Friday, August 21, 2009

MasterHowto: Government’s Reluctance on National Economic Investment


Today’s global crisis has pushed the governments all over the world to behave more efficient in national spending management. Triggered by the financial turmoil happening in the US, in the mid of 2008, contagious effects cannot be avoided to hit all countries which is in turn affects the national stability in both economy and finance sector. Peaking oil price in the beginning of 2009 seriously contributed to the worsening of national budget plan adequacy. The spending for development is therefore worried to be insufficient due to the rising price of commodities and materials. Finally, many governments appear to be so reluctant in allocating extra budget for future national economic investment.

It is true that each country suffers from global turmoil in a different way from each other. Most of industrial countries face the big challenge of overcoming the possible collapse of giant corporations. The US administration has to spend more less than $700 billion to carry out the recovery package program in which 30 percent of it will be for collapsing companies bail out. European countries additionally reached the amount of billion dollars as well to prevent from the worsening effects of financial meltdown around the region. China, Canada, and Japan have to do the same thing. Eventually, the volume of imported commodities in these developed countries decline significantly caused by the lowering public consumption in domestic market.

On the other hand, developing countries suffer from no different phenomenon of downgrading economy. Besides the decreasing price stock exchange for national companies, countries have to halt their export commodities to ship abroad. Apparently, many importing countries stop their order of commodities from overseas exporters. Furthermore, some importers even hardly decide to delay the payment for some commodities that have been purchased previously. The domino effect is the sinking revenue of exporting companies to have sufficient capital adequacy to cover the production and operation cost. Subsequently, domestic are forced to tighten operational spending and rationalize the existing labors. Jobs loss and increasing number of unemployment are inevitable finally at last.

The reluctance of governments to spend more on national economic investment might be reasonable to the extent that they are beyond the budget plan of development. To overcome the impact of global turmoil and financial meltdown is something compulsory which in fact does not have to inhibit the spirit of national economic development. Entering the second quarter of 2009, global economic performance shows a better score if compared with the previous. Financial market also takes step by step growing confidence where stocks sellers and buyers are getting more enthusiast than what they did during the beginning of the year. Things are apparently bettering and moving. Governments in this regards, have to play their roles best and more bravely than they are doing right now. Since the future development of countries lie on the current national economic investment, a confident move has to take place without delay. Unless the governing administrations would like to see their countries suffer from the possible second phase of poor economic performance in the future.

1 comment:

  1. Nice post sir :) government should undertake any real actions for the sake of our country. In the era of global crisis like this, one good thing the government can do, really means a lot for people particularly for those who are the have not

    ReplyDelete

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