World Economic Forum 2011 – Davos, Switzerland

January 28, 2011

By Padmini Arhant

The world economic forum is currently held in Davos, Switzerland. Many issues apart from the economy are discussed at this large consortium.

Economy is the priority for the population struggling with high unemployment, housing market decline from foreclosures in addition to credit crunch experienced by potential home buyers and small businesses alike.

The bank bailouts to eliminate toxic assets off the balance sheet and facilitate lending has been mostly utilized for mergers and acquisitions with ‘too big to fail’ status intact – the precise factor that prompted taxpayer funds interjection into the crumbling finance industry.

Corporate profits across the industrial spectrum are exceedingly high not barring financial institutions yet the jobless rate and liquidity in the credit market is stagnant exacerbating the ordinary citizens’ plight.

Manufacturing sector is drastically affected in the globalized economy. The developed and developing nations are confronted with reviving blue collar jobs desperately required to ease suffering among the working class.

Corporations incentivized with generous tax cuts, taxpayer funded capital infusion and labor unions suppression continue to venture overseas in search of mega profits ultimately shared among top management through huge bonuses while depriving the hard working majority the livelihood.

The offshore dealings might be lucrative for the corporate shareholders and the respective governments with foreign exchange reserves, the labor force over there are marginalized in terms of comparable wages and employment benefits.

Again factory workers in poorer nations are often exploited under harsh economic and political conditions attributed to multinational dominance in the regions receptive to foreign investors.

Environment abuse in the globalization era has been catastrophic for the poorest people living near the industrial sites.

The weak environment standards maintained predominantly to accommodate energy, pharmaceutical…industries’ policies in the developing nations are proved detrimental to the local residents diagnosed with serious health problems.

In the industrialized world, the lower income groups are exposed to health hazards emanating from chemical industrial waste and oil spills witnessed lately with pervasive impact on all living species.

Therefore the corporate ethical conduct in the domestic and international operations deserves attention with effective remedies to restore meaningful capitalism and globalization pursuit.

Inflation is a legitimate concern without having to raise interest rates in borrowing given the real estate slump and limited credit availability having a stranglehold on the national economies.

In order to increase supply to the growing demands of any goods as an alternative inflation control measure – the businesses need finance in the prevalent restricted credit facilities and the banks with capital have responsibility to lend qualified entrepreneurs thereby promoting job growth, consumer spending and investor confidence – all relevant to stimulate the global economy.

The bankers’ claiming the existing credit control is the result of the regulatory imposition in the wake of sub-prime and hedge fund mis-management does not bode well,

Since they could not apply to all financial products that could otherwise paralyze the credit networks representing the fundamental economic source.

Sound monetary policy allowing responsible money circulation and the currency value determined by market forces rather than arbitrary means could prevent currency devaluation disputes and trade wars contributing to disproportionate surpluses and deficits among economic powers.

Fiscal policy is focused on deficit reduction through austerity mainly targeting programs like health and education for the most vulnerable demographics.

Denying affordable educational access to present generation is prohibiting better economic future made possible with qualified efficient workforce and taxpayers in the competitive global settings.

Spending cuts in alarming defense expenditure and redundant wasteful projects instead of life dependent programs and services could produce desirable results in debt containment besides a healthy productive society benefitting all.

Generating revenue in the absence of tax hikes on the extraordinary income derived from the collective input distributed within privileged members in the society is evidently counterproductive for it escalates national debt other than widening the gap between the rich and poor.

Economic activities for growth stimulus are largely related to melting the liquidity freeze to enable cash strapped small businesses, retailers and manufacturers create jobs.

Resuming lending services to home buyers upon satisfying the eligibility criteria and refinancing options to help default home owners retain their property instead of losing in foreclosures with a negative impact on the national housing sales including the construction industry is guaranteed to expedite recovery.

Transparency in derivatives with mortgage securities identified as the primary cause in the 2008 financial market brink of collapse would build trust in the international security exchange.

Interest rates, transaction fees on credit cards and regular bank accounts still remain exorbitant despite the regulation passed to curb practices that led to phenomenal debt accumulation and bankruptcies in the United States.

Failure in adherence to legislation on predatory methods has no consequences with the banks conducting business as usual delineating Wall Street from Main Street.

The reforms in general are circumvented due to loopholes in the legislation and the political clout displayed with industry lobbyists winning $19 billion tax exemptions in financial reform, no premium caps in health care law, offshore drilling permits…confirming Wall Street control over U.S. political election and legislation.

Investments in infrastructure, green energy, innovative research and development in science and technology is paramount in the protectionist aspect.

However, there is no momentum in expediting projects perhaps due to inadequate funding and/or political reasons.

The industrialized and emerging economies pledge to the developing nations has not been delivered in action on the economy and environment that could essentially alleviate poverty, hunger and disease endured by many across the globe.

Political instability arising from oppression i.e. lack of freedom and individual rights is prompting citizens’ protest against repressive governments sheltered until now with diplomatic ties and trade relationships by powerful ‘democracies.’

Civilian uprising in Egypt and Yemen reveal the breaking point in public frustration towards
authoritarianism. Political independence in these countries is long overdue.

The overthrown government heads of the state are provided refuge as seen with Tunisian former President Ben Ali received by Saudi Arabia.

These events are indicative of the established complacency to undemocratic elements disrupting political, economic and social progress.

United States, France and Saudi Arabia were reportedly involved in Lebanon’s recent political fallout disabling government services in the sovereign nation.

Reluctance to expand U.N. Security Council permanent membership in acknowledgment of twenty first century geopolitical dynamics is an impediment to world peace. The ongoing polarization efforts foment terrorism and militancy used as the perpetual warfare premise.

Hence international solidarity exemplified in rejecting the status quo is imperative for fair distribution of global resources, honoring individual liberty, political rights, social equality ultimately leading to universal economic prosperity.

World economic forum is a unique opportunity to resolve myriad humanitarian challenges through constructive dialogue and powerful strategies for a new peaceful beginning.

Wishing a successful economic summit in Davos, Switzerland.

Thank you.

Padmini Arhant


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