News / Economy

Top Economic Stories of 2010

Multimedia

The tide from the global recession has ebbed, but economists say the world is still feeling turbulence in its wake:  continuing high unemployment, the European debt crisis and a lopsided, uneven recovery. Mil Arcega spoke with economists about the big stories that shaped the global economy in 2010.

A snapshot of the world economy in 2010 shows the globe weathering the worst financial crisis of this generation.

But more than two years after the downturn, it remains a fragile, uneven recovery - one that World Bank economist Hans Timmer says is largely driven by growth in developing nations.

"By far the most, the biggest story is the very strong performance of the emerging economies especially in Asia, but increasingly also in Latin America," said Timmer.

But the rapid expansion in countries such as China, India and Brazil underscored a growing imbalance.
By the mid-point of the year, stubbornly high unemployment in the United States, and the threat of insolvency within the 16-nation eurozone had become another reminder that the recovery would neither be smooth nor easy.
Uri Dadush is the director of Carnegie's International Economics Program.

"I think the biggest story in 2010 was the continuation of the recovery which was actually quite rapid, but the other big story of 2010 was the emergence of the European debt crisis which is continuing to simmer and represents the biggest risk for the global economy in 2011, " said Dadush.

Amid a storm of protests in Greece over austerity measures that were preconditions for a European bailout, worried investors lost confidence in the euro. The dollar wasn't doing much better. A week before a crucial meeting of G20 leaders, the U.S. Federal Reserve announced a new plan to buy $600 billion in government securities.  The policy was meant to lower interest rates and bolster the U.S. economy.  

But G20 leaders accused the U.S. pumping dollars into world markets to make U.S. exports cheaper.  

The policy fanned protectionist sentiments and, says Domenico Lombardi at the Brookings Institution, undermined the U.S. argument against currency manipulation by China.

"The timing of that announcement was a little bit unfortunate because it sort of jeopardized in a way the chances of having a full cooperative meeting because then emerging economies reacted to that announcement," said Lombardi.

Without the urgency that had characterized previous meetings, G20 leaders managed only a commitment in principle against currency manipulation.

But the G20's inability to find more common ground was soon eclipsed by fears of a larger European crisis.  Faced with a banking crisis and the prospect of not being able to repay its debts, Ireland became the second eurozone country to ask for a bailout.

Without a bigger fund, economist Desmond Lachman at the American Enterprise Institute says other high-debt countries will fall.

"The country that is very likely to be next is Portugal, and after Portugal, we'll get Spain," said Lachman.

Spain poses the biggest challenge yet for the European Union.  As the third largest economy in Europe, many consider Spain too big to fail.

"You know my view is that countries like Portugal, Spain, Ireland, that they simply can't stay within the rigors of the euro," explained Lachman.

But the World Bank's Hans Timmer says talk of the euro's demise is greatly exaggerated.

"He [referring to Lachman] underestimates the determination by the European policy makers to stick to the euro and to do everything to defend it," he said.

Economists say a stable Europe is critical to the global recovery. Domenico Lombardi at Brookings says that's especially true in Africa, where European donor money represents a significant chunk of the overall budget of some countries.

"If the prospects for Europe improve then clearly Africa is going to benefit from that," he said.

Adding to the inter-connectedness of the global economy is growing consensus among experts that rapid expansion in some emerging markets is unsustainable without balanced growth in the West.  
Again, the World Bank's Hans Timmer:

"Part of the problem is that increasingly unemployment becomes structural in the United States," he said. "It's concentrated in sectors that were unsustainably large during the boom period before the crisis, so you need to create employment in new sectors."

But as the old year makes way for the new one, a late but noticeable surge in U.S. consumer confidence is helping to reduce the prospects of another downturn.  Still - even the most optimistic analysts say a realistic forecast for the world economy in 2011 is for more of the same - painfully slow but steady growth - amid rapidly rising debt.

You May Like

Katrina Brought Enduring Changes to New Orleans

The city’s recovery is the result of the people and culture the city is famous for, as well as newcomers and start-up industries More

China to Open Stock Markets to Pension Funds

In unprecedented move, government to soon allow local pension funds to invest up to $94 billion in domestic shares More

Magical Photo Slides Show Native Americans in Late 1800s

Walter McClintock spent 20 years photographing the Blackfoot Indians and their vanishing culture at the dawn of the modern age More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs

World Currencies

EUR
USD
0.8874
JPY
USD
120.83
GBP
USD
0.6497
CAD
USD
1.3271
INR
USD
66.162

Rates may not be current.