Honduran economy: Crisis situation.

Ever since the ouster of its President Manuel Zeyala, Honduras is drifting into a crisis situation. All economic activities have taken a hit, and are affecting the well-being of the citizens of this country.

Tourism, one of the major industries, and the major foreign exchange earner, mainly on account of the ancient Mayan ruins, is said to be down by about 40%. The overall economic growth is expected to contract by over 2.5%. Unemployment is up at 3.5%. Inflation is running at a high 11.4%. Public debt is up at 22% of the GDP. The country’s exports have taken a hit, and international development and aid agencies have stopped extending their services.

One of the original Banana Republics, so called for their dependence on the banana crop for their economic prosperity, Honduras is experiencing a downslide triggered by the economic downslide in the United States, on account of its over-dependence on the U.S.

Apart from bananas, the other agricultural produce of the country includes coffee, citrus fruits, corn, etc. Timber is also produced in large quantities. Among the major industries sugar, coffee, textiles, clothing, wood products, etc. The country exports coffee, gold, bananas, plam oil, timber, etc, and imports raw materials for industries, foodstuffs, chemicals, fuels, etc.

The industrial growth for 2009 was projected at 4.4% and the GDP growth at 4%. However, this was before the coup in June 2009. The next election is slated for 29th November, by which time the eocnomy is likely to have deteriorated further. In this bleak national landscape, the only reason to cheer was Honduras’ qualification for the Soccer World Cup.

Unemployment is a major problem, as one sector after other buckles under the pressure of economic adversities. An end to the political uncertainty and restoration of the economic activities is going to take some time. All concerned are anxiously waiting for the November election to bring about a welcome change in the country.

China and America SAED.

Thi is the second and concluding part of the article.

Bilateral Relations: China-U.S. bilateral relations seem to be going north with several important issues, both at the bilateral level, as well as global, willy nilly driving them in consort. On the bilateral front, some of the activities lined up are an official visit to China of the United States President, the exchange of military delegations, American participation in the Shanghai World Expo in 2010, facilitation of visa procedures on either side, and restarting the dialog on the issue of human rights.

On the economic and financial side, the two sides resolved to take necessary steps to revive their domestic economies by increasing savings in the U.S. and increasing spending and consumption in China. The second important issue is to build a powerful financial system with a proper regulatory framework in place. Thirdly, to work against protectionism and towards open markets, creating more jobs, etc. And fourthly, to reform the global financial system and to take care of future crises.
Global and regional issues also took up considerable time and effort of both the countries, with both of them resolving to hold joint discussions and exchanges as required, on the issues of low carbon economy, climate changes, energy, environment, etc. Specific projects that would be pursued for fruitiion were clean, and efficient power, clean and efficient transport, clean air and forest, and wet land protection.

It is clear that the United States and China have a lot to gain from mutual co-operation and with America’s hands full in Afghanistan, and Iraq, it may not have much of a choice than to be ‘friends’ with China, much against its natural tendencies to show off its ‘muscle’ and ‘brains’.
Concluded.

China and America SAED.

You cannot thrash them all. You cannot beat them all. The strength of your opponent defines your options in dealing with him.

In his over 25 centuries old treatise, “The Art of War”, the Chinese master, Sun Tzu, had wrote:”He who wishes to fight, must first count the cost”. And quite appropriately, perhaps, the Americans seem to be following the advice of the Chinese master diligently in avoiding a confrontation with China. China is too big, and too powerful to be trifled with. And so, the American strategy toward China is predictably different from that applied to Iraq, Iran, Libya, Saudi Arabia, and so on.

Las week, the 28th of July, to be precise, a new chapter, as it were, opened in China-U.S. relations, with the successful conclusion of the first round of China-U.S. Strategic And Economic Dialog(SAED). The dialog revolved around the theme of strategic and long term issues concerning both the countries in particluar, and the rest of the world, in general. The objective of holding the dialogwas apparently to achieve a deeper understanding of each others’ views, to bring about consensus in thought and action, to increase mutual trust that follows greater understanding, to take matters forward through mutual co-operation, and give a filip to their bilateral partnership.

A pretty long list of wishes. But one which both the sides seem to be keen on achieving, at least apparently. Of course, for their own reasons. It is difficult to imagine America giving space voluntarily to Chinese ambitions for World dominance. At the same time, the U.S. may not have many options at its disposal, in dealing with China. And the current economic crisis has only made it worse. America may be slowly, but reluctantly, coming to the realization that it cannot always call the shots. And progress in these talks may result in some benefits too, especially for its beleagured industry, and banking and financial system by attracting more Chinese imports of American goods and services.
To be concluded.

Challenging times for American Economy

Is the worst over for America?   Economically speaking, that is.  Is the U.S. economy on the mend?   Are better times around the corner?   Can the beleaguered citizens of the capitalist citadel breathe easier?   What would the Americans not give to get a “yes” for all of these questions!

 

Economists, Corporate leaders, experts and specialists of various hues are cautiously optimistic of the prospects of the economy coming out of the southern doldrums and heading towards northern pastures.   However, they do not want to be seen making the same mistakes again by making outlandish claims of economic well-being, in the face of continuing tough times, as they did about the supposedly unstoppable race of the economy towards the ninth heaven.

 

Some of the reasons advanced for the optimism about the U.S. economy, among other things, are said to be the slow but steady improvement in consumer sentiment, the slower pace, as well as smaller quantum of job losses, an improvement in the manufacturing environment, etc.   That apart, it is expected that consumer demand would pick up slowly in the next few weeks.   Just like a drowning man clutches at straws, the experts are clutching at any little bit of positive news to butress their claims of economic upturn.

 

Does all of this add up to an upturn in the economic conditions?   No one in his right mind would dare take a definitive stand on this.   Such is the effect of the sudden and unexpected downturn that took most by surprise.   The experts and specialists do not wish to be caught again with their tongues out!

 

From the statistics available, it would appear that American consumers are more positive of their economic future, and appear to be opening their wallets and purses a bit wider than before.   And the number of Americans queueing up for the dole seems to be slowing down a bit.  

 

It remains to be seen if the massive sums of money invested by the Obama administration to shore up the financial and other sectors of the American capitalist kingdom, would have the desired effect.   For the moment, everyone seems to keep his fingers crossed and praying for a better morrow.

 

 

 

 

 

AMERICAN POWER ON THE WANE?

Is America, the sole super power of the world, on the way to be a has been?   Is America losing its sting?   Is America on the decline?   Is American power on the wane?

Commentators around the world are debating this hot topic in the light of the continued crisis gripping the American economy, and its fabled markets.   Some are convinced that America, the super power, is truly and well on its way to demise.   And going by the increasingly negative news emanating from the United States, one cannot be blamed for imagining the worst.

Whether America can continue to hold its position as the sole super power of the world may depend on a very simple and mundane asset, namely, CASH!   How deep are America’s pockets?   In order to retain its present position in the comity of nations, America may have to go on spending cash, and more cash,  till it reaches a point when its economy finds its feet once again, and America can go back to strutting around on the world stage as the only super power!

What does America need to spend money on?   Here are some of the areas where the U.S. has to spend billions upon billions of dollars without really counting them (saves time!), in order to keep its number one position.

Take Care Of Own:  The American Government has to naturally take care of its own citizens first, like any good Government, and that requires a hell of a lot of money.   Its not an easy task for the American Government to keep its citizens happy, given their proclivity to wasteful spending, and lack of the savings habit.  

The American Government has not only to take care of the basic needs of its citizens, but also to pamper them with innumerable goodies.   Cheap gas, for one.   Americans are hooked to the automobile, and keeping them happy on the road costs the American state quite a packet!

America has to ensure unemployment within its population to the bare minimum, or pay unemployment doles to the unemployed.   On the other hand,it has also to provide job opportunities to a large number of aliens, in order to retain its competitive edge by attracting the best talent from all over the world.   Also a large number of aliens throughout the world, looking up to America for a better future, does its image a whale of good.   And the Social Security system that American citizens are entitled to, takes up a large chunk of the American State spending.

Military Power:  America has to maintain a vast, and first rate defence force, that has the capability of intervening in any part of the world, at short notice.  This entails maintaining and sustaining a steady supply of arms and ammunitions of every variety and description, in huge quanities, and of the best quality of course.   Land, Sea and Air based, and in future, space based weapons systems of the highest quality and accuracy are needed to project America’s muscle power before the rest of the world-to friends and foes alike.

Projecting Power Abroad:   Propping up friendly, even if brutal regimes with little or no concern for human rights, like Israel, and Egypt in the pursuit of its strategic interests, takes up a huge chunk of America’s resources.   Israel is the top beneficiary of American aid, so much so that every morsel of food that the Israelis consume, and every drop of water they drink is either partly or fully financed by America!  The second largest receipient of American aid is Egypt.

And then there are states like Pakistan and South Korea, that are supposed to act as a bulwark against perceived threats to not only American interests, but to world peace and prosperity.   Pakistan is supposed to counter the threat of the Taliban and Al Qaeda, and South Korea is supposed to halt the spread of red (communism) from North Korea!   Both these friendly states, especially Pakistan, swallow up a considerable amount of American money year after year.

As if this were not enough, America has a bounden duty to punish unfriendly regimes like Iraq and Afghanistan by occupying these states physically;  and subverting their systems to make them America-friendly requires a virtual pipeline of cash to be put in place between America and these countries.   In spite of all this, the end result may not be satisfactory for America, which means all the money spent going down the drain.

Intelligence gathering:  This is another area where America spends countless billions of dollars to maintain its ‘edge’ over the rest of the world, in the hierarchy of nations.   The American intelligence set up is said to be as expansive as it is expensive.  The cost of  maintaining and running such a vast network of intelligence gathering mechanism, both human and non-human can only be imagined, as a lot of the expenditure is of a secret nature, and not accounted for.

By no means, is the above, a complete list of the expenditure incurred by the American Government to maintain its power and prestige, and more importantly, its ’sole super power’ status.

The current economic crisis that has America in a vice like grip, refuses to ease up soon, thereby putting enormous pressure on the American system, and pushing America into more and more debt, thereby mortgaging the future of the coming generations of Americans.   If this situation continues, America may soon be left with the hard choice of saving its flesh and bones, by letting off its enviable, or hated, as you please, status, of the sole super power of the world.