Browsing: Economy

Economy
Protests and Covid leave Hong Kong stuck in recession

Hong Kong’s economy was already in recession when the pandemic hit in January. Six months of running battles between pro-democracy campaigners and local government had deterred many of the visitors who fuel the lucrative tourism industry, while the threat of violence on the streets and closures of shops had sent retail sales down nearly a quarter on the previous year.With much of Asia shut down by coronavirus restrictions during the winter months, there was little expectation of a recovery until the spring, when the level of infections fell to almost zero across mainland China and most of the rest of the region, and the measures could be eased.Some analysts expected the recovery to be strong. Hong Kong is a hub for financial and professional services in competition with Singapore. Many workers could operate from home and maintain the same level of activity.Q&AThe fight for Hong KongShowThe national security law China imposed on Hong Kong in June 2020 has wrought profound changes on the region of more than 7 million people.From who really runs Hong Kong now to the fate of the pro-democracy movement and how major global companies are grappling with the implications of

Economy
World Bank announces $12bn plan for poor countries to buy Covid vaccines

The World Bank has announced plans for a $12bn (£9.3bn) initiative that will allow poor countries to purchase Covid-19 vaccines to treat up to 2 billion people as soon as effective drugs become available.In an attempt to ensure that low-income countries are not frozen out by wealthy nations, the organisation is asking its key rich-nation shareholders to back a scheme that will disburse cash over the next 12 to 18 months.David Malpass, the World Bank president, said the initiative was needed because Covid-19 was having a much bigger impact on low and middle income countries than on the developed world.“Having this finance available will be a game changer because once a safe and effective vaccine is available it will allow people to resume their lives with confidence.”Many countries – including the US, the UK, China and Russia – are working on treatments for Covid-19 and Malpass said the World Bank did not want to wait for a vaccine to become available before acting.“There has been substantial reservation of doses by the higher income countries and we want to make sure low and middle income countries have access as well,” Malpass said.The Bank believes the global economy will not recover fully

Economy
German compromise on releasing EU funds 'caves in to Viktor Orbán'

Germany has been accused of caving into Viktor Orbán over a revamped draft law on the control of EU funds, as German diplomats attempt to settle a row that threatens to hold up billions of coronavirus recovery funds.European Union leaders had agreed a €1.8tn (£1.63 tn) financial package, consisting of a €750bn coronavirus recovery fund and a €1.074tn budget for 2021-27, at an epic summit spanning four days and nights in July. However, turning that political agreement into legal texts that commanded the support of the European parliament has been running into trouble that risked delaying the funding.A leaked compromise plan, drawn up by Germany, holder of the EU’s rotating presidency, has been heavily criticised by the Netherlands, the Nordic countries and many concerned MEPs.The law proposed in July had been intended to ensure that only countries who respected the rule of law could benefit from EU funds. The regulation had been proposed amid growing alarm in the EU about backsliding on the rule of law in Poland and Hungary, whose nationalist governments benefit from generous EU funds.Those opposed to the German-brokered compromise said the new text narrowed the definition of the rule of law. “The current proposal rows back

Economy
Difficult to find fairness amid the Covid crisis | Letters

The chancellor’s efforts to support the economy amid the Covid crisis are welcome. But it is worrying that while he freely accepts that many livelihoods will be put in jeopardy, he tells people they should not be afraid about the future (Tory lockdown sceptics praise Sunak for saying UK must live ‘without fear’, 24 September).Since lockdown was relaxed and infection rates have increased, there is a growing tension across generations involving the distinction between lives and livelihoods. As a retired person I have worked my shift, I am fortunately comfortably off and own my home like so many of my generation. I am aware and able enough to look after myself during this crisis, but far too often I hear my peers carping about how younger people are to blame for the growing problems. I am not talking about reckless and stupid behaviour – that is never acceptable – but people having to make difficult choices just to survive.There seems to be an expectation that people working to maintain themselves and their families under huge pressure should be more worried about me and my lot. This is wholly unfair. We should be doing everything in our power to protect and

Economy
Sunak's winter plan is the shadow chancellor's chance to fight back

The job of shadow chancellor is one of the toughest in politics. Your opponent can call on the full weight of the Treasury and can actually do stuff. It is always a struggle to be heard.In theory, life should have been a bit easier for the current shadow chancellor, Anneliese Dodds, because she took over from John McDonnell just as the economy was falling into the Covid-19 abyss. It normally helps not to be in charge when the country is going through a monster recession.But it has still not been easy for Dodds. Over and above the normal difficulties associated with being shadow chancellor, she has faced three additional problems: a Labour party shellshocked from defeat last December; a government that has responded to the crisis with policies Labour would have followed had it been in power; and a chancellor who has gone out of his way to be consensual.So would Labour have introduced a furlough scheme? Clearly, yes. Did it have a problem with state control of the train operating companies? No, it didn’t. Would Dodds have followed Rishi Sunak’s example and invited Frances O’Grady, the TUC general secretary, to Downing Street for talks about what the government ought

Economy
Tory split on coronavirus has seen off any joined-up strategy | Phillip Inman

It would help if the cabinet could agree. Yet for the past seven months it has remained deeply divided, squabbling over the scientific advice and what Covid-19 might mean for the nation’s health and jobs.Britons have become familiar with a bewildering, almost weekly stream of tactical policies, twisting this way and that, many of them in direct opposition to each other.There was no better example than Rishi’s dinners, the eat out to help out (EOTHO) subsidy that sent millions of people into pubs, restaurants and cafes during August.With only a few rules in place dictating how businesses should conduct themselves, it became a feeding frenzy. While many establishments invested in thermometer guns to test customers on entry, and rejected people calling themselves Minnie Mouse for the purpose of track and trace, many did not.Such was the parlous state of the UK’s track-and-trace system during the summer, that we will never know how much this contributed to the spread of the virus. It could be that the escalating infection rate seen last week was fuelled by this one policy.What we do know is that the EOTHO idea was met with dismay by health minister Matt Hancock and triggered an even more

Economy
UK furlough scheme will fail to prevent 1m losing jobs, say experts

The chancellor’s multibillion-pound subsidy for part-time working will fail to prevent another one million workers losing their jobs by the middle of next year, leading economists have said.Young workers and those at the bottom end of the income scale will be the hardest hit as employers continue to shed workers in the period before the end of the furlough scheme next month.Rishi Sunak said this week that he expected many of the estimated 3 million workers currently on furlough would return part-time after the Treasury’s winter economic plan, which put in place a series of measures to underwrite the finances of the worst-hit businesses.But the consultancy Capital Economics said the unemployment rate, which has been subdued while millions of workers remain on furlough, would probably rise towards 7% by the end of the year, implying that more than a million people would become out of work.Ruth Gregory, a senior economist at the firm, said: “We suspect the effect of the government’s restrictions announced this week and the possibility of tighter restrictions in the coming months will outweigh any downward impact on unemployment from [Sunak’s] fiscal package.“That’s why we expect the unemployment rate to rise further, to at least 7% by

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