from the 2000 Census.

Among the findings:

Median household income dropped in 79 percent of the cities and towns. Incomes dropped in the wealthiest communities as well as the poorest. Charleston, Ill., home to Eastern Illinois University, saw the biggest drop -- 31 percent -- to a median household income of just under $21,000.

Nationally, incomes dropped by 4.3 percent during the period, to $50,007.

The poverty rate increased in 70 percent of the cities and towns. Athens, Ohio, home to Ohio University, had the highest poverty rate, at 52.3 percent, in the 2005-07 period.

Nationally, the poverty rate increased from 12.4 percent to 13.3 percent since the start of the decade.

The unemployment rate increased in 71 percent of the cities and towns. Muskegon, Mich., a city of about 40,000 near Lake Michigan, had the highest unemployment rate, at 22.1 percent.

Nationally, the unemployment rate increased from about 4 percent in 2000 to 6.6 percent in the 2005-07 period.

Median home values increased in 92 percent of the cities and towns studied -- doubling and tripling in many cities, mainly in California. Nationally, the median home value increased 26 percent, to $181,800.

It's not surprising that many communities were doing better in 2000 than they were middecade, said Scott Hoyt, senior director of consumer economics at Moody's Economy.com.

"The year 2000 was at the end of an incredible boom that lasted a decade," Hoyt said.

Incomes were up, unemployment was down and the dot-com bubble had not yet burst on Wall Street.

"We just didn't have enough years of expansion" this decade, he said.

Economic slump began earlier than thought
Seattle Post Intelligencer

Canada to kickstart infrastructure projects to avert recession

MONTREAL (AFP) — Canada is reviewing infrastructure projects that could be launched quickly to minimize the impact of the global economic turmoil on the Canadian economy, Finance Minister Jim Flaherty said Monday.

Flaherty said Canada is "not in a recession right now," but was not about to bounce back to full strength in the coming months.

"I think it's reasonable that we may have a technical recession... two negative quarters in a row," he said.

"Times are uncertain and the economic picture is not getting better," he admitted.

Flaherty said he had discussed possibly fast-tracking infrastructure projects with Prime Minister Stephen Harper, which could "help create jobs and stimulate economic activity.

"Canada goes into this economic slowdown in the best position of the major industrialized countries in the world because we have been prudent and responsible over the last three years," he added.

"We have paid off... 37 billion dollars (30 billion US dollars or 23 billion euros) worth of debt. The credit of the government of Canada is the best in the world, so we are in a position as a government to take various actions," said Flaherty.

"We're reviewing steps we could take in addition to infrastructure, of course, that would help stimulate the economy."

Canada is currently suffering from a decline in exports to the United States, its main trading partner, and a fall in the prices of raw materials, of which Canada is a net exporter.

Flaherty reiterated Monday that Ottawa would come to the aid of Canadian subsidiary companies of the "Big Three" US automakers -- General Motors, Chrysler, Ford -- if they have a viable plan for survival. Canada to kickstart infrastructure projects to avert recession
AFP

beritadarigunung: Remember late 90's poor days. The so called bright ones been accusing mahathir for doing similar thing.