Two months after elections took place at the end of September, the German parties Social Democrats, Greens, and Free Democrats announced last week that they have concluded their coalition talks. The leader of the Social Democrats party, Olaf Scholz, is expected to take over as chancellor from Angela Merkel. This means that Germany may finally have a new government. Some policies included in the new deal are raising the minimum wage to 12€, building 400,000 new apartments to fight the housing crisis, legalizing the sale of cannabis, and new plans to phase out the use of coal by 2030.
To help battle the skyrocketing oil prices worldwide, Britain, the U.S., China, India, Japan, and Korea have decided to release tens of millions of barrels of crude oil from their storage, according to the New York Times
A bus caught fire and crashed in Bulgaria, killing at least 45 people
A new variant of COVID-19 called Omicron that was first detected in South Africa has started to spread
52 people were killed due to a gas buildup and explosion in a Siberian coal mine last week
There were clashes between the police and demonstrators in Honiara, the capital city of the Solomon Islands. The protestors demanded that the prime minister resign.
The cyberwar between Iran and Israel has reached new heights
These past few days, the political leaders of the G20 member countries met in Rome to discuss a handful of issues. Some of the politicians who were present are:
Alberto Fernandez (Argentina)
Scott Morrison (Australia)
Jair Bolsonaro (Brazil)
Justin Trudeau (Canada)
Xi Jinping (China)
Emmanuel Macron (France)
Angela Merkel (Germany)
Mario Draghi (Italy)
Narendra Modi (India)
Joko Widodo (Indonesia)
Manuel Lopez Obrador (Mexico)
Moon Jae-in (South Korea)
Vladimir Putin (Russia)
Salman bin Abdulaziz Al Saud (Saudi Arabia)
Cyril Ramaphosa (South Africa)
Recep Tayyip Erdogan (Turkey)
Boris Johnson (United Kingdom)
Joe Biden (United States)
Joining these political leaders was the President of the European Commission of the European Union, Ursula von der Leyen, and President of the Council of the European Union, Charles Michel. Antonio Guterres, general director of OMS, specifically discussed financial issues relating to the health of the world population.
What was discussed?
So, first and foremost I want to say my thoughts on the possible solutions that will be discussed in the hopes of resolving some of the world’s current Economics problems.
The European Union will invest in the eco-transaction for social enterprises, which are present in nations like Germany and Netherlands, but not in Turkey or in the United States at the moment. Mario Draghi was noted as saying that the Turkish president did not consider the political circular economy. Therefore, there will be no equality in the sense of financial economics in the future, and as a result there will be more discrepancies in terms of environmental sensibility.
The markets will be more open to Artificial Intelligence. This is especially important as AI is now considered fundamental for new inventions and innovations.
The United States will invest more on the prototype of financial democracy. In general, it has been noticed that Biden’s government is more concerned with solving population problems than Trump’s government.
China will be the first world power nation. Compared with all other international markets, China is one of the best markets for social capital that Chinese companies can invest with and also for AI (Artificial Intelligence).
In general, I believe there will be considerable investments in innovation, but I also think there will be areas that will see more progress than others.
I believe the central areas will be capital growth, new health solutions and eco transactions, with a greater focus on the rights of employees. Meanwhile , I think that the semi-peripheral areas will be capital growth, new health solutions but also more consideration of people’s rights on goods and services and on working issues of industries. In my opinion, the periferica areas will be debts and stagflation. It is also possible that there will be problems about having credits as paying back debts may become difficult to do. However, also inflation and financial stagnation are likely to lead to many problems, meaning that no investments will be made into sustainable finance.
Let’s hope there will be a graduating consideration of nations that are in critical situations, like Perù, Mexico, Spain, and many African countries.
Last week, Cuba saw some of the biggest protests in decades. Thousands of Cubans went to the streets to protest against power outages and food and medicine shortages, which were caused by the country’s economic crisis. The New York Times describes scenes in which people have to wait for hours to buy food. Although Cuba had already been suffering from an economic crisis before the pandemic hit, lockdowns have meant that the valuable income from the tourism industry has also been cut.
Floods in Western Europe
Violent storms caused floods in Western Europe last week. So far, the number of deaths is over 180 but more than a thousand people still remain missing. Germany and Belgium were hit the worst but Switzerland and the Netherlands have also been affected.
The Death Valley in California reached a temperature of 54 degrees Celsius (130 degrees Fahrenheit) last weekend. This is one of the highest temperatures to ever be recorded.
After protests in South Africa connected to the arrest of the former president Jacob Zuma turned violent, the South African military has been deployed by the government. Alone 117 people died last week due to looting and vandalism.
According to the New York Times more than 77% of New Mexico is “in severe drought”.
The designated prime minister of Lebanon, Saad Hariri, has resigned after months of trying to form a new government.
Civil war has been raging in Tigray, a northern region in Ethiopia, for eight months. On Monday night, Tigrayan fighters entered Mekelle, the regional capital shortly after the Ethiopian government troops had withdrawn from Mekelle. Shortly after entering the city, the Tigrayan forces also gained control over the airport and the telecommunications network as residents celebrated. The attack on Mekelle by the Tigrayan forces, known formally as the Tigray Defense Forces, is part of a greater counterattack against the Ethiopian government troops. Ethiopian government troops then formally retreated from the Tigray region on Wednesday after it had occupied the Tigray region since November. More than two million people have been displaced and impending crises, including famine and a lack of water, bear grave prospects for the future of the Tigray region.
The Trump Organization was charged with “running a 15-year-tax fraud scheme” on Thursday, according to the New York Times
Western Canada and the northwestern US have experienced a huge heat wave, which has been deadly
The highest court in South Africa has ordered the imprisonment of South Africa’s former president, Jacob Zuma, for 15 months. Jacob Zuma previously failed to appear before court for a corruption inquiry
Africa’s growth performance and outlook to the COVID-19 pandemic situation
Economic activity in Africa was constrained in 2020 by an unprecedented global pandemic due to COVID–19. Real GDP in Africa grew by 3.4 percent in 2021, after contracting by 2.1 percent in 2020.This projected recovery from the worst recession in more than half a century will be underpinned by a resumption of tourism, a rebound in commodity prices, and the rollback of pandemic-induced restrictions. Nevertheless, the outlook is subject to great uncertainty from both external and domestic risks.
Debt dynamics and consequences
The COVID–19 pandemic has caused a surge in government financing needs in Africa. Since the COVID–19 pandemic began in early 2020, governments have announced fiscal stimulus packages ranging in cost from about 0.02 percent of the GDP in South Sudan to about 10.4 percent of the GDP in South Africa. These fiscal stimulus packages have had immediate and direct implications for budgetary balances, borrowing needs, and debt levels. However, the World Bank estimates that African governments need additional gross financing of about 154 billion dollars in 2020/21 to respond to the crisis.
Debt resolution and the nexus between governance and growth
Debt resolution in Africa has often been disorderly protracted, with bad economic consequences. The economic consequences of sovereign debt restructuring are less severe in countries that act pre-emptively and collaboratively and in those countries where economic governance is stronger. However, recent debt resolution in Africa has been delayed by long-lasting litigation with private and official creditors. The absence of orderly and successful sovereign debt resolution, especially with private creditors, makes the prospects of debt distress worrisome for African economies.
Adapting to climate change and building climate resilience
By 2021 The Next Generation ACBP has set out a blueprint to help Sub-Saharan African economies achieve low carbon and climate-resilient outcomes. The World Bank has used this new Climate Plan to build on a strong track record under the original plan in which the Bank supported 346 projects with more than $33 billion. In East Africa, the World Bank is also helping affected communities and households cope with the worst locust plague in decades.
Accelerating the high-tech and digital economy
The World Bank is supporting Africa’s vision to achieve universal and affordable access to information and communications technology. In Malawi, the Digital Foundations Project complements government efforts on digital transformation by supporting improvements to the legal framework and building human capacity, promoting high-quality internet access for all, and building the government’s ability to deliver services to citizens and conduct business digitally. Across the continent, the Bank has led Digital Economy Country Diagnostics (DE4A) in over 20 countries (completed and FY20 in progress) to assess the current state of the digital economy, with 15 more countries requesting diagnostics in FY20. The World Bank also has 15 active and 29 pipeline investment operations in Africa that contribute to the operationalization of the DE4A initiative that includes a broadband infrastructure component totaling over $5.5 billion in investment.
Harnessing technological developments are key to improve access to clean and reliable energy. The Bank is supporting operations in Africa to increase access through grid extension and expansion of transmission networks, innovative off-grid electrification solutions, expansions of renewable generation capacity, development of regional power pools, and improvement of service efficiency. Across Africa, many World Bank-financed projects, such as the Azito Power Project in Cote d’Ivoire, are crowding in private capital and reducing public debt as well as lowering the overall costs of service for electricity. Furthermore, the World Bank is also supporting the development of new technologies such as solar storage solutions, smart meters, mobile utility payments, satellite mapping, and imaging, high-voltage DC transmission, and solar home systems and mini-grids.
Supporting inclusive governance and transforming economies
It is important to enable efficient and inclusive delivery of services, such as judicial courts, waste management, and safety nets, and to build institutions and systems which are resilient to economic, social, and environmental pressures. These pressures can pose challenges to the World Bank’s work on governance and inclusion in Africa. By creating sound conditions for investment and establishing continuity of state services, businesses can thrive and citizens can access much-needed services, thereby achieving greater stability. Technology has also affected how governments operate and interact with citizens, increasing transparency and service delivery. The region continues to work to connect every African individual, business, and government to the Internet by 2030.
In March 2020, Somalia began receiving debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative, which will help Somalia reduce its initial debt of $5.2 billion (end of 2018) to $557 million once it reaches the HIPC Completion Point. The Bank played a major role in helping Somalia reduce its debts by providing $140 million in Pre-Arrears Clearance Grants in FY19 and $375 million in development policy financing to strengthen state capacity, financial management, transparency, and promote inclusive private sector-led growth. Additionally, the World Bank has also provided nearly $400 million in financing since March to help tackle the urgent crises facing Somalia while planning for long-term reforms and development goals.
This past week, the military supposedly fired rubber bullets, water cannons, and tear gas at protestors. However, several ambassadors from Western countries issued a joint statement in which they urged the military to refrain from using violence against the protestors. The statement also said that the protestors were protesting against the overthrow of “their legitimate government.” Since then, a closed-door trial against Daw Aung San Suu Kyi began in secret.
Almost 7 months after leaving Earth, a new rover from NASA has landed on Mars
So far, three people have died from ebola during the recent outbreak in Guinea
The former President of South Africa, Jacob Zuma, did not appear at an inquiry panel about his role in corruption this past Monday