C-Change 09: The worst is yet to come

C-Change 2009

C-Change '09: The worst is yet to come

We are living in abnormal times and the world economy will be growing at only 0.9 percent in 2009

Idhries Ahmad

Thursday, February 19, 2009

KATHMANDU, NEPAL: Eminent journalist and Educator, Paranjoy Guha Thakurta, warned that global recession was much worse than it is being thought and the worst was yet to come.

Speaking to a packed gathering of top notch Indian CIOs here at the annual CIOL Change 2009, today, Paranjoy forecasted that the current depression will be even worse than the great depression that was witnessed by the world in 1930.

"That depression was followed by Third World War which was fought over guns and missiles, but I believe the next war, if any, will be fought over the natural resources," he added. We are living in abnormal times and the world economy will be growing at only 0.9 percent in 2009 and 40 percent of that growth is going to come from India and China."

Drawing parallels with the great depression of 1930, Paranjoy said that the current depression was even severe as markets across the world was extremely volatile.

"Volatility across commodity, prices is very severe. The oil prices have dropped from $140 dollars to less than $57 in less than a year. Again, we are seeing food riots in more than 40 countries as prices of food have been doubled in 2007/2008,” he said.

For the first time in history, we are seeing land which should have grown maize is producing bio diesel for our vehicles, he noted.

These indications pointed to a severe economic climate in the foreseeable future, pointed Paranjoy and added that denying the inevitable was making the problem even more acute. "The US was in constant denial for more than a year before the recession hit the economy. Humans, as race, believe in good and shy away from even listening to anything that is uncomfortable"

Giving another example of worsening situation, Paranjoy said, “Because of ozone effect, ice caps around the North Pole was disappearing and this caused a worry for the want of natural resources.”

He added the current crisis was not because of crisis in financial system but in terns if problems in the capital system.

©CIOL Bureau