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Economic fallout being felt in unexpected ways

Venezuelans protest economic collapse.

Venezuelans protest economic collapse. Photo: Getty

The world economy is moving forward, if very slowly, according to the view from office towers housing the big banks, investment groups and analysts.

But on the ground in many parts of the world people are suffering and that reality is making itself felt in both depressing and unexpected ways.

Venezuela

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So bad have economic circumstances become in the once oil-rich Latin American country of Venezuela, that a million people hit the streets of the capital, Caracas, on Thursday in rival demonstrations calling for an end to hunger, crime, inflation and corruption.

In the economic mayhem even animals aren’t safe. In Caracas’ Caricuao zoo, hungry Venezuelans recently broke into a pen and butchered a black stallion, leaving only its head and ribs for zookeepers to deal with next morning.

Tapirs and other animals starved.

Tapirs and other animals starved. Photo: AAP

And at least 50 other zoo animals, including Vietnamese pigs, tapirs, rabbits and birds -have starved to death in recent months as their food was diverted by desperate humans.

Brexit

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In a far more benign way, in China and Britain, animals are also at the forefront a changing economic interface. Following dramatic floods in the Yangtze basin which devastated pig production, China has taken advantage of the post-Brexit vote weakness of the pound to buy up British pork.

UK pork exports are up 40,000 tonnes in recent months, pushing pork price up 19 per cent in the supermarket, in a squeeze that is likely to continue, The Guardian has reported.

China is buying up UK pork.

China is buying up UK pork. Photo:AAP

The unexpected Brexit vote has raised the spectre of recession in the UK and bankers are pressuring new Prime Minister Theresa May to save London’s bacon as a financial centre.

They want Ms May to strike an interim deal that would preserve the ability of banks to freely sell financial services across the European Union post-Brexit. That would save hundreds of thousands of finance sector jobs that could otherwise migrate to Europe when Britain leaves the EU.

However it may be a vain hope. “Our principle of no notification, no negotiations is there to protect those who stay together, not the one leaving,” European Council President Donald Tusk wrote on Twitter on Thursday. “We shall not give it up.”

Brazil

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Brazil has been on public display like never before as the Rio Olympics captured global attention. But along with the glitz and glamour of Copacabana, there was the unmistakable stain of social degradation as athletes and visitors faced armed muggers in the streets.

With the economy falling 9.7 per cent on a per capita basis in just over two years and unemployment up from 6.5 per cent to 11.6 per cent since 2014, Goldman Sachs has likened the situation to “depression.”

President Rousseff was impeached.

President Rousseff was impeached. Photo: AAP

Less than two weeks after the Olympics ended, President Dilma Rousseff was impeached by the country’s Senate and replaced by her former deputy, Michel Temer, over a corruption scandal.

But with much of the populace angry with the whole political establishment, there is a real danger of violence.

“Get yourselves into the trenches,” urged Senator Roberto Requião, Mr. Temer’s party who opposed his leader by siding with Ms. Rousseff in the impeachment vote. “Conflict will be inevitable,” the New York Times reported.

The Rousseff impeachment presaged an era of “intense division in Brazilian society”, he said.

Russia

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Russia, the world’s largest country by area and 12th largest by GDP, is in recession, with the economy down 0.9 per cent in the first half of 2016 after a 3.7 per cent contraction in 2015. It’s economy is only 1.8 per cent larger than eight years ago.

Investment is on the slide both in industry and residential construction, as is private consumption. Russians are cutting back on purchases of consumer goods and services to survive.

The country’s Centre of Development at the Higher School of Economics (HSE) says Russia could “lose a decade” of economic growth by the time presidential elections arrive in 2018″ without fundamental economic reform. The International Monetary fund agrees.

Recession could see more aggression.

Recession could see more aggression. Photo: AAP

Russia built up a big reserve fund during the energy boom along with boosting military and social expenditure. When the boom died so did revenues and the fund, now being used to fund spending, could dry up early next year.

The difficulty is that without needed reform that would damage the interests of President Vladimir Putin and his business oligarchs, Russia could be forced into more aggressive foreign policy adventures to divert public attention from the economy.

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