World Bank Cites Need For Restructuring Approaches To Economic Growth And Job Creation

Tuesday, October 02, 2012 07:44
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World Bank Cites Need For Restructuring Approaches To Economic Growth And Job Creation

Tags: earnings | European crisis | world economy

The World Bank is predicting the fallout from the European debt crisis will weigh on global economies for the foreseeable future and will restructure the way foreign policy makers restore economic growth and create jobs.

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The crisis is reducing demand and affecting exports from developing countries. Continued turmoil in the markets has caused trade financing to dry up. This particularly affects developing countries whose economies depend on selling goods and services abroad.
 
Trade credit drives financial system, a fact many are not aware of. The European crisis is also exposing cracks in the composition of the euro that will have to be cured.
 
World Bank chief economist Kaushik Basu, who took his post on October 1, says the world is becoming a single economy and globalization is occurring much more rapidly than anticipated.
 
Developing countries are the primary focus of the World Bank. Its annual development report, released Monday evening, showed there are 200 million unemployed people across the globe actively seeking work.
 
About 620 million—mostly young people and women—are unemployed and not looking for work.
 
More than half of the world’s three billion working people are either farmers or are self-employed.
 
Cheap labor sources have pulled people out of poverty in developing countries but have created new tensions in developed economies.
 
Basu says all economies must change their thinking and not diminish the issues present in industrialized countries for the sake of growth in developing countries.
 
The primary point is that the global economy is in the process of restructuring. Much thought needs to be given to what that means for both industrialized and developing economies across the globe.
 
The steps many developed countries currently are taking to jumpstart growth are founded on old paradigms, not the new paradigm such a restructuring would mandate.

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