In 2008, the United States of America a major financial crisis which led to the most serious recession since the Second World War. This all started when the Lehman Brothers, one of the largest investing bank in the world, failed (The financial crisis of 2008: Year in Review by Joel Havemann, Encyclopedia Britannica eb. com). On September 15, 2008 to be exact the fall of the Lehman Brothers resulted to the downfall of the United States stock market and the laying off of employees by many successful companies.
Now the question left is how does the failure of this major financial company affects the US stock market and even marked the beginning of the 2008 Global Crisis? In a critical sense, financial business is more important that other industries because finance is necessary for every business to operate successfully. Lack of access to credit would cause even profitable businesses to close down. Thus without a successful financial bailout, all industries would have suffered catastrophically.
And like a domino effect when the Lehman Brothers failed, many successful companies suffered and lay off their employees. Unfortunately many of these employees are not Americans and in fact these are the people whom we considered as the American dreamers. And when these become jobless they were given no choice but to go back to their own respective countries. In our country these people are our Overseas Filipino workers whom we considered as our “Bagong –Bayani”. We call the “Bagong-Bayani’ because they are the biggest contributors of our dollar reserves.
This has a good effect in our economy because the higher our dollar reserves are, the higher the value of our money. Therefore the higher the number of our Overseas Filipino Workers, the better we economy we have. On the other side of the story, the geopolitical factor of the United States of America also affects the economy of the country like any other country which economy and government are inseparable. Unfortunately in this case it worsens the situation or as they say it, it throws more fuel to the fire. By geopolitical factor we mean the US- Iraq war during the Bush administration.
The neocon plan of the former president George bush to bomb the Iraq as revenge for the 9/11 bombing in Ney York city worsen the economic situation of the country. And again, the Unites States of America did not solely shoulder the burden. We, major oil importers, have also our own shares of burden and adjustments to make. Since Iran, Iraq and other middle-east countries are the major oil producers, the bombing of Iraq, which also affects some parts of the Middle East, paralyzed the production of oil and its distribution to the world.
Indeed during those years, the world had to adjust to a peak in oil production and to higher energy prices, after the current lull. If geopolitical mistakes turn the richest producing region into a hot warzone for many years, the worldwide economic consequences will be disastrous (The financial crisis of 2008: Year in Review by Joel Havemann, Encyclopedia Britannica eb. com). Statement of the Problem: How does the 2008 Global crisis affects third world countries? 1. How does it affect the employment rates of the countries? 2. How does it affect the living of small and ordinary families?
Scope: Third World Countries is a term often used to describe developing countries of Africa, Asia and Latin America. This includes all countries with different kinds of economy like Venezuela a capitalist country, North Korea a communist country, and a very poor country like Mali and even some rich country like Saudi Arabia. This third world nation s tend to have economies dependent on the developed countries and are generally characterized as poor with unstable and having high rates of population growth, illiteracy, and disease.
Another key factor in determining if a country is a third world or not is the lack of middle-class. These countries have millions of people under their poverty line and a very small elite class controlling the country’s wealth and resources. The factors that tell if a country is a third country or not are the following: a. Political Rights b. Civil Liberties c. Gross National Income d. Poverty of Countries e. Human Development Countries f. Freedom of information within a country (Encyclopedia of World Geography) Chapter 2: Third World Country