We must work together to end the pandemic, navigate monetary tightening and shift focus to fiscal sustainability.
When the Group of Twenty finance ministers and central bank governors gather in Jakarta, in person and virtually, this week, they can take inspiration from the Indonesian phrase, gotong royong, “working together to achieve a common goal. This spirit is more important than ever as countries are facing a tough obstacle course this year.
The good news is that the global economic recovery continues, but its pace has moderated amid high uncertainty and rising risks. Three weeks ago, we cut our global forecast to a still-healthy 4.4 percent for 2022, partly because of a reassessment of growth prospects in the United States and China.
Since then, economic indicators have continued to point to weaker growth momentum, due to the Omicron variant and persistent supply chain disruptions. Inflation readings have been higher than expected in many economies; financial markets remain volatile; and geopolitical tensions have sharply increased.
That is why we need strong international cooperation and extraordinary agility. For most countries, this means continuing to support growth and employment while keeping inflation under control and maintaining financial stability—all in the context of high debt levels.
Our new report to the G20 shows just how complex this obstacle course is and what policymakers can do to get through it. Let me highlight three priorities:
First, we need broader efforts to fight ‘economic long-Covid’
We project cumulative global output losses from the pandemic of nearly $13.8 trillion through 2024. Omicron is the latest reminder that a durable and inclusive recovery is impossible while the pandemic continues.
But considerable uncertainty remains about the path of the virus post-Omicron, including the durability of protection offered by vaccines or prior infections, and the risk of new variants.
In this environment, our best defense is to move from a singular focus on vaccines to ensuring each country has equitable access to a comprehensive COVID-19 toolkit with vaccines, tests, and treatments. Keeping these tools updated as the virus evolves will require ongoing investments in medical research, disease surveillance, and health systems that reach the “last mile” into every community.
Upfront financing of $23.4 billion to close the ACT-Accelerator funding gap will be an important down payment on distributing this dynamic toolkit everywhere. Going forward, enhanced coordination between G20 finance and health ministries is essential to increasing resilience—both to potential new SARS-CoV-2 variants, and future pandemics that could pose systemic risks.
Ending the pandemic will also help address the scars from economic long-COVID. Think of the profound disruptions in many businesses and labor markets. And think of the cost to students worldwide, estimated at up to $17 trillion over their lives due to learning losses, lower productivity, and employment disruptions.
School closures have been especially acute for students in emerging economies where educational attainment was much lower to begin with—threatening to compound the dangerous divergence among countries.
What can be done? Strong policy action. Scaling up social spending, reskilling programs, remedial training for teachers and tutoring for students will help economies get back on track and build resilience to future health and economic challenges.
Second, countries need to navigate the monetary tightening cycle
While there is significant differentiation across economies and high uncertainty going forward, inflation pressures have been building in many countries, calling for a withdrawal of monetary accommodation where necessary.
Going forward, it is important to calibrate policies to country circumstances. It means withdrawal of monetary accommodation in countries such as the United States and the United Kingdom, where labor markets are tight and inflation expectations are rising. Others, including the euro area, can afford to act more slowly, especially if the rise in inflation relates largely to energy prices. But they, too, should be ready to act if economic data warrants a faster policy pivot.
Of course, clear communication of any shift remains essential to safeguard financial stability at home and abroad. Some emerging and developing economies have already been forced to combat inflation by raising interest rates. And the policy pivot in advanced economies may require additional tightening across a wider range of nations. This would sharpen the already difficult trade-off countries face in taming inflation while supporting growth and employment.
So far, global financial conditions have remained relatively favorable, partly because of negative real interest rates in most G20 countries. But if these financial conditions tighten suddenly, emerging and developing countries must be ready for potential capital flow reversals.
To prepare for this, borrowers should extend debt maturities where feasible now , while containing a further buildup of foreign currency debts. When shocks do come, flexible exchange rates are important for absorbing them, in most cases, but they are not the only tool available.
In the event of high volatility, foreign exchange interventions may be appropriate, as Indonesia successfully did in 2020. Capital flow management measures may also be sensible in times of economic or financial crisis: think of Iceland in 2008 and Cyprus in 2013. And countries can take macroprudential measures to guard against risks in the non-bank financial sector or where property markets are surging. Of course, all these measures may still need to be combined with macroeconomic adjustments.
In other words, we need to ensure that all countries can move safely through the monetary tightening cycle.
Third, countries need to shift their focus to fiscal sustainability
As countries emerge from the grip of the pandemic, they need to carefully calibrate their fiscal policies. It’s easy to see why: extraordinary fiscal measures helped prevent another Great Depression, but they have also pushed up debt levels. In 2020, we observed the largest one-year debt surge since the second world war, with global debt—both public and private—rising to $226 trillion.
For many countries, this means ensuring continued support for health systems and the most vulnerable, while reducing deficits and debt levels to meet their specific needs. For example, a faster scaling back of fiscal support is warranted in countries where the recovery is further ahead. This in turn will facilitate their shift in monetary policy by reducing demand and thus helping to contain inflationary pressures.
Others, especially in the developing world, face far more difficult trade-offs. Their fiscal firepower has been scarce throughout the crisis, which has left them with weaker recoveries and deeper scars from economic long-Covid. And they have little scope to prepare for a post-pandemic economy that is greener and more digital.
For example, the IMF last year described how green supply policies, including a 10-year public investment program, could raise annual global output by about 2 percent compared to the baseline on average over 2021-30.
All these policy actions can help us find a new modus vivendi for a more shock-prone world. But they may be hampered by debt. We estimate that about 60 percent of low-income countries are in or at high risk of debt distress, double 2015 levels. These and many other economies will need more domestic revenue mobilization, more grants and concessional financing, and more help to deal with debt immediately.
That includes reinvigorating the G-20 Common Framework for debt treatment. This should start with offering a standstill on debt service payments during the negotiation under the framework. Quicker and more efficient processes are needed, with clarity on the steps to go through, so that everyone knows the road ahead—from formation of creditor committees to an agreement on debt resolution. And make the framework available to a wider range of highly indebted countries.
The IMF’s role
The IMF plays an important role in this area by providing macroeconomic frameworks and debt sustainability analyses. And we encourage greater debt transparency: by requesting greater disclosure of what a member country owes and to whom when it seeks IMF financing, and by working with our members through the IMF-World Bank Multi-Pronged Approach to debt vulnerability.
We also need to build on the historic allocation of Special Drawing Rights of $650 billion. As well as holding the new SDRs as reserves, some members have already begun to put them to good use. For example: Nepal for vaccine imports; North Macedonia for health spending and pandemic lifelines; and Senegal to boost vaccine production capacity.
To magnify the impact of the allocation, we encourage channeling of new SDRs through our Poverty Reduction and Growth Trust, which provides concessional financing to low-income countries, and the new Resilience and Sustainability Trust.
With its cheaper rates and longer maturities, the RST could fund climate, pandemic preparedness, and digitalization policies that would improve macroeconomic stability for decades to come. The G20 has given its strong backing to the RST, and we aim to have it fully operational this year.
As countries face up to multiple challenges, the IMF will support them with calibrated policy advice, capacity development, and financial assistance where needed. The key is to bring agility into all aspects of policymaking—but even that is not enough.
We also need to follow the spirit of Indonesia’s motto, Bhinneka Tunggal Ika—”Unity in Diversity.” Together we can get through the obstacle course to a durable recovery that works for all.
Courtesy : IMF Blog
Western Moves to Contain China’s Rise and The New Global Order!
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Many Western countries are actively working to limit China’s rise to power on the global stage. Their approach involves utilizing international law and norms to create a narrative that portrays China as a potential threat to the current world order. This strategy aims to curb China’s influence and prevent it from becoming a dominant force in the international community. By constructing this narrative, Western countries hope to gain support from other nations and strengthen their positions in the global arena. However, this approach may also lead to increased tensions and conflict between China and the West.
II. Western Countries’ Efforts to Contain China’s Rise
A. Use of International Law and Norms
Western nations have strategically harnessed international law and norms to impede China’s rise. This involves leveraging their diplomatic and economic influence to mould a narrative that portrays China as a disruptor of the established global equilibrium.
B. Creation of a Narrative Portraying China as a Threat to the World Order
The West, through its geopolitical manoeuvring, has meticulously crafted a narrative painting China as a menace to the prevailing world order. This narrative, however, raises questions about its veracity, as it seems detached from objective facts and is utilized to rationalize Western aggression against China.
C. Lack of Factual Basis for the Narrative
Scrutinizing the narrative reveals a notable absence of a factual foundation. The depiction of China as a global threat appears to be a strategic fabrication, a tool wielded to legitimize Western actions against China and rally international support.
D. Use of the Narrative to Justify Western Aggression Against China
The narrative portraying China as a threat serves as a pretext for Western aggression against the emerging global power. This aggressive stance, built on a shaky foundation, not only distorts the reality of China’s peaceful rise but also contributes to an increasingly precarious global situation.
III. China’s Response to These Challenges
A. Efforts to Create a New World Order
In response to the challenges posed by Western containment strategies, China is actively engaged in creating a new world order that prioritizes equity and inclusivity. This involves a departure from the traditional power dynamics and a quest for a more balanced and fair global system.
B. Focus on Equity and Inclusivity
China’s approach to reshaping the world order underscores a commitment to equity and inclusivity. By advocating for a fair and just global environment, China aims to foster cooperation, mutual respect, and understanding among nations.
A. Recap of the Main Points
The central theme revolves around Western attempts to stifle China’s ascent, deploying international law and norms to construct a narrative that casts China as a global threat. tIt also analyses China’s response, emphasizing its pursuit of a new world order marked by equity and inclusivity.
B. Final Thoughts
The Western endeavours to contain China’s rise carry significant implications for global stability. Recognizing China’s ascendancy and engaging in collaborative efforts to construct a more equitable and just world order is not only prudent but essential for fostering a harmonious and cooperative international community. As we navigate these complex geopolitical waters, the imperative is to move beyond adversarial narratives and embrace a shared vision for a better future.
Fidelity National Financial Hacked: Real Estate Industry in Chaos
In a significant setback to the real estate and mortgage industry, Fidelity National Financial (FNF), a Fortune 500 company that provides title insurance and settlement services, was forced to take down its entire network on November 22, 2023, following a cybersecurity incident. The attack, which is still under investigation, involved the unauthorized access of FNF systems using exfiltrated credentials.
The shutdown of FNF’s systems has had a widespread impact on the real estate industry, causing significant disruptions to title insurance, escrow, and mortgage transactions across the United States. The company’s customers, which include lenders, real estate agents, and homeowners, have been left scrambling to find alternative solutions to complete their transactions.
The Scope of the Attack
Details about the nature of the attack remain limited, but FNF has acknowledged that the cyberattack involved the unauthorized access of its systems and the potential theft of sensitive data. The company has not confirmed whether the attack was ransomware-based, but the fact that it took down its entire network suggests that it may have been a sophisticated attack.
The impact of the attack has been felt throughout the real estate industry. Lenders have been unable to issue title insurance, which is required for most home purchases. Real estate agents have been unable to close deals, and homeowners have been left in limbo, unable to finalize their home purchases or refinance their mortgages.
FNF’s Response to the Attack
In response to the attack, FNF has taken a number of steps to mitigate the damage and restore its systems. The company has brought in cybersecurity experts to investigate the attack and implement corrective measures. It has also been working to restore its systems and services as quickly as possible.
FNF has also been communicating with its customers about the attack and the steps it is taking to address the situation. The company has set up a dedicated website to provide updates on the progress of the investigation and restoration efforts.
The Impact on the Real Estate Industry
The cyberattack on FNF is a stark reminder of the growing threat of cyberattacks in the real estate industry. As more and more businesses rely on technology to conduct their operations, they become increasingly vulnerable to cyberattacks.
The attack on FNF is likely to have a lasting impact on the real estate industry. Businesses will need to invest more in cybersecurity measures to protect their systems and data. They will also need to be more vigilant in detecting and responding to cyberattacks.
Recommendations for Real Estate Businesses
In light of the cyberattack on FNF, here are some recommendations for real estate businesses:
- Implement strong cybersecurity measures. This includes using strong passwords, firewalls, and antivirus software. Businesses should also regularly back up their data.
- Educate employees about cybersecurity. Employees should be trained to identify and avoid phishing scams and other social engineering attacks. They should also be aware of the company’s cybersecurity policies and procedures.
- Have a plan for responding to cyberattacks. This includes having a team in place to investigate and respond to attacks. Businesses should also have a plan for communicating with customers about cyberattacks.
Cyberattacks are a growing threat to businesses of all sizes, including those in the real estate industry. By taking proactive measures to protect their systems and data, businesses can help to reduce their risk of being attacked.
The Aftermath of the Cyberattack
The cyberattack on Fidelity National Financial (FNF) has had a significant impact on the real estate and mortgage industry. The attack has caused widespread disruptions to title insurance, escrow, and mortgage transactions, and it has left businesses and consumers scrambling to find alternative solutions.
Impact on Title Insurance
Title insurance is a crucial part of the real estate closing process. It protects lenders and homeowners from financial losses caused by defects in the title to a property. The cyberattack on FNF has made it difficult or impossible for lenders to issue title insurance, which has caused delays in closings and has left some homeowners unable to finalize their purchases.
Impact on Escrow
Escrow is a process in which a third party holds funds and documents for the benefit of two or more parties involved in a real estate transaction. The cyberattack on FNF has disrupted escrow services, causing delays in the transfer of funds and documents. This has made it difficult for buyers to pay for their homes and for sellers to receive their proceeds from the sale.
Impact on Mortgage Transactions
The cyberattack on FNF has also had an impact on mortgage transactions. The company’s systems are used to process mortgage applications and to verify loan documents. The shutdown of these systems has made it difficult for lenders to process mortgages, which has caused delays in loan closings.
Impact on Consumers
The cyberattack on FNF has also had a direct impact on consumers. Homebuyers and sellers have been left in limbo, unable to finalize their transactions due to the disruptions caused by the attack. This has caused financial hardship and frustration for many consumers.
The Road to Recovery
FNF is working to restore its systems and services as quickly as possible. The company has brought in cybersecurity experts to investigate the attack and implement corrective measures. It is also working to communicate with its customers about the attack and the steps it is taking to address the situation.
However, it is unclear how long it will take for FNF to fully recover from the attack. The company’s customers are likely to face continued disruptions in the coming weeks and months.
The cyberattack on FNF is a stark reminder of the growing threat of cyberattacks in the real estate industry. Businesses need to take proactive measures to protect their systems and data. They should also be prepared to respond to cyberattacks quickly and effectively.
Here are some lessons that can be learned from the cyberattack on FNF:
- Cyberattacks are a real threat to businesses of all sizes.
- Businesses need to invest in strong cybersecurity measures.
- Businesses need to educate their employees about cybersecurity.
- Businesses need to have a plan for responding to cyberattacks.
By taking these steps, businesses can help to reduce their risk of being attacked and can minimize the impact of an attack if it does occur.
The cyberattack on Fidelity National Financial is a major setback for the real estate and mortgage industry. The attack has caused widespread disruptions and has left businesses and consumers scrambling to find alternative solutions. It is a stark reminder of the growing threat of cyberattacks and the need for businesses to take proactive measures to protect themselves.
Unveiling the Megacities: A Comprehensive Look at the World’s Urban Giants
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In the vast canvas of global urbanization, megacities emerge as the epicentres of human civilization, shaping the narrative of our collective existence. This meticulously crafted exploration aims to peel back the layers of the top ten largest cities worldwide, offering an intricate tapestry of insights that go beyond mere statistics.
From the pulsating energy of Tokyo’s technological marvels to the historical grandeur of Istanbul’s dual-continent embrace, each city becomes a chapter in the dynamic saga of urban life. Join us on this journey as we dissect the unique characteristics that propel these megacities into the forefront of global attention, transcending borders and unlocking the essence of modern living.
1. Tokyo: A Technological Wonderland
Tokyo, the pulsating heart of Japan, emerges as a seamless blend of tradition and innovation. Boasting a skyline that mirrors its technological prowess, the cityscape is punctuated by iconic landmarks such as the Tokyo Tower and the Shibuya Crossing. With a population density that defies expectations, Tokyo’s efficient public transport system intertwines the fabric of this sprawling metropolis.
2. Delhi: The Cultural Melting Pot
In the vibrant tapestry of India, Delhi stands tall as a cultural melting pot. From the historic Red Fort to the bustling markets of Chandni Chowk, every corner whispers tales of a bygone era. The city’s rich history, coupled with its contemporary vigor, makes it a fascinating subject of exploration for locals and tourists alike.
3. Shanghai: The Economic Powerhouse
Shanghai, a beacon of China’s economic ascent, commands attention with its glittering skyline along the Huangpu River. As a global financial hub, Shanghai epitomizes the rapid evolution of China’s economic landscape. The juxtaposition of colonial architecture in the Bund and futuristic skyscrapers in Pudong paints a vivid picture of the city’s dynamic identity.
4. São Paulo: Latin America’s Megacity
São Paulo, the sprawling megalopolis of Brazil, pulsates with a rhythm uniquely its own. Nestled within the lush landscape, this city is a testament to the resilience and vibrancy of Latin American culture. From the bustling Paulista Avenue to the tranquillity of Ibirapuera Park, São Paulo captivates with its diverse offerings.
5. Mumbai: The Maximum City
Mumbai, India’s financial powerhouse, unfolds as a narrative of contrasts. The city’s iconic skyline, adorned with skyscrapers, stands in stark contrast to the serene shores of the Arabian Sea. With Bollywood at its heart and the Dabbawalas weaving through its streets, Mumbai encapsulates the essence of India’s cultural diversity.
6. Beijing: Where Tradition Meets Modernity
Beijing, China’s ancient capital, showcases a kaleidoscope of history and innovation. From the Forbidden City, a testament to imperial grandeur, to the avant-garde architecture of the Bird’s Nest Olympic Stadium, Beijing seamlessly intertwines its rich heritage with a vision for the future.
7. Istanbul: Bridging Continents
Istanbul, straddling Europe and Asia, unfolds as a city where history and geography converge. The Hagia Sophia and the Blue Mosque are timeless witnesses to the city’s imperial past. The Bosphorus Strait, a natural masterpiece, not only divides but also unites this city of two continents.
8. Lahore: Pakistan’s Cultural Gem
Lahore, a jewel in Pakistan’s crown, resonates with an aura of cultural grandeur. Standing as architectural marvels, the Lahore Fort and Badshahi Mosque reflect the city’s Mughal legacy. The bustling streets of the Walled City exude an old-world charm, inviting exploration into the heart of Pakistan’s cultural heritage.
9. Shenzhen: The Silicon Valley of Asia
Shenzhen, a testament to China’s technological prowess, emerges as the Silicon Valley of Asia. With a skyline dominated by sleek skyscrapers, the city is a breeding ground for innovation. From the vibrant electronics markets to the avant-garde architecture, Shenzhen epitomizes the fusion of technology and commerce.
10. Jakarta: Southeast Asia’s Megacity
Jakarta, the vibrant capital of Indonesia, unfolds as a sprawling metropolis between the Java Sea and the Bogor Highlands. From the historic remnants of the Old Town to the modernity of the National Monument, Jakarta encapsulates the diversity and dynamism of Southeast Asia.
By dissecting the stories of these megacities, we are able to see beyond national borders and gain insight into the global pulse of urban life. Every city adds to the rich tapestry of human civilization with its own fusion of modernity and tradition, providing a mosaic of experiences that capture the spirit of urban life and pique the imagination.
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