[Captain.Remy]

Very interesting article I found due to my research for my International economics class:

For all the growing confidence that markets and leaders are expressing, the world is still a fragile place economically. Having covered the fastest growing economies 2010, we thought it would be timely to look at the worst economies in the coming year.

Many people were surprised at the top growth performers in the world economy, with less well-known countries like Qatar, Botswana, Azerbaijan, Republic of Congo and Angola leading the pack.

We are looking a different situation when looking at contracting countries. With one exception, all of the 12 worst countries in 2010 are in Europe, and the reason is pretty simple: the Financial Crisis - or Credit Crunch as it is known to some in the old world. We have gone from calling countries the Sick Man of Europe to calling Europe the Sick Continent of the World, just as Asia and Africa rise to the ascendancy.

It seems a bit harsh, since the crisis started in the subprime mortgage sector in the US, and then spread around the world. However, the scale of credit-related problems was larger for many European countries when compared to the size of their economy. America encouraged the world to follow its free-wheeling approach to debt leverage (going as far as to use Economic Hit Men).
This is a case of caveat emptor, or buyer beware. The US is far and away the largest economy in the world, has plenty of customers for its debt, and controls the US dollar which is still the world's main reserve currency, and will be for many years to come. Follow its advice at your peril, you don't have the security it has when things go wrong.

Here is the full table of the worst economic crashes in 2010:



Country Growth Rate
1. Ireland -3.0%
2. Lithuania -3.0%
3. Equatorial Guinea -2.828%
4. Latvia -2.035%
5. Montenegro -1.952%
6. Finland -1.238%
7. Estonia -1.045%
8. Bulgaria -1%
9. Germany -1%
10. Spain -0.714%
11. Netherlands -0.66%
12. Greece -0.6%

Take what is expected to be the worst economy in the world in 2010: Ireland. The former 'Celtic Tiger', expected to contract 3 per cent in 2010 and 8 percent in 2009, is now suffering in the way that the US should be, according to the Huffington Post.

In many ways, Ireland seems to be a microcosm of the United States, only with a Gaelic accent. However, sheer size and the status of the U.S. dollar as the world's reserve currency has delayed the full replication of what Ireland is currently experiencing. For that reason, what is occurring to the Irish economy in the present may be a window of what might soon lie ahead for the United States.

With a well-educated, English speaking and lower cost workforce plugged directly into the European Union, Ireland became a center for many industries, in particular tech. The new jobs reversed the centuries-old migration of Irish workers out of the country, and it became a net-importer of talent. As people and money flowed in, property prices boomed spectacularly. Irish Banks got rich financing this growth, became the dominant force in the economy, and in the relentless pursuit of profit gorged themselves on securities, including toxic assets from the US.

Now the economy is being hit both sides. The banks have come undone and have now been nationalised or have the government as major owners. As the world economy collapsed, exports plummeted, businesses have shut down and unemployment has rocketed. 12.5 percent of the population is out of work, and that number is expected to rise to 15 per cent in 2010. Whole areas of this once vibrant country have come ghost towns - and the people are angry. Yet another bailout is in the works, stoking more anger.

If approved by Parliament, which appears increasingly likely, NAMA would spend some $81 billion of taxpayer money to buy loans worth an estimated $70.5 billion at current market value. The so-called bad bank, as NAMA is sometimes called, will then manage the loans on behalf of the state for the next decade, by which time,the government assumes, the country's property market will have recovered. This assumption also explains the $10.5 billion markup in the sum to be paid for the toxic assets — a differencethe government says reflects the long-term economic value of the loans.

Lenihan says housing prices need only appreciate 10% over the next 10 years for NAMA to return a profit on its initial expenditure. But predicting what's around the corner is never easy — as Ireland knows only too well. According to NAMA's draft business plan, a "prolonged property market depression" or "sluggish economic growth" could result in the failure of the scheme. Despite the risks, proponents say it's the only way to ensure that Ireland's banks start lending again. But for residents bearing the brunt of the country's economic slump, NAMA is little more than an inflated bailout for the gambling debts of developers and the banks that fueled their folly.

Government debt has grown alarmingly. The budget deficit had been running at 14% of GDP. A second emergency budget was recently created, with a mix of tax increases and spending cuts aimed at bringing the deficit down to 10.75%. But even these austerity measures as the ratings agencies (desparately trying to save their own tarnished reputations) have downgraded the sovereign debt of Ireland. Standard & Poors have cut its AAA credit rating to AA+.

What does this mean?

Firstly, it means that the rating agencies believe that Ireland has underestimated the size of its problems - it now has the second highest level of household debt in the world, running at 190 percent. Secondly, it means that they believe the chance ofIreland defaulting on its debt has increased. Thirdly - and most importantly - it means that the borrowing costs for the Irish government will go up, since lending rates are closely tied to credit rates. This of course will only increase the deficit. And so the cycle of financial doom and destruction spins ever downward.

Challenging Ireland for the questionable honour of worst economy is Lithuania. It does not have the complexity of the securitisation markets to deal with, but in many ways its story parallels that of Ireland. It has built an export-oriented economy with a currency pegged to the Euro. Following record growth of 8.9 per cent in 2007, it slowed in 2008 and then plunged this year, withthe economy falling 9.5 percent in Q1 2009, and a full year drop of 10 percent expected, similar to the other two 'Baltic Tigers' of Latvia and Estonia, who have similarly dismal forecasts for 2010.

The 12 worst crashes feature similar stories of property busts (such as that in Spain) and export plunges (Germany).

The only exception to the European domination of the top 12 is Equatorial Guinea. Most people have never heard of it and would have a problem finding it on a map (a tiny dot on the west coast of Africa in case you are interested). It's story is a sad one of greed and corruption.

The few hundred thousand inhabitants of this country are subsistance farmers. Nothing much happened there until the mid nineties, when oil was discovered. In theory now it has the fourth highest GDP per capita in the world, but in practice the inhabitants are still extremely poor while the President Obiang Nguema and his friends and family enjoy lavish lifestyles.

Once again, the US is complicit. There are direct flights between the capital Malabo to Houston Texas, center of the us oil industry. In 2004, a US senate report found that Riggs Bank was guilty of helping officials embezzle hundreds of millions of dollars. And then there was the coup attempt, where plotters including Sir Mark Thatcher, son of the former British Prime Minister Margaret Thatcher, were found guilty and in many cases sent to prison for an attempted coup. They claimed it was to spread the wealth, but it was much more likely that they wanted to replace Nguema and take over his palaces, planes and plantations for themselves.

Meanwhile, what should be a wealthy nation struggles with gross misuse of power and the economy suffers.

And although the means and methods vary considerably, that means that the story of Equatorial Guinea is not as different as it first seems from Europe, the Sick Continent of the World ...

http://www.economywatch.com/economy-...010-11-11.html

Do you agree ? And why ?

[Princess]

That article looks full of stuff I'd have no clue about. I just know everything is very expensieve and I can't get a job anywhere!

[Iceman]

Lisbon Treaty, Nama, that's all that needs to be said. I agree with the majority of the article but to conclude that it's the worst in the world is a bit out there.

[30stone]

Highest quality of life, yet worst economy lol.

[Iceman]

Also the part about tech is very true with companies such as IBM not havinf to pay **** all for the land they used....wont be there much longer!!!

[Niamh.]

Originally Posted by 30stone

Highest quality of life, yet worst economy lol.

leave our country alone you!!

[Iceman]

To be honest im quite happy about having the higehst quality of life and worst economy, rather be happy and ****ed rather than sad and ****ed!lol

[MrGaryy]

Perhaps not the worst in the world but the economy is in a very poor state at the minute from what I hear. Something like 14.2% of the working population are unemployed and the government has said they need about 14 billion to balance out everything at this moment in time :/

No doubt Britain is not too far behind though.

[Iceman]

Originally Posted by MrGaryy

Perhaps not the worst in the world but the economy is in a very poor state at the minute from what I hear. Something like 14.2% of the working population are unemployed and the government has said they need about 14 billion to balance out everything at this moment in time :/

No doubt Britain is not too far behind though.

24 billion!

Yesterday because we had 250000 people strike we managed to save 100 million in pay! I say let them strike more often and Ireland will save bucket loads!

[MrGaryy]

Originally Posted by Schumacher

24 billion!

Yesterday because we had 250000 people strike we managed to save 100 million in pay! I say let them strike more often and Ireland will save bucket loads!

100 million, my god. If thats all it takes, strike away. But yeah when I ehard about them needing that much money, I was like 'UMG is there even that much money in existence?!' LOL

[my parents are both Irish so I hear all this stuff from them. I don't have just a particular random interest in Ireland's economy LOL.]

[Iceman]

Originally Posted by MrGaryy

100 million, my god. If thats all it takes, strike away. But yeah when I ehard about them needing that much money, I was like 'UMG is there even that much money in existence?!' LOL

[my parents are both Irish so I hear all this stuff from them. I don't have just a particular random interest in Ireland's economy LOL.]

It's crazy I say we all have a 2 week holiday we'll save loads!

24 billion is ridicolous though, I blame Bertie Ahern and Brian Lanihan and anyone who voted yes to the lisbon treaty.

[MrGaryy]

Lisbon treaty... that as that agreement that essentially gave up all of Ireland's say in decisions in the EU, yeah?

[Iceman]

Originally Posted by MrGaryy

Lisbon treaty... that as that agreement that essentially gave up all of Ireland's say in decisions in the EU, yeah?

Yeah, now all of Europe has agreed to it, only good thing is Tony Blair wasn't elected president of Europe.....other than that it just a screw to Neutral countries like ourselves....

ah well if the **** hits the fan ill move, until then im pretty stable moneywise and know that I could get a job if i wnated one, it's just be 4 hours away from where i live and i dont wanna move yet!

[MrGaryy]

Tony Blair president of Europe... dear God!

haha, sounds like you're set for now then!

[Iceman]

Originally Posted by MrGaryy

Tony Blair president of Europe... dear God!

haha, sounds like you're set for now then!

thank god he didnt get the job, all of europe and USA v Iraq and N Korea = not good.

yeah for now, ill be moving their hopefully by June, I wanna make sure things are set up here first before i leave....

[arsenalforever]

Originally Posted by Princess

That article looks full of stuff I'd have no clue about. I just know everything is very expensieve and I can't get a job anywhere!

thats the probelm
they need to get jobs flowing but as long as peopel from other countries come over here and work for pennies i doubt you get a job

[Stu]

Originally Posted by arsenalforever

thats the probelm
they need to get jobs flowing but as long as peopel from other countries come over here and work for pennies i doubt you get a job

Half of them have fucked off back home, realising they're home country is probably in better shape than Ireland right now.

We can't really blame anything on the darkies or the poles anymore. It's not that easy.

[arsenalforever]

Originally Posted by Stu

Half of them have fucked off back home, realising they're home country is probably in better shape than Ireland right now.

We can't really blame anything on the darkies or the poles anymore. It's not that easy.

your probably right i haven't seen a lot around these days

[Patrick]

Originally Posted by Schumacher

To be honest im quite happy about having the higehst quality of life and worst economy, rather be happy and ****ed rather than sad and ****ed!lol

[Captain.Remy]

Thank you guys for the reactions, I needed it for my Business English presentation I have to do on Thursday.