1 Canada, Australia feel squeeze of China slowdown (Heather
Stewart, Calla Wahlquist & Jared Lindzon in The Guardian) In 2011, the iron
ore-rich Pilbara region of north-west Australia was on the frontier of a 21st
century gold rush, this time with iron ore as the main prize – driven by
China’s formidable appetite for natural resources to build up its
infrastructure and modernise its economy.
Pilbara boasted salaries two-thirds higher than the
national average and almost 80% of workers were flown into their jobs from
Australia’s big cities. Now, mortgaged to the hilt on homes that lost value
almost before the paint had dried, the mineworkers that remain are accepting
longer hours and lower wages in an effort to keep up with the repayments.
Their plight resonates thousands of miles away in
Calgary, Canada. Oil, not iron ore, has been the foundation of that city’s
prosperity. But fears that China’s appetite for natural resources is waning are
sapping confidence; and as oil prices have plunged, another property boom could
soon turn to bust.
Official figures showed last week that Canada’s
economy has now slipped into recession, having recorded two successive quarters
of negative growth and confirming the weakness that the prime minister, Stephen
Harper – who is fighting a tough re-election battle, has been reluctant to
confront.
Like Australia, Canada weathered the financial crash
of 2008 well, avoiding the banking crises suffered by the US, UK and the
eurozone, instead growing fast on the back of exports of abundant natural
resources. But as the price of natural resources has dropped over the past
twelve months, both countries have been hit hard. Their currencies have
plunged, growth has slowed or ground to a halt and economists are warning that
there may be worse to come.
The experience of both countries is reminiscent of a
syndrome economists call Dutch disease: the dark side of the riches that can
flow from abundant natural resources. When demand for natural resources is strong
workers, investment and political attention pour into extracting and exporting
the precious stuff. It is in the downswings that the resilience of
resource-rich economies is seriously tested. Shifting an economy from one
source of growth to another, in this instance from natural resource extraction
to services exports, is rarely a smooth process.
2 US adds 173,000 jobs in August (BBC) The US added
173,000 jobs in August, the Department of Labor has said, in the last
unemployment report before September's interest rate decision by the Federal
Reserve. That was below the 217,000 predicted by analysts, although the Labor
Department said that figures for August tend to be revised higher subsequently.
The unemployment rate fell to 5.1% - down from the
July figure of 5.3%. The rate is the lowest since April 2008. The
weaker-than-expected August number could make Fed officials think twice about
increasing rates when they meet on 16-17 September.
On Twitter, BBC economics editor Robert Peston said
it was "inconceivable" that the Fed would now raise rates this month
given the jobs data and slowdown in emerging markets such as China.
3 Over 2m displaced by Boko Haram in Nigeria
(Johannesburg Times) Over 2.1 million people are internally displaced in northeast
Nigeria after a spike in a six-year insurgency by the Boko Haram group, the
International Organization for Migration has said, revising a previous figure
of 1,5 million.
More than 1,000 people have died in Boko Haram
attacks since May 29 when President Muhammadu Buhari came to power. The IOM
said the majority of those displaced by the violence (92%) now live in host
communities while the remainder live in camps or camp-like sites, adding that
the victims were in dire need of food and shelter.
Attacks by Boko Haram, which seeks to impose a
strict Islamic system in northern Nigeria, have killed at least 15,000 people
since 2009. The extremists have carried out deadly ambushes across Nigeria's
borders and in recent weeks suicide bombers, many of them women, have staged
several attacks in Nigeria, Cameroon and Chad.
An 8,700-strong Multi-National Joint Task Force,
drawing in Nigeria, Niger, Chad, Cameroon and Benin, is expected to deploy
against the insurgents soon.
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