More news about the agonies of capitalism

Today I read the cables from March 11th. They were continuing to rain information about the international economic crisis.

This time, it was the well known economist and Nobel laureate in Economy Joseph Stiglitz speaking; the press and academia quote him often. The French news agency AFP speaks of his statement made yesterday in the city of Sao Paulo in Brazil.

“President Barack Obama’s economic rescue package for more than 700 billion dollars is ‘much better than Bush’s response in 2008’, but ‘it is not enough and the crisis will worsen’.

“We ought to look at things in perspective. (President George W.) Bush was paralyzed and things got worse every day without his doing anything.

“He remembered that ‘many emerging countries have been turned into innocent victims of the crisis. The irony is that while the U.S. government was giving lessons on rules and institutions in the emerging countries, its policies were a total disaster’.

“’As a result of that, the crisis today is severe in the entire world and countries like Brazil are really going to suffer’, Stiglitz indicated to the newspaper that consulted him about the 3.6% drop in the Brazilian economy in the fourth trimester last year, the strongest one since the same period in 1996 and reported on Tuesday.

“He also warned that despite the fact that ‘there is a global agreement to not turn to protectionism’ many of the help packages ‘have a basis of protectionist measures and the ones who will suffer most will be the developing countries’.

Reuters informs us that “Severstal, the largest steel company in Russia, announced on Wednesday that it plans to eliminate between 9000 and 9500 jobs in its country’s steel mills as a response to the weak world demand, and that it will also fire workers in its carbon and iron mines.

“The Russian steel companies joined their rivals in other countries in cutting back their production during the fourth trimester even though, until now, they had avoided massive layoffs due to the politically sensitive nature of such a measure.

“’Additional job cut-backs are also planned in their carbon and iron fields in Russia’, Mordashov stated.

“Severstal has reduced its production in several plants in Russia, Italy and the United States during the last months, due to a decreased demand for steel. In February, it was reported that crude steel production in the fourth trimester fell some 4 percent as compared to the previous period.

In a cable coming from Dar es Salaam, that same agency printed that:

“’China can lead the world out of the economic crisis thanks to its healthy international reserves, its large commercial surplus and its massive investments all around the world’, said an advisor to the Secretary General of the United Nations.

“Up to the present time, China has withstood the economic turbulence better than either Europe or the United States even though the drop suffered by the last two economies greatly harmed its exports sector, causing factory shut-downs and job losses.

“I hope that China can lead the world out of this crisis first’, said Jeffrey Sachs, advisor to Ban Ki-Moon the U.N. Secretary General in an interview with Reuters on Tuesday afternoon.

“They didn’t have a bubble as large as the one in the United States or in Europe. China has great amounts of currency reserves, a large commercial surplus, and many investments. China has the means to be the first to initiate the recovery. If that is successful this year, then it would be spread to other economies.

“China, the third world economy, usually manages a current account surplus, with vast exports and relatively limited imports.

“The economic information released on Wednesday revealed that Chinese exports were shaky in February due to the fact that the country felt the whole impact of the global financial crisis, but capital expenses accelerated with the help of the government’s massive stimulus package.

“The country has around 2 trillion dollars in currency reserves. Its current account surplus today was at around 440 billion dollars at the end of 2008, up to 20 percent over that of the previous year, according to official statistics.

“The U.N. has said that 72 billion dollars would be needed to help Africa, a fraction of the amount being used by the governments of Europe and the United States to rescue their economies”.

There is no hope coming from New York or Washington for the countries of the Third World.

Fidel Castro Ruz
March 12, 2009
10:14 a.m.