Don961: Corona puts the world’s economy inevitable confrontation with the 10 most serious crises
Before the emergence of the Coruna virus, the global economy was already preparing for a wave of slowdown and retreat, but the emergence of the deadly virus has turned the slowdown and recession into violent recession, and perhaps bankruptcies, whether at the level of giant companies or some countries that have no financial strength to face the existing risks.
The analysis prepared by “Projekt Syndicate” indicates that after the financial crisis that struck the global economy during 2008, the imbalances and risks prevailing in the global economy were exacerbated by policy errors, and instead of addressing the structural problems revealed by the financial collapse at the time and the economic stagnation that followed, Often governments have created major negative risks that have made another crisis inevitable.
But the appearance of the Corona virus exacerbated the already existing crises, and unfortunately, even if the greater recession led to a faded “U” recovery this year, the “L” Great Depression would follow later in the decade, Because of 10 ominous and risky crises.
Decline in GDP leads to reduced household income
In the list of risks comes the debt crisis and default, as the policy response to the “Covid-19” crisis implies a huge increase in the fiscal deficit, equivalent to 10 percent of GDP or more at a time when levels of public debt in many countries were already high If not unsustainable.
Worse, the loss of income for many families and companies means that private sector debt levels will also become unsustainable, potentially leading to collective instances of debt default and bankruptcy. Along with rising public debt levels, this guarantees a weaker recovery than the one that followed the Great Recession a decade ago.
The second crisis is the demographic time population within the advanced economies, where the Covid-19 crisis shows that public spending is too much to be allocated to health systems and that comprehensive health care and other related public goods are necessary and not luxuries.
However, given that the majority of developed countries are aging populations, financing such expenditures in the future will make implicit debts from unfunded health care and social security systems today more than ever.
The third crisis is embodied in the increasing danger of deflation in prices. In addition to causing a deep economic recession, the crisis also creates a massive recession in commodities (machinery and unused capacities) and in labor markets (collective unemployment), as well as pushing prices to collapse in Basic commodities such as oil and industrial minerals. This would make the real appreciation of the size of the debt due to the price contraction likely, which would increase the risk of bankruptcy.
Currency losses and facing the huge financial deficit
The fourth crisis, according to the analysis, is related to the devaluation of the currency. As central banks try to combat price deflation and avoid the risk of higher interest rates in the wake of massive debt accumulation, monetary policy will become more unfamiliar and widespread.
In the short term, governments will need to manage fiscal deficit funded by monetary policy in order to avoid economic recession and deflation. However, over time, persistent negative supply shocks, as a result of accelerating declining globalization and renewed protectionism, will make inflation stagnation inevitable.
The fifth crisis is the broader digital imbalance in the economy. Whereas, with millions of individuals losing their jobs or working in exchange for less pay, the income and wealth gaps in the economy of the 21st century will widen further. To hedge future supply chain shocks, companies in developed economies will shift their production from low-cost regions to more expensive domestic markets.
But instead of helping workers at the local level, this trend would increase the pace of automation, which puts negative pressure on wages and fuels populism, nationalism, and xenophobia.
The sixth danger relates to the trend to reduce globalization, as the Corona virus accelerates the trend towards fragmentation or divisions, and fragmentation that was already occurring. The United States and China will spread faster, and most countries will respond by adopting more protectionist policies to protect companies and local workers from global turmoil. The post-epidemic world will be marked by tighter restrictions on the movement of goods and services, capital, labor, technology, data and information.
This is already happening in the pharmaceutical and medical equipment and food sectors, where governments impose export restrictions and are implementing other protective measures in response to the crisis.
Negative reactions opposed to democracy would reinforce this seventh trend, as populist leaders benefit from economic weakness, mass unemployment and rising inequalities.
Under conditions of increasing economic insecurity, there will be a strong motivation to present foreigners as a scapegoat for the crisis. Workers with blue collar and broad middle classes will be more affected by populist rhetoric, especially with regard to proposals to restrict immigration and trade.
A geostrategic confrontation between Washington and Beijing
The eighth threat is embodied in the geostrategic confrontation between the United States and China, and in light of the attempts of the US President Donald Trump to make every effort to blame China for the spread of the epidemic, the Chinese President Xi Jinping’s regime will continuously double his allegations that the United States is plotting to prevent the peaceful rise of China. The Sino-American separation will intensify in trade, technology, investment, data and monetary arrangements.
Worse, this diplomatic separation will pave the way for a new cold war between the United States and its competitors, not only China but also Russia, Iran and North Korea.
With the presidential elections approaching in the United States, there are good reasons to expect an escalation in the secret cyber war, which is the ninth trend, which may lead even to traditional military clashes.
And, given that technology is the primary weapon in the battle to control industries in the future and fight epidemics, the private technology sector in the United States will become increasingly integrated into the National Industrial Security Complex.
The tenth danger is environmental turmoil, which could do more damage to the economy than the financial crisis. Where repeated epidemics are mainly man-made disasters, they are the result of poor health, health standards, misuse of natural systems, and the growing interdependence of the world through globalization. Epidemics and the many symptoms of climate change will become more frequent, severe and costly in coming years. LINK
Samson: Leaked documents reveal the smuggling of 6 billion euros from Kurdistan to abroad
13:40 – 05/12/2020
A group of leaked documents published by the “iCord Daily” website revealed that billions of euros have been smuggled from the Kurdistan region to abroad.
The site stated in the news of his translation of the information, “According to the documents dated in 2018, an amount of 6 billion euros has been transferred from a private company based in Erbil called (Abor Land) from the (Abor Group) to outside the region under the name of investment banking.”
According to the documents, “The person in charge of the group is a person named Sherwan Kamel Aziz, who is the president of the company and authorized to sign who carries the passport number A4566977 to arrange the purchase of banking equipment worth 6 billion euros,” according to the document.
The site added that “obviously it is not possible for any company in Kurdistan, Iraq to have a huge capital with the exception of the ruling family in the Kurdistan region.”
He pointed out that “for many years, transparency organizations, legislators, monitors, and international organizations accused senior officials of the Kurdistan Regional Government of Iraq of corruption and money laundering, especially with regard to the confiscation of oil revenues in the region.” LINK