Sharpest economic contraction since 1930’s to slash $8.5 trillion off global economy

Globalization faces ‘existential crisis’ as 34 million people into extreme poverty in 2020 

by Felix von Geyer

The social and economic lockdown caused by the COVID19 pandemic could wipe nearly $8.5 trillion in output over the next two years, according to a new United Nations Report released Wednesday.

The writedown could reverse economic gains made over the previous four years making this the sharpest economic contraction since the Great Depression that could plunge an estimated thirty-four million people worldwide into extreme poverty this year alone.

The latest United Nations World Economic Situation and Prospects (WESP) mid-2020 report projects a global economic contraction of 3.2 per cent this year compared to initial forecasts of a 2.1 per cent global economic growth for 2020 before the pandemic, representing a 5.3 per cent swing in the original economic forecast.

The report estimates that GDP growth in developed economies is expected to plunge to -5.0% in 2020. A modest 3.4% growth – barely enough to make up for the lost output – is expected in 2021. World trade is forecast to contract by nearly 15 per cent in 2020 amid sharply reduced global demand and disruptions in global supply chains.

Approximately 90 per cent of the world economy has been in lockdown to a greater or lesser degree which has disrupted supply chains, depressed consumer demand and rendered millions out of work. 

According to the baseline scenario, developed country economies will likely contract by 5.0 per cent this year while developing country output will shrink by 0.7 per cent.

Increased economic poverty and inequality created by the pandemic’s socio-economic effects are estimated to push 34.3 million people below the extreme poverty line in 2020. African countries will suffer most with 56% of increased extreme poverty taking place within the African continent.  

Further extreme poverty could ensue during the coming decade swelling the extreme poverty ranks by an additional 130 million people by 2030, the target date to eradicate ‘poverty in all its forms and dimensions’ under goal one of the seventeen of the United Nations Sustainable Development Goals.

The report stresses that the pandemic will now further widen income inequality within and between countries.

Across the world governments have rolled out fiscal stimulus measures approximating 10 per cent of GDP, according to WESP. Developed countries have managed to increase fiscal spending including cash transfers and tax relief while the European Union has suspended its rules on limits to budget deficits.  In the US the Federal reserve has launched an unlimited bond buying programme already worth $2.3 trillion while the European Central Bank has leveraged €750 billion to buy bonds. Elsewhere Japan has expanded its asset management programme.

In contrast developing countries have managed to leverage programmes worth maybe 1 per cent of their GDP to alleviating the effects of the Coronavirus lockdown.

Therefore the aftermath of the Coronavirus,m developed countries will address domestic financing challenges through a lens of increased public debt and its ability to leverage higher taxes while developing countries will face higher inflation and a debt crisis as many developing countries area already heavily indebted both to private and multilateral institutions.

Indeed, the depth and severity of the crisis foreshadows a slow and painful recovery and places globalization in an existential crisis, according to the report. Efforts to recover from the aftermath of the Coronavirus will be a ‘litmus test for globalization and global solidarity,’ states the report. This crisis of legitimacy will further be exacerbated if global integration in the wake of the pandemic is seen to global health risks over resilience mechanisms to buffer against global shocks.

Consequently, the United Nations proposes a moratorium on debt finance, particularly for developing and least developed countries including the increased use of Special Drawing Rights under the IMF. Similarly, enhanced debt should be aligned to the UN Sustainable Development Goals established in 2012 at the Rio+20 conference. To this end the report embraces the World Bank rolling out $160 billion over the next 15 months. 

Elliott Harris, UN Chief Economist and Assistant Secretary-General for Economic Development stated that ‘The pace and strength of the recovery from the crisis not only hinges on the efficacy of public health measures in slowing the spread of the virus, but also on the ability of countries to protect jobs and incomes, particularly of the most vulnerable members of our societies.’

Where global liquidity per capita surged since the 2008 Global Financial Crisis, productive investment per capita stagnated, the report noted, aiding equity and bond prices over productive investment.

Hamid Rashid, Chief of the Global Economic Monitoring Branch and lead author of the report, said ‘The lesson we learnt from the last crisis is that fiscal and monetary stimulus measures do not necessarily boost productive investments. Governments must encourage businesses receiving its financial assistance to invest in productive capacities. This is a must for protecting decent jobs and preventing further rise in income inequality.’

The report proposed an increased availability and rapid deployment of international funds to address liquidity shortages and enable more manoeuvrability in fiscal policy options. Debt restructuring for developing countries particularly for commodity and tourism dependent economies is also highlighted to stimulate growth and accelerate recovery.  

A window of opportunity for ‘recovering better’ still exists. To this end the report advocates renewed global solidarity including enhanced public health systems and building resilience to withstand economic shocks while improving social protection systems worldwide, greening of economies and addressing climate change is the concluding theme of the UN report.

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    Damit das nicht passiert, musst du dich ausgiebig vorbereiten. Männerfrisuren schneidest du alternativ mit einem Haarschneidegerät.
    Hier kommt es darauf an, geboren Einstellung zu wählen, damit du
    nicht zu viele Haare abrasierst. Außerdem ist
    ein Kamm sehr wichtig. Damit überprüfst du während des Schneidens nichts unversucht lassen,
    ob die Haare geboren Länge haben. Besonders wichtig ist natürlich die passende Haarschere.
    So verhinderst du, dass kleine Härchen im Oberteil niemand und jucken. Stelle außerdem eine mit Wasser
    befüllte Sprühflasche bereit. So hast du die Möglichkeit, die Haare
    zwischendurch immer wieder anzufeuchten. Derjenige dessen Haare geschnitten werden,
    gut daran tun, zu einen Friseurumhang oder zumindest ein Handtuch so Schultern legen. Gerade wenn du dir selbst die Haare schneidest,
    ist es wichtig, dass du das in der Nähe eines Spiegels
    tust.

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  191. Sie haben ihren eigenen Pool. Unter Corona ist das verboten. Die Baustelle liegt auf Eis.
    Den kompletten Maßnahmenkatalog des Tourismusministeriums scheint noch keiner gesehen nicht
    geöffnet haben. Yesim Yalcin ist Ärztin in Antalya und
    macht schon ein paar Tage mit ihrem Bruder und seiner Frau hier Urlaub.

    Das Hotel bleibe diese Saison am besten zu. Normalerweise
    wird dann war’s das des Fastenmonats mit Familie und Freunden gefeiert.
    Nicht nur Sevki Erdogan hofft, dass viele Einschränkungen Anfang
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    zu reisen. Um deutsche Urlauber trotz Corona wieder in die Türkei zu locken, holt die Regierung in Ankara den TÜV ins Boot.

    In der Gegenwart sind seine Hotelzimmer alle leer, nur mehrere der luxuriösen Villen sind belegt.
    Ein Hotelzimmer hätte sie allerdings nicht genommen. Die
    dürfen heutzutage allerdings nicht benutzt werden. Ferienhäuser werden diese Saison wohl insgesamt mehr gefragt sein. Schwimmen und Spazieren am Meer ist verboten. Die
    Türkei will, dass sie das bis zu den Sommerferien aufhebt.
    Der Küstenort Kas in der Türkei im Oktober 2019 – damals war die Welt noch frei von Corona.
    Bad in einem der Zimmer begutachtet. Im
    kleinen Boutique-Hotel fragen umso mehr Merih Ciraks Stammgäste,
    wann sie diese Saison aufmacht. Der Hotelchef kann das in Rätseln sprechen “Auftreten einige Entscheidungen, die hoffnungsloses Unterfangen”, sagt er.
    Ihr Vater bleibt dagegen dabei: Urlaub mit Corona
    mache keinen Spaß und sei gefährlich. Sicher ist das aber nicht.

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  193. Mehrscheiben-Isolierglas (MIG), auch als Wärmedämmverglasung oder Isolierverglasung bezeichnet,
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  204. Gastwirte haben die Quittung nach der Massensause der Partytouristen auf Mallorca bekommen. Sie dürfen ihre Lokale in Zeiten von Covid-19 nimmer öffnen – derartig Beschluss der Regierung.

    Sie stehen unter Schock. Die Playa de Palma ist von heute auf
    morgen eine Geisterstadt geworden. Alle Bars und Restaurants
    an der sogenannten Bier- und an der Schinkenstraße haben ihre Rollläden heruntergelassen. Die wenigen Menschen, die noch unterwegs sind, unterhalten sich
    über das eine Thema. Dennis hat gerade deren Nachricht erfahren. Davon, dass die
    Balearen-Regierung Ernst macht im Kampf gegen den ausufernden Partytourismus.
    Nach den illegalen Partys schließt Mallorca die Lokale an der “Bier- und Schinkenstraße”.

    Der Besitzer eines Schnellimbiss an der “Bierstraße” kann noch gar nicht glauben, dass er seinen Laden wieder schließen muss.
    Der Geschäftsmann sagt, er verstehe die Entscheidung der Balearen-Regierung
    halt nicht. Ja, am vergangenen Wochenende sei es laut gewesen an der Playa de Palma.

    Ja, schon so einige Urlauber hätten über die Stränge geschlagen. Doch
    erklärtermaßen hat die Politik das Thema künstlich hochgespielt.

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