On the Global Front... 4.27.09
HK hit by trade deficit as exports plunge
Hong Kong exports fell 21.1 percent year on year last month, government statistics showed, the latest sign of a severe drop in demand for goods made just across the border.
The value of exports fell to HK$175.5 billion, after a year-on-year decline of 23 percent in February, the Census and Statistics Department said.
At the same time, the value of imports dropped 22.7 percent to HK$193.7 billion from a year earlier.
A visible trade deficit of HK$18.2 billion, equivalent to 9.4 percent of the value of imports, was recorded.
For the first quarter, the value of exports dropped by 21.9 percent over the same period last year.
Demand for goods dropped sharply from Europe and the United States in March, but exports to Asian countries were also hit. Electrical and telecoms goods were hardest hit over the period, the department said.
A government spokesman said that ''as the global economy has yet to show signs of recovery, the external trading environment will remain challenging in the coming months.''
The New Angst at the Heart of Germany
The economic meltdown has rattled the confidence of the skilled workers at the heart of the German economic and social model. But they are unlikely to take to the streets -- at least for the time being.
Germany has long been overshadowed by warnings that a crisis was looming. But now it's here. Politicians, business leaders, experts and trade union leaders sit around the table in the Chancellery. The only thing they know is that no one knows what to do.
No one will be left unaffected by these troubled times. Germany's economy is set to shrink by 5, maybe 7, percent and the number of unemployed will increase by at least another 1 million.
For the first time since World War II, Germany's middle class has been shaken to the core. It is not those with low-income jobs, like retail workers in discount stores or carers for old people, who are at greatest risk. Instead, it is those working in the highly productive industries at the heart of the German economic model who face the full force of the downturn.
Mboweni warns SA economy may shrink again
South African Reserve Bank Governor Tito Mboweni said on Tuesday he "might not be surprised" to see another quarter of negative growth, which would send Africa's biggest economy into recession.
South Africa's economy shrank by 1,8% in the fourth quarter of 2008 and weak manufacturing and mining output have indicated it heading for its first recession in 17 years, although the Treasury is still optimistic this will be avoided.
"There might be a bit of a difference of opinion between me and the finance minister [Trevor Manuel]," Mboweni told members of the Johannesburg Country Club.
"He's confident we won't see another quarter of negative growth. We are of the view that we might not be surprised to see another quarter of negative growth ... technically that's a recession."
Mboweni said the government's infrastructure spending plan, the Reserve Bank's inflation targeting policy and fiscal discipline had provided a buffer against the global economic crisis.
Inflation has been above the central bank's 3% to 6% target band since it breached it in April 2007. It peaked in August 2008 and stood at 8,6% year-on-year in February.
Mboweni said the inflation outlook had improved and headline CPI was likely to come back to the target band in the third quarter, then pierce it briefly before settling back in the band in 2010.
"The inflation picture globally looks good, that is why central banks have been in a position to provide monetary accommodation. As inflation projections come down further, it goes without saying monetary accommodation must be provided for the future."
The central bank has cut the repo rate by 250 basis points to 9,5% since December, after raising interest rates by 500 basis points between June 2006 and June 2008.
The elimination of public opinion By Manuel L. Quezon III [Philippine Daily Inquirer]
Much as administration supporters in and out of office insist they’re reasonable people, who only want an open debate, and who therefore accuse their opponents of being fanatically opposed to change, the reality is otherwise. The only change the administration wants is a unicameral, parliamentary system, possibly with a kind of fake federalism—in a region where even neighboring parliaments are bicameral, and where no unitary state is contemplating a shift to federalism.
An insight into the actual problem confronting the House today (and the motivations behind their present moves) is provided by a speech made by Raul Manglapus in the 1971 Constitutional Convention, endorsing the “Ban Marcos” resolution.
According to Manglapus, politicians began to consider abolishing the four-year term (with one possible re-election for another term) in 1949, because of the controversial elections of that year. By the 1960s, legislators were also keenly interested in two other Constitution-related proposals: first, that the membership of the House should be increased; and second, for elections to be synchronized to save time and money.
In 1967, fulfilling the provisions of the 1935 Constitution, Congress began sitting in joint session to consider these proposals, but no consensus could be reached on restoring a single six-year presidential term and on synchronized elections; there was agreement, though, to increase the number of representatives.
At which point, according to Manglapus, “someone said, ‘Since we cannot agree and we cannot keep on meeting in joint sessions because the public will demand that we cease this futile exercise, let us call a Convention.’”
But, Manglapus added, “the intention of course was that the Congressmen and the Senators were to control the Convention. And therefore when somebody said, ‘Let us call a Convention, anyway we can all be members of that Convention and we can control it,’ some other members of the House said ‘We cannot because we are inhibited by the present Constitution.’”
Clever colleagues proposed a solution: “All we have to do is amend the present Constitution at the same time that we pass the increase of seats in the House. We will say ‘However, a senator or congressman may be a delegate to the Constitutional Convention.’”
The problem was that any amendment had to be submitted to the people; Manglapus related that public opinion was disgusted with such a self-serving proposal, the result being “84 percent of them said ‘no.’ And the next morning the Senators and Congressmen woke up to find they had created a frankenstein monster. They had called a Constitutional Convention and they were not going to control it. And so they began to make noises that there was no need for the Convention, that [it] would be expensive… [and] cheaper and more convenient for the Senators and Congressmen to resume their work as a constituent assembly.”
Public opinion forced Congress to pass a Constitutional Convention Act, according to Manglapus, and deprived the political professionals of the fruits of victory twice over. Is it any wonder then, that when President Marcos offered a means—“constitutional authoritarianism”—to veto public opinion, that the political class, on the whole, decided it could live with martial law?
That option seems fairly remote today. The President is reported to be meeting with House members practically every other day: will it, can it, finally gamble on throwing caution to the wind and brazening it out? The only way it can is if Lito Lapid runs to the Supreme Court, or Oliver Lozano does, to provoke a manufactured constitutional crisis—with the payoff not necessary in the lifetime of the present Congress, but say, in the 15th, under the leadership of by-then Representative Gloria Macapagal-Arroyo of Pampanga.
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