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Emerging Economies Should Spend Their Surpluses On Their Own People, Says Oecd

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http://www.guardian.co.uk/business/2010/nov/03/oecd-emerging-economies-spend-on-own-people

Fast-growing economies in the east should spend the vast savings accumulated through trade on their own people rather than use it to accumulate bonds and shares in the west, an influential thinktank said today.

The organisation for Economic Co-operation and Development (OECD) warned that policies designed to rebalance currencies would fail unless countries adopted more far-reaching and fundamental reforms.

The Paris-based research group, often described as the rich nations' thinktank, said in a webcast that world leaders needed to go beyond discussions about currencies at the G20 summit in South Korea next week and examine conflicts that hold back growth in the world economy.

It said: "Structural reforms, such as the strengthening of social safety nets and the development of financial markets in emerging economies, should be employed to reduce their savings and dependence on financial markets in advanced economies. The OECD sees structural reforms, such as the liberalisation of product markets, also as crucial to recover the output losses associated with the crisis and to help put public finances back on a sustainable path."

The pace of the global economy recovery had slowed since earlier this year, the OECD said, while public debt in most OECD countries was set to reach all-time highs.

"With support from fiscal stimulus fading, output and trade have softened," it said. "Average GDP growth across OECD countries is expected to be between 2.5% to 3% this year, between 2% and 2.5% in 2011 and between 2.5% and 3% in 2012. Activity is projected to vary widely across countries, particularly within the euro area.

"The US is expected to gain considerable momentum in 2012, while the Japanese recovery is expected to lose some steam. In many emerging-market economies growth is continuing robustly, although at a slightly slower pace than earlier in the recovery.

With public deficits and debt at "unsustainable levels", stabilising debt relative to GDP in most countries would require a historical consolidation effort of between 6% to 9% of GDP, said OECD secretary general Angel GurrĂ­a. "But in fact even more is needed to bring debt back to sustainable levels."

No wonder the Fed needs to print and buy govt bonds if the developing world won't invest in the US recovery...

Perpetual debt is the way to wealth.

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These quangos like the aforementioned 'think tank' seem to hate the west and have a hard on for developing countries.

Do they forget who pays their wages?

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These quangos like the aforementioned 'think tank' seem to hate the west and have a hard on for developing countries.

Do they forget who pays their wages?

Indeed, its the reason Foreign AID budgets are maintained.....

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At f*cking last.

+1

At least it's finally gaining more traction.

Not sure they'll have much luck with China though without first hitting them with a big stick (Is $600bn a big enough stick? I doubt it). Can't come soon enough.

Edited by Red Karma

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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