By Andrea Shalal and David Lawder
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen on Thursday warned of the risk of a permanence divergence in the global economy in the wake of the COVID-19 crisis, and urged major economies to inject significant new fiscal support to secure a robust recovery.
In a statement to the steering committees of the International Monetary Fund and the World Bank, Yellen underscored the need for major economies to continue supporting developing countries as they grapple with the COVID-19 pandemic, climate change and high debt burdens.
She urged the World Bank to help countries, particularly the world’s poorest, get timely access to COVID-19 vaccines, and backed accelerated negotiation to replenish the World Bank’s International Development Association fund for the poorest countries – a goal the bank aims to reach by December.
The United States had pledged $4 billion to the COVAX global vaccine distribution initiative, Yellen said, urging others to join in.
She signalled that Washington, which so far has only loaned vaccines to Mexico and Canada, could provide excess doses to other countries in the future.
“The United States will continue to work with partners to increase vaccine supplies, explore sharing excess vaccines, and make sure financing does not become an obstacle for global vaccination,” Yellen said, without providing any details.
Yellen’s comments reflect the Biden administration’s focus on strong international cooperation to tackle global challenges – a sharp departure from the “go-it-alone” approach pursued by former President Donald Trump’s administration.
“The (COVID-19) crisis has exacerbated the trend of rising income inequality, raising concerns about a divergent path within and across countries. We also face the existential threat of climate change. We can only resolve these problems through strong international cooperation,” Yellen said in remarks prepared for her first meeting with the IMF’s International Monetary and Financial Committee and the World Bank’s Development Committee.
The former head of the Federal Reserve said substantial fiscal and monetary support from major economies had improved the global economic outlook significantly, but more efforts were needed.
Washington was implementing a $1.9 trillion COVID-19 relief plan and was working on another large infrastructure package, Yellen said, urging other major economies to take similar actions.
“The job is not yet done, given high uncertainty and the risk of permanent scarring,” she said. “I urge major economies to not just avoid removing support too early, but to strive to provide significant amounts of new fiscal support to secure a robust recovery.”
Yellen said developing countries should work with the IMF and World Bank on economic policies and structural reforms and seek full-fledged IMF financing programs, which carry conditions, where necessary. Some countries may need deeper debt treatment, she added.
She called on all creditors to “fully and transparently” implement the Group of 20’s common framework for debt treatments to avoid “unnecessary delays that can prolong debt overhangs and exacerbate growth shocks.”
She also urged the World Bank to lead on “transformative climate investments” and to continue to set an aggressive agenda on climate and the green recovery from the crisis.
(Reporting by Andrea Shalal and David Lawder; Editing by Toby Chopra and Paul Simao)
China Vows Better Policy Support to Economy as Headwinds Mount – BNN
(Bloomberg) — Chinese policy makers reiterated the need to fine-tune economic policies as the world’s second-largest economy faces increasing headwinds from virus outbreaks and high commodity prices.
Policy should be preemptive and coordinated across cycles, the State Council, the equivalent of China’s cabinet, said in a statement after a meeting chaired by Premier Li Keqiang Wednesday. Governments at all levels should maintain the continuity and stability of macroeconomic policies and enhance their effectiveness, while also do a good job in preventing and controlling virus cases, it said.
Efforts are needed to better coordinate fiscal, financial and employment policies in order to “stabilize reasonable expectations by the market,” it said.
China again vowed to make sure the economy is operating within a reasonable range, with further measures to boost consumption, guiding private capital to play a better role in expanding investment, and ensuring stable growth in foreign trade and foreign capital, according to the statement. While the employment situation is stable this year, efforts are still needed to maintain employment and help companies, it said.
The economy took a knock in August from stringent virus controls and tight curbs on property. While China’s Covid zero approach helped to quickly quash the infections, retail sales growth suffered, slowing to 2.5% in August.
Facing the continued commodity boom, the State Council also pledged to use more market-based measures to stabilize commodity prices and ensure supplies of power and natural gas during the winter.
©2021 Bloomberg L.P.
UAE Says It's Unwinding Pandemic Stimulus as Economy Recovers – Bloomberg
The United Arab Emirates has begun winding down an economic support program launched in response to the coronavirus pandemic as the economy shows signs of gradual recovery, the central bank said in a statement.
The reduced reserve requirements for banks won’t change for now and neither will the lower loan-to-value ratio required for first-time home buyers seeking mortgage loans, the bank said. The loan deferral component of the Targeted Economic Support Scheme will expire by the end of 2021 with financial institutions able to carry on tapping a collateralized 50-billion-dirham ($13.6 billion) liquidity facility until the middle of 2022, in line with earlier guidance.
The Caregiving Economy – The Atlantic
Care work has long been indispensable and invaluable. Indispensable: It is the work that makes all other work possible. Invaluable, quite literally: Our society is incapable of valuing it properly.
The sector of the American economy devoted to care—of children and the elderly and people with disabilities—is valued at $648 billion. That’s larger than the U.S. pharmaceutical industry. And yet most individual caregivers are criminally underpaid. That’s because caregiving is viewed either as a “labor of love,” in which case it can never be priced without destroying its essence, or as a service so basic that anyone can do it, in which case it is priced lower than dog walking or waitressing.
Recognizing the true value and potential of care, socially as well as economically, depends on a different understanding of what care actually is: not a service but a relationship that depends on human connection. It is the essence of what Jamie Merisotis, the president of the nonprofit Lumina Foundation, calls “human work”: the “work only people can do.” This makes it all the more essential in an age when workers face the threat of being replaced by machines.
When we use the word in an economic sense, care is a bundle of services: feeding, dressing, bathing, toileting, and assisting. Robots could perform all of those functions; in countries such as Japan, sometimes they already do. But that work is best described as caretaking, comparable to what the caretaker of a property provides by watering a garden or fixing a gate.
What transforms those services into caregiving, the support we want for ourselves and for those we love, is the existence of a relationship between the person providing care and the person being cared for. Not just any relationship, but one that is affectionate, or at least considerate and respectful. Most human beings cannot thrive without connection to others, a point underlined by the depression and declining mental capacities of many seniors who have been isolated during the pandemic.
The best care goes further. The goal is not simply to provide comfort or sustenance, but to enable and empower, to develop or maintain the capabilities of another human being. All parents or other caregivers of young children, for instance, know that bath time, mealtime, or even time on the changing table is scaffolding for talking, playing, or teaching: igniting young minds and shaping young brains. At the other end of life, good care consists of enabling an older person to have what the doctor and writer Atul Gawande calls his or her “best possible day”—the best day possible under the circumstances of a particular illness or condition.
Extend the idea of developing or maintaining human abilities beyond childhood and old age, and an entire vista of care jobs opens up. Call it the “care-plus economy.” It is generating all sorts of new jobs. Coaching, for instance, is a rapidly expanding career category, and not just on sports fields. There are life coaches, career coaches, and health and education coaches who guide people through social services. These are all jobs that enable others to perform at their best.
Education is a care-plus job. Lelac Almagor, a fourth-grade teacher, wrote in an essay for The New York Times, “I’m not ashamed to say that child care is at the heart of the work I do. I teach children reading and writing, yes, but I also watch over them, remind them to be kind and stay safe, plan games and activities to help them grow.”
The number of community health workers, a job category pioneered in poorer countries, is increasing in the United States. The jobs have different titles, but their core function is to connect people to the health system. The Baltimore Health Corps, for example, tackled both the health and economic crises created by the pandemic by hiring nearly 300 unemployed or furloughed community members as contact tracers, care coordinators, or administrative staff.
Academic advisers once confined their role to signing off on students’ course selections, but today they have become crucial to keeping students in college and helping them make the most of their experience. Technology has made a big difference, as it will in other care-plus jobs. In explaining Georgia State University’s successful retention of first-generation college students, Vice Provost Timothy Renick points to advising powered by predictive analytics. By monitoring students closely, the advising office gains information about when they are most likely to be discouraged and think about dropping out, and hence when personal interventions can be most effective.
The next frontier of the care-plus economy will be an explosion of mental-health jobs. Traditional therapy with a high price tag cannot meet Americans’ needs. But peer counselors, behavioral-health coaches, and technology-enabled support systems are filling the gap. Crisis Text Line, for instance, analyzes data to learn when depressed people are most likely to act on suicidal thoughts and how best to stop them.
One of us, Hilary, has worked in Britain to expand caregiving networks. In 2007 she co-designed a program called Circle, which is part social club, part concierge service. Members pay a small monthly fee, and in return get access to fun activities and practical support from members and helpers in the community. More than 10,000 people have participated, and evaluations show that members feel less lonely and more capable. The program has also reduced the money spent on formal services; Circle members are less likely, for example, to be readmitted to the hospital.
The mutual-aid societies that mushroomed into existence across the United States during the pandemic reflect the same philosophy. The core of a mutual-aid network is the principle of “solidarity not charity”: a group of community members coming together on an equal basis for the common good. These societies draw on a long tradition of “collective care” developed by African American, Indigenous, and immigrant groups as far back as the 18th century.
President Joe Biden has proposed spending $400 billion on home- and community-based care. Such support is crucial not only for the people being cared for, but for the professionals who provide that care—overwhelmingly Black and brown women, many of whom work for below minimum wage and receive few if any benefits. Suppose, however, that these workers were part of a new social sector based on community care, in which government and nonprofit organizations partnered to feed, house, treat, educate, or employ community members in part by embedding them in networks that would meet their needs in the round. Creating this sector will require not only a mix of government, private, and philanthropic funding, but also a new social contract about what we owe one another and what we should expect from the government.
Care jobs help humans flourish, and, properly understood and compensated, they can power a growing sector of the economy, strengthen our society, and increase our well-being. Goods are things that people buy and own; services are functions that people pay for. Relationships require two people and a connection between them. We don’t really have an economic category for that, but we should.
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