Recovery, With a Grain of Salt

 Early summer is a time of optimism, and the bailout of Greece’s bankrupt economy tempts us to believe the global recession is behind us and the breakbulk sector is cycling into recovery.

But let’s append that forecast and call it a recovery taken with a grain of salt. The phrase “taken with a grain of salt” comes from the fact that food is more easily swallowed if taken with a small amount of salt. Roman philosopher Pliny the Elder translated an antidote for poison with the words “be taken fasting, plus a grain of salt.”

Everyone wants to return to some semblance of the trade boom that buoyed breakbulk from a niche sector into a major international market during the past decade. We must not forget how far the economies of the world fell during the past two years when we see the World Trade Organization predicting a 9.5 percent increase in trade this year after caveats for oil price increases, currency fluctuations and more market turbulence.

Emerging markets are heading up for the breakbulk/heavy-lift sectors: China, Australia, Africa and South America are all showing signs of strong growth.

But the world’s top three industrialized economies — Europe, Japan and the United States — should take a more frugal view of the future. The misfortunes of Japan Airlines have added to ongoing deflation in a country with the highest ratio of public debt to gross domestic product of any industrialized nation. With a public debt at 201 percent of GDP — 7.5 million yen per person — Japan’s economy might be in danger of imploding.

Analysts say the U.S. economy is in recovery mode, but many are calling it a jobless one. The unity of the European Union is being sorely tested by the debt crises in Greece, Spain and Portugal.

Even with trade resuming this year, developed nations will not reach 2008 levels until at least 2013.

Unemployment is too high in the world’s top three industrialized economies: Japan tops 3.5 million or 5 percent; the U.S. posts 4.6 million or 9.7 percent; and the EU27 bloc is 23 million or 9.6 percent.

We should also take heed of the growing number of industrial disputes affecting transportation today, from European railway workers to Delhi airport employees. Earlier this month, Greek government workers disrupted flights as demonstrators occupied the Acropolis in an escalation of protests against 30 billion euros (US$40 billion) of additional wage cuts.