Economic crisis – GUWIV http://guwiv.com/ Mon, 09 May 2022 21:40:38 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://guwiv.com/wp-content/uploads/2021/11/guw-150x150.png Economic crisis – GUWIV http://guwiv.com/ 32 32 Palestinian Authority prime minister calls for reinstatement of foreign aid amid financial crisis https://guwiv.com/palestinian-authority-prime-minister-calls-for-reinstatement-of-foreign-aid-amid-financial-crisis/ Mon, 09 May 2022 20:04:51 +0000 https://guwiv.com/palestinian-authority-prime-minister-calls-for-reinstatement-of-foreign-aid-amid-financial-crisis/ Analysts say financial aid and reform can help, but a sustainable Palestinian economy is not possible as long as the Israeli occupation continues Palestinian Authority Prime Minister Mohammad Shtayyeh flew to Brussels, Belgium’s capital and seat of the European Union, on Sunday for a meeting of the Ad Hoc Liaison Committee, a body whose primary […]]]>

Analysts say financial aid and reform can help, but a sustainable Palestinian economy is not possible as long as the Israeli occupation continues

Palestinian Authority Prime Minister Mohammad Shtayyeh flew to Brussels, Belgium’s capital and seat of the European Union, on Sunday for a meeting of the Ad Hoc Liaison Committee, a body whose primary function is to coordinate the delivery of international aid to Palestinians and Palestinians. Authority. One of Shtayyeh’s priorities will be restoring international financial aid, which has dwindled dramatically in recent years, leaving the PA strapped for cash.

Peter Stano, the European Commission’s senior spokesperson for foreign affairs and security policy, confirmed to The Media Line that High Representative/Vice-President Josep Borrell will host the annual meeting of the International Donor Coordination Group on Tuesday. Palestine. Norwegian Foreign Minister Anniken Huitfeldt will chair the meeting.

The Palestinian economy has been going through a serious crisis since at least 2018.

In March of that year, the Trump administration signed into law the Taylor Force Act, cutting off about a third of US foreign aid to the Palestinian Authority due to payments the Palestinian Authority makes to the families of Palestinians killed, injured or imprisoned while carrying out attacks against Israel. The United States views these payments as encouraging terrorism.

Subsequently, Australia and the Netherlands reduced their aid to the PA for the same reason.

In August 2018, the United States cut its contribution to UNRWA, the United Nations agency for Palestinian refugees, by $300 million, after the State Department called it “a fatally flawed operation”. and cut its direct aid to the PA by more than $200 million.

Finally, in February 2019, the Trump administration halted all USAID support to the West Bank and Gaza Strip and halted its $60 million a year contributions to fund Palestinian security services. This latest cut was made at the request of the AP, which feared it could be sued in US court for alleged complicity in “acts of war” that targeted US citizens.

The resulting financial crisis has been exacerbated by the effects of the COVID-19 pandemic, limiting economic stimulation and growth.

The World Bank reported on Monday that foreign aid to the PA had fallen from 27% of gross domestic product in 2008 to just 1.8% of GDP in 2021.

During the nearly two years of COVID-19 restrictions, the PA has relied on local resources, which are minimal when tourism is taken out of the equation. This pushed a wave of Palestinians below the poverty line. The World Bank reported that incomes fell in more than 60% of Palestinian households and that 20% of the previously employed labor force became unemployed.

Dr. Nasr Abdel Karim, professor of finance and economics at Arab American University, told The Media Line that “the PA’s financial situation has never been good”. It relied on international donors and Israel to fill its financial gap. However, when foreign aid dwindled, then COVID-19 hit and Palestinian movement across the Green Line was restricted, the long-simmering financial crisis resurfaced.

The PA’s current situation, according to Karim, is one of massive, accumulated debt that equates to “nearly 65% ​​of GDP”. With debt at its peak and foreign aid covering only around 5% of the PA’s budget, compared to 15-20% of the budget, the government is in crisis.

PA saw a sharp 12% decline in GDP in 2020 and a moderate recovery in 2021, when GDP grew by 7%. “The forecast shows an expected growth of 3% in 2022,” Karim said, “but this figure is very optimistic.”

Karim believes that the Palestinian economy is at its maximum potential, with no possibility of growth. Self-reliance and financial sustainability are not possible as long as the Israeli occupation continues. “Sustainability cannot be achieved as long as Israel controls borders, water sources, airspace and more than 62% of land in the West Bank,” he said.

One of the reasons financial aid has declined, Karim says, is the stagnation of the Israeli-Palestinian peace process. The EU and America have provided peacebuilding assistance and “the peace process is almost dying,” he said. And while Israel is not held responsible for the lack of progress, the Palestinians, Karim says, are under pressure.

But even if economic independence is achieved, warns Karim, “you cannot continue to ignore the fact that we have poor financial management in the PA”. He said reform was needed, likening the situation to surgery needed during a health crisis, even if it is painful.

Abu Zaid al-Nabali, owner of a major car dealership in Ramallah, West Bank, told The Media Line that the lack of financial assistance from the Gulf states, the US and the EU combined with two years pandemic, had a negative impact on its car sales. “People have less to spend and buying a car is no longer a priority for them. They have to feed their family.

Nabali added that if the situation did not improve, he would be forced to close his doors. “I have to cut my losses,” he said.

The PA’s economic crisis is not only financial but also inherently political. Political analyst Nour Odeh told The Media Line that the financial situation is not just the result of budget shortfalls, limited availability of funds or mismanagement, but that the government can never function effectively. under occupation.

“The occupation has total control, even over the revenues of this government. … It basically puts an artificial ceiling on the Palestinian economy and systematically impoverishes Palestinians,” Odeh said.

She said the loss of EU funding for the PA was purely political and due to one person: Hungarian Prime Minister Viktor Orbán. “He overrides the will of European parliamentarians and even the European Commission itself because of his very public political leanings, which are anti-Palestinian, pro-Israel and pro-occupation,” she said.

Odeh claimed that “the almost bankrupt government is politically beneficial to the US, the EU and Israel”, which she said want to weaken the PA, thus maintaining the status quo and prolonging the occupation.

Crystal Dunlap is an intern in The Media Line’s Press and Politics Student Program.

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Australia Seeks to Fill Asia’s Energy Gap Amid Ukraine Crisis | Business and economy https://guwiv.com/australia-seeks-to-fill-asias-energy-gap-amid-ukraine-crisis-business-and-economy/ Mon, 09 May 2022 05:18:38 +0000 https://guwiv.com/australia-seeks-to-fill-asias-energy-gap-amid-ukraine-crisis-business-and-economy/ Taipei, Taiwan – As the war in Ukraine upends global commodity markets and triggers a scramble for resources, the crisis is redrawing the energy map of Asia-Pacific. While the picture is far from clear, the region’s emerging contours are already having an outsized effect on Australia’s resource behemoth. With similar trade profiles, Russia and Australia […]]]>

Taipei, Taiwan – As the war in Ukraine upends global commodity markets and triggers a scramble for resources, the crisis is redrawing the energy map of Asia-Pacific. While the picture is far from clear, the region’s emerging contours are already having an outsized effect on Australia’s resource behemoth.

With similar trade profiles, Russia and Australia compete in many key markets, from gas and coal to wheat and barley, ideally positioning Canberra to fill the void left by a sanctioned Kremlin.

Amid geopolitical uncertainties, many Asian markets have fallen back on near and stable democracy to weather the storm.

Woodside, Australia’s largest exporter of liquefied natural gas (LNG), reported growing demand from Democratic Asia. While US and Qatari LNG exports were redirected to Europe in March, Australia sent nine additional shipments to South Korea and Japan and could still win more market share from Russia.

Meanwhile, the country’s coal miners scrambled to meet record demand, driving up prices. Newcastle coal futures, Asia’s benchmark for the commodity, climbed to over $400 a tonne in early March and currently remain at around $350. Some producers reported in April that Australian coal had sold off due to the rush.

“A lot of energy in Asia has been apolitical,” Graeme Bethune, founder of EnergyQuest, an Australian energy consultancy, told Al Jazeera. “But that is changing, as it is everywhere in the world. I think there will be more alignment between democracies in the future…and Australia is seen as a safe and secure trading partner.

Woodside, Australia’s largest LNG exporter, reported growing demand from Democratic Asia [File: David Gray/Reuters]

In the longer term, the outlook is less clear. Although Australia is now seen as an energy backstop for the region, the underlying trend in Asian countries is towards energy self-sufficiency, a trend likely to be accelerated by the current crisis.

Geopolitical pressures, combined with a new set of price incentives, could see an acceleration towards renewables, reducing import dependency and dampening Australian energy demand.

“It would be nice to separate energy from geopolitics, but the reality is you just can’t,” Bruce Robertson, Australian analyst at energy think tank IEEFA, told Al Jazeera.

“Ukraine has been a wake-up call for literally everyone in the world. Governments are looking at Europe, and Germany in particular, and seeing the new need for energy independence. energy at home, you are much safer than depending on imports.

Japan and China, two of the biggest buyers of Australian resources, are both seeking to cut imports of its main energy products. A recent study by academics at the Australian National University warns that rising domestic coal production in China means a huge reduction in Australian imports is imminent, predicting a 25% decline by 2025.

The forecast follows a bitter trade war that has seen Australian coal targeted by unofficial sanctions from China. Although Australian coal that had been stuck in Chinese ports began to clear customs again late last year, the outlook suggests that the product’s best days in China are already behind it.

Challenges for Australian exports

“China doesn’t want to depend on Australia for energy, that’s the main thing,” Robertson said, predicting Beijing’s pivot away from Canberra will also extend to LNG.

“They will likely stay the course with current projects, but are highly unlikely to sign up for new LNG projects in the future.”

“China hasn’t signed new LNG contracts with Australia for several years now,” Bethune added, noting that more contracts had been awarded to American companies, while stressing that it could not be sure of the importance of the role that politics had played.

Bethune said China still needed Australian coking coal for steelmaking and that was likely to remain so for the time being, despite a general trend of Australian import diversification.

Japan is the world’s largest importer of LNG and enjoys a long-standing trading partnership with Australia. Hit by shockwaves from Russia in recent weeks, increased shipments from Australia – already its main supplier with more than 36% of total imports – has helped Japan weather the storm. Yet Tokyo, which announced on Sunday that it would phase out Russian oil in conjunction with its Group of Seven partners, is also aiming for greater self-sufficiency.

“Japan aims to halve its LNG imports by 2030,” Robertson said. “Japan is the largest market for Australian LNG and accounts for around a third of our total exports. If Tokyo hits its target, it would be a serious blow to Australian gas.

As Australian LNG suppliers look to tap into emerging South Asia, these markets present new hurdles.

Pakistan has experienced an LNG shortage marked by power outages and is now in a contract dispute over defaulted projects with multinationals Gunvor and ENI. Bangladesh, meanwhile, has run out of credit to buy LNG at soaring spot market prices.

“I think they were scared off by the volatility and the lack of availability [of gas]”, Robertson said.

“Are they going to keep doubling their gas mileage after this? I think that would be a rather stupid decision.

solar panels in china
The once optimistic outlook for natural gas as a whole is increasingly challenged as renewables become more economically attractive [File: Qilai Shen/Bloomberg]

The once optimistic outlook for natural gas as a whole is increasingly in question, as rising LNG costs and market volatility have made renewables much more attractive.

“For price-sensitive countries, the current environment and volatility is certainly a cause for concern,” Kaushal Ramesh, a Singapore-based researcher at Rystad Energy, told Al Jazeera. “There is a risk that countries will not be able to purchase LNG for the next five years as Europe absorbs global supply.”

Ramesh said many countries will be faced with the choice of continuing to rely on coal and fuel oil or making the leap to renewables.

“At the end of the day, one of the best ways to achieve energy security is to completely sever the link to commodity imports – both from this perspective and from a marginal price perspective, renewables provide that pathway,” he said.

Despite Australia’s dependence on resources, there are still bullish arguments to be made for its energy at the dawn of the renewable energy era.

Australia has the highest solar radiation per square meter of any continent on Earth, receiving around 58 million petajoules of sunlight every year, which is 10,000 times its total energy consumption.

Efforts to leverage this power are underway. The Australia-Asia PowerLink project, due for completion later in the decade, will help power Singapore and Indonesia with the world’s largest solar farm in northern Australia.

“There’s also a growing focus on hydrogen,” Bethune said. “Australia also produces key minerals needed for renewable energy.”

Ramesh said Australia is in a strong position to be a regional renewable energy powerhouse when it comes time to break the commodity tie.

“We understand that there are ongoing discussions about renewable energy exports and the development of green hydrogen and green ammonia hubs,” he said.

One such plant for these new green fuels was granted “coordinated project status” by the Queensland state government last month.

“These projects are still in their early stages, but have caught the eye of current Australian fossil fuel customers in North Asia,” Ramesh said.

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Lebanese abroad vote ahead of national elections held amid economic crisis https://guwiv.com/lebanese-abroad-vote-ahead-of-national-elections-held-amid-economic-crisis/ Sun, 08 May 2022 13:13:48 +0000 https://guwiv.com/lebanese-abroad-vote-ahead-of-national-elections-held-amid-economic-crisis/ Thousands of Lebanese living in nearly 50 countries have started early voting in the country’s closely watched parliamentary elections, days after similar voting took place in 10 predominantly Muslim countries. This is the second time in Lebanon’s history that citizens residing abroad can vote for their 128 representatives. (AFP) Lebanese expats from 48 countries, including […]]]>

Thousands of Lebanese living in nearly 50 countries have started early voting in the country’s closely watched parliamentary elections, days after similar voting took place in 10 predominantly Muslim countries.

This is the second time in Lebanon’s history that citizens residing abroad can vote for their 128 representatives. (AFP)

Lebanese expats from 48 countries, including the United States, Russia, France and the United Arab Emirates, voted ahead of the May 15 legislative elections.

More than 194,000 people were registered to vote on Sunday, according to the official national news agency.

In Paris, long queues were reported outside the embassy, ​​and voting also took place in Canada and the United States.

On Friday, in an earlier phase, more than 18,000 Lebanese voted in nine Arab states and Iran, with turnout reaching 59%, a slight increase of 2% from 2018 polls.

The critical election comes amid an unprecedented financial crisis that has caused a mass exodus of people, although while opposition figures have pinned their hopes on the diaspora vote, experts say the status quo policy should continue.

The vote is the first since the start of the economic crisis and the devastating 2020 port explosion in the capital Beirut, with many accusing the political elite of rampant corruption and mismanagement.

READ MORE: Elections in Lebanon: a short guide

Although there are no official figures, the Lebanese diaspora is estimated to be more than double the size of its national population of over four million.

Although there are no official figures, the Lebanese diaspora is estimated to be more than double the size of its national population of over four million. (AFP)

Prospect of “change”

“I voted for change,” said Abed Saad, who voted in Dubai, where people waited in line for up to three hours.

“If we don’t vote, others will win, and we don’t want them to win,” the 27-year-old said, referring to established parties.

But voter registration, though on the rise, remains relatively low among the millions of Lebanese living abroad.

Lebanese Foreign Minister Abadallah Bou Habib said turnout in Dubai had reached 15% in just two hours, with the queue of voters outside the Lebanese consulate stretching nearly a kilometer despite the heat suffocating.

Turnout in 10 predominantly Arab countries on Friday was around 60%, Bou Habib said, matching the overall turnout in the 2018 polls overseas.

Since 2019, the Lebanese pound has lost over 90% of its value and poverty rates have skyrocketed to cover over 80% of the population.

The World Bank has called the economic crisis one of the worst since the mid-19th century. The authorities have repeatedly failed to chart a way out of the crisis.

READ MORE:
UN: Crisis in Lebanon exposes children to deadly diseases

Source: TRTWorld and agencies

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Why Bangladesh will not fall into a Sri Lankan crisis https://guwiv.com/why-bangladesh-will-not-fall-into-a-sri-lankan-crisis/ Sat, 07 May 2022 19:12:07 +0000 https://guwiv.com/why-bangladesh-will-not-fall-into-a-sri-lankan-crisis/ Sri Lanka, an island nation in South Asia, has been going through an unprecedented economic crisis in recent times. The country is on the verge of bankruptcy due to poor economic management and a severe shortage of foreign currency. Since the beginning of the crisis, discussions have taken place over whether Bangladesh will accept a […]]]>

Sri Lanka, an island nation in South Asia, has been going through an unprecedented economic crisis in recent times. The country is on the verge of bankruptcy due to poor economic management and a severe shortage of foreign currency. Since the beginning of the crisis, discussions have taken place over whether Bangladesh will accept a fate similar to that of Sri Lanka in the future. In this article, I have tried to explain why Bangladesh will not be like Sri Lanka from three angles: political, economic and the conundrum of the Chinese debt trap.

POLITICS

Gotabaya Rajapaksa, the interim president, and his brother Mahinda Rajapaksa, the former president, have been myopic in maintaining a balanced relationship with two Asian giants, China and India. During the civil war that ended in 2009, Sri Lanka leaned more toward China while sidelining India. Numerous rights groups at the time alleged that Chinese arms and assistance to Sri Lanka facilitated the bloodshed and death of thousands of trapped civilians.

There is speculation that China is turning its back on Sri Lanka amid a massive economic crisis. According to media reports, while President Gotabaya has asked China, Sri Lanka’s biggest lender, to restructure its debt to the country, China has yet to take a concrete decision. On the other hand, India’s economic aid to Sri Lanka this year amounted to over $3 billion and has been crucial in meeting the various needs of the government and people of Sri Lanka. Sri Lanka seems to receive more support from India than from China during this disaster.

Bangladesh has been careful in balancing its relations with China and India. While China has increased its economic cooperation with Bangladesh by funding development projects, India benefits from its shared history, values, culture and geographical proximity to the country. Although it has not made substantial investments like China, India has recently invested in several projects, including the expansion of railways, and boosted bilateral trade with Bangladesh. Bangladesh’s relations with India have reached a new high, which is a testament to its skill in the diplomatic field.

ECONOMIC

From an economic point of view, Bangladesh is in a better position than Sri Lanka. Sri Lanka’s total debt is $33 billion. With a total population of 22 million, the country’s per capita debt is $1,650. On the other hand, the total debt of Bangladesh is $49.45 billion. Considering the population of 168 million, Bangladesh’s per capita debt is $292.11. Sri Lanka’s debt per capita is almost six times that of Bangladesh. Due to the Corona outbreak, the flow of remittances from Sri Lanka has bottomed out. In the financial year 2020-21, while Sri Lanka received a remittance of $8.5 billion, Bangladesh reached a record high of $24.78 billion, almost three times as much than that of Sri Lanka. Bangladesh earned $4.76 billion from exports in March, while Sri Lanka earned $1.1 billion in January. While Sri Lanka’s export earnings have fallen, those of Bangladesh have increased. By May 2022, Sri Lanka’s foreign exchange reserve had fallen below $50 million, while Bangladesh had a reserve of $44.40 billion.

Another reason for Sri Lanka’s economic crisis is the non-repayment of foreign loans. Bangladesh, which is very successful in this regard, regularly repays the principal of the external debt. During the July-February period of the current fiscal year, the country repaid $1.34 billion in principal and interest on its outstanding medium- and long-term (MLT) external loans. According to the World Bank and the International Monetary Fund (IMF), a country would enter the danger zone if its external debt exceeds 40% of its GDP. Bangladesh is in the “safe zone” because its total external debt is less than 15% of its GDP. This contrasts sharply with the idea that Bangladesh is overburdened with external debt. Sri Lanka has recently undertaken several infrastructure development projects with foreign loans, which have not been of any use to the people. On the other hand, the government of Bangladesh has launched several infrastructure development projects, such as Padma Bridge, Metro Rail, Karnaphuli Tunnel and Ruppur Nuclear Power Plant, which are supposed to benefit ordinary people and are expected to provide good performance once launched. .

THE CHINESE DEBT TRAP

American statesman John Adams, who served as president from 1797 to 1801, said, “There are two ways to conquer and subjugate a country: one is by the sword; the other is in debt. By choosing the second path, China quickly rose to the rank of the world’s leading official creditor. This Chinese strategy of entrenching itself in different countries not politically but through loans is called debt trap diplomacy. Sri Lanka’s overall debt to China is $8 billion, which is about one-sixth of Sri Lanka’s total external debt of $45 billion. In 2017, Colombo was forced to lease the port of Hambantota in southern Sri Lanka from China for 99 years after defaulting on $1.4 billion in debt. In contrast, the Chinese loan represents only 6% of the total loan from Bangladesh. Bangladesh is still in debt among countries or institutions which are World Bank – 38%, Asian Development Bank – 24.5%, JICA – 17%, China – 6.81%, Russia – 6.18 % and India – 1.3%. While many countries are overwhelmed with Chinese debt, Bangladesh has been able to take full advantage of Chinese loans without major risk of running out of cash.

In light of the above discussion, Bangladesh needs to exercise caution when it comes to spending money on big projects, repaying debts and taking advantage of macroeconomic opportunities. Once Bangladesh becomes a developing country from a Least Developed Country (LDC) in 2026, it will no longer benefit from getting low interest loans. If import costs increase further, the reserve will be strained, reducing the chances of spending the reserve money on infrastructure projects. However, despite all the worrying factors, considering Bangladesh’s GDP, export earnings, foreign exchange reserves, remittances and other indicators of the economy, it can be said with certainty that the situation in Bangladesh probably won’t look like Sri Lanka’s.

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A tragedy for Ukraine, a housing crisis for Turkey https://guwiv.com/a-tragedy-for-ukraine-a-housing-crisis-for-turkey/ Sat, 07 May 2022 03:30:00 +0000 https://guwiv.com/a-tragedy-for-ukraine-a-housing-crisis-for-turkey/ With rents soaring and house prices skyrocketing amid a surge of foreign buyers – especially those fleeing war in Ukraine – Turkey is on the brink of an affordable housing crisis. Unless government controls are instituted, the social, political and economic implications for the country will be profound. Data shows that the Turkish real estate […]]]>

With rents soaring and house prices skyrocketing amid a surge of foreign buyers – especially those fleeing war in Ukraine – Turkey is on the brink of an affordable housing crisis. Unless government controls are instituted, the social, political and economic implications for the country will be profound.

Data shows that the Turkish real estate supply chain is broken. According to Housing price index prepared by the Turkish central gank, the price of buying a house in Turkey has increased by 96% since February 2021. In Istanbul, it has jumped by 106%.

Other studies paint an equally dire picture. Housing Market Study published in April by Bahcesehir University’s Center for Economic and Social Research estimated the annual increase at 134%, while the latest Eurostat study housing price index estimated that the annual increase in house prices was 60% in Turkey, six times the European average.

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Sri Lanka’s energy crisis hits the country’s fishing industry https://guwiv.com/sri-lankas-energy-crisis-hits-the-countrys-fishing-industry/ Fri, 06 May 2022 13:42:11 +0000 https://guwiv.com/sri-lankas-energy-crisis-hits-the-countrys-fishing-industry/ COLOMBO — Sri Lanka is facing its worst economic crisis since its independence from Britain in 1948. Food shortages, soaring prices and power cuts prompted the government to seek emergency financial assistance. A hard-hit sector is the fishing industry in the north of the country. The lack of fuel, ice, and marketing options has driven […]]]>

COLOMBO — Sri Lanka is facing its worst economic crisis since its independence from Britain in 1948.

Food shortages, soaring prices and power cuts prompted the government to seek emergency financial assistance.

A hard-hit sector is the fishing industry in the north of the country. The lack of fuel, ice, and marketing options has driven entire communities out of work.

Sri Lanka’s fishing industry is facing the brunt of the economic crisis the island nation is embroiled in, with fishermen facing severe fuel shortages for their boats unable to set sail.

Fishing is a major livelihood for northern Tamils ​​and fuel shortages in the crisis-hit country have crippled the industry, according to a report.

Local media have reported that fishermen in the north of the country who usually fish every other day cannot venture into the seas even once a week.

A country boat needs 30 liters of kerosene for a day’s fishing, whereas now it can only handle about 20 liters once a week.

The deep economic crisis in the country continues to deepen with foreign exchange reserves falling to $500 million.

Apart from this, the scarcity of ice bars used to preserve the fish and the unavailability of means of transport to transport the catch to Colombo and other places of sale have crippled the livelihoods of the fishermen.

Fishermen from Analaitivu, Nainativu and other areas of Jaffna district are the most affected as they cannot even come to Jaffna to buy kerosene.

As Sri Lanka is going through a severe economic crisis, India is providing a financial package to Colombo so that it can meet some of the most immediate needs and help stabilize its national economy. — Agencies

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Supporting the industry’s recovery from the COVID-19 crisis https://guwiv.com/supporting-the-industrys-recovery-from-the-covid-19-crisis/ Thu, 05 May 2022 20:11:46 +0000 https://guwiv.com/supporting-the-industrys-recovery-from-the-covid-19-crisis/ DUBAI: When Vinayak Mahtani’s sea-view apartment in Dubai’s Palm Jumeirah was completely ransacked and abandoned by a tenant, it was crushed. He had inherited his father’s apartment and attached sentimental value to it. After he and his wife renovated it and listed it on Airbnb to try short-term rentals in 2015, he was shocked to […]]]>

DUBAI: When Vinayak Mahtani’s sea-view apartment in Dubai’s Palm Jumeirah was completely ransacked and abandoned by a tenant, it was crushed. He had inherited his father’s apartment and attached sentimental value to it.

After he and his wife renovated it and listed it on Airbnb to try short-term rentals in 2015, he was shocked to find he could double his rental income in a year. After that, his friends and family started offering their properties for short-term rental, which led to Mahtani officially registering his vacation home business, Bnbme, in 2018. Today, Bnbme operates nearly 150 properties in the United Arab Emirates and 20 in India, with plans to expand into Saudi Arabia.

“We are selective with the properties we offer to clients because they expect a luxury experience, so we will review a potential villa, assess the snags, let our designers spruce it up and improve it, and then we manage it. for an agreed period of time,” Mahtani explained in an interview with Arab News.

“We’re not looking to have thousands of properties and become the biggest provider of holiday homes in the Middle East. We refuse more properties than we accept because we want to maintain a brand standard.

Changing travel trends

Mahtani, who has worked in the hospitality industry since 2005, is poised to dramatically change consumer preferences.

The global vacation rental market is expected to top $111.2 billion by 2030, according to Precedence Research in late 2021. Additionally, short-term rentals have weathered the pandemic better than hotels in 27 markets , according to a joint report by major accommodation data providers. , STR and AirDNA, last year.

The change in consumption habits is noticeable as travelers have preferred to rent apartments or villas rather than staying in small hotel rooms, especially for families during confinements in large cities. Since then, the holiday home market has seen a global spike in demand that has shown no signs of stopping.

From January to April 2022, Bnbme recorded a 118% increase in revenue and a 76% increase in bookings. The main markets this year are Saudi Arabia, the United Kingdom, Russia, France and the United Arab Emirates.

“When the lockdown first happened in March 2020, hotel general managers called to ask if their customers could rent our apartments because they needed extra space or longer stays,” Mahtani said. . “So when the pandemic hit, we panicked and filled our entire inventory with customers who were paying lower than usual rates, but that kept us going for the difficult six months that followed. We didn’t let any of our staff go.

Dubai’s pandemic support

After that, Dubai’s masterful handling of COVID-19 measures has made the city a welcoming and easy-to-live-in place, especially for digital nomads and families during the pandemic.

As a result, Bnbme experienced a boom during the pandemic which led to higher occupancy rates. This growth is part of a luxury real estate boom that Dubai has experienced over the past two years. According to Knight Frank, a real estate consultancy, luxury home prices have risen at the fastest rate in 2021, with Dubai leading at 44% year-on-year.

“In the post-COVID-19 landscape, ultra-high net worth buyers have visited Dubai in large numbers,” said Andrew Cummings, head of prime residential at Knight Frank Middle East.

“To add to this, at the high end of the market, quality is now the watchword, with developers building prime properties to meet the demands of the global elite who over the past year have has shown interest in owning homes in Dubai.”

A comprehensive Knight Frank report from 2019 showed that Dubai’s holiday home market represents 2% of total Dubai households, the highest proportion of any other critical global hub city.

Saudi Arabia’s plans

Bnbme plans to expand into Saudi Arabia in 2023, starting with beachfront villas in Dammam and spacious apartments in Makkah. The company hopes to build on luxury standards beyond the actual properties; services include luxury car pick-up at the airport, celebrity chefs for private hire, in-home shisha services and organic toiletries from Europe.

“We wanted guests to stay in a property that had all the luxury resort amenities with the comforts of home,” Mahtani said. “What could be better than flying first class? Fly with a private jet. It’s similar to what we’re trying to do with hosting.

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The dreams of Sri Lankan tea pickers shattered by the economic crisis https://guwiv.com/the-dreams-of-sri-lankan-tea-pickers-shattered-by-the-economic-crisis/ Thu, 05 May 2022 03:21:00 +0000 https://guwiv.com/the-dreams-of-sri-lankan-tea-pickers-shattered-by-the-economic-crisis/ BOGAWANTALAWA, Sri Lanka, May 5 (Reuters) – On a lush plantation in Sri Lanka, Arulappan Ideijody deftly plucks the tips from each tea bush, tossing them over his shoulder into an open basket on his back. After a month of picking more than 18 kg (40 lb) of these tea leaves every day, she and […]]]>

BOGAWANTALAWA, Sri Lanka, May 5 (Reuters) – On a lush plantation in Sri Lanka, Arulappan Ideijody deftly plucks the tips from each tea bush, tossing them over his shoulder into an open basket on his back.

After a month of picking more than 18 kg (40 lb) of these tea leaves every day, she and her husband, Michael Colin, 48, receive around 30,000 rupees, worth around 80 dollars after the island nation has devalued its currency.

“It’s not enough money,” Arulappan, 42, said of their earnings, which have to support the couple’s three children and elderly mother-in-law.

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“Where we used to eat two vegetables, now we can only afford one.”

She is one of millions of Sri Lankans reeling from the island’s worst economic crisis in decades.

The COVID-19 pandemic has cut off the tourism lifeline of the Indian Ocean nation, already short of revenue following the government’s steep tax cuts.

Left short of foreign exchange to buy essential supplies of food, fuel and medicine, Sri Lanka turned to the International Monetary Fund for an emergency bailout. Read more

Rampant inflation and shortages sparked weeks of protests that sometimes turned violent.

Plantation workers like Arulappan, who are mainly drawn from the island’s Tamil minority, are more affected than most because they do not own land to provide a cushion against soaring food prices.

His family is one of 17 people living in traditional “line houses”, or single-storey, box-like terraces whose design has not changed since the days of British colonial rule, which ended in 1948.

The emerald green hills stretch for miles around, while the fragrant wood smoke of the burning tea branches that families use for their cooking fires rise above the cottages.

Their fortunes reflect the rise and fall of an economy that emerged from a decades-long civil war in 2009.

Buoyed by a booming tourist industry and exports of items such as clothing and plantation products like tea, rubber and cinnamon, Sri Lanka has achieved a GDP almost double that of neighboring India. in 2020.

Arulappan left school at 14 and worked in a garment factory before marrying and moving to the plantation in Bogawantalawa, a valley in the central highlands famous for its fine teas and about a four-hour drive to east of Colombo, the commercial capital.

The job’s flexible hours allowed her to care for her children and start a small business selling vegetables to other workers on credit.

But the pandemic has been a setback for the family and the country, shutting down the economy for months and cutting off the tourism sector, a key source of foreign currency.

“There were days when we only ate rice,” Arulappan said.

The tea industry, which supports hundreds of thousands of people, also suffered last year from a controversial government decision to ban chemical fertilizers as a health measure. Although later reversed, the ban left fertilizers in short supply.

Tea production in the first quarter fell 15% on the year to its lowest level since 2009, with the Sri Lanka Tea Board saying dry weather had taken its toll on bushes that had not received enough water. fertilizer after the ban.

Coupled with long power cuts, fuel shortages and runaway inflation, this has helped push the industry into “near total collapse”, said Plantation Association spokesman Roshan Rajadurai.

The crisis has prevented Arulappan from making repayments for the past two months on a series of high-interest loans she took out to start her business, cover the costs of a family wedding and pay off other debts.

Food inflation is approaching 50% for the year, with transport almost 70% more expensive, according to official figures, although in practice the figures are even higher.

The price of flour has doubled over the past year, putting many plantation workers out of reach of the coconut-infused flatbreads they munch on while picking tea.

“We had to switch to eating rice. But even that is very expensive now,” Arulappan said.

The cost of the two-mile bus ride to school for her two young children has also more than doubled in recent months, but the couple continue to pay for private lessons to ensure a better life for them.

“I never want to see my kids working on a plantation,” Michael said.

However, the crisis doomed the university plans of their eldest son, Akshon Ray.

Arulappan saved for two years for a laptop she promised the 22-year-old if he performed well in his final exams.

Above the family’s metal cupboard is a folder containing the brochure of the university where he planned to study. But the financial burden was too heavy.

“You have to support the family,” Arulappan told his son just before he left to work in a broom factory in Colombo.

She does not yet know where he is staying.

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Reporting by Alasdair Pal and Uditha Jayasinghe in Bogawantalawa; Editing by Clarence Fernandez

Our standards: The Thomson Reuters Trust Principles.

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RBI treads cautiously over inflation crisis – The New Indian Express https://guwiv.com/rbi-treads-cautiously-over-inflation-crisis-the-new-indian-express/ Wed, 04 May 2022 11:33:00 +0000 https://guwiv.com/rbi-treads-cautiously-over-inflation-crisis-the-new-indian-express/ By PTI MUMBAI: The RBI warned on Wednesday that while India’s economy appears capable of weathering deteriorating geopolitical conditions amid the ongoing Russian-Ukrainian war, it faces headwinds from the global fallout from geopolitical tensions, prices commodity prices and the moderation of external demand. The RBI, however, did not change the GDP growth projection made in […]]]>

By PTI

MUMBAI: The RBI warned on Wednesday that while India’s economy appears capable of weathering deteriorating geopolitical conditions amid the ongoing Russian-Ukrainian war, it faces headwinds from the global fallout from geopolitical tensions, prices commodity prices and the moderation of external demand.

The RBI, however, did not change the GDP growth projection made in April.

It had cut the GDP growth projection for the fiscal year 2022-23 to 7.2% from its previous forecast of 7.8%.

The Monetary Policy Committee (MPC) of the Reserve Bank’s Rate Setting Committee decided to hold an off-cycle meeting on May 2-4 and raised the benchmark (repo) lending rate by 40 basis points and increased the CRR by 50 basis points to contain the rise in inflation.

The MPC’s decision was announced by RBI Governor Shaktikanta Das on Wednesday afternoon.

“I would therefore like to emphasize that our monetary policy actions today, aimed at reducing inflation and anchoring inflation expectations, will strengthen and consolidate the medium-term growth prospects of the economy. We remain mindful of the “Possible short-term impact of higher interest rates on output. Our actions will therefore be calibrated,” the governor said in a statement.

The committee said that in this high-tension global environment, it is useful to take stock of national macroeconomic and financial conditions.

The rebound in domestic economic activity that began with the ebb of the Omicron wave is proving increasingly broad.

“With respect to the outlook for domestic economic activity, the forecast for a normal southwest monsoon improves the outlook for kharif production. The recovery of contact-intensive services is expected to be sustained, with the decline in third wave and increasing vaccine coverage,” the central bank said.

In addition, investment activity should be boosted by robust government investment, improving capacity utilization, stronger corporate balance sheets and favorable financial conditions.

“On the other hand, the deteriorating external environment, high commodity prices and persistent supply bottlenecks pose formidable headwinds, as well as the fallout from the volatility of the normalization of the monetary policy in advanced economies,” the committee said.

Overall, India’s economy appears capable of withstanding deteriorating geopolitical conditions, but it is prudent to continuously monitor the balance of risks, said the six-member panel led by Governor Das.

The governor also said that while the drivers of domestic economic activity are strengthening, they face headwinds from global fallout in the form of prolonged and heightened geopolitical tensions; high commodity prices; Lockdowns or restrictions related to COVID-19 in some major economies.

The economy is also facing headwinds from slowing external demand and tighter global financial conditions due to monetary policy normalization in advanced economies.

These risks are moving in the direction predicted in the April statement after the MPC meeting and appear to persist, Das said.

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Ukraine crisis adds to global economic woes https://guwiv.com/ukraine-crisis-adds-to-global-economic-woes/ Tue, 03 May 2022 21:01:44 +0000 https://guwiv.com/ukraine-crisis-adds-to-global-economic-woes/ Ideas & Debate Ukraine crisis adds to global economic woes Wednesday 04 May 2022 Smoke rises from a Russian tank destroyed by Ukrainian forces at the side of a road in the Lugansk region on February 26, 2022. PHOTO | AFP The Russian-Ukrainian war is now in its third month, and it continues to impact […]]]>

Ideas & Debate

Ukraine crisis adds to global economic woes


Smoke rises from a Russian tank destroyed by Ukrainian forces at the side of a road in the Lugansk region on February 26, 2022. PHOTO | AFP

The Russian-Ukrainian war is now in its third month, and it continues to impact many countries on many fronts: energy security, food security, climate change mitigation and even geopolitics.

It should be noted that when Russia invaded Ukraine on February 24 this year, the world was already grappling with high prices for goods, including energy and food, as the world struggled to restore supply chains interrupted by two years of the Covid pandemic.

When the war in Ukraine broke out, oil prices were already above $100 and food prices were on the rise. The war specifically disrupted huge grain and oilseed supplies from the vast agricultural lands of Ukraine and Russia, which aggravated the global food crisis.

Indeed, the Ukraine crisis has recently become a credible scapegoat for many emerging economic issues around the world.

This is how the Ukrainian crisis is impacting global oil and gas supply chains: the war has forced Europe to reshape its energy supply and use strategies to reduce European Union demands for Russian gas by two-thirds by the end of this year and completely by the end of the year. the end of this decade.

As for oil, Europe plans to stop imports from Russia within the next two years, having already stopped coal imports.

These changes are driven by Europe’s need to reduce the real risks of Russia using oil and gas exports as a political weapon.

Indeed, last week Russia cut off gas supplies to Poland and Bulgaria in a bid to impose payment for gas imports in Russian rubles, an attempt by Russia to hit back at the EU by regarding the economic sanctions imposed on Russia by the West.

From a climate change mitigation perspective, the Russia-Ukraine crisis has become a blessing in disguise as Europe accelerates its energy transition plans to renewables (wind, solar, nuclear) to replace fuel imports fossils from Russia.

There is of course an associated climate flow since some European countries are increasing the use of local coal to replace Russian gas.

When it comes to global energy security (availability and accessibility), the Russian-Ukrainian war has become one of many global factors keeping oil prices just above $100 a barrel.

The other factor driving prices down is the ongoing Covid pandemic shutdown in China, which has reduced oil demand and price pressure.

While Western countries are avoiding Russian oil, some Eastern countries are increasing their imports of heavily discounted Russian oil.

Essentially, these countries extract less oil from the Middle East, which in turn becomes available to European countries that have chosen to boycott Russian oil. A balancing logistics game that can balance the overall availability of oil around the world and stabilize prices just above $100.

Piped gas supplies from Russia are less flexible than oil to be replaced with supplies from alternative sources. Investments in infrastructure have already started to increase the capacity of LNG (liquefied natural gas) reception facilities in Europe.

The United States is bundling LNG supplies to Europe and has become the biggest beneficiary of Europe’s ongoing boycott of Russian gas.

In response to the Russian invasion of Ukraine, major Western oil companies (Exxon, Shell, BP, Total Energies) are withdrawing their capital from the Russian oil and gas industry, a development which has important implications for the future position of Russia as the world’s largest oil and gas producer. .

This is also another climate change mitigation measure, as global fossil fuel production will decline. Unless of course there is equivalent replacement production capital from China.

Perhaps the most sinister consequence of the ongoing Russian-Ukrainian crisis is the return of polarized geopolitical alliances, with loyalties in the West (US and Europe) or East (Russia and China), which means a return to the geopolitical model of the “cold war”. .

This can divide and damage the economic globalization that has facilitated global trade and investment over the past three decades. If new geopolitical animosities emerge and persist, maintaining neutrality by various nations will become difficult diplomacy.

Like the rest of the world, Kenya is already treading tough economic ground with high prices for oil, food and medicine, especially with a depreciating shilling and a scarce dollar.

The government will certainly have to come up with effective solutions that could lead to reduced taxes on certain items, including petroleum fuels. This may contravene IMF conditionalities, but it is essential to protect the economy and reduce stress on Kenyan households.

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