Category Archives: Global economy

How the Suez canal blockage can seriously dent world trade

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Analysis: 12% of global shipping uses the canal with any delays disrupting supply chains, fuelling shortages and hiking prices

World trade’s pre-eminent shortcut – the Suez Canal – is facing “massive” disruption which could cause cargo delays around the globe, shipping experts warned on Friday.

The narrow, 120-mile passage of water linking the Red Sea and the Mediterranean allows ships of colossal proportions to navigate a relatively direct route from Asia to Europe, rather than taking a 3,500-mile diversion around Africa.

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Mathias Cormann elected OECD chief despite climate record

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Former Australian finance minister’s candidacy was dogged by complaints from environmental groups

Australia’s former finance minister Mathias Cormann has won a hard-fought election to become the new chief of the Organisation for Economic Co-operation and Development (OECD), despite grave concerns voiced by environmental groups over his record on climate change.

Cormann narrowly defeated the Swedish former EU trade commissioner Cecilia Malmström in the election to lead the 37-member Paris-based organisation, which gives advice to member governments on economic trends, inequality, fighting corruption and trade and is seen as the world’s leading rulemaker on corporate tax.

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‘Not a suitable candidate’: climate groups urge OECD not to appoint Mathias Cormann as next head

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A letter signed by 29 experts and activist groups says Cormann’s climate record should rule him out of secretary-general’s job

International climate change groups and influential advisers on the global shift from fossil fuels have written to the OECD expressing “grave concerns” over Australian politician Mathias Cormann’s bid to be its next secretary-general.

Former Australian finance minister Cormann’s record in a government that “persistently failed to take effective action” to cut emissions while blocking international action meant he was “not a suitable candidate”, the letter says.

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Ports feel the chill as trade re-routes around Brexit Britain

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In Holyhead, traffic has fallen 50% as hauliers stymied by Brexit find their way from Ireland to France without entering the UK

Perched on the shores of Anglesey, the island linked by road bridges to the north-west coast of Wales, Holyhead’s geography has given it a leading role in British-Irish trade since the early 19th century.

About 50 miles directly across the Irish Sea from Dublin, a journey of just three-and-a-quarter hours by ferry, Holyhead was until December the second busiest roll-on roll-off port in the UK after Dover. About 450,000 trucks rumbled through each year on their way to Dublin, with cargoes of meat and agricultural produce, secondhand cars and items destined for the shelves of Irish supermarkets.

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Human destruction of nature is ‘senseless and suicidal’, warns UN chief

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UN report offers bedrock for hope for broken planet, says António Guterres

Humanity is waging a “senseless and suicidal” war on nature that is causing human suffering and enormous economic losses while accelerating the destruction of life on Earth, the UN secretary-general, António Guterres, has said.

Guterres’s starkest warning to date came at the launch of a UN report setting out the triple emergency the world is in: the climate crisis, the devastation of wildlife and nature, and the pollution that causes many millions of early deaths every year.

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‘Put a big fat price on carbon’: OECD chief bows out with climate rally cry

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Exclusive: Ángel Gurría says action on environmental crises must be defining focus of wealthy countries after Covid

The environment, climate change and the protection of nature must be the defining tasks of rich and major developing countries now and in the years to come, the outgoing head of the Organisation for Economic Co-operation and Development has said, and the institutions that advise governments must take responsibility for keeping them focused on those tasks.

Ángel Gurría said the coronavirus crisis must be dealt with as a matter of urgency, but that the biggest task after that would be tackling the world’s environmental emergencies.

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‘I’m focused on results’: Ngozi Okonjo-Iweala on becoming first African female WTO leader – video

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Ngozi Okonjo-Iweala said she was focused on delivering results after becoming the first woman and first African to be appointed director general of the World Trade Organization. 'I want to make sure that people remember my continent producing the first leader of the WTO that made a difference,' Okonjo-Iweala said.

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Risk of global food shortages due to Covid has increased, says UN envoy

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Exclusive: Agnes Kalibata says price rises and scarcity mean people in poverty are in more danger than last year

People living in poverty around the world are in danger of food shortages as the coronavirus crisis continues, the UN’s food envoy has warned, with the risk worse this year than in the period shortly after the pandemic began.

Agnes Kalibata, the special envoy to the UN secretary general for the food systems summit 2021, said: “Food systems have contracted, because of Covid-19. And food has become more expensive and, in some places, out of reach for people. Food is looking more challenging this year than last year.”

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‘I’m a fighter’: WTO’s first female, African head ready for battle

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Ngozi Okonjo-Iweala, set to be named director general, joins as global trading system facing make-or-break moment

Even for an economist, there are lots of very large numbers in the life of Ngozi Okonjo-Iweala. As the chair of Gavi, the vaccine alliance, she has overseen the annual immunisation of millions of children. When managing director of the World Bank, she oversaw $81bn (£58bn) worth of operations. In her stints in charge of Nigeria’s finances, she tackled Africa’s most populous country’s $30bn debt. And she has 1.5 million followers on Twitter.

There are lots of smaller numbers too: the 20 non-profit organisations that have appointed Okonjo-Iweala to their advisory boards, the major banks and corporations she has advised, the 10 honorary degrees in addition to her own doctorate, 20 or so awards, dozens of major reports authored, and the books.

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Brexit cost will be four times greater for UK than EU, Brussels forecasts

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Departure to cost EU 0.5% of GDP but UK 2.25% by end 2022, according to first official estimate since deal was agreed

The economic blow dealt by Brexit will be four times greater in the UK than the EU, according to the latest forecasts by Brussels.

A month into the new relationship, the European commission said the UK’s exit on the terms agreed by Boris Johnson’s government would generate a loss in gross domestic product (GDP) by the end of 2022 of about 2.25% in the UK compared with continued membership. In contrast, the hit for the EU is estimated to be about 0.5% over the same period.

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Northern Ireland suspends Brexit checks amid safety fears for port staff

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Decision came after council withdrew 12 staff at Larne following reports of ‘menacing behaviour’

Brexit checks on animal and food products arriving into Belfast and Larne ports have been suspended amid fears over the safety of staff, Northern Ireland’s agriculture ministry has said.

The decision came after Mid and East Antrim borough council agreed on Monday night to remove 12 of its staff at Larne port with immediate effect, following an “upsurge in sinister and menacing behaviour in recent weeks”.

A spokesman for Stormont’s Department of Agriculture, Environment and Rural Affairs (Daera) said: “On the basis of information received today and pending further discussions with the PSNI [Police Service of Northern Ireland], Daera has decided in the interests of the wellbeing of staff to temporarily suspend physical inspections of products of animal origin at Larne and Belfast.

“The situation will be kept under review and in the meantime full documentary checks will continue to be carried out as usual.”

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Keep Covid rescue programmes or risk triggering stock market crash, warns IMF

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International Monetary Fund says there are concerns about share price bubble

Governments and central banks must maintain their pandemic rescue programmes or risk triggering a stock market crash, the International Monetary Fund has said.

Warning that there were legitimate concerns about a share price bubble, the Washington-based organisation said that without continued low interest rates and government subsidies it was possible a “correction” in stock markets would occur.

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‘It’s a big deal’: why former protester turned Davos mayor wants WEF back

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Philipp Wilhelm knows local people rely on forum’s revenue – but still thinks world must change

In his youth, Philipp Wilhelm was at the forefront of protests against the World Economic Forum’s annual “extreme capitalism” gathering of the business and political elite in Davos, the Swiss mountain resort where he grew up.

Now, however, Wilhelm is the mayor of the town and his central mission is to ensure the return of the WEF jamboree, which had been scheduled to start next week but was cancelled this year due to the pandemic.

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As Covid cases spike, Dubai works to keep its economy open

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For an emirate dependent on trade, transport and tourism, vaccination, not lockdown, is key to keeping its economy going

As if the Boohoo online fashion company had not generated enough controversy in recent months, its bosses once again found themselves in the headlines last week for hosting a four-day meeting with suppliers in the luxurious surroundings of a Dubai hotel.

The company’s top executives had taken a private jet to the emirate for the get-together with the businessmen and women who supply their fabrics and manufacture their fashions, despite Foreign Office guidance that advises against all but essential travel.

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Is ‘hysterical’ market speculation pushing us towards another crash?

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Despite Covid, global stocks started 2021 on a high. But some analysts warn of an ‘epic’ bubble, amid fears that the flow of stimulus has created a monster

Insurrections are not usually seen by investors as buy signals. Yet even as rioters stormed the seat of US legislative government last week, stock market indices hit new highs in New York, adding another chapter to 12 months of apparent defiance of economic gravity.

Wall Street, measured by the benchmark S&P 500, was not alone in starting 2021 with a bang. London’s FTSE 100 jumped by more than 6% in the first week of the year as investors took in a heady cocktail of a President Joe Biden ready and able to spend money, cheap borrowing costs, and the hopes that vaccines will end the coronavirus lockdowns. Yet amid the exuberance a serious concern looms: are we on the cusp of another colossal crash?

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The world in 2021 – how global politics will change this year

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Donald Trump’s departure will alter the face of geopolitics. The climate crisis and Covid response will affect all nations – while others face very particular challenges. Observer correspondents examine the 12 months ahead

A potent mix of hope and fear accompanies the start of 2021 in most of the world. Scientists have created several vaccines for a disease that didn’t even have a name this time last year. But many countries, including the UK and the US, are still stumbling through the deadliest period of the pandemic.

The shadow of Covid will not begin to lift, even in richer countries, for months. Britain was the first to approve a vaccine and has secured extensive supplies, yet Boris Johnson’s suggestion that life might be returning to normal by Easter is widely seen as optimistic. Other countries, particularly in the south, face a long wait to get vaccines, and help paying for them. The rebuilding of economies shattered by Covid everywhere will be slow; even countries that managed to contain it have taken a hit, from Vietnam to New Zealand.

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China to overtake US as world’s biggest economy by 2028, report predicts

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Centre for Economics and Business Research says it expects this to happen half a decade sooner than it forecast a year ago

China will overtake the US as the world’s biggest economy before the end of the decade after outperforming its rival during the global Covid-19 pandemic, according to a report.

The Centre for Economics and Business Research said that it nowexpected the value of China’s economy when measured in dollars to exceed that of the US by 2028, half a decade sooner than it expected a year ago.

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UK and US close to deal on cutting tariffs, says White House trade chief

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Talks on reducing charges on items such as Scotch whisky follow UK move to drop levy on Boeing

The UK and the United States are hoping to reach an agreement on reducing trade tariffs, according to Robert Lighthizer, the US trade representative in Donald Trump’s outgoing administration.

In an interview with the BBC, Lighthizer said he was in talks with the UK’s international trade secretary, Liz Truss, which could remove hefty tariffs imposed by the US on goods including Scotch whisky.

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World Bank ‘missed vital opportunities’ to support Covid response, says Oxfam

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Millions forced to do without or pay for services as funding fails to adequately shore up healthcare systems, report finds

Millions of people in low-income countries have been forced to go without healthcare or have had to pay for it during the coronavirus pandemic, despite billions of pounds in emergency World Bank funding, research has found.

The World Bank’s $6bn (£4.45bn) emergency health fund to 71 countries in response to Covid-19 failed to strengthen health systems or remove financial barriers to using them, according to an Oxfam report published on Friday.

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China targeting Biden team, intelligence chief warns, amid fresh trade war measures

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William Evanina speaks of Beijing’s influence campaign ‘on steroids’, as Congress passes bill targeting big companies such as Alibaba

A counterintelligence chief in the US has warned that Chinese agents are already targeting the personnel of President-elect Joe Biden, as well as those close to his team, as Congress unveiled more measures targeting big Chinese companies.

William Evanina, from the office of the US Director of National Intelligence, told the Aspen Institute Cyber Summit on Wednesday it was an influence campaign “on steroids”.

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