It appears Indian economics, too, is getting radicalised. Aside from shady efforts to isolate Pakistan under FATF, India is furious at China also. India tried to boycott import of Cheap Chinese electronic goods, particularly transistors/chips. Through aid injections, it weaned away some SAARC countries from attending scheduled conference in Pakistan. India’s developmental assistance to six neighbouring countries in South Asia over the last four fiscal years amounted to over Rs 211 billion. The countries are Afghanistan, Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka.
India’s politically-stringed aid
India extended developmental assistance to six neighbouring countries. The total aid to Afghanistan from 2014-15 to 2017-18 was Rs 22.32 billion, to Bangladesh it was Rs 5.14 billion, and to Bhutan it was Rs 156.8 billion. The developmental assistance to Maldives during the same period was Rs 2.7 billion, to Nepal it was Rs 13.22 billion, and to Sri Lanka it was Rs 10.8 billion. India has built a dam in Afghanistan and making 11 more there. She has committed Rs 45 billion for Bhutan’s 11th Plan – about 68 per cent of the total external assistance received. Another Rs 5 billion came in from India as part of the economic stimulus plan.
Modi visited only such countries that as could promise to isolate Pakistan. Between 2014 and 2018, over Rs 2,021 crore was spent on chartered flights, maintenance of aircraft and hotline facilities during Prime Minister Narendra Modi’s visits to top 10 countries from where India has received the maximum foreign-domestic investment inflows. Foreign Direct Investments grew from US$ 30,930.5 million in 2014, to US$ 43478.27 million in 2017. A total of Rs 1,583.18 crore was spent on maintenance of Modi’s aircraft and Rs 429.25 crore on chartered flights during the period between June 15, 2014 and December 3, 2018. The total expenditure on hotline was Rs 9.11 crore. Modi visited over 55 countries in 48 foreign trips since taking over as prime minister in May 2014. Over Rs 1,346 crore was incurred on chartered flights, maintenance of aircraft and hotline facilities during Manmohan Singh’s foreign visits from 2009-10 till 2013-14 during UPA-II.
The trading community also stands saffronised. The Confederation of All India Traders announced, “The time has come when China should suffer due to its proximity with Pakistan. The Confederation represents 70 million traders. It burnt Chinese goods on March 19 to “teach a lesson” to China. In a statement, the Confederation said. “It has launched a national campaign to boycott Chinese goods among the trading community of the country, calling the traders not to sell or buy Chinese goods.”
Chinese Xiaomi-Inc mobile phones and toys are ubiquitous in India. Trade between the countries grew to nearly $90 billion in the year ending March 2018.
Ashwani Mahajan, a leader of the Swadeshi Jagran Manch, also, called for a boycott of Chinese goods. He also wrote to Prime Minister Narendra Modi recommending that India should slap higher tariffs on Beijing. The Manch is the economic wing of the Rashtriya Swayamsevak Sangh, a Hindu nationalist group with close ties to the ruling Bharatiya Janata Party. Yoga guru Baba Ramdev also called for a ban on Chinese goods in the country.
The bilateral trade will cross the US$ 100 billion mark this year. However, this figure includes a deficit of US$ 58 billion for India and it has been increasing over the years. India’s bilateral trade deficit with China plus Hong Kong is about a third of its total trade deficit with all countries put together. Trade deficit with China came down by US$10 billion in the fiscal year ended March 2019 to $58 billion (in over US$ 80 billion trade). Decrease is illusory.
China has begun to ship some of its products through Hong Kong rather than its domestic ports. The combined Indian trade deficit with China plus Hong Kong has not reduced. India’s bilateral trade deficit with China plus Hong Kong is about a third of its total trade deficit with all countries put together. That with China alone is around a quarter of the total trade deficit.
The International Monetary Fund (IMF) has taken a closer look at the problem of bilateral trade imbalances in its latest World Economic Outlook, based on a study of 63 countries over 20 years.
First, while basic macroeconomic accounting tells us that China runs a huge trade surplus because it saves more than it invests, it has also been strongly interventionist in the way it has managed its exchange rate. Its sustained currency manipulation is reflected in its $3 trillion foreign exchange reserves. Besides, China uses subsidies to promote its domestic industry, giving it an unfair advantage in many areas. India fears bilateral trade deficit has become part of a larger geostrategic dilemma.
This is especially true of specific items such as consumer electronics, telecom equipment and power equipment. India ignores its uncompetitive goods in global market.
Aside from gung-ho, India’s trade ministry said in an email the country can’t take any unilateral punitive action against a fellow member of the World Trade Organisation. India could not boycott import of China-made transistors that accounted for 81.9 percent of India’s transistor imports in 2017. The transistors are an input to almost all Indian electronic goods and machinery. India cannot afford to switch to home-made expensive alternative. These imports also contain embodied technologies, particularly semiconductors, fertilizer and pharmaceutical.
Despite political differences, the world is cooperating on economic issues. It is India’s own interest not to subordinate economics to political expediency.
Retaliatory tariffs are unlikely to `soften’ China. Indian consumers may still not buy Indian goods. They may prefer to goods from countries other than China. Besides, China may route its products through other countries like Hong Kong. The solution lies in making Indian goods cost-effective substitutes against Chinese goods.
Rising wages in China are making Chinese goods more expensive. But, it is Vietnam, Indonesia, Bangladesh, Malaysia and the Philippines, not India, that are taking advantage of it. India needs to
Create niched in global markets and supply chains. Foxconn Technology Co. Ltd will begin mass-producing Apple iPhones at its factory outside Chennai this year. The Taiwanese company also makes phones for Xiaomi and Nokia in India. Such industrial projects should serve conveyor belts for India’s entry into international markets.
Trump’s wavering support
Both Trump and Modi hoped to isolate thorny trade issues from their geopolitical ties as both countries positioned themselves in Asia against an increasingly assertive China. The USA has conjured up an anti-China strategic alliance — which includes the so-called Quadrilateral Security Dialogue between the US, India, Japan and Australia. Even assuming it to be intact, it appears India and the USA appears to be headed for a bout of turbulence.
The Trump administration notified Congress (March 6, 2019) that it wants to scrap trade concessions for India, the largest beneficiary of the so-called generalised system of preferences that impacts $5.7 billion worth of goods. The move is symbolic. It affects just a fraction of India’s trade flows. But it is significant as it is in sync with India’s ennui towards China in view of her `hold’ on declaring a Pakistani religious leader `terrorist’.
The USA is finding it hard to maintain trade restrictions, for instance on Turkey, while treating India as a protégé. The USA cannot keep up unequal trade practices for long. US pulled out of Trans-Pacific Partnership trade deal that would have more closely tied Asian economies to Washington, despite pleas from regional allies such as Japan. Trump can’t remain unruffled by Indian customs duty hikes, expanded import substitution rules and domestic price caps.
Oil- import waiver
Washington policy makers are uneasy with India, with a history of non-alignment. Around May 2019, Washington may withdraw waiver to India on oil imports from Iran, and press for increased oil, natural gas and coal imports from the US. India says it is prepared to meet scrapping of preferential US trade concessions. Oil crunch would pinch, but India does not like to be seen buckling to American pressure.
India’s anachronistic saffronomics detrimental to her economic future
China’s role under World Trade Organisation and in BRIC (Brazil, Russia, India and China) would force India to shun its spurious repugnance to BRI. In 1990, BRIC countries accounted for 11% of global gross domestic product (GDP), by 2014 nearly 30%. These countries are not a political alliance, like the European Union or a formal trading association. Yet they have power as an economic bloc.
By 2050 (with China as a sole hegemon), these economies, including India, would be wealthier than most of the current major economic powers. Columbia University established the BRICLab, where students examine foreign, domestic, and financial policies of BRIC members. China and India are destined to become the world’s dominant suppliers of manufactured goods and services by 2050.
Brazil and Russia will become dominant suppliers of raw materials. BRIC expanded to include South Africa as the fifth nation in 2010.
RCEP, being negotiated between India, China, the 10-member ASEAN, Japan, South Korea, Australia and New Zealand, may result in the largest free trade bloc in the world covering about 3.5 billion people and 30 per cent of the world’s Gross Domestic Product. Apart from producer goods, the areas being negotiated include services, investments, intellectual property and government procurement.
China wants India to give concessions it has given the ASEAN countries. India has refused to do so as it is eliminating duties on more than 80 per cent items with ASEAN under a free-trade agreement. India ostensibly wants to protect domestic industry against competition from cheap Chinese goods.
India should not let narrow political interests smother broader economic interests. It should welcome Chinese investment in energy security, and infrastructure, such as roads and railways, industrial parks and in the food processing sector. To attract Chinese tourists, India should expand its hospitality sector please Chinese palate. In 2018, the total number of travellers from China to India and vice versa added up to just one million. India could attract more Chinese visitors by alluring them with promise of an unparalleled mélange of heritage, adventure, wellness, medical and spiritual well-being.
An Uneven Recovery: the Impact of COVID-19 on Latin America and the Caribbean
Employment rates in some Latin American and Caribbean countries have experienced a relative recovery, although in most, rates fall short of pre-pandemic levels. The quality of available jobs has also declined, as has the number of hours of paid work per week, according to data from a new survey by the World Bank and the United Nations Development Program (UNDP).
The High-frequency Phone Surveys, the second phase of which was implemented this year in 24 countries of the region, provides a snapshot of families’ well-being and their perceptions regarding the crisis. The goal is to take the pulse of the region and measure the impacts of the pandemic in key areas such as the labor market, income and food security, gender equality, and household access to basic services, such as education, health (including the COVID-19 vaccine), Internet connectivity and digital finance. The survey took a representative sample of the population aged 18 and over with access to a telephone in each country.
“The COVID-19 pandemic underscored the pre-existing inequalities in the region, where the most vulnerable and poorest groups have been disproportionately affected,” said Luis Felipe López-Calva, UNDP Regional Director for Latin America and the Caribbean. “This survey allows us to take the pulse of the region and propose evidence-based solutions.”
“The pandemic severely impacted millions of families in the region,” said Carlos Felipe Jaramillo, World Bank Vice-president for Latin America and the Caribbean. “These surveys we present today are crucial for obtaining current data on the scope of the crisis and for recommending informed measures to help improve the quality of life in our countries.”
Survey results demonstrate that the crisis particularly affected women, both because of the stronger initial impact on them and their slower labor market recovery. Mothers of young children (aged 0 to 5 years) have been most affected. In fact, a year and a half after the onset of the crisis, women are twice as likely as men to be unemployed owing to the pandemic. This situation is exacerbated by an increase in women’s household responsibilities, including supervision of children in remote education, and a higher incidence of mental health problems.
For the region as a whole, the employment rate stood at around 62 percent, almost 11 percentage points below the pre-pandemic level. Employment rates surpassed pre-crisis levels only in Guatemala, Nicaragua and El Salvador.
Moreover, formal employment fell 5.3 percent in the region while self-employment grew 5.7 percent, and the proportion of workers employed in small businesses (maximum of four workers) increased by 8 percent. These figures point to a deterioration in the quality of available employment. Even among the employed population, regional survey results identified a decrease in weekly hours of paid work, from 43 to 37, confirming this negative trend.
The survey data found that 28 percent of people employed before the pandemic lost their jobs, and more than half (17 percent) of those with a job before the pandemic have left the labor force. These impacts disproportionately affected women with young children: 40 percent of female workers over 18 with children aged 0 to 5 years lost their pre-pandemic job, compared to 39 percent of women in general and 18 percent of men.
The pandemic had a greater impact on less educated workers (both men and women). Thirty-five percent of those with a primary education or less lost their job during the pandemic, as did 28 percent of employees with a secondary education. Approximately 19 percent of individuals with a tertiary education became unemployed.
Survey data revealed that as a consequence of labor market setbacks, just over half of the households in the region have not yet managed to recover their pre-pandemic income levels. This situation occurred despite government efforts to help families through direct transfer programs and other benefits. Approximately 38 percent of survey respondents had received emergency cash transfers.
The survey demonstrated that food insecurity still affects 23.9 percent of households in Latin America and the Caribbean. This figure is almost double that reported by households prior to the pandemic — 12.8 percent. However, most countries have improved in this area with respect to the levels observed in June 2020.
Results also demonstrated that more than a year after the onset of the crisis, 86 percent of school-age children and youth receive some type of education (face-to-face or remote). However, figures vary widely across countries: in Guyana and Guatemala, it is 64 percent while in Peru and Chile, it reaches 95 and 97 percent, respectively. Additionally, education coverage falls below pre-pandemic levels in the countries surveyed. Just under a quarter of students in the region attended face-to-face classes.
Access to health services improved significantly. However, the percentage of unvaccinated people remains high in some countries. Eight percent of the regional population has not been vaccinated or is not willing to receive a vaccine. This percentage is especially high in the Caribbean: 60 percent in Haiti, 49 percent in Jamaica and 43 percent in Saint Lucia and Dominica.
Finally, according to the survey results, the use of mobile banking and online transactions (e-commerce) rose sharply during the pandemic. The use of digital payments also increased — currently, 26 percent of survey respondents said they used mobile wallets. The highest increases were among the rural population, the population over age 55 and those with low levels of education (primary or less).
Gender-based violence in Bangladesh: Economic Implications
Violence against women is one of the most heinous crimes perpetrated in today’s world. However, despite the gravity of the violence perpetrated against women, it is still the pervading reality in the world. Bangladesh is also afflicted with this malaise of violence against women which is manifested in the deluge of news across the media about the violence against women in various form .While Bangladesh has made commendable strides in the economic front, the perennial subjugation of the women who account for virtually half of its population remains a hurdle. Against this backdrop, this article investigates the economic toll incurred to the economy owing to the entrenched culture of systemic violence in our country.
Women constitute nearly half of the population of Bangladesh. As such, their innate potentials have considerable bearing on the socio-economic progress of the country. Admittedly, advancement of a country in socio-cultural indicators presupposes the simultaneous improvement of women from the subjugated position culturally attributed to them. It is impossible to envisage a prosperous thriving economy without the contribution and participation of the women equally. Therefore, the lack of women’s participation commensurate with their capabilities hinders the development of the country.
One of the obstacles women confront in their journey of transforming into human capital is perhaps the retrograde views that society harbor about the traditional gender role of the women which fetter their contribution to the economy and society by bestowing them only the circumscribed role of looking after the domestic affairs and rearing and educating child. The pastoral as well as urban culture perpetuate these traditional gender roles and deny women a free rein over their fate. Whenever women disavow the preordained and predictable roles provided by the society, they have to face mounting pressure from society so as to conform to the prevailing norms .Failing to conform to the regressive gender role will spell grave consequences for the women .When the society fails to cower the woman with the threats that are at its disposal ,it resort to the egregious path of violence. While violence against women is one of the most reprehensible crime one can ever commit, it however is normalized through a power dynamics that reinforces the overbearing male role and relegate women to the subjugation. Therefore, the culture of violence against women isn’t anomalous rather is embedded in the prevailing patriarchal power dynamics which deem chastising women for their rebellious attitude is solicited and invoke often contrived and distorted religious edicts in order to legitimize their deplorable crime. Moreover, the culture of violence against women which has been aptly termed as a epidemic by the United Nations is rooted in the prevailing socio-economic structure of the country that systematically condone the browbeating of women into submission to patriarchal norms and wield violent measures when the woman stubbornly gainsay their patriarchal hegemony.
While the social, cultural and health toll of the violence perpetrated against women is undoubtedly strenuous, the economic losses incurred by the violence and the opportunities nipped in the bud owing to violence against women also need to be taken into account in order to the adequately discern the deleterious ramifications of the violence against women .However, despite profound economic toll that are inflicted due to the violence against women, it is still unaddressed in the economic literature worldwide and discussion and cognizance about this momentous issue and its economic implications still scant.
As has been mentioned earlier, women constitute the lynchpin of the economy of Bangladesh which has been adequately manifested in the participation of women in Bangladesh’s much-heralded RMG sector and other productive sectors. However, this success of the economy overshadows the plight and perils this working class women confront in their bid to become economically productive. The violence against women is systemically entrenched in the country and women’s engagement in the economic activities are frowned upon by the society and culture .Therefore ,the this patriarchal fetter women behind the door of their houses and worst women are inflicted physical and mental violence in event of questioning the dictates of the elders and the male custodians. Therefore , the fundamental impact of violence against women on the economy of the country related to the untapped opportunities due to the constrains imposed by the patriarchal society on women under the pretext of social, religious and cultural norm. This threat alone or normalization of the gender role of the women as a care-giver hinder women in taking part in the economy on a par with their male counterparts .
Beside the lost opportunities that can be tapped, the violence against women has numerous other implications on the economy. Firstly, the violence against women inevitably results in the physical damage and mental trauma of the victim which has enduring toll on her. Therefore ,violence against women translate to toll on the health of the victim and therefore the cost incurred on the victim due to medical fees as a result of the violence is also included in the economic cost of violence against women. Secondly, the violence against women also leads to diminished productivity of the victim due to the health hazards. Therefore, violence against women has implicit economic cost on the economy as a result of the lost productivity.
Thirdly,the cycle of the violence against women negatively sensitize women in not challenging the sacrosanct patriarchal norms and therefore women fit themselves with the prevailing adverse society and they themselves reproduce and reinforce these norms .Therefore, a vicious cycle set in which prevents women to actualize their potential and stymie them in their path of realizing their goal .This result a sense of apathy in women with regards to education and other means of social mobility and they deliberately avoid the economically productive activities that are deemed taboo by the prevailing social norms and cultural ethos.
Moreover, violence against women is an egregious form of crime perpetrated by a patriarchal agent while the society has entrenched roles, norms and ethos that condone and encourage such outrageous violence .Moreover, a vicious cycle is at play in the gender based violence. The economic repercussions of the violence committed against women is considerable. Violence against women hinder the development of the women commensurate with their inherent potential which nip the dreams of women in the bud. Besides, gender based violence also deter women in challenging the prevailing patriarchal norms and undertaking productive economic activities that are frowned by the patriarchal society and are deemed taboo. Moreover, a widespread sensitization in societal level as well as a drastic overhaul of the patriarchal structure is necessary in order to avert the adverse socio-economic consequences of gender-based violence and extirpate the heinous root of this deplorable crime.
Omicron Variant: Implications on Global Economy
The prolonged battering of the Covid-19 has been considerably hitting the world economy. While vaccination and a receding in the cases of the cases in virus transmission has provided brief respite to the countries that are grappling with the recurring surge of the virus, the resurfacing of another virulent mutation termed as Omicron sounds ominous for the future of the world economy .Against this backdrop, this article projects the plausible economic ramifications of the new strand of the virus on the global economy.
The economic downward trajectory occasioned by the Covid-19 has been unprecedented in recent global history. While the economic depression of 2007-08 proved disastrous for the world economy, the toll emanating from Covid-19 pandemic and consequent economic stagnation has surpassed all the previous economic plunge .In fact, some analysts have gone to the extent of comparing the Covid-19 induced economic depression with the great depression of the 1920s.However, whether the far reaching repercussions of the Covid-19 on the global economy will be as momentous is still remains to be seen. Nevertheless, the profound economic jolt triggered by the Covid-19 pandemic is poised to reverberate across the world through shaping socio-economic and political events
The scar inflicted by a protracted economic recession owing to Covid-19 is apparent in the arduous path of economic rejuvenation in the western countries and eastern countries alike. Virtually every country is grappling with the toll that Covid-19 has incurred in the economy. The western countries are finding it difficult to retrieve the losses that Covid-19 has precipitated. Although the swift vaccination of the western countries at the expense of the developing countries has provided a fleeting lull in their battle against Covid-19,it seem however the virus has resurfaced with increasing virulence in order to offset whatever gain these embattled countries managed to garner in their fight against Covid-19.
The skyrocketing and unprecedented inflation of the western countries coupled with a plummeted consumer confidence has meant a prolonged period of stagnation of their economies. However, in the wake of vaccination induced temporary respite in the viral cases, the economies rebounded strongly from the pits of economic recession. However, these hard-earned gains will be reversed in the event of the advent of any new strand of the virus. Already, the delta variant which originated in India had triggered a spate of Covid-19 flare-ups in the United States and United Kingdom. Against this backdrop, the Omicron variant is set to aggravate the economic woes of the western countries and in turn the world.
While the western countries are reeling from economic stagnation, the developing and underdeveloped countries are confronting many abysmal realities due to their prevailing economic backwardness. Their economic plight has been lingering in want of adequate vaccination due to the apathetic stance of the western countries and global governance institutions .Therefore, while the western countries has rebounded from the Covid-19 induces economic predicaments, the difficulties confronted by the developing countries has continued unabated. While the influence of advanced countries and their less advanced counterparts in world-economy is inextricably tied, the callous attitude of the developed countries to the vaccination of countries in Asia and South Asia turn out to be sheer lack of economic prudence.
While western countries are considered as the economic hub of the world, it is however the developing countries on which the vital supply chains of the world economy hinges on. Therefore, the tardy pace of vaccination in these countries is prejudicial to the global economic stability. The economic ramification of the slow pace of vaccination is twofold for the world economy. Firstly, the slow vaccination hinders the revival of the economic activities in the developing countries thereby obstructing the supply chain of the commodities .This supply chain crisis has ripple effect in the western economies. The recent predicament of inflation and attending macroeconomic woes in countries like the United States and United Kingdom is manifestation of the supply chain crisis plaguing the world economy. Due to the paucity of commodities and raw materials, the prices of necessary goods has escalated in the western countries which has plummeted consumer confidence and triggered a vicious cycle of stagflation in the economy that is reminiscent of the 1970s when a similar crisis in oil supply has precipitated economic downturn in the western economies.
Secondly, the slow rate of vaccination also run the risk of allowing the virus to mutating to newer and much virulent variants and due to the unfettered communication as a result of globalization the emergence of any new variant doesn’t remain in the confines of any border rather proliferate like wildfire and precipitate global crisis. Therefore, the lack of vaccination or slack pace therefore has global repercussions. Therefore, it is judicious of the developed countries to concentrate efforts in contributing to the vaccination of the less developed countries which will yield good results for their economy.
The ubiquitous mechanism in battling Covid-19 remains one of containment that entails halting economic and other activities and insulating the countries from other countries through imposing border controls, curbs on air communication and other stringent measures echoing protectionist attitude. However, these measures are antithetical to the spirit of the globalization and global trade. While lockdowns and other protectionist measures yield temporary improvement in the Covid cases, it is not viable in the longer term. Besides, lockdowns have deleterious ramifications on the economy and further aggravate economic rebounding of the developed countries and developing countries alike. Therefore, efforts should be aimed at preventing the Covid cases rather than grappling with the Covid with a knee-jerk policy of improvisation. .
Moreover,Covid-19 has already occasioned far-reaching economic fallout in the world economy. Indications abound regarding the fact that the world economy is verging on profound and prolonged recession. Against the backdrop of ominous predictions and slackening growth and painful inflation of the world economy, the prospects of the world economy due the advent of a new variant remain mired in obscurity. It can be concluded that the economic repercussions of yet another novel variant will be momentous and will offset hard-earned growth of the countries .Unlike previous precedent of haphazard policy and knee-jerk policy solutions, this time around the countries need to undertake challenge much prudently and should concentrate all of their efforts aiming at universal vaccination of all countries so as to prevent the resurfacing of similar virulent viral strands.
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