Import Relief – Lost Worlds Thu, 23 Jun 2022 17:35:00 +0000 en-US hourly 1 Import Relief – Lost Worlds 32 32 Russia offers wheat, fertilizer imports appear to decline Thu, 23 Jun 2022 17:35:00 +0000

Clouds of uncertainty hanging over Bangladesh’s wheat imports will finally lift as Russia offers 3 lakh tonnes of wheat and senior US official says sanctions ‘do not prevent Russia from exporting its grain or its fertilizers”.

Russia, the world’s biggest wheat exporter, on Thursday offered to export 3 lakh tonnes of wheat within 60 days, officials said after a virtual meeting to sign the supply agreement.

Food Minister Sadhan Chandra Majumder also yesterday informed parliament about the Russian offer to export wheat to Bangladesh.

Officials who attended the virtual meeting said Bangladesh had agreed to the proposal but wanted a two-phase wheat supply – 2 lakh tonnes in 60 days and an additional 1 lakh tonnes in 90 days to avoid congestion. at the port.

Moscow has offered Dhaka a rate of $440 to $450 per ton.

The two sides will come to a final decision on wheat prices and delivery time at the next meeting to be held on July 4.

Meanwhile, the Assistant Secretary of the US State Department’s Bureau of Economic and Business Affairs, Ramin Toloui, has made it clear that the import of Russian food and fertilizers is not subject to US sanctions regarding the war of Moscow in Ukraine.

He suggested that countries seek help from the United States if they have problems importing Russian food and fertilizer, according to a Reuters report.

The news came as a relief for Bangladesh which is struggling to find countries to source wheat and fertilizer from.

Agriculture Secretary Md Sayedul Islam told The Business Standard they would consider how to resume fertilizer imports from Russia following the US official’s statement.

The resumption of fertilizer imports from Russia will greatly ease the pressure of government subsidies, he believes.

“The United States does not want there to be barriers to the ability of countries, companies to buy Russian food, Russian fertilizers and for these products to enter international markets,” the US official said. Toulouse.

He encouraged countries to contact the US Treasury Department or local US embassies if they encountered any problems.

Foreign relations analyst Humayun Kabir told TBS: “We must inform the West first before importing wheat and fertilizer from Russia so that no confusion arises.”

In addition, a diplomatic initiative is needed to negotiate with Russia and ensure that Western countries do not oppose imports, he added.

Thus, the Ministry of Foreign Affairs should also be engaged in this regard, he also said.

“Our main weakness is the lack of cooperation between government agencies in dealing with foreign issues,” said Humayun Kabir, also a former ambassador to the United States.

In FY22, there is a demand for 57.50 lakh tons of chemical fertilizers – 26 lakh tons of urea, 7.5 lakh tons of TSP, 7.5 lakh tons of MoP and 16.5 lakh tons of DAP.

Russia is the main import source of non-urea fertilizers for Bangladesh. Additionally, Bangladesh imports 7.5 lakh tons of MOP from Belarus and Canada every year.

Food Secretary Md Ismail Hossain led the Bangladeshi side in the virtual bilateral meeting held to finalize the wheat supply deal with Russia.

After the meeting, he told TBS that they had a positive discussion with Russian Ministry of Food and Agriculture officials to source wheat from the country under a government agreement to government.

“They expressed interest in exporting 2-3 lakh tonnes of wheat to us and we agreed,” he said.

An agreement will be signed with Moscow on wheat imports after the wheat prices and method of payment are finalized in upcoming meetings, he noted.

A Food Ministry official, speaking on condition of anonymity, told TBS that Russia had recently notified Bangladesh of its interest in exporting wheat to the latter. Previously, Dhaka, through its embassy in Moscow, had also asked Moscow to supply it with the food grains.

The food secretary said that although there are plans to import 2 lakh tonnes of wheat from Russia, the amount could increase to 3 lakh tonnes during final negotiations.

Bangladesh is now trying to source wheat from different countries after its main supplier, India, banned grain exports last month to rein in its local prices.

The national wheat production of Bangladesh stands at 10 lakh tons per year. In FY22, the government set a target of importing 9 lakh tons and has so far signed agreements with various countries for supplies of 6.5 lakh tons. Total imports now stand at 4.7 lakh tonnes, according to the Ministry of Food.

On the other hand, private imports dropped drastically to 31 tons in FY22 from 48 lakh tons in FY21 and 60 lakh tons in the pre-pandemic year of 20.

Efforts for wheat from other sources

Additionally, efforts are underway to import 5-6 lakh tonnes of wheat from India on a government-to-government basis, Ismiel Hossain also said, adding, “We have sent a list of 13 Indian dealers to the Indian government through through the High Commission. If they agree, the country’s wheat imports will begin.

“We learned from the Indian media that the Indian government has taken a positive decision in this regard. We will be happy to get at least 2-3 lakh tons of wheat from the country,” he noted.

Besides Russia and India, the government is working to purchase 1 lakh tonnes of wheat each from Canada and Australia under a G2G deal, the food secretary said, adding that they will meet with these countries practically next week.

In addition, negotiations are underway with the Argentine government to import wheat. There will be a virtual meeting with him very soon, he said.

The food directorate also took the initiative to increase stocks by importing wheat through tenders. As part of this, a tender for the import of 1 lakh tonnes of wheat will be launched on July 5, the food secretary said.

Private import from Russia depends on success of G2G initiative

Millers say that if the government’s initiative to import wheat from Russia is successful, the private sector will also resume imports.

But, they are keeping an eye on the payment system that will be adopted because it will be a challenge to pay for Russian wheat given the Western sanctions against Moscow, they point out.

Taslim Shahriar, Senior Deputy Managing Director at Meghna Group of Industries, told TBS that it would be great if the government could import Russian wheat by removing complexities from the payment system.

But whether the private sector will be allowed to use the payment system finalized by the government will be understood later, he said.

When the Russian-Ukrainian war broke out on February 24, the European Union, the United States and their allies imposed sanctions on Russia and cut off its number of banks from the main international payment system, Swift.

The United States has also warned more than once that the West will impose sanctions on countries that import goods from Russia in defiance of the sanctions, which have stopped imports of goods from Russia to many countries in Asia and other countries. Africa, including Bangladesh.

In response, Russia’s blockade of food exports at the Ukrainian seaport of Odessa led to a halt in the country’s food exports. In this situation, the United Nations took the initiative to start exporting the stored food products from Ukraine, expressing the fear of famine in different parts of the world, including Africa and the Middle East.

The United States and the EU have accused Russia of creating a global food crisis.

On the other hand, Moscow says Western sanctions against its banking and shipping sectors prevent Russia from exporting food and fertilizers and scare foreign shipping companies from transporting them. Russian officials are pushing for sanctions to be lifted to get grain to world markets.

In all these contexts, the two superpowers have softened their position on food exports. At a recent Foreign Ministerial meeting with Turkey, Russia agreed to allow ships carrying grain to leave the port of Odessa in Ukraine.

In a statement, Assistant Secretary of the US State Department’s Bureau of Economic and Trade Affairs, Ramin Toloui, said: “Nothing prevents Russia from exporting its grain or fertilizers except its own policies and actions.” , reported Reuters.

“The United States does not want there to be barriers to the ability of countries, companies to buy Russian food, Russian fertilizers and for these products to access international markets,” Toloui said.

US softened stance could open window on Russian fertilizer imports

“The US statement could reopen the way for fertilizer imports from Russia, which will benefit us a lot,” Agriculture Secretary Md Sayedul Islam said.

However, the payment system will be decided by the Bangladesh Bank and the Ministry of Finance, he also said, adding, “We will take the initiative to import fertilizers after considering the whole issue.”

The agriculture secretary said that before the start of the war in Ukraine in February, Bangladesh had approved a proposal to import 1.8 lakh tonnes of fertilizer from Russia, but it was not possible to do so due to payment complications, he noted.

There have been fertilizer crises around the world since it stopped exporting from Russia and Belarus, leading to several hikes in its prices. As a result, global food production is set to decline further in coming years, global agencies fear.

They think the food crisis could take a more terrible form.

Bangladesh is also suffering from its negative effects.

Agriculture Minister Abdur Razzak said the government used to import fertilizer at $300 a ton from Russia before the war started, but now has to import it from Canada at $1 $200 per ton.

Due to the impossibility of importing fertilizers from Russia, it becomes difficult to ensure the supply of fertilizers to farmers in the next Boro season, he added.

The fertilizer subsidy amounted to Taka 28,000 crore in the current financial year due to imports at four times higher prices.

Peter Obi, Oseni Rufai and the importance of a “no consequence” manifesto, by Rotimi Akinola Tue, 21 Jun 2022 12:48:12 +0000

If left unchecked, Labor Party candidate Peter Obi will degenerate from 2023 election darling into comic relief just to punctuate our predicament.

I seriously warn any serious Nigerian who wants to listen that this seemingly serious former Governor of Anambra might turn out to be a serious joke.

Visit INEC registration centers and see how young Nigerians queue in harsh weather conditions to get registered for voter registration cards. The candidates with whom these young men and women have apparently decided to pitch their tents must repay that energy with serious presidential campaigning.

Obi’s current form smacks of lack of seriousness. And his last interview, the one he had on Sunday with Oseni Rufai, was indicative of this casual trajectory.

Our favorite presidential candidate was praised for his brilliant ideas and asked if he would articulate them in a policy document, aka “manifesto.” Obi’s response made me laugh and I started wondering if his whole campaign wasn’t one big joke that many hadn’t yet appreciated.

“When people talk about my manifesto and my this, I did it somewhere. I don’t need to go and start putting on glossy papers,” Obi said when Rufai pointed out that people were asking to see his manifesto.

Obi said people should go to Anambra and see what he “put into practice” there and see him as a precursor to what he would do if elected president. He then described some of Nigeria’s problems. When asked how he would solve the problem, Obi replied “go to Anambra”.

“But you’re still going to give us a document,” Rufai insisted. Obi continued to insinuate that this would not be necessary because those who have provided manifestos in the past have not delivered on their promises.

“How are you going to solve this problem,” Rufai asked of the issues Obi described regarding education. “Of course go to Anambra,” Obi said. They went back and forth until Rufai, I guess, decided it was best to let the candidate hang himself.

A repercussion of Obi’s laughable disdain for a political document came to light when the candidate was asked about restructuring and the state police. Instead of providing a coherent answer, he just rambled from one unanchored idea to another.

Obi becomes president tomorrow and says we should just trust him and let him lead the country without a constitution? If you think that’s an exaggeration, you haven’t followed the political campaign of Nigeria’s worst president.

Nigerians were disappointed with the Goodluck Jonathan administration, and rightly so. But Muhammadu Buhari and his Southern parcel handlers managed to divert that public discontent behind a Cinderella candidate who has now been at Aso Rock for nearly eight years without issuing a single manifesto. We are the consequences.

When Buhari started implementing his “unmanifested” agenda, his own wife had to shout that her husband had been hijacked by two men who were swimming against the ruling party platform.

If we don’t start holding Obi accountable now, we won’t be able to if he’s elected president. And a manifesto gives us a way to start evaluating an aspiring president’s ideas before they’re implemented.

If Obi’s insistence on a manifesto’s irrelevance is a joke, he needs to come out within a week and make that clear so we can start thinking he’s a clown. Any failure to commit to publishing a manifesto ahead of next year’s poll would amount to an insult to the millions of young Nigerians who sacrifice their flesh and blood to register to vote just because Obi is on the ballot. vote.

All he has to do is sit down with his team of experts and put some consistency into his ideas, then put those ideas to paper. Any serious candidate who is not a placeholder for one of the monster political parties would not find this task unnecessary.

Obi must be very careful. The anger in the streets has, thankfully, turned into the political energy we all crave. Young Nigerians are ready to vote. If Obi mess this up, the love many have for him can easily turn into his antithesis.

Congratulations to him for his excellent performance as Governor for two terms. But Nigeria is not Anambra. You cannot manage a country as complex as ours by “going to check”. If that is all you would say to those asking for a manifesto, then there is no difference between you and the ancestor who rules Lagos.

Any crowd that does not see the merit of this argument may suffer from another variant of Buharidism. And the stakes in 2023 are too high for that kind of deadly joke.

All the King’s Horses and All the King’s Men – The Genoa Conference and the Gold Standard Sun, 19 Jun 2022 14:19:47 +0000

One century ago, many great statesmen of the world gathered in the Italian city of Genoa build a monetary order for the post-war world.

Prior to 1914, the world’s major economies were based on the classic gold standard. This was based on convertibility between paper money and gold at a fixed parity price and on the free export and import of gold.

If a central bank sets a parity price of £5 an ounce of gold, for example, an expansion of the money supply relative to gold reserves would drive the market price up to, say, £6 per ounce. In this case it would make sense to take a £5 note to the bank, buy 1 ounce of gold and resell it in the market for £6. During monetary contractions, the process worked in reverse. If the market price fell to, say, £4 an ounce, it would make sense to buy an ounce of gold in the market for £4 and sell it to the bank for £5. In each case, convertibility corrected for monetary expansion or contraction. During an expansion, gold would flow out of the banks, forcing a contraction in the currency if they wished to maintain their reserve ratios. Similarly, a contraction would see gold flow to banks which would increase their currency issuance.

The First World War broke this system. Countries financed their war efforts by printing money and convertibility and exportability were suspended. Between 1914 and 1918, total metal reserves as a percentage of banknotes plus deposits fell from 63 to 1% in Austria-Hungary, from 57 to 10% in Germany, from 60 to 9% in Italy, from 64 to 17% in France and from 40 to 33% in Great Britain. This caused runaway inflation, followed by a collapse. In 1920, the League of Nations reported:

“Everywhere, the disorder of currency and exchange hinders trade and delays reconstruction. In some countries, it is a primary factor among those that cause a collapse of the economic and social system.

After the war, most countries wanted to return to the gold standard, but faced a problem: there was now a lot more currency in relation to their gold reserves. Gold parity prices were well below market prices, which would lead to massive outflows of gold once convertibility was restored.

To solve this problem, among others, the statesmen met in April and May 1922. Their solution was the gold exchange standard.

The gold exchange standard would resolve the imbalance between money and gold reserves by increasing reserves. But the stock of gold could not be increased beyond new discoveries, so the gold-exchange standard allowed central banks to add to their gold reserves the assets of countries whose currencies were convertible. Golden. In practice, these were pounds sterling and dollars. In 1927, currencies accounted for 42% of the total reserves (gold and currencies) of twenty-four European central banks, compared to 27% in 1924 and 12% in 1913.

But sterling assets were no longer considered ‘as good as gold’. In 1925, Britain’s Chancellor of the Exchequer, Winston Churchill – against his better judgment – restored the convertibility of sterling to pre-war parity. It was too high and helped cripple British exports. Attempts to lower wages through internal devaluation have caused the general strike of 1926. Countries like France and Germany started exchanging their pound for gold. From 1924 to 1928, foreign exchange fell from 59% of Germany’s total reserves to just 8%. Sterling couldn’t cope; liabilities stood at $2.5 billion, nearly four times the Bank of England’s gold reserves.

In 1927, Montagu Norman, Governor of the Bank of England, convinced his friend Benjamin Strong, Governor of the Federal Reserve Bank of New York, to lower the Fed funds rate in the hope of easing pressure on the pound sterling. . Whatever relief this action bought in sterling, some economists saw it as a cause of the stock market bubble that burst so spectacularly in 1929.

The Wall Street crash and its aftermath destroyed the gold exchange standard. As budget deficits mounted, the pound came under renewed pressure in 1931. Unable to pass “austerity” measures, the Labor government collapsed and was replaced by a national government which rapidly devalued (a external devaluation): “Nobody told us that we could do that. observed a Labor politician. With one central country severing its link to gold, others soon followed. By the end of 1932, 32 countries had lost gold. Beggar-thy-neighbor devaluations would continue throughout the 1930s.

The gold standard is sometimes blamed for the Great Depression, but the classic gold standard was history then: as an economist Richard Timberlake note: “The operational gold standard ended forever when the United States became a belligerent in World War I”. The flaws of its successor, the gold-exchange standard, devised a century ago, however, carry much more guilt.

Sri Lanka’s schools and government offices will close as transport stops Fri, 17 Jun 2022 14:16:17 +0000

Published on: Amended:

Colombo (AFP) – Sri Lankan authorities on Friday announced a two-week closure of government offices and schools, with public transport almost entirely at a standstill due to a lack of dollars to pay for imported fuel.

The Ministry of Public Administration has ordered all departments, public establishments and local councils to maintain skeletal services from Monday in response to the acute shortage of petrol and diesel.

“Due to the scarcity of public transport as well as the impossibility of organizing private vehicles, it is decided to drastically reduce the number of employees reporting for work,” the ministry order reads.

Sri Lanka is facing its worst economic crisis since its independence in 1948 and has been unable to fund the import of basic necessities such as food, medicine and fuel since the end of the year last.

The country is also facing record inflation and long power outages, all of which have contributed to months of – sometimes violent – protests calling on President Gotabaya Rajapaksa to step down.

Earlier this week, authorities declared Friday a public holiday, also in a bid to save fuel.

Despite the move, long queues were seen outside pumping stations on Friday, with many motorists saying they had waited days to fill their tanks.

The Department of Education said all schools have been told to remain closed for two weeks from Monday and to provide online education if students and teachers have access to electricity.

The shutdown order came a day after the United Nations launched its emergency response to the island’s unprecedented economic crisis by feeding thousands of pregnant women facing food shortages.

Four out of five people in Sri Lanka have started skipping meals because they cannot afford to eat, the UN has said, warning of a ‘serious humanitarian crisis’ looming with millions in need of food. assistance.

The World Food Program (WFP) said it began distributing food vouchers to around 2,000 pregnant women in “underserved” areas of Colombo on Thursday as part of “life-saving assistance”.

WFP is trying to raise $60 million for food aid between June and December.

Sri Lanka defaulted on its $51 billion foreign debt in April and is in talks with the International Monetary Fund for a bailout.

Merchant Navy Reform Act – The Federal Maritime Commission will take the helm | Adams and Reese LLP Wed, 15 Jun 2022 21:46:36 +0000

A rare bipartisan effort is bringing much-needed reform to U.S. shipping to level the playing field through a new regulatory authority that will impact ocean carriers, marine terminal operators, shippers, motor carriers and others throughout the supply chain.

The Ocean Shipping Reform Act is on its way to President Biden’s desk after it passed the House Monday night. These are the first major revisions to the Shipping Act of 1984 in more than two decades.

The bill revises requirements governing shipping to increase the authority of the Federal Maritime Commission (FMC) to address the many challenges that U.S. shippers have faced in recent years. For example, the bill requires the CMF to:

  • investigate complaints about detention and demurrage charges (i.e. late fees) charged by common carriers;
  • determine whether such fees are reasonable; and
  • seek refunds for unreasonable charges.

It also prohibits common ocean carriers, marine terminal operators or shipping intermediaries from unreasonably denying cargo space when available or using other unfair or unjustly discriminatory methods.

Key points to remember

Detention and demurrage: The law provides a list of information that must be included on detention and demurrage invoices and directs the FMC to begin developing rules to more specifically define prohibited practices by common carriers, marine terminal operators and intermediaries. of maritime transport concerning the assessment of detention and demurrage costs.

Fee Claims and Assessment of Refunds: A person can file complaints with the FMC about charges imposed by a common carrier, after which the FMC will promptly investigate the compliance charge and provide the common carrier with the opportunity to submit additional information. The common carrier will be responsible for establishing the reasonableness of any demurrage or detention charges. If the load does not comply, the FMC orders reimbursement and civil penalties.

Public Disclosure: The FMC will annually publish on its website all findings of false detention and false information on demurrage bills by common carriers and all penalties imposed or imposed on common carriers.

Data gathering: The FMC will publish quarterly reports outlining the total import and export tonnage and the total number of loaded and empty 20-foot equivalent units per vessel (carrying to the United States) operated by each ocean-going common carrier. The common maritime carriers must provide all the information necessary for this report.

Service contracts: The law leaves the door open for the FMC to add to the list of “other essential terms” in service contracts between common ocean carriers and shippers that the FMC may deem necessary or appropriate in future rulemaking.

Register of maritime exchanges: As of the date of the development of the corresponding FMC rules, a person may not operate a shipping exchange (platform connecting shippers with common carriers) involving shipping in the foreign trade of the United States unless such stock exchange is registered with the FMC. The law provides an exception for maritime exchanges which are subject to comparable supervision and regulation by the foreign authorities where the exchange is headquartered.

What does that mean?

The law requires the FMC to begin the process of developing rules on these changes in the coming months. While the intent of the bill is to provide transparency and private sector enforcement of detention and demurrage charges, as well as to provide U.S. exporters with needed relief on cargo space, it It remains to be seen how these laws will ultimately be implemented through the new FMC regulator. . Shipping carriers, shippers and other industry players should stay tuned for updates on FMC’s proposed regulations.

High and hidden taxes driving up the price at the pump Mon, 13 Jun 2022 22:00:41 +0000

presented by the Canadian Taxpayers Federation

To Canadian politicians, the soaring cost of living is like winter’s slush, summer’s mosquitoes and other unfortunate forces of nature. They would like to help, but what can they do?

Here’s an idea: our politicians just have to follow the example of other countries and reduce the pile of hidden taxes they charge at gas pumps.

Canadian drivers pay six different taxes in some major cities. For example, Montreal drivers pay provincial and federal gasoline taxes, provincial and federal sales taxes, public transit tax, and carbon tax. Motorists in Vancouver, where taxes make up 38% of the price at the pump, also pay six different taxes.

With taxes representing more than 55 cents per liter of gasoline on average, a family pays approximately $40 in taxes to fill their van. That’s a lot of money that could help pay for groceries or baseball cleats for the kids.

The federal government and some provinces impose a sales tax in addition to other taxes. That means politicians tax the fuel you need to drive, and then they tax those taxes. This tax on tax adds more than four cents to the average price at the pump.

Provincial politicians can provide relief today by following the example of Alberta, which reduced its fuel tax by 13 cents per litre.

“While the national inflation rate rose in April, the rate fell in Alberta,” said Trevor Tombe, an economist at the University of Calgary. “The fall in gasoline prices because of the tax exemption is the reason.”

Authorities could immediately provide similar relief.

Conservative leadership candidate Pierre Poilievre’s proposal to scrap the carbon tax and suspend federal fuel and gasoline sales taxes would save an Ontario family $20 every time that she fills up her van.

The heavy tax bill that Canadians are paying at the pumps is about to get worse.

The federal carbon tax has increased three times during the pandemic, and Prime Minister Justin Trudeau has said he will continue to raise the carbon tax until it reaches nearly 40 cents per liter in 2030 .

While the Trudeau government claims that “families will be better off for it” thanks to its carbon tax and rebate, the Parliamentary Budget Officer shows that these politicians are using magic calculations. Even at the low end, including the rebate, the Parliamentary Budget Officer’s analysis shows Trudeau’s carbon tax will cost an average family $300 this year, rising to $1,145 in 2030.

The Trudeau government is also imposing a second carbon tax through fuel regulations that could add another 11 cents per liter to gasoline by 2030. But even that is likely a low estimate of the true cost. British Columbia has a second carbon tax that currently costs about 17 cents per liter of gasoline, helping to make British Columbia one of the least affordable places on the planet. And there is no rebate with the second carbon tax.

While Ottawa is imposing higher tax bills on Canadians, there is a long list of other countries doing the right thing.

The UK has announced an $8 billion fuel tax break. South Korea has reduced its gasoline tax by 30%. Germany reduces fuel taxes. The Netherlands reduced its petrol tax by 21%. Italy, Ireland, Israel, India, Peru, Poland, 25 Indian states and union territories, Newfoundland and Labrador, New Jersey and Florida are also reducing taxes on the ‘essence.

Other jurisdictions reduce more than gasoline taxes.

Italy reduced income and business taxes. Spain, France and Austria have reduced electricity taxes. Sri Lanka cuts taxes on food and medicine. Brazil and Colombia reduce import taxes. Turkey reduces taxes on foodstuffs. South Africa has reduced business taxes. Croatia reduced taxes on energy, sanitary products and food. Greece, Algeria and Albania also announced tax relief.

Other countries are showing that it is possible to cut taxes to help mitigate the rising cost of living. There’s no reason why our politicians shouldn’t reduce gas taxes to help Canadians meet their daily needs.

Franco Terrazzano is the Federal Director of the Canadian Taxpayers Federation

Editor’s note: Morinville Online welcomes letters and opinion column submissions from the general public as well as sitting government MPs and groups whose mandate is to hold government to account.

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Why the IMF says food subsidies shouldn’t go to everyone Wed, 08 Jun 2022 21:21:00 +0000

Earlier this year, IMF President Kristalina Georgieva urged governments to subsidize rising food and energy prices “in a very targeted way”, with a focus on the poorest people. (via BBC). Now the fund has doubled down on that language, advising world leaders to think strategically about aid spending.

In a blog post, the IMF has warned world leaders of the economic risks of giving blanket aid to entire national populations rather than focusing on helping those citizens most at risk. Giving aid to large swaths of the population is putting additional strain on already unstable national budgets that are still reeling from pandemic relief costs, the organization has warned.

In response to recent food and fuel price hikes, more than half of the 134 countries studied by the organization have implemented large-scale tax cuts, price subsidies and direct cash transfers in response to the growing global financial crisis. To counter rising food prices and the resulting increase in food insecurity, the IMF has recommended that developed countries invest primarily in expanding social safety nets and domestic food production while implementing temporary economic measures, such as subsidized taxes on food imports, as a safeguard.

No time for a honeymoon Tue, 07 Jun 2022 05:59:42 +0000

Faced with growing challenges at home and abroad, the Albanian government must focus on the long term

Any thought of a honeymoon period for the new Albanian government is already diminishing as challenges mount both at home and abroad. The Reserve Bank of Australia raised interest rates for the second consecutive month today, marking the first consecutive rate hike in 12 years. Wages will remain stable and the cost of living will continue to rise: mortgage repayments are on the rise and the effects of the gas and energy crisis will continue to be felt in the economy for the months to come. On the international stage, the new Prime Minister and his Foreign Minister, Penny Wong, have been swift, but the range of challenges Australia faces in our region alone is daunting. Much has been made of Wong’s early travels to the Pacific neighbors, but none of the issues she will address (most related to China’s territorial influence or climate change) can be immediately resolved. At best, as with Anthony Albanese’s visit to Indonesia this week – and, indeed, as with many of our domestic political issues – the new government has only just begun to weave its way through a pile of neglect. left by the Morrison government. Its immediate task is to find answers that do not aggravate existing problems.

The Reserve Bank raised the official exchange rate 0.5 percentage points more than expected, the biggest one-month increase since the start of 2000, and warned that more rate hikes are on the way. Risk and uncertainty have been entrenched in the economy for many months, as has an expected rise in the rate of inflation. So there is no magic cure for rising costs to consumers, either from the Reserve Bank or the government. There are also other worrying signs: building permits are down 32% this time last year, hitting a construction industry that was already suffering from the collapse of some large companies.

Various commentators are already trying to blame the energy crisis on a government whose ministers have been in office for an entire week, and they have also begun digging into the distant past to find out who is responsible for the failure to put in place energy. a policy that would have reserved some Australian gas for Australian use. Spoiler: neither previous Labor nor Liberal governments introduced one. More recently, and this is for News Corp commentators in particular, we had a Coalition government in power – for nine years.

The only weak gas policy the Morrison government left in place was a trigger that could temporarily limit exports and increase domestic supply. But that won’t work until January at the earliest. Ukraine-related price spikes aren’t going away either. Combined with the costs caused by the collapse of our coal-fired power plants, the winter is going to be difficult for many low-income earners.

Albanese and his new ministers will be tempted to offer temporary relief (especially to low-income people), which will be welcome and needed. The most important thing will be to take a few deep breaths and take a long-term view of what is needed in terms of a steady transition to a cleaner and fairer economy. Labor ministers have had ample time to consider it, so they are likely ready to take action, albeit in the cautious way they have all repeatedly promised.

As with re-engagement with Pacific nations, Albanese’s trip to Indonesia offered promising signs. Our close neighbor is not in the top 10 of our import or export markets. And the relationship has been rocky for many years, to the point where it has sometimes seemed like Australian leaders don’t understand that Indonesia is Southeast Asia’s largest economy, a market of 270 million people. , and that it should be one. of the world’s five largest economies in the future.

Albanese, meeting President Joko Widodo yesterday, acknowledged that Australia’s economic relationship with Indonesia has “struggled to keep pace” with the country’s rise, and his visit so early in his term as Prime Minister is a sign of an intention to change that. If Albanese can also begin to revive shaky relations with China, his government will go a long way to ensuring Australia’s future prosperity and security in the region. It will still be a long road.

Listen to The Politics podcast, featuring Rachel Withers

How to control inflation Sun, 05 Jun 2022 12:42:47 +0000 Policy makers must have breathed a sigh of relief upon hearing the news of GDP growth at 8.7% for the year 2021-22. Based on a 6.6% GDP contraction in 2020-21, it was somewhat in line with expectations. The economy now looks largely out of the shadow of Covid-19, and only a notch better than in 2019-20. But the big question remains: can India achieve similar economic growth in 2022-23? And more importantly, can India contain runaway inflation which is at 7.8% (CPI for April 2022), with food CPI at 8.4% and WPI at over 15%?

My humble assessment is that unless bold and innovative steps are taken on at least three fronts, GDP growth and inflation are both expected to be between 6.5 and 7.5 percent in 2022-23. Targeted policy action is needed on three fronts: first, a rapid tightening of accommodative monetary policy; second, prudent fiscal policy; and third, a sound trade policy. Let me elaborate a bit on each of them.

The Reserve Bank of India (RBI) has a mandate to keep inflation at 4% plus or minus 2%. The RBI has already started the process of monetary policy tightening by raising the repo rate, albeit a bit late in the game. RBI Governor says it is ‘reckless’ to predict he will continue down this path, but the speed at which he can drop to pre-Covid levels is an issue that requires better assessment of the likely consequences of his actions on growth and inflation. A fine calibration would therefore be necessary. I expect that by the end of 2022-2023, the pension rate will be at least 5.5%, if not more. It will always remain below the likely inflation rate and therefore depositors will continue to lose the real value of their money in banks with negative real interest rates. This only reflects an inherent bias in the system – in favor of entrepreneurs in the name of growth and against depositors, which ultimately leads to increased inequality in the system.

The second front on which a strong lifting of weight is needed comes from the mandarins of the Ministry of Finance for a more prudent fiscal policy. It slackened in the wake of Covid-19 which saw the Union government’s budget deficit climb to over 9% in 2020-21 and 6.7% in 2021-22, but now needs to be tightened. Can it reduce its budget deficit to less than 5%, let alone the advice of the FRMB law to reduce it to 3% of GDP? I don’t see that happening, especially when improved food and fertilizer subsidies and cuts in petrol and diesel duties will cost the government at least Rs 3 trillion more than expected in the budget. This will surely push the budget deficit above the 6.4% target unless tax revenues improve significantly or the government does all it can to monetize land and state-owned enterprise assets. My assessment is that fiscal policy will remain loose, more populist and confusing, and the fiscal deficit will remain in the 6.5-7.5% range in 2022-23. I don’t see it going below 5% even by the end of 2023-24.

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The third front is that of a rational trade policy. In a knee-jerk reaction, India announced a ban on wheat exports and imposed restrictions on sugar exports. Calls are also being made to ban cotton exports. Export restrictions/bans go beyond agricultural products, even iron ore and steel etc. in the name of controlling inflation. But blunt export bans are bad trade policy and only reflect the panicked face of the government. A more mature approach to filtering exports would be through a gradual process of minimum export prices and transparent export duties for short periods, rather than blunt bans, if they are desperately needed to promote consumers. However, even with these restrictions/bans on exports, I doubt that the government can control the inflation which is a global phenomenon today. Can India completely isolate itself from the global economy? Can he stop exporting all the products whose prices are rising – from mangoes and corn to fish and spices? A prudent solution to moderate inflation in the country lies in a liberal import policy, reducing tariffs at all levels. Just to cite an example where CPI inflation has been very high and provocative (17% in April) — in the case of edible oils and fats, India reduced tariffs on palm oil , soybean oil and sunflower oil, but customs duties on rapeseed and cottonseed oil remain prohibitive at 38.5% for crude and 49% for refined. The domestic price of mustard oil has increased by more than 47% in the last two years, world prices even more, but our import duties remain at astronomical levels in the name of atmanirbharta. It does not work.

If India is to be atmanirbhar (self-sufficient) in critical commodities where import dependency is unduly high, it must focus on two oils – crude oil and edible oils. In crude oil, India is almost 80% dependent on imports and in edible oils, imports represent 55 to 60% of our domestic consumption. In both cases, agriculture can help. The massive production of ethanol from sugarcane and maize, especially in eastern Uttar Pradesh and northern Bihar, where water is abundant and the water table is replenished every two years approximately by light flooding, is the way to reduce dependence on crude oil imports. And in the case of edible oils, a large program of palm plantations in coastal areas and the northeast is the right strategy. A start has been made on these lines. You have to double it. But if we want to sustainably control food inflation, we must invest in increasing productivity and making agricultural markets more efficient. There is no shortcut.

Gulati is professor of the Infosys chair for agriculture at ICRIER

Biden’s Indo-Pacific economic framework lacks teeth Fri, 03 Jun 2022 16:52:46 +0000

So far, the global conditions are still in the stage of economic recovery from the effects of covid 19. Even in the country where the outbreak originated, the country is still battling the outbreak. Not finished with the epidemic, in early 2022, the world was again shocked by the Russian invasion of Ukraine, although at the beginning the reason for the invasion was not a complex issue, but until now , the four-month-long war has become a new central issue in the world that has caused many problems. dangerous risks to human safety, real or not. The pandemic and the Russian-Ukrainian war are just two of the big issues facing world governments today, we don’t count the minor border wars, the Jewish-Israeli invasion of Palestine, new epidemics that have the potential threaten human life, climate and energy issues. If the epidemic and the Russian-Ukrainian war are today considered as big problems and challenges, it is because the epidemic and the Russian-Ukrainian war threaten the flow of distribution of logistical goods as well as energy . If this is studied further, it could be because the countries that are the main players right now are countries that have great power. The involvement of major powers will become a magnet for other countries, the impact will also be felt by many countries and also the state actors involved. The greatest global impact today is that epidemics and wars have threatened global economic stability. At least there are about 10 countries in the world that have experienced inflation and are threatened with recession in the second quarter of 2022.

Understanding Recession, Crisis, Inflation and Depression

Several major countries in the world are currently experiencing high rates of inflation, and are even experiencing a period of recession. Before discussing further inflation and stagflation, it is necessary to recall a few terms in the threat of the economic environment. Economists use at least four terms to describe economic threats, namely:


A recession is a period when a country’s economic growth declines for two consecutive quarters. A recession is usually marked by a decline in purchasing power and an increase in unemployment. The difference between a recession and a crisis is that the impact of a recession is more evenly distributed across all sectors of the economy. The elements that cause a recession, for example, are the economic shocks due to the pandemic, excessive indebtedness and inefficient investments. Moreover, uncontrolled deflation can also be the cause of a recession. Deflation itself means that prices fall from time to time, causing wages to contract and continuing to drive prices down. This puts a stop to shopping activities.


Crisis is a situation where several economic indicators decrease drastically in a country. This is due to fragile economic fundamentals, as evidenced by slowing economic growth. Signs of an economic crisis are usually manifested by declining government spending capacity, low purchasing power of the population, and rising commodity prices.

The difference between a recession and a crisis is its impact, i.e. a recession can be deeper and more widespread over a longer period than a crisis.


Inflation is a condition in which the price of goods and services increases continuously for a certain period of time. Inflation is caused by an increase in the circulation of money in society, an increase in production costs and an imbalance between supply and demand. The impact of inflation can lower people’s purchasing power. If the purchasing power decreases within a certain period of time, it will automatically lead to a decline in economic growth, which can lead to a recession. The existence of inflation can also potentially be the cause of a crisis, or even a recession.

Economic depression

In the meantime, what is most feared if the recession does not end is economic depression. An economic depression can also be referred to as an extreme recession that lasts up to two consecutive years. In other words, if there is an economic depression, it means that the economic problems cannot be solved. This leads to a worsening of the impact, such as higher unemployment rates and has a global impact.

The inflationary tsunami swept countries in the United States, Europe and other countries. At least 60% of countries have an annual inflation rate above 5%. In developing countries, inflation can be above 7%. According to data from Trading Economics in April 2022, there were at least 10 countries with the highest inflation with Venezuela in the first place with high inflation reaching 222%, followed by Zimbabwe, which was 96.40%, then Turkey, which almost reached 70% in April. then. Uncertain economic growth causes recessions and crises. The global consensus is now that global economic growth will average just 3.3% this year, down from the 4.1% expected last January, before the outbreak of war. Global inflation is forecast at 6.2%, 2.25% higher than last January’s forecast. The IMF has lowered its forecast for the 143 countries this year which account for 86% of the world’s gross domestic product (GDP).

The threat of global stagflation 2022

The fact that many countries in the world must take into account today is higher inflation and slower economic growth. Today, the world faces a new condition of global economic threat, namely “stagflation” which is already in sight. Stagflation is the rate at which inflation exceeds expectations, while expectations for growth decline rapidly. In another description, stagflation is described as a characteristic in which the price of goods continues to be high while income does not increase. Stagflation reflects a time when no matter how hard you try to make money, the money you collect is not enough to meet the commodity exchange rate, when there is no of economic value activity that can be carried out due to the scarcity of materials, which leads to an increase in the number of unemployed. Stagflation is also defined as a condition of unemployment accompanied by inflation. Stagflation presents a tough choice for policymakers, which is the right path, the right tactic, and the right time. So far, the price of basic necessities in the market has been steadily rising, while the exchange rate is still weak, while jobs are increasingly difficult, wages and salaries have not not increased, while basic needs continue to soar.

Will inflation and the threat of stagflation change current power?

Economic strength is part of a country’s soft power, although it is undeniable that it is currently very difficult to avoid a real (military) war. Both types of power (soft and hard) are very transparent and easy to feel, even information spreads so quickly in the world. The situation where the domination of these two powers at the same time characterizes the current pattern of the world state order. We see that for years America held the top spot of world power, after the end of World War II there was a polar shift of power to America, where America led and also controlled the world’s culture, education, economy, and even weapons, so there was no choice but to follow America or have no place in this world. However, now things are starting to change. A weak US dollar and a strengthening Russian ruble reflect the characteristics of power in its current soft form. It turned out that the sanctions imposed on Russia did not worsen the situation of the country, the economic policies of Russia which raised the prices of gas and oil and required purchases in ruble forced the sanctioning countries to rethink the imposition of sanctions on Russia, because Russia is the largest energy exporting country. Coal and natural gas are essential for the survival of life, especially during the deadly winter. A protracted war between Russia and Ukraine could expose the world to the worst economic risk ever imagined. Not only the countries that are at war, the impact of the current change is also being felt by other countries, like it or not, state actors must be smart in taking partisan decisions with all the risks that they incur, it is very difficult to be neutral for developing countries, if they are pro- one of them will accept the risk, but if he is neutral he will be accused of being a traitor by both parts. However, withdrawing completely is impossible, since countries that are not involved in the war need energy supplies from the belligerent countries, be it energy or food, so there is no eternal enemy or eternal friend, there are only eternal interests. . What should be done is not to become too dependent on others, at the state level, it is time to reduce dependence on goods and energy from outside, create new breakthroughs, minimize exports. At the individual level, what needs to be done is to reduce consumption behaviors and get used to simple patterns and lifestyles and reduce dependence on government and certain actors.