By Albin Joseph

After a series of economic slowdowns, two of the world’s major economies, namely Japan and the United Kingdom, have plunged into recession recently. Japan has been displaced from its position as the third largest economy by Germany. The United Kingdom fell into recession at a critical juncture when the elections are just a few months away. This poses severe challenges to Prime Minister Rishi Sunak, whose primary commitment to the nation was to promote the overall economic growth of the kingdom.

A recession is defined as two consecutive contractions in the Gross Domestic Product (GDP) of a country. If there is a dip in GDP growth for a continuous six months, then it’s termed a Recession; Japan’s economy contracted by 0.4% and that of the UK by 0.3% in the last three months of 2023. There was a steady decline in the economies of these two nations throughout the course of 2023. From July to September 2023, Japan’s economy witnessed a de-growth of 3.3%, and the UK’s economy had a slump of 0.1%. Going by these numbers, it’s obvious that these two economies are under the grip of Recession.

The cost of living in the UK has risen considerably, major sectors like manufacturing and construction have not been performing well, and the British Pound has been on a weakening trend against the US Dollar during the past six months. During 2023, the UK’s economy grew by a meagre 0.1%, which is the weakest growth ever since the 2009 financial crisis. All eyes are set on the next UK budget that UK Finance Minister (Chancellor of the Exchequer) Jeremy Hunt is to present in a couple of weeks. The budget is expected to bring in concrete measures to curb inflation and propel overall economic growth.

Japan was relegated to fourth place in terms of GDP which totaled $4.2 trillion in 2023, whereas Germany assumed third place with its GDP estimated at $:4.5 trillion. A weaker Japanese yen is the major reason attributed to the slump in Japan’s economic growth. Moreover, there has been a slowdown in business, which leads to a lack of wage increments and layoffs. This lead to a fall in domestic demand, which made people curtail their expenses and hold on to their earnings.

A decline in population growth and an ageing population have affected the overall GDP, as well as the productivity of Japan. Traditionally, both Japanese and German economies were powered by small and medium-scale industries that were renowned for their high productivity. Of late, Japan’s productivity took a beating because of its shortage of qualitative labour, whereas Germany managed to keep its productivity intact by endorsing immigration, which led to overall population growth as well. By immigration, Germany’s population grew to 85 million in 2023. This not only made up for the low birthrate in Germany but also fueled the overall growth in GDP. Japan could overcome its labour shortage by endorsing immigration, but the country has its own reservations in the formulation of policies on this front.

Though this recession wouldn’t last long, it’s quite obvious that whenever major economies plunge into recession, it will have a ripple effect across the world, at least in the short run. The Euro zone has revised its growth forecast for 2024 from 1.2% to 0.8%, and it remains to be seen whether other countries will follow suit.

The author is a Member of Loka Kerala Sabha

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Protesters were carrying placards which included slogans like “Hate Has No Home Here”, “Senator Durbin Hates Indian Immigrants” and “Racism is a Disease”. Indian immigrants, including women and children also participated in the protest rally.

“These are taxpaying law-abiding skilled immigrants who are already in the country for many years- doctors, engineers, scientists and professors. They are stuck in the long green card backlog which will span 150 years! What we are doing here is protesting Senator Durban’s hold on the bill yesterday and he is making sure that Indian immigrants who are already here would not get equal treatment under the law, which is unfair,” said Aman Kapoor, Immigration Voice president.

Today protests broke out outside @SenGaryPeters’s office protesting @SenatorDurbin’s bigotry against Indian immigrants.

Durbin needs to be constructive by negotiating with Senator Lee, instead of shamelessly grandstanding on the Senate floor.

Sen Peters needs to denounce Durbin pic.twitter.com/m0Jl0cWCMs

— Immigration Voice (@immivoice) July 23, 2020

During the rally, the group also demanded that the green card backlog must be cleared up before the wait time.

The decision to ban visas are a huge set back for a large number of Indian IT professionals and several American and Indian companies who were issued H-1B visas by the US government for the fiscal year 2021 beginning October 1.

They would now have to wait at least till the end of the current year before approaching the US diplomatic missions to get stamping.

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In an exclusive interview with a news channel, Trump said that the Supreme Court’s decision, last month, blocking his administration’s plan to end the Obama-era program gave him “tremendous power”.

Just after the short interview by Trump, the White House issued a statement saying that the immigration deal would not include amnesty.

“As the president announced today, he is working on an executive order to establish a merit-based immigration system to further protect US workers,” the White House said in a statement.

“Furthermore, the president has long said he is willing to work with the Congress on a negotiated legislative solution to DACA, one that could include citizenship, along with strong border security and permanent merit-based reforms,” the White House said.

“This does not include amnesty. Unfortunately, Democrats have continually refused these offers as they are opposed to anything other than totally open borders,” said the White House in a statement.

Meanwhile, this sudden announcement by Trump has also drawn sharp criticism from many. Senator Ted Cruz in Twitter post described the move as a mistake.

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