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More Economic Surprises in Store - ASHARQ AL-AWSAT English Archive
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Economic surprises are unfolding one after another as new financial issues continue to emerge. The foundation of the open and free economy is facing new challenges at the core of its construction and basis. The interest rate has hit zero. In the central banks of industrial countries, the official interest rate is…zero!

OPEC and its twelve member states announced the biggest reduction in oil production in history; a reduction of 2.2 million barrels per day in order to encourage supply and demand in a deteriorating market that is enduring a grave and frightening recession, which has caused the price of oil per barrel to drop more than US $100 in less than five months.

India and China have announced a serious downturn in economic growth and highlighted the sharp slowdowns of more than two percentage points in each country. This is important because of the significant role both India and China play in international economic growth, as both countries are the engine for bigger emerging markets.

The unemployment rate in the United States of America has risen enormously, especially with the announcement of the consequences and “conditions” of the US auto bailout package, which requires cutting costs, the closure of a number of factories, and the dismissal of thousands of workers. General Motors alone announced that it would be closing 20 factories during the upcoming period.

Perhaps this stifling and destructive financial crisis will have its biggest impact on charitable organizations, communities, research centers and non-profit organizations, which have witnessed a terrifying cut to the donations and endowments that they used to receive on a regular basis. This is threatening to all their projects and objectives since they rely on donations from major companies and professionals, all of whom have been affected by the aftershocks of this financial crisis.

The advertising market is also collapsing and there has been talk of “unprecedented” cuts in the expected budgets for 2009 that will cause serious damage to the media.

There are countries that have not been harmed “directly” by this crisis. However, its dark shadows have had an impact upon the heads of financial markets and businessmen in these countries, causing serious disruption to their work. Asked about the crisis, they say, “We do not realize the extent of the problem, therefore we must be precautious.”

Amid this cocktail of drama however, there has been a surge in sales of gold and works of plastic arts. As people are losing faith in the financial markets, stock markets and banks, some of them have turned towards investing their money in non-conventional products, the prices of which are increasing in front of their very eyes, and which they can sell when they need to.

Rest assured that there will be more economic surprises in store.

Hussein Shobokshi

Hussein Shobokshi

Hussein Shobokshi is a businessman and prominent columnist. Mr. Shobokshi hosts the weekly current affairs program Al-Takreer on Al-Arabiya, and in 1995 he was chosen as one of the "Global Leaders for Tomorrow" by the World Economic Forum. He received his BA in Political Science and Management from the University of Tulsa.

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