As impeachment captures attention, Trump tries to shift focus to the economy - Canada News Media
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As impeachment captures attention, Trump tries to shift focus to the economy



Trump impeachment
Exaggerating the strong economy (and speaking in the third person) Trump this week sought to brand this the best economy in the history of the world.
In the Oval Office Thursday, he complained that the Senate’s passage of his re-worked North American Free Trade Agreement between Mexico, Canada and the United States, was not the top news story.
“Today we just had passed the USMCA. It’s going to take the place of NAFTA, which was a terrible deal. The USMCA will probably be second to this witch hunt hoax,” he said, with a map of the 2016 election results on the desk in front of him. “Think of it. The president of the US who has led the greatest growth, the greatest economically viable of any country anywhere in the world is the United States as big as it is. We’re doing better than any other country by far. Our unemployment rates are the best in over 50 years. African American, Asian, African American, Hispanic American unemployment best in the history of our country. I have to go through a hoax.”
A day earlier, before Wednesday’s signing of a Phase One trade deal with China, as impeachment gripped Capitol Hill, the president commanded the stage for nearly 40 minutes thanking the negotiators, business leaders and lawmakers in the room. (And TV host Lou Dobbs.)
He took credit for stock market records and, sounding more like a TV producer than a president, he applauded White House economic adviser Larry Kudlow for using his TV savvy to calm investors on a down day for the market.
“He was standing in the middle of the Rose Garden. He had a beautiful scarf waving in the wind. He was everything perfect, right out of Greenwich, Connecticut. He started talking, and by the time he finished, I said, you just made a trillion, because the market just went up 250 points,” he said.
With or without administration cheerleading, the stock market is at record highs. And jobless rates are at historic lows.
The economy is really good. But it’s no GOAT, or greatest of all time.
Economic growth is hovering around two percent — hardly the rocket-fueled growth Trump promised from tax cuts and deregulation. In fact, economic growth has been stronger many times before, including some quarters of the Obama recovery, in the Clinton years and certainly post World War II. And jobs growth in the first 34 months of the Trump economy lags the last 34 months of the Obama economy.
But the president owns this message, exaggerations and all.
Senator Michael Bennet, A Democrat from Colorado, outlined a counter-narrative to Wolf Blitzer.
“Barack Obama’s administration created more jobs than Donald Trump’s administration on average per month. If Donald Trump were creating jobs at the same rate Barack Obama were creating jobs, we’d have a million more jobs here in this country right now. And our farm bankruptcies have been up over 24%. Farm income is down 16%. The president has had to basically pay off farmers with $28 billion he borrowed from the Chinese to keep them afloat DURING THIS TRADE DEAL. Things are the not great for everybody in this economy.”
Still, the strong economy is central to the president’s re-election strategy. Two big questions. Can the president stay on that message? And can Democrats find an economy message of their own that resonates.

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Sudan to Tackle Fuel Subsidies as Economy Hangs on the Edge – VOA News



KHARTOUM, SUDAN – Sudan hopes to cut fuel subsidies over the course of 18 months, starting as early as March, and replace them with direct cash payments to the poor, the country’s finance minister said, laying out a timetable for sweeping economic reforms sought by international lenders.

The plan comes as Sudan’s fragile democracy is slowly taking shape after the ouster last year of the country’s long-time autocrat Omar al-Bashir.

In an interview with The Associated Press on Tuesday, Finance Minister Ibrahim Elbadawi said the decision was a “no brainer.” The government has previously said it will not change bread and flour subsidies.

Elbadawi’s comments are the first to reveal a planned timeline since the Sudanese government skirted the issue of slashing subsidies late last year, after the country’s pro-democracy movement rejected the move. The government included subsidies in the 2020 budget.

In the interview with the AP, Elbadawi said the plan now is to gradually lift fuel subsidies, which take up 36% of the nation’s budget, as early as March and following an economic conference with civil society groups, and continue into the next year. A former World Bank economist, Elbadawi was appointed to the country’s interim government last year. He said gasoline subsidies would be removed first, before tackling those related to diesel in mid-year.

Sudan’s new leadership is navigating a treacherous transition to civilian rule. Two-thirds of the country’s more than 40 million people live in poverty, and slashing the fuel subsidies could lead to destabilizing protests reminiscent of the large-scale demonstrations that ended al-Bashir’s 30-year rule in April. At the same time, sweeping economic reforms are required to re-integrate Sudan into the international economy and win support from international lenders.

Since al-Bashir’s ouster, an interim government made of civilian and military representatives has been leading the country and the economy — already in a severe downturn and battered by a weakening currency, shortages and inflation — has become the lynchpin of the fragile transitional period.

Sudan has been an international pariah after it was placed on the United States’ list of states that sponsor terror, more than two decades ago. This largely excluded it from the global economy and prevented it from receiving loans from international institutions like the International Monetary Fund.

Sudan’s interim government has also inherited a debt of 60 billion dollars and a rapid inflation rate, and badly needs an injection of funds from foreign donors. The nation’s currency, the Sudanese pound, is trading on the black market for double its official rate of 45.3 pounds to the dollar.

The uprising against al-Bashir began as protests over rising prices of key staples such as bread and frustration among the youth over unemployment and the brutality of the nation’s security forces. Many in the country’s civil society movement fear that lifting subsidies now could make the country’s most vulnerable even poorer.

Elbadawi said a direct cash payment to poor families, through banks or mobile phone transfers, could help ease the shock of the reforms. Such a program could be off the ground in six months, he said, though the government still needs better data to reach all those in need. As part of a pilot group, said that some 4.5 million people would start receiving the money soon, Elbadawi added.

“We think that if we manage to do this, it will be a very viable and credible alternative,” he told the AP. “It will target the poor, it will promote the cause of peace and it will actually change the social contract.”

Because of the longstanding subsidy program, Sudan has been one of the cheapest countries in the world to fill up a tank. Cheap gasoline prices have also encouraged fuel smuggling out of the country. If things were to stay as they were — with no changes to the 2020 budget — the government would be spending more on subsidies than on health, education and internal security combined, Elbadawi said.

To pave the way for international loans, Sudan has been in talks with the U.S. to remove it from the list of terrorism sponsors —something Elbadawi hopes will be only a matter of weeks or a few months. In the meantime, he said the government is in talks with the IMF and is working on a reform program that could lay the groundwork for future debt relief.

The government is also launching a national dialogue to explain the necessity of the subsidy reforms but will tread carefully, aware of likely popular opposition, Elbadawi said. The Sudanese Professionals Association, the main organizer of demonstrations during last year’s uprising, has threatened to mobilize protesters if the transition goes astray.

That means Sudan’s civilian stakeholders would have to be on board with the program.

“If, for whatever reason, we are unable to reach a consensus, then I think it will be incumbent upon the government to explain the consequences and to allow the Sudanese people to take whatever decision and course they want to take,” Elbadawi said.

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Markets can accelerate the transition to a low-carbon economy – World Economic Forum



  • Prices shape the behaviours of individuals and companies alike.
  • Insurers are incentivizing customers to tackle climate change.
  • A carbon tax would encourage users to put less of it into the atmosphere.

The World Economic Forum’s Annual Meeting in Davos is changing. After the financial crisis in 2008, the event was dominated by the urgent need to stabilize the global economy, with a focus on the immediate future.

Things are different now. The challenges discussed in Davos have become more complicated because they are longer term. The climate emergency requires us to talk about the next 30 years.

We need to think in such a long timeframe because, even if we stopped emitting carbon today, thermal inertia means that temperatures will go on rising for years to come.

And rising temperatures are already changing our way of life. They are altering weather patterns and intensifying floods, storms and wildfires. They are depleting coral reefs and marine life. They are melting glaciers, altering water patterns and impacting where we can grow crops. As an insurer, we see these impacts first-hand every day.

Prices shape behaviour

But preparing today for changes whose full effects will only be felt in 30 years or more is a huge challenge. Experience tells us that warnings are not enough to inspire action, because people are averse to change.

One of the great strengths of market economies is the way in which prices shape the behaviours of individuals and companies alike. We should use this strength to accelerate the transition to a low-carbon economy and to build up the ability of our communities and businesses to withstand the effects of climate change.

Insurance incentives

Insurers have a long history of incentivizing good behavior, including the development of better safety standards in factories and vehicles. At Zurich, we are incentivizing our customers to tackle climate change and adapt to its impacts.

Among other measures, we are engaging with customers who have high-carbon activities about their plans to change their business mix. We will no longer insure them if their plans fall short of our commitment to combating global climate change.

Carbon taxes

Successfully combating climate change will take much more than the efforts of one company or even one industry. We need measures that impact prices across entire economies, and only governments are in a position to do that.

At the moment, the price of emitting carbon into the atmosphere doesn’t reflect the long-term consequences. By introducing carbon taxes, governments can set the balance right and influence behaviour. A price on carbon would encourage users to put less of it into the atmosphere.

An ideal outcome would be a global agreement. However, given the current geopolitical climate, a localized solution is more realistic. The EU’s recent work in this area shows there is potential if governments step up and work together on a regional basis.

Carbon pricing initiatives, 1990-2020

Pricing climate risks

Similarly, a suitable pricing of climate-related risks is needed for them to be taken more seriously. Climate and environmental issues are the top risks facing the world over the next decade, according to the World Economic Forum’s Global Risks Report 2020, published earlier this month. But in a survey just a few months ago for the WEF’s Regional Risks of Doing Business Report, businesses didn’t even cite environmental risks among the top 10.

For a better pricing of climate risks, we need to agree on how to measure and report these risks, and encouraging progress was made on this front in Davos this week. Pricing climate risks would give businesses a powerful incentive to fund investments to prepare our economies for a warmer and potentially very different future, for example protecting coastal communities from rising sea levels.

The UN’s latest climate change report suggests $3.5 trillion of investments are needed globally each year until 2050, to meet the Paris Agreement targets. This level of investment cannot be achieved without also mobilizing governments, and they have a unique opportunity. With interest rates at record lows, governments can raise the money needed to fund the creation of a sustainable infrastructure at little or no cost.

Beyond polarization

The discussion on climate change at this year’s WEF meeting made headlines for the confrontations between believers and non-believers, optimists and pessimists. In reality, we have moved beyond such polarization. There is widespread recognition that climate change is real.

As Ursula von der Leyen, President of the European Commission, said in her keynote address in Davos: “The WEF’s Global Risks Report identifies that the top 5 risks for our economy are all climate related. There is still scope to address these risks but the window of opportunity is rapidly closing. We have to act now”. I fully agree with that view.

Most serious debate is now about how to fund a complex transition and manage multiple interconnected risks. Getting the incentives right will go a long way towards speeding up the behaviours and actions needed to ensure a sustainable and brighter future.

License and Republishing

World Economic Forum articles may be republished in accordance with our Terms of Use.

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The coronavirus could be much worse for China's economy than SARS – CNN



The virus outbreak escalated just before the new year, one of China’s most significant economic events. Chinese consumers spent more than 1 trillion yuan ($145 billion) last year on holiday shopping, dining, entertainment and travel, according to state news agency Xinhua.
Extensive travel restrictions and fears about the virus mean people aren’t spending as much this week. But the extended holiday — to February 2 nationwide and for another week beyond that in Shanghai and several provinces — will impact millions of people in other ways as government offices and schools remain closed.
How the coronavirus is already hurting global business
Major companies such as Tencent (TCEHY), Huawei and Alibaba (BABA), will feel the effects, too, as head offices remain shut. Tencent (TENC) has told its roughly 54,000 employees that it will be extending holidays until February 9.
Exactly how big the economic hit will be is hard to predict. China hasn’t come to a complete standstill — the Shanghai Stock Exchange is reopening on February 3. Grocery stores and food delivery services are still up and running, even in areas under lockdown.
ING economist Iris Pang said Wednesday that the outbreak would knock a modest 0.3 percentage points off China’s first quarter growth.
But Tommy Wu, analyst at Oxford Economics, said the impact could be worse than the SARS outbreak in 2003, given the coronavirus is spreading rapidly and coincides with the holiday travel rush. Economists at Nomura warned that the outbreak could knock more than two percentage points off growth in the first quarter — larger than the quarterly drop registered during SARS.
Patrick Perret-Green, an economist with research firm AdMacro, said the hit to China’s annual growth rate could be even more severe.
“There will be no quick recovery. China was growing strongly [during SARS], as was the rest of the world,” he said. “Now China and the global economy is like a patient on dialysis, and somebody just pulled an IV out.”

A big hit to growth

Before the outbreak escalated this month, the International Monetary Fund and the World Bank had forecast China’s annual economic growth to fall to about 6%, down from 6.1% in 2019.
Perret-Green said the outbreak and measures to contain it could push China’s 2020 GDP growth rate near levels last seen in 1990, when it was 3.9%, according to World Bank data.
The Wuhan virus is the last thing China's economy needs right nowThe Wuhan virus is the last thing China's economy needs right now
“Officially it may be closer to 4.5% and possibly the reality could be close to zero,” said Perret-Green, who suggested the government severely overstates its GDP figures to begin with.
Margaret Yang, an analyst at brokerage firm CMC Markets, said the “adverse economic impact is enormous.”
All sectors will likely feel the effects of the delay in getting back to work, she said in a research note Tuesday, singling out transportation, tourism, entertainment, retail and commercial property.
The Wuhan coronavirus has already killed 132 people, and infected over 6,000 others in China, but is not yet as lethal as the 2003 SARS outbreak. SARS had a roughly 10% fatality rate, compared to the estimated 3% for the coronavirus right now.
But the economic costs aren’t only about how deadly the virus is, according to Andrew Batson and Ernan Cui, analysts at research firm Gavekal Dragonomics.
“These costs are instead going to be determined by the measures China’s government takes to contain its spread — measures which have rapidly escalated to an unprecedented severity,” they wrote in a research note on Tuesday.
Travel and tourism will have an outsized effect, Batson and Cui said. They noted that the sector raked in 514 billion yuan ($74 billion) during the seven-day holiday in 2019, equivalent to 2% of first quarter GDP.

Travel industry suffering

There has already been a plunge in the number of trips made during the holiday. Liu Xiaoming, China’s vice minister for transport, told reporters on Sunday that the overall number of trips made across the country on the first day of the Lunar New Year fell nearly 30% from a year ago. Travel by plane and train fell more than 41%, he added.
Major travel companies, hotels and airlines are waiving cancellation fees and offering refunds through most of February. Some airlines are suspending services.
British Airways suspends all flights to China as coronavirus spreadsBritish Airways suspends all flights to China as coronavirus spreads
Meanwhile, major tourist spots including museums, Beijing’s Forbidden City and even Disney’s (DIS) parks in Shanghai and Hong Kong have shuttered their doors. Beijing and other cities across China also canceled Lunar New Year celebrations, trying to limit crowds.
“This will mean a permanent loss of revenue from tourist activities, as the canceled excursions are not going to be repeated after the holiday is over,” wrote Batson and Cui.
Even after the extended vacation ends, China won’t be returning to business as usual. Many people will likely remain cautious, staying indoors and avoiding crowded areas.
— CNN’s Vanessa Yung, Serenitie Wang and Yong Xiong contributed to this report.

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