Collapse of the Global Economy
Financial Crisis "Has Destroyed 40 Percent of World Wealth"
January 30, 2009George Washington Blog - At the World Economic Forum in Davos, it was revealed that Forty Percent of the World's Wealth has been destroyed by the financial crisis so far...
Russian Banks Ask for Gov't Cash as Crisis Grips
January 30, 2009Reuters - Germany said on Thursday it may let lenders set up 'bad banks' to warehouse toxic assets and ease the grip of the financial crisis while Russia's financial heavyweights called for capital from the state.
The collapse in financial markets has eaten into banks' profits, while the economic slowdown has pushed up the number of bad loans, forcing many to turn to their government for help. Russia has unveiled a $200 billion rescue package for the economy...
Shell Reports $2.81 Billion Loss in Fourth Quarter
January 29, 2009AP - Royal Dutch Shell PLC, Europe's largest oil company, said Thursday it swung to a net loss of $2.81 billion in the fourth quarter, as the price of oil fell sharply and it wrote down the value of inventory. In the same period a year earlier, Shell had $8.47 billion in net profit.
The company said fourth quarter sales fell 24 percent to $81.1 billion. Crude production was down less than one percent to 3.42 million barrels per day, but Shell's selling price fell 29 percent to $58.40. Chief executive Jeroen van der Veer called the results "satisfactory...given the pressure on demand for oil and gas due to a weaker global economy."
The company's refining division, where the inventory was written down, booked a heavy loss of $6.42 billion compared with a profit of $2.56 billion a year earlier...
Britain Announces 2nd Banking Rescue Plan
January 19, 2009AP - Britain announced a second rescue plan for the country's ailing banks on Monday, hoping to thaw frozen lending by offering to insure banks against large-scale losses on bad assets they already hold.
London's stock market, however, was spooked by fears that the latest government move was a step toward full nationalization of one or more banks. Fears focused on the Royal Bank of Scotland, which disclosed that it is likely to report a record full year loss — its shares were down 66 percent by afternoon. RBS said its losses for the full year could be as much as 28 billion pounds ($41.3 billion), which would be the biggest loss ever by a British corporation.
Prime Minister Gordon Brown said on Monday that the government has increased its stake in RBS to almost 70 percent, but declined to say whether he believed the bank will eventually be fully nationalized...
Half of Europe Locked in Depression
January 18, 2009Telegraph - Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch. Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.
A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece's social fabric is unravelling before the pain begins, which bodes ill. Each is a victim of ill-judged economic policies foisted upon them by elites in thrall to Europe's monetary project – either in EMU or preparing to join – and each is trapped...
Europe had "Catastrophic" 4th Quarter
January 18, 2009Reuters - The European economy is sliding deeper into recession and the fourth quarter of last year was "catastrophic," European Union Industry Commissioner Guenter Verheugen said on Sunday. "The figures the European Commission will present next week will, unfortunately, show that we have slipped deeper into recession," Verheugen told German radio DeutschlandFunk. "The last quarter of 2008 was catastrophic in every respect..."
2008 In Review: 'Once-In-A-Century' Financial Crisis Hits Markets Worldwide
December 24, 2008Radio Liberty - Although the first big signs of trouble began to emerge last summer, 2008 was the year the financial crisis would go truly global, knocking the economies of the United States, Europe, and Japan into their first simultaneous recession since World War II.
In 2008, terms like "credit crunch," "fiscal stimulus," and the one that started it all -- "subprime" -- would become part of everyday language. As early as January, U.S. authorities recognized the economy needed a health check. But President George W. Bush's words as he pushed for a fiscal stimulus package were still confident.
"We can provide a shot in the arm to keep a fundamentally strong economy healthy, and it will help economic sectors that are going through adjustments, such as the housing market, from adversely affecting other parts of our economy,” Bush said.Unfortunately for the United States, and for countries around the world, that housing market adjustment would indeed have startling adverse effects.
“The time of domination by one economy and one currency has been consigned to the past once and for all." -- Russian President Dmitry MedvedevThe crisis had its roots in the market's subprime section. Too many people had taken out home loans beyond what they could afford to pay back. When they began to default in large numbers, lenders began to collapse. Banks posted huge losses on complex securities linked to those subprime mortgages. This in turn led banks to become more reluctant about lending money to businesses and each other...
U.S., UK Housing Slump Deepens, Economic Woes for Japan
December 24, 2008NYTimes - Bleak housing data showed the United States and Britain were sinking deeper into recession and authorities from Washington to Tokyo worked hard to spend their way out of the worst downturn in decades. Japan's government on Wednesday approved its biggest-ever budget to revive its economy while U.S. President-elect Barack Obama sought to clinch a deal with congressional lawmakers on a massive stimulus package even before the Christmas Day.
A record drop in U.S. existing home sales and prices last month reported on Tuesday showed the world's biggest economy was on track for what one Federal Reserve official said could be the longest downturn since the World War Two. Housing is at the root of the year-long U.S. slump and the global malaise and economists expect the economy to decline much more in the current quarter after a 0.5 percent contraction in the third quarter. Britain, the world's fifth-largest economy, is in an equally dire shape. The Royal Institution of Chartered Surveyors said house prices were set to fall by 10 percent next year, confirming the bleak outlook after Tuesday's data showed the economy shrinking by 0.6 percent in the third quarter...
Toyota Projects First Operating Loss Since 1941
December 22, 2008Chron.com - Toyota Motor Corp. projected its first-ever operating loss since it began such reports, acknowledging Monday that its nine-year stretch of global vehicle-sales growth had stalled.
Crashing auto demand, especially in its key U.S. market, and the profit erosion from a surging yen proved too much for Japan's top automaker, which had been booming on the success of its fuel-efficient models, including the Camry sedan and Prius gas-electric hybrid.
Gloom dominated the annual news conference by Toyota's president, who in recent years had outlined ambitious expansion plans. This year, Toyota President Katsuaki Watanabe even refused to give a worldwide vehicle sales goal for 2009.
"The tough times are hitting us far faster, wider and deeper than expected," he told reporters at Toyota's Nagoya office. "This is an unprecedented crisis requiring urgent action."Watanabe also blamed the strong yen, which has risen to 13-year highs against the dollar to about 90 yen recently.
Toyota lowered its net profit forecast to just 50 billion yen ($555 million) for the year through March 2009 — a tiny fraction of the 1.7 trillion yen it earned the previous fiscal year. Toyota expects to lose money on an operating basis of 150 billion yen ($1.66 billion) for the fiscal year ending March 2009. Toyota has never reported an operating loss since it began giving such figures in 1941. The only such loss it has had is an internal calculation for the year ending March 1938, a year after the company was founded. Operating income reflects a company's core business performance. Last fiscal year, Toyota had a whopping operating profit of 2.27 trillion yen.
Toyota also lowered the number of vehicles it expects to sell globally this calendar year to 8.96 million, down 4 percent from a year ago. Earlier this year, Toyota had expected to sell 9.5 million vehicles around the world in 2008...
IMF Warns of 'Disturbing' UK Debt
December 21, 2008BBC - The level of debt in the UK is "disturbing," the head of the International Monetary Fund has said. But Dominique Strauss-Kahn told the BBC that given the severity of the economic downturn, more government borrowing was the lesser of two evils.
Mr Stauss-Kahn was responding to a BBC question about it being easier to get insurance against McDonald's defaulting than UK government bonds. He said 2009 would be "a really bad year" and society was going to suffer.
Public debt has risen to £650bn - 44.2% of UK gross domestic product. Consumer debt is more than £1.4 trillion. In last month's pre-Budget report, the chancellor announced plans for a £20bn economic stimulus package, which would bring public debt close to 50% of GDP.
Shaun Ley, of BBC Radio 4's The World This Weekend, asked Mr Strauss-Kahn: "Markets seem to have made their own judgements about this: it is cheaper to get insurance against big multinationals like BP and McDonald's defaulting than it is to get insurance against UK government bonds going under. That is quite disturbing, isn't it, when a country is viewed in that way?"
"Yes, it is," Mr Strauss-Kahn said. "That is a good example of the fact that we are facing something which is almost unknown." He said governments around the world had no choice but to step in and spend more. "I'm specially concerned by the fact that our forecast, already very dark... will be even darker if not enough fiscal stimulus is implemented," he said. "The threat is that big today that I think that between two different problems, increasing deficit - which is never good - and fighting against recession - which is even worse - we have to choose the less bad solution."He added that measures announced by the G20 group of leading industrial countries last month may not be sufficient to revive the global economy.
Interest rate cuts would not do enough and governments had to use fiscal stimulus, he said. It would take a spending package equivalent to about 2% of global GDP - about $1.2 trillion (about £800bn) - to make a real difference, he said. "The problem is that all the whole society is going to suffer," he added.
World Markets Mixed after Fed's Historic Rate Cut
December 17, 2008AOL Money - Asian stocks markets climbed Wednesday after the U.S. Federal Reserve slashed its key interest rate to historic lows in an effort to pull the world's largest economy out of recession. But enthusiasm was tempered by a mix of lingering worries about the U.S. economy and a weakening dollar — which could add to the woes of Asia's exporters.
Asian bourses opened higher after the U.S. central bank announced a steeper-than-expected 0.75 percentage point cut to its target rate for overnight loans between banks to a range of zero to 0.25 percent. The Fed also promised to use "all available tools" to heal the U.S. economy.
The central bank's bold actions surprised Wall Street — most analysts expected a 0.5 percentage point cut — and raised hopes of lower interest rates and cheaper money across Asia. Hong Kong's central bank slashed rates as a result, and speculation mounted of further easing from the Bank of Japan.
"Every central bank is pumping loads of liquidity into the markets and this is very positive for the markets," said John Mar, co-head of sales trading, Daiwa Securities SMBC Co. in Hong Kong...
Fed Cuts Key Interest Rate to Near Zero
December 16, 2008CNN Money - The Federal Reserve has slashed its target interest rate to nearly zero and is taking a number of other unprecedented moves in an effort to battle a severe financial crisis and worsening recession. Consumers trying to buy a house or finance a car loan could be the big winners, but analysts caution that any upturn in the economy is still months away.
The Fed on Tuesday announced that it was reducing its target for the federal funds rate to between zero and 0.25 percent, down from 1 percent, a level that was already the lowest target rate in a half century. And the central bank pledged to use "all available tools" to fight the current downturn. It said it was likely that rates would be kept at "exceptionally low levels" for some time to come...
"The Fed has decided to flood the economy with money in the hopes that it will be lent and spent," said Sung Won Sohn, an economist at the Martin Smith School of Business at California State University, Channel Islands...If the recession ends next June, as some economists are forecasting, it will have lasted 18 months, making it the longest downturn since the Great Depression.
World Markets Plunge as U.S. Auto Bailout Fails
December 12, 2008CFTKTV News - World stock markets plunged Friday as the U.S. Senate's rejection of a $14 billion deal to rescue Detroit's ailing automakers stoked concerns that the recession in the world's largest economy will be even longer and deeper than projected...
Investors were rattled after the bailout for Detroit's struggling Big Three automakers failed in the U.S. Senate. The collapse came after bipartisan talks on the auto rescue broke down over Republican demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with U.S. plants of Japanese carmakers.
The bankruptcy of any of the big American automakers would deal another blow to the world's largest economy, already in recession. Hopes for the U.S. auto industry now appear to rest with President George W. Bush agreeing to tap the $700 billion Wall Street bailout fund, or TARP, to aid the carmakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain...
Mainland China's stock market fell as investors were discouraged by the lack of any major new initiatives to spur the economy following a top-level economic conference earlier in the week. Figures this week show that China's economy is feeling the pinch of the global slowdown. For the first time in seven years, exports fell in November.
Investors also grappled with grim U.S. economic and corporate news. New unemployment benefit applications in the week ending Dec. 6 rose to a seasonally adjusted 573,000 from an upwardly revised figure of 515,000 in the previous week. And Bank of America Corp. announced it expects to cut 30,000 to 35,000 jobs over the next three years.
Markets had rallied after President-elect Barack Obama last weekend proposed a massive stimulus package for the U.S. economy once he takes office in late January, pledging the largest public works program since the creation of the U.S. interstate highway network a half-century ago...
Economic Crisis: U.S., China and the Coming Monetary Storm
December 9, 2008Asia News - The massive levels reached by the foreign debt of the United States and the excessive and unjustified devaluation of China’s yuan are two high risk factors for the world economy and stability. Solutions found so far may be useful for financial institutions but not for the population. A “transnational” oligarchy is emerging that includes central banks, the Chinese Communist Party, Russia’s oligarchies and oil sheiks.
After the crises in subprime lending, the banking sector and the stock market, the same tsunami is sending a new tidal wave that could crash against the dollar and the Euro but also against China and Asia, Eastern Europe as well other emerging nations.
This view does not fit well with the agreement reached in Washington by G-20 heads of government and heads of state whose countries represent almost 90 percent of the world Gross Domestic Product (GDP). In the U.S. capital the leaders of these countries pledged not to erect new trade barriers. In their view globalisation must not stop; we should not return to protectionism, making the same error made in the 1929 crisis. However, such a unanimous consensus seems more lips service to an idea than any actual meeting of the minds. In reality the development of globalisation has been based on an unbalanced economic model. Until now it has relied on controlling monetary emission and non tariff barrier protectionism. The coming monetary storm will thus be a violent and dangerous rebalancing act of the system of international exchange...
Breakdown of the Global Monetary System By Summer 2009
December 2, 2008Global Research - The G20-meeting held in Washington on November 14-15, 2008, is in its essence a historical indicator that the Western - above all Anglo-Saxon - monopoly on global economic and financial governance is coming to an end.
Nevertheless, according to LEAP/E2020, this meeting also clearly demonstrated that this kind of summits is doomed to inefficiency because they concentrate on curing the symptoms (banks’ and hedge funds’ financial difficulties, derivative markets’ explosion, financial and currency markets’ dramatic volatility, etc.) rather than the fundamental root of the current crisis; i.e. the collapse of the Bretton Woods system based on the US Dollar as sole pillar of the global monetary system.
Without a complete overhaul of the system inherited from 1944 by summer 2009, the failing of the current system and that of the United States at the center, will lead the whole planet to an unprecedented economic, social, political and strategic instability, and more specifically to a breakdown of the global monetary system by summer 2009.
In light of the technocratic jargon and calendar of the declaration released after this first G20-meeting (totally disconnected from the speed and scope of the unfolding crisis), it is more than likely that the disaster will have to happen for the fundamental problems to be seriously addressed and for the beginning of a reply to be initiated.
Four key-factors are now pushing the Bretton Woods II system to collapse in the course of the year 2009:
- Fast weakening of the central players: USA and UK.
- Three visions of the future of global governance will be dividing the world’s largest players (United States, Eurozone, China, Japan, Russia, Brazil) by spring 2009.
- Unbridled speeding-up of the last decade’s (de-)stabilizing processes.
- Increasing number of more and more violent backlashes...
Financial Disaster Will Lead to Civil Disorder in 2009 or 2010, Says Secret Citibank Memo
November 28, 2008Natural News - An internal memo from a top Citibank analyst reveals what the banks really think about the global financial situation, and the outlook is grim. "The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed through into an inflation shock," wrote Tom Fitzpatrick, Citibank's chief technical strategist.
He goes on to explain that the massive money creation efforts by the Federal Reserve and other central banks will end with one of two things: a resurgence of inflation or a fall into "depression, civil disorder and possibly wars." Either outcome, he says, will cause the price of gold to skyrocket. Gold will push to well over $2,000 per ounce, he explains.
The timing on all this? Sometime in either 2009 or 2010, said the analyst. This coincides with predictions I've made here on NaturalNews.com, where I've publicly predicted price inflation of 20% - 40% in 2009, and the financial collapse of the United States government (sometime before 2025) due to an irreversible debt burden.
I've also predicted that when the people wake up and realize their dollars have been looted by the Treasury and turned into worthless pieces of paper, there will be riots in the streets. These events have already been set into motion. It is now only a matter of time until they bubble to the surface. On the day the mainstream taxpayers actually figure all this out, don't be caught out in public. Stay home.
Citigroup Says Gold Could Rise Above $2,000 Next Year as World Unravels (Secret Memo)
November 27, 2008Telegraph - Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.
The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before. This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.
"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist. "The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock. Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said.
"This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised."
"What happens if there is a meltdown in a country like Pakistan, which is a nuclear power. People react when they have their backs to the wall. We're already seeing doubts emerge about the sovereign debts of developed AAA-rated countries, which is not something you can ignore," he said.Gold traders are playing close attention to reports from Beijing that the China is thinking of boosting its gold reserves from 600 tonnes to nearer 4,000 tonnes to diversify away from paper currencies.
"If true, this is a very material change," he said.Mr Fitzpatrick said Britain had made a mistake selling off half its gold at the bottom of the market between 1999 to 2002. "People have started to question the value of government debt," he said.
Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009. Gold was trading yesterday at $812 an ounce. It is well off its all-time peak of $1,030 in February but has held up much better than other commodities over the last few months – reverting to is historical role as a safe-haven store of value and a de facto currency.
Gold has tripled in value over the last seven years, vastly outperforming Wall Street and European bourses.
Citigroup Collapses! Banking Shutdown Possible
November 25, 2008Global Research - Few people were interested in bank ratings; they blindly assumed all banks were safe. And over the years, regulators have followed a parallel path. Rather than proactively restrict or shut down the weakest, large institutions, they have encouraged their massive growth, making it very difficult for the smaller, safer institutions to compete.
More recently, in the wake of the biggest financial failures in history — Bear Stearns, Lehman Brothers, Washington Mutual, Wachovia and others — rather than liquidate the failed firms’ bad assets, the authorities have been engineering shotgun mergers. The end result is that they have been sweeping most of the bad assets under the carpet of larger banks like Bank of America, Citigroup, and JPMorgan Chase, each of which already had abundant bad assets of its own.
Adding insult to injury, Treasury Secretary Paulson’s decision this month — not to buy up the bad assets from many of these banks — has only heightened this concern. Rather than dispose of the toxic waste, the regulators have been rolling up the garbage to the larger banks.
And now, here we are, nearing the end of the road with the largest banks of all endangered and with no larger bank that can swallow them up. It’s a day of reckoning that leaves me no choice but to issue this three-part warning:
- Despite the U.S. government’s massive Citigroup bailout, it is going to be difficult for the global banking system to survive the shock to confidence for very long.
- Even if insured depositors do not pull out their funds, uninsured institutional investors are likely to run with their money, threatening to bring the system down.
- And alas, even if you have your money in a safe bank with full FDIC coverage, you could be adversely impacted.
Most prominent on our August “X” List was Citigroup, America’s second largest banking conglomerate with over $2 trillion in total assets. The bank was already suffering crushing losses in mortgages. But at mid-year, it still had close to $200 billion in other mortgages on its books, denoting the strong possibility of many more to come.
In addition, Citigroup had a massive portfolio of credit cards — 185 million accounts worldwide — that we felt could be the final nail in its coffin. Even before the most recent episode of the global financial crisis, Citigroup’s losses on bad credit cards had surged by 67% from a year earlier. Worse, the number of credit cards 90 days past due was going through the roof, foreshadowing more large losses on the way. All of these weaknesses were detailed in Citigroup’s financial statements. Not detailed, however, were the highly dangerous derivatives...
HSBC May Need $30 Billion: Morgan Stanley
January 13, 2009Reuters – HSBC Holdings Plc, Europe's biggest bank, may have to raise as much as $30 billion in capital and halve its dividend as earnings are likely to deteriorate more than expected, Morgan Stanley analysts said on Tuesday. HSBC earnings are likely to fall more "sharply" this year with no recovery until 2011 at the earliest, the analysts, including Anil Agarwal and Michael Helsby, wrote in a note.
"Profits will be hit by falling and flattening yield curves, combined with the cyclical impacts of a global recession and FX, and this should impair HSBC's dollar cash flow," the analysts wrote.Morgan Stanley analysts added that their detailed study of HSBC's capital and asset quality position "reinforces our belief that it will have to halve the dividend and raise major capital in 2009." The analysts have an "underweight" rating on the stock. Morgan Stanley slashed its 2008 earnings estimates for HSBC to 90 cents a share from $1.08 per share, its 2009 estimate to 55 cents from 90 cents and its 2010 estimate to 50 cents from 73 cents.
Asia Stocks Slip Ahead of U.S. Jobs
January 8, 2009Reuters – Asian stocks slipped and the U.S. dollar drifted higher on Friday, as investors braced for the December U.S. payrolls data, expected to show sharp job losses and deal another blow to hopes for a speedy recovery this year.
The world's largest economy probably shed more than half a million jobs last month, bringing job losses in 2008 to a post-war record, boding ill for Asia's struggling exporters who have been starved of demand from developed nations...
Toyota to Suspend Production for 11 Days in Japan
January 6, 2009AP - Toyota is suspending production at all 12 of its Japan plants for 11 days over February and March, a stoppage of unprecedented scale for the nation's top automaker as it grapples with shrinking global demand.
The last time Toyota Motor Corp. halted production at all its Japan plants was in August 1993, when demand plunged because of a rising yen, and that was for only one day, according to the company.
A global economic downturn has hammered the auto industry in Japan and elsewhere, forcing carmakers to cut staff, lower production and delay new models. Major automakers in the U.S. had teetered on the brink of collapse until securing a multibillion dollar government lifeline...
Bleak Sales in December Cap a Grim Year for Automakers
January 5, 2009NYTimes - Vehicle sales in the United States tumbled more than 35 percent in December, dragging the Detroit automakers’ full-year totals down to their lowest levels in nearly half a century. Sales plunged 53 percent last month at Chrysler, which along with General Motors received a $4 billion from the federal government at the end of December to help them remain solvent. It sold just 89,813 vehicles last month, an average of less than one sale per day at each of its 3,300 dealers nationwide. Chrysler sales were down 30 percent for the full year.
Sales fell 37 percent at Toyota, 35 percent at Honda and 32 percent at the Ford Motor Company. G.M. and Nissan reported 31 percent declines.
For all of 2008, Ford’s sales fell 21 percent, a difference of more than 500,000 vehicles, while G.M.’s sales were down 23 percent, a drop of nearly 900,000. The totals were the lowest f0r those companies since 1961 and 1959, respectively, according to the trade publication Automotive News. Toyota’s sales for all of 2008 were off 16 percent, while Honda’s were down 8 percent. It was the first times since 1995 that either Japanese company posted an annual sales decline.
G.M. cut its first-quarter production forecast by another 180,000 vehicles, to a level 53 percent lower than the same period of 2008. Smaller carmakers fared slightly better. Volkswagen sales fell 14 percent last month and 3 percent for the year, and Mercedes said sales fell 24 percent in December and 11 percent for the year...
Factories Slash Output, Jobs Around World
January 2, 2009Reuters - Factories in China and India joined much of Europe in slashing output and jobs at a record pace in December, another sign the biggest emerging markets were wilting under the recession gripping industrialized nations.
Zimbabwe’s Crisis Raises Dire Alerts
December 27, 2008AP - International aid agencies warned Saturday that Zimbabwe’s humanitarian crisis was deepening, with a sharp rise in acute child malnutrition and a worsening cholera epidemic. Acute child malnutrition has increased by almost two-thirds compared with last year, the aid agency Save the Children said in a new report on Saturday. “Some children are wasting away from lack of food,” said Lynn Walker, the agency’s Zimbabwe director. Around five million people are in need of food aid, the report said, with 18,000 tons of food needed by January.
President Robert Mugabe’s government has acknowledged the collapse of Zimbabwe’s health system, but Mr. Mugabe also claimed this month that the epidemic had been brought under control and that there was “no cholera” in the country. The World Health Organization said Saturday that 1,518 people had died of cholera and a total of 26,497 cases had been recorded since August.
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