Monthly archives of “February 2009

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Economic slowdown

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Economic slow down, recession, layoffs, bankruptcy, bankrupt banks, dipping share markets etc are few words and phrases echoing in everybody’s mind these days. It all started with major US and European corporate giants started filling for bankruptcy or started reporting huge losses on YoY numbers, QoQ number, for some the losses are in tune of billions of dollars. Poor show by big bank and corporates clubbed with negative future prediction has sent a depressing wave across the globe resulting in panic attack and weakening of other economies. Is it going to get worse? After how many months will the scenario will improve? How many more layoffs will take place before the economy stabilizes? are some questions which economists, think tanks, industrialist, analysts, management gurus, politicians all over the world are busy in finding the answers. Everyone is scared, nobody know whats more in the bag.
This economic crisis has spread all over the world. No country remains untouched. Industries are crying for help from governments. Governments world over are taking measures in form of bail out packages. The bail out come in form of all cash help, purchase of equity shares or creating holdings, or relaxation in taxes and duties. After spending hundreds of billions of dollars the economic super powers show no sign of recovery. World leaders and world organizations like IMF, World Bank are trying to work out on model that will fuel economic growth world wide and not just in handful of countries. Theories and suggestions are pouring in but no visible changes are noticeable. The numbers are still disappointing and are not showing stability.
Now question arises what do we do? How measures corporates shall take to revive the company? What more government should do to boost industrial growth? One thing which comes instantly in our thoughts is to cut unnecessary expenses. Yeah I know we all have seen various cost cutting measures in our respective companies, though we hate these steps which may reduce our comfort level but they are need of the hour. This thought is made more concrete by words of Franklin Raines – “If there’s a severe recession, the automatic stabilizers will come into effect, and we will still try to reduce the structural deficit, but we will not try to keep cutting the budget so that we keep worsening a severe recession“. So you can understand how important is cost cutting. Its really easy to crib about the cut in perks and facilities taken back, that time we fail to understand how important these steps are in order to keep our jobs intact.
Around ’75 when the recession hit, club owners started going to disco because it was cheaper for them to just buy a sound system than it was to hire a band” – Tommy Shaw clearly indicate the attention we shall give innovation. By innovating new efficient and effective process and products which not only save company’s cost but also provide value for money to consumers also. we can help in fueling the growth. With consumer pattern changing very frequently, we need to put sincere efforts in driving innovation at our workplace and home. This is not applicable for individual working at various companies, but also holds true for various government agencies and financial agencies. Government should look for more efficient and effective measure, policy amendments and tax cuts which give corporates, individuals a sense of relief and also do not create a hole in Government’s pocket.
Cost cutting, innovation, strict change in tax rates and more disciplined policies are the mantra for dealing with economic crisis. Let us all stand together and work towards a common goal of quickly coming out from this phase of business cycle called Recession.
Always remember “Recession is when a neighbor loses his job. Depression is when you lose yours ” by Ronald Reagen.

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