The 2021 Nobel Memorial Prize in Economic Sciences was awarded to three U.S.-based economists who work with real-life experiments. David Card from the University of California, Berkeley, specializes in studying “unintended experiments to examine economic questions.” An example of such an experiment is whether raising the minimum wage causes people to lose their jobs. Joshua D. Angrist from the Massachusetts Institute of Technology and Guido W. Imbens from Stanford University won the prize for their joint work on developing research tools that economists utilize to test major theories using real-life situations. An example of this could be whether additional education has an impact on the amount a person earns. Click here to watch a video of the three winners
32 countries joined the U.S. in a deal aiming to reduce methane emissions by 30% by 2030 that was developed by the E.U.
A trial in Burkina Faso hopes to finally establish who killed Thomas Sankara, the former president, more than 30 years after his death
In a pledge, the E.U. decided to give 1 billion Euros (around 1.15 billion US$) in aid to Taliban-ruled Afghanistan and neighboring countries
A man killed 5 people using a bow and arrow in Kongsberg, which is just outside of Oslo, Norway. The police announced that the suspect is now undergoing psychiatric evaluation
In Germany, elections took place this past Sunday. In Berlin, the marathon took place on the same day, which led to many disruptions and some people only being able to vote after the first results had already been published. The Social Democrats (SPD) ended up winning the election, winning 25.7% of the votes, earning just 1.6% more than the Christian Democratic Union (CDU), which is Angela Merkel’s party. Because no party earned more than 50% of the votes, they have to form a coalition. At the moment, there are three possibilities, but the negotiation talks could take months. It is also still unclear who will become Chancellor now that Angela Merkel’s 16-year long chancellorship has ended.
Elections in Canada
After the current prime minister Trudeau called elections early this summer in the hopes of gaining a majority, the people decided last week that he should stay in power. Overall, Trudeau’s party the Liberals won 158 seats, 12 seats short of the 170 seats required to have a majority. The Conservatives, meanwhile, won 119 seats. However, voter turnout was the lowest in more than a decade, with just 59% of Canadians who are eligible to vote giving their poll.
Meng Wanzhou, the executive of Huawei, has been released and returned to China last week
Thousands of residents of the island La Palma had to be evacuated by Spanish authorities last week because a volcano spewed lava and smoke. The eruption was later called the “most powerful eruption in half a century,” according to the New York Times
The U.S. lifted its travel ban on foreign travelers who have been fully vaccinated from 33 countries, which include E.U. countries, China, Iran, South Africa, Brazil and India
Same-sex marriages are now legal in Switzerland after many people voted for the legalisation in the vote
The current President of Nicaragua, Daniel Ortega, is taking steps to ensure that he will win the elections in November again. The New York Times writes that there is no “credible challenger” and that Ortega is “turning Nicaragua into a police state.” Seven candidates have been jailed or put under house arrest since June alone and people from all backgrounds — from millionaire banker to a decorated general to a low-profile provincial activist — have been targeted.
The U.S. remembered the 9/11 attacks that happened 20 years ago.
Maria Kolesnikova, a Belarusian opposition figure, was sentenced to 11 years in prison during a trial in Minsk last week
In a ruling last week, Mexico’s Supreme Court decided that making abortion a crime was “unconstitutional”. Nonetheless, abortion is still not available to most of the Mexican female population.
El Salvador adopted Bitcoin as a legal tender, the first country to do so
The Taliban named an acting cabinet last week. However, the lack of women and some former leaders from the Taliban’s 1990s regime have raised alarm bells in other countries.
The pandemic has had extreme impacts on economies and has reached almost every country in the world (with many in recession). Lockdowns and restrictions, high levels of unemployment, low productivity due to health risks, weak demand (drop in household spending), etc. have all had lasting impacts. However, the pandemic has impacted different countries, communities, groups, and demographics differently. Although recovery from the pandemic is looking strong in many parts of the world, with successful vaccination roll-outs and strict law enforcement, unfortunately, the impacts of the virus will remain in some economies for years to come. This presentation will explore why governments have roles to play in ensuring that economic recovery post-pandemic is inclusive and accounts for the hardships faced by all communities. I argue that a recovery that is focused on ensuring GDP/national income levels are back to pre-pandemic levels is NOT sufficient. Post-pandemic recovery planning is the perfect opportunity for global economies to create plans which focus on sustainable and socially supportive economic growth to ensure the highest possible degree of well-being for citizens.
Before discussing the topic of an inclusive recovery, I would like to briefly go through an important economic concept. The Keynesian Model in macroeconomic theory is different from that of the monetarist/new classical model. Whereas the new classical model assumes that the economy will automatically tend back to the full employment level of output at potential GDP due to wage flexibility in the labor market, the Keynesian model acknowledges that in the real world, there are labor market rigidities that cause wage and price downward inflexibility. This means that when AD is low and the economy is in a recessionary gap (where unemployment is higher than the natural rate and equilibrium GDP is less than potential GDP), there is no guarantee that the free market will return to full employment. Increases in AD (eg. from 1->2) need not lead to an increase in the price level, which means that the economy can remain in this recessionary gap in the absence of government intervention. This model illustrates the role of the government in ensuring the economy can progress from the recessionary gap and tend back to potential GDP to stimulate investment and economic growth.
These are the 3 potential shapes of economic recovery that I will be looking at. The first indicates a sharp decline in national income followed by a quick sharp increase back to the same trajectory indicating increasing potential output. A U-shaped recovery is similar to a V-shaped recovery, but the process is much slower. The third one is a K-shaped recovery, in which some industries experience a V/U-shaped recovery but others continue to suffer. Economies around the world are experiencing recoveries which show similar characteristics to each of the shapes outlined here, but I will focus on the United States.
The United States has experienced a very sharp recovery in many aspects of the economy, so many argue that recovery has followed a sharp V-shape. The strong growth was mostly due to easing anxiety over the pandemic as vaccines have been rolled out across the country, boosting domestic demand and allowing businesses, such as restaurants and bars to reopen. The Biden administration has also released relief stimulus packages that have boosted household spending and accelerated economic growth, bringing the economy back to pre-pandemic levels when looking at figures like GDP or the stock market. However, this snapshot of the economy is not representative of the whole country and fails to account for many communities that continue to suffer. Therefore, I argue that the current shape of the recovery differs for individual demographics, and industries that were most affected by covid (leisure, hospitality) are generally made up of low-wage, minority workers. Thus, the recovery for individuals which are undoubtedly dependent on their income from work, is strongly impacted by the industry they work in.
The diagram shows the economy in a recessionary gap when AD is weak and unemployment is greater than the natural rate. Government intervention is needed to boost AD (invigorate animal spirits and household spending). An inclusive recovery, much like any other economic recovery, would still aim to achieve this and get the economy closer to potential output. The factors of production are the various inputs required for the production of g/s in an economy. The most important FOP for most firms tends to be labor. The reason why an increase in the quality/quantity of FOP causes long-term growth (increase LRAS) is because more FOP or more efficient FOP allow for more productive production and increases the production capacity of firms. This means that the potential output of an economy increases.
This data shows that although unemployment figures may seem promising (943000 jobs added in July, rate of unemployment 5.4%), there are still millions of unemployed workers continuing to struggle. Those included in the unemployed/displaced are mainly low-wage workers, who were already in economically precarious situations before the pandemic. They earned less than a third of the average hourly wage of the displaced mid/high-wage workforce, and many were living below 200% of the poverty line. The pandemic exacerbated the situation due to job losses, and this was disproportionately worse for low-wage workers as those industries impacted most by Covid (eg. services, leisure, hospitality, gig economy) which require face-to-face interaction are predominantly made up of low-wage migrant workers. This data presents a need for an inclusive recovery, as it is inequitable and unjust to strive for a speedy and strong economic recovery when millions of workers who make up important parts of the economy are left behind. Therefore, I firmly believe that economic objectives for post-pandemic recovery should shift from ensuring we return to pre-pandemic levels of eg. GDP/employment to ensuring the economy comes out of the crisis better, stronger, and more inclusive.
The controlled racial pay gap is a comparison of pay between white men and people of color who have the same job and qualifications. As we can see, research into the racial wage gap shows us that racial bias persists in the U.S. workforce. Not only was this a large issue before the pandemic hit, but it has been severely exacerbated by the economic implications of the virus. This data that we have now seen on both racial bias in unemployment and wages show that there is clear potential gain for the economy if POC/minorities were to be paid fairly for their work. Many minorities work in positions that do not utilize their full skills, which can be thought of as a widespread underutilization of labor. Policies that advocate for fair pay across ethnicities/demographics would make the most economic sense as this aims to increase the amount of labor (a FOP) available to use in the economy and will shift out the LRAS.
To summarise, the economic benefits of an inclusive recovery include achieving long-term economic growth as well as a lower risk of high inflation. Although neoclassical/right-wing economists may argue against an economic recovery focused on social objectives, there are clear reasons as to why an inclusive recovery is the most beneficial for society and does not necessarily involve neglecting economic objectives.
In the Keynesian model, the long-run aggregate supply curve can shift outwards mainly when there is a greater quantity/quality of FOP, or due to improvements in technology/efficiency. An inclusive recovery aims at building a better workforce through training, education, fair remuneration, etc. Therefore, this can be thought of as an improvement in the quality/quantity of the most important FOP (labour) as the workforce becomes more able to complete the work most needed by the economy. Additionally, aspects of an inclusive recovery such as improved childcare support could even increase the quantity of labour, which would also cause an outward shift in the LRAS and thus long-term economic growth which increases the potential output that can be produced by an economy.
Another benefit of long-term economic growth is that is reduces the inflationary consequences of short-term economic growth (aka. Short-term increases in AD). In the diagram, increases in AD without corresponding increases in LRAS increase real output as well as the price level. Sustained increases in the general price level is known as inflation, which has undesirable consequences if it exceeds the 2-3% range. However, if LRAS increases at the same time, short-term growth can be achieved without a subsequent increase in the price level (or at least with a lower increase). This helps avoid an inflationary spiral, which tends to be common following recessions.
Other than the economic benefits mentioned, an inclusive recovery is necessary for other reasons pertaining to social justice as well.
First and foremost, it is immoral to strive for economic benefits that do not advantage (or at least do not intend to advantage) all citizens equally. Economies must ensure that wellbeing is a significant social objective, which can only be achieved if all demographics are given the same rights, resources, and opportunities.
John Rawls’ theory of justice states that equal distribution of resources should be the desirable state of nature, as opposed to following utilitarian philosophies; holds that every individual has an equal right to basic liberties, and that they should have the right to opportunities and an equal chance as other individuals of similar ability.
John Rawls presented two principles of justice that self-interested and rational individuals would choose when separated by the veil of ignorance. The veil of ignorance is a method to work out the basic institutions and structures of a just society. According to Rawls, this demands that we think as if we are building society from the ground up, in a way that everyone who is reasonable can accept. The situation before any particular society exists; this situation = Original Position. Essentially, after this position, there are two justice principles: Principle of Equal Liberty & Principle of Equality. The former states that all citizens have an equal right to basic liberties, and the latter holds that economic principles should be arranged in a way to meet two requirements; ie. the least advantaged in society should receive
a) greater number of benefits + the economic inequalities should be arranged in a way that no individual is blocked from occupying any position, regardless of their social background.
b) The data we looked at before on the controlled racial wage gap in the US clearly indicates that workers with similar abilities are not given the same opportunities. Many POC are deprived of their right to a basic living standard as they are denied work based on their background, which they cannot change.
c) I strongly believe that this disparity highlights a role for the government to intervene and provide the necessary means for individuals of all backgrounds to receive justice and advance in society regardless of their race.
As we touched on earlier, the recovery isn’t affecting all workers equally. Just as Black and Hispanic communities have struggled with higher rates of infection and death since the beginning of the COVID-19 pandemic, communities of color are continuing to bear the brunt of high unemployment and economic insecurity, even as the overall numbers fall. These low-wage minority workers typically work in sectors such as retail and hospitality, which pose health risks during a pandemic and are therefore subject to shut down, and so we’re much closer to economic normalcy in sectors like construction and professional and business services than we are in sectors like leisure and hospitality. Ensuring an inclusive recovery must involve paying attention to these distinct disparities and ensuring that investment and grants are rightfully placed into these especially hard-hit sectors. Furthermore, policies that encourage career mobility and basic economic stability are also necessary to generate the right jobs and ensure they are available to those who need them. It is necessary to enhance education and training workforce systems to help workers adapt to changing skill needs while also strengthening worker protections and improving job quality, focusing on issues such as pay, stable and predictable hours, and adherence to health and safety standards.
Furthermore, many women have been impacted at far greater rates. Women make up 39 percent of global employment but account for 54 percent of overall job losses. One reason for this greater effect on women is that the virus is significantly increasing the burden of unpaid care, which is disproportionately carried by women. The lack of childcare available for working mothers means that they either reduce their working hours or leave their jobs entirely. The low wages associated with “pink collar” jobs have long contributed to the gender disparities within the labor force, and the shortage of affordable, high-quality childcare systems perpetuates the outdated stereotypes of women’s societal roles. COVID-19’s disruption to employment, childcare, and school routines has had considerable impacts on the economy and has pushed millions of women and families to financially unstable situations. Just as we mentioned how POC disproportionately represent low-wage jobs, the same applies to women. Many single-parent families (in which single mothers are much more common) rely on a single stream of income which determines their living expenses; if parents are not fairly remunerated, it puts many households into poverty. The childcare and education systems need remodeling to change this disparity. Affordable and accessible childcare enables more women to either join or stay in the workforce, which has several benefits to our argument. Firstly, it is much more equitable as women would then have the same opportunities as men when taking on jobs requiring more hours. Additionally, this adds more labor to the workforce, making the economy more productive and increasing the economy’s potential output. Solutions to this gender disparity should not exclusively focus on short term COVID-19 recovery, but should also make long-lasting changes that aim to close the wage gap, improve working conditions and family leave options, and better align the childcare and school systems to the needs of working parents so mothers who want to work can do so.
The Families First Coronavirus Response Act (FFCRA) provided 12 weeks of parental paid leave and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided enhanced unemployment benefits that reduced poverty rates in America. The CARES Act also provided direct aid to states to address immediate problems in education budgets and provided the Child Care and Development Block Grant (CCDBG) with $3.5 billion to keep childcare providers afloat. But many of the most important provisions of these two pieces of legislation have expired, will expire soon, or were inadequate. And, these were just short-term solutions to a much more deep-rooted problem.
Biden’s proposed 10-year, $1.8 trillion American Families Plan would spend $225 billion to improve child care. This funding would help providers improve the quality of programs; establish a $15 minimum wage; expand training for early childhood caregivers; and reduce the cost of care for low-income families. An additional $425 billion in Biden’s plan would go toward establishing universal preschool for all three- and four-year-olds. But while investment in public infrastructure tends to have bipartisan support, investment in “soft” infrastructure eg. childcare and education hasn’t received the same support from Republicans in the US Congress.
The AFP also plans to extend or make permanent enhancements to several key tax credits that were in the COVID rescue bill → this reduces poverty and provides economic boosts to families with children. Many Republicans oppose the fact that this plan will be funded through tax increases on Americans, but these tax increases are only significant to the highest income bracket and large corporations (top 1%).
Apart from increasing living standards, the elements of the AFP have other impacts on the economy.
Tax credits will increase the level of disposable income within households, thus shifting the AD curve rightwards. Government spending (an element of AD) will also contribute to this shift, due to the large amounts of investment into childcare and education.
The improvements in childcare will allow a) parents who worked less hours to be able to work more and b) parents who were previously not in the labour force as they tended to unpaid house work/child care to enter the labour force. Both of these points have the effect of shifting the LRAS curve outwards, thus increasing the level of potential output/GDP within the economy.
Increasing both LRAS and AD simultaneously results in the reduction of inflationary pressures normally brought about by increases in AD, which we discussed before.
Mid-recovery inflation (esp. in the US) has skyrocketed because the comparison to prices now versus a year ago when much of the country was in lockdown is very drastic. Although many argue that current rates of inflation are just transitory, if they get too high, IR’s will have to go up, which puts the economy at risk of recession again. Additionally, inflation rates are worrying as they can have lasting impacts on consumer confidence and spending ie. consumers believe that prices will continue rising so they spend now and save later. Therefore, it is in the economy’s best interest to reduce inflationary pressures and ensure the economy doesn’t overheat during its recovery.
Although the current policies which are being designed to tackle the issue of racial and gender disparities within unemployment figures have clear positive impacts on the economy, I also believe there are some other points that the US has failed to address. In regards to the childcare system, although tax credits and investment into childcare corporations may alleviate some pressures, there also needs to be more systemic changes made to the system. High labor turnover rates in the childcare industry exist due to generally low wages. Childcare educators must be fairly compensated and trained in order to improve the quality, quantity, and stability of the industry.
When it comes to racial disparities, the racial gap in people receiving jobless aid persists despite enhancements to the unemployment system through the CARES Act. Supporting labor unions and collective bargaining ensures workers of all backgrounds can have more leverage to negotiate wages and other terms of their working conditions. The Biden administration can try to change labor laws to allow for “sectoral bargaining”, in which workers organize by industry to reach a collective agreement that covers all workers in a sector rather than across one firm. Additionally, there are other elements of recovery for racial minorities that can be introduced which are not related directly to economics. For example, acts like the George Floyd in Policing Act would aim to combat police misconduct, excessive force, and racial bias in policing. Such acts would give more power to POC and allow them to be treated the same way as their white counterparts.
A very important factor to consider when looking at building an inclusive recovery is to ensure you are equipping the unemployed with the necessary skills and knowledge they need to be able to find work. In addition to trying to get as many people looking for jobs into work as possible, it is also important for the economy to look beyond this and try to build a sustainable and equitable framework to avoid distinct disparities within the unemployed. This can be achieved by addressing the main reasons why unemployed workers are finding it hard to get a job, and necessary government interventions to support and provide skills for the unemployed:
Addressing specific employment barriers → Short-term strategies such as providing expanded unemployment benefits or increasing the number of capital projects may help ease overall unemployment, but interventions must address specific employment barriers for heavily affected segments. For example, workers without a college degree may need additional training and skills-based education to transition to new career pathways and ensure they have the skillset that firms are looking for.
Tackling structural and technological unemployment requires the consideration of how the pandemic has catalysed the shift to technology-enabled business models in many industries, and how this will affect workers and future skill requirements.
Enhanced training for those looking for work to gain the skills which the economy needs will also lead to long run economic growth, as the quality of labour is improved. Having a better trained workforce with the necessary skills for the future needs of the economy will increase productivity and help those who were greatly disadvantaged by the pandemic to become attractive candidates due to better education and skills.
The last U.S. forces left Afghanistan last Monday. Their departure ended a 20-year long occupation. The war in Afghanistan cost the U.S. over $2 trillion and left more than 170,000 people dead. Shortly before midnight, the last 5 American cargo jets left the Kabul airport, leaving behind many Afghans, including former members of the security forces. The Taliban and fighters celebrated the U.S. departure and gunfire could be heard across Kabul. A day later, President Biden once again defended the withdrawal, claiming that it was a choice “between leaving or escalating” the situation.
The return of a Napoleonic general, Gen. Charles Etienne Gudin, was supposed to improve relations between France and Russia, two countries that have long had difficult diplomatic relations. However, when the ceremony took place, the Presidents were not to be seen.
The leader of Guinea’s special forces led a coup, announcing on state television that the constitution and government had been dissolved. Whether he will be successful is still uncertain.
Less than a year after he started office, Prime Minister Yoshihide Suga of Japan said that he would not seek re-election
What are the Taliban? The Taliban is a militant terror group that ruled Afghanistan under the command of Mullah Omar (founder and the first leader of the Taliban) from 1996 – 2001 until they were toppled by the U.S. forces. In response to the 9/11 attack, the US launched “Operation Enduring Freedom,” which was aimed at all the suspects of the attack — mainly Al Qaeda and Taliban. Due to this, the Taliban was overthrown easily. The ideology followed by the Taliban is extremist. They aim to install Islamist rule all across Afghanistan. They have almost 85,000 fighters according to recent NATO estimates.
● Taliban emerged in Pashtun areas straddling Pakistan and Afghanistan
● Captured the province of ‘Herat’
27 SEP 1996
● Taliban captured the Afghan capital, Kabul, and the regime of President Burhanuddin Rabbani was overthrown
● Islamic Emirate of Afghanistan was established by Mullah Omar
● 90 percent of Afghanistan was captured
● They enforced their own Islamic or Sharia Law once they were in power
● Al-Qaeda, led by Osama Bin Laden in Afghanistan, carries out the largest terror attack ever conducted on US soil (9/11)
● A US-led coalition bombs Taliban and al-Qaeda facilities in Afghanistan. Targets include Kabul, Kandahar and Jalalabad.
(7th of October)
● Fall of Kabul; the Northern Alliance, a group of anti-Taliban rebels backed by coalition forces, enters Kabul as the Taliban fled the city. (13th of November)
● New constitution, 26th of January; the constitution paves the way for presidential elections in October 2004.
● Hamid Karzai, the leader of the Popalzai Durrani tribe, becomes the first president under the new constitution. He serves two five-year terms as president.
● UK troops deployed to Helmand, May 2006
● 17th of February 2009, U.S. President Barack Obama approves a major increase in the number of troops sent to Afghanistan.
● Osama bin Laden killed, 2nd of May 2011
● Death of Mullah Omar, 23rd of April 2013
● NATO ends combat operations, 28th of December 2014
● Taliban resurgence
● The US and the Taliban sign an “agreement for bringing peace” to Afghanistan, in Doha, Qatar on the 29th of February. The US and Nato allies agree to withdraw all troops within 14 months if the militants uphold the deal.
2021 ● On the 16th of August, the Taliban returned to power, In just over a month, the Taliban swept across Afghanistan, taking control of towns and cities all over the country, including Kabul. Afghan security forces collapsed in the face of the Taliban advance.
What is happening in Afghanistan now?
On April 14, US President Joe Biden announced that the US forces would withdraw by September 11th, 2021. In May 2021, foreign forces started to withdraw from the country and the Taliban stepped up to defeat the Western-backed government. The Taliban captured 26 provincial capitals in just 10 days, while Kabul fell in 1 day and the Taliban were thus able to take control over Afghanistan again. On August 15th, Afghanistan’s President Ashraf Ghani, who was backed by the U.S., resigned and fled to Oman.
On August 14th, Joe Biden made a statement about the Afghanistan crisis and what role the U.S. will play :
“Over the past days, I have been in close contact with my national security team to give them directions on how to protect our interests and values as we end our military mission in Afghanistan.
First, based on the recommendations, I have authorized the deployment of approximately 5,000 U.S. troops and an orderly and safe evacuation of Afghans who helped our troops during our mission and those at special risk from the Taliban advance.
Second, I have ordered our Armed Forces and our Intelligence Community to ensure that we will maintain the capability and the vigilance to address future terrorist threats from Afghanistan.
Third, I have directed the Secretary of State to support President Ghani and other Afghan leaders as they seek to prevent further bloodshed and pursue a political settlement.
Fourth, we have conveyed to the Taliban representatives in Doha that any action on their part on the ground in Afghanistan, that puts U.S. personnel or our mission at risk there, will be met with a swift and strong U.S. military response. Fifth, I have placed Ambassador Tracey Jacobson in charge of a whole-of-government effort to process, transport, and relocate Afghan Special Immigrant Visa applicants and other Afghan allies. Our hearts go out to the brave Afghan men and women who are now at risk. We are working to evacuate thousands of those who helped our cause and their families.”
What does the Taliban’s return mean for the citizens of Afghanistan?
Questions are being asked about how the group will govern the country, and what their rule means for women, human rights, and political freedom in Afghanistan. Its leadership says it wants peace and an inclusive government that is compatible with Islamic law or the Sharia Law, but many Afghans are skeptical about this and thousands have already fled the country, fearing a return to a brutal and repressive regime.
A brief about the Sharia law:
Sharia is Islam’s legal system. It is the set of laws that govern the dailylives of Muslim people and it is based on a combination of the Quran and the teachings from the prophet Muhammad.
Taliban officials have repeatedly tried to assure Afghan citizens, particularly women, that this time the rule will be different. Earlier this week, the Taliban urged women to join its government. Some representatives have also said that women will be allowed to work and study. When they were last in power, the Taliban had made full burqa compulsory but this time they said that women will not be required to wear a full Burqa, and can opt for just the hijab (headscarf). Well, what is the actual situation on the ground? Despite their assurances, parts of the country are seeing a return to the repressive old order, women in some provinces are not allowed to leave their home without a male relative escorting them and were also denied access to universities in some places, girls have been banned from returning to schools and there have been reports of several forced marriages. Smartphones and television have been banned, young men are being forced to join their ranks. Reporters and peace activists who raised their voices against the Taliban face risk to their lives. In the current situation in Afghanistan, chaos has been created everywhere, Airports and ATMs were mobbed with thousands of people trying to escape the country. According to reports, 5 civilians have been shot at the terminal, 3 people were also seen holding on to the wheel of a US plane flying out of Kabul.
How are other countries and the UN reacting?
United Nations: UN Secretary-General Antonio Guterres urged the Taliban to exercise utmost restraint to protect lives
China: Released a statement that it is looking to deepen “ friendly and cooperative” relations with Afghanistan.
Pakistan: Imran Khan, made a statement which was “ The Afghans broke shackles of slavery”
Germany: Released a statement that U.S, troops withdrawal was the “biggest NATO Debacle”.
India: Union minister of state for External Affairs, Meenakshi Lekhi, said that India wants peace all over the world as India continues evacuation exercises to rescue Indians currently in Afghanistan.
Why was the Taliban’s renewed rule over Afghanistan inevitable?
Over the past 20 years, the U.S. has poured trillions of dollars into Afghanistan to oust the Taliban, an effort that was clearly unsuccessful. But a look at the country’s strategic geographic location and the politics of the region tells us that this outcome was inevitable. Afghanistan is strategically located between central and south Asia – a region rich in oil and natural gas. It has long faced constant meddling from the Soviet Union/Russia, the UK, the U.S., Iran, Saudi Arabia, India, and Pakistan.
The President of Tunisia, Kais Saeid, tried to seize power in what some call a coup. He announced that he would fire the prime minister and has already suspended Parliament. However, so far it seems that his success is very limited, although many Tunisians expressed their support. Tunisia has been a democracy since the Arab Spring revolutions.
A landslide in India killed 9 people, most of them tourists. Furthermore, monsoons on the western coast have also killed more than 164 people so far.
France has been witnessing many protests against the so-called “Covid Pass” policy
North Korea and South Korea have — after 14 months of silence — reopened diplomatic and military hotlines between the two countries
Flash floods in Afghanistan have killed at least 80 people, but the search for survivors still continues
President Biden announced that EU citizens will continue to be barred from entering the U.S., citing fears that the Delta variant would be spread, despite the fact that U.S. citizens are allowed to enter EU countries, as long as they are fully vaccinated
Forest fires in Turkey and wildfires in Greece have had devastating consequences for the people living in the surrounding areas
Are you up to date with the Olympics? Check here for the newest updates
On July 29th, 63 years ago, the US Congress passed the legislation, which established NASA, otherwise known as the National Aeronautics and Space Administration. NASA is a government established agency that is responsible for the technology and science related to space and air. As you may know, NASA’s purpose is not only to analyse and explore space, in case of Earth’s demise, providing alternative approaches to human survival beyond our atmosphere but also to protect the human race from the harms of space. An example of this would be detecting asteroids that could pose a threat to human existence if the trajectory proves to be heading towards Earth. However, it is questionable as to the necessity of space exploration. Annually, the US government provides NASA with a budget of $22.629 billion, and this number is ever-increasing. Although this only represents around 0.48% of the total of the US government spending, it is highly debated as to whether spending this amount of money is necessary, and could instead be directed to other means, e.g. building renewable energy sources to help reduce climate change.
Applications of space research
However, it is important to recognise the necessity of space exploration for proving/disproving scientific theories that have previously been developed on Earth. These theories have brought us insights into gravity, the atmosphere, fluid dynamics, the geological evolution of other planets and most importantly it has shown us the connection between the sea, sun and moon. Thanks to Sir Isaac Newton’s discovery in 1687, we now know that tides are very long-period waves that move throughout the ocean in response to forces exerted by the moon and sun. Fishing, recreational boating, and surfing all rely on tidal data. Commercial and recreational fishermen alike rely on their understanding of tides and tidal currents to boost and improve their catch rates. According to the report published by Allied Market Research, the global fish farming market generated $271.61billion in 2018, and is projected to reach $376.48 billion by 2025, witnessing a CAGR of 4.7% from 2018 to 2025, and is therefore a staple part of our global economy.
The Space Race and Jeff Bezos
Nevertheless, It could be argued that the race to space has become glorified, being used as an anchor for the economically elite to exhibit their wealth. The last century’s space race was a competition between the world’s great powers and a test of their ideologies. It would prove to be a synecdoche of the entire Cold War between the capitalist United States and the socialist Soviet Union. Has this desire to be deemed most rich and powerful continued into the 21st Century? On the 20th of July, Jeff Bezos, the richest man in the world, alongside three other passengers (his brother, Mark Bezos; Wally Funk, a storied aviator; and Oliver Daemen, an 18-year-old fresh out of high school), made the trip to space and back. Bezos stated that by going first, he wanted to prove that his technological advanced vehicle was safe, and that Blue Origin is finally ready to make its 11-minute suborbital trips, an experience people can buy. The $5.5bn journey raised the question as to whether this accessible technological advancement was a step in the right direction, or whether its consequence will lead to an even greater division between the top 1% and the remainder of the population.
The Olympics — arguably the greatest sporting event in the world — started on Friday with the opening ceremony. Tennis player Naomi Osaka lit the Olympic cauldron. However, the current circumstances with the outbreak of COVID-19 mean that the games look very different this year. More than 120 people involved with the Olympics tested positive so far, including at least six athletes. Additionally, an Algerian judoka decided to quit the Olympics before his competition had even started as the matching of the competitors may have meant that he would have to fight against an Israeli athlete, leaving concerns about whether the Olympics really is successful in bringing athletes from around the world together peacefully.
Haiti gets a new government
A new prime minister was announced in Haiti last week: Ariel Henry. He will replace the interim prime minister Claude Joseph, a neurosurgeon who had not yet been sworn in amid the chaotic struggle for leadership taking place at the moment. However, the list of cabinet ministers hardly changed.
After floods in Western Europe last week left almost 200 people dead, floods in Zhengzhou, China, caused by very heavy rainfall have left more than 30 people dead this week and displaced more than 250,000
Officials announced that a recent bus explosion in Pakistan that killed 13 people, including 9 Chinese workers, was a terror attack
Extreme weather conditions in the U.S. have continued, with wildfires raging across the Western part of the country
Last month, the leaders of the Group of Seven (G7) met in Cornwall and revealed a new agreement to introduce a global minimum corporate tax rate of at least 15%. This tax would have to be paid by all corporations, regardless of where they locate their headquarters and was created in an effort to stop large multinationals from shifting their profits into tax-havens to avoid paying corporate taxes.
Why is it necessary?
Finance leaders around the world have stated that, as of late, corporations in global commerce are trying to get the tax rate as low as possible: “We’ve had a global race to the bottom in corporate taxation and we hope to put an end to that,” Treasury Secretary Janet Yellen said in late March. Major developed economies around the world, such as Britain and the US, have wanted to raise corporate taxes and find methods to tax large tech giants at higher rates, but this is extremely difficult to do when these corporations are international but taxes are national. Essentially, no economy would be able to pass legislation to raise taxes when every other economy in the world remained at their relatively lower tax rates — not only is this controversial but it is also futile as large corporations are skilled enough to know how to move their profits into locations where the corporate tax is little to none. The global minimum rate will, ideally, ensure that all corporations around the world are taxed at the same base rate and thus create an even playing field.
Problems that may arise
This initiative does not come without its critics. Republicans have argued that this decision will inevitably reduce the competitiveness of American corporations, which was counteracted by the fact that all countries will have the same base rate. Regardless, they are still reluctant to changes in the tax code and are in favour of minimised government intervention in the economy. The Biden administration has been pushing for a hike in the corporate tax rate, as this supports the President’s plan to raise the US rate from 21% to 28% to fund his large-scale infrastructure plan. Additionally, although Biden is clearly pushing for the change, it will be an obstacle for him and his administration to get this plan through to the thinly divided Congress in which Republicans will resist changes to the tax system.
Some of the G7 delegations are in fact insistent on this tax rate being flexible, in order to ensure it can be pushed even higher in the future. Although several nations are highly supportive of this agreement, it only includes 7 nations. The G7 — Britain, Canada, France, Germany, Italy, Japan and the United States — plans to extend this proposal to the G20 as well later this year.
This tax also incorporates stricter taxation for huge multinationals, notably US tech corporations, who have avoided taxes in spite of the considerable profits they gain from operating in several locations.
All in all, this tax definitely levels out the playing field for global corporations, and could even help improve the budgets of some countries that will benefit from greater tax revenue. Although it disadvantages smaller economies that have thrived due to low taxes, such as Ireland, further planning and proposals to a greater variety of nations indicate a promising future for equitable taxation.