1 Oil hurtles down after Opec meet (Terry Macalister
& Graeme Wearden in The Guardian) Oil prices have crashed to a new
four-year low, below $72 per barrel, after a major split inside Opec forced the
cartel to hold production at current levels rather than make cuts to try to
turn the market around.
The reduced cost of energy - prices are now down 37%
since the summer - should be a boost to British consumers and the wider
economy, but experts warned the North Sea oil industry is now facing a slump in
investment and major job cuts. There are now predictions that the price of
Brent blend could fall to as low as $60, which would be disastrous for
countries with high producing costs and economies dependent on oil and gas,
such as Russia and Iran.
Norway, an important oil and gas producer outside
OPEC, saw its Krona currency hit a five year low against the dollar while Shell
and BP saw their shares battered. Prior to a crunch meeting at its Vienna
headquarters, OPEC was under huge pressure from some members to reduce output
in a bid to counter the five month slide in Brent blend prices from $115.
Prices have fallen due to increased US shale production and faltering demand as
growth slows in China, Europe and emerging markets.
2 German jobless at record low (BBC) Germany's
unemployment rate has hit a record low, but slower inflation has raised
concerns over deflation. The Federal Statistical Office revised October's
unemployment number from 6.7% to 6.6%, November's figure was also 6.6%. Both
figures were adjusted for seasonal variation. Meanwhile inflation fell to its
lowest rate in nearly five years in November. Official figures showed inflation
dropped to 0.5% in November from 0.7% in October.
The fall in the number of unemployed was larger than
analysts' expectations, down 14,000 to 2.872 million, the Federal Labour Office
said. The figures are in marked contrast to many other economies in the
eurozone. Economists have warned of a potential economic "stagnation
trap" in the euro area. However, analysts said that record employment,
rising wages and low interest rates are helping to prop up domestic demand in
Germany.
Inflation remains weak in the eurozone and
economists say the rate in Germany could fall further. Low German inflation may
put pressure on the European Central Bank (ECB) to further stimulate the
eurozone economy, Jennifer McKeown of Capital Economics said. The ECB has
started buying covered bonds and asset-backed securities to try to revive the
eurozone economy and keep deflation at bay.
3 South Asia’s boring club (Khaleej Times) Next year
will be the 30th since the South Asian Association for Regional Cooperation was
formed. Its career as an association has, since the mid-eighties, been neither
distinguished nor even promising. The countries of the region, viewing the
emerging tide of multi-lateralism elsewhere (especially in Latin America) and
viewing the debris of the non-aligned movement, shuffled together to form
SAARC.
The group has all the equipment — a secretariat,
various centres that profess to tackle common subjects, a stable of
professionals who advise bored officials, and so on — but has produced little. Some
of the blame for such a desultory career must lie with the relations between
Pakistan and India, which every other month swing between ‘hostile’ and
‘concerned’ but rarely tread any other territory.
Still, that ought not to have weighed so heavily on
the other members of SAARC — Sri Lanka, Nepal, Afghanistan, Bangladesh, the
Maldives and Bhutan. The accoutrements of SAARC should have served them just as
well, but have simply not been used. This is the greyish and uninspiring
background to the 18th SAARC summit this week in Kathmandu, Nepal.
The economic globalisation of the last decade
especially has linked countries — within South Asia and outside — with
bilateral agreements rather than through multi-lateral fora like SAARC. The
poor showing has not deterred the countries from announcing yet another new
SAARC centre which will merge four existing regional centres — the SAARC
Disaster Management Centre (in India), the SAARC Coastal Zone Management Centre
(in the Maldives), the SAARC Meteorological Research Centre (in Bangladesh) and
the SAARC Forestry Centre (in Bhutan).
The suspicion, not unfounded, is that SAARC and its
colourless apparatus exists to provide convenient sinecures for ex-diplomats
from the eight countries and their colleagues. Of course, the “meetings on the
sidelines”, over which some mild interest is mustered pertaining to SAARC, may
lead to a front page headline or two, but on the balance, that occasional
fillip is hardly worth the expense of maintaining the club.
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