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Singapore Economy Still in Dire Situation, Central Bank Says – BNN

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(Bloomberg) — Singapore’s economic situation remains dire amid the coronavirus pandemic, impacted by what could be lasting shifts in global demand and to supply chains, according to the city-state’s central bank.

“Even if subsequent waves of infection are more limited” globally, it’s not clear whether confidence in resuming normal economic activity will be restored, Ravi Menon, managing director of the Monetary Authority of Singapore, said at a briefing Thursday following the release of the central bank’s annual report. “People may be slower to return to previous patterns of work as long as the virus is still circulating.”

After weathering U.S.-China trade-war pressures in 2019, Singapore’s export-reliant economy has been slammed by coronavirus travel restrictions, disruptions to supply chains and government-imposed lockdowns that have pummeled consumption.

Gross domestic product plunged an annualized 41.2% in the second quarter from the first three months of the year, the biggest quarterly contraction on record. The government expects the economy to shrink 4% to 7% this year, though Menon on Thursday noted both upside and downside risks to that forecast.

Stimulus Steps

Menon said roughly 12% of Singapore’s economy is at the “epicenter” of the impact from the pandemic. Travel-related sectors — including airlines, accommodation, arts and entertainment, and recreation — account for about 4% of Singapore’s GDP and have exerted the “largest drag on economic growth,” he added.

“The financial services sector in particular has done reasonably well” amid the pandemic, Menon said, with a “good part” of financial activity moving online. Technology enabled 85% of finance workers to work from home during Singapore’s partial lockdown, with minimal disruption.

Singapore Banks Show Resilience to Covid Crisis, MAS Chief Says

Singapore has rolled out about S$93 billion ($67 billion) in fiscal support to alleviate the economic impact of the virus and containment measures, including wage subsidies, rental relief, government fee waivers and jobs training opportunities.

The MAS, which uses the currency as its main policy tool rather than interest rates, took unprecedented easing steps in March to help cushion the economy. It lowered the midpoint of the currency band and reduced the slope to zero to allow for a weaker exchange rate that could support export-driven growth.

Other highlights from the briefing:

  • Weak external demand and “continued small frictions” in global supply chains will continue to weigh on Singapore’s trade, but exports of biological and electronic products have held up better than expected
  • The central bank aims to curb disinflationary pressures that could destabilize the economy
  • MAS doesn’t seek to enhance export competitiveness by weakening the exchange rate
  • About $21 billion has been provided through a U.S. dollar facility MAS set up following an arrangement with the U.S. Federal Reserve
  • MAS sees no need to adjust measures introduced over the past decade to cool the property market, which have helped temper the downturn’s impact on property prices
  • Higher corporate and household debt levels entering 2021 will weigh on growth and could be a “source of vulnerability” for the economy

©2020 Bloomberg L.P.

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Pandemic has devastated India's economy and left its children vulnerable to exploitation as cheap labour – CBC.ca

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Ajay Tomar regularly scans the platforms of the New Delhi Railway Station, the busiest in India, running through a checklist in his head. 

The social worker is trained to spot signs of children being trafficked into forced labour. One telltale sign is seeing one or two kids are surrounded by a group of adults, the children isolated. He always glances at their hands to check if they are worn, a clue the child has been working illegally. 

Child labour is illegal in India for anyone under 14 except in special circumstances, such as working for a family business. But it’s a problem that has been exacerbated by the coronavirus pandemic, with indications pointing to a sharp increase in the number of children being exploited as cheap labourers. 

India’s last census, in 2011, showed the country had nearly 8.2 million child labourers between the ages of five and 14, mainly in the country’s poor rural states, such as Bihar and Uttar Pradesh. Children’s rights groups say that number improved significantly this past decade but fear the pandemic will reverse much of that progress.

A 10-year-old boy works inside a lime paste factory in a Mumbai slum in November 2010. Child advocates say that the child labour situation has improved in the past decade but worry that progress will be set back as the pandemic economy forces children back to work. (Danish Siddiqui/Reuters)

India’s swift and severe lockdown to stop the spread of COVID-19, imposed in March with mere hours’ notice, made a desperate situation worse and created “fertile ground” for traffickers, according to Sudarshan Suchi, CEO of Save the Children India. 

It abruptly shut all of the country’s schools and forced migrant labourers out of work, Suchi said, and once the measures started to ease, industry turned to the cheapest labour available to make up the shortfall: children.   

Children who have missed their online classes due to a lack of internet facilities sit on the ground maintain a safe distance as they listen to pre-recorded lessons over loudspeakers in Dandwal village in the western state of Maharashtra. (Prashant Waydande/Reuters)

Schools in many parts of the country remain shut

The country has the second-highest number of COVID-19 cases after the U.S., at 9.6 million, and third-highest number of deaths, at almost 140,000.

Reopening orders vary from state to state, but schools across the country are still closed or operating at a much-reduced capacity, and children in some of India’s poorer communities are not in class because they don’t have access to online learning.  

Children watch online lectures inside a digital mobile education library in Mumbai set up so that children without access to cellphones can follow classes virtually during the pandemic. Schools in many part of India are closed as COVID-19 cases show no sign of slowing down. (Francis Mascarenhas/Reuters)

On the heels of its deadliest month from COVID-19 cases, Delhi’s Deputy Chief Minister Manish Sisodia said schools would remain shut until a vaccine is available. 

In other states, such as Gujarat, classes were set to resume in late November before authorities, spooked by a rise in infections, decided to hold off. 

As a result, Suchi said, his crews have seen a “marked increase” in child labour in urban and rural areas, where children are often pushed into working at garment factories, car repair shops or garbage dumps, where they pick out plastics to earn a few cents.  

“The vulnerability is at its highest right now,” he said. 

Suchi also worries the damage has already been done, since once children from poorer communities leave class for work, it’s much harder for them to return.

WATCH | In pandemic, children have become source of cheap labour in some parts of India:

In India, with a COVID-19 case count second only to the U.S., it’s children who’ve become the cheapest and easiest sources of income for families ravaged by economic fallout. 2:32

Families complicit in child labour

Tomar, who works for the Delhi-based non-governmental organization Prayas, has been seeing more of that vulnerability, too, as families turn to children to help scrape together enough money to survive.

“We find kids here who have come to work … with their fathers and mothers,” Tomar said.

While he was speaking to CBC News, Tomar’s fellow social workers on the railway rescue team were interviewing a preteen boy who tried to run away from the two adults who had forced him into manual labour. One of them was his cousin; the other his brother.

Kids on the platform at the New Delhi Railway Station. Workers from the Prayas Juvenile Aid Centre Society patrol the station on the lookout for children who are being forced to work illegally by adults. (Stephanie Jenzer/CBC)

The boy eventually told the social workers that his relatives forced him to work 14 days in a row at a bicycle-chain repair factory near the New Delhi train station until he got so tired he tried to travel back to his home state of Bihar, hundreds of kilometres away, to see his mother. His captors tailed him to the station, where Tomar’s team noticed the group and intervened. 

Tomar said the fact the boy’s brother was involved in forcing him to work is all too common.

“We find out every day that families are almost all OK [with it],” said Tomar. “We can’t say anything to them. They are vulnerable, marginalized people.” 

Ajay Tomar, a social worker with Prayas, believes during the pandemic, some children he would have normally been able to rescue may be slipping through the cracks. (Stephanie Jenzer/CBC)

Economy contracted 24% during pandemic

Chaman Shagufta, who works as a counsellor with the same organization at a children’s shelter in one of Delhi’s poorest neighbourhoods, knows that all too well. 

She often has to tease the stories out of the children and track inconsistencies before handing their files over to India’s child welfare authorities, who determine if a child should be allowed to return to their family or be sent to a shelter.

Shagufta’s rapid-fire questions, punctuated by terms of endearment, are effective in getting two young boys picked up at the New Delhi Railway Station on their way to Maharashtra from the poverty-plagued state of Bihar to tell part of their story.

“Before the lockdown, we were in school,” said one boy.

Boys at one of the 38 children’s homes and shelters run by Prayas practise drawing and the alphabet. (Stephanie Jenzer/CBC)

He insisted he was 15, but Shagufta was unconvinced, suspecting the boy was closer to 12. 

“It’s very much a probability that they have come for work since schools are locked down and nobody is studying,” she said. 

Many parents know children are being sent off to work, she said, and reason that they may as well “earn something” during the shutdown period. 

It’s a sign of the dire straits families are in in an economy that has contracted 24 per cent between April and June of this year, according to government GDP figures. 

Children near a street corner in central Delhi where they beg for money from drivers stuck in traffic. (Stephanie Jenzer/CBC)

‘Nowhere children’

Children are most at risk under those circumstances, said Amod Kanth, the former Delhi police officer who founded the NGO Prayas. 

“I prefer to call them ‘nowhere children,’ he said. “They are not on the radar. They are not visible. They are not accounted for because they happen to be drifting, traveling, migrating.

“They suffer more compared to others in the pandemic.”

Amod Kanth, a former New Delhi police officer who founded Prayas, says children ‘are not on the radar’ during the pandemic and suffer more as a result. (Stephanie Jenzer/CBC)

In another children’s home operated by Prayas, Poonam waits patiently for a quick visit in the hallway outside the large room where her three eldest children are getting an art lesson from social workers. 

The 30-year old mother of four boys lives in one of Delhi’s poorest slums and told CBC News the eight months since the start of India’s lockdown order were the hardest she’s had to endure. 

“It was tough,” she said. “My children were starving.”

Her husband, an addict, had already left her and she was also caring for her own mother, who has health problems.    

Poonam is a 30-year-old mother of four who works selling vegetables. During the pandemic, she has only been able to earn less than $3 a day. She says she had no choice but to let her children beg for money in order to survive. (Stephanie Jenzer/CBC)

Desperation pushed her to send three of her sons, ages 5, 7 and 11, to beg on the streets outside a local temple and at busy intersections while she ran her vegetable stand, making about 150 rupees (less than $3 Cdn) a day, she said. 

Only, fewer people were out buying vegetables and the struggle to find enough money for the family to eat was crushing.

The boys were spotted begging a month ago and taken in by social workers, who alerted the authorities and started the child welfare committee process to determine whether the three can be sent home. 

They are living temporarily at the Prayas shelter, and Poonam desperately wants to keep it that way. 

“It’s too hard. They will die if they come back to me,” Poonam said, her voice breaking with emotion.

At a home for vulnerable children in northeast Delhi, boys learn handicraft skills. (Stephanie Jenzer/CBC)

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Kuwaitis go to polls as economy poses challenge for new emir – TheChronicleHerald.ca

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By Ahmed Hagagy

KUWAIT (Reuters) – Kuwaitis voted in legislative polls on Saturday with the Gulf state mired in its worst economic crisis in decades, which poses a challenge for the government’s often stormy relationship with a parliament blamed for blocking reforms.

More than 300 candidates, including 29 women, are vying for 50 seats in the Gulf’s oldest and most outspoken assembly with legislative powers. Critics say it has stalled investment and economic and fiscal reform in the cradle-to-grave welfare state.

Campaigning, which took place mostly on social media and local TV channels due to COVID-19 restrictions, has focused on the economy, corruption and demographics in a country where foreigners make up the bulk of the workforce.

“Kuwait needs development. The streets are broken and there is no development and no economy … and coronavirus has affected everything in every way,” said Ibrahim, a government employee, after voting in Kuwait city.

Turnout is expected to be lower than in past elections due to concerns about COVID-19 which, along with low crude prices, has battered state finances in the wealthy oil-producing nation.

A low turnout could strengthen the hand of tribal, Islamist and other candidates who can rally supporters to head to polling centres, analysts said.

“Kuwaiti opposition who boycotted (previous) polls are moving to run and vote, and this could strengthen their presence,” said Kuwaiti political analyst Mohamad al-Dosayri.

Frequent clashes between the cabinet and the assembly have led to successive government reshuffles and dissolutions of parliament. Kuwait’s emir, who has the final say, picks a prime minister who selects a cabinet.

The current government is due to resign after the elections.

Sheikh Nawaf al-Ahmad al-Sabah took the reins as emir in September following the death of his brother.

FACE MASKS AND SANITIZER

Kuwait’s economy, which is worth nearly $140 billion, is facing a deficit of $46 billion this year. A government priority is to overcome legislative gridlock on a bill that would allow Kuwait to tap international debt markets.

Sheikh Nawaf has called for unity to face challenges at home and in a region experiencing heightened tension between Kuwait’s larger neighbours Saudi Arabia and Iran.

Late ruler Sheikh Sabah al-Ahmad broke the hold of opposition groups on parliament in 2012 by using executive powers to amend the voting system, sparking large protests.

Under the old electoral system, voters were allowed to cast ballots for up to four candidates, which the opposition says allowed alliances that partly made up for the absence of political parties, which are officially barred.

The system introduced in 2012 allows votes for only a single candidate, which the opposition says makes alliances difficult.

At al-Waha School in Jahra City, a polling station for men, voters in Arab robes protected themselves with face masks and hand sanitizers before putting their votes into the ballot box.

About 20 female observers watched a male judge checking the identity of women voters at the Bahsira school for girls before they cast their ballots.

Kuwaiti opposition figures have proposed electoral reforms and a pardon for dissidents, many in self-exile.

“There have been some reforms in the judiciary and the Emiri Diwan,” or court, said a Kuwaiti politician who asked not to be named. “We heard echoes of more reforms after elections.”

(Reporting by Ahmed Hagagy in Kuwait; Additional reporting by Stephanie McGehee; Writing by Aziz El Yaakoubi; Editing by William Mallard and David Clarke)

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Confused by the economy during the COVID-19 pandemic? Don't worry, so are the economists – CBC.ca

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The numbers can be so big, they’re hard to get your head around. The swings are so volatile, you can lose your footing.

And yet, with millions of Canadians struggling through the COVID-19 crisis, many of us want to understand what is going on with the economy.

“My head is spinning, too,” said Benjamin Tal, deputy chief economist at CIBC. “So I don’t blame people, because we’ve never seen anything like this.”

Every week, a flood of new data comes out. This week, we were inundated with the federal government’s fiscal update, GDP figures and job numbers. All trying to shape the story of the economy. Sometimes the numbers contradict each other. Sometimes they give a sort of head-fake and contradict themselves.

The fiscal update that came out on Monday had built all its projections on an average of the forecasts from the big banks. The next morning, Statistics Canada released quarterly GDP numbers that missed the forecast by a staggering seven points. By the end of the week, jobs data came out showing Canadian employers added three times as many jobs as expected.

Like many businesses these days, Scout, a gift shop in Toronto that sells products made by local artisans, is having to adjust how it operates. (Submitted/Leah Eyles)

Every economist is trying to figure out what those numbers are telling us. And they’re not always getting it right.

“Economists have never been more wrong about where the data would come through,” said Frances Donald, chief economist and head of macro strategy at Manulife Investment Management in Toronto.

New methods

Most of the time, she said, economists rely on data such as job growth and retail sales numbers to make sense of the situation. The problem is those statistics tell us what was happening months ago.

“This is a daily crisis that requires daily data points,” she said.

To combat that, economists have turned to higher frequency data such as google mobility trends, restaurant reservation tallies and public transit numbers.

Shops in Toronto’s Roncesvalles neighbourhood hang posters in their storefronts encouraging people to buy local. (Evan Mitsui/CBC )

But Donald said the bigger issue is the unique, unprecedented nature of this crisis. 

“We don’t have a functional precedent for what is happening,” she said.

There may be other moments in the past that share some similarities, but nothing experts can use to model probable outcomes.

Change of perspective

Tal said he understands why more Canadians than usual seem to be following economic updates with bated breath. But he said the best option is to focus less on the details and think of the broader economic themes.

So, while the short term is bad, he said, the medium term looks better.

“We are buying time at this point,” he said, until the virus comes under control. 

Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks to news media before unveiling her fall economic statement earlier this week. (Blair Gable/Reuters)

Yes, the world is headed into a long and dark winter, he said. Yes, COVID-19 cases are rising and government-imposed restrictions could spread. And, yes, households and businesses will need government support and record-low interest rates to provide them a bridge to the second half of next year, he said.

 

But if you zoom out and look at the longer-term forecasts, the second half of next year shows a lot of promise. Tal said the economic crisis is largely due to the fact that people aren’t spending as much as they normally would.

Some of that is because of government-mandated closures.

But some of it is also a question of confidence.

Even if the movie theatres were open, how many people would pay to sit in close contact with strangers for a two-hour film?

Looking ahead

That spending issue is a large source of the hope for 2021. Tal calculates that Canadian households and businesses are sitting on $170 billion in savings. And once the virus comes under control, he predicts that money will spill back into the economy.

“I see this unleashing of potential demand in the economy,” he said. “Most of it will be in the services sector. And that will benefit employment for people that are struggling. It’s just a question of time.”

So, in the interim, he recommends not getting too caught up in the minutiae of the daily economic data.

That’s advice financial markets seem to be following. As COVID-19 case counts soar and government-imposed restrictions spread, the major stock market indexes are all climbing. Donald said markets seem to be looking past the short- and medium-term unknowns and banking on a solid return next year.

WATCH | The National’s report on the fall economic update: 

The government unveiled a record deficit of $381 billion in its fiscal update, along with spending plans for more pandemic relief and a huge stimulus plan to jolt the economy post-pandemic. 2:18

She said the markets don’t seem to be too caught up in the daily barrage of economic information.

“The markets are thinking ahead to where we are going to be in 6, 12, 48 months,” she said. “Not where we are at this very moment.”

Besides, she said, one of the best indicators available is to just look around and see how people around you are acting. Are people nervous and scared? Are they staying home or are they out shopping? The data will catch up to our behaviour eventually. 

“You don’t need a PhD in economics to look around at your friends and family and get a sense of what their behaviour is,” she said. “We don’t need numbers and releases, we just need to look out our front doors.”

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