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The global public overwhelmingly favours multilateral cooperation

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A global opinion poll published today by the World Economic Forum finds that a clear majority of people in all regions of the world say they believe cooperation between nations is either extremely or very important. It also finds that a large majority rejects the notion that national improvement is a zero-sum game, and that most people feel that immigrants are mostly good for their adopted country.

The research, covering a sample size of over 10,000 people from every region of the world, was commissioned ahead of next week’s World Economic Forum Annual Meeting in Davos-Klosters, Switzerland. The findings can be viewed as an endorsement by the public of the key principles of the multilateral system. It also roundly debunks the negative notion of immigrants that has raced to the top of the news agenda across Europe, North America and elsewhere.

However, regional viewpoints differ. Asked how important it is that countries work together towards a common goal, a global average of 76% said they believe it is either extremely important or very important. These sentiments are felt most strongly in South Asia and sub-Saharan Africa, where 88% share the same view. At the other end of the scale, only 61% of Western Europeans and 70% of North Americans say they consider cooperation to be extremely or very important.

Asked whether their country has a responsibility to help other countries in the world, South Asians again registered the highest levels of concurrence, with 94% answering positively compared to a global average of 72%. Again, North Americans and Western Europeans were the least effusive, with only 61% and 63% respectively answering in the affirmative.

While a global majority of respondents – 57% – say they believe that immigrants are “mostly good” for their new country, only 40% of those living in Eastern Europe and Central Asia and 46% of respondents in Western Europe subscribe to the same opinion. Perhaps unsurprisingly given its history, North Americans trailed only South Asians in their approval of immigrants, with 66% saying they believe immigrants are mostly good.

The data, which came about as a result of a collaboration with Qualtrics, will be used in panel discussions and workshops at the Annual Meeting as a guide for participants as they explore how to build an architecture for global governance that is capable of fostering the international collaboration necessary to solve the world’s most critical challenges.

One finding that will surely prove valuable to the discussions is the fact that, while most people still believe in the power of international cooperation, they share a much less positive view of their own country when it comes to social progress. This despondency at the lack of upward mobility is felt most acutely in Western Europe, where only 20% of respondents said they feel it is either extremely common or somewhat common for someone to be born poor and become rich through hard work. Respondents in the United States, where the ideal of the American Dream is deeply rooted in the national consciousness, were only a little more positive with 34% saying they believe the statement to be either extremely or very common.

“The combination of climate change, income inequality, technology and geopolitics pose an existential threat to humanity. What we see with this research is that, while the international community’s capacity for concerted action appears constrained, the overwhelming desire of the global public is for leaders to find new ways to work together that will allow them to cooperate on these critical shared challenges we all face,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

“This is a bold reminder that listening is critical to leadership,” said Bill McDermott, CEO of SAP. “If we just have the courage to ask, the people always know what problems need solving. I’m proud we will enter this annual meeting with such a compelling view of the human experience, unfiltered, from the people who are actually living it.”

As well as providing insight into the global public’s attitudes on opportunity and international relations, the survey also shines a light on other important matters of global importance in 2019. For example, on the subject of sustainability, 54% of respondents said they have either a “great deal” or “a lot” of trust in what climate scientists say. At the other end of the spectrum, the region in the world where most respondents have little or no trust in climate scientists is North America, with only 17% responding positively.

When it comes to the role of technology in society, the number of people that say they believe technology does more good than harm outnumber those who say they think it does more harm than good by a factor of nearly four to one. However, when asked whether they agree with the statement that technology companies are more interested in making the world a better place rather than simply making money, responses differed markedly between regions. The region of the world where respondents take the most positive view of technology is sub-Saharan Africa, where 66georg% of those surveyed agree that technology companies want to make the world a better place, followed by South Asia (64%) and East Asia and the Pacific (63%). This compares to only 39% of Western Europeans and 40% of North Americans and respondents from Eastern Europe and Central Asia.

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Philippines: Reducing Inequality Key to Becoming a Middle-Class Society Free of Poverty

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Policies that support employment and workers, raise education quality and improve access, boost rural development, and strengthen social protection can reduce inequality, thus enhancing Filipino peoples’ chances for improving their well-being.

In a report titled “Overcoming Poverty and Inequality in the Philippines: Past, Present, and Prospects for the Future” released today, the World Bank said that the Philippines has made important gains in poverty reduction. Driven by high growth rates and the expansion of jobs outside agriculture, poverty fell by two-thirds—from 49.2 percent in 1985 to 16.7 percent in 2018. By 2018, the middle class had expanded to nearly 12 million people and the economically secure population had risen to 44 million.

Yet inequality remains high: the top 1 percent of earners together capture 17 percent of national income, with only 14 percent being shared by the bottom 50 percent. With an income Gini coefficient of 42.3 percent in 2018, the Philippines had one of the highest rates of income inequality in East Asia.

“The Philippines aims to become a middle-class society free of poverty by 2040, but we know from global experience that no country has managed to make this transition while maintaining high levels of inequality,” said Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand. “Inequality of opportunity and low mobility across generations wastes human potential and slowdown innovation, which is crucial for building a competitive and prosperous economy that will in turn improve the well-being and quality of life of all Filipinos.”

The report highlights that the expansion of secondary education, mobility to better-paying jobs, access to basic services, and government social assistance have started to reduce inequality since the mid-2000s. However, unequal opportunities, slow access to tertiary education among low-income households, inequality in returns to college education, and social norms putting the heavier burden of childcare on women has slowed down the narrowing of inequality in the Philippines.

Despite the strong recovery of growth and the labor market, COVID-19 pandemic has partly reversed decades-long gains in reducing poverty and inequality in the Philippines. It halted economic growth momentum in 2020, and unemployment shot up in industries that require in-person work. In 2021, the national poverty rate rose to 18.1 percent despite government assistance.

Recovery in the Philippines is uneven across the income distribution and the poorest who suffered the most from COVID have yet to fully recover their incomes. With food prices going up, many families coped by reducing their consumption, including eating less. These coping strategies can have serious consequences on the health and nutrition of children in these vulnerable households.

The report says that inequality starts even before birth and is perpetuated over the life cycle. It starts with maternal nutrition and health during pregnancy. Differences continue into childhood, where disparities in access to health care, proper nutrition, safe drinking water, sanitation, and quality education determine the extent to which a child’s human capital develops.

“Inequality shapes outcomes later in life, such as employment opportunities and income, which in turn influence how much support adult Filipinos are able to provide for their children to help maximize their potential,” said Nadia Belhaj Hassine Belghith, Senior Economist with the East Asia Poverty Global Practice covering Thailand and the Philippines who led the study.

The report says that policy priorities to reduce inequality in the Philippines can be structured around three themes, including healing the pandemic’s scars and building resilience, setting the stage for a vibrant and inclusive recovery, and promoting greater equality of opportunity.

Healing pandemic’s scars will require promoting greater vaccine booster uptake, overcoming the learning loss due to COVID-19, strengthening social assistance, unemployment insurance programs for the informal sector, and taming inflation.

Setting the stage for vibrant recovery entails reskilling of workers, promoting entrepreneurship, increasing the participation of women in the labor force, and raising the productivity of agriculture.

Promoting greater equality of opportunity entails increasing access to quality health care, increasing equality of opportunity in education, and improving access to quality housing, among others. Equality of opportunity needs to target the lagging regions and other people disadvantaged in accessing these because of the circumstances of their birth.

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Germany in secret talks to buy Iranian oil: report

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An Israeli paper has claimed that Germany is in “secret” talks with Tehran to buy Iranian oil as part of its efforts to wean itself off Russia’s energy supplies.

The Jerusalem Post quoted the chief economist for the partially state-owned bank LBBW in the southwestern German state of Baden-Württemberg as saying that Germany is engaged in secret talks with the Islamic Republic to buy Iranian oil.

“Intensive talks are already being held behind the scenes with Venezuela, Iran or Algeria to cover Germany’s oil and gasoline needs,” said Moritz Kraemer, the chief economist of the Landesbank Baden-Württemberg (LBBW).

Bernd Wagner, a spokesman for LBBW, told the Jerusalem Post that “as a matter of principle, LBBW does not conduct any Iran-related business.”

When asked about Kraemer’s statement about secret talks with Iran, Wagner said, “There seems to be a misunderstanding. The chief economist is talking about the national economy, not about LBBW’s business. We have a very clear distinction here.”

No official announcements have so far been made about the alleged secret talks between Tehran and Berlin. But tensions have been on the rise between the two sides over German officials’ statements regarding Iran’s internal developments. 

On Monday, the Iranian foreign ministry summoned the German ambassador to Tehran, Hans-Udo Muzel, over German Chancellor Olaf Scholz’s “meddlesome” remarks about Iran.

“Following the meddlesome and irresponsible statements of the German chancellor towards the Islamic Republic, Hans-Udo Muzel the German ambassador to Tehran was summoned to the foreign ministry on Monday,” the Iranian foreign ministry said in a statement.

The statement added, “During the session, the director general of the west European affairs of the foreign ministry condemned the irresponsible statement of the German official. He conveyed strong protest of the Islamic Republic of Iran about Germany’s destructive approach towards the domestic developments of Iran to the German envoy.”

It continued, “The foreign ministry official said the German side should bear the consequences of the continuation of such non-constructive statements and acts on the future of the mutual ties. He stressed that the Islamic Republic of Iran is monitoring the stances and actions of the other sides with dignity and grandeur, taking into account its national interests, and will give them proportionate responses.”

The statement concluded, “The German ambassador, for his part, said he will convey the message of the Islamic Republic of Iran to his government at the earliest. During the meeting the formal notice of protest of the Islamic Republic was handed over to the German ambassador.”

Tehran Times

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India’s Urban Infrastructure Needs to Cross $840 Billion Over Next 15 Years

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A new World Bank report estimates that India will need to invest $840 billion over the next 15 years—or an average of $55 billion per annum—into urban infrastructure if it is to effectively meet the needs of its fast-growing urban population. The report, titled “Financing India’s Urban Infrastructure Needs: Constraints to Commercial Financing and Prospects for Policy Action” underlines the urgent need to leverage more private and commercial investments to meet emerging financial gaps.

By 2036, 600 million people will be living in urban cities in India, representing 40 percent of the population. This is likely to put additional pressure on the already stretched urban infrastructure and services of Indian cities – with more demand for clean drinking water, reliable power supply, efficient and safe road transport amongst others. Currently, the central and state governments finance over 75 percent of city infrastructure, while urban local bodies (ULB) finance 15 percent through their own surplus revenues.

Only 5 percent of the infrastructure needs of Indian cities are currently being financed through private sources. With government’s current (2018) annual urban infrastructure investments topping at $16 billion, much of the gap will require private financing. 

“Cities in India need large amounts of financing to promote green, smart, inclusive, and sustainable urbanization. Creating a conducive environment for ULBs, especially large and creditworthy ones, to borrow more from private sources will therefore be critical to ensuring that cities are able to improve living standards of their growing populations in a sustainable manner,” said Auguste Tano Kouamé, Country Director, World Bank, India.

The new report recommends expanding the capacities of city agencies to deliver infrastructure projects at scale. Currently, the 10 largest ULBs were able to spend only two-thirds of their total capital budget over three recent fiscal years. A weak regulatory environment and weak revenue collection also adds to the challenge of cities accessing more private financing. Between 2011 and 2018, urban property tax stood at 0.15 percent of GDP compared to an average of 0.3-0.6 percent of GDP for low- and middle-income countries. Low service charges for municipal services also undermines their financial viability and attractiveness to private investment.

Over the medium term, the report suggests a series of structural reforms including those in the taxation policy and fiscal transfer system – which can allow cities to leverage more private financing. In the short term, it identifies a set of large high-potential cities that have the ability to raise higher volumes of private financing.

“The Government of Indiacan play an important role in removing market frictions that cities face in accessing private financing. The World Bank report proposes a range of measures that can be taken by city, state, and federal agencies to bend the arc towards a future in which private commercial finance becomes a much bigger part of the solution to India’s urban investment challenge,” said Roland White, Global Lead, City Management and Finance, World Bank, and co-author of the report. 

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