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

Video Experts Warn World Losing Ebola Fight

Doctors Without Borders says world is losing battle against Ebola, unless wealthy nations dispatch specialized biological disaster response teams More

Video Experts: Rise of Islamic State Significant Development in Jihadism

Many analysts contend the group - which grew out of al-Qaida in Iraq - has been rebuilding for years More

US-Based Hong Kongers Pledge Support for Pro-Democracy Activists

Democracy advocates call on Chinese living abroad to join them in opposing new election rules for their home territory 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.
Larger Than Life Chinese Lanterns Make Southern California Appearancei
X
Elizabeth Lee
September 02, 2014 8:57 PM
Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Larger Than Life Chinese Lanterns Make Southern California Appearance

Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Experts See Rise of ISIS as Significant Development

The Islamic State’s rise seems sudden. It caught the U.S. by surprise this summer when it captured large portions of northern Iraq and spread its wings in neighboring Syria. But many analysts contend that the group - which grew out of al-Qaida in Iraq - has been rebuilding for years. VOA's Jela de Franceschi takes a closer look at the rise of ISIS and its implications for the Middle East and beyond.
Video

Video Israel Concerned Over Syrian Rebels in Golan

Israeli officials are following with concern the recent fighting between Syrian rebels and government forces near the contested Golan Heights. Forty-four U.N. peacekeepers from Fiji have been seized by Syrian Islamist rebels and the clashes occasionally have spilled into Israel. VOA’s Scott Bobb reports from Jerusalem.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.