Chindonesia Getting Prepared For G-20 Summit

Posted on September 8th, 2009 at 7:37 pm by Akhyari



Shanghai, one of China's signs of boom

The global downturn failed to prevent China overtaking Germany as the world’s third-largest economy. In fact, China’s economy has shown signs of improvement recently, with the annual growth rates of both industrial output and retail sales rising in July.

But the downturn has had serious consequences for the country, both internally and externally. Chinese exports have been hit hard by falling world demand, with millions of rural migrants returning to their villages after the factories that employed them closed down. China’s waning appetite for raw materials has had a knock-on effect on other countries’ exports, crushing hopes that key emerging markets could compensate for the developed world’s slowdown.

Its banks have not felt the impact seen elsewhere, but ordinary people have – with migrant workers especially hard hit. While China’s growth remains relatively strong compared with other countries, it has launched a $587bn stimulus package and has underlined that it now has the largest deficit in 20 years.

And China has recently been talking about the possibility of a new world currency to replace the dollar, though it stopped short of calling for this when it met with Brazil, Russia and India at the first BRIC summit in June.


Mumbai, India's booming pride

Indian government under Prime Minister Manmohan Singh is well placed to embark on economic changes, having won a new term with a strong margin in May. In July’s budget, Finance Minister Pranab Mukherjee said the government’s “first challenge” would be to return to a growth rate of 9% a year “at the earliest”.

The Indian economy grew 6.7% in the year to the end of March 2009, but had grown by an average of 8.8% in the previous five years. Agriculture, which makes up about a fifth of the economy, was one of the sectors to see growth fall, while industrial firms such as Tata have been severely affected by the freeze in world credit markets and a general fall in global spending. In the budget, the government also increased spending on urban poor schemes and the jobs-for-work scheme to help the poor.

Although India’s economy has undoubtedly been affected by the global recession, Prime Minister Singh has said he has no intention of going to the IMF for help – an institution he partly blamed for the economic downturn, saying it had conducted “too little surveillance of the affairs of the developed countries”.

Mr Singh has also shared France and Germany’s concern for greater regulation of financial markets. He has said he is happy that his country has been admitted to two key standard-setting bodies. “India has now been made a fully-fledged member of the Financial Stability Forum [and] also the Basel Banking Committee. This from India’s point of view is a plus factor,” he said.


City of Tomorrow, Surabaya, Indonesia's 2nd largest city. Indonesia's confidence of growth

Globalisation has been a significant economic benefit for Indonesia in recent years. Thanks in no small part to a big growth in manufacturing facilities for major multinationals, its economy grew 6.1% in 2008. However, with Western firms cutting back production towards the end of the year, Indonesia’s exports dropped sharply in the final three months of the year. To help lift the economy, the government of President Susilo Bambang Yudhoyono has passed a $6bn (£4.3bn) fiscal stimulus.

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