Poverty rises; a generation’s future ‘slipping away’

Most of those newly at risk are in sub-Saharan Africa, which had some of the world’s fastest growing economies in recent years. (Reuters/File)
Short Url
Updated 11 August 2020
Follow

Poverty rises; a generation’s future ‘slipping away’

  • 100 million more people globally likely to fall into bitter existence of living on just $1.90 a day: World Bank

ADDIS ABABA: As a domestic worker, Amsale Hailemariam knew well the luxury villas that had grown up around her simple shelter of raw metal and plastic sheeting. In them, she saw how her country, Ethiopia, had transformed.

“Oh God, a day will come when my life will be changed, too,” she thought. The key lay in her daughter, months from a career in public health. Then a virus mentioned in none of her textbooks arrived, and dreams began to fade.

Decades of progress in one of modern history’s greatest achievements, the fight against extreme poverty, are in danger of slipping away because of the COVID-19 pandemic. The world could see its first increase in extreme poverty in 22 years after whittling it down to 10 percent of the population, further sharpening inequalities.

“We are living in a state where we are above the dead and below the living,” Amsale said, near tears. “This is not life.”

Up to 100 million more people globally could fall into the bitter existence of living on just $1.90 a day, according to the World Bank. That’s “well below any reasonable conception of a life with dignity,” the United Nations special rapporteur on extreme poverty wrote this year. It comes on top of the 736 million people already there, half in just five countries: Ethiopia, India, Nigeria, Congo and Bangladesh.

Even China, Indonesia and South Africa are expected to have more than 1 million people each fall into extreme poverty, the World Bank says.

“It’s a huge, huge setback for the entire world,” said former US Agency for International Development administrator Gayle Smith, now president of the ONE Campaign. She called the international response to the overall crisis “stunningly meager.”

Most of those newly at risk are in sub-Saharan Africa, which had some of the world’s fastest growing economies in recent years. The World Bank shared with the AP the earliest data out of Ethiopia as it takes a global measure of the pandemic’s effects. Similar efforts are underway in more than 100 countries.

Ethiopia had boasted of one of the world’s most dynamic economies. Its transformation began in 1991, when the country was exhausted by war. A new leader, Meles Zenawi, was shaking off years of Marxist dictatorship and terrifying drought whose images of withered children left the world aghast. His legacy would be the emergence of millions from grinding poverty.

Amsale and her newborn daughter, Bethlehem Jafar, were newly arrived in the capital, Addis Ababa. Amsale scraped by through manual labor, vowing her girl would never do the same.

Ethiopia’s government looked to emulate China’s astonishing lifting of more than 800 million people from poverty. Some people embraced new manufacturing jobs. Others joined the growing sectors of hospitality, services and aviation, hoping to join Africa’s expanding middle class.

Ethiopia’s number of people in extreme poverty dropped from nearly half the population in the mid-1990s to 23 percent two decades later. “Impressive,” the World Bank said.

Addis Ababa, already Africa’s diplomatic capital, became its aviation hub. Under the country’s Nobel Peace Prize-winning Prime Minister Abiy Ahmed, the city has seen a wave of new construction. And a source of national pride is a massive dam near completion on the Nile, a bid to pull millions more from poverty.

Now the country, along with Congo, Kenya, Nigeria, and South Africa, is expected to see half of sub-Saharan Africa’s new extreme poor.

Ethiopia’s prime minister has taken the global lead in appealing to rich countries to cancel the debt of poorer ones, saying his country spends twice as much on paying off external debt as it does on health.

Fitsum Dagmawi has heard his countrymen’s fear. He is calling fellow citizens for the World Bank survey and asking how their lives have changed.

Some ask him: What will we do now? “I will have to struggle,” one head of a household said.

The first round of calls to 3,200 households found a 61 percent drop in employment, with many job losses in sectors tied to growth: Construction, hospitality, restaurants, big hotels. The second round saw a partial rebound, but that doesn’t mean people resumed the same stable jobs.

“Small shocks in income can have devastating effects,” World Bank senior economist Christina Wieser said.

For some Ethiopians, destitution is near. Nineteen percent of households are already eating less. 

A quarter reported running out of food in the last 30 days.

So much depends on how long the pandemic lasts. The African Development Bank once assumed that COVID-19 would subside by June, country director Abdul Kamara said. Now, he said, “decades of poverty reduction in Ethiopia could be lost.”

Some 2.5 million jobs are threatened, he said, roughly the same number of Ethiopians who enter the workforce every year.

For a young woman like Bethlehem, the future seems in shambles. She now shelters with her mother just steps away from an overflowing public toilet. The neighbors who once welcomed Amsale into their homes to cook and clean now turn her away, fearing the virus.

Mother and daughter make do with the equivalent of $34 a month for helping with projects like sweeping the streets. But Amsale doesn’t like to go out, fearing infection.

They believe life will only become more difficult. “I really hope some vaccines will be available soon,” Bethlehem said.


Oil Updates – prices climb amid US stocks decline, Middle East conflict

Updated 6 sec ago
Follow

Oil Updates – prices climb amid US stocks decline, Middle East conflict

TOKYO: Oil prices extended gains on Wednesday after industry data showed a surprise drop in US crude stocks last week, a positive sign for demand, though markets were also keeping a close eye on hostilities in the Middle East, according to Reuters

Brent crude futures rose 26 cents, or 0.29 percent, to $88.68 a barrel and US West Texas Intermediate crude futures climbed 26 cents, or 0.31 percent, to $83.62 a barrel at 9:34 a.m. Saudi time.

US crude inventories fell 3.237 million barrels in the week ended April 19, according to market sources citing American Petroleum Institute figures. In contrast, six analysts polled by Reuters had expected a rise of 800,000 barrels.

Traders will be watching for the official US data on oil and product stockpiles due at 5:30 p.m. Saudi time for confirmation of the big drawdown.

US business activity cooled in April to a four-month low, with S&P Global saying on Tuesday that its flash Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 50.9 this month from 52.1 in March.

“This could help convince policy makers that rate cuts are required to support the economy,” ANZ analysts said in a note.

US interest rate cuts could bolster economic growth and, in turn, demand for oil from the world’s top consumer of the fuel.

Analysts were still bullish that any latest developments in conflicts in the Middle East will still support markets, though the impact on oil supplies remains limited for now.

“Overall, crude oil prices are well supported around current levels by on-going Middle East risk premium. On the topside, risk of possible renewed OPEC production increase from Jun will help limit any significant upside,” said head of markets strategy for United Overseas Bank in Singapore Heng Koon How.

“We maintain our forecast for Brent to consolidate at USD 90/bbl by end of this year,” Heng added.

Israeli strikes intensified across Gaza on Tuesday, in some of the heaviest shelling in weeks.

“Recent reports suggest that both Iran and Israel consider the current operations concluded against one another, with no follow-up action required for now,” ING analysts said in a note.

“The US and Europe are preparing for new sanctions against Iran – although these may not have a material impact on oil supply in the immediate term,” they added.
 


Pakistan Stock Exchange hits record high, breaks 72,000 points in intraday trade

Updated 24 April 2024
Follow

Pakistan Stock Exchange hits record high, breaks 72,000 points in intraday trade

  • Analysts say investors expect a significant decline in April inflation data that may lead to a cut in interest rates
  • The Pakistani bourse has recently been trading at record highs due to hopes of positive loan talks with the IMF

ISLAMABAD: Pakistan’s benchmark share index breached the key level of 72,000 to trade at a record high of 72,414 points during intraday trade earlier on Wednesday, according to data from the Pakistan Stock Exchange website.

The Pakistani bourse has recently been trading at record highs amid positive sentiment prevailing among investors due to hopes of the country’s successful talks with the International Monetary Fund (IMF) for a new loan program.

The country’s finance minister, Muhammad Aurangzeb, recently visited Washington to hold talks with IMF officials for a long-term bailout facility as Pakistan’s current $3 billion program is due to expire this month.

The finance minister expressed hopes the outline of the new program would soon become visible, adding that the loan would help Pakistan continue with structural economic reforms.

“After a record current account surplus, investors are now expecting a big fall in April inflation data that may result in a cut in interest rates in the coming months,” Sohail Mohammed, CEO of Karachi-based brokerage company Topline Securities, told Reuters.

Pakistan’s benchmark KSE100 index has surged 75.5 percent over the past year and is up 11.5 percent year-to-date.

The equity market is expected to surge further as an IMF delegation arrives in Pakistan next month to determine the contours of the new loan facility.

“We are still hoping that we can get into a staff-level agreement [with the IMF] by the time June is done or early July so that we can move on,” the finance minister said on Tuesday while addressing a news conference in Islamabad.

With input from Reuters


Saudi Arabia’s non-oil exports surge by 4.4% in February: GASTAT 

Updated 24 April 2024
Follow

Saudi Arabia’s non-oil exports surge by 4.4% in February: GASTAT 

RIYADH: Saudi Arabia’s non-oil exports, including re-exports, saw a surge of 4.4 percent in February compared to the same period the previous year, official data showed. 

According to the General Authority for Statistics, the total value of non-oil exports in February reached SR21.86 billion ($5.83 billion), marking a rise from SR20.93 billion in the corresponding period of the preceding year. 

The increase in non-oil shipments was driven by an 8.3 percent surge in the exports of rubber and plastic products in February, constituting 24.1 percent of the total exports.  

Strengthening the non-oil private sector remains pivotal for Saudi Arabia, as the Kingdom continues its economic diversification efforts aimed at reducing reliance on oil. 

The report unveiled a 4.1 percent year-on-year decrease in the Kingdom’s non-oil exports, excluding re-exports, in February. Conversely, the value of re-exported goods surged by 32.3 percent during the same period. 

However, GASTAT noted that Saudi Arabia’s overall merchandise shipments decreased by 2 percent in February compared to the year-ago period.  

This decline was primarily attributed to a 3.8 percent decrease in oil exports in February compared to the same month in 2023, according to the report.


UBS gets green light to open Saudi branch for banking operations

Updated 23 April 2024
Follow

UBS gets green light to open Saudi branch for banking operations

RIYADH: In a move aimed at enhancing Saudi Arabia’s financial landscape, the Kingdom has granted permission for a branch of the Swiss bank UBS to operate within the nation. 

According to the Saudi Press Agency, the approval was granted during a session chaired by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud, held by the Cabinet in Jeddah on April 23.

The session commenced with King Salman briefing the Cabinet on the recent communications and discussions held between the Kingdom and several countries regarding shared relations, regional issues, and global developments, as reported by SPA.

In this context, the Cabinet reaffirmed Saudi Arabia’s steadfast stance toward promoting security and stability in the region and the world. 

The Minister of Media, Salman bin Yousef Al-Dossary, stated in a press release following the session that the Cabinet praised the outcomes of the second ministerial meeting of the dialogue between the Gulf Cooperation Council countries and Central Asian countries. 

He emphasized the Kingdom’s commitment to continue strengthening communication channels with various countries worldwide and supporting areas of joint coordination, including multilateral efforts.

Additionally, the Cabinet expressed its appreciation for the participants of the forthcoming World Economic Forum special meeting, set to take place in Riyadh in the upcoming week, highlighting the Kingdom’s dedication to encouraging global collaboration and tackling shared challenges.

Moreover, the Cabinet announced that the World Bank had selected Saudi Arabia as a center for knowledge dissemination to promote worldwide awareness of economic reforms, underscoring its leadership in achieving significant progress in global competitiveness indicators.

Al-Dossary further highlighted that the Cabinet applauded the achievement of five Saudi cities in obtaining advanced positions in the 2024 Smart Cities Index.

Following today’s session, the Cabinet approved cooperation agreements with Qatar, the Dominican Republic and the UK as well as Turkey, Chad, Portugal, Hong Kong, and Yemen.

Additionally, the body authorized discussions regarding statistical collaboration with Australia and maritime cooperation with Egypt. It also endorsed anti-corruption agreements with South Korea, archival partnerships with Greece, and financial technology collaboration with Singapore.

Authorization was granted for negotiations on science and technology cooperation with the Bahamas. A unified law for international road transport within GCC countries was approved, and additional compensation was granted to Tabah village’s affected families in the Hail region. 

Furthermore, final accounts for various government entities were approved.


UAE and Oman establish $35bn investment partnerships across multiple sectors 

Updated 23 April 2024
Follow

UAE and Oman establish $35bn investment partnerships across multiple sectors 

RIYADH: Trade and economic ties between the UAE and Oman are set to further strengthen thanks to the signing of investment deals worth 129 billion dirhams ($35.12 billion).  

According to a press statement, these agreements cover multiple sectors, including renewable energy, green metals, railway, digital infrastructure, and technology investments. 

Economic ties between the UAE and Oman have remained robust in recent years, with non-oil trade volumes reaching approximately 50 billion dirhams in 2023. 

“The UAE and Oman have strong historical relations that are founded on shared values, goals and principles. The agreements represent a major milestone in our bilateral ties, as they pave the way for us to leverage our collective strength to realize our shared vision of advancement and prosperity,” said Mohamed Hassan Al-Suwaidi, UAE’s minister of investment.  

One of the major agreements signed by both countries was an industrial and energy megaproject valued at 117 billion dirhams. This project encompasses renewable energy initiatives, including solar and wind projects, alongside green metals production facilities. 

The deal’s signatories included Abu Dhabi National Energy Co., Abu Dhabi Future Energy Co., and Emirates Global Aluminium, as well as Emirates Steel Arkan, OQ Alternative Energy, and Oman Electricity Transmission Co. 

Another agreement, valued at 660 million dirhams, was signed between Abu Dhabi Developmental Holding Co. and Oman Investment Authority to establish a technology-focused fund. 

A UAE-Oman rail connectivity project, valued at 11 billion dirhams, was also inked by both countries. 

Additionally, UAE’s Ministry of Investment and the Ministry of Commerce and Trade signed another deal with Oman’s Ministry of Investment Promotion to cooperate in multiple sectors, including digital infrastructure, food security, and energy. 

Etihad Rail, Mubadala, and Omani Asyad Group Co. signed a shareholding partnership valued at 3 billion dirhams. 

Both countries also announced the formation of a UAE-Oman alliance to enhance bilateral economic and trade relations. 

The UAE’s Ministry of Investment, in the press statement, further noted that the signing of these agreements will serve to bolster relations across key sectors and foster socio-economic benefits, contributing toward a stable and prosperous future for both countries.