This article describes some of the global effects for the international debt collection industry which has been created by the recent global recession.
1. GLOBAL RECESSION: Effects in The Americas: THE CARIBBEAN
THE CARIBBEAN basin economies, of which there are approximately 35 suffered what may be described as a �direct hit� from the global meltdown. The most vulnerable sector, namely tourism, was down by over 32% at the end of 2008, and basic commodities such as oil, bauxite and methanol also suffered from drastic price reductions. In addition to tourism, severe effects were also experienced in the Caribbean AGRICULTURE and FINANCIAL/BUSINESS SERVICES sectors. This economic recession is likely to be of a prolonged and serious nature throughout 2009 and the following year, and given the small open nature of this economy will be even worse than the post September 11 tourism slump. Regional GDP in THE CARIBBEAN is expected to be in negative figures (at approximately minus 3%) and this, together with rising unemployment, has engendered public unrest and escalating crime rates in many islands. Only Trinidad and Tobago out of the �Big Six� (the others being JAMAICA, BARBADOS, GUYANA, PUERTO RICO and DOMINICAN REPUBLIC)Barrister at Law � Chairman, A.V. Knowles & Co. Limited Newtown, Port-of-Spain, Trinidad. is expected to maintain positive growth for 2009, mainly due to its oil, gas and petrochemicals earnings. The collapse of the financial giant, CLICO INVESTMENT BANK in Trinidad has already cost the Treasury approximately TT $8 billion, and this combined with the dramatic fall of the STANFORD empire in ANTIGUA / BARBUDA has created shockwaves throughout the Caribbean. Given the huge array of investments in a variety of industries by these firms, it is likely the BANKING sector�s resilience will be tested in the coming year. There will be increased skepticism and call for reform of the regulatory frameworks governing offshore financial centers, for example, the CAYMAN ISLANDS, both of which contribute to the general industry climate looking dim indeed.
2. Global Recession: Effects in The Americas: CANADA
In CANADA the impact of the global economic crisis has been less dramatic than in the U.S. The Canadian banking system has been protected by fundamental structural mechanisms. Canada�s banks, although few in number, are amongst the strongest in the world and their stocks, although buffeted, have remained strong and able to demonstrate profitability. Canadian BANKS have been quick to make adjustments to their credit adjudication in terms of pre-requisite compulsory & pertinent information required, and amend their portfolio management strategies. Massive job cuts, plant closures and union concessions / wage rollbacks in the auto sector will not only put pressure on those in the industry but those in the feeder industries which traditionally support the auto sector in CANADA. The Canadian MANUFACTURING sector, and in particular the AUTOMOTIVE industry, has suffered the greatest impact following the country�s economic downturn.
3. Global Recession: Effects in The Americas LATIN AMERICA
In LATIN AMERICA whilst basic commodity prices have fallen sharply the impact on tourism has been less dramatic. The majority of economists agree the worst effects from the global crisis are to be expected in the medium to long term. So far the worst affected sector in Latin America has been INTERNATIONAL TRADE which in recent years has been their main growth contributor. This decline constitutes a serious economic issue because persistent export declines can erode much of the economic gains already achieved. The LATIN AMERICAN economic growth rates demonstrated reductions compared to previous years but most economic projections suggest local economies will continue to grow moderately. Unfortunately the majority of multinational companies and industries have been forced to implement severe cost cutting measures including employee mass separation plans. MEXICO, as the southern neighbor of the USA, has been particularly vulnerable to the negative effects of this crisis because of its close links with the American economy. As a result the Bank of Mexico expects a 4.8% reduction in GDP for 2009, but it also predicts the Mexican economy should react positively by 2010 with a 1.5% to 2.5% growth in GDP.