It is Indeed a “Revealing Crisis,” Mr. Obama

Signs of the slowing economy appeared in the United States in the last quarter of 2007, when growth fell to two percent – a change from the previously booming 3.3 percent with a large rise in exports. As for consumption, it had the biggest economic drop, with a 2.2 percent fall in the span between July and November 2008. During this time, a financial and economic crisis erupted in the United States, and it was this crisis that issued forth to the rest of the world.

This is because the United States economy represents a large link in the chain of the world economy: it trades with numerous countries on different continents, associates with companies of various nationalities and those that are multinational as well, profits abroad from foreign investments, finds a ready market in wars of aggression in Iraq and Afghanistan and numerous bases outside of the United States, has a plentiful budget for foreign aid, and so on.

The crisis is to be blamed for the world economy suffering a capital loss of about 50 trillion dollars in 2008, including 9.6 trillion in Asia and 2.1 trillion in Latin America, according to what the Asian Development Bank last disclosed. It’s similar to what the United States underwent in the economic situation of 1946. Interest rates have dropped to nearly zero – 0.35 percent – and President Obama has called the United States unemployment rate “astounding.” Unemployment now reaches 8.1 percent of the workforce, with 651,000 workers laid off in February 2009 alone. Manufacturing dropped 1.9 percent in January 2009. For the first time, General Motors Corporation was facing bankruptcy, with recorded losses in 2008 totaling 31 billion dollars, removing it from its #1 position in the world.

The same goes for the Japanese Toyota Corporation, whose losses totaled another 3.9 billion dollars in only three months. In fact, the Japanese economy, ranked second in the world, has reached an unemployment rate of 4.1 percent of the workforce. In January 2009, for the first time in 13 years, Japan registered a current account deficit due to the drop in demand for Japanese exports. The Tokyo Stock Exchange index fell to an extent that has not been witnessed in 25 years.

China, which has replaced Germany as the third largest economy in the world, is in the same condition. The Communist Party governs China, but its economy has a capitalist nature. It’s been reported that 20 million Chinese rural migrant workers coming to the cities have lost their jobs. Prime Minister Wen Jiabao says that his country is claiming growth of about 8 percent despite the crisis. Before, growth had been at 10 percent. They face a budget deficit in China in 2009 of about 140 billion dollars.

Germany’s unemployment is estimated to have increased to 4.5 million workers last year, which is about 7.3 percent of the workforce. As for the European countries that run on the euro, the number of unemployed there has increased to 13 million workers. It has been said that the British government tried to limit the effects of the global crisis upon Britain by dropping interest rates to 0.5 percent. Statistics suggest that 140,000 British workers will lose their jobs in 2009. In Eastern Europe, which was pushed by Washington to leave behind a socialist system and instead enjoy prosperity under the umbrella of capitalism, the number of workers who will join the ranks of the unemployed will be 50 million. It’s known that the Northern European countries, once described as God’s heaven on Earth, will now in this heaven see a shrink in local production as a whole – 4.9 percent for Sweden in the last quarter of 2008, and a likewise 3.9 percent drop in production for Denmark during the same period. Finland saw an economic stagnation that had not been seen in 16 years.

Its worth mentioning that the Turkish economy, which took off in recent times, is now seeing the other side of the coin. Turkey awaits aid from Germany, Italy and Australia totaling 2.2 billion euros, part of an assistance package valued at 24.5 billion euros, which will be given to other countries hit by the global crisis. In addition, we should mention the developing countries in general, who need no less than 500 billion dollars to reduce the effects of the crisis.

There is no need to explain the effects of the global crisis on Egypt, for Minister of Finance Dr. Yusuf Ghali made it clear on March 8th that tax revenue on sales will return as tariffs on imports and the Suez Canal are dropped, a decree which will increase from the budget deficit. It’s known that tourism is shrinking and an absence of foreign trade and direct foreign investment will increase unemployment in Egypt and will affect the overall standard of living.

In conclusion, we return to where we started. We say to President Obama: you can compensate for the three trillion dollar budget deficit in the United States. The start to fixing the foreign and domestic situation is to adhere to a policy of peace, attempt to involve government in the economy, not adhere to a policy of agricultural protectionism, give aid to needy countries, and commit to coexisting peacefully with the world instead of in a state of war and aggression.