Global economics: Instability in sovereign debt markets still poses threat to supply chain recovery

image
By Patrick Burnson, Executive Editor
May 27, 2010 - SCMR Editorial

As reported in SCMR yesterday, a new report from the Organization of Economic Cooperation and Development, trade flows are ramping up.

Instability in sovereign debt markets, however, pose a serious risk to a global economic recovery. It has highlighted the need for the euro area to strengthen its institutional and operational architecture. Bolder measures need to be taken to ensure fiscal discipline, said the OECD report.

“Several countries are already taking early action to enhance the credibility of their fiscal consolidation plans and this is very welcome,” said OECD Secretary-General Angel Gurría.
“This is a critical time for the world economy.”

He added that coordinated international efforts prevented the recession from becoming more severe but that significant challenges remain.

“Many OECD countries need to reconcile support to a still fragile recovery with the need to move to a more sustainable fiscal path,” he said. “We also need to take into account the international spill-overs of domestic policies. Now more than ever, we need to maintain co-operation at an international level.”

With a huge debt burden weighing on many OECD countries and the strengthening recovery, the emergency fiscal measures provided by governments to tackle the crisis must be removed by 2011 at the latest, the OECD report stated. It adds that the pace of such action must be appropriate to particular conditions and the state of public finances in each country.

To support growth as budgets are being tightened, macroeconomic, financial and structural policies need to be linked, said OECD spokesmen. Spending cuts or tax rises should focus on areas that are the least harmful to growth, they added.

According to the report, fiscal rules could enhance the credibility of plans to strengthen public finances. Reforming product and labor markets to enhance competitiveness must also be part of the strategy.



About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

less than one percent of all U.S. businesses export, and of those that do, the majority interacts only with NAFTA trading partners Mexico and Canada.

Seasonally-adjusted (SA) for-hire truck tonnage in April at 134.8 (2000=100) fell 2.1 percent from March and on the heels of a 4.4 percent February to March decrease.

The current price at $2.357 per gallon saw a 6-cent increase on the way to its highest weekly price of 2016 based on EIA data. And it is also the highest price since the week of December 14, when it was at $2.338 per gallon.

As e-commerce growth and demand goes, so goes the increased need for e-commerce fulfillment centers and distribution centers, according to the debut issue of the Global Prime Logistics Rents report recently issued by global commercial real estate firm CBRE Group Inc.

In this new world of Omni-channel—profitable and efficient anytime, anywhere fulfillment is the goal.

Article Topics

News · Supply Chain · Finance · Trade · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.