Showing posts with label Economic. Show all posts
Showing posts with label Economic. Show all posts

11 July 2020

Congress Shouldn't Pass Another Coronavirus Bailout: Here's Why

by Rachel Greszler
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Following job gains of 2.7 million in May, the economy added 4.8 million more jobs in June.

And even as the labor force grew by 1.7 million workers, the unemployment rate fell by 2.2 percentage points, from 13.3% to 11.1%.

While unemployment is still high, the faster-than-expected turnaround and record gains show the resiliency of the American economy and prove that this is not another Great Recession.

The American economy just added more jobs in two months than it did in the 46 months after the height of unemployment during the Great Recession.

Amid the COVID-19 pandemic, Americans have shown their willingness and desire to return to work, to stores, to religious services, and to medical appointments.

Moreover, the report indicates that Americans are weaning off of federal supports such as Paycheck Protection Program loans, paid family leave, and unemployment insurance benefits.

8 July 2020

E.U. Formalizes Reopening, Barring Travelers From U.S.

By Matina Stevis-Gridneff
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BRUSSELS — The European Union will open its borders to visitors from 15 countries as of Wednesday, but not to travelers from the United States, Brazil or Russia, putting into effect a complex policy that has sought to balance health concerns with politics, diplomacy and the desperate need for tourism revenue.

The list of nations that European Union countries have approved includes Australia, Canada and New Zealand, while travelers from China will be permitted if China reciprocates.

The plan was drawn up based on health criteria, and European Union officials went to great lengths to appear apolitical in their choices, but the decision to leave the United States off the list — lumping travelers from there in with those from Brazil and Russia — was a high-profile rebuke of the Trump administration’s handling of the coronavirus crisis.

Travelers’ country of residence, not their nationality, will be the determining factor for their ability to travel to countries in the European Union, officials said, and while the policy will not be legally binding, all 27 member nations will be under pressure to comply. If not, they risk having their European peers close borders within the bloc, which would set back efforts to restart the free travel-and-trade zone that is fundamental to the club’s economic survival.

4 July 2020

Where Does the TAP Gas Pipeline Project Stand to Date? The View From Baku

By: Shabnam Hasanova

On June 9, the press service of the Trans-Adriatic Gas Pipeline (TAP) consortium announced that construction of the 105-kilometer offshore segment of TAP, which will transport Azerbaijani natural gas to Europe, had been completed. This latest development phase comprised the offshore deployment of 36-inch pipes by the semi-submersible pipelaying vessel Castoro Sei, operated by the Italian firm Saipem. At the same time, project work included building the above-water interface with onshore assets on Albanian territory as well as hydrotesting various associated facilities to guarantee their safety and readiness. Operations to link the Italian and Albanian coasts started in January 2020, with tubes being welded and checked onboard the Castoro Sei and subsequently installed in a steady stretch, from west to east, along the Strait of Otranto, at the southern tip of the Adriatic Sea (Azernews.az, June 10).

Several weeks earlier, on May 20, the project hit another milestone when it commenced delivering the first test volumes of natural gas into a four-kilometer segment of the overland pipeline in Albania, between the Albanian-Greek border and a metering station in the town of Bilisht. This is the primary phase of the pipeline testing process, in accordance with national and global safety and functional requirements, which guarantees that the system is fully secure and available for exploitation. After this first segment is authorized, gas will begin to be slowly integrated into other parts of the Albanian pipeline and beyond (Tap-ag.com, May 22).

Its Economy Battered by COVID-19, Spain Tries a Guaranteed Minimum Income

Alana Moceri 

MADRID—Tens of thousands of households in Spain began receiving checks last Friday under a new guaranteed minimum income program that was passed by parliament in early June. Plans to provide a guaranteed income had been part of the coalition agreement reached in January between the ruling Socialists and their junior coalition partner, the far-left Podemos party, but they were fast-tracked due to the economic impact of the coronavirus pandemic.

Spain is one of the hardest-hit countries from COVID-19, with nearly 300,000 confirmed infections and more than 28,000 deaths. Its GDP is expected to contract by more than 9 percent this year, with unemployment slated to rise from 14.4 percent to 19 percent. Long lines are forming at food banks across the country, as charities struggle to meet the spike in demand for their services. All of this has raised the stakes for Spain’s new policy, which, if implemented effectively, could provide a necessary layer of protection for the most disadvantaged Spaniards.

The Economic and Military Impact of China’s BeiDou Navigation System

By Namrata Goswami

On June 23, 2020, China completed construction of its BeiDou Positioning and Navigation System (BDS) by launching the 55th and final satellite for its BDS3 navigation constellation. With this launch, China now enjoys a fully independent self-reliant global navigation satellite system (GNSS) as an alternative to the U.S. Space Force-maintained Global Positioning System (GPS). An independent BeiDou offers China augmented precision navigation and timing (PNT) for its military space forces.

A commentary from Xinhua, China’s state-run new agency, highlighted this aspect by specifying:

The BeiDou network, a major infrastructure independently constructed and operated by China, can better meet the demands of the country’s national security, economic as well as social development. It can also provide more stable and reliable services, as well as an alternative to the U.S.-owned Global Positioning System (GPS) [emphasis added] for global users. Given national security concerns due to the GPS’s dominance, China is not the only one in the world that strives to develop its satellite navigation systems. For many years, the European Union, Russia and others have all been working on their own projects.

3 July 2020

What Annexation Would Really Mean for Middle East Peace

By Aaron David Miller

Israel could soon begin the process of annexing some of the West Bank. Prime Minister Benjamin Netanyahu’s pledge to unilaterally apply Israeli law to portions of the territory—virtually guaranteeing their the permanent retention by Israel—looms alongside an even larger elephant in the room: Netanyahu is well on his way to ensuring that a real Palestinian state based on June 1967 borders with a capital in East Jerusalem goes the way of the dodo. Regardless of what happens with annexation, that will be his legacy—and it will likely be an irreversible one.

Leaders inside and outside the Middle East are now practically begging Netanyahu to show restraint. In recent weeks, the debate in Israel has shifted from whether to annex to how much to annex, underscoring the extent to which the game is being played on his terms. The Israeli prime minister faces trial for bribery, fraud, and breach of trust; a challenge from unruly right-wing coalition partners; a resurgence of COVID-19; an economic recession; and the perpetual problem of Iran. But if staying in power and permanently closing the door on the creation of a real Palestinian state are his immediate goals, he is winning, with a good deal of wind at his back.

2 July 2020

The World Isn’t Ready for Peak Oil

Amos Hochstein

Two months ago, the world experienced a historic collapse in oil prices, as coronavirus-related shutdowns cratered global demand, briefly turning prices for May delivery negative. Prices have since rebounded modestly, but they remain unsustainably low for countries that depend on oil exports to generate government revenue.

The resulting instability, from the Middle East to Africa to the Americas, raises a flurry of immediate national-security concerns. But the current crisis also offers a stark preview of the challenges the world will face if it negotiates a climate accord without also moving to stabilize the more than a dozen countries that depend on oil exports as their primary source for generating government revenue.

In Iraq, for example, oil revenues account for 90 percent of the government’s budgetary income and two-thirds of its economy. This year’s falling oil prices have already reduced the country’s revenues by half.

Despite Economic Turmoil, Indonesia-Australia Trade Agreement Pushes Ahead

By Kyle Springer

This year is going to be a tough one for trade. The COVID-19 pandemic has prompted an unprecedented cessation of economic activity. The shock is two-pronged, hitting both supply and demand. Travel restrictions and social distancing measures have disrupted the fundamental tools of international business: travel, face-to-face meetings, and large events. Supply chains are collapsing. 

But amid the chaos, an unlikely agreement has broken through. The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which has been over a decade in the making, will enter into force in July 2020

The state of their bilateral economic ties is what makes the agreement a breakthrough. For two neighboring G-20 economies, their trade and investment ties are surprisingly weak. No two G-20 countries trade as little as Australia and Indonesia do, absent a sanctions regime. Indonesia’s share of Australia’s total trade has stagnated at around 2 percent over the past two decades while Australia’s overall trade with Asia has increased. 

The investment numbers are equally uninspiring. Australia’s investment in Indonesia is less than 1 percent of its outward flows, and accounts for 1.5 percent of Indonesia’s inward investment. 

30 June 2020

Reopening America&The World


The coronavirus has imposed a heavy toll on people’s lives, livelihoods, and connections with one another. As America and the world reopen from this devastating pandemic, it is important to examine how the process is taking place, its impact on individual lives and livelihoods, and learn from the experiences of other nations. In this report, we look at the experiences of the United States and other countries to see what we can derive about the reopening and its human impact. We present the insights and observations of three dozen Brookings scholars who look at reopening from many different angles and offer their thoughts and recommendations.

The first volume focuses on the American experience while the second one examines the experiences of other nations and lessons for the United States. Brookings President John Allen’s essay presents an overview of the pandemic and the serious questions it has raised for the world. Our goals in this project are to inform the public conversation about COVID, help business, government, and civic leaders take their next steps, and think about the immediate and longer-term consequences of the virus. We must learn as much as possible about this pandemic in order to address its overall ramifications.

Global Economic Prospects, June 2020


The COVID-19 pandemic has, with alarming speed, dealt a heavy blow to an already-weak global economy, which is expected to slide into its deepest recession since the second world war, despite unprecedented policy support. The global recession would be deeper if countries take longer to bring the pandemic under control, if financial stress triggers defaults, or if there are protracted effects on households and firms. Economic disruptions are likely to be more severe and protracted in emerging market and developing economies with larger domestic outbreaks and weaker medical care systems; greater exposure to international spillovers through trade, tourism, and commodity and financial markets; weaker macroeconomic frameworks; and more pervasive informality and poverty. Beyond the current steep economic contraction, the pandemic is likely to leave lasting scars on the global economy by undermining consumer and investor confidence, human capital, and global value chains. Being mostly a reflection of the recent plunge in global energy demand, low oil prices are unlikely to provide much of a boost to global growth in the near term. While policymakers’ immediate priorities are to address the health crisis and moderate the short-term economic losses, the likely long-term consequences of the pandemic highlight the need to forcefully undertake comprehensive reform programs to improve the fundamental drivers of economic growth, once the crisis abates.

29 June 2020

This Is How Blockchain Can Be Used In Supply Chains To Shape A Post-COVID-19 Economic Recovery


The COVID-19 crisis has rattled supply chains around the globe and created serious questions about the future of commerce. Critical to recovery and restoring economic activity is regaining trust in these systems. This challenge presents an opportunity for the integration of blockchain, a technology with the potential to fundamentally alter the future of supply chain.

Though digitization has driven transaction costs down significantly, most business domains still operate in silos, creating accounting discrepancies that need to be aligned.

The need to process transactions quickly and verify the creation, transmission and reception of a particular exchange of value is ever more critical to business success. To make a supply chains resilient, there must be transparency and integrity across domains, which can be improved through the deployment of blockchain technologies.

Reviving the WTO

Ngozi Okonjo-Iweala

The World Trade Organization is in the news mostly for the wrong reasons nowadays. Many people regard it as an ineffective policeman of an outdated rulebook that is unsuited for the challenges of the twenty-first-century global economy. And WTO members generally agree that the organization urgently needs reforming in order to remain relevant.

Recent months have brought further challenges. The WTO’s appellate body, which adjudicates trade disputes among member countries, effectively ceased functioning last December amid disagreements regarding the appointment of new judges to the panel. And in May 2020, Director-General Roberto Azevêdo announced that he would step down at the end of August, a year before his current term was due to end.

Whoever Azevêdo’s successor is will face a major challenge. Since its establishment in 1995, the WTO has failed to conclude a single trade-negotiation round of global trade talks, thus missing an opportunity to deliver mutual benefits for its members. The Doha Development Round, which began in November 2001, was supposed to be concluded by January 2005.

28 June 2020

COVID-19 Threatens to Derail an Unsteady Democratic Transition in Sudan

Yasir Zaidan 

More than a year after the fall of dictator Omar al-Bashir’s regime, the coronavirus pandemic is hitting Sudan’s still-fragile democratic transition. Differences between the civilian and military leaders in the transitional, power-sharing government are growing, as the military consolidates its authority due to restrictive security measures that went into effect in April, including a ban on public gatherings and protests around the country, with particularly harsh restrictions in effect in the capital, Khartoum. COVID-19 has also brought chaos to Sudan’s troubled economy, damaging the transitional government’s credibility and popularity.

The road had not been smooth since last August, when Sudan’s powerful military agreed to an interim constitution, officially known as the Constitutional Declaration, with the Forces for Freedom and Change, an umbrella group of activists that had led the protest movement to end Bashir’s 30-year rule. The Constitutional Declaration inaugurated a three-year power-sharing period until national elections could be held, but it did not take long for relations between the civilian and military sides of the transitional government, known as the Sovereign Council, to come under strain

27 June 2020

How the Pandemic Should Shake up Economics

KAUSHIK BASU

ITHACA – The COVID-19 pandemic has caused massive disruptions to markets, supply chains, and world trade. This has forced a reckoning with many traditional policies and should be treated as an opportunity to rethink some of the ideas that economists have long taken for granted – including the basic notion of what makes an economy function efficiently.

That notion goes back to 1776, a landmark year during which Adam Smith published The Wealth of Nations, America’s 13 states declared independence, and the same day, July 4, the philosopher David Hume held a dinner party for his friends, including Smith, to mark the twilight of his life.

Smith’s path-breaking work, along with later highly influential contributions by Léon Walras, Stanley Jevons, and Alfred Marshall, transformed economics. We learned that markets can function smoothly without a central authority, because the actions of ordinary people trying to earn more and purchase the goods they want create tugs and pulls of demand and supply, causing prices to rise and fall.

As this idea became formalized, the social norms and customs on which markets also depend became part of the woodwork – tacit assumptions that we ignored, because they are so unchanging in normal times, and then forgot were there.

Reviving the WTO

NGOZI OKONJO-IWEALA

WASHINGTON, DC – The World Trade Organization is in the news mostly for the wrong reasons nowadays. Many people regard it as an ineffective policeman of an outdated rulebook that is unsuited for the challenges of the twenty-first-century global economy. And WTO members generally agree that the organization urgently needs reforming in order to remain relevant.

Recent months have brought further challenges. The WTO’s appellate body, which adjudicates trade disputes among member countries, effectively ceased functioning last December amid disagreements regarding the appointment of new judges to the panel. And in May 2020, Director-General Roberto Azevêdo announced that he would step down at the end of August, a year before his current term was due to end.

Whoever Azevêdo’s successor is will face a major challenge. Since its establishment in 1995, the WTO has failed to conclude a single trade-negotiation round of global trade talks, thus missing an opportunity to deliver mutual benefits for its members. The Doha Development Round, which began in November 2001, was supposed to be concluded by January 2005.

Fifteen years later, WTO members are still debating whether the Doha process should continue. Some think it has been overtaken by events, while others want to pursue further negotiations.

26 June 2020

How the Coronavirus Could Crush the U.S. Economy

by Desmond Lachman

Aspecter is haunting the United States and world economies. It is the specter of a second wave in the coronavirus pandemic later this year. Making this specter all the more troubling is the Trump administration’s happy talk that the U.S. economy is on the cusp of a strong V-shaped economic recovery from its worst economic recession in the past ninety years.

One does not need to be a high-powered epidemiologist to know that the coronavirus pandemic is far from over. The number of new coronavirus cases worldwide is now increasing at the fastest pace since the start of the pandemic. Twenty-one states in the United States, including California, Florida, and Texas, are all now experiencing disturbing increases in infection rates. Meanwhile, even in China, where draconian measures were taken to bring the pandemic under control, new cases are now springing up around that country.

It hardly gives comfort that many epidemiologists are now warning that the overly hasty and ill-prepared lifting of lockdowns risk increasing the infection rate. Nor can we derive solace from the rising trend towards large-scale political demonstrations and gatherings where social distancing is generally observed in the breach.

Infographic Of The Day: Tesla Is Now The World's Most Valuable Automaker


The company, which began as a problem-plagued upstart a little over 15 years ago, has now become the world's most valuable automaker - surpassing industry giants such as Toyota and Volkswagen.



Enduring Stark Utopia: A Polanyian Reading of the Global Political Economy

Alessandro Colasanti

This content was originally written for an undergraduate or Master's program. It is published as part of our mission to showcase peer-leading papers written by students during their studies. This work can be used for background reading and research, but should not be cited as an expert source or used in place of scholarly articles/books.

The 19th century planetary economic system that Karl Polanyi critically analysed in his The Great Transformation (GT) ([1944] 2001) displays a sharp resemblance with its present-day equivalent. It would be no exaggeration to characterise both as a ‘stark utopia’ (Polanyi, 2001). This essay argues that this is not simply because of the occurrence of two disastrous planetary economic and financial crises in each respective historical period – in 1929 for Polanyi, and in 2008-09 for us in the 21st century – but crucially because of the socio-political and cultural turbolences that followed the crises. Both events stem from tensions inherent to a global economy and market society founded upon a liberal creed congenial to a pursuit of personal gain, whose socio-economic effects inevitably undermine social and political stability from local to transnational levels. During both the interwar and post-2008 period, the policies derived from such creed have negatively, and in certain cases deliberately, affected those section of society who lack economic power. In both historical periods, their derived social frustrations appear to incite authoritarian sentiments and intolerance.

23 June 2020

Economic Consequences Of COVID-19 In The EU-19

Dirk Ehnts

This background article explains where the money for governments in the current crisis comes from and why, contrary to general expectations, the EU-19 (eurozone) will probably not play a major role in this crisis.

The Western states decided relatively late to largely shut down public life in response to the spread of Covid-19 (coronavirus) because they knew from the outset that the near-quarantine would have far-reaching economic consequences. Since the health and economic future is completely uncertain and, for example, pubs and hotels are or were closed, the citizens hardly spend any money. Companies are foregoing investments, and entire industries are lying idle: Lufthansa had to cancel almost all flights, VW had to stop production in Wolfsburg. The workers are therefore unemployed, which makes the applications for short-time work benefits skyrocket. More people are already unemployed than during the Great Financial Crisis of 2008/09. The economy would collapse if the state did not intervene.

But how does the state get its money - and what money? Should national governments spend more? Or should the EU spend more money, and if so, how? The questions mix up monetary policy issues with political questions about the future of the eurozone and the European Union. In this text I will try to separate the two dimensions. To put it bluntly, the crisis will cause economic damage in the form of lost production combined with unemployment. This damage is real economic damage. Less goods and services will be produced and therefore consumed. Nevertheless, we are constantly hearing about the “financial costs" of the crisis. This view of things is fundamentally wrong. Costs are a business concept. They evaluate the consumption of production factors in production. But if less is produced, then there are no “costs".

21 June 2020

Study: Face Masks Critical in Preventing Spread of Coronavirus

by Ethen Kim Lieser

A new study conducted by a team of researchers in Texas and California has found that not wearing a face mask dramatically increases a person’s chance of being infected by the COVID-19 virus.

The team utilized data to compare coronavirus infection rate trends in Italy and New York—both before and after face masks were made mandatory.

According to the study, which was published in the Proceedings of the National Academy of Sciences, both locations started to witness lower infection rates after the face mask measures were enforced.

Researchers claimed that wearing face masks prevented more than 78,000 infections in Italy between April 6 and May 9, and more than 66,000 infections in New York City between April 17 and May 9.