By The New Indian Express,21st January 2016
(Note: A slow down in global economy is bad news for the Lazarases of this world, not for the Dives who have stored up wealth for generations. One percent of the world possess the wealth of 99 % of the world population, or 65 individuals possess more than the wealth of three billion poor peoples of the world. So what is urgently needed is unleashing of generosity on th part of the super rich to share at lest part of their unused wealth to sustain the life of the starving coupled with starting productive programmes for every one’s benefit. james kottoor, editor)
That the global economy is slowing down is an understatement. This is more so when much of the world economic activity’s fulcrum is oil. With oil prices falling below $28 per barrel and set to drop further — some suggest they could fall as low as $10 a barrel. The reason? Iran, a major oil producer, just free from sanctions imposed by the US, is all set to boost its crude output. The country has announced that it will increase its crude output by 500,000 barrels a day. With this, the global crude oil market is set for a glut and consequent collapse in oil prices.
Moreover, the Baltic Dry Index, an assessment of the price of moving major raw materials by sea, slid to a fifth consecutive record low last week. It fell by 3.26 per cent to 415 points and continued its free fall to close at a record low on Tuesday amid concerns over vessel oversupply and global demand shortage. The overall index fell for the 11th straight session and was down six points, or 1.63 per cent, at 363 points. The index has plunged 115 points or around 24 per cent in January. Trade activity has almost come to a standstill since last week with container ships between Europe and North America — the two major continents and trade centres — either anchored or in port and there seem to be no signs of improvement.
Experts point to China as one of the main reasons for the slow down. The dragon economy has become a drag on the global economy. Growth slowed down to 6.9 per cent after the fourth quarter slowed to 6.8 per cent last year. This was exacerbated by a huge outflow of capital, a slide in the Yuan currency and stock market crashes. With many of the markets riding piggyback on the Chinese economy, demand fell everywhere and impacted the world economy at large. The latest forecast by the International Monetary Fund (IMF) cut its global growth forecast for 2016 at 3.4 per cent, down 0.2 per cent but put India’s projected growth at 7.5 per cent, up from 7.3 per cent last year. So, as the dragon slows down, it could be the time of the resurgent tiger, cranked up by low oil prices.