Day: April 12, 2022

The pandemic plunged 77 million more people into extreme poverty last year and many developing countries can’t recover because of the crippling cost of debt repayments — and that was before the added impact of the war in Ukraine, a U.N. report said Tuesday.

The report said rich countries could support their recovery from pandemic slumps with record amounts borrowed at ultra-low interest rates. But the poorest countries spent billions of dollars servicing their debts and faced much higher borrowing costs, preventing them from spending on improving education and health care, protecting the environment and reducing inequality.

According to the U.N., 812 million people lived in extreme poverty — on $1.90 a day or less — in 2019, and by 2021 amid the pandemic the number had risen to 889 million.

The report is on financing to achieve U.N. development goals for 2030, including ending poverty, ensuring quality education for all young people and achieving gender equality.

U.N. Deputy Secretary-General Amina Mohammed said at a news conference that the effort “is coming at a critical moment for humanity, adding to the compounding crises of climate assaults on our natural systems and the protracted COVID-19 pandemic.”

Added to this, she said, is the global impact of the war in Ukraine. A U.N. analysis indicates “1.7 billion people are faced with exposure to spiking food, energy and fertilizer costs as a result of the war in Ukraine,” Mohammed said.

The report estimates that GDP per capita in 20% of developing countries will not return to pre-2019 levels by the end of 2023, even before absorbing the impact of Russia’s war in Ukraine.

It says the poorest developing countries, on average, pay 14% of their revenue for interest on their debts, with many forced to cut budgets for education, infrastructure and capital spending as a result of the pandemic. Rich developed countries pay only 3.5%, it says.

The war in Ukraine will exacerbate these challenges, the report said, and it will also bring higher energy and commodity prices, renewed supply chain disruptions, higher inflation, lower growth and increased volatility in financial markets.

Mohammed said “it would be a tragedy” if rich donor nations increased military expenditures as a result of the war and cut aid to developing countries and reduced efforts to address the climate crisis.

The U.N. already was “off track” in efforts to reach the U.N. development goals before the pandemic hit and brought new problems, she said. Now, the war and its impact will set these efforts back again, “so the big message is that we need more resources,” she said.

“There is no excuse for inaction at this defining moment of collective responsibility, to ensure hundreds of millions of people are lifted out of hunger and poverty,” Mohammed said. “We must invest in access for decent and green jobs, social protection, health care and education leaving no one behind.”

The report’s recommendations include speeding up debt relief and expanding eligibility to highly indebted middle-income countries, aligning the international tax system to address such issues as inequality in availability of coronavirus vaccines and access to medical products, accelerating investment in sustainable energy, and improving information sharing.

The report was produced by the U.N. Department of Economic and Social Affairs in collaboration with more than 60 international agencies, including the U.N. system and international financial institutions.

Source: Voice of America

Some Shanghai residents were able to leave their homes for the first time in more than two weeks on Tuesday as the city took tentative steps towards easing a COVID-19 lockdown amid mounting worries over the economic impact of the strict curbs.

With a quarter of the population under what brokerage Nomura described as “full or partial lockdowns,” China’s leadership is taking increasing steps to ease the economic toll of its “zero-COVID” strategy but remains reluctant to risk larger waves of infection.

German auto parts giant Bosch and Taiwan’s Pegatron Corp., which assembles iPhones for Apple Inc., said on Tuesday they had suspended operations at their China plants due to the restrictions, underscoring the risks both to China’s economy and global supply chains.

Shanghai said on Monday that more than 7,000 areas – which local media reported as home to about 4.8 million of its 25 million residents – had been classified as lower-risk after no new infections for 14 days. Local officials have been announcing which residential compounds can open up.

But while some people were allowed out on Tuesday, there was still confusion about how freely they could move, with many awaiting permission from their residential committees.

One resident said she briefly left home for a scooter ride after getting permission from her compound, only to be told later that she could no longer do so.

“You know how it all changes very fast … if you can go out you better do so quickly because you won’t know if it could change in the next hour,” she said, declining to be named.

Officials say daily infection rates were likely to remain high in the next few days, with Shanghai still struggling to get to grips with the outbreak – China’s biggest since the coronavirus was discovered in late 2019 in the central city of Wuhan.

“The epidemic is in a rapid increase phase, with social transmission still not brought under effective control,” Lei Zhenglong, of the National Health Commission, told a briefing in Beijing.

“The forecast for the next few days is that the number of infected people will remain at a high level,” he said.

Amid concerns about the tough curbs, the U.S. State Department ordered non-emergency government workers to leave its consulate in Shanghai. Read full story

Bosch suspended output at sites in Shanghai and the city of Changchun in COVID-hit Jilin province, while putting two other plants – one in Shanghai and another in neighboring Taicang – under “closed-loop” operation, with workers isolated inside.

Pegatron said it halted operations at its plants in Shanghai and neighboring Kunshan, citing government measures to control the spread of infection.

Nomura estimates that as many as 45 cities in China are now implementing either full or partial lockdowns, making up 26.4% of the country’s population and 40.3% of its GDP.

The outbreaks have added to inflationary pressures as residents hoard goods and transport restrictions erode supplies, but that has been partly offset by weaker demand as incomes decline, Chinese brokerage Cinda Securities said, adding that relief measures were needed urgently.

Premier Li Keqiang warned on Monday that China needed to be “highly vigilant” against further downward economic pressures and said the fight against COVID-19 needed to be “coordinated” with economic and social development.

China is also encouraging long-term investors to buy more equities and major shareholders of listed firms to increase their holdings when stocks slump, in a bid to stabilize a stock market rocked by the worsening outbreak, the country’s securities watchdog said late on Monday.

Liu Min, vice head of Shanghai’s commercial commission, said efforts were being made to reopen supermarkets, convenience stores and pharmacies, but non-essential businesses will remain suspended.

Many in the city still struggled to buy food. E-commerce giant JD.com 9618.HK, which received a license on Saturday to supply the city, came in for online criticism on Tuesday when shoppers found that delivery dates had been pushed back more than a week.

On Monday, Shanghai’s total new asymptomatic cases fell 11% from a day earlier to 22,348, with confirmed symptomatic cases rising to 994 from 914.

Source: Voice of America