NEWS,12.10.2012

ILO: Jobless ranks swell

There are now 30 million more people without jobs around the world than before the global financial crisis began, the head of the International Labour Organisation said in remarks published Friday.The figures come amid a growing debate over the merits of austerity, especially in Europe, where painful budget-cutting has pushed jobless levels as high as 25 percent in some countries, including debt-hit Greece and Spain."Global unemployment is still more than 30 million higher than before the crisis," said Director-General Guy Ryder. "And nearly 40 million more women and men have stopped looking for work."He said around a third of the more than 200 million unemployed around the world are under 25."With the world's workforce growing by around 40 million a year we face large and growing decent-work deficits stretching out years ahead."Of those employed, 900 million women and men are unable to earn enough to lift themselves and their families above the $2 a day poverty line."Ryder said that figure would be 55% lower if the poverty reduction trend seen before the crisis had been maintained."This means that the damage of austerity measures has been more profound than previously thought."There is now an urgent need to revisit the timelines for fiscal balances, taking a much longer view of the time it will take to repair the damage done by the financial excesses of the pre-crisis period."On Thursday, International Monetary Fund chief Christine Lagarde said too much austerity too quickly could cause difficulties, particularly if a number of economies were chasing targets at the same time.In a news conference Lagarde said the IMF was happy for debt-addled Greece to have an extra two years to get its fiscal house in order, as new figures showed that one in four Greeks is unemployed."Instead of frontloading heavily it is sometimes better - given the circumstances and the fact that many countries at the same time go through that same set of policies with the view of reducing their deficits - it is sometimes better to have a bit more time," she said."This is what we've advocated for Portugal, this is what we've advocated for Spain and this is what we are advocating for Greece."I have said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation programme."Lagarde also warned that while the world economy was still expanding "it's certainly not growing as it should to create jobs around the world", adding that it was crucial "to make sure there are jobs available for young people".Greece is going through a painful round of austerity and spending cuts imposed on the country in return for promised loans and debt relief worth a total of about €347bn since 2010.This week the OECD said unemployment in advanced countries stood at 7.9%, or around 47.8 million people, 13.1 million more than at the onset of the financial crisis in 2008.The Organisation for Economic Cooperation and Development, which provides analysis and policy guidance for 34 leading countries, noted that unemployment rates continued to vary widely in August.The OECD said unemployment in Spain also stood at around 25%, while in Portugal and Ireland it was 15.9% and 15% respectively.

Beverage tycoon is China's richest man

 

Beverage tycoon Zong Qinghou regained his position as China's richest man this year, Forbes magazine said Friday, but the global economic slump took its toll on other billionaires.Zong, who heads soft-drink producer Wahaha, has a fortune of $10 bn, according to the magazine's annual ranking of China's 400 richest, helping him win back the position he lost last year as his wealth rose by $3.5bn.A similar list released last month by the China-based Hurun Report also crowned Zong as China richest, but put his wealth at $12.6bn.Last year's number one, construction equipment magnate Liang Wengen, fell to sixth place with his wealth sliding 37% from last year to $5.9bn as his Sany company was hit by a slowdown in China's economy.Forbes said the number of China's billionaires fell to 113 this year from 146 in 2011, while the wealth of the country's top 100 richest people declined seven percent to $220bn.In comparison, the United States has at least 400 billionaires, according to a list released by Forbes last month."This year we encountered a long period of economic difficulty that's rarely been seen in the past decade," editor of Forbes China, Zhou Jiangong, told a news conference."This is a year which saw wealth created by Chinese entrepreneurs shrinking," he said.Wu Yajun, who runs property giant Longfor, is the country's richest woman, with a fortune of $6.2bn, up 5% from last year.She is also one of five property magnates in the top 10, despite government controls on the sector aimed at curbing speculation.In a country that has the largest online population in the world, it is perhaps not surprising that two internet billionaires made the top ten.Robin Li, co-founder of China's top search engine Baidu, held on to second place despite a slide in his company's stock price, with wealth of $8.1bn, down 12%And Ma Huateng, the owner of Tencent, which operates popular instant messaging and microblog services, took fourth spot with $6.4bn, gaining 49% from last year.Wang Jianlin, of property developer Wanda, is at number three with $8bn, roughly doubling his fortune from last year."Some lost ground, while others in the same sector made gains. Suffice to say that this year's list reflects the uncertainty that can arise from China's moderating economic expansion," said Zhou of Forbes.China's economy recorded annual growth of 7.6% in the second quarter this year, its worst performance in three years. The government will next week announce third-quarter performance.The world's second-largest economy has been rocked by Europe's debt crisis and the weak US recovery, prompting Beijing to cut interest rates and ramp up infrastructure spending to spur growth.

S&P downgrades Spain two notches

Standard & Poor's cut Spain's sovereign debt rating on Wednesday by two notches to just above junk level, citing the deepening recession and strains from the country's troubled banks.S&P cut the rating to BBB- from BBB+, just one level above "speculative" or "junk" grade debt, which could have sent Madrid's borrowing costs skyrocketing to untenable levels."The downgrade reflects our view of mounting risks to Spain's public finances, due to rising economic and political pressures," S&P said."The deepening economic recession is limiting the Spanish government's policy options," it said, adding that rising joblessness and tighter spending will likely intensify social conflict and tensions between the country's regions and Madrid.Moreover, S&P expressed doubts that all of the eurozone governments will give their backing to the bloc's effort to recapitalize Spain's banks, leaving more of the burden at least on the Spanish government and forcing its debt burden to balloon."Against the backdrop of a deepening economic recession, we believe that the government's resolve will be repeatedly tested by domestic constituencies that are being adversely affected by its policies," S&P said."Accordingly, we think the government's room to maneuver to contain the crisis has diminished."The ratings agency also attached a "negative outlook" to the rating, a warning of a possible further downgrade over the medium term.Such a downgrade would come, S&P said, if political support for the government's reform agenda weakens, if eurozone support fails to prevent Spain's borrowing costs from jumping above sustainable levels, or if debt tops 100 percent of economic output or debt payments surpass 10% of general government revenues.