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Coronavirus: Sturgeon calls for £80bn to 'kick start' economy – BBC News

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First Minister Nicola Sturgeon has called on the UK government to invest £80bn to “kick start the economy” after lockdown.

The Scottish government wants to see a stimulus package worth 4% of UK GDP to “deliver an investment-led recovery” in the wake of the coronavirus crisis.

It also wants the value added tax rate (VAT) to be cut to 15% for six months.

Prime Minister Boris Johnson has warned of a fiscal “thunderclap” in the wake of the pandemic.

But he has pledged not to use austerity policies to tackle it and said he would model his approach on that of former US President Franklin D Roosevelt, whose “New Deal” programme of reforms helped the United States recover from the Great Depression in the 1930s.

The lockdown restrictions imposed to tackle the health crisis have caused a sharp economic contraction, with warnings that output in Scotland may not recover until 2023.

The Scottish government has published a paper setting out 10 requests for UK ministers in dealing with the looming recession, including a call to “avoid a return to the austerity of the past” and focus on reducing inequality.

Ms Sturgeon said the proposals were “ambitious but also practical and sustainable”, and would “benefit not just Scotland but the whole of the UK”.

Scottish ministers want to see a fiscal stimulus package worth 4% of UK GDP – or £80bn – as well as “major investment in low-carbon, energy efficiency and digital infrastructure”.

This would include support for consumers and businesses through tax cuts, cash grants to individual households, a public sector investment programme to focus on green technology, and an extension of wage subsidy schemes for the hardest hit sectors.

As part of this Scottish ministers want the standard rate of VAT levied on goods and services to be cut from 20% to 15% for six months post-lockdown, and to 5% for the hospitality sector.

This could cut prices for shoppers, and the paper said this would be “one of the quickest ways to provide an additional spending boost to support the sectors of retail, hospitality, leisure and tourism that have been most impacted by the lockdown”.

They have also called for a “jobs guarantee scheme” for young people, echoing the recommendations of an advisory group which said 16 to 25-year-olds must be offered “secure employment”.

Finance Secretary Kate Forbes said the virus had caused “the biggest economic shock of our lifetimes”, hitting the most vulnerable in society disproportionately.

She said the UK government’s fiscal policies were “still key” in determining Holyrood’s budget, calling for “bold, practical steps which would provide an immediate boost to our economy, protect existing jobs and deliver new ones”.

Ms Forbes also called for Holyrood to be given additional fiscal powers, saying Scotland could be at a “severe disadvantage” without more control over the economic recovery.

The UK government says it has already introduced emergency tax and spending measures worth an estimated £133bn, with its jobs retention “furlough” scheme covering more than a quarter of the workforce.

Mr Johnson has pledged not to use austerity policies to balance the books, instead saying that “this is the moment for a Rooseveltian approach to the UK”.

He is to unveil a spending programme in a speech on Tuesday which Number 10 has dubbed “build, build, build”.

The prime minister told Times Radio: “The country has gone through a profound shock. But in those moments you have the opportunity to change and to do things better.

“We really want to build back better, to do things differently, to invest in infrastructure, transport, broadband – you name it.”

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Long-term strategies to control COVID-19 must treat health and economy as equally important – EurekAlert

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Strategies for the safe reopening of low and middle-income countries (LMICs) from months of strict social distancing in response to the ongoing COVID-19 pandemic must recognise that preserving people’s health is as important as reviving the economy, argue an international team of researchers.

The team also say that strategies need to be based on local epidemic growth rate at the time, social and economic costs, existing health systems capabilities and detailed plans to implement and sustain the strategy.

The COVID-19 pandemic has been responsible for over half a million deaths globally. Many LMICs responded to the pandemic by introducing a number of measures from physical distancing to strict social distancing.

These measures have proved relatively successful in containing the disease and limiting the number of deaths in places where the risk of transmission is high, public health systems and usage are suboptimal and awareness of disease prevention practices is low. However, they have often come with tremendous negative social, economic and psychological effects.

To prevent further negative impacts of lockdown, many countries are now looking to ‘reopen’, risking population health, especially given shortcomings in surveillance infrastructure and poor diagnostic capabilities.

In a paper published in the European Journal of Epidemiology, a team of epidemiologists from the University of Cambridge, the University of Bern, BRAC University and the National Heart Foundation in Bangladesh, have examined three community-based exit strategies, and recommend their scopes, limitations and the appropriate application in the LMICs.

Dr Rajiv Chowdhury from the University of Cambridge, lead author of the paper, said: “Successfully re-opening a country requires consideration of both the economic and social costs. Governments should approach these options with a mind-set that health and economy both are equally important to protect – reviving the economy should not take priority over preserving people’s health.”

The three approaches considered are:

*Sustained mitigation

Sustained ‘mitigation-only’ approaches such as those adopted in the United Kingdom, Switzerland and other European countries, involve basic prevention measures such as mask wearing, physical distancing and the isolation of positive cases after testing.

However, the researchers point out that the relative success and ease of implementation of these approaches in high-income settings was aided by a number of factors. For example, high-income countries have the capacity to implement mass testing, population surveillance and case isolation to contain the epidemic, in addition to a high number of trained contact tracers operating in a relatively small and sparse population and high levels of adherence to the measures, including home quarantine and hygiene advice.

By contrast, in LMICs, a sustained mitigation-only approach may be unfeasible due to poor or absent nationwide population surveillance, contact tracing, testing infrastructure and critical care. For example, LMICs generally have limited supply of ventilators (around 48,000 for India’s 1.3 billion people), personal protective equipment, trained healthcare personnel and safe working conditions, compromising the healthcare system’s effectiveness.

*Zonal lockdowns

Zonal lockdowns involve identifying and ‘cordoning off’ new outbreak clusters with a high number of cases, keeping contact between zones low and containing the disease within a small geographic area.

However, the authors point out that any successful implementation of zonal lockdown requires regular data feedback operations in real time to identify hotspots, including information on newly confirmed cases, updated region-specific reproduction and growth rates, and deaths by age. This may be especially difficult to introduce in LMICs due to the absence of widespread population surveillance on random selections of the population and poor reporting and testing capabilities – for example, Pakistan conducts only 0.09 tests daily per 1,000 individuals compared to 0.52 in France.

Additionally, control of transmission within zones may be an enormous undertaking. In India, where this approach has been employed, the infection size within a cordoned zone can be as high as 100-200 times that outside the zone.

Countries seeking to introduce such measures should establish within the lockdown zone public health measures, including house-to-house surveillance and case-referral systems, and emergency services. They should also create buffer zones to reduce the rates of transmission from outside the zone. Such measures may only be effective when overall population transmission is relatively low and reducing.

*Rolling lockdowns

Intermittent rolling lockdowns are now advocated by the World Health Organization in various LMICs. These involve implementing strict social distancing for a set number of days before a period of relaxation. Rolling lockdowns may be particularly useful in LMICs with dense populations, where this is a high potential for contact, weak health systems and poor contact tracing.

A modelling study published by the team in May showed that a system involving 50 days of strict lockdown followed by 30 days of relaxation, enabling the economy to ‘breathe’ and recuperate, could reduce the reproduction number to 0.5, reduce the strain on health systems and considerably reduce the number of deaths compared to a situation with no lockdown.

Professor Oscar Franco, of the University of Bern and senior author of the paper, said: “Rolling lockdowns need be flexible and tailored to the specific country. The frequency and duration of the lockdowns or relaxed periods should be determined by the country based on local circumstances. They don’t necessarily need to be nationwide – they can also involve a large zone or province with very high incidence of COVID-19.”

Dr Shammi Luhar of the University of Cambridge and co-author of the paper, added: “These three strategies should not be considered as one or the other. A country should further adapt and could combine them as needed.”

###

Reference

Chowdhury, R et al. Long-term strategies to control COVID-19 in low and middle-income countries: an options overview of non-pharmacological interventions; 13 July 2020

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Jordan presses sweeping tax evasion crackdown to aid ailing economy – The Globe and Mail

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Jordan’s Prime Minister Omar al-Razzaz speaks to media during a news conference in Amman, Jordan on April 9, 2019.

Muhammad Hamed/Reuters

Jordan’s Prime Minister Omar al-Razzaz promised on Sunday to deepen a crackdown on tax evasion that officials say has deprived the country’s cash-strapped economy of billions of dollars in revenue in recent years.

The government has gone after senior businessmen and former politicians suspected of tax dodging, money laundering and customs evasion in a weeks-long campaign that has gained greater urgency with the hit to state finances from the COVID-19 pandemic.

“Protecting public money and fighting corruption is a national duty,” Mr. al-Razzaz said in his weekly television address to the country.

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Tax authorities have raided around 650 companies so far, sometimes accompanied by security forces, according to officials who say this is the biggest campaign to combat tax evasion in decades.

The government said it had frozen the assets of dozens of companies and businessmen on suspected tax evasion charges. It added that it would track offshore havens where wealthy Jordanians have long parked cash to avoid taxes.

Some critics have accused the government of using the campaign to carry out a witch hunt against its political enemies, including some of Jordan’s leading business figures, including former ministers and senior politicians.

Officials deny that, saying the goal is to ensure justice and that no one is above the law.

The government has been using its wider powers under a state of emergency since March to give prosecutors and the main anti-corruption agency greater powers, and stiffen penalties.

A two-month coronavirus lockdown has crippled Jordanian businesses and slashed state revenues by tens of millions of dollars, leading to the sharpest economic contraction in two decades.

The government expects the economy to shrink by 3.5 per cent this year, a far cry from an International Monetary Fund (IMF) estimate of 2-per-cent growth before the pandemic.

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The aid-dependent country, already undertaking a tough three-year IMF reform program, tapped international debt markets this month to borrow US$1.75-billion.

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Jordan presses sweeping tax evasion crackdown to aid ailing economy – TheChronicleHerald.ca

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By Suleiman Al-Khalidi

AMMAN (Reuters) – Jordan’s Prime Minister Omar al-Razzaz promised on Sunday to deepen a crackdown on tax evasion that officials say has deprived the country’s cash-strapped economy of billions of dollars’ revenue in recent years.

The government has gone after senior businessmen and former politicians suspected of tax dodging, money laundering and customs evasion in a weeks-long campaign that has gained greater urgency with the hit to state finances from the COVID-19 pandemic.

“Protecting public money and fighting corruption is a national duty,” Razzaz said in his weekly television address to the nation.

Tax authorities have raided around 650 companies so far, sometimes accompanied by security forces, according to officials who say this is the biggest campaign to combat tax evasion in decades.

The government said it had frozen the assets of dozens of companies and businessmen on suspected tax evasion charges. It added that it would track offshore havens where wealthy Jordanians have long parked cash to avoid taxes.

Some critics have accused the government of using the campaign to carry out a witch hunt against its political enemies, including some of Jordan’s leading business figures, including former ministers and senior politicians.

Officials deny that, saying the goal is to ensure justice and that no one is above the law.

The government has been using its wider powers under a state of emergency since March to give prosecutors and the main anti-corruption agency greater powers, and stiffen penalties.

A two-month coronavirus lockdown has crippled Jordanian businesses and slashed state revenues by tens of millions of dollars, leading to the sharpest economic contraction in two decades.

The government expects the economy to shrink by 3.5% this year, a far cry from an International Monetary Fund (IMF) estimate of 2% growth before the pandemic.

The aid-dependent country, already undertaking a tough three-year IMF reform programme, tapped international debt markets this month to borrow $1.75 billion.

(Reporting by Suleiman Al-Khalidi; Editing by Andrew Cawthorne)

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