World unemployment rising

Unemployment is rising around the world! Unemployment rates in the 30 wealthy countries that belong to the Organization for Economic Cooperation and Development range from a low of 3.2 percent in the Netherlands to 17.6 percent in Spain.

In the developing world, the downturn has also taken its toll. Unemployment in Brazil appears now to be easing a bit, but Mexico in August 2009 posted its highest jobless rate in 13 years. In Africa, the continent's largest economy, South Africa, is in the grips of its first recession in 17 years and about a quarter of the population is officially without work.

The U.S. unemployment rate was 9.4 percent in July, above the European Union rate of 8.8 percent. By August, the U.S unemployment rate had ticked up to 9.7 percent, a 26-year high. Most economists see U.S. unemployment topping 10 percent by early next year.

The speed of the increase in unemployment rates also varies, with countries like France starting with relatively high unemployment and shifting only slightly upward, and Britain and Ireland starting low but rising fast.

The OECD expects the jobless rate in its 30 members to approach 10 percent in the second half of next year, meaning 57 million people out of work. If forecasts are correct, about half of those would have joined the jobless lines in the three years from the start of the downturn to the end of 2010.

U.S. is historically quicker at reducing unemployment after a shock than Europe. But still, it could take three years or longer for the U.S. to return to pre-crisis levels.
Here is a look at unemployment rates around the world:

GERMANY — Unemployment edged up this year to 7.7 percent in July from an annual rate of 7.3 percent in 2008, but that was down from 8.4 percent in 2007, according to harmonized OECD data. Employment has been kept in check so far by government financial support for workers put on shorter hours in order to avoid mass layoffs.

FRANCE — The increase in French jobless lines has been somewhat tempered by short-work arrangements and government incentives such as exempting payroll taxes for some workers. The unemployment rate rose to 9.2 percent in July from 7.8 in 2008, according to the OECD. It is expected to hit 10 percent by the end of the year.

BRITAIN — Unemployment hit a nearly 13-year high of 7.9 percent in July. The number of people out of work looks on course to pass the three million mark next year as the impact of the recession translates to rising dole queues. However, the number losing their jobs has fallen from spring highs.

SPAIN — Spain has gone from being a European model for growth, creating more than a third of all new euro-zone jobs over the past decade, to having the region's highest unemployment rate. This stems mainly from the collapse of a construction boom and a credit-fueled consumer spending spree over the past two years. The OECD charts the rise in unemployment as moving from 8.3 percent in 2007 to 11.3 percent in 2008 and 17.6 percent this July.

IRELAND — The story is similar in Ireland, where unemployment has surged from 4.6 percent in 2007 to 6 percent in 2008 and 13.3 percent in July.

JAPAN — Japan's unemployment rate actually dipped to 5.5 percent in August after reaching 5.7 percent in July, the highest level in Japan's post-World War II era, amid mounting job and wage cuts. Still, the total number of jobless in August rose 32.7 percent from a year earlier to 3.61 million. The number of temporary workers has surged in recent years, reaching around a third of the work force in the world's No. 2 economy. The plight of these workers, who with little job security have born the brunt of the recession, has stirred emotions in Japan.

CHINA — The official urban unemployment rate was 4.3 percent for the three months ended June 30 but the actual level could be more than double that because the government system ignores millions of migrant workers and employees who are furloughed by state companies but not recorded as laid off. As of June 30, there were 9 million registered unemployed people in an urban work force of 210 million, according to a spokesman for the Ministry of Human Resources and Social Security, Yin Chengji.

As many as 30 million migrants are believed to have lost jobs in export-oriented factories in late 2008, government officials said. Some are believed to have found work on construction projects financed by Beijing's stimulus but no figures have been reported.

INDIA — The picture is even less clear in India where the government does an official employment survey only about once every five years. Ninety percent of the work force is in the so-called informal sector.

MEXICO — Mexico's unemployment rate rose to 6.28 percent in August, the highest rate in more than 13 years, according to The National Statistics Institute. The jobless rate among the country's roughly 45 million workers was up from 4.2 percent in August 2008. President Felipe Calderon has announced reforms to ease red tape and lower costs for investors in public works projects to foster job growth. The government also started paying one-third of the salaries of automotive workers to curb layoffs at the plants.

BRAZIL — Unemployment in Brazil reached 8.1 percent in August, remaining stable over the last two months. The figure shows a drop in the jobless rate from its peak of 9 percent in March. Brazil emerged from recession in the second quarter of this year and analysts are now predicting the economy will expand slightly in 2009.

SOUTH AFRICA — The unemployment rate in South Africa hovered at 23.6 percent in this year's second quarter, according to the country's statistics office. That was up slightly from 23.1 percent in the April-June quarter of 2008, as South Africa is mired in its first recession since 1992.

The African continent as a whole was initially unscathed by the financial turmoil that roiled Europe and the United States. But the collapse of Western consumer demand has meant Africans are selling less of the commodities on which many of their economies depend.

Resilient Asia Poised to Lead Recovery from Global Slowdown, Says ADB

HONG KONG, CHINA – Developing Asia is proving to be more resilient to the global downturn than was initially thought, the Asian Development Bank (ADB) said.

The Update to ADB's flagship annual economic publication, Asian Development Outlook (ADO) 2009, forecasts economic expansion in developing Asia to come in at 3.9 percent in 2009, up from the 3.4 percent expected in March when the ADO 2009 was released. In 2010, the growth projection is likewise upgraded to 6.4 percent from 6.0 percent. Stronger growth in East Asia and South Asia underpinned the improved prospects.
"Despite worsening conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown," said ADB Chief Economist Jong-Wha Lee.

Firm action by many governments and central banks, the relatively healthy state of financial systems prior to the global crisis, and the rapid turnaround in the region's larger, less export-dependent economies, all enhanced developing Asia's growth prospects. However, there are notable divergences in the outlook across subregions and across economies.

Economic growth in East Asia is upgraded to 4.4 percent in 2009, from the 3.6 percent projected in ADO 2009. In the People's Republic of China, aggressive monetary easing and the massive fiscal stimulus package rolled out by the Government bolstered the region's largest economy, which is now expected to grow by 8.2 percent in 2009 and 8.9 percent in 2010, up from the March forecast of 7 percent and 8 percent, respectively. A shallower contraction in the Republic of Korea is also expected on the back of effective fiscal stimulus measures. Meanwhile, the economies of Hong Kong, China and Taipei, China are likely to shrink more sharply on account of the severe drop in the demand for their exports.

Prospects for South Asia improved to 5.6 percent this year, up from the ADO 2009 forecast of 4.8 percent as the outlook for five of the eight subregional economies were upgraded. The subregion's limited reliance on trade partly shielded it from the adverse effects of the global slump. Emerging signs of a recovery in private business confidence and a continued large fiscal stimulus announced in the July 2009 budget helped bolster India's projected economic expansion to 6.0 percent this year, upgraded from 5 percent in March. Bleaker prospects are projected for the Maldives, on account of weak tourism receipts, and for Pakistan and Sri Lanka due to tight domestic demand and the weak global economy.

Aggregate growth in Southeast Asia is projected to slow to 0.1 percent this year, compared to expectations of 0.7 percent growth in ADO 2009. The more positive outlook for Indonesia and Viet Nam failed to offset the deteriorating prospects for the more open (Malaysia and Thailand) and smaller (Brunei Darussalam and Cambodia) economies in the subregion. Despite expectations that private consumption will recover in the second half of the year, ADB still revised its projection of the Philippines’ gross domestic product (GDP) growth downward to 1.6 percent this year and 3.3 percent in 2010.

Projections for Central Asia are much bleaker now than in ADO 2009 due to lower commodity prices, a deeper downturn in the Russian Federation (the subregion's main trade and financial partner), and weaker capital inflows, investments, and remittances. Growth is forecast to slow to 0.5 percent this year, compared to the March forecast of 3.9 percent. Kazakhstan's economy is expected to shrink to -1.0 percent in 2009, as it grapples with a fallout from a banking crisis and lower oil prices.

Economic expansion in the Pacific Islands is slightly downgraded to 2.8 percent this year compared with 3.0 percent in ADO 2009, largely as a result of falling incomes from remittances and tourism.

"The improved regional outlook should not make developing Asian economies complacent. A protracted global slowdown or the hasty withdrawal of stimulus packages can degrade the region's ongoing recovery," said Dr. Lee.

To develop more resilient economies, developing Asia should broaden the scope and structure of its openness. Reducing its vulnerability to external shocks requires policy makers to tackle the geographically unbalanced structure of its trade, capital flows, and movement of workers.

By promoting closer economic linkages within the region and a more balanced internal economic structure with a bigger role for domestic demand, policy makers in developing Asia will be able to achieve rapid yet stable growth for the region.

Asian stocks rise on new Japan stimulus

HONG KONG (AP) – Asian markets gained more ground Monday as Japan's new $150 billion stimulus plan and upbeat news about Chinese bank lending boosted hopes for recovery in the region's major economies.

Trade was thinner than normal with many investors still away for a public holiday and several markets closed. A stronger dollar combined with Tokyo's latest measures helped exporters like Mazda and Nissan. Oil prices slipped to near $51 a barrel.

Chinese stocks led the region with Shanghai's main index climbing 2.8 percent to 2,513.70. South Korea's Kospi gained 2.22, or 0.2 percent, to 1,338.26 with car companies especially strong after the government announced almost $400 million in aid for the country's auto industry. Hyundai Motors added 2.2 percent.

Japan's Nikkei 225 stock average fluctuated throughout the day before closing down 39.68 points, or 0.4 percent, to 8,924.43, though the nation's auto giants were higher.

Eslewhere, Taiwan and Singapore stock measures were up 1-2 percent. Hong Kong, India, Thailand, New Zealand and Australia were closed for a public holiday Monday.

Asian-wide free-trade zone

Pattaya, Thailand, (AFP)- Sixteen Asian nations representing nearly half the world's population will step up studies into a free-trade zone stretching from China to Australia.

Asian leaders will throw their support behind efforts to deepen and expand trade ties and reject protectionist measures.

Leaders of the 10-member Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia, India, and New Zealand under the East Asia Summit will ''explore ways and means to increase regional trade.''

The leaders said an East Asia-wide free-trade zone covering ASEAN as well as China, Japan, and South Korea would enhance the free flow of goods, people and capital. ASEAN has signed free-trade pacts with most of its trading partners, but it is pushing for a larger Asia-wide zone where both tariff and non-tariff barriers are torn down.

Economists say establishing an Asia-wide free-trade zone will be challenging and is a long-term project, but that networks of smaller accords could be a foundation to build on.

But some analysts have warned that dividing the world into trade blocs could undermine multilateral talks under the World Trade Organization.