Library: Iceland

Crisis in the Midst of Recovery

June 20, 2011
By Nate Haken
The Failed States Index

After having contracted by 0.5% in 2009, global GDP is now very much in recovery mode, with growth of around 5% in 2010. However, this does not mean smooth sailing either for developing or developed countries. In the last year there have been massive protests against governments’ economic stewardship in countries as disparate as Greece and Burkina Faso, illustrating the sobering truth that under certain conditions recovery can be even more destabilizing than recession.

In 2009, economies in the developed world took a nosedive, as debt crises spread like wildfire, hopping through the Eurozone from Iceland, to Ireland, to Greece, and Portugal. Looking ahead, people are now turning their concern toward Spain. All of these countries, whether or not they have been, or will be, bailed out to stabilize their economies, are facing the necessity of austerity measures to prevent such crises from repeating themselves in the future. These austerity measures are being imposed as economies are now deemed strong enough to withstand them. Nevertheless, they have sparked protests, which have sometimes turned violent. Meanwhile, the recovering global economy is contributing to rising food and fuel prices, which have sparked massive protests and military crackdowns in Mozambique, Uganda, and Burkina Faso.

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