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International | Global Justice and Anti-CapitalismIMF update underlines speed of slide into global recession
The International Monetary Fund (IMF) sharply revised its estimates for global growth downwards last Thursday, predicting a simultaneous recession in the US, Japan and major European economies for the first time since the institution was established in 1945. The IMF cut its previous projection of 3 percent for the world growth rate in 2009 to 2.2 percent, with an overall contraction in the advanced economies of 0.3 percent. The new assessment is an update to the IMF's World Economic Outlook (WEO) issued just last month—a sign both of the speed with which the world economic crisis is unfolding and the inability of governments and global institutions to comprehend, let alone stop, the rapid slowdown. The IMF summed up the bleak outlook, stating: "Prospects for global growth have deteriorated over the past month, as financial sector deleveraging has continued and producer and consumer confidence have fallen."
The IMF stated in April that global growth of less than 3 percent was "equivalent to a global recession". Last week, however, IMF chief economist Olivier Blanchard played down the latest figures, saying that he did not view the 3 percent level as a "useful" definition. He urged coordinated international action, saying that if that happened, "the forecast we have may be on the pessimistic side." There is no doubt that the rapidity of the economic slowdown and the intractability of the financial crisis have caught the IMF by surprise. Warnings that the global economy is either in recession, or is rapidly sliding into one, are now commonplace. Talks of a full-blown economic depression is also being quietly discussed. At a meeting of the World Economic Forum in Dubai, one senior monetary official told Reuters: "There is a real possibility of a real, deep, international depression." He described the crisis as "the worst in 100 years." More http://wsws.org/articles/2008/nov2008/imfu-n10.shtml
§World financial crisis bankrupts Eastern Europe: The toll of capitalist restoration
Massive state bailouts throughout Eastern Europe are rendering a historical verdict on the project of capitalist restoration. Far from following the free market nostrums that declare state intervention to be the primary retarding force of economic life, the region's business oligarchs are turning to the state to protect their immense fortunes.
As the regimes of Eastern Europe collapsed in the years 1989-91, pro-capitalist reformers and their allies in the Stalinist bureaucracies proclaimed a new dawn of democracy and promised that the market economy would lay the basis for prosperity and freedom. But hundreds of millions were instead plunged into destitution, as the nationalized industry created by the October Revolution in Russia and the extension of state-owned industry into post-war Eastern Europe were dismantled. Industries were shut down and sold off to benefit the new elite of multi-millionaire businessmen, drawn largely from the ranks of the Stalinist apparatus. Highlighting this state of affairs does not imply a nostalgic defense of the repressive, economically autarchic Stalinist regimes which preceded it however. The bureaucracy's usurpation of political power from the working class in the Soviet Union and its proclamation of the theory of "socialism in one country" set the stage for counter-revolutionary policies internationally and within the USSR itself that both isolated the Soviet Union and undermined nationalized industry and economic planning. This culminated in the decision by the bureaucracy, working hand in glove with Western imperialism, to dismantle the nationalized economy in order to safeguard its own privileges and wealth. More http://wsws.org/articles/2008/nov2008/pers-n10.shtml |