1 Eurozone shows symptoms of chronic economic illness
(Larry Elliott in The Guardian) Christine Lagarde, the head of the
International Monetary Fund, has warned that the eurozone is displaying the
symptoms of Japan’s longstanding economic problems and needs fresh moves to
avert the threat of recession.
With the IMF’s annual meeting in Washington likely
to be dominated by the failure of Europe to emerge from the financial crisis of
six years ago, Lagarde dropped a broad hint that she wanted Germany to run down
its budget surplus to boost growth. She said there was a “serious risk” of a
recession in the eurozone if nothing was done to avert a new downturn.
Asked if the eurozone was the new Japan, a country
that has never fully recovered from the financial crash at the end of the
1980s, Lagarde said: “We have alerted to the risks of persistently low
inflation, which was one of the attributes of Japan.” Speculation is growing
that the ECB will adopt quantitative easing – the money-creation programme used
by the US Federal Reserve, the Bank of England and the Bank of Japan – over the
next few months.
But Lagarde said she wanted to see fiscal policy
used to supplement the ECB’s efforts. She said: “We have also alerted to the
risk of recession in the eurozone. That has been identified by us at between
35-40%, which is not insignificant. We are not saying that the eurozone is
heading towards recession, but we are saying that there is a serious risk of
that happening if nothing is done.”
2 Ebola ‘entrenched and accelerating’ in West Africa
(BBC) The World Health Organization has warned that Ebola is now entrenched in
the capital cities of all three worst-affected countries and is accelerating in
almost all settings. WHO deputy head Bruce Aylward warned that the world's
response was not keeping up with the disease in Guinea, Liberia and Sierra
Leone.
The three countries have appealed for more aid to
help fight the disease. The outbreak has killed more than 3,860 people, mainly
in West Africa. Mr Aylward said "the disease is entrenched in the
capitals, 70% of the people affected are definitely dying from this disease,
and it is accelerating in almost all of the settings," he said.
Meanwhile in Spain, seven more people are being
monitored in hospital for Ebola. They include two hairdressers who came into
contact with Teresa Romero, a Madrid nurse who looked after an Ebola patient
who had been repatriated from West Africa.
3 The concept of a second Singapore (The Kok Peng in
Straits Times) The concept of Singapore as a global city started much earlier
than many of us realise. In 1972, Singapore's first foreign minister, Mr S.
Rajaratnam, addressed the Singapore Press Club.
"By linking up with international and
multinational corporations, Singapore not only becomes a component of the world
economy, but is offered a short cut to catch up or at least keep pace with the
most advanced industrial and technological societies. By plugging-in in this
way, we can achieve in 20 to 30 years what otherwise would have taken a century
or more to achieve," he said.
Most of us will agree that this development
strategy, put in place so many years ago, has been spectacularly successful. I
would like to make the case that while the particular globalisation strategy
that Singapore embarked on soon after independence was the right one we may
have overstayed in applying this strategy as the dominant one.
As a result, our shortage of land, labour and other
capabilities is becoming more obvious and severe. I believe it is timely to
have a second strategic pillar, which I would describe in short as
"creating a second Singapore outside Singapore" - the economic space
of Singapore and Singapore companies should be much bigger than the geographical
space of Singapore.
Further expansion overseas by Singapore companies
would ease the pressure on our land and labour market. It would ease the inflow
of foreign workers since our companies would employ them in their home
countries. It would enable our small and medium-sized enterprises (SMEs) to
achieve scale more easily.
A strategic shift of this nature would require a
change in mindset, institutions and skills. Mistakes will be made, and the
risks will be greater in the short to medium term. It seems to me that the
greater long-term risk is in staying with a strategy that has been largely
unchanged for nearly half a century.
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