The Global Economic Crisis is the greatest threat to globalisation since the 1930's Discuss : The gravity of the

current situation is beginning to be recognized. The recovery is likely to be L-shaped; the global economy could be entering a lost decade, comparable to what Japan experienced after its crash and financial implosion in 1991. But that was one country, now its the world. In reality, things could get much worse than that. The greatest threat the world economy faces is a resurgence of protectionism. This would, as it did in the past, decrease growth and dramatically increase unemployment. This calamity would be occurring at a time of a huge increase in the youth of the developing world, when hundreds of millions of young people will be coming on to the labor market. In the Middle East, 100 million jobs need to be created in the next decade-and-a-half. In Pakistan, between 2010 and 2020 ten years the population is due to increase by 35 million! In only one decade, Pakistans population will grow by the equivalent of 12% of the United States! Chinese Premier Wen Jiabao pointed out that China needs to create 12 million jobs annually and for that it requires a minimum growth of 8%; every 1% decrease in GDP growth means 1 million jobs less. Just recently, 20 million Chinese migrant workers lost their jobs. The ILO (International Labour Organization) estimated that in 2009 unemployment will increase worldwide by 50 million. This could end up having been too optimistic. In the 1930s it was unemployment, following the great crash and the trade wars, that gave rise to extremist political movements, xenophobia and eventually to war. The social protection, wealth and demographics of the West make it unlikely that a 1930s scenario will be repeated. However, the situation in the developing world is different and far more alarming. Furthermore, while the last couple of decades saw a quite remarkable decrease in global poverty, the current crisis, protectionism and unemployment could see a dramatic reversal of this process. Already the effects are being felt in many ways. According to FAO (The Food and Agricultural Organization), between 2007 and 2008 the number of undernourished people increased by 50 million.(for conclusion) It is worth pausing briefly to recollect the words of John Steinbeck in The Grapes of Wrath (1939): How can you frighten a man whose hunger is not only in his own cramped stomach but in the wretched bellies of his children? You cant scare him he has known a fear beyond every other. An international financial crisis, surging unemployment and protectionism were the ingredients that fuelled the cataclysms that ensued in the 1930s. We have an international financial crisis, which will not go away tomorrow, unemployment is rising, protectionism is rearing its very ugly head, but there is still time to act. And this is where business leaders must stand up and be counted. On 15 November last year the first G20 summit was held in Washington. The leaders all pledged to promote the open global market economy, to bring the WTO Doha Round to conclusion and to prevent new protectionist practices; specifically, in paragraph 13: "We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty. In this regard, within the next 12 months, we will refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports."

Not only has this pledge turned out to be sheer rhetoric, but indeed since the Washington summit nearly every single member of the G20 has taken protectionist measures. The next G20 summit is to be held in London on 2 April. What the world needs to try to prevent the current crisis turning into a tragic drama is to have a minimum of 1028 business leaders, preferably far more, signing a petition addressed to Gordon Brown (host of the summit) expressing the clearest and strongest rejection of protectionist measures and the imperative of maintaining, indeed enhancing, the global market economy. The late David de Pury, a man of great vision, board member of Nestl and Chairman of the Evian Group, entitled the last article he wrote before his untimely death, Let us not repeat the mistakes of the past. We are in serious danger of doing so. Business leaders must consider not repeating the mistakes of omission they made in the 1930s. The FT is currently running a series on the future of capitalism. If business leaders fail to fight against protectionism, there may be no future for capitalism at all. The consequences will be terrible and the inheritance bequeathed to future generations dreadful. See "Facing the global crisis with our children in mind."

The United States housing market correction (a possible consequence of United States housing bubble) and subprime mortgage crisis has significantly contributed to a recession. The 2008/2009 recession saw private consumption fall for the first time in nearly 20 years. This indicates the depth and severity of the current recession. With consumer confidence so low, recovery will take a long time. Consumers in the U.S. have been hard hit by the current recession, with the value of their houses dropping and their pension savings decimated on the stock market. Not only have consumers watched their wealth being eroded they are now fearing for their jobs as unemployment rises. [43] U.S. employers shed 63,000 jobs in February 2008,[44] the most in five years. Former Federal Reserve chairman Alan Greenspan said on April 6, 2008 that "There is more than a 50 percent chance the United States could go into recession."[45] On October 1, the Bureau of Economic Analysis reported that an additional 156,000 jobs had been lost in September. On April 29, 2008, nine US states were declared by Moody's to be in a recession. In November 2008, employers eliminated 533,000 jobs, the largest single month loss in 34 years.[46] For 2008, an estimated 2.6 million U.S. jobs were eliminated.[47] The unemployment rate in the US grew to 8.5 percent in March 2009, and there were 5.1 million job losses until March 2009 since the recession began in December 2007.[48] That was about five million more people unemployed compared to just a year prior,[49] which was the

largest annual jump in the number of unemployed persons since the 1940s.[50] Although the US Economy grew in the first quarter by 1%,[51][52] by June 2008 some analysts stated that due to a protracted credit crisis and "rampant inflation in commodities such as oil, food and steel", the country was nonetheless in a recession.[53] The third quarter of 2008 brought on a GDP retraction of 0.5%[54] the biggest decline since 2001. The 6.4% decline in spending during Q3 on non-durable goods, like clothing and food, was the largest since 1950.[55] A Nov 17, 2008 report from the Federal Reserve Bank of Philadelphia based on the survey of 51 forecasters, suggested that the recession started in April 2008 and will last 14 months.[56] They project real GDP declining at an annual rate of 2.9% in the fourth quarter and 1.1% in the first quarter of 2009. These forecasts represent significant downward revisions from the forecasts of three months ago. A December 1, 2008, report from the National Bureau of Economic Research stated that the U.S. has been in a recession since December 2007 (when economic activity peaked), based on a number of measures including job losses, declines in personal income, and declines in real GDP.[57] By July 2009 a growing number of economists believed that the recession may have ended.[58][59] The National Bureau of Economic Research announced on September 20, 2010 that the 2008/2009 recession ended in June 2009, making it the longest recession since World War II Globalisation - Introduction The global economy is in the midst of a radical transformation, with far-reaching and fundamental changes in technology, production, and trading patterns. Faster information flows and falling transport costs are breaking down geographical barriers to economic activity. The boundary between what can and cannot be traded is being steadily eroded, and the global market is encompassing ever-greater numbers of goods and services. Treasury: Long-term global economic challenges and opportunities for the UK, December 2004

What is Globalisation? Globalization is an issue that rouses strong emotions among people. The first step in understanding the topic is to define what it means. We are hampered by the reality that there is no one single agreed definition indeed the term globalisation is used in slightly different ways in different contexts by various writers and commentators. What is common to all usages is an attempt to explain, analyse and evaluate the rapidincrease in cross-border (tra 1 Economic "globalization" is a historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across international borders. There are also broader cultural, political, and environmental dimensions of globalization. The term "globalization" began to be used more commonly in the 1980s, reflecting technological advances that made it easier and quicker to complete international transactionsboth trade and financial flows. It refers to an extension beyond national borders of the same market forces that have operated for centuries at all levels of human economic activityvillage markets, urban industries, or financial centers. There are countless indicators that illustrate how goods, capital, and people, have become more globalized. The value of trade (goods and services) as a percentage of world GDP increased from 42.1 percent in 1980 to 62.1 percent in 2007.

Foreign direct investment increased from 6.5 percent of world GDP in 1980 to 31.8 percent in 2006. The stock of international claims (primarily bank loans), as a percentage of world GDP, increased from roughly 10 percent in 1980 to 48 percent in 2006.1 The number of minutes spent on cross-border telephone calls, on a per-capita basis, increased from 7.3 in 1991 to 28.8 in 2006.2

The number of foreign workers has increased from 78 million people (2.4 percent of the world population) in 1965 to 191 million people (3.0 percent of the world population) in 2005.

International Trade A core element of globalization is the expansion of world trade through the elimination or reduction of trade barriers, such as import tariffs. Greater imports offer consumers a wider variety of goods at lower prices, while providing strong incentives for domestic industries to remain competitive. Exports, often a source of economic growth for developing nations, stimulate job creation as industries sell beyond their borders. More generally, trade enhances national competitiveness by driving workers to focus on those vocations where they, and their country, have a competitive advantage. Trade promotes economic resilience and flexibility, as higher imports help to offset adverse domestic supply shocks. Greater openness can also stimulate foreign investment, which would be a source of employment for the local workforce and could bring along new technologiesthus promoting higher productivity.

No one should ever argue that globalization is perfect, because it is not. (Taylor 87-91) However, the concerns of skeptics can be easily alleviated. America is a country where everyone has an equal chance in life. No one is born into a predetermined destiny, as are many people who live in countries like Peru. It is a great thing for a country to be influenced by American standards, so that the people in that country can live in a technologically advanced, free country. It is true that there is sometimes a loss of culture associated with globalization. However, skeptics forget that not all culture is good. For instance, in the past in China if a girl was born it was very likely she would have been murdered because Chinese culture dictated that only boy children were of value. The population of China did not necessarily want to have that type of culture, but their government forced certain policies and traditions onto the Chinese people. It is often better to rid a country of certain cultures

that are immoral and wrong, especially those cultures which the government forces onto its people. Globalization encourages independence and choices for all citizens.
a situation in which the economy of a bounty experiences sudden downturn brought on by a financial crisis the country facing economic crisis will experience falling GDP, drying up of liquidity, rising or falling prices due to inflation or deflation.

When people talk of an economic crisis, it could involve a variety of serious economic problems such as currency collapse, hyper inflation. Perhaps the most common crisis, is a steep fall in GDP and deep recession. This is the most serious economic crisis as it leads to the most serious impact on human welfare in terms of economic inactivity and mass unemployment. The credit crisis played a direct role in leading to wider economic problems a year later

October 29, 1929 is known as Black Tuesday in the books because the US stock market had faced the most devastating crash in the history of stock market crash. This lead to the 12 year long great depression all over the world. During this period the world economy was affected very badly in the US the unemployment percentage rose up to 25% and in some countries it rose up to an all time high of 33%. This was the worst affect of the global economy crises on globalisation. The countries started recovering from the great depression