COVID-19: World economy will go into recession with likely exception of India, China: UN
United Nations: The world economy will go into recession this year with a predicted loss of trillions of dollars of global income due to the coronavirus pandemic, spelling serious trouble for developing countries with the likely exception of India and China, according to a latest UN trade report.
With two-thirds of the world's population living in developing countries facing unprecedented economic damage from the COVID-19 crisis, the UN is calling for a USD 2.5 trillion rescue package for these nations.
According to the new analysis from United Nations Conference on Trade and Development (UNCTAD), the UN trade and development body titled 'The COVID-19 Shock to Developing Countries: Towards a 'whatever it takes' programme for the two-thirds of the world's population being left behind', commodity-rich exporting countries will face a USD 2 trillion to USD 3 trillion drop in investments from overseas in the next two years.
The UNCTAD said that in recent days, advanced economies and China have put together massive government packages which, according to the Group of 20 leading economies (G20), will extend a USD 5 trillion lifeline to their economies.
"This represents an unprecedented response to an unprecedented crisis, which will attenuate the extent of the shock physically, economically and psychologically," it said.
It added that while the full details of these stimulus packages are yet to be unpacked, an initial assessment by the UNCTAD estimates that they will translate to a USD 1 trillion to USD 2 trillion injection of demand into the major G20 economies and a two percentage point turnaround in global output.
"Even so, the world economy will go into recession this year with a predicted loss of global income in trillions of dollars. This will spell serious trouble for developing countries, with the likely exception of China and the possible exception of India," the UNCTAD said.
The report, however, did not give a detailed explanation as to why and how India and China will be the exceptions as the world faces a recession and loss in global income that will impact developing countries.
Further, given the deteriorating global conditions, fiscal and foreign exchange constraints are bound to tighten further over the course of the year.
The UNCTAD estimates a USD 2 trillion to USD 3 trillion financing gap facing developing countries over the next two years.
In the face of a looming financial tsunami this year, the UNCTAD proposes a four-pronged strategy that could begin to translate expressions of international solidarity into concrete action.
This includes a USD 1 trillion liquidity injection for those being left behind through reallocating existing special drawing rights at the International Monetary Fund; a debt jubilee for distressed economies under which another one trillion dollars of debts owed by developing countries should be cancelled this year and a 500 billion dollars Marshall Plan for a health recovery funded from some of the missing official development assistance (ODA) long promised but not delivered by development partners.
The speed at which the economic shockwaves from the pandemic has hit developing countries is dramatic, even in comparison to the 2008 global financial crisis, the UNCTAD said.
"The economic fallout from the shock is ongoing and increasingly difficult to predict, but there are clear indications that things will get much worse for developing economies before they get better," UNCTAD Secretary-General Mukhisa Kituyi said.
The report shows that in two months since the virus began spreading beyond China, developing countries have taken an enormous hit in terms of capital outflows, growing bond spreads, currency depreciations and lost export earnings, including from falling commodity prices and declining tourist revenues.
Lacking the monetary, fiscal and administrative capacity to respond to this crisis, the consequences of a combined health pandemic and a global recession will be catastrophic for many developing countries and halt their progress towards the Sustainable Development Goals.
Even as advanced economies are discovering the challenges of dealing with a growing informal workforce, this remains the norm for developing countries, amplifying their difficulties in responding to the crisis.
"Advanced economies have promised to do 'whatever it takes' to stop their firms and households from taking a heavy loss of income," said Richard Kozul-Wright, UNCTAD's director of globalisation and development strategies.
He added: "But if G20 leaders are to stick to their commitment of 'a global response in the spirit of solidarity', there must be commensurate action for the six billion people living outside the core G20 economies".
According to reports, the death toll from the coronavirus pandemic has soared past 35,000 while the number of confirmed cases topped 750,000 globally.
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Telangana CM urges Amit Shah to increase sanctioned strength of IPS officers in state
Hyderabad (PTI): Telangana Chief Minister A Revanth Reddy met Union Home Minister Amit Shah in Delhi on Wednesday night and urged him to increase the sanctioned strength of IPS officers to the state in view of its growing administrative and security needs.
The two leaders also discussed the recent surrender of several senior Maoist leaders before the Telangana Police and other issues.
"During the meeting, the two leaders discussed the issue of Maoist surrenders and their rehabilitation. The chief minister informed Shah that significant improvements in policing have taken place in Telangana over the past two years," an official release here said.
Highlighting that 591 Maoists have laid down their arms and joined the mainstream of society during this period, the chief minister said the state government was providing them compensation and rehabilitation assistance as per the rules.
He requested the Union home minister to extend financial support from the central government for development works in the backward regions of the state.
Reddy also urged Shah to increase the sanctioned strength of IPS officers to the state from 83 to 105 in line with the state's growing administrative and security needs, the statement said.
The first cadre review after the formation of Telangana was conducted in 2016, while the next review, due in 2021, was delayed and finally carried out in 2025. Even then, only seven additional IPS officers were allocated to the state, the chief minister informed Shah and requested that the third cadre review be conducted in 2026 as per the schedule.
Reddy explained that Telangana, like the rest of the country, is facing several modern challenges, including cybercrime, drug trafficking, white-collar crimes, and other emerging security threats.
He highlighted the reorganisation of the Hyderabad, Cyberabad, and Malkajgiri Police Commissionerates, the proposed formation of the Future City Commissionerate and the rapidly growing population in Hyderabad to underline the increasing administrative requirements of the state.
