World digitally divided : ILO
Technology is creating a growing divide between industrialised and developing countries, the International Labour Organisation (ILO) warned recently, saying that countries that fail to harness the Internet would lose out economically.
"Increasing numbers of workers are unable to find jobs or gain access to the emerging technological resources needed to ensure productivity in an increasingly digitalised economy", the organisation warned in a report.
An increasingly interdependent global economy whose development has been spurred by technological growth means that countries who fail to adapt to the Internet age will lose out on jobs and development, the report said.
Countries which are slow to join the technological revolution, it says, are not able to acquire the competitive advantage and incased market access afforded to users of the Internet.
Africa and the Middle East, the body warned, together made up just one percent of Internet users; 90 percent are from industrialised countries.
While 57 percent of Internet users were from either Canada or the United States, it said, "vast swathes of the globe remain technologically disconnected from the benefits of the electronic marvels revolutionsing life".
"Barely six percent of the world's people have ever logged onto the Internet," according to the report.
But the report did find that penetration of information and communications technology (ICT) into developing countries was increasing and that countries were benefiting as a result.
IMF growth index at 3.5%
The International Monetary Fund will lower its 2001 world economic growth forecast to around 3.5 percent, from the previous 4.2 percent, Stanley Fischer, IMF first deputy managing director, said.
"it is clear that world economic growth has slowed. Our estimate will come down significantly to around 3.5 percent," Fischer told a seminar at the annual summit of the World Economic Forum organised in Switzerland.
Fischer explained the downward revision of the 4.2 percent rate forecast in September was needed because of the swift and deeper than expected slowdown of the US economy.
WB offering credit in domestic currencies
In an effort to meet changing client needs, the World Bank will start offering its borrowers financial products denominated in their domestic currencies, including the rupee. With these products, bank clients will have an option to convert or swap, depending on the loan product, disbursed loan amounts into their domestic currency. The local currency financial products will be confined to the local expenditure component of the World Bank's financing, and clients requests will be considered on a case-by-case basis, according to a World Bank press release.
The demand for World Bank Financial products in the national currencies of clients stems from the growing interest among our borrowers in reducing their currency risk exposure and in lending to their sub-borrowers in local currency for projects that generate local currency revenues," says Graeme Wheeler, director of the Bank's Financial Products and Services Department.
US internet economy worth $830 billion
The Internet economy generated an estimated 830 billion dollars in revenues in 2000, a 58 percent increase over 1999, a study release recently reported.
The study by the University of Taxas' Center for Research in Electronic Commerce was based on projections following statistics of the first half of 2000.
The report did not reflect the slump in dotcoms in the final months of 2000, but said the projected figure was based on "if the technology sector and the US economy remain relatively healthy."
"To understand how far the Internet economy has come in a short period of time, the 830 billion dollars is a 156 percent increase from just two years ago when the Internet accounted for 323 billion in revenues", the report said.
"The Internet economy force has become a more integral part of the US economy than ever before, creating jobs and increasing productivity in companies across the economy. The impact goes far beyond dotcoms, as Internet economy forces are transforming traditional companies and jobs."
The research commissioned by Cisco Systems, said the Internet economy directly supports more than three million workers, including an additional 600,000 in the first half of 2000.
Low oil prices not to harm us, OPEC economy
Secretary General of the Organisation of Petroleum Exporting Countries (OPEC) Ali Rodriguez said that low oil prices will not only harm oil producing countries but also the economy of the United States.
If oil prices kept falling, Rodriguez said, it would harm the US oil sector, as the United States is one of the world major oil producers, with daily production of eight million barrels. In 998 when the oil price dropped to approximately 10 US dollars per barrel, 136,000 wells in the US were closed down with a production cut of 500,000 barrels and 36,000 workers were laid off, he said.
E & Y sees economic slow-down in UK
The UK economy and consumer spending will slow sharply in 2001, forcing the Bank of England to cut interest rates to 5 percent from 6 percent by the end of the year, according to independent forecasters the Ernst & Young Item Club. Several UK newspapers report that the Item Club's forecasts, show the economy slowing to 2.1 percent in 2001 and 2.0 percent last year. In its previous report, growth of 2.5 percent had been expected for 2001. The Item Club will also predict a sharp fall in consumer spending growth, from 3.75 percent last year to 2.5 percent this year and 2.0 percent in 2002.
"With monetary and fiscal policy both remaining extremely tight, a substantial relaxation of policy will be necessary to keep the economy growing," the Sunday Business Newspaper quotes the report as saying. "We assume that the chancellor cuts taxes by another 3 billion in the budget and that the MPC cuts 1 percent off interest rates over the next year", it adds.
The independent forecasting group user the Treasury's own economic model to reach its conclusions. Professor Peter Spencer the Item Club's economic adviser, will suggest the rate cutting process should start with a 25 basis point easing at the next bank of England policy meeting. The independent on Sunday reports. The Item Club will also point out that the deterioration in growth will lead to a major slowdown in business investment and substantial job losses.