1 Economic blow seen in drop in global birth rates (Johannesburg Times) The 2008 financial crisis did more than wipe out billions in wealth and millions of jobs. It also sent birth rates tumbling around the world as couples found themselves too short of money or too fearful about their finances to have children. Six years later, birth rates haven’t bounced back.
For those who fear an overcrowded planet, this is good news. For the economy, not so good. Economists attribute up to a third of it to more people joining the workforce each year than leaving it. The result is more producing, earning and spending. Now this secret fuel of the economy, rarely missing and little noticed, is running out.
“For the first time since World War II, we’re no longer getting a tailwind,” says Russ Koesterich, chief investment strategist at BlackRock, the world’s largest money manager. “You’re going to create fewer jobs. … All else equal, wage growth will be slower.”
Births are falling in China, Japan, the US, Germany, Italy and nearly all other European countries. Studies have shown that births drop when unemployment rises, such as during the Great Depression of the 1930s.
The trend emerges as a gauge of future economic health – the growth in the pool of potential workers, ages 20-64 – is signalling trouble ahead. This labour pool had expanded for decades, thanks to the vast generation of baby boomers born in the first few decades after World War II in many countries. Now the boomers are retiring, and there are barely enough new workers to replace them, let alone add to their numbers.
A return to “normal” growth is unlikely: Economic growth of 3 percent a year in developed countries, the average over four decades, had been considered a natural rate of expansion, sure to return once damage from the global downturn faded. But many economists argue that that pace can’t be sustained without a surge of new workers.
2 Barclays to cut 8,000 investment banking jobs (Jill Treanor in The Guardian) Barclays will announce on Thursday that it is cutting up to 8,000 investment banking roles – almost a third of the division’s workforce – as it retreats from one of the most controversial parts of its business. Antony Jenkins, the embattled Barclays chief executive, is to outline his plan to overhaul the investment bank after facing fierce criticism for his decision to increase bonuses by 10% last year, when profits fell sharply.
In an announcement to the City, Jenkins is expected to explain how he intends to tackle the most troublesome parts of the investment bank – the traditional powerhouse of Barclays – to prove to investors that he can rein in costs and start to bolster the profitability of the organisation.
In his latest strategy update Jenkins is expected to signal the potential for fresh cuts in the investment banking arm, which employs 24,000 around the world, primarily in the City and Wall Street. The jobs are not expected to go all at once, but spread over three years. The bank has already earmarked 12,000 job cuts for this year, with 7,000 of those in the UK. It is unclear how many of the latest round of 8,000 are on top of those earlier numbers.
3 A Nigerian nightmare (Mahir Ali in Khaleej Times) Africa’s largest country — in terms of both its population and the size of its economy — is today hosting a World Economic Forum (WEF) event where regional leaders and China’s prime minister will discuss the continent’s strategies for growth.
One can be reasonably sure, though, that one topic that has been concentrating minds across the host nation for the past three weeks will not feature on the agenda of the international gathering in Abuja. On April 14, the odious outfit known as Boko Haram raided a school in Chibok, in Nigeria’s north-eastern state of Borno, and abducted more than 300 schoolgirls. About 50 or so managed to escape early on, either from the trucks they were being transported in, or from the camp where the terrorists were holding them.
Last Sunday, shortly after President Goodluck Jonathan offered his first official comment on the unprecedented crime, a video surfaced with a chilling message purportedly from Boko Haram’s leader, Abubakar Shehau, in which he declares: “I abducted your girls. I will sell them in the market… I will sell them off and marry them off…”
The cancerous growth of Boko Haram is something the Nigerian state has signally failed to arrest in recent years. The terrorists don’t only target schools, students and teachers — as recent bomb blasts in Abuja and elsewhere suggest, random destruction of lives and property is also very much a part of their agenda. There are innumerable parallels between Boko Haram and the Taleban, not least in terms of their obscurantist mindset and the limp-wristed state response to an endless series of outrages.
The popular upsurge in Nigeria in the wake of the latest unspeakable atrocity provides some scope for hoping that the state will finally act decisively to obliterate the growing menace. Naturally, the lives and welfare of the abducted girls must be an absolute priority. Looking back a few years hence, it would also provide a degree of satisfaction to be able to pinpoint the moment when Boko Haram sealed its own fate by going much too far.