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ADB Announces $6.5 Billion Initial Response to COVID-19 Pandemic

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The COVID-19 pandemic has become a major global crisis, requiring forceful action at national, regional, and global levels, according to ADB President Masatsugu Asakawa. Photo: ADB

The Asian Development Bank (ADB) today announced a $6.5 billion initial package to address the immediate needs of its developing member countries (DMCs) as they respond to the novel coronavirus (COVID-19) pandemic.

“This pandemic has become a major global crisis. It requires forceful action at national, regional, and global levels,” said ADB President Masatsugu Asakawa. “With our developing member countries, we are formulating an aggressive set of actions to combat the pandemic; to protect the poor, the vulnerable, and wider populations across the region; and to ensure economies will rebound as swiftly as possible. Based on close dialogue with our members and peer institutions, we are deploying this $6.5 billion rescue package to meet the immediate needs of our members.”

Mr. Asakawa stressed that “ADB stands ready to provide further financial assistance and policy advice down the road whenever the situation warrants, on top of the $6.5 billion package.”

The initial package includes approximately $3.6 billion in sovereign operations for a range of responses to the health and economic consequences of the pandemic, and $1.6 billion in nonsovereign operations for micro, small, and medium-sized enterprises, domestic and regional trade, and firms directly impacted. ADB will also mobilize about $1 billion in concessional resources through reallocations from ongoing projects and assessing possible needs for contingencies. ADB will make available $40 million in technical assistance and quick-disbursing grants.

To provide the support package to DMCs as quickly and flexibly as possible, ADB will seek adjustment in its financing instruments and business processes. Subject to approval by ADB’s Board of Directors, this will include faster access to emergency budget support for economies facing severe fiscal constraints, streamlined procedures for policy-based lending, and universal procurement with flexible and faster processes.

The pandemic demands a coordinated response and strong collaboration among countries and organizations. ADB will further strengthen its close collaboration with the International Monetary Fund, the World Bank, regional development banks, the World Health Organization, and major bilateral funding agencies including the Japan International Cooperation Agency, as well as the US Centers for Disease Control and private sector organizations, to ensure effective implementation of its COVID-19 response.

Since its first COVID-19 response on 7 February 2020, ADB has already provided more than $225 million to meet urgent needs of both governments and businesses in DMCs. ADB’s COVID-19 response to date includes:

7 February 2020: A $2 million grant to enhance infectious disease prevention, detection, and response in the People’s Republic of China (PRC) and the Greater Mekong Subregion;

27 January to 17 February 2020: $1.5 million in loan savings from the ongoing GMS Health Security Project allocated to procure essential equipment for detection and personal protection;

25 February 2020: A CNY130 million ($18.6 million) private sector loan to a Wuhan, PRC-based pharmaceutical distributor to enable the continued supply of essential medicines and personal protective equipment;

26 February 2020: A second grant window was established with an initial $2 million allocation to help DMCs contain COVID-19 and improve resilience. Additional financing is being mobilized for this grant window;

12 March 2020: $200 million made available through ADB’s Supply Chain Finance Program for companies manufacturing and distributing medicines and other items needed to combat COVID-19. Through its partner financial institutions, ADB can provide essential working capital to such companies;

13 March 2020: A $3 million grant to support the Philippine government’s response to COVID-19, including the purchase of emergency medical supplies and the delivery of effective health care services;

13 March 2020: A $600,000 grant from the Health System Enhancement Project to finance preventive and response efforts in Sri Lanka, including disease surveillance and the provision of medical supplies and equipment;

13 March 2020: $100,000 was reallocated from the Tajikistan Maternal and Child Health Integrated Care Project to finance COVID-19 prevention and mitigation, medical supplies, and equipment;

18 March 2020: $1.4 million was reallocated from the Fifth Health Sector Development Project in Mongolia to procure essential medical equipment for early detection, emergency care, and management of severe respiratory diseases. ADB also approved a $225,000 small-scale technical assistance to strengthen Mongolia’s national capacity for infection prevention and control.

The financial instruments that provided the above measures are available for all ADB DMCs.

ADB’s initial economic analysis and associated data files were published on 6 March 2020 in The Economic Impact of the COVID-19 Outbreak on Developing Asia. It provided estimates of the impact on developing Asia—and on individual economies and sectors in the region—through numerous channels, including sharp declines in domestic demand, lower tourism and business travel, trade and production linkages, supply disruptions, and health effects.

ADB will publish updated estimates of the economic impact of the pandemic in its Asian Development Outlook 2020 to be released on 1 April 2020. 

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‘Immensely bleak’ future for Afghanistan unless massive human rights reversal

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Women in a waiting room of a clinic in Afghanistan. © UNICEF/Alessio Romenzi

The international community must dramatically increase efforts to urge the de facto authorities in Afghanistan to adhere to basic human rights principles, a group of UN independent rights experts said on Friday. 

“The future is immensely bleak for Afghans if more is not done by the international community to ensure the Taliban changes its modus operandi and complies with its human rights obligations,” they said in a statement

The experts recalled that following the Taliban takeover last August, they had appealed for the international community to take “stringent actions” to protect Afghans from violations such as arbitrary detention, summary executions, internal displacement, and unlawful restrictions on their human rights. 

Failure to deliver 

“One year later, we reiterate this call,” they said. “Despite making numerous commitments to uphold human rights, the Taliban have not only failed to deliver on their promises, they have also reversed much of the progress made in the past two decades”. 

Moreover, the humanitarian and economic crisis in Afghanistan, which has already caused immeasurable harm to millions, shows no signs of slowing down. In fact, it is predicted to worsen, they added, partly due to the interruption of international assistance and the freezing of Afghan assets abroad.  

Attack on women and girls 

The experts said the Taliban have committed a “plethora” of human rights violations, with the virtual erasure of women and girls from society, as well as their systematic oppression, being particularly egregious.  

“Nowhere else in the world has there been as wide-spread, systematic and all-encompassing an attack on the rights of women and girls – every aspect of their lives is being restricted under the guise of morality and through the instrumentalization of religion. Discrimination and violence cannot be justified on any ground”. 

Regrettably, there is little indication that the human rights situation is turning a corner, they said. 

No confidence 

“Indeed, the daily reports of violence – including extra-judicial killings, disappearances, arbitrary detention, torture, heightened risks of exploitation faced by women and girls including for the purposes of child and forced marriage, and a breakdown in the rule of law – gives us no confidence that the Taliban has any intention of making good on its pledge to respect human rights.”

Citizens now have no means for redress as the Afghanistan Independent Human Rights Commission has been abolished, along with other independent oversight mechanism and institutions.  

The administration of justice has also been compromised. The applicable law is unclear, and judges and other officials have been replaced, which has especially affected women. 

Peace prospects dim 

The experts pointed to other violations, such as the curtailing of press freedom, and the rise in attacks on religious and ethnic minorities, some of which were claimed by the ISIL-KP terrorist group. They also and highlighted how journalists, activists, academics and artists have either left the country, quit their work, or gone into hiding.

Furthermore, in the absence of an inclusive and representative government, prospects for long-lasting peace, reconciliation and stability will remain minimal.  

“The de facto authorities seek international recognition and legitimacy. Regrettably, they continue to abuse almost all human rights standards while refusing to offer even a modicum of respect for ordinary Afghans, in particular women and girls,” said the experts. 

Most recently, the Taliban appeared to have been harbouring the leader of Al Qaeda. Ayman al-Zawahiri was killed last week in a US drone strike, which the experts said also raises concerns of a violation of international law.  

“Until it demonstrates significant steps towards respecting human rights, including by immediately reopening girls’ secondary schools and restoring their access to a quality education, they should not be on a path to recognition.” 

Action by the authorities 

In addition to honouring their international obligations, the experts have called for the Taliban to fully implement human rights standards, including respecting the rights of women and girls to education, employment and participation in public life.   

The de facto authorities should immediately open all secondary schools for girls, and lift restrictions on women’s mobility, attire, employment and participation. The rights of minority communities must also be upheld. 

The Taliban are also urged to “respect the general amnesty and immediately stop all reprisals against members of the former government’s security forces, other officials and civil society, especially human rights defenders, including women”. 

Furthermore, human rights monitors and humanitarians should be allowed free, unhindered access throughout the country, including to sensitive locations such as detention facilities.

They also called for the Afghanistan Independent Human Rights Commission, bar associations, and other relevant unions, to immediately be reinstated and allowed to operate freely and independently. 

International appeal

The experts also outlined steps the international community should take. 

They include insuring civilians have equitable access to humanitarian aid, and supporting ongoing initiatives by Afghan women towards a strategy to promote the rights of women and girls, with clear benchmarks and expectations. 

Countries are also urged to maintain and/or adopt sustained and robust humanitarian exemptions within sanctions regimes to ensure compliance with international human rights and humanitarian law.  

“Such measures should be fit for purpose, ensure that sanctions measures do not interfere with protected humanitarian action under international law, and function to remediate the current humanitarian crises and to prevent sanctions from continuing to exacerbate the humanitarian human rights crises being faced by the Afghan people,” they said. 

Role of UN experts 

The 20 experts who issued the statement were all appointed by the UN Human Rights Council

They include Richard Bennett, UN Special Rapporteur on the situation of human rights in Afghanistan, and other Special Rapporteurs who monitor and report on issues such as the situation of human rights defenders worldwide. 

These independent experts receive their mandates from the Council and operate in their individual capacity. They are neither UN staff, nor are they paid for their work. 

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IAEA: ‘Very alarming’ conditions at Ukraine’s Zaporizhzhia nuclear power plant

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image made from a video released by Zaporizhzhia nuclear power plant

The situation at Ukraine’s Zaporizhzhia nuclear power plant has deteriorated rapidly to the point of becoming “very alarming,” Director General of the International Atomic Energy Agency (IAEA) Rafael Mariano Grossi warned the Security Council on Thursday afternoon.

“These military actions near such a large nuclear facility could lead to very serious consequences,” Mr. Grossi said at the meeting requested by Russia, which was marked by resounding calls to allow the Agency’s technical experts to visit the area amid mounting safety concerns.

IAEA has been in frequent contact with both Ukraine and Russia to ensure that it has the clearest picture possible of the evolving circumstances.

Europe’s largest nuclear plant shelled

Providing an overview, the IAEA chief said that on 5 August, the Zaporizhzhia plant – Europe’s largest – was subjected to shelling, which caused several explosions near the electrical switchboard and a power shutdown. 

One reactor unit was disconnected from the electrical grid, triggering its emergency protection system and setting generators into operation to ensure power supply. 

The senior UN official said that there was also shelling at a nitrogen oxygen station.  While firefighters had extinguished the blaze, repairs must still be examined and evaluated.

No immediate threat

He said that the preliminary assessment of IAEA experts indicate that there is no immediate threat to nuclear safety as a result of the shelling or other military actions. 

However, “this could change at any moment,” Mr. Grossi cautioned.

Overarching goal

He recalled his recent address to the ongoing Tenth Review Conference of the Parties to the Nuclear Non-Proliferation Treaty, where he outlined seven indispensable pillars that are critical for nuclear safety and security.

These included aspects dealing with the physical integrity of the plant, off-site power supply, cooling systems, and emergency preparedness measures. 

“All these pillars have been compromised if not entirely violated at one point or another during this crisis,” flagged the IAEA chief. 

“Any nuclear catastrophe would be unacceptable and thus preventing it should be our overarching goal”.

He asked both sides to cooperate with the UN atomic agency. 

“This is a serious hour, a grave hour, and the IAEA must be allowed to conduct its mission in Zaporizhzhia as soon as possible”.

Trading Blame

Presenting his case, the Russian delegate said Ukrainian forces used heavy artillery against Zaporizhzhia on 5 August, shelling the plant during a shift change to intimidate staff – their own citizens. 

He upheld that on 6 August, those forces attacked with cluster munitions, and on 7 August, a power surge occurred, blaming. 

The Russian Ambassador blamed Kyiv for refusing to sign a trilateral document issued by IAEA, stressing that Moscow strictly complies with the IAEA Director General’s seven principles. 

In turn, Ukraine’s representative said that the withdrawal of Russian troops and return of the station to the legitimate control of Ukraine is the only way to remove the nuclear threat at Zaporizhzhia. 

The Ukrainian Ambassador insisted on the need to send a mission to the site and has negotiated modalities with the Agency. 

“Despite their public declarations, the occupiers have resorted to manipulations and unjustified conditions for the site visit,” he said. 

Given the militarization of the site by Russian armed forces, such a mission must include qualified experts in military aspects.

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UN trade body calls for halting cryptocurrency rise in developing countries

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The UN trade and development body, UNCTAD, has called for action to curb cryptocurrencies in developing nations, in three policy briefs published on Wednesday. 

Although private digital currencies have rewarded some individuals and institutions, they are an unstable financial asset that can bring social risks and costs, the agency warned. 

UNCTAD said their benefits to some are overshadowed by the threats they pose to financial stability, domestic resource mobilization, and the security of monetary systems. 

Rise of crypto 

Cryptocurrencies are an alternative form of payment. Transactions are done digitally through encrypted technology known as blockchain. 

The use of cryptocurrency rose globally at an unprecedented rate during the COVID-19 pandemic, reinforcing a trend that was already in motion. Some 19,000 are currently in existence.  

In 2021, developing countries accounted for 15 of the top 20 economies when it comes to the share of the population that owns cryptocurrencies.

Ukraine topped the list with 12.7 per cent, followed by Russia and Venezuela, with 11.9 per cent and 10.3 per cent, respectively.  

Not so golden 

The first brief – All that glitters is not gold: The high cost of leaving cryptocurrencies unregulated – examines the reasons behind the rapid uptake of cryptocurrencies in developing countries, including facilitation of remittances and as a hedge against currency and inflation risks

“Recent digital currency shocks in the market suggest that there are private risks to holding crypto, but if the central bank steps in to protect financial stability, then the problem becomes a public one,” UNCTAD said. 

Furthermore, if cryptocurrencies continue to grow as a means of payment, and even replace domestic currencies unofficially, the “monetary sovereignty” of countries could be jeopardized. 

UNCTAD also highlighted the particular risk that stablecoins pose in developing countries with unmet demand for reserve currencies.  As their name implies, stablecoins are designed to maintain stability as their value is pegged to another currency, commodity or financial instrument. 

“For some of these reasons, the International Monetary Fund has expressed the view that cryptocurrencies pose risks as legal tender,” the agency said. 

The second policy brief focuses on the implications of cryptocurrencies for the stability and security of monetary systems, and to financial stability in general. 

“It is argued that a domestic digital payment system that serves as a public good could fulfil at least some of the reasons for crypto use and limit the expansion of cryptocurrencies in developing countries,” said UNCTAD. 

For example, monetary authorities could provide a central bank digital currency or a fast retail payment system, though measures will depend on national capacities and needs. 

However, UNCTAD has urged governments “to maintain the issuance and distribution of cash”, given the risk of deepening the digital divide in developed countries. 

Tax evasion fears 

The final policy brief discusses how cryptocurrencies have become a new channel for undermining domestic resource mobilization in developing countries, and warns of the dangers of doing too little, too late. 

While cryptocurrencies can facilitate remittances, UNCTAD warned that they may also enable tax evasion and avoidance through illicit financial flows – similar to a tax haven, where ownership is not easily identifiable. 

“In this way, cryptocurrencies may also curb the effectiveness of capital controls, a key instrument for developing countries to preserve their policy space and macroeconomic stability,” the agency added. 

Curbing crypto 

UNCTAD has outlined several actions aimed at halting cryptocurrency expansion in developing countries. 

The agency urged authorities to regulate crypto exchanges, digital wallets and decentralized finance to ensure the comprehensive financial regulation of cryptocurrencies. 

Furthermore, regulated financial institutions should be banned from holding cryptocurrencies, including stablecoins, or offering related products to their clients. 

Advertising related to cryptocurrencies also should be regulated, as is the case with other high-risk financial assets.

Governments are advised to provide a safe, reliable and affordable public payment system adapted to the digital era. 

UNCTAD also advocates for global tax coordination regarding cryptocurrency tax treatments, regulation and information sharing.

Additionally, capital controls should be redesigned to take account of what the agency described as “the decentralized, borderless and pseudonymous features of cryptocurrencies”.

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