Tag: UK

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Analysis News

Sanctions imposed on Russia: a big change to daily life

Introduction

This year, on the 24th of February, the world witnessed the Russian invasion of Ukraine. After rising tensions, the Russian Government decided to start the ‘special military operation’ which has since claimed thousands of lives. As a result of this conflict, many countries were quick to impose strict economic sanctions on Russia, which have already had their effect on the Russian economy. But what are the consequences of such sanctions on daily life in Russia?

What sanctions have been imposed?

Many countries, among them the US, UK, New Zealand, and the EU member countries, immediately imposed different sanctions to try and stop Russia from further military actions. The more or less immediate reaction of the US government was to ban the export of certain technologies to Russia, which would “make it harder… to modernize [Russia’s] oil refineries.” (Al Jazeera) However, one of the most significant actions the US took was banning Russian oil, which is one of Russia’s biggest exports. Among many others, the EU froze the European assets of Russian President Vladimir Putin and his foreign minister Sergey Lavrov. Russia’s ally country, Belarus, also suffered some consequences as the EU banned imports of products from tobacco, mineral fuels, cement, steel, iron, etc. Many different companies such as IKEA, Spotify, and Apple have also decided to leave Russia. Among them are also Visa and Mastercard who have suspended operations in Russia. This has already had its effects on the Russian economy because people are unable to complete transactions.

Impacts on daily life in Russia

When the war started and the sanctions were imposed, the Russian rouble “plummeted…, leading many retailers to raise their prices.” People living in Moscow believe that while food may not disappear, prices will probably rise exponentially. “On 20 February I ordered groceries for 5,500 roubles [about $57; £44] and now the same basket costs 8,000,” says an EU citizen living in Moscow. While certain retailers are simply limiting the amount of products people can buy, others have “agreed to limit price rises on some staples to 5%”. Moreover, there has been a more than 10% increase in the prices of smartphones and televisions, but many of them quickly sold out before the companies left the Russian market.

International impacts

Perhaps one of the most significant sanctions was one imposed by the US when it banned imports of oil and gas from Russia. The UK has also followed in the US’s steps and has started to “phase out oil imports”. The European Union said it would “move to end its reliance on Russian gas”. 

Why is this important? Along with Iran and Qatar, Russia is home to the largest reserves of natural gas. Half of the world’s natural gas reserves in 2020 were accounted for by the three aforementioned countries. In 2021, 45% of the EU’s gas imports and 40% of its entire gas consumption came from Russia. Despite the EU and other countries announcing plans for ending their reliance on Russian oil and gas, it seems as though these sanctions will have certain long-lasting consequences. As soon as the US stopped such imports from Russia, oil and gas prices started to rise and the same is expected in other countries that have imposed similar bans.

Conclusion

Sanctions imposed on Russia have so far affected its citizens much more than the people with the power to stop the war in Ukraine. However, their long-lasting effects on the conflict remain to be seen. It is true though, that bans on Russian oil and gas from some of the major countries in the world will have great consequences for the world’s economy as people are realizing their economic dependence on Russia and governments who support Ukraine will try to distance themselves from such policies and trade in the future. Daily life in Russia, although already hard, is expected to get harder, as products disappear and soon enough, jobs might also vanish. In this case, Russia will have a very hard time getting its economy back on track and the lives of its citizens back to normal.

Sources

Al Jazeera Staff. “Infographic: How Much of Your Country’s Gas Comes from Russia?” Www.aljazeera.com, 17 Mar. 2022, http://www.aljazeera.com/news/2022/3/17/infographic-how-much-of-your-countrys-gas-comes-from-russia-interactive. Accessed 19 Mar. 2022.

—. “List of Sanctions against Russia after Ukraine’s Invasion.” Www.aljazeera.com, 3 Mar. 2022, http://www.aljazeera.com/news/2022/2/25/list-of-sanctions-on-russia-after-invasion.

—. “US Bans Russian Oil: What Is next for Oil and Gas Prices?” Aljazeera.com, Al Jazeera, 9 Mar. 2022, http://www.aljazeera.com/news/2022/3/9/us-bans-russian-oil-what-does-this-mean-for-oil-prices.

Badshah, Nadeem. “Visa and Mastercard Will Both Suspend Operations in Russia.” The Guardian, 5 Mar. 2022, http://www.theguardian.com/world/2022/mar/05/visa-and-mastercard-will-both-suspend-operations-in-russia. Accessed 19 Mar. 2022.

Hanbury, Mary, et al. “Here Are the Major US and European Companies Pulling out of Russia Following the Invasion of Ukraine.” Business Insider, 10 Mar. 2022, http://www.businessinsider.com/list-all-the-companies-pulling-out-of-russia-ukraine-war-2022-3#28-tiktok-28. Accessed 19 Mar. 2022.

Shamina, Olga, and Jessy Kaner. “Russia Sanctions: How the Measures Have Changed Daily Life.” BBC News, 13 Mar. 2022, http://www.bbc.com/news/world-europe-60647543.

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News

What is COP26 and why is it so important?

Introduction

It is the 26th iteration of the Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC). This annual meeting brings together the 197 members of the convention to take joint action against climate change. The representatives of the countries discuss issues such as climate change mitigation and financing to support developing countries in their efforts to move away from fossil fuels. This year, the conference took place from the 31st of October to the 12th of November.

History of COP26

The first UN climate talk was held in Berlin, Germany, in 1995. At the historic COP21 meeting, held in 2015, countries approved the Paris Agreement. This was a landmark deal under which each country agreed to submit pledges on emissions reductions for its country and adaptation measures, in a collective effort to keep global warming. 

The COP meets every year, unless the Parties decide otherwise. The COP usually meets in Bonn, the seat of the secretariat, unless a country offers to host the session. Just as the COP Presidency rotates among the five recognized UN regions — Africa, Asia, Latin America and the Caribbean, and Europe (Eastern, Central, and Western) — there is a tendency for the venue of the COP to also shift among these groups.

The secretariat was established in 1992. Originally, the secretariat was located in Geneva. In 1995, however, the secretariat moved to Bonn, Germany. 450 staff are employed at the UN Climate Change, hailing from over 100 countries to represent the many distinct member countries. At the head of the secretariat is the Executive Secretary, a position currently held by Patricia Espinosa.

This year’s COP26

This year the meeting was held in Glasgow UK, from 31st October to 12th November. The UK will share the presidency with Italy, which hosted the last ministerial meeting before the conference.

Five years down the line, countries were scheduled to return to the forum and finalise a rulebook on how to implement the Paris Agreement. The UNFCCC secretariat pushed for this by asking all countries to update their NDCs. None of this happened in 2020 due to the Covid-19 crisis, which led the UN to postpone the meeting. Negotiations resumed this year with the same agenda: “Nations will need to reach consensus on how to measure and potentially trade their carbon-reduction achievements. They will also need to ratchet up their national pledges for a chance to keep global warming within 1.5 °C.”

Why is COP26 so important for South Asia?

South Asia is home to nearly a quarter of the world’s population, and to some of the countries most vulnerable to the impacts of climate change. According to the Intergovernmental Panel on Climate Change (IPCC), the world is currently well on track to reach 1.5C of warming by 2040, and South Asian economies are among the vast majority of countries that are not doing enough to improve on this. 

India has been in the spotlight recently as the world’s potential next biggest polluter in the second half of this century, if China and the US reduce their carbon emissions as they have promised. Despite its renewable targets, 80% of India’s energy needs are currently met by fossil fuels, mostly coal. 

International partners have been putting pressure on the Modi administration to set a 2050 deadline for India’s emissions to reach ‘net-zero’, meaning that India would be able to absorb all the emissions it produces. At this year’s COP meeting, Kelkar said that “we need to meet the long-overdue climate finance target of USD 100 billion per year, & we need to close years of pending negotiations on international carbon trading.” While a net-zero commitment by the mid-21st century may be unfeasible for countries in South Asia, Bangladesh and Nepal have submitted updates to their climate pledges prior to COP26, increasing their mitigation efforts in line with the principles of the Paris Agreement.

Top takeaways from COP26

The first two days of the COP26 featured over 100 high-level announcements and speeches. These helped to set the tone for the two-week long conference. Over 140 countries submitted updated 2030 climate plans, or nationally determined contributions (NDCs).

India: announced a commitment (“Panchamrit”) on climate change, which included:

  • Resolution to reach net-zero emissions by 2070, including significant near-term commitments to work toward that goal
  • Pledge to install 500 gigawatts of non-fossil fuel electricity and to generate 50% of India’s energy capacity with renewable energy sources
  • Promise to reduce India’s carbon intensity 45% by 2030 and to cut its projected carbon emissions by 1 billion tons between now and 2030. This will be achieved by steering the country towards a low-carbon development pathway and sending strong signals to every sector about what the future holds.

Brazil

  • Formalized its pledge to reach net-zero emissions by 2050 
  • Set a new goal of reducing emissions by 50% by 2030, however the emissions impact from this goal is no stronger than what the country put forward in 2015
  • It is critical that Brazil comes back soon with a serious commitment to reduce emissions.

China

  • Released its new climate commitment just ahead of COP26, which includes a plan to peak emissions by 2030 and reach carbon neutrality before 2060. This reiterates President Xi’s announcement last December at the Climate Ambition Summit.

New Zealand

  • submitted an updated climate plan with a strengthened 2030 emissions reduction target, aiming to cut its emissions in half from 2005 levels.

Argentina

  • also nudged its 2030 emission cap downward from 359 to 349 million metric tons of CO2 equivalent in 2030.

Sources

  1. https://www.wri.org/insights/top-takeaways-un-world-leaders-summit-cop26
  2. https://www.bbc.com/news/science-environment-59088498
  3. https://www.thethirdpole.net/en/climate/cop26-explained/?gclid=Cj0KCQjwrJOM%20BhCZARIsAGEd4VEAqEsNHfpKPhngRsaAymC52hqhfq5vWy8gTmDzhoItPSwjmYFt%20koEaAv-BEALw_wcB
  4. https://www.thethirdpole.net/en/climate/cop26-south-asia-india-whats-at-stake/
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Weekly Summaries

8th of November – 14th of November

Tensions at the Poland-Belarus Border

Poland has stationed thousands of troops along its border with Belarus where migrants from Middle Eastern countries have set up camp, hoping to enter the European Union. This situation can be seen as a confrontation between Belarus and the E.U., of which Poland is a member. Politicians from E.U. member countries have accused President Lukashenko, Belarus’ leader, of “intentionally trying to create a new migrant crisis in Europe,” according to the New York Times. The E.U. imposed sanctions on Belarus after President Lukashenko’s victory in the elections of August 2020.

Other News

  • After Brexit, British companies have found themselves caught in a tangled web of restrictions and financial obstacles if they want to do business in E.U. countries. The country Estonia saw an opportunity and is now welcoming British companies who want to escape such troubles.
  • The top general of Sudan’s army appointed himself as the “head of a new ruling body” after last month’s coup, according to the New York Times
  • Japan’s economy contracted again in the third quarter of the year
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News

The G20 Summit in Rome, Italy

Who attended?

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.

  1. 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. 
  2. The markets will be more open to Artificial Intelligence. This is especially important as AI is now considered fundamental for new inventions and innovations. 
  3. 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. 
  4. 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).

Conclusion

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.

Sources

  1. https://www.consilium.europa.eu/en/
  2. di Taranto, Giuseppe. “The History of Economics.” (2012)
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Weekly Summaries

1st of November – 7th of November

Elections in Japan

The governing Liberal Democrats won the elections, but it was closer than usual. The new prime minister, Fumio Kishida, was chosen by his party, the Liberal Democrats, only last month but was still able to lead them to a victory. The other candidate for the representative of the Liberal Democrats was Sanae Takaichi, who would have become Japan’s first female leader. In the end, the Liberal Democrats won 261 seats, easily making the 233 seats necessary to have a majority, but lost 23 seats compared to the 2017 elections. Interestingly, the Liberal Democrats’ main opposition party, the Constitutional Democratic Party, also lost seats, according to the New York Times. Prime minister Kishida is a former foreign minister but faces some charisma in the issues and is in fact often said to be “boring” by the Japanese press.

Other News

  • In pro-democracy protests after the coup in Sudan last week, three people were killed and more than 100 were injured.
  • 4 countries, the U.A.E., Bahrain, Saudi Arabia, and Kuwait called back their diplomats from Lebanon’s capital city, Beirut. The move comes after Lebanon’s information minister referred to the Yemen war as a “Saudi and Emirati aggression,” according to the New York Times.
  • The chief executive of the British bank Barclays stepped down after there was an inquiry by regulators into his relationship with Jeffrey Epstein.
  • A building collapsed at a construction site in Lagos, Nigeria, killing at least four people and trapping more than 100.
  • In Virginia, USA, a Republican governor, Glenn Youngkin, was elected last week. He is the first Republican governor to be elected in Virginia in more than a decade.
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Analysis News

AUKUS: Why is it such a big deal?

Introduction

Before answering the question of why the AUKUS agreement is such a global issue, we must first understand its background and contents. Over the past couple of decades, ever since the end of the Cold War between the USSR and the USA, a new nation has been rapidly expanding its influence on the world. That nation is China. In response to China’s growing power, many alliances, notably the World War II-era “Five Eyes” alliance (consisting of the USA, UK, Australia, New Zealand & Canada), now seem to be overwhelmingly focused on Beijing. Announced on the 15th of September, 2021, the AUKUS agreement has become the newest addition to the long list of actions taken by the West to counter China.   

Motivations for AUKUS

AUKUS has been described by analysts as one of, if not the most significant security arrangement between the US, UK and Australia since World War II. According to the states involved in the agreement (USA, UK & Australia), the focus of AUKUS is to maintain “a free and open Indo-Pacific,” with the help of nuclear-powered submarines on patrol. The new security partnership will supply Australia with nuclear-powered submarine technology which will be provided by the USA and UK. While it may take over a decade for the Australian Navy to deploy the first submarine, the agreement represents the USA’s mission to form a stronger threat in Asia and the Indo-Pacific to offset China’s rapidly modernizing military. Even though Australia has tried to remain balanced concerning her ties with the USA and China, the recent barrage of disciplinary trade reprisals from Beijing has drastically shifted Australia’s stance on the matter.

China’s Reaction

What does China think of this agreement? Unsurprisingly, Beijing has consistently lashed out at what it calls a “Cold War mentality,” denouncing anti-China partnerships. Chinese officials have stated that the AUKUS agreement will cause an arms race in the Indo-Pacific. From the Chinese perspective, the agreement was not created for competitive purposes, but instead is a deliberate attempt to impede China’s development. Relations have become increasingly tense, even before AUKUS. President Joe Biden’s administration has continued to put effort into preventing China’s economy from pulling ahead. Furthermore, Beijing has sparred with the UK over Hong Kong and Canada over detained citizens while Europe has called China a “systemic rival”.

Reaction of other countries

China is not, however, the only nation that has been upset by AUKUS. France, and many other NATO member states, such as Germany, have denounced the agreement. France suffered the most, losing a $37 billion deal between France and Australia concerning diesel-powered submarines. Adding insult to injury, France – a very old ally of the West – found out about the new pact just a few hours before it was announced to the public. The Asia-Pacific is a key strategic and economic region for France as 1.65 million French citizens reside on islands including La Reunion, New Caledonia, and French Polynesia. The cancellation of a deal that would reinforce such a region is a great loss for France. The French Foreign Minister, Jean-Yves Le Drian described AUKUS as a “stab in the back”. As a response, France has recalled her ambassadors to Washington and Canberra for the time being.

Conclusion

All is not lost, however. In a joint statement, President Joe Biden of the USA and President Emmanuel Macron of France have agreed to work on creating “conditions for ensuring confidence and proposing concrete measures toward common objectives”. The two leaders have said they will meet in Europe towards the latter half of October to further mend the damaged diplomatic relations.

Sources

  1. BBC. “Aukus Pact: France and US Seek to Mend Rift.” BBC News, 23 Sept. 2021, http://www.bbc.com/news/world-europe-58659627.
  2. —. “UK, US and Australia Launch Pact to Counter China.” BBC News, 15 Sept. 2021, http://www.bbc.com/news/world-58564837.
  3. Chazan, Guy. “Aukus Security Pact Is ‘Insult to a Nato Partner’, Says Merkel’s Adviser.” Financial Times, 24 Sept. 2021, http://www.ft.com/content/dfc4f860-c178-4c2a-a46c-c5f4e5595b1a. Accessed 26 Sept. 2021.
  4. Prof. Nursin Atesoglu Guney. “ANALYSIS – Third Front of New Cold War Expanding in Asia-Pacific.” Www.aa.com.tr, 24 Sept. 2021, http://www.aa.com.tr/en/analysis/analysis-third-front-of-new-cold-war-expanding-in-asia-pacific/2373757. Accessed 26 Sept. 2021.
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Weekly Summaries

16th of August – 22nd of August

Chaos at the airport in Kabul

Thousands of Afghans continue to try to flee the country, with some clinging on to departing planes and crowds at the airport trampling people to death. Britain and Canada have since announced that they will both take 20,000 Afghans each who had fled the country. Meanwhile, President Biden defended the “hard and messy” retreat from Afghanistan, claiming that he had to either follow through on the deal with the Taliban he inherited from President Trump or fight the Taliban, according to the New York Times.

Earthquake in Haiti

Haiti was already trying to cope with the aftermath of the 2010 earthquake and the murder of President Jovenel Moïse in July. Now, another earthquake has hit, the death toll of which has now increased to more than 2,200 people. The government also estimates that around 10,000 more people have been injured. Heavy rains have made rescue missions difficult and the people are turning to local churches for support.

Elections in Zambia

Hakainde Hichilema, the leader of Zambia’s main opposition party — the United Party for National Development — won the presidential elections, receiving 59.38% of the votes. His main opponent, Edgar Lungu, who was the previous President, received only 38.33% of the votes. It is only the third time in Zambia’s history that an opposition leader won the election.

Other News

  • Amazon has taken over Walmart’s position and become the world’s largest online retailer operating outside of China, according to the New York Times
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News

A Noisy Return to a Post-Pandemic Normal

Introduction

As COVID-19 infections throughout the world rise, especially with the Delta variant — a mutated version of the virus — it brings into question, when will we get back to a new ‘normal’. While parts of the world are already returning to a pre-pandemic norm, countries in Africa still lag behind in securing vaccines for their healthcare workers. Until the world can ensure a safe and equitable distribution of vaccines, there will be no normal — for a while. 

The United Kingdom

Dubbed “Freedom Day,” the United Kingdom is returning to pre-pandemic normalcy. All restrictions have been lifted, and with 68.8% of the population having received a 2nd dose, all is going well, until you start to take into account the steady rise in infections — especially with the transmissible Delta variant, which killed thousands in India a few months ago. Like Shakespeare’s play on words, this is another gamble with the economy. For the past few months, the British economy has been stagnating, recent consumer trends show that household expenditures decreased by 11% when compared to Q3 2020-2021, and a loss in consumer spending hurts aggregate demand in the UK. This has a negative effect on the GDP and led to a loss in income, rise in unemployment, and consistent failures to meet monetary policies set forth by the Bank of England. 

Downing Street is now trying to get people back out: partying, eating, drinking, and working; and throughout the western world, governments have taken similar approaches. Across the pond, the United States is, for the most part, open, while Canada is coming out of lockdown. Lockdowns have hurt local business, people are frustrated and government debts and deficits have taken a toll on the state. However, in most of the Western world, we see that vaccines are readily available, but most countries still do not have enough vaccines to return to a ‘new’ normal. 

Georgia

Countries such as Georgia, Ukraine, or Belarus for example are not relatively poor states — in comparison to the rest of the world — but lag behind in vaccination rates. Vaccine hesitancy is rampant among the public and even with government encouragement, few people volunteer to take it, and in order to save their economies, prematurely opened up. This leaves them vulnerable to COVID-19, which delays the world’s return to normal, and raises a philosophical question: do the ends justify the means for some countries that are opening up prematurely due to vaccine shortages? For example, the IMF predicts Georgia will grow at 7.7% this year due to opening up prematurely, but amid rising delta infections, hospital beds filling up, and exhausted medical and financial resources, it is very possible many will die in the next wave. 

However, Georgia isn’t alone. There are a hundred other countries facing the same question. Do the ends justify the means? What to prioritize? Nonetheless, getting the jab is important — no matter where you live — as it means you are one less person to vaccinate and more vials can be donated to other, lesser developed countries. The faster vaccines can be secured for poorer, lesser developed nations, the faster we will return to a ‘new’ normal because a dozen nations don’t represent the world. The longer it takes to vaccinate any human, the longer this pandemic drags on, and the longer you’ll wear a mask. So, if you have the opportunity to do so, take your dose as it’ll help strengthen the world from a virus which churned the world to a halt.

Sources

Categories
Analysis

Singapore’s Economic Transformation

Introduction

In the 1960s, Singapore was an underdeveloped country with scarce resources after being a British colony for more than 100 years. Today, Singapore is one of the fastest-growing economies in the world and has transformed into a modern city with the second-highest population density in the world and a skyline full of skyscrapers. How was this possible?

Singapore immediately after gaining independence

After gaining independence in 1965, Yusof bin Ishak served as Singapore’s first president and Lee Kuan Yew was Singapore’s first prime minister. At the time Singapore was facing many problems. Most of Singapore’s 3 million inhabitants were unemployed and more than two-thirds of Singaporeans were living in slums or so-called squatter settlements in the fringe part of the city. Singapore’s immediate neighbors, Malaysia and Indonesia, were initially not friendly towards Singapore. Additionally, Singapore lacked access to natural resources, a clean water supply, proper sanitation, and infrastructure. Originally, the prime minister at the time, Lee Kuan Yew, hoped to modernize Singapore through foreign aid, but no country showed interest in helping Singapore.

Singapore and globalization

While a member of the British colonies, Singapore’s economy was focussed mainly on the entrepôt trade. However, there was very little perspective for the future of this industry. Therefore, politicians decided to focus on industrialization, specifically developing labor-intensive industries. This was a big step as Singapore had undergone very little industrialization before. Once production started, Singapore was forced to adapt once again as its neighbors (Malaysia and Indonesia) did not want to trade with it. Therefore, Singapore started looking into globalization as an opportunity to trade with the “developed” world. To attract foreign investment, Lee Kuan Yew worked to create a Singapore that was safe, corruption-free and had low taxes, putting in place harsh penalties — even including the death sentence — for people who disobeyed the law. Furthermore, all independent labor unions were also meshed to form the National Trade Union Congress (NTUC). These new measures helped Singapore become attractive for multinational corporations, especially because Singapore’s political system was very stable.

Singapore and foreign direct investment

Singapore was hugely successful in attracting multinational corporations. In fact, by the end of 1972, “one-quarter of Singapore’s manufacturing firms were either foreign-owned or joint-venture companies” (according to ThoughtCo.). Among the foreign investors, Japan and the U.S. were especially influential. All of the cash flowing into Singapore meant that between 1965 and 1972, Singapore was able to achieve annual double-digit GDP growth every single year. In order to maintain their growth, the government decided to start heavily investing in education. Technical schools were set up and the multinational corporations investing in Singapore were encouraged to train their unskilled workers. People who couldn’t find jobs were given jobs in sectors such as the tourism and transportation industry by the government.

Singapore today

Today, Singapore’s port has become the second-busiest in the world, only behind Shanghai. Before the outbreak of COVID-19, more than 10 million visitors came to Singapore annually. Aside from the shipping and tourism industries, Singapore’s medical industry has also grown significantly, alongside the banking industry. Despite its small size and comparatively recent economic transformation, Singapore is now the 15th largest trading partner of the United States. In 2019 there were over 3,000 multinational corporations that operated in Singapore. If you don’t mind abiding by some comparatively strict laws, Singapore is one of the best places to live these days, offering its citizens the third-highest life expectancy in the world. Singapore really has become a “powerful and financial center” (according to the BBC) of the world.

More recently, Singapore has had to grapple with an increasing number of unemployed due to the outbreak of COVID-19. Aid packages and policies have been put in place by the government to protect jobs and create opportunities for people. However, Leila Lai states that in order to survive, “Singapore will need to accelerator economic transformation and establish itself as a key player in the Asian and global realms of technology, innovation, and enterprise.” Although there is hope, only time will tell to what extent Singapore will be able to recover from the effects of the pandemic.

Sources

  1. https://www.thoughtco.com/singapores-economic-development-1434565
  2. https://www.bbc.com/news/business-32028693
  3. https://www.businesstimes.com.sg/government-economy/economic-transformation-must-speed-up-for-singapores-survival-beyond-covid-19

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News

The G7 Summit in Cornwall

What is the G7?

The G7 is a political establishment, founded in 1975, that addresses current and potential future challenges that can affect the growth of the global economy, including the impacts of fluctuating oil prices and of emerging markets. The G7 is made up of some of the wealthiest economies across the world — the US, the UK, Canada, France, Germany, Italy, and Japan (China is not a member of the G7). The organisation is not an official, formal entity and therefore has no legislative or authoritative power to enforce policies or laws around the world. However, due to the powerful nature of the countries involved, policies can be introduced within said countries, helping to resolve global issues.

What is the purpose of the G7? 

The intergovernmental organisation meets periodically to assess economic and monetary issues that have developed throughout the world between each summit. They discuss and sometimes act in order to assist in resolving global issues, particularly those that concern the global economy.  Their efforts have allowed the organisation to launch initiatives, which fund issues and relieve crises, including several aimed at relieving debt within developing nations. For example, the establishment provided $300 million in 1997 to help construct the containment of the reactor meltdown at Chernobyl, following the nuclear disaster. 

What did they discuss in Cornwall last week? 

As expected, the main topic of conversation was resolving the current global crisis, COVID-19. The leaders within the establishment debated the importance of a stronger global health system and reviewed a potential plan of action which could reduce the global health inequality that could protect us from future pandemics.  Their agenda further included discussion on actions taken towards climate change, e.g. the unsuccessful Paris Agreement of 2015, and trade agreements. This was a big topic for Britain in particular, since talks regarding Brexit began in 2016 when Britain decided to leave the European Union.

What were the outcomes of the meeting? 

The meeting had three major outcomes: “A Billion doses of COVID-19 vaccine (1)”, “no more coal (2) ”, and “tech giants and tax havens targeted (3)”.

  1.  The leaders at the conference pledged to deliver over 870 million vaccine doses to the developing world, on top of the 250 million already promised by the US and the 100 million from the UK. This action will not only allow the HIC’s to recover from the pandemic but allow LIC’s to recover, also. This will have a rather large impact as the lower-income countries are more at risk of an unrecoverable economic depression than higher-income countries. 
  2. There was a unanimous agreement in which the G7 leaders pledged to phase out coal-fired power generation at home and reduce/end funding for new coal-burning power plants in the developing world. Furthermore, the leaders committed to offering developing nations $2.8bn to help them switch to cleaner fuels. These plans will not only help reduce carbon emissions but will consequently reduce climate change. A large issue within climate change is that developing countries do not have funding to provide renewable sources of energy. Therefore, this initiative is of great importance as it will allow countries to take a global stance against global warming.
  3. The summit agreed to take steps towards dissuading MNC’s (multinational co-operations) from shifting profits to low tax-havens. The leaders signed up to levy a minimum 15% corporate tax rate. This will help boost economies especially following the pandemic, which has caused severe economic instability globally. Furthermore, the leaders have also moved to help protect the global financial system from the impact of climate change by agreeing on rules which require companies and financial institutions to disclose the extent to which their business is exposed to climate change risks.

Sources

  1. https://www.weforum.org/agenda/2021/06/g7-summit-covid19-tax-environment/
  2. https://www.investopedia.com/terms/g/g7.asp