UN Predicts Grim Economic Outlook for 2012

The world economy is on the brink of another recession and prospects for recovery will worsen unless the international community can strengthen cooperation, says the UN’s 2012 Report on World Economic Situation and Prospects.

“We have a situation where we may well be at risk of a double dip. In any case it is very likely there will be a further slow down.” says Jomo Kwame Sundaram, UN Assistant Secretary General for the Department Economic and Social Affairs (DESA).  

Sundaram and DESA director for policy and analysis Rob Vos where at the UN to preset an overview of the report, which will be released in the new year.

Sundaram says today’s announcement by China that its manufacturing sector had shrunk over the recent period is an ominous sign, especially for developing countries that for the most part had continued to do reasonably well during most of the crisis.

“We do not have the basis for a strong recovery in the developed world and what is likely to happen in the near future is the further deterioration of conditions in the developing world.” he said. “This current situation, in the view of the Chinese, is worst than the last quarter of 2008.”

Sundaram says the international community has so far failed to take collective action and adopt preventive measures to ensure possible future European debt problems can be contained. 

He says the complex political relationship between European national governments and the European Union framework, along with ideological differences between the White House and Congress have seriously limited any international consensus to addressing the crisis.

Rob Vos, Director of Policy and Analysis at DESA, says even in a best case scenario global economic growth will drop. 

“We project that the world economy could grow to 2.6% next year, that’s slightly down from 2.8% but that is already a pretty strong deceleration from what happened in 2010 when the world economy was growing at 4 percent.” 

Vos says projections are based on the assumption the European debt crisis will not reach the EU’s larger economies. But with both Italy and Spain coming under increased financial pressure, he says the worse case scenario is quite likely.

The report’s forecast also depends on Congress and the White House agreeing on the extension of payroll tax cuts and emergency borrowing benefits.

“If those two actions don’t happen, we estimate that the US economy could further slow by another one percentage point of growth next year, which would be further down from already slow growth of 1.7%.”

Vos says the US should also start thinking about short term stimulus measures to avoid an increase in home foreclosures, which he says continues to undermine the health of the banking sector and negatively impact the economy.

“There is weaknesses and some dangers in the mortgage market that because of the high unemployment, a lot of the home’s are underwater so to speak, that their debts are higher than the value of their homes, that there may be a need to give people more bridge loans to overcome those problems and to avoid more foreclosures.”

Ahmadinejad Visit to UN Sparks Protests, Walkouts

On a day where several hundred demonstrators rallied and chanted outside UN headquarters against Mahmoud Ahmadinejad’s visit to New York, European Union and American diplomats inside the world body staged their own protest, walking out half way through the Iranian President’s address to the General Assembly.

In his half hour speech, Ahmadinejad’s listed off a long line of rhetorical questions condemning American and European foreign policy as far back as the 17th century.

“Who imposed colonialism for over four centuries upon this world?…Who triggered the first and second world wars? Who created the wars in the Korean peninsula and Vietnam? Who imposed, through deceit and hypocrisy, the zionist and all their 60 years of war, homelessness, terror and mass murder on the Palestinian people and countries of the region?” 

Ahmadinejad also spoke of more recent events,blaming the global economic crisis on the greed of Western governments and corporation, criticizing the Security Council’s bias towards Israel and putting in question NATO’s motives in Libya. 

“ Do these arrogant powers really have the competence and ability to run or govern the world? Or is it acceptable that they call themselves as the sole defender of freedom democracy and human rights, while they militarily attack and occupy other countries? Can the flower of democracy blossom from NATO’s missiles, bombs or guns?”

Last year, diplomats walked out of the Iranian President’s General Assembly address after he said the September 11th attacks could have been orchestrated by the American intelligence community and called for an international investigation into the matter

Ahmadinejad once again brought up 9/11 conspiracy theories, this time questioning American motives behind the operation to kill Osama Bin Laden.

“Instead of assigning a fact finding team, they killed the main perpetrator and threw his body into the sea…why should it not have been allowed to bring him to trial, to help recognize those who launch terrorist groups and brought wars and other miseries into the region?Is there any classified information that must be kept secret?”

The US mission to the UN issued a short response to the Iranian President’s address. 

“Mr. Ahmadinejad had a chance to address his own people’s aspirations for freedom and dignity, but instead he again turned to abhorrent anti-Semitic slurs and despicable conspiracy theories.” said the statement.

No Need for IMF, EU Financial Help Says Greek Foreign Minister

Greece's Alternate Foreign Minister has dismissed rumors that the IMF or the European Union would intervene to provide financial assistance to the country. Greece's economy is faltering and the budget deficit last year was 13 per cent of its GDP. "There is no thought at all about the IMF" Minister Dimitri Droutsas said, "and there is no need for financial assistance from the European Union"

Speaking Thursday in New York, Droutsas said his government had already announced major structural changes to deal with the crisis, including a new tax system to discourage tax evasion, raising the retirement age to 67 for public pensions and freezing wages for civil servants.

Droutsas also said the government would try to scale down the many bureaucratic levels of the Greek public sector, in which many unions are on strike or planning strikes to protest the changes. Droutsas said it was natural the new mesures would meet with some resistance because they affect so many people directly, but he expressed confidence the government will be able to work with other parties and has the support of the population and the European Union.

The Greek Alternate Foreign Minister also told reporters the current reunification talks in Cypress remain a priority issue for his government. On a recent trip to the divided Mediterranean island, Secretary General Ban Ki Moon called on both the Greek and Turkish Cypriot leaders to accelerate the negotiation process. Although the Secretary General said a solution was “within reach” during his visit, Droutas believes the present stage of discussion does not allow for overwhelming optimism, adding that the latest proposals by Turkish Cypriot leaders were outside the framework that had been earlier discussed.

World Needs A Commitment From U.S. On Climate Change

By Leah Valencia - University of New Mexico/Talk Radio News Service

In Barcelona, policy makers are awaiting a commitment from the U.S. to cut greenhouse gas emissions during preliminary agreements being made ahead of the UN climate conference in Copenhagen next month.

Nick Mabey, CEO of E3G, a nonprofit think tank that promotes green solutions, said Monday that key players have began to advocate ambitious commitments, noting that China and India have discussed lofty international abatement commitments. Mabey said that all that remains is a commitment from the U.S to reduce emissions.

“With the major countries moving on finance and on commitment, this really sets up for the EU-US summit...to see the U.S. come forward and make a very positive statement about its intentions,” Mabey said during a conference call hosted by the U.S. Climate Action Network.

The U.S., which is the second largest greenhouse gas emitter in the world - China is the largest - has yet to commit to a goal to reduce emissions by 2020. This has made it difficult to gain commitments from other developing countries. In contrast the European Union has vowed to cut 1990-level emissions by 20 percent in the next decade.

“The principle for supporting developing countries is committing to finance, as Europe has, and a strong agreement that we can build on in the future,” Mabey said. “This is really an important time where U.S. leadership has to come to the full.”

The current preliminary discussions taking place in Barcelona represent the final negotiating sessions before the United Nations meets in Copenhagen on Dec. 6 for the EU-US climate conference. There, 190 nations will draft an agreement to succeed the Kyoto Protocol, which expires in 2012.

Clinton: "I don't pretend to have any psychological insights"

Senator and Senate Foreign Relations Commmittee Member Bob Corker (R-Tenn.)asks Secretary of State Hillary Clinton a question about the energy issue in Europe. He expresses concern that the U.S. seems more concerned with Europe's energy security than they do. Clinton explains what she knows about the issue. (1:54)