Abu-Ghazaleh Tackles Global Economic Crisis at the Orthodox Club

 

AMMAN ----October 31, 2011---- HE Dr. Talal Abu-Ghazaleh, chairman and CEO of Talal Abu-Ghazaleh Organization (TAG-Org) tackled the global economic crisis- challenges and its effect in a lecture organized at the Orthodox Club.

According to HE Dr. Abu-Ghazaleh who predicted the occurrence of the crisis in 2008, the crisis that he believes will last for ten years will move from being a financial one to an economic one which is the most difficult phase due to the way it is being handled.

He said:" The global economy moved from falling companies to falling countries which means bankruptcy of countries as the case in Italy which is in debt to France with more than half trillion US dollars (1/5 of France's GDP) and it is in debt to other European countries with more than 1.5 trillion dollars meanwhile Spain owes European countries with more than one trillion dollars in addition the budget deficit in major European countries reached 10 percent."

"We are in a very dangerous stage because the budget deficit and public debt have surpassed the 3 percent barrier of the GDP for example in Italy it reached 33%, Ireland 32%, Greece 11%, the UK 11%, France 8% and Sweden 5%. Also, these countries have surpassed the public debt which normally should not exceed the 60% of the GDP and the G-7's debt surpassed its GDP with 70%, for example Japan 225%, the US above 100%, the UK 94%, France 100%, Italy 130% and Germany 85%, " he added.

HE Dr. Abu-Ghazaleh stated that the American public debt has increased during George W. Bush presidency from $5 trillion to $10 trillion and during Obama’s to $15 trillion and if we add social security ($8 trillion) and health insurance ($38 trillion) the total will reach $62 trillion.

Meanwhile, the global government debt is around $41 trillion in 2010 and predictions expect it will reach $50 trillion by the end of 2011 due to governments borrowing which represents 70% of the total global national income which is $80 trillion and the global governments’ debt will increase $5 trillion annually.

HE Dr. Abu-Ghazaleh referred to the old saying 'When the US sneezes, the world catches cold' while President Obama says the recovery of the US depends on China and Asia.
"This proves that the crisis is an opportunity for us contrary to what George Bush wished when he said that "we as the whole world fell in this crisis and we must recover together. We are in a changing world in everything and this is happening fast due to information technology," he said.

According to HE Dr. Abu-Ghazaleh, the crisis is very dangerous because it moved from the private sector to the States as the US administration did not have a choice but to rescue falling companies, and the US blames Europe because any collapse will affect the US economy, Europe is the real partner to the US because 75% of European investments are in the US and vice versa.

"Meanwhile, a new world is being created by the world's most populated countries: Russia, Brazil, China and India. The future belongs to the countries with huge economy and maybe Russia will become Europe's capital and China will be the world's second economy and Russian is the second oil producing country globally," he said.

Regarding the Arab world, HE Dr. Abu-Ghazaleh says:" the promising future is Egypt, oil will be the only source for energy without any competition and I predict the price of oil to reach $150. We have to take advantage of the global crisis and it is beneficial for the West to see us prosper."

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