The American economy affects everyone, regardless of their societal status. Therefore, when the American Economy is in recession, the whole world falls into a state of trauma, millions of jobs are lost and multi-national companies are forced to shut down. In America alone 2.8 million jobs were lost in 2008 (source: CNN money). If the tolls were so high in one of the stronger economic states what of the less resilient?
Why I chose this topic
I chose this topic as to know the other side of an, other-wise cliché, research question. Is it not true that every-one knows of the great devastation that the 2008 recession caused for countries such as the United States of America and France? But is it not true that no-one bothered to even ask about the rest of the countries that are part of the very same planet as well?
“To know what really happened, you must look at the holistic picture”
– Dalai Lama.
To understand what really happened in the Great 2008 Recession, we must go all the way back to the end of the Second World War. After the fighting had stopped, the European economic system had grinded to a halt as the war-time technology and equipment trade ceased, “The economic mechanism of Europe is jammed”, wrote David Lloyd George, Britain’s war-time president of the time. On an international level, this meant disaster as the European colonies extended through half of the globe.
However, together, the economists of the time managed to establish a new system in the Bretton Woods agreement in 1944. Every-one of the 700 or so members present there agreed to it, except one, John Maynard Keynes. He ended up to be the only one right. The over dependence on the U.S economy meant sure-shot failure.
Impacts on the African States
Africa is, undoubtedly, the continent that has suffered the most due to past conflicts, notably the apartheid. These past developments and the only recent freedom of many African countries from foreign rule, have led to weak governments, poor macroeconomic policies and a very volatile markets. For this reason, this continent is one that does not attract many foreign investors and remains highly isolated from the rest of the world, that is why, the U.S.A implemented the AGOA, African growth and Opportunity Act, in 2000 (Source: United States Trade Representative). This, further led to the formation of the African Union (AU), consisting of most of the sub-Saharan African States that benefitted from the AGOA. In this way the African Union prospered and the greater African economic powers soon emerged from the rest, including Kenya, South Africa and Egypt.
However, all good is not to last! As soon as the 2008 recession hit the growing powers got their feet blown away from beneath them and their before splendid growth rates (5-8%) were slashed down to very low or negative numbers, officially marking the arrival of the Great Recession in Africa.
On a global scale, not many economies were further...