Business

Published: Friday November 13, 2009 MYT 1:14:00 PM
Updated: Friday November 13, 2009 MYT 1:51:22 PM

Unemployment in rich nations a danger to economic rebound: World Bank


SINGAPORE: Large-scale unemployment is expected to continue in some of the world's developed countries and would endanger the economic rebound, China's Xinhua news agency reported quoting World Bank President Robert Zoellick as saying here Friday.

The World Bank chief's comment came days after Washington announced that the unemployment rate hit 10.2 percent in the United States last month, a double-digit level not seen since April 1983.

Economists say the jobless number could still rise.

High unemployment is likely to cause "secondwave effects" to financial institutions as problems will continue in consumer loans, credit card loans and mortgages and sometimes, commercial properties, Zoellick said at the AsiaPacific Economic Cooperation (APEC) Leaders' Week CEO summit.

Zoellick said while Asia is recovering fast from the worst recession in decades the conditions in the U.S. and Europe remain difficult.

He said rising unemployment would also prompt political leaders to raise barriers and take up protectionism measures to defuse political pressures.

"Protectionism is another major risk. By and large now it is a low-rate fever, it is not yet a full-blown influenza, but if you have large-scale unemployment, political leaders might be under pressure to do something," Zoellick said.

The World Bank chief also highlighted three other aspects of risks to the global recovery the handover of demand from public to private sectors, the new source of growth as US consumers could no longer be the engine, and inflationary pressures and asset bubble concerns in fast recovering East Asian economies. - Bernama


For more reports on APEC from the The Straits Times, a partner with The Star in the Asia News Network, click here.

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