Crisis Communications: Best Practices for Incidents and Events
World Economic Crisis - Home - Events & Action
Transcript of World Economic Crisis - Home - Events & Action
![Page 1: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/1.jpg)
World World Economic Economic
Crisis:Crisis:Implications for Implications for
South AfricaSouth Africa
����������� ��������������������������
���������������������������
��� ���������!�����
����������������������������������
"�����"�����#���#���$������$������
���������������� ����������������#�������������#�������������
%������ ��&�%������ ��&�
'�(���)**+'�(���)**+
![Page 2: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/2.jpg)
"�� ������������������
�������������������������)*������• $���������������
• $���������������• $�������������
source: US Fed, Gagnon, 2009
![Page 3: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/3.jpg)
"�� ������������������
���������������������• �������,��
• �����&������������• ������������������������������
source: US Fed, Gagnon, 2009
![Page 4: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/4.jpg)
![Page 5: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/5.jpg)
1) 1) Underlying Underlying capitalist capitalist
crisis crisis tendenciestendencies
![Page 6: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/6.jpg)
Background:Stagnant
global real annual GDP
growth, 1970-2008
Source: IMF Global Financial Stability Report
…apparent 2000s uptickbut per capita growth declined since 1960s…
2008
… longer term cause of 2008 financial bubble…
![Page 7: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/7.jpg)
-��.��������������/ ������0�����������������&� ���������
�����&�&� ��������1��������������� ���
US corporate profits derived much less from manufacturing products;much greater sources of profits came from abroad;profits also came more from returns on financial assets.Source: Gerard Dumenil and Dominique Levy
![Page 8: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/8.jpg)
because of overinvestment, a
subsequent investment drought from early
1980s(late 1990s was mainly IT, especially software)
(source: John Bellamy Foster and Fred Magdoff, 2009)
2���������� �� �����������������
![Page 9: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/9.jpg)
overaccumulation of capital remained
through 1980s-2000s(source: John Bellamy Foster and Fred
Magdoff, 2009)
![Page 10: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/10.jpg)
2) 2) Financial Financial
bubbling as bubbling as mode of mode of
crisis crisis managementmanagement
![Page 11: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/11.jpg)
&������(��3������� �� �����/������������������
4���5�������2������������6�������5�������
���4���-��������6������(����5�������
![Page 12: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/12.jpg)
US economy becomes debt-addicted from
early 1980s(source: John Bellamy Foster and
Fred Magdoff, 2009)
![Page 13: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/13.jpg)
US corporate profits become finance-
addicted in mid-1980s(source: John Bellamy Foster and
Fred Magdoff, 2009)
![Page 14: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/14.jpg)
‘hollowing corporations’from mid-1980s
(source: John Bellamy Foster and Fred Magdoff, 2009)
![Page 15: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/15.jpg)
3) 3) Volatility: Volatility: financial financial bubbles bubbles
start start bursting bursting
![Page 16: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/16.jpg)
Stock market crashes,pre-2008
… leading to speculation
and then vast devaluations
of Western finance even before 2008…
![Page 17: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/17.jpg)
Volatile $ flows into US stock market, 1990-2008
Source: International Monetary Fund Global Financial Stability Report
… e.g. $7 trillion devaluation in even New York, 2000-02…
![Page 18: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/18.jpg)
Stock market volatility: emerging markets
Source: International Monetary Fund Global Financial Stability Report
… smaller stock markets in middle-income countries
especially prone to boom/bust during late 2000s …
![Page 19: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/19.jpg)
Volatility inexorably worsens
(source: Unctad 2009)
![Page 20: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/20.jpg)
4) 4) Critical Critical mass of mass of financial financial
devaluation devaluation
![Page 21: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/21.jpg)
Short-term gut reaction: flight to ‘stability’ –
US government bonds…how long can this madness last?!...
Source: IMF
![Page 22: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/22.jpg)
Short-term gut reaction: run from the
emerging markets
Source: UNCTAD
![Page 23: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/23.jpg)
Stock market volatility: all markets in ‘08
Source: Unctad
… widespread, dramatic loss of paper wealth
![Page 24: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/24.jpg)
Housing devaluations:
Change in prices,
Jan 2007-July 2008
Source: IMF, World Economic Outlook,October 2008
…and the bursting of the bubble began in the US, Japan, Denmarkand Ireland in 2007…
![Page 25: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/25.jpg)
Commodity devaluations:
Change in prices, July – December 2008…particularly devastating for African countries
addicted to export-led extractive-industry ‘growth’…
Source: Unctad, The Global Economic Crisis, May 2009
![Page 26: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/26.jpg)
US and European banks, insurers
Devaluation of banks and insurers…vast financial sector write-offs…
Source: IMF, Global Financial Stability Report, April 2009
![Page 27: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/27.jpg)
US and European banks
Devaluation of commercial loans
Source: IMF, Global Financial Stability Report, April 2009
…to levels last seen in the early 1930s…
![Page 28: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/28.jpg)
$�&������������ ����������������7 ������������������������89)*�8+++
������&��� ���������������89:*���899*������8+:*����������������������;������&����������8+9*��+*���������������.������������&/<2(61#� �������������������������=�������>����������� ��0�2(61#�������������������������?�������������� �������������� ���� ����� ���������������������� ����� ��!�
![Page 29: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/29.jpg)
5) 5) Real sector Real sector
devaluation of devaluation of overover--
accumulated accumulated capital?capital?
![Page 30: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/30.jpg)
Crash of GDP, industrial production and FDI
… vast implications for the ‘real sector’ too…
Source: The Economist
![Page 31: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/31.jpg)
Keynes, PLEASE HELP!
… note that North is allowed to do deficits, but South is discouraged…
![Page 32: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/32.jpg)
@ ��� ���������$��������������4���,��������������A����� B ��
����������C
![Page 33: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/33.jpg)
A�����/� ��������������&��������
VOLCKER SHOCK
“Volcker was selected [as Fed chair in 1979] because he was the candidate of Wall Street. This was their price, in effect.” – Jimmy Carter’s domestic policy advisor Stuart Eizenstat
Source: Gerard Duminil and Dominique Levy
![Page 34: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/34.jpg)
6) 6) South South
AfricaAfrica’’s s story:story:
A mirror of A mirror of the USA the USA
![Page 35: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/35.jpg)
�!�������������������������������������
����������� ������
6����������� ����������
![Page 36: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/36.jpg)
2�����������������������������&�����0� �����!�"�-�)**:
"�&�����.����/ ���������!/��������������
-������������������������3����&����������(�����8++D
![Page 37: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/37.jpg)
�!�������������� ��������������������������� ������������&�
Source: IMF
![Page 38: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/38.jpg)
Credit card and home mortgage bond‘non-performing loans’ soar since early-2007
Source: IMF Executive Board Article IV Consultation, October 2008
![Page 39: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/39.jpg)
�!� �����&�����������&�������/����&�����<����������E������8++F�)**D>
Source: ABSA Bank testimony to Competition Commission
![Page 40: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/40.jpg)
2��E����������������������8++:�)**F���4���������,����������������
![Page 41: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/41.jpg)
Investment reactions: capital strike
Capital escapes to
London
Investment reactions: capital strike
SA’s biggest firms moved offshore, many after getting permission byTrevor Manuel to relist financial hq on London Stock Exchange
Anglo American, DeBeers, Old Mutual, SA Breweries, Didata (following Gencor, Liberty Life)�
![Page 42: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/42.jpg)
Biggest property bubble: 389% increase, 1997-2008
…fifth currency crash since 1996…
![Page 43: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/43.jpg)
���������0������������<��3�0�������������&��������������������>�
![Page 44: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/44.jpg)
#������&�����������������������&��������������������������������������&�����&�������<����&��&�����������������������1,��>�
�����0�2(6�!�������G�5�����������91*'
![Page 45: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/45.jpg)
5�������������������������������������������1�����1���������������
![Page 46: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/46.jpg)
The Economist, 25 Feb 2009
SA is world’s most risky emerging market, #1 of 17
![Page 47: World Economic Crisis - Home - Events & Action](https://reader036.fdocuments.net/reader036/viewer/2022071602/613d5018736caf36b75bd7c2/html5/thumbnails/47.jpg)
Result: a wave of social protestsResult: a wave of social protests(recorded by SA Police Service)(recorded by SA Police Service)