Budget talks between the Republican and Democratic parties reached a deadlock in the United States and further delayed the government’s plan to increase the $14.3 trillion debt ceiling and avert a possible credit default. The budgetary committee reached tentative agreements, in line with their deficit-cutting plan, for reductions in areas such as health benefits, annual government spending, farm subsidies and tuition aid. However, the scepticism of the Republicans to raise taxes and reduce tax benefits and breaks for wealthy individuals, broke down bipartisan talks on the debt issue. The momentary breakdown had a negligible impact on bond markets, with investors predicting that the budgetary committee will reach a compromise well before the 2 August deadline. However, Washington’s inability to resolve the issue before this deadline may see the United States default on their debt and plunge the US and global markets into yet another recession.
Europe faces an uncertain economic future amid a deepening debt crisis in Greece and fears of fiscal problems spreading to Spain, Portugal and Ireland. Greece is embroiled in a domestic battle to pass a €28-billion, five-year fiscal austerity plan to reduce the budget deficit. The next tranche of payments from the 2010 IMF-EU bailout, without which the country is expected to be bankrupt by mid-July 2011, is contingent upon the successful passage of these austerity measures. This uncertainty is affecting global economic markets, including sustained euro weakness and dollar strength due to risk aversion, depressed European stock markets and an increase in the price of gold because of its position as a store of value.
Going forward, Eurozone countries are expected to take decisive moves to resolve the Greek crisis and prevent its spread to other countries in the EU. These actions include continued direct financial support through the European Financial Stability Facility (EFSF) and indirect support for debt restructuring and fiscal reorganisation. The success or failure of the European effort to resolve the debt crisis, will have far-reaching consequences on the rate of growth in the Eurozone and the rest of the world, the value of major global currencies and the price of commodities, especially gold and oil.
CPI has increased from 4.2% in April to 4.6% in May.
The repo and prime rates have remained unchanged. The gold price has increased over the past month, mainly due to the debt crisis in Greece. The oil price has shown a marginal decrease and there has been an appreciation in the currency against the dollar, the euro and the pound.
“There has been a tendency to underestimate the shift in the economic balance of power that is now underway.” Jim O’Neill of Goldman Sachs
The Next 11 (N-11), as chosen by Goldman Sachs, have the potential along with BRICS (Brazil, Russia, India, China and South Africa) to become the world’s largest economies in the 21st century. All these states were chosen because of their promising investment and growth prospects.
The N-11 consists of Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam. They have a combined population of 4.5 billion, which is almost 75% of the global total and are growing much more rapidly than the advanced economies of Europe and North America. It is believed that the new ‘Growth 8’ (Brazil, Russia, India, China, South Africa plus South Korea, Indonesia, Turkey and Mexico) will grow at four or five times the pace of the United States between now and the end of the decade. China alone will account for half of that growth.
Each of the N-11 has unique characteristics, being in different development stages both economically and politically.
- South Korea, the most developed country among the N-11, is a full democracy with an advanced, high-income economy and fully developed markets.
- Mexico, Turkey and the Philippines are considered to be newly industrialised nations of upper-middle-income economies and advanced or secondary emerging markets.
- Egypt, Indonesia, Iran, Nigeria, Vietnam and Pakistan are seen as developing nations consisting of lower-middle-income or transitionary economies of authoritarian or newly democratic political regimes.
- Bangladesh, the least developed country of the N-11, is a new democracy and has a low-income economy.
The African continent is the second-largest continent on the earth's surface. It covers approximately 30 330 000 sq km, and makes up about 22 percent of the world's total surface area. The largest country is the Republic of Sudan, situated in northeast Africa and covering a total of 2 505 800 sq km, while the smallest country is the Seychelles, which covers an area of 453 sq km.
Africa can be classified in many ways: by geographical region (Central Africa, West Africa, East Africa, Southern Africa and North Africa), by religion (Christianity, Islam, Hinduism and traditional religions) or by language spoken (Francophone, Anglophone, Arabic or Lusophone). The purpose of this piece is to provide a classification of Africa based on the primary languages spoken. Africa is a continent with a very high linguistic diversity, and in total there are an estimated 1 500 - 2 000 languages spoken.
The pie chart below details the relative contribution to total GDP based on the language spoken. The Arab-speaking and Anglophone countries contribute the highest proportion to GDP, 36% and 46% respectively.