This document provides an overview of global economic news and reports in the first quarter of 2009. It discusses the economic slowdown affecting most regions of the world due to the global financial crisis. While developing countries are expected to continue growing, their growth rates will decline substantially. The document also summarizes economic conditions in various Asian countries and regions, finding that Asia is generally faring better than other parts of the world due to healthy foreign reserves and banking systems.

1. Whitehall Monitor
The
Global Economic Overview
INSIDE:
BRIC Countries
Top Oil Exporters
Global Competitiveness Index
Regional Economic News
More
2009 Edition, Vol. 1
Jan-Mar, 2009

2. Whitehall Monitor
The
Global Economic Overview
Contents:
Introduction... New World (dis)Order 1 Gulf Cooperation Council 6
Asia Region Roundup 2 Europe 7
Japan 2 Iceland 7
Global Competitiveness Index 3 United Kingdom 8
BRIC Countries 4 UNICEF Ranking of Child Well-being 8
Russia 4 The battle of the oligarchs behind the gas dispute 9
Brazil 4 United States 10
India 5 U.S. Industrial Overview 11
China 5 Canada 12
UN Millenium Development Goals 5 Latin America and Caribbean Countries 13
Middle East and Africa 6 Ten Wealthiest Countries in the Caribbean 13
Africa’s Top Ten Economies 6
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© 2009 Whitehall Consultants Ltd. All rights reserved

3. New World (dis)Order
Global Economic, Political Turmoil closes out 2008
Jan. 2009 Page 1 The Whitehall Monitor
mark the first contraction in any year
since World War II,” The Associated
Press reported.
Olivier Blanchard, chief economist
for the IMF says it appears the global
economy has “stepped back from the
brink of financial catastrophe,” although
he expects the world economy to grow at
a scaled down 2.2 percent pace as com-
pared to the previous October projection
of 3 percent for the year. In addition,
the IMF scaled back forecasted growth
of .5 percent for the economies of devel-
oped countries to a decline by .3 percent
for 2009, marking the first contraction
in any year since the Great Depression.
And if that’s not discouraging enough,
the World
Bank ex-
pects even developing countries, for
so long the bright spot in the global
economy, to slow down from 7.9 per-
cent growth in 2008 to a forecasted 4.5
percent in 2009.
The crisis spread “across borders and
capital markets to entities as diverse as
Iceland, Russian banks, and Gulf prop-
erty developers,” summed up Australia’s
Export Finance Insurance Corporation
(EFIC) which noted that several unlike-
ly countries have gone begging to the
IMF for financial aid, such as Hungary,
Ukraine, Iceland, Pakistan, and Serbia.
EFIC notes that East Asia has weath-
ered the downturn better than most re-
gions “thanks to buffers like current ac-
count surpluses, large foreign exchange
reserves, comfortable fiscal positions,
and well-capitalized banks.”
Looking ahead, the danger is that
invervention by the U.S. Federal Reserve
and other countries’ central banks will
lead to stagflation. As Nobel economist
Paul Krugman expressed it, “The scenar-
io I fear is that we’ll see the whole world
in the equivalent of Japan’s lost decade in
the 1990s, that we’ll see a world of zero
interest rates and inflation and no sign of
recovery, and it will just go on for a very
extended period.”
Commodity prices have dropped
steadily, which is good news in terms
of fuel costs, but discouraging for the
mining of coal, iron ore,
and base metals which have
declined in some cases to a
point where they are below
the marginal cost of extraction.
Perhaps most discouraging of all
is the near-record low reached by
the Baltic Dry Index (BDI), which
measures the cost of moving raw
materials, precursors to trade, by sea.
Totally devoid of speculative content,
the BDI is a good leading indicator for
economic growth and production, and
its rapid decline in the second half of
2008 supports speculation of rapid dete-
rioration in global trade, at the very least,
and suggests a possible rapid decline in
the Chinese economy, too. We’ll explore
China in more depth inside.
Strife and turmoil were not limited
to economic problems this year. The
wars in Iraq and Afghanistan continue
and Israel attacked Hamas positions in
the Gaza Strip during the last weeks of
December, blasting away relentlessly and
ensuring continued polarization of the
most radical positions. A week of ter-
rorism in Mumbai wreaked havoc on
Indians and tourists alike, reminding the
world that economic strife is nothing
when compared to the shock of random
attacks of this sort.
T
here’s a saying, when the U.S.
sneezes, the rest of the world
catches a cold, and the adage took
on a life of its own in the last quarter of
2008 as the sub-prime mortgage failure
set off the stunning failure in mid-Sep-
tember of the oldest U.S. investment
company,LehmanBrothersholdingsInc.,
and industries and countries alike began
to bleed various shades of crimson. One
of the most pronounced was the U.K.,
first forced to bail out the Royal Bank of
Scotland, then a plethora of other institu-
tions. This has led to the sharp decline in
the value of the Sterling.
Had the economic woes halted there,
most analysts believe the recession would
have been of moder-
ate proportions, but the
credit crunch sparked by
the banking crisis has led
to a widespread drop in
consumption in the U.S.
where the auto industry was
forced to go hat-in-hand
to Congress for some
bridge loans. Unfortu-
nately, this is where the
sneeze/cold theme comes
in: once consumption be-
gan to decline, global trade
slowed too, and has, in the
last quarter of 2008, come to
a screeching, frightening halt.
There is more discussion about the U.S.
economic situation inside, but here, we
reveiw the global picture. For starters,
the World Bank expects global trade, the
economic engine for many developing
economies, will shrink by 2.1 percent
in 2009, the first decline of any amount
since 1982.
“Conditions have deteriorated so
much since the IMF’s semiannual World
Economic Outlook was released in Oc-
tober that it issued an update last month
cutting its 2009 forecast for developed
countries’ economies to a drop of 0.3
percent, from 0.5 percent growth in the
previous estimate. Such a decline would

4. Asian Region Roundup
G
enerally speaking, Asia is
faring better than most re-
gions in the current eco-
nomic slowdown, thanks in large part
to healthy foreign reserves, impressive
trade surpluses, and healthier banking
systems that declined to join the high-
risk ventures and schemes floated
by their European and North
American counterparts. Still,
their export-driven economies
will feel a tremendous pinch
moving forward from the al-
most full-stop of international
trade right now.
The region boasts some of the
highest commercial real estate rental
rates in the world, and three of its coun-
tries – Brunei, Singapore, and Macau
have purchasing power parity equal to
or better than the U.S. and most of the
rest of the world, chalking up the sixth,
seventh, and eighth highest GDP’s per
capita worldwide for 2006.
The region has a healthier popula-
tion than most of the rest of the world
and Japan, Hong Kong, and Australia
have among the world’s highest life ex-
pectancy rates. Asian healthcare costs
are lower than most of the rest of the
world, too. Speaking of healthcare, the
Asian country of Turkmenistan has the
highest number of doctors per capita in
the world!
New Zealand leads the pack of least
corrupt countries across the globe, shar-
ing the honor with Denmark and Swe-
den. The agrarian island country also
ranks third worldwide in car
ownership
per cap-
ita (and
owns the most
per capita in Asia).
In a seeming con-
tradiction, New
Z e a l a n d
uses more
clean energy per capita than Asian
counterparts.
Newly elected centrist prime minis-
ter John Key of the National Party said
warned the economy, already in the
third quarter of its first recession in a de-
cade, may not emerge until 2010 due to
the global slowdown as exports account
for some 30% of the country’s GDP and
the World Bank predicts international
trade will decline in 2009 for the first
time in more than 25 years.
Fortunately, the central bank has
room to maneuver and will likely re-
duce the discount lending rate from the
current 5% to around 3% by late 2009.
Unemployment, 4.2% last quarter, was
the highest in five years and economists
predict a jump to 6.5% by June, 2010.
Neighboring Australia is faring slight-
ly better, fueled by Chinese demand
of its iron ore and other raw materials.
Australia’s current account deficit as a
percentage of GDP decreased from an
average of 6% for 2004-2006 to the
4.75-5% range and is expected to nar-
row to 4.5% this year. The economy,
which grew at a 4.25% pace for 2007
grew only about 2.5% for 2008 and is
expected to grow even slower, only to
2% for 2009. Unemployment fell from
4.5% in 2007 to 4.25% for 2008 but is
expected to jump to 5% for 2009. In-
flation, up from 2007’s 2.5% to average
4.2% for 2008, is expected to drop by
one point for 2009 to 3.2%.
Australia owns more computers per
capita than other Asian countries, and
ranks eighth in the world overall. Sin-
gapore, Japan, and Hong Kong rank
10th-12th respectively.
Singapore’s economy shrank by 6.8%
in the most recent fiscal quarter, after
some growth earlier in the year, pro-
ducing a modest 2.2% growth in GDP
for the year. Most economists expect
the slowdown will continue and the
economy is forecasted to shrink by 2%
or more for 2009. Inflation averaged
about 6.5% for the year. Unemploy-
ment remains low, thanks in part to the
reputation Singapore has as an attrac-
Region fares better than most during downturn, but recent
halt in global trade will hurt these export-driven economies
Jan. 2009 Page 2 The Whitehall Monitor
Japan, already battered by the 1990s recession, suffers once again, this time along with the
U.S., Europe, and other major industrialized countries in this current down turn.
Toyota Motor, the Japanese automotive manufacturer is expecting its first operating losses
in seven decades. Citing a stronger yen, higher input prices and falling worldwide consump-
tion, Toyota expects net profits to drop some $1.7 billion for the fiscal year which ends March 31.
The corporate bond market has declined despite efforts by the Bank of Japan to shore up confidence in the Markit iTraxx,
Japan’s index of credit-default swaps which is climbing as perceptions of credit quality drop. Intervention by the Bank of Japan
was through direct purchase of short-term corporate debt instruments. This followed a second reduction in as many months
of the overnight lending rate to .1 percent from .5 percent Dec. 19.
Toyotareflectsalargerproblemfortheworld’sthirdlargesteconomy:FactoryoutputinJapandeclinedby8.1percentinNovember,
followinga3.1percentdropinOctober.Japan’seconomyinchedaheadbyaslim.3fortheyear,andisexpectedtoshrinkby.9percent
for2009. Andalthoughtheunemploymentrateat3.9%forNovemberisoneofthebestoflargereconomies,businessconfidence
fell sharply in the last quarter.
Japan

5. Asian Region Roundup (Cont’d)
tive destination for IT firms and others
outsourcing although the country faces
growing competition from countries of-
fering lower costs and more attractive
wage concessions.
By 2050, Pakistan is expected to sur-
pass Indonesia to rank fourth most pop-
ulous country on earth. Its economy
grew by an estimated 6 percent this year,
but is expected to creep along only at a
1.5% growth rate for 2009. Recognizing
Pakistan’s coffers were running dry, due
in part to lost tourism dollars, the IMF
agreed to lend Pakistan $7.6 billion for
two years. Inflation skyrocketed for the
year by 20.8% and according to unof-
ficial sources, unemployment jumped to
around 15% this year due to closers of
some 70 percent of textile businesses in
2008.
The assassination of opposition leader
Benazir Bhutto last December post-
poned elections but in February, the
Pakistan People’s Party won a majority,
forming an alliance with the Pakistan
Muslim League and elected Yousaf Raza
Gilani Prime Minister. Threatened with
impeachment,formerPresidentandmil-
itary dictator Pervez Musharif stepped
down in August, replaced by Asif Ali
Zardari. The financial and political situ-
Jan. 2009 Page 3 The Whitehall Monitor
ation keep the country on Washington’s
radar. That the South Asian country
shares critical borders with Afghanistan,
Iran, China, India and Tajikistan mean
it will remain there during the Obama
administration.
With its reduced telecom costs and
eager workforce, Vietnam has entered
the top 20 countries in the Global Ser-
vices Location Index which analyzes and
ranks countries on remote functions,
such as IT services and support, call cen-
ters and back-office support. The coun-
try is also the second largest producer of
coffee beans in the world behind Brazil,
growing more than 1 thousand tons of
beans each year. Vietnam has a trade
deficit but expanded exports by 4.25%
year on year in December thanks to in-
creased shipments of coal, electronics,
garments and crude oil.
Until the global downturn, Macau
was making headlines as the Las Vegas of
the Pacific. In fact, gambling revenues
in the territory jumped by more than
25% to record-breaking levels. “Macau
has been transformed from a sleepy is-
land into a legitimate rival to Las Ve-
gas,” reports The Economist. China’s
government, however, has taken notice
as well as measures to make it harder for
Chinese mainlanders to travel there to
play and spend their yuan by reducing
the number of travel visas for citizens,
and has halted travel to Macau through
Hong Kong completely.
Affairs between Taiwan and China
have warmed considerably with the Tai-
wanesepresidentialelectionofYing-Jeou
MA, and subsequent arrest of Taiwan’s
former president Chen Shui-bian. The
former president charges the arrest was
to appease the Mainland’s government.
The Taiwanese economy contracted 1%
for the third quarter and is expected to
decline by another 2.5-3% for 2009.
The unemployment rate is around 4.5%
and industrial production ground to an
alarming halt, falling 28.4% in Novem-
ber.
Whitehall has excellent partners
based throughout Asia to offer credit
reports, including personal reports in
some instances, debt recovery services,
sector studies, and of course our coun-
try risk reports offering in-depth as-
sessment of a country’s risk including
political and economic. For more de-
tails, contact our office by e-mail at
info@whitehallusa.com.
Global Competitiveness Index 2008-2009
SOURCE: World Economic Forum
The following table ranks countries by their global competitiveness index score based on a comprehen-
sive assessment of countries' competitiveness by the World Economic Forum and produced in collabora-
tion with leading academics and a global network of research institutes.
2008 2007
Rank Country Score Rank
1 United States 5.74 1
2 Switzerland 5.61 2
3 Denmark 5.58 3
4 Sweden 5.53 4
5 Singapore 5.53 7
6 Finland 5.50 6
7 Germany 5.46 5
8 Netherlands 5.41 10
9 Japan 5.38 8
10 Canada 5.37 13
11 Hong Kong SAR 5.33 12
12 United Kingdom 5.30 9
13 Korea, Rep. 5.28 11
2008 2007
Rank Country Score Rank
14 Austria 5.23 15
15 Norway 5.22 16
16 France 5.22 18
17 Taiwan, China 5.22 14
18 Australia 5.20 19
19 Belgium 5.14 20
20 Iceland 5.05 23
21 Malaysia 5.04 21
22 Ireland 4.99 22
23 Israel 4.97 17
24 New Zealand 4.93 24
25 Luxembourg 4.85 25

6. BRIC Countries
Straddling Europe and Asia, Russia is the
world’s biggest supplier of energy and has the
third largest reserves, some $451 billion at
the end of 2007 and the economy has grown
by a comfortable average of 7 percent for the
past several years. But a double-edged sword
has struck in the form of the ill-advised Georgian war which
caused foreign investors to exit Russia causing a rapid decrease
in the value of the ruble, and a recent steep drop in oil prices.
In November, Prime Minister Vladimir Putin reassured the
country saying his administration would be proactive to pre-
vent a repeat of Russia’s 1998 oil-related financial crash. Still,
Russian equity markets have lost 70% of their value and the
central bank has spent more than $50 billion propping up the
weakened ruble at Putin’s instruction.
Wary Russians cashed in 6 percent of their ruble deposits
for U.S. dollars in October and banks are moving their depos-
its away from rubles as well. Industrial production slumped
by 8.7 percent in November, year on year, the steepest decline
since 1998. For this reason, Putin has given the go-ahead for
a gradual decline in the ruble.
“The situation is starting to look like 1998 when, in antici-
pation of devaluation, the credit market is frozen and there is
an enormous contraction of the economy,” Anton Strouchen-
evsky, an economist at Troika Dialog, the Moscow investment
bank, told The Economist in late December.
Putin, at the helm since Boris Yeltsin
resigned over an economic collapse nine
years ago, and Russian president Dmitri
Medvevev face growing unrest internally as
tensions mount over the rising unemploy-
ment and also since two percent of workers
face wage arrears. Putin places the blame for the sharp eco-
nomic decline at the doorstep of U.S. president George Bush,
but the failure to diversify has weakened the economy which
relies on the oil sector too much, analysts claim. As it now
stands, GDP next year is expected to grow less than 4 percent
and consumer prices have increased by a dramatic 14 percent
for the year. The official unemployment rate as of October,
6.1, percent is increasing and some 400,000 Russians were out
of work as of November.
The country ranks 147th least corrupt country in the world
according to the Corruption Perception Index published by
Transparency International, and its recent war with the coun-
try of Georgia and increased tension over oil transfers with
Ukraine have not won the country any new fans. Despite
Breton Woods-type efforts of the world’s 20 biggest and
emerging economies to stymie the global losses and jump-
start global trade when it met November 15 in Washington,
D.C., Russia’s government increased tariffs on imported cars
two days later. So, within its borders and outside, the only
thing growing in Putin’s Russia is unrest and unpopularity.
BRIC are the four economies growing so fast that by 2050, their combined economies could eclipse those of all the
current wealthy countries in the world. The four are Brazil, Russia, India, and China. No formal trading bloc or associa-
tion, but the four countries have explored the possibility of forming an alliance of sorts to translate their increasing eco-
nomic might into greater political power.
Brazil
Jan. 2009 Page 4 The Whitehall Monitor
Taking office in 2003, president Luiz
Inacio Lula da Silva introduced a pro-
gressive agenda including expansion of
the middle class, eradication of hunger,
and production of green energy, based
on principles set forth in the Millen-
nium Development Goals agreed to
during the UN Millennium Summit in 2000.
Brazil has reduced 675 m-tons of greenhouse gas emissions,
created a million new jobs, and significantly reduced reliance
on fossil fuel imports. The Amazon notwithstanding, Brazil’s
metropolitan regions are densely populated. In fact, Sao Paulo is
the seventh most populous urban center in the world, and Rio
de Janeiro, ranks 21st.
Brazil is the second largest food exporter, and is rated 80th
least corrupt country, sandwiched between fellow BRIC coun-
tries China (72nd) and India (85th). Russia, at 147th, clearly
has room to improve.
Brazil’s budget deficit for 2008 ran less than 2% of its GDP,
and the currency, the real, has strengthened by 10% over the
past three years. The economy grew by an average rate of 6.1%
for the year to the second quarter, sparking concerns it was over-
heating, so in September, the central bank raised its benchmark
interest rate to 13.75 percent, the fourth rate hike since April.
Brazil’s stock market tumbled more than 35 percent in 2008
due to the global financial crisis, tighter credit, and commodity
price drops. Still, the economy expanded by 5.3 to 5.6 percent
for the year. It is expected to slow to 2.4 to 3.2 percent for 2009,
weighed down by sluggish international demand. Industrial
production inched ahead marginally in the latest figures and the
unemployment rate was 7.5 percent in November. The central
bank cut inflation forecast for next year due to the global finan-
cial crisis to 4.7 percent. For 2008, inflation ended at about 6.2
percent.
Brazil jumped to fifth in the world’s Global Location Index
growing its export services sector, thanks to a sophisticated IT
sector, close proximity to North America, and growing univer-
sity enrollment and quality certifications. Partly because of the
growth of its service sector, Brazil’s trade surplus, at the end of
November, was $26.1 billion.

7. Jan. 2009 Page 5 The Whitehall Monitor
China’s government has reason to be proud of the impressive
showing the country had in putting on and taking the most
gold medals during the summer’s Olympics held in Beijing and
showcasing the country’s best features.
The economy, which benefitted from the investment in infra-
structure, employs ever-increasing ranks of the 800,000 rural
peasants moving into urban regions for work. There is a prob-
lem in this since the economy needs to grow at least 8percent
per year in order to keep unemployment manageable and the
masses peaceful. For this year, the country sped ahead once
again at a healthy 9.6percent growth rate, but the economy
may not fare as well in 2009 since it relies so much on global
trade which is expected to contract for the first time in 25-plus
years.
Before the global trade slowdown became evident in Novem-
ber, China’s exports grew 21percent for the year, compared to
a huge 26percent increase for the same period in 2006-7. This,
despite a 20percent increase in valuation of the yuan in the
past three years, which made exports more costly. Despite the
yuan’s uptick, President Hu Jintao will face increasing pressure
from the U.S. and other countries to permit an even greater
rise in the yuan. And while exports remain strong, domestic
spending is growing too. Low household debt and an increase
in real income fueled retail sales growth of 17percent for the
year to October.
The rapid decline in foreign trade is expected to hit Guang-
dong province in Southern China hardest and thousands of
companies, footwear, toy and clothing manufacturers have had
to shutter their doors, displacing thousands of workers. Indus-
trial production grew by only 8.2percent for the year to Octo-
ber, about half the previous year’s growth rate. Capital markets
have declined, too, as have property values. The government is
so alarmed it has recently announced a massive 4 trillion yuan
($586 billion) over two years aiming to address a number of
priorities including reduction in corporate tax burdens, invest-
ment in healthcare, education and green technologies as well as
a speed up of post-earthquake reconstruction. In addition, the
central bank cut its benchmark lending rate to 5.31percent in
late December, the fifth decrease in three months.
China’s actions in the next few months could make or break
this global recession. If China’s economy continues to decline,
the worldwide recession would likely deepen. More discon-
certing for this most populous country on earth will be po-
litical stability of its people if unemployment grows and GDP
shrinks further. More than any other country on earth, China
bears monitoring over the next two to four quarters.
India
India has weathered the bank-
ing downturn better than most
other countries thanks to the
cautious guidance of its former
governor of the Reserve Bank of
India, Dr. Y.V. Reddy. Taking
office in 2003, Reddy took a
number of steps to shore up the
financial sector in the world’s second most populous country.
He increased lending standards and risk weightings on com-
mercial buildings and retail construction, doubled the capital
reserve requirements of banks, curtailed the use of riskier
securitizations and derivatives in India, counter to Ameri-
can and European investment models and pre-emptively
increased interest rates to more than 20 percent to fight
burgeoning inflation and burst the first signs of a housing
bubble in India.
“No Indian bank has come close to failing the way so
many United States and European financial institutions
have,” the New York Times reported recently. Reddy was
of course, unpopular with his country’s financial sector.
Until, that is, headlines in the West screamed of massive
write-offs and emergency bailouts. Reddy retired from the
post this past September.
The terrorist attacks in Mumbai in December capped
a year of some insecurity for the country although grow-
ing tensions with Pakistan have been defused since the
attacks, thanks to efforts of senior military officials from
both countries and China, who dispatched its Deputy Foreign
Minister and a delegation of six others to resolve differences
once it was suspected the attacks came from a Pakistani-based
terrorist group.
The country remains at the top of the Global Services
Location Index and industry surveys and visiting executives
agree the country offers first-rate remote services, strong
technical and language skills, seasoned vendors and favorable
government policies, despite worries over wage inflation and
increased demand overheating the economy. The country’s
main competitor right now is China, but India’s strength in
language capabilities keep it far above the rest.
China
United Nations
Millennium Development Goals
• Goal 1: Eradicate extreme poverty and hunger
• Goal 2: Achieve universal primary education
• Goal 3: Promote gender equality and empower women
• Goal 4: Reduce child mortality
• Goal 5: Improve maternal health
• Goal 6: Combat HIV/AIDS, malaria and other diseases
• Goal 7: Ensure environmental sustainability
• Goal 8: Develop a Global Partnership for Development
For more, visit http://www.undp.org/mdg/basics.shtml

8. Failure to re-negotiate a six-
month truce and increased mortar
attacks and movements of mortars
to within the West Bank, Israel
went on the attack at year end
striking at Hamas by air and land.
More than 750 people have been
killed, including many scores of ci-
vilians, and at press time, there are
international calls for a truce but
no movement toward that end.
Israel’s economy grew at an ac-
celerated 5.1 percent pace for the
third quarter and average growth for the year was 4.3 percent.
Despite the global slowdown, it is expected to grow another
1.7-2 percent for 2009. Productivity was up 3 percent for
the year to September 30 and concerns of inflation would
be greater for the central bank were it not for the worldwide
recession since it hit 4.5 in November. Still, for the year,
inflation only averaged 2.8 percent. The unemployment rate
was 5.9 percent as of the end of September .
Israel’s trade balance for the last 12 months as of November
was a deficit $14.4 billion and the current-account balance
for the year was $2.6 billion, representing 1.3 percent of the
GDP for 2008. The shekel traded at 3.84 against the dollar
at Dec. 30 2008 and the budget deficit was .7 percent of the
GDP for 2008.
Egypt’s trade deficit was in excess of $23 billion as of June,
although the current account is running a marginal $900
million surplus, less than 1 percent of the GDP also. The
pound traded at 5.52-5.53 per dollar at year end 2007 and
2008 respectively. The budget deficit is 6.8 percent of the
nation’s economy which grew by 7.2 percent for the year and
is expected to grow a healthy 5.1 percent in 2009. Industrial
production grew a healthy 6.8 percent as of June 30 but
inflation is barreling ahead, at 20.3 percent as of the end of
November. Unemployment is
about 8.6 percent.
It should come as no surprise
that Saudi Arabia, which boasts
the world’s richest oil reserves,
estimated at 264 billion barrels
at the end of 2007, should have a
strong trade surplus, which it does.
It reached $150.8 billion as of the
end of 2007. The current account
surplus at that time was $95 bil-
lion, some 30% of the country’s
economy which is expected to
experience a downturn in 2009,
due to a collapse in the price of oil. The riyal is pegged to the
dollar at 3.75 per greenback. Inflation grew from 4.9 percent
a year ago to a disconcerting 10.4 percent at the end of the
third quarter of 2008, and is expected to remain at around
8.5 percent for 2009.
South Africa’s economy grew by 3.5 percent for the year
2008 and is expected to grow a respectable 2.5 percent for
2009, despite a 1.6 percent decline in productivity in Oc-
tober. Inflation grew from 8.4 percent at the end of 2007
to 11.4 percent for 2008 and unemployment is very high at
23.2 percent as of the end of September. Despite a wealth of
resources, South Africa imports more than it exports and the
trade deficit was $9.5 billion at the beginning of November
and the balance of payments deficit was $23.2 billion at the
end of September, representing 7.8 percent of the economy.
The rand weakened significantly against the dollar, sliding
nearly 50% from 6.83 at the end of 2007 to 9.47 to the dollar
at the end of 2008.
Africa’s Top Ten Economies:
Source: ClickAfrique.com
( GDP Figures in US $ Bilions)
Country Global Rank GDP
South Africa 27 467.6
Egypt 29 431.9
Nigeria 40 294.8
Algeria 42 268.9
Morocco 60 127
Sudan 62 107.8
Angola 72 80.9
Libya 73 78.8
Tunisia 75 77.2
Kenya 83 57.7
Gulf Cooperation Council
Established in 1981, the Gulf Cooperation Council (GCC)
includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and
the United Arab Emirates (UAE). The Gulf Cooperation
Council was formed to protect members’ security and eco-
nomic interests and led to a common market and the presi-
dency of the Gulf Cooperation Council rotates yearly among
members. Council headquarters are in Riyadh, Saudi Arabia.
According to MEED, member states are expected to “suffer a
substantial setback in 2009” with possible GDP declines of
20 percent for the year. This is in part because of the decline
in oil prices which are expected to remain lower for 2009
than they were in 2008.
“GCC economies will also be affected by the volatility of the
dollar, to which five of the six GCC states peg their cur-
rencies, the equities crash, the liquidity squeeze, the global
real estate crash, the aviation and tourism slump, and lower
volumes of world trade,” MEED reports.
Middle East and Africa
Jan. 2009 Page 6 The Whitehall Monitor

9. In mid-2007, Chris Laird, an analyst
with a precious metals trading firm, was
among many predicting the collapse of
the global credit bubble. In March, 2008,
he elaborated: “Right now, we are looking
at the precipice of a total world financial
collapse. When the stock markets finally
let go, people will wake up to the reality
of world financial bankruptcy. Millions of
people will lose much of their retirement
savings, in a super world stock crash...
Think of (the Tech bubble crash) as mere-
ly a taste of what is to come.”
Whilethe
subprime
mortgage
crisiscaused
c o l l a p s e
within the
U.S. Gov-
ernment-
sponsored
F e d e r a l
Na t i o n a l
H o m e
Mortgage
A s s o c i a -
tion (Fan-
nie Mae)
and Federal
Home Loan
Mortgage
Corpora-
tion (Fred-
die Mac),
prompting
the Federal
H o u s i n g
F i n a n c e
Authority
into con-
s e r va t o r -
ship, across the pond from Iceland to
Turkey, central governments prepared for
the worst.
Belgium-Netherlands-Luxembourg
financial giant Fortis, was partly national-
ized in late September also when finance
ministers from the trio of countries agreed
to invest more than $16 billion into the
sinking multinational. A later selloff of
the Belgian assets which was encouraged
by then-Belgium Prime Minister Yves
Leterme to BNP Paribas led to a court
inquiry and Leterme’s resignation over al-
legatnions he influenced the transaction
at the cost of smaller investors. Replac-
ing Leterme as Prime Minister is Herman
Van Rompuy who took control in late
December.
Germany’s second-largest commer-
cial property lender, Hypo Real Estate,
found itself on the receiving end of a $51
billion bailout package when the Ger-
man government provided guarantees
by a consortium banks for the huge deal.
Deutsche Bank shares are getting hit in
early January due to a rumor bank loan
losses may surpass the 3.4 per cent climax
the bank faced during the Great Depres-
sion in 1934.
Iceland and Great Britain, both ru-
mored at the brink of bankruptcy when
on October 8, central banks across the
continent, and even China, took extraor-
dinary measures and announced simul-
taneous cuts of .5 percent to their base
lending rates. Still, the following day,
Iceland’s economy and monetary unit
collapsed. The bank rate cuts did not halt
the decline and Friday, October 10, stock
markets across Europe and Asia crashed
in what some have called the worst week
since the Wall Street Crash of 1929.
While the United States appears to be epi-
center of this recession, globalization has
ensured all the world is dragged down. To
what extent depends upon a country’s re-
serves and unfortunately, most of Europe
has low reserves to buffet it during this
crisis.
There is some good news to balance
out the bad. A few wise European banks
with sufficient liquidity entered the flea
market with purses open and acquired, at
Europe
ICELANDOn October 9, Iceland’s financial sector collapsed completely with the
failure of Kaupthing Bank, the nation’s biggest bank, following the Septem-
ber failures of the two other main banks, Glitnir and Landsbanki Island. All
three have been placed in receivership by the country’s Financial Supervi-
sory Authority. The collapse stemmed from inability to refinance short-term
debt and a run on deposits in the U.K. following the U.K.’s forced bankruptcy
of Kaupthing’s British subsidiary which has prompted the bank to file suit
against the British government. On Jan. 5, Iceland’s Prime Minister Geir
Haarde said his government supports the lawsuit and would be willing to help
fund it.
In all, some $61 billion in deposits, about 12 times the size of the small
country’s economy, is in doubt and affects more than 500,000 customers
from outside the country, with frozen assets held by 12 British universities, in-
cluding Oxford and Cambridge, facing £77 million in losses. Other hospitals,
government municipalities and even the police force of London. Iceland has
received loan guarantees of €4 billion from Russia $2.1 billion from the IMF
to help guarantee the deposits.
At the same time, the Icelandic kronur has fallen sharply and the country’s
stock exchange plummeted by more than 90%. A silver lining is that the
devalued kronur will surely boost tourism, already booming. From January to
November, 49,000 North American tourists enjoyed the volcanic island south
of the Arctic Circle with a country-wide population of only 320,000.
great discount, assets of some of the failed
banks. These include: Banco Santander
of Spain, which acquired Bradford & Bin-
gley’s for $1.1 billion. Europe’s second-
largest bank, Santander is likely to expand
further in the long-term.
Barclays Bank is considered one of
Europe’s better-capitalized banks and ac-
quired some of bankrupt Lehman Broth-
ers operations at fire sale costs.
Although BNP Paribas was rocked by
the subprime mortgage crisis like most
other banks last year, the massive French
bank remains
among the top
banks in the
Eurozone based
on market capi-
talization. And
as noted earlier,
since it acquired
the Belgian held
assets of Fortis,
it will grow fur-
ther.
In non-bank-
ing news, after
much procrasti-
nation, Turkey’s
g o v e r n m e n t
agreed to cut its
budget by some
$3.6 billion at
the end of the
year. Turkey
hopes to secure
a loan from the
IMF of some
$25 billion and
the budget cut
and repayment
of some $50 bil-
lion in foreign debt are conditions of the
loan.
Turkey, too, is suffering from the global
recession and the budget cuts come at a
time when the export-reliant economy
is struggling. While official projections
from the government call for 4 per cent
growth in GDP for next year, the Orga-
nization for Economic Cooperation and
Development (OECD) projects a GDP
decline of 2 per cent for the country next
year. The overnight lending rate lies at
17.5 per cent right now and the Turkish
lira has fallen against the dollar from 1.17
to 1.52 as of December 30.
Inflation in Turkey is high at 10.6 per-
cent for the year, and unemployment
stood at 9 percent for the year as of Sept.
30.
For years the muslim country has been
Jan. 2009 Page 7 The Whitehall Monitor

10. This month, the Bank of England
lowered its benchmark rate to the low-
est since the institution’s foundation ––
nearly a century before the United States
declared its Independence from the Brit-
ish government –– in 1694! The cut re-
duces interest rates to 1.5 percent, is the
fourth in as many months, and to lend
scale to the agression with which inter-
est rates have been cut over the past year,
consider the interest rate stood at 5.25
percent as of February, 2008.
“The availability of credit to both
households and businesses has tightened
further, pointing to the need for further
measures to increase the flow of lending
to the non-financial sector,” the bank’s
governor, Mervyn King, announced in a
statement released to the press. “Output
is likely to continue to fall sharply during
the first part of this year.”
Following Northern Rock PLC’s bail-
out in Sept. 2007 and nationalization on
February 22, 2008, the bank has taken
aggressive measures to get on track, de-
spite the dour economic outlook and has
managed to repay more than half of the
debt owed from the pre-nationalization
bailout.
Unfortunately, the government was
forced to nationalize another pair of
financial institutions, Royal Bank of
Scotland, the second largest bank in the
country, and lmortgage lending giant
Bradford & Bingley, in September.
“With that move, every single one
United Kingdom
EU in January, 2007, has been caught in
a number of scandals and in July an EU
report found that 34 of 35 EU-funded
projects within Bulgaria had financial
irregularities and withheld €220 million
in development aid.
On the IT front, and offshore services
in general, Bulgaria is doing better along
with several other Central and Eastern
European countries, landing within the
top 51 countries on the Global Loca-
tion Index. Bulgaria squeezed into the
top 10 countries in the Global Location
knocking on the door of the European
Union, hoping to gain entry, and for
years it has been put off. In June, 2006,
though, it gained preliminary approval,
but is required to meet EU six year bud-
getary perspectives. It is not likely to
gain accession until 2013 at the earliest,
and more likely, will not become a full
member until 2021.
Bulgaria, which gained entry into the
of the country’s “building societies,” or
smaller regional banks, has now been
taken over either by the government or
another big traditional bank.” Rob Gif-
ford of National Public Radio reported.
Bradford & Bingley, formed in 1964
by the merger of two building societies
around for more than 150 years each,
was valued at more than £3 billion in
early 2006. It was the largest lender to
rental property owners. On Sept. 26,
the share value dropped to £256 million,
dragged down by the worst British hous-
ing decline in 30 years.
“Hysterical claims that Britain is on
the brink of ‘national bankruptcy,’ or that
the Government has ‘run out of money’
or that the pound is going the way of the
Icelandic krona may be a normal part of
political banter, but they are absurd,” re-
ported The Times associate editor Anatole
Kaletsky in November. Kaletsky noted
that at 40 per cent, Britain’s public debt-
to-GDP ratio is the lowest among G7’s
other advanced economies.
“If it were to rise to 57 per cent, as
suggested by Treasury projections, this
would not
p r e s e n t
a serious
problem,”
he not-
ed. “Nor
would it
drive up
i n t e r e s t
rates and
inflation,
to judge by
the experi-
ence of Ja-
pan, Italy,
France and
Germany,
all of which have public debt ratios above
57 per cent.”
Prime Minister Gordon Brown’s La-
bour Party was growing in unpopularity
before the financial crisis, but his per-
sonal stock has arisen given his steady
resolve in addressing the downturn and
his ten years of experience as head of
the Treasury. Besides concerns over the
mid-2009 general elections, other wor-
ries likely to be keeping him up at night
include unfunded government and pub-
lic worker pension schemes as the popu-
lation continues to age, and the rapid de-
cline in the sterling versus the U.S. dollar.
Calls to join the Euro are growing.
The current account deficit expanded
to £7.7 billion in the third quarter, repre-
senting about 2.1 per cent of GDP. The
economy grew by a very slight .8 per cent
for the year and is projected to shrink by
around 1.4 per cent for 2009. Industrial
production has slumped as well, shrink-
ing by 5.2 per cent as of October. Infla-
tion averaged 3.7 per cent for 2008 and
unemployment was 6 per cent for the
1 Netherlands
2 Sweden
3 Denmark
4 Finland
5 Spain
6 Switzerland
7 Norway
8 Italy
9 Ireland
10 Belgium
11 Germany
12 Greece
12 Canada
13 Poland
14 Czech Republic
15 France
16 Portugal
17 Austria
18 Hungary
19 United States
20 United Kingdom
UNICEF Ranking of Child Well-Being In
Advanced Countries 2007
In the chart below countries are listed in order of their average rank for
these six dimensions of child well-being that were assessed: material
well-being, health and safety, educational well-being, family and peer
relationships, behaviours and risks, and subjective well-being.
Jan. 2009 Page 8 The Whitehall Monitor
Europe, Cont’d Index, outpacing previous placeholders
Czech Republic (which ended this year
in 13th), Hungary, and Poland. Slo-
vakia ranked 12th, Estonia and Latvia
came in at 15th and 17th places respec-
tively. Lithuania even landed in 28th
place. “Estonia today is what Ireland
used to be ten to 15 years ago,” the GLI
reports, “a relatively low-cost European
location with top class, largely untapped
talent and a pro-business policy envi-
ronment.

11. Reprinted with permission.
By Jérôme Guillet and John Evans
A monolithic, Putin-led Kremlin us-
ing the “energy weapon” to browbeat
neighbouring Ukraine and beyond
threaten the rest of Europe with natural
gas shortages: the image has become a
commonplace during the “gas spats” of
the past few years. Yet those spats have a
longer history than is generally appreci-
ated – they began in 1992 – and, what is
more, Vladimir Putin and Gazprom can-
not win a prolonged gas war, and they
know it.
The Soviet gas industry
was born in Ukraine in the
1930s and the infrastruc-
ture was built from there.
Ukraine remained a central
part of the gas pipeline network
even as the focus of activity moved to
western Siberia. Carving up the Soviet
Union along along the borders of its
former republics made for an often un-
workable allocation of physical assets.
Vital assets for Gazprom, the Russian gas
monopoly, are located in Ukraine and
thus no longer under its direct control:
the pipelines are an obvious item, but,
just as significantly, Ukraine controls
most of the storage capacity of the Rus-
sian export system. On the other hand,
Ukraine, a heavy industry country, has
mostly depleted its gas reserves, making
it dependent on gas from Siberia.
So this is a situation of mutual de-
pendence. Russia needs Ukrainian infra-
structure to honour its export contracts
to Europe, and Ukraine needs Russian
gas. In case of conflict, withholding gas
(from Russia’s side) or shutting down
export infrastructure (from Ukraine’s)
are tempting options, which have been
taken up repeatedly since the demise of
the Soviet Union.
Ukraine used to get its gas allocation
from Soviet planners and continued
to expect the same after independence.
When Russia first tried to get payment for
its deliveries in the early 1990s, it failed.
When it first cut off gas to Ukraine to en-
force payments, Ukraine simply tapped
the gas sent for export purposes; when
European buyers howled, Russia relented
and restored gas supplies without having
managed to get paid by Ukraine. This
has gone on. Yet somehow the gas con-
tinues to flow every year.
Russia cannot cut off Ukraine for any
lengthy period of time, because that en-
dangers its exports. In practice, giving
roughly 20 per cent of its gas shipments
to Ukraine as payment for transit is an
acceptable deal for both sides. So why
the annual charade?
Gazprom understood long ago that
Ukraine would never pay for official de-
liveries. The attempted “solution” was to
privatise a portion of the trade. Custom-
ers were offered lower rates if they paid
them directly to another supplier, for-
mally unrelated to either Ukrainian gas
authorities or Gazprom.
The co-operation of senior
G a z - prom management
and Russian
and Ukrainian
politicians was
required
to set
up the 30bn-cubic-me-
tre-a-year trade. The trade’s enablers are
in a position to benefit personally from
it – and in effect cut out both Kiev and
Gazprom. Political infighting in Ukraine
can largely be understood by the struggle
to be the Ukrainian counterparty to the
trade. (It is no coincidence that Yulia Ty-
moshenko, the prime minister, made her
fortune in gas trading in the 1990s and
that Viktor Yanukovich, the pro-Russia
opposition leader, represents some of the
largest heavy industrial gas buyers in east-
ern Ukraine.) In Russia, similarly, both
the Kremlin and Gazprom are rife with
infighting between shifting coalitions.
So while the world focuses on the pre-
dictable brinkmanship between Ukraine
and Russia, the real fight over the share-
out is taking place more discreetly be-
tween a few oligarchs in Moscow and
Kiev. This is perhaps the whole pur-
pose of the noisy puppet show. Worries
about Russia or Gaz prom using the “gas
weapon” against Europe are misplaced.
In their official capacity, both are keenly
aware of their absolute dependency on
exports to Europe for a huge share of the
country’s income, and on the need for
stable, reliable, long-term relationships
to finance the in vestments needed in gas
infrastructure.
Of far more concern is that govern-
ments in Ukraine and Russia tolerate –
indeed encourage – use of their upper
political echelons and large parts of their
infrastructure as instruments in disputes
between unknown oligarchs. It suggests
how little the rule of law and principles
of accountability have penetrated public
life in each country. And also, compared
with the power of competing factions,
how overstated is the strongman reputa-
tion of Mr Putin, Russia’s prime minis-
ter.
Jérôme Guillet, an investment banker,
and John Evans, a writer, are editors of
the European Tribune, a news and debate
website (www.eurotrib.com)
The battle of the oligarchs behind the gas dispute
Top Exporters
(thousand barrels per day)
1 Saudi Arabia 8,525
2 Russia 6,866
3 United Arab Emirates 2,564
4 Norway 2,557
5 Iran 2,469
6 Kuwait 2,340
7 Venezuela 2,134
8 Nigeria 2,131
9 Algeria 1,842
10 Mexico 1,630
11 Libya 1,530
12 Iraq 1,438
13 Angola 1,379
14 Kazakhstan 1,145
15 Qatar 1,033
Biggest Consumers
(thousand barrels per day)
1 United States 20,687
2 China 7,201
3 Germany 5,410
4 Japan 5,198
5 United Kingdom 3,625
6 Russia 2,811
7 India 2,572
8 Canada 2,297
9 Brazil 2,220
10 Korea, South 2,180
11 Saudi Arabia 2,139
12 Mexico 2,078
13 France 1,981
14 Netherlands 1,951
15 Italy 1,743
Let’s Talk Oil
Source: U.S. Energy Information Administration, 2006 figures
Jan. 2009 Page 9 The Whitehall Monitor

12. Jan. 2009 Page 10 The Whitehall Monitor
The Decem-
ber 22 Tennessee
Valley Authority
Fossil plant coal
fly ash slurry spill
seems a tragic but
fitting legacy to
the presidency of
George W. Bush.
Indicative of the
neglect his admin-
istration gave to infrastructure spending
across the United States, this 1.1 billion
gallon slurry was the largest fly ash re-
lease in United States history covering
300 acres of pristine Tennessee rivers
and farmland up to six feet deep in some
areas. From bridges in need of repair to
wear military forces and worn out equip-
ment, to schools in decline...
Rather than dwell on the Bush years,
however, president-elect Barack Obama
must unite the country which faces tre-
mendous challenges ahead in order to
right itself, economically, politically, and
even physically. Not since the Great De-
pression has the economy shed so many
jobs so rapidly … 524,000 in December
bringing 2008 total to a six-decade high
of 2.589 million, the worst since 1945.
The unemployment rate jumped from
6.8 to 7.2 percent, the highest level since
1993. According to the Bureau of Labor
Statistics, at least 10.3 million Ameri-
cans were out of work as of the end of
December. At 20.4 percent, unemploy-
ment among teens is highest, followed
by unemployment among blacks, 11.2
percent. Those out of work for 27 weeks
or more was up by 822,000 since No-
vember, 2007. The Federal Reserve re-
ported in meeting notes of its December
meeting that unemployment is “likely to
rise significantly into 2010.” The U.S.
outplacement firm Challenger, Gray &
Christmas reported more than 166,000
job cuts were announced in December,
an 8.4 percent decline over November’s
numbers, but nearly four times more
than December 2007’s numbers, suggest-
ing the job losses are going to continue.
“The loss of jobs is beginning to create
a bit of a negative feedback loop,” Mark
Vitner, senior economist at Wachovia
told CNNMoney recently. But Chal-
lenger’s CEO, John A. Challenger, says
the economic stimulus package could
stop the bleeding by mid-2009.
“The plan to rebuild the nation’s crum-
bling infrastructure will benefit not only
laborers on the front lines, but it will
push up through the economy, creating
jobs for manufacturing workers, engi-
neeers, architects, technology specialists,
etc.,” Challenger told CNNMoney.
On January 8, president-elect Obama
called on Congress to quickly pass his
proposed $800 billion stimulus plan
aimed to increase jobs by 3 million by
2011 and boost consumer spending. It
includes substantial tax cuts for individ-
uals and businesses alike, coupled with
a large infrastructure spending pack-
age geared toward creating a national
energy grid, encouraging renewable re-
source technology, and revamping roads,
schools and more.
Nancy Pelosi, Speaker of the House
of Representatives, and fellow democrats
are calling on the president to raise taxes
on the wealthiest individuals and has in-
dicated she will delay a vote on this pack-
age until after the inauguration, prepar-
ing the scene for a potential battle.
“Every day we wait, or point fingers, or
drag our feet, more Americans will lose
their jobs, more families will lose their
savings, more dreams will be deferred and
denied, and our nation will seek deeper
into a crisis that at some point, we may
not be able to reverse,” Obama warned.
Lenders and retailers alike hint at the
negative feedback loop dilemma, as the
Federal Reserve announced in early Janu-
ary that consumer borrowing in Novem-
ber,thelatestmonthreportedon,dropped
by a record $7.9 billion as Americans,
staring down both barrels of an economic
shotgun, faced with job insecurity and
awareness of the worst economic down-
United
States
On January 20 Democrat Barack Obama will
be inaugurated 44th president of the United
States, facing the greatest economic challenges
for the country (and the world) since the Great
Depression.
turn since the Great Depression.
“Today’s figures foreshadow a pro-
longed drop in consumer spending as
households try to reduce debt with their
net worth declining and job losses accel-
lerating,” Bloomberg reported.
The tightening of credit is one part
of the equation as lenders are wary of
expanding their already weakend credit
portfolios. And they have reason to be.
According to the American Bankers As-
sociation, delinquencies on indirect auto
loans, which are those made through car
dealerships and other third parties, were
the highest ever, at 3.25 percent for the
third quarter of 2008, the latest numbers
available. . ABA also noted delinquent
payments in eight loan categories, ranging
from auto loans to home equity loans.
““The number one factor in rising con-
sumer credit delinquencies is job losses,”
ABA Chief Economist James Chessen
said. “With one million jobs lost in the
first three quarters and two and a half
million expected for the year, delinquen-
cies of all types of consumer loans will
likely increase in the coming quarters.”
Reflecting the reluctance to spend or
buy on credit, retail stores posted a 2.2
percent decline in November and De-
cember, according to the International
Council of Shopping Centers which has
never seen a greater drop in its 39 years
reporting these numbers.
Macy’s, the nation’s second-largest
departement store group, is rumored to
be preparing announcment of a $3 bil-
lion after-tax write down of goodwill,
Bloomberg reported Jan. 9. That same
week, Alcoa, the world’s largest alumi-
num producer, announced a $900 mil-
lion reorganization writeoff. The Stan-
dard & Poors Index dropped nearly 40
percent in 2008 dragged down by such
writeoffs and credit losses at financial en-
tities worldwide.
One of the main losers, which shed
60 percent of its market value in mid-
November alone, was Citigroup. It was
weighed down by $306 billion in trou-
bled assets at the time, Bloomberg noted.
The federal government, which earlier
had provided Citigroup $45 billion of
TARP Funds, agreed to guarantee the
troubled bank’s entire $300-plus billion
troubled asset portfolio in late Novem-
ber, in exchange for preferred shares of
the company’s stock.
In early January, Citigroup agreed
to support legislation it had previously

13. U. S. (Cont’d)
lobbied against that allows bankruptcy
courts to reset of mortgage rates for some
current homeowners to stave off foreclo-
sures. The legislation was voted down in
the 110th Congress, but was amended to
restrict it to only current homeowners.
Citibank’s support and a democratically
controlled House and Senate, the bill
is likely to pass and quickly get signed
into law by the new president who was a
sponsor of the original legislation. Shares
of Citigroup, which serviced about 7
percent of all U.S. mortgages for the year
as of Sept. 30, rose on the news.
Officially in a recession since last quar-
ter of 2007, the economy shrank by .5
percent for the quarter but grew 1.3 per-
cent for the year. Inflation grew by its
smallest amount, 1.1 percent for Novem-
ber, compared to 4.1 percent for the year.
The dollar was down dramatically
much of the year but toward year end,
pulled back as much of the world sought
greenbacks as a safe haven currency
again. Because of its declining economy,
the British pound is no longer the green-
back’s chief competitor and the dollar’s
main competition is from the ten-year-
old Euro which, before the U.S. invaded
Iraq, was on par with the dollar and now
trades at an impressive .75 to the dollar.
The trade deficit was at $853.1 billion
for the 12 months ended Oct. 31, and
the current account deficit was $697.9
billion for the latest 12 months ended
Sept. 30, about 4.5 percent of the GDP.
The U.S. budget deficit reached 3.2
percent of the GDP for 2008, a worse
showing than other major advanced
economies with the exception of India,
Japan, and the UK who posted 4.3, 3.3
and 5.3 percent deficit gaps, respectively.
Even before the new stimulus package
is added, Obama will be burdened with
massive national debt. As of Jan. 6, the
national debt exceeded $10.6 trillion, of
which $6.3 trillion is held by the public
according to the U.S. treasury.
The rapid decline in auto sales is indicative of the malaise in
manufacturing. Overall Productivity grew 1.5 percent in the
business sector, including farming, for the third quarter, sea-
sonally adjusted but Manufacturing Productivity declined by
2.7 percent. Durable goods manufacturer productivity showed
growth of 2.9 percent, but was offset by a steep 10.2 percent
decline in productivity of non-durable goods manufacturing.
“Economic activity in the manufacturing sector failed to
grow in December for the fifth consecutive month,” Norbert
J. Ore, C.P.M., chair of the Institute for Supply Management™
reported in the organization’s January Manufacturing ISM
Report on Business®. “The decline covers the full breadth of
manufacturing industries, as none of the industries in the sec-
tor report growth at this time.” The report notes that new or-
ders have declined to the lowest level on record, going back to
January 1948, for 13 consecutive months straight.
“The industries failing to grow in December are: Nonmetal-
lic Mineral Products; Printing & Related Support Activities;
Wood Products; Machinery; Primary Metals; Paper Products;
Transportation Equipment; Chemical Products; Fabricated
Metal Products; Electrical Equipment, Appliances & Compo-
nents; Furniture & Related Products; Plastics & Rubber Prod-
ucts; Textile Mills; Computer & Electronic Products; Food,
Beverage & Tobacco Products; and Miscellaneous Manufactur-
ing,” ISM reports.
Order backlogs have
never been lower than
they hit last month
since ISM began track-
ing order backlogs in
January 1993. To off-
set the slower demand,
manufacturers are cut-
ting inventories and
shutting down capac-
ity. Export orders de-
clined too, for the third
month in a row follow-
ing 70 straight months
of growth in the organization’s New Export Orders Index. Four
industries did report some growth in new export orders.
• Apparel, Leather & Allied Products
• Textile Mills
• Plastics & Rubber Products
• Miscellaneous Manufacturing.
No growth in export orders was noted in the following
industries: Furniture & Related Products; Primary Metals;
Nonmetallic Mineral Products; Paper Products; Printing &
Related Support Activities; Chemical Products; Transportation
Equipment; Fabricated Metal Products; Machinery; Electrical
Equipment, Appliances & Components; Computer & Elec-
tronic Products; and Food, Beverage & Tobacco Products.
A bit of good news for the U.S. trade deficit, imports of
materials by manufacturers decreased for the 11th consecutive
month of contraction in imports.
The industries reporting growth in import activity for De-
cember are:
• Apparel, Leather & Allied Products
• Paper Products
• Electrical Equipment, Appliances & Components.
The remaining industries responding to the survey, includ-
ing Nonmetallic Mineral Products; Plastics & Rubber Prod-
ucts; Transportation Equipment; Printing & Related Support
Activities; Textile Mills; Fabricated Metal Products; Machin-
ery; Chemical Products; Food, Beverage & Tobacco Products;
and Computer & Electronic Products did not expand import
activity for the month.
As hinted in the Baltic Dry Index, shipments of manufac-
tured durable goods decreased $5.0 billion or 2.4 percent to
$202.9 billion for October, the third decrease in three con-
secutive months. This was a marked jump over a 0.2 percent
September decline.
U.S. Industrial Overview
REMINDING YOU: Information is Power!
Whitehall offers U.S. sector reports to wholesale customers for
$150 per sector. These reports include identification of the lead-
ing companies, customers, suppliers, trends, ratios, and more.
Jan. 2009 Page 11 The Whitehall Monitor
Accounting for an estimated 90 percent
of the GDP, small businesses are the
backbone of the economy. They have
been hurt dramatically hurt by the slow-
down of major manufacturing giants.

14. Jan. 2009 Page 12 The Whitehall Monitor
Canada has a reputation
of embracing the rule of law
and is perceived as fourth
least corrupt country in the
world, according to Trans-
parency International, and
yet in a move designed to
bypass a confidence vote
that would have tossed his Con-
servative government out, on De-
cember 4, 2008, Prime Minister
Stephen Harper temporarily shut
down parliament with permission
of the Governor-General. It was
the first time in Canada’s history
for such a prorogue. Harper sur-
vived an earlier election held in
October, but his minority Con-
servative government is under
pressure from opposition who
have formed a coalition which is
likely to unseat him.
The confrontation erupted
when Harper announced his fall
economic update which would
have eliminated millions in subsidies from political parties and
removed the right of civil workers to strike. Harper has re-
moved both of those contentious items from a revised version.
The political back-and-forth comes amidst a global crisis
which saw the most dramatic deline in the Canadian dollar
against the U.S. dollar in more than half a century as plummet-
ing commodity prices in the latter part of 2008 inflicted great
damage to the resource-rich country. In fairness, the decline
only served to level out gains the Canadian currency made in
2007 when it was at one point valued higher than the U.S.
greenback. Analysts expect more weakness for both the Cana-
dian and U.S. dollars in at least the first half of 2009.
Canada’s oil rich western provinces were strong enough to
balance out economic declines in
both Ontario, with its automotive
industry under pressure, and Que-
bec’s industry sector. Thanks to
British Columbia and elsewhere,
Canada has an estimated 23 years
of oil reserves, in excess of 25 bil-
lion barrels at the end of 2007 ac-
cording to BP.
The unemployment rate rose
marginally above the structur-
al unemployment rate, helped
along no doubt by the shedding
of 1,300 jobs by Canada’s major
telecom firm, Nortel. At the end
of November the unemployment
rate was 6.3 per cent. The econo-
my barely grew, .6 percent for the
whole year, and in September industrial production fell 3.7 per
cent. Fortunately, the inflation rate as of November was only
2 per cent, but that is sparking concerns of a deflationary situ-
ation and zero economic growth down the road. As it is, the
economy is only expected to grow .1 per cent for all of 2009.
What you need: North American Credit Reports ... and More!
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in global markets, and Whitehall wants to be your partner in taking advantage of new opportunities that may
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can companies produced in-house, and throughout the remainder of the world through our trusted partners.
Our standard wholesale prices and delivery times for reports on North American businesses are as
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Express: 3-5 days 75
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Reports include the latest intelligence gathered from
various sources including government agencies, banks,
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Besides our in-house business credit reports and international credit reports supplied through our world-
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(in select countries) and debt recovery services. When it comes to your international business intelligence
needs, Whitehall covers the globe! For more information, call us at 615-223-1125 or send an e-mail to
info@whitehallusa.com.
Canada
Pristine Vancouver ... ©John Olson, 2007

15. Despite a budget surplus that ac-
counted for 5.9 percent of the GDP,
Chile’s economy shrank by a slight .2 per-
cent for the third quarter. Still, it held its
own to grow by nearly 4 percent for the year.
Because of a reliance on overseas trade, the GDP is
expected to grow only 1 percent in 2009. Productivity
shrank for October by .8 percent. Inflation grew from 7.4
percent for 2007 to 8.9 percent for 2008 and unemploy-
ment was 7.5 percent at the end of October.
Columbia’s GDP grew by an average of 3.2 percent for the
year 2008 and is expected to grow by another 2 percent for
2009 despite a 7.5 percent decline in productivity in Octo-
ber, the latest figures available. Inflation increased from 5.4
percent for 2007 to 7.7 percent at the end of November and
unemployment is in double digits – just at 10.1 percent at the
end of October. At that time, the country’s trade surplus was
$2.7 billion, despite a current account deficit for the last 12
months to June was $4.9 billion which amounted to 2.4 per-
cent of the country’s GDP. The Colombian peso ended the
year at 2,242 to the U.S. dollar, a slight decline from 2007’s
year end position of 2,017. The budget deficit was 1 percent
of the GDP at year’s end.
Mexico has a decent 4.5 percent unemployment rate as
of November, and inflation grew modestly from 3.9 percent
to 5.2 percent for 2008. But productivity declined slightly
in October by 2.7 percent and the economy barely inched
along growing only 1.8 percent for the year. It is expected to
do worse and post a slim.2 percent decline next year. This
might be because the trade balance was $14.5 billion year
on year at the end of November, and the current account
balance at the end of the third quarter was $11.8 bil-
lion, representing 1.7 percent of the GDP. The peso
dropped in value against the dollar from 10.9 at
2007 year end to 13.5 at the start of 2009.
The country has no budget deficit to
speak of.
With unemployment of nearly a
quarter of its population, Venezuela’s
Hugo Chavez has much to worry about.
The oil-rich country was coasting along
beautifully during the $120-a-barrel days in
2008, but having dipped to under $50 a barrel,
his country is not bringing in the foreign dollars
to support the large number of public employees or
pensioners. Still, the economy boasted a trade surplus
of $50.2 billion at the end of September, and a cur-
rent account surplus of $49.4 billion for the year ended Sept.
30, contributing 15.5 percent to the economy for 2008. The
boulivar strengthened in value against the dollar moving from
5.5 to 5.2 over the last two Decembers. Despite high interest
rates and a budget deficit, the economy grew an estimated 4.2
percent for the year, and inflation, though high at approxi-
mately 11.4 percent, is not the hyperinflation once common-
place throughout Latin America.
Despite a decline in productivity of 7.2 percent for No-
vember, Argentina’s economy
expanded by an impressive
6.2 percent for the year and is
expected to grow an additional
2.2 percent in 2009. Its trade
surplus is a healthy $14.1 billion
as of the end of November, and
the current account balance,
representing 2.9 percent of the
GDP, was $9 billion as of the
end of September. The Argen-
tine peso dropped in value from
3.15 to 3.44 against the dollar
year on year to December 31,
2008, but a budget surplus at a
scant .7 percent of GDP repre-
sents good management. Inter-
est rates are high at 19.56 on
three-month bonds and inflation
fell slightly to 7.9 percent at the
end of November and averaged 9
percent for the year. At the start
of October 7.8 percent of the
population was unemployed.
Latin America and Caribbean
Ten Richest Countries in
the Caribbean
Source: U.S. Central Intelligence Agency
Country Per Capita
GDP
(In US $)
The Bahamas 21,300
Trinidad and Tobago 19,700
Barbados 18,200
Antigua and Barbuda 10,900
St. Kitts and Nevis 8,200
Dominican Republic 8,000
Saint Lucia 4,800
Jamaica 4,600
Cuba 3,900
Grenada 3,900
Southern coast of St. Vincent.
Ian Mackenzie, Photographer.
Jan. 2009 Page 13 The Whitehall Monitor