World experiencing one of the deepest recessions since Great Depression due to COVID-19: World Bank

Agencies
October 15, 2020

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Washington, Oct 15: The world is experiencing one of the deepest recessions since the Great Depression in the 1930s owing to the novel coronavirus, World Bank President David Malpass has said, terming the COVID-19 pandemic a "catastrophic event" for many developing and the poorest countries.

He told reporters that given the extent of the economic contraction, there was a rising risk of disruptive debt crises in countries.

So that has got a lot of focus here at the meetings, Malpass told the media on Wednesday at the start of the annual meetings of the International Monetary Fund and the World Bank.

"The recession has been deep, one of the deepest since the Great Depression. And for many developing countries, and for the people in the poorest countries, it is truly a depression, a catastrophic event. It is continuing to add to the ranks of those in extreme poverty," he said.

That is the focus of this meeting and the focus of their actions, he said, adding that the World Bank was building as big a growth programme for countries as they can in this fiscal year.

A day earlier, the Board approved the extension of the health emergency programmes to up to USD 12 billion for vaccines and therapeutics and distribution of those in countries that do not otherwise have access.

Responding to a question, Malpass said that the world was currently experiencing a K-shaped recovery.

That means that the advanced economies have been able to provide support, especially for their financial markets and for people that have jobs that can be done by working from home. But people that are in the informal economy have lost their jobs, and are depending on social protection programmes, he said.

For the developing countries, and especially the poorest developing countries, that downward leg in the K is an increasingly desperate recession or depression that is facing people in the poorest countries because of the loss of jobs, the loss of income, and also the loss of remittances coming from workers, working outside the country, Malpass said.

"What we're trying to do at the World Bank is recognise that problem and provide extra support for social protection for the poorest in countries, also recognising the agricultural challenges," he said.

The president welcome countries that are keeping open their export markets, and also countries that are able to change their subsidy systems in order to allow more food availability within their economies during this very challenging time.

Malpass said that the first priority was saving lives, people's health, and safety.

That involves procedures that have been widely discussed of social distancing and masks and proper health care if people contract the virus, strengthening of hospital systems and so on. All of those are important, he asserted.

"And then, as we look at the next stage, what I think we can be talking about is that it's going to be a prolonged downturn for many of the countries, there won't be as fast a rebound in tourism, for example, as many would like to have," he said.

There will need to be flexibility in economies, so that people can move to new jobs and positions, and the country can be prepared for a post COVID-19 global economy, Malpass said.

Acknowledging that it is going to be different from the pre-COVID-19 economy, he noted that one does not know exactly how and that will only evolve over time.

"And so, having countries preserve some of their core industries and businesses, and then keeping families together. We're providing social safety nets to try to help provide cash grants for people, for example, in Brazil, we have a sizable programme. In Jordan, we support Jordan's sizable programme and elsewhere around the world, he said.

The World Bank is encouraging countries to spend in the first instance on health programmes, on social programmes, and on education, Malpass said, adding that a critical step for countries is to reopen schools.

"We think there are as many as a billion children still out of school in the developing world. And in those cases, learning goes backward, which has a huge future cost for countries. This is particularly true for girls that are left out at a critical point in their lives, left out of school. That's a high priority, he said.

Now, looking longer term, infrastructure is a very important part of a country's growth, he said.

"We have a large undertaking through the IFC that works on infrastructure that helps provide electricity and low carbon ways, for example, that helps provide clean water, that helps provide global public goods, meaning helping the country reach a balance with the environment and with the climate that benefits themselves and their neighbours. All of those are key priorities, he said.

On infrastructure, one of the challenges is they have a very low interest rate environment, and it should be an environment that provides much more infrastructure investment than is currently occurring, Malpass said.

"A key step in this is the documentation and the standardisation of the quality of the infrastructure projects. It's vital that the world move toward a financing structure where multiple infrastructure projects can be pooled in order to reduce the risk to the entire package, and that's difficult right now because of the difference in the contracts.

"So, one of the things we've wanted to do is try to help standardise some of the contracting and make it much more transparent. This will help the infrastructure build up, he said.

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News Network
October 23,2020

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Nashville, Oct 23: US President Donald Trump on Thursday described the air in India and China as "filthy" as he denounced Democratic rival Joe Biden's plans to tackle climate change.

At their second and final presidential debate, Trump renewed his criticism that action on climate change was unfair to the United States.

"Look at China, how filthy it is. Look at Russia, look at India -- it's filthy. The air is filthy," Trump said at the debate in Nashville.

Trump charged that Biden's climate plan was an "economic disaster" for oil states such as Texas and Oklahoma.

Biden said that climate change is "an existential threat to humanity. We have a moral obligation to deal with it."

"We're going to pass the point of no return within the next eight to 10 years," he said.

The planet has already warmed by around one degree Celsius (34 degrees Fahrenheit) from pre-industrial levels, enough to boost the intensity of deadly heat waves, droughts and tropical storms.

Trump has pulled the United States out of the Paris climate accord, which aims to cap global warming "well below" two degrees Celsius.

Trump's remarks come days before Secretary of State Mike Pompeo and Defense Secretary Mark Esper visit New Delhi for talks on building the growing US-India partnership.

At the first presidential debate, Trump also spoke critically of India, questioning its coronavirus data amid criticism of Trump's handling of the pandemic.

Biden said this in the opening remarks of the showdown that comes just 12 days before the election.

"The President still has no comprehensive plan," Biden added.

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Agencies
October 12,2020

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Stockholm, Oct 12: US economists Paul Milgrom and Robert Wilson won the Nobel Economics Prize on Monday for work on commercial auctions, including for goods and services difficult to sell in traditional ways such as radio frequencies, the Nobel Committee said.

The duo was honoured "for improvements to auction theory and inventions of new auction formats," the jury said.

The Royal Swedish Academy of Sciences noted that the discoveries by Milgrom, 72, and Wilson, 83, "have benefitted sellers, buyers and taxpayers around the world," it said in a statement.

The winners will share the prize sum of 10 million Swedish kronor (about $1.1 million, 950,000 euros).

Last year the honour went to French-American Esther Duflo, Indian-born Abhijit Banerjee of the US, and American Michael Kremer for their experimental work on alleviating poverty.

Even if it might be the most prestigious prize an economist can hope to receive, the economics prize has not reached the same status as those originally chosen by Alfred Nobel in his will, which included medicine, physics, chemistry, literature and peace.

It was instead created through a donation from the Swedish central bank and detractors have thus dubbed it "a false Nobel."

The prize closes the 2020 Nobel season which so far has seen the peace prize awarded to the UN's World Food Programme.

Women have been more prevalent than usual this year, with American poet Louise Gluck winning the literature prize.

And Frenchwoman Emmanuelle Charpentier and American Jennifer Doudna became the first all-female duo to win a scientific Nobel on Wednesday, clinching the chemistry award for their discovery of the CRISPR-Cas9 DNA snipping "scissors."

Winners would normally receive their Nobel from King Carl XVI Gustaf at a formal ceremony in Stockholm on December 10, but the pandemic means it has been replaced by a televised ceremony showing the laureates receiving their awards in their home countries.

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News Network
October 14,2020

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The social media is buzzing after the International Monetary Fund (IMF) predicted that Bangladesh will overtake India in per capita GDP for 2020.

As India's growth falls, amongst the most in the world, India is on track to fall below Bangladesh in terms of the per capita GDP. India will grow smartly next year, as per IMF.

As per the World Economic Outlook report of IMF released on Tuesday, India's per capita GDP is set to plunge by 10.5 percent to $1,877 this fiscal year ending March 31, 2021. This will make India the third poorest country in South Asia with only Pakistan and Nepal behind.

Bangladesh, Bhutan, Sri Lanka and Maldives now have more per capita GDP than India.

Bangladesh's per capita GDP in dollar terms is expected to grow 4 per cent in 2020 to $1,888, overtaking India.

Congress leader Rahul Gandhi attacked the BJP government on this count. "Solid achievement of 6 years of BJP's hate-filled cultural nationalism: Bangladesh set to overtake India".

Stock market expert and Director Enam Holdings, Manish Chokhani tweeted, "Today's special. Both our neighbours marching ahead. We wish them well and hope our achievements meet our own aspirations!".

Chokhani added a clipping of Bangladesh overtaking India and China's booming economy and stock markets. The tweet was tagged to business and stock market leaders Samir Arora, Nilesh Shah, Anand Mahindra, Harsh Goenka and Harsh Mariwala.

Till five years back, India's per capita GDP was 40 per cent higher than Bangladesh.  In the last five years, Bangladesh has grown three times the rate of India, at 9.1 per cent compared to 3.2 per cent for India, a much larger economy.

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