Latest news with #developedworld

FIRST READING: Everything (except Mark Carney's approval rating) is getting worse

National Post

16 hours ago

Business
National Post

FIRST READING: Everything (except Mark Carney's approval rating) is getting worse

Article content Canada has a Superintendent of Bankruptcies that keeps regular stats on just how many Canadians are going under each month. And according to data compiled by the site Better Dwelling, consumer insolvencies hit 11,464 in June. That's higher than any point since 2010, when the last cohort of victims from the 2008 Great Recession were finally throwing in the towel. Article content More concerning is that the most severe type of insolvency — bankruptcy — is growing at an outsized rate. This is where we should mention that Canadian household debt is one of the highest in the developed world, with total consumer debt in Canada hitting a historic high of $2.5 trillion in February, according to a report by the financial analyst firm TransUnion. Article content The share of workers collecting a government paycheque is at generational highs Article content It's been widely reported that youth unemployment is hitting highs not seen in a generation. But Canada's overall employment rate is also getting steadily worse. The share of Canadians 15 years or older who have a job is now down to just 60.9 per cent. When omitting the temporary job losses caused by COVID lockdowns, that's the lowest sustained employment rate Canada has seen since the 1990s. Article content With job losses occurring way faster in the private sector than in the public sector, the share of government jobs in the Canadian economy has now hit a high of 21.7 per cent. In other words, there is now a civil servant for every four Canadians employed in the private sector. Article content There are now more bureaucrats in the job market than at any point since the early 1990s, just before a sovereign debt crisis compelled a rapid reduction in the size of the Canadian government. Article content There's nothing inherently wrong with a trade deficit. The term merely refers to whether a country imports more than it exports, and need not have any connection with GDP or national wealth. The United States, notably, has spent decades with both a trade deficit and the world's largest economy. Article content However, given the share of the Canadian economy devoted to export industries, it's of some concern that the Canadian trade deficit is hitting lows never seen before. According to recent Statistics Canada figures, April and June both posted the largest Canadian trade deficits on record, at $7.6 billion and $5.9 billion, respectively. Article content Article content Article content The Carney government has already backed off on some of the more sweeping housing pledges it made during the 2025 election. While the Liberal campaign had promised to restore affordability with the 'most ambitious housing plan since the Second World War,' this was quickly checked by official assurances that housing prices wouldn't actually be going down. Article content And for the foreseeable future, Canadian real estate is set to remain some of the most unaffordable on earth. Article content Housing construction is poised to fall dramatically in the coming years, exacerbating the housing shortage at the core of the Canadian affordability crisis. In Ontario, for instance, housing starts have already charted a 25 per cent drop as compared to last year. Article content

Rethinking development in an era of upheaval

Arab News

3 days ago

Business
Arab News

Rethinking development in an era of upheaval

For many developing countries, the global economic landscape has shifted dramatically in recent years. Lower growth, disrupted supply chains, reduced aid flows and heightened financial market volatility represent significant headwinds. Underpinning these changes is a fundamental restructuring, driven by the developed world, of the postwar economic and financial order. Against this background, a handful of factors are becoming critically important for the current and future well-being of developing countries — and for the fate of multilateral institutions. For much of the period following the Second World War, the global economic and financial order operated as a core-periphery construct, with the US at its center. The US provided global public goods, led multicountry policy coordination and acted as a crisis manager, in accordance with a widely accepted set of rules and standards. The end goal was eventual convergence, securing an ever more integrated and prosperous world economy. But three factors undermined this order. First, insufficient attention was paid to increasingly destabilizing distributional outcomes, leading to widespread alienation and marginalization within politically influential segments of society. Instead of continuing to influence politics, economics became subservient to it. Second, the existing order struggled to integrate rapidly expanding large developing countries. The most notable example is China, whose immense economy but relatively low per capita income created a persistent misalignment between its domestic development priorities and its new global responsibilities. The world could no longer smoothly absorb the external consequences of China's economic strategy, generating tensions that international governance structures have struggled to resolve. There is nothing to replace the traditional core-periphery model, resulting in a bumpy journey toward an unclear destination Mohamed A. El-Erian The third factor was the transformation of the US from a stabilizing force to a source of volatility. Contributing to this development were the 2008 global financial crisis (which originated in the US), the weaponization of tariffs against China in 2018 and the increasing use of payment system sanctions. It accelerated in recent years with the failure to ensure the equitable global distribution of COVID-19 vaccines, the 'uber-weaponization' of tariffs against friends and foes alike, the dismantling of America's foreign aid system, and continued indifference to devastating humanitarian crises and repeated violations of international law. While the traditional core-periphery model is inherently ill-equipped to handle all this, there is nothing to replace it, resulting in a bumpy journey toward an unclear destination. Despite this, developing countries have navigated the changing landscape relatively well so far. Their success can be attributed largely to hard-won policy achievements, including the strengthening of macroeconomic frameworks and institutions in recent decades. But to maintain this positive trajectory in an increasingly challenging external environment, developing countries must affirm four key policy priorities. The first is to preserve macroeconomic stability while aggressively addressing any structural and financial vulnerabilities, including shallow domestic financial markets, weak regulatory frameworks and governance deficits. The second priority is to strengthen international links that boost resilience, improve agility and expand optionality. This requires coordinated, multiyear efforts to harmonize regulations, foster regional financial integration and build trade infrastructure. Multilateral institutions such as the World Bank and regional development banks have a crucial role to play Mohamed A. El-Erian Third, developing countries should prepare themselves to exploit the new opportunities created by innovations — from productivity enhancements in traditional sectors to improvements in social sectors where investment in human capital has the highest returns. Artificial intelligence, in particular, holds immense potential to revolutionize medicine, education and agriculture, which could help these countries leapfrog traditional development stages. Building a supportive ecosystem requires investing in digital infrastructure, cultivating a skilled workforce and developing an innovation-friendly regulatory environment. Lastly, with many US assets appearing overvalued and US Treasuries becoming more volatile, the small but strategically important subgroup of developing countries with high levels of foreign reserves and substantial financial wealth in dollars is being pushed to reconsider their holdings' traditional US overweight. This process will inevitably be protracted and complex and will require careful asset disaggregation, revised asset-allocation methodologies and new investment mindsets that look beyond conventional safe havens. Multilateral institutions such as the World Bank and regional development banks have a crucial role to play in helping their members pursue such an approach. To become trusted advisers, these institutions must get better at compiling and disseminating best practices for new and evolving technologies that can improve health, educational and productivity outcomes, and they must do more to promote these technologies' uptake. For example, their staff must be equipped to answer questions about interacting with AI agents, leveraging innovations to deliver essential services and managing the attendant risks. Multilateral institutions should also encourage regional links and projects that facilitate trade, expand cross-border infrastructure and promote shared resource management. And in a world shaped increasingly by frequent shocks, there is an urgent need to enhance contingency funding facilities, such as by strengthening risk-sharing tools. Of course, this should not undermine the essential work that these institutions perform in fragile countries. Given the overwhelming evidence that traditional development models struggle in countries with such serious governance and security challenges, this, too, is an area that requires more out-of-the-box thinking. AI and other emerging technologies provide developing countries with a rare opportunity to unlock new pathways to inclusive economic growth. But exploiting this historic opportunity is far from automatic. Unless developing countries create the conditions necessary for the efficient and equitable diffusion of such innovations throughout their economies — starting, crucially, with the health and education sectors — they risk falling further behind, causing inequalities within and between countries to deepen and accelerating the fragmentation of the global order. • Mohamed A. El-Erian, President of Queens' College at the University of Cambridge, is a professor at the Wharton School of the University of Pennsylvania, an adviser to Allianz, and Chair of Gramercy Fund Management. This commentary is based on the author's keynote presentation at the 2025 Annual Bank Conference on Development Economics. © Project Syndicate

Swiss Leaders Seek Talks With Roche, Novartis After US Tariffs

Bloomberg

10-08-2025

Business
Bloomberg

Swiss Leaders Seek Talks With Roche, Novartis After US Tariffs

Switzerland's government has reached out to local drugmakers Roche Holding AG and Novartis AG to discuss the tariff situation, a spokesperson said, after the country was hit with the highest US levies in the developed world. Economy Minister Guy Parmelin and Interior Minister Elisabeth Baume-Schneider will meet top executives of the two companies for a crisis summit on the future of the Swiss pharma industry, SonntagsBlick reported on Sunday. Other producers will participate as well, the newspaper added.

HAMISH MCRAE: We can fight inflation - here's how

Daily Mail

09-08-2025

Business
Daily Mail

HAMISH MCRAE: We can fight inflation - here's how

Stand by for another surge in inflation. It will happen here and we have a poor record on it compared with the rest of the developed world. But this is a global thing, not just a British one, and we have to arm ourselves against it. We had a glimpse of our own future last week. The Bank of England expects inflation to rise through the autumn and it looks as though it will hit 4 per cent in October, double its target. Indeed inflation will probably stay above target right through next year and beyond. So what does the Bank do? It cuts interest rates. True, there were four sensible members of the Monetary Policy Committee who voted against the cut and it looks like there will be no further cuts this year. I still expect the next movement to be up, not down, though so far I have been ahead of the market on that. It's not all the fault of the Bank. Much of the blame lies with the Government. Whatever you think about the rises in living wage and National Insurance contributions the fact is they have increased costs, particularly for supermarkets and the hospitality industry. Food prices are 4.5 per cent up on the year, and look like rising further through the autumn. The combination of the Government's net zero and other environmental policies adds 16 per cent to a typical household's electricity bill. That's from a House of Lords study this year. Governments may want to follow these policies but they need to be honest about their impact on inflation and hence on living standards. The UK has become an outlier on inflation, but we seem likely to be joined by the US, which matters vastly more for the world. There's the whole business about Donald Trump's attacks on the chair of the Federal Reserve, Jerome Powell, and who he might appoint to succeed him. We can assume that, whoever it is, the US will have looser monetary policies next year. More immediately there is the effect of tariffs, which put up prices not just in America but everywhere. We don't know by how much, because the tariffs are only just coming in, but we do know that anything that gums up global trade raises costs. We all pay for that in higher inflation. So what's to be done? Here there's a glimmer of hope. It's competition. Politicians don't really care about price rises; they say they do, but they don't. Central banks everywhere have underestimated the danger of the resurgence of inflation, and now are, with the possible exception of the European Central Bank, too weak to take the steps needed to crush it. But the private sector can and must help. An example. You may have noticed a story last week that Lidl has replaced Aldi as Britain's cheapest supermarket. We're supposed to be good at retailing, Napoleon's jibe that we were 'a nation of shopkeepers' and all that. But it has taken two German-owned groups to revolutionise our food distribution. Go into Tesco and the signs have a little tick and say Aldi Price Match. They don't say Sainsbury's price match, though that's number two behind it in sales. It's foreign competition that is taming our shopping bills. There's the challenge: to use our power as consumers to squeeze down inflation. If a restaurant imposes an extra charge on a meal, or pads its prices, go elsewhere. If an energy supplier ups the electricity bill, find another. The same goes for other services. If your bank cuts the interest rate on savings, move your cash elsewhere. And so on. It's an attitude to apply to taxation, too. If, as I expect, the Chancellor raises fuel duty and other taxes in the autumn, you follow the incentives. If that means driving (or drinking) less, so be it. We have already seen a response to higher taxation in capital gains tax revenues since the last Government cut the tax-free limits. Many people decided not to take the hit, held on to their assets instead and revenues fell by 18 per cent in the 2023-24 tax year. Ultimately it is not in our power to control inflation. If Government policies push it up and the Bank of England fails to curb it, then it's ordinary people who are hammered. But we can fight back and must do so in the months ahead.

How Switzerland's Tariff Drama Swung From Hope to Despair