Even though five years after the onset of the global economic crisis, it has been persisting its existence, causing decreases in production and exports, as well as jobs layoff of thousands people across the world in various proportions.
With regard to job layoffs and cutoffs in wages and pensions prompt masses to strikes and demonstrations to get back their rights in some countries of the world.
Seemingly, the global economic crisis after taking a breath in 2010, it has begun to continue on its way since late 2011 to date, even it would be able to maintain its effect in 2013, the entire recovery is predicted in 2014 and 2015…
According to the experts and analysts, the economic crisis occurs depending on a few reasons in today’s world conditions.
Some of the reasons for economic crisis are accounted as follows:
Income inequality across the world,
Interconnectedness throughout the world,
Becoming a global village of the world,
Weakening of global confidence,
And war, strife, conflicts and terrorist actions within and between some countries, and other reasons can be added to the current ones.
In this global portrait, solution suggestions are presented by various organizations and authorities to relieve the ailment economies of the world.
But these remedies some time cannot be applied and sometime are not enough to end the economic challenges in the global village!
Happening first in the USA in 2007, this time global economic crisis has been sparked from the European Union. Eurozone economy maintains its dwindling characteristic and had shrunk by 0.2 percent in the three months from April to June compared with the previous quarter.
An OECD report says, global economy is slowing, with key European countries entering a recession that is now having an impact worldwide, adding that the G7 economies are expected to grow at an annualised rate of just 0.3 percent in the third quarter of 2012 and 1.1 percent in the fourth.
“Our forecast shows that the economic outlook has weakened significantly since last spring, the slowdown will persist, if leaders fail to address the main cause of this deterioration, which is the continuing crisis in the euro area,” according to a chief economist of OECD.”
The report warns that the continuing euro area crisis is dampening global confidence, weakening trade and employment and slowing economic growth for OECD and non-OECD countries alike and fear is that a disaster in one country can have ripple effects around the world.
As for a latest report of the United Nations, trends over the last 30 years show income inequality increasing both within countries and between them, and drawing attention in several countries, the richest one per cent of the population now accounts for 10 to 20 per cent of national wealth.
The report of the UN highlights a better income distribution pattern that would help stimulate and sustain economic growth in the short run and would provide stronger incentives for investment, innovation and job formation in the long run.
Global growth fell from 4.1 per cent in 2010 to 2.7 per cent in 2011, with a further decline expected by UNCTAD – to below 2.5 per cent – in 2012.
Meanwhile, a new World Bank report advices that it is time to rethink the role of the state in the financial sector, so that governments can better balance the need for credit and emergency support for banks with measures to promote transparency and competition when crises erupt.
In conclusion, since the globalization process started in the world, it has become more fragile, sensitive against some developments especially in economic and commercial issues. So global village requires being more diligent.