The global economic shock of the COVID-19 pandemic has driven most commodity prices down and is expected to result in substantially lower prices over 2020, the World Bank said in its April Commodity Markets Outlook.
Energy and metals commodities are the most affected by the sudden stop to economic activity and the serious global slowdown that is anticipated. Commodities associated with transportation, including oil, have experienced the steepest declines. Despite only moderate impact on the outlook for most agricultural commodities, supply chain disruptions and government steps to restrict exports or stockpile commodities raise concerns that food security may be at risk in places, the report says.
“In addition to the devastating human toll, the economic impact of the pandemic will dampen demand and cause supply disruptions, negatively affecting developing countries that rely heavily on commodities,” said Ceyla Pazarbasioglu, World Bank Group Vice President for Equitable Growth, Finance & Institutions. “Policymakers can take advantage of lower oil prices by undertaking energy-subsidy reforms to help free spending for urgent pandemic-related purposes. These reforms need to be complemented with stronger social safety nets to protect the most vulnerable segments of society. Policymakers must resist the urge to impose trade restrictions and actions that put food security at risk, as the poor would be hit the hardest.”
Monthly average crude oil prices plunged 50 percent between January and March. Prices reached an historic low in April with some benchmarks trading at negative levels. They are expected to average $35 per barrel in 2020, a sharp downward revision from the October forecast and a 43 percent drop from the 2019 average of $61 per barrel. The downward revision reflects an historically large drop in demand. The decline in crude oil prices has been exacerbated by uncertainty around production agreements among the Organization of the Petroleum Exporting Countries (OPEC) and other oil producers. Energy prices overall (which also include natural gas and coal) are expected to average 40 percent lower in 2020 but see a sizeable rebound in 2021.
Metal prices also fell in early 2020. The biggest declines were in copper and zinc, which are particularly associated with global economic activity. Metal prices are projected to drop 13 percent overall in 2020 as slowing demand and the shutdown of key industries weigh heavily on the market. Industrial metals would be affected the most by the global economic slowdown, in particular that of China, which accounts for more than half of global metals demand.
Agriculture prices are less tied to economic growth, and saw only minor declines in the first quarter of 2020, except for rubber, which is used in transportation. Prices are expected to remain broadly stable in 2020 overall as production levels and stocks of most staple foods are at record highs. However, agricultural commodity production could face disruptions to the trade and distribution of inputs such as fertilizer, pesticides, and labor availability. Disruptions of supply chains have already affected emerging market and developing country exports of perishable products such as flowers, fruits, and vegetables.
“This enormous shock to commodity markets and low oil prices could deliver a serious setback to developing economies and jeopardize the necessary investments in critical infrastructure that support long term growth and create quality jobs,” said Makhtar Diop, World Bank Vice President for Infrastructure. “The international community must rally together to address these setbacks by advancing interventions in diverse sources of energy, sustainable transport and access to digital infrastructure and services that allow people to stay connected during these uncertain times. This will be key to delivering vital social services, protecting jobs, supporting business and saving lives.”
An analytical focus examines the impact of the COVID-19 pandemic on commodity markets. Mitigation measures taken to control the virus have resulted in an unprecedented collapse in oil demand, and supply chain disruptions could cause dislocations in the consumption and production of other commodities and imperil food security. The pandemic has the potential to affect commodity demand and supply for an extended period, the analysis finds.
The plunge in oil prices provides policymakers in emerging market and developing economies with an opportunity to undertake energy-subsidy reforms. These reforms can help free spending for urgent pandemic-related purposes, discourage wasteful energy consumption, and reallocate spending to programs that better target the poor.
Another analytical section looks at OPEC in the context of other similar commodity supply management agreements. Such agreements have collapsed over time under pressure from economic forces and other events, and OPEC may be subject to the same pressures.
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help these countries strengthen their pandemic response. Over the next 15 months, the World Bank Group will be deploying up to $160 billion in financial support to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery, including $50 billion of new IDA resources in grants or highly concessional terms. The Bank is also increasing disease surveillance, improving public health interventions, and helping the private sector continue to operate and sustain jobs.
Suicide remains one of the leading causes of death worldwide
New research published by the UN health agency on Thursday revealed that suicide remains one of the leading causes of death worldwide – taking more lives each year than HIV, malaria, breast cancer, war and homicide.
Based on its estimates that more than 700,000 people, or one-in-100, died by suicide in 2019, the World Health Organization (WHO) produced new LIVE LIFE guidelines to help countries reduce that rate by a third, no later than 2030.
“We cannot – and must not – ignore suicide”, said WHO chief Tedros Adhanom Ghebreyesus.
From job loss to financial stress and social isolation, the many risk factors triggered by the COVID-19 pandemic make suicide prevention “even more important now”, said the top WHO official.
The WHO guidance “provides a clear path for stepping up suicide prevention efforts”, he added.
Among young people aged 15-29, suicide was the fourth leading cause of death after road injury, tuberculosis and interpersonal violence, according to the study: Suicide worldwide in 2019.
While rates varied between countries, regions and gender, the analysis shows that more than twice as many men kill themselves, than women.
Those rates are generally greater in high-income countries, while the highest suicide rates for women were found in lower middle-income countries.
Per 100,000 people, the 2019 global average of suicide rates stood at 9.0, while that number jumped to 11.2 in the WHO Africa region; 10.5 in Europe; and 10.2 in Southeast Asia. At 6.4, the Eastern Mediterranean region had the lowest rate.
“Each one is a tragedy”, said the WHO chief.
While the report showed a global suicide drop of 36 per cent between 2000 and 2019, the Americas Region witnessed a 17 per cent surge.
WHO said, “a significant acceleration” in suicide reduction is needed to meet the Sustainable Development Goal (SDG) target by 2030.
WHO’s guidance to suicide prevention, zeros in on four strategies: limiting access to the means of suicide; educating the media on responsible suicide reporting; fostering socio-emotional life skills in adolescents; and early identification, assessment, management and follow-up of those with suicidal thoughts and behaviour.
The guidance highlights that in the social media age, media reports can prompt copycat suicides, especially when surrounding a celebrity. It calls for suicide coverage to be counteracted with articles highlighting successful recovery from mental health challenges or suicidal thoughts. It also recommends working with social media companies to increase awareness and remove harmful content.
Since half of all mental health conditions appear before children reach 14, adolescence is a critical period, according to WHO, which encourages anti-bullying programmes, support services and clear protocols for people working in schools when suicide risk is identified.
A previous suicide attempt is one of the most important risk factors for a future suicide, said the UN health agency.
Healthcare workers should be trained in early identification, assessment, management and follow-up and crisis services should also be available to individuals in acute distress, according to the guidance.
“A comprehensive national suicide prevention strategy should be the ultimate goal for all Governments”, said Alexandra Fleischmann, WHO suicide prevention expert, adding that “LIVE LIFE interventions can save lives and prevent the heartbreak that follows for those left behind”.
World Bank Supports Recovery and Resilience of Rwanda’s COVID-19-Affected Businesses
The World Bank Group today approved $150 million from the International Development Association (IDA)* to help the Government of Rwanda increase access to finance and to support recovery and resilience of businesses affected by the COVID-19 pandemic.
The Access to Finance for Recovery and Resilience (AFIRR) Project also benefits from $25 million in IDA grants, as well as an additional $7.5 million grant from the Global Risk Financing Facility (GRiF), to help enhance business’ access to finance.
“This project is an important contribution to the government’s post-COVID Economic Recovery Plan, promoting investment in priority growth sectors, supporting jobs and reinforcing Rwanda’s financial system’s crisis preparedness.” said Rolande Pryce, World Bank Country M anager. “The AFIRR project provides significant resources to help further capitalize the Economic Recovery Fund coupled with enhanced support programs to improve firms’ capacity and remove barriers to access to finance. It provides a suite of instruments that strengthen the existing recovery ecosystem ranging from financial instruments to adjustment mechanisms that include innovative risk mitigation solutions.”
The project will provide financing targeting affected businesses to facilitate refinancing of existing debt obligations, provide working capital, and support investments for business adaptation and growth through the provision of longer-term sources of finance. This will be complemented by risk sharing instruments, including a partial credit guarantee scheme and a bridge loan and insurance facility, to increase access to finance for underserved segments, such as micro, small and medium sized enterprises (MSMEs). In addition, the project will provide targeted technical assistance to firms, participating financial institutions, and government implementing agencies, to address existing constraints for increasing uptake of the Economic Recovery Fund.
“Interventions under the project will help businesses to continue to operate and adapt to the post-COVID-19 environment. They will also provide a lifeline to firms in growth-potential sectors that find it difficult to access financing from financial institutions; this will contribute to preserving jobs and mitigating loss of otherwise productive firms that can help drive economic recovery” said Brice Gakombe, World Bank Financial Sector Specialist, and Task Team Leader of the project.
In addition to providing financing, the AFIRR project will bolster the capacity of key government and private sector stakeholders on the technical aspects of the financing and risk-sharing instruments, as well as disaster risk financing principles. As women were hardest hit by the COVID-19 (coronavirus) pandemic, the project focuses on increasing the share of women-inclusive enterprises able to access financing under the liquidity and financing facility and through targeted training to address gender specific constraints for MSMEs as well as improve outreach in underserved segments.
The AFIRR project will be co-financed in the amount of $100 million by the Asian Infrastructure Investment Bank (AIIB), of which Rwanda is a non-regional member. It is AIIB’s first investment in Rwanda.
How to Make Your Hospitality Business More Sustainable
Climate change and its impact on the world has been a major news story for decades, but it’s only in recent years that awareness has been pushed to the fore. This is thanks to the actions of activists such as Greta Thunberg and Sir David Attenborough.
However, it’s also because 2020 was the joint hottest year on record, tying with 2016 – although, unlike 2016, there was no El Nino event last year to contribute to these temperatures.
While there is pressure on companies to play their part and think more sustainably, there are things that smaller businesses can do too. As someone who runs a hospitality business, you can make operations more environmentally aware. If you want to think green, here are some ideas to help.
Consider the materials
How much paper does your business use? There’s a real trend for cardboard menus and paper flyers showcasing the latest dining deals. Hotel rooms are filled with directories and leaflets, too – and these need replacing when they get tatty.
To resolve the issue, try switching to digital. Create online menus that diners can access, have a screen detailing the latest meal deals and specials, and introduce tablets to bedrooms in your hotel. If you’re reluctant to include tablets, try creating a directory on the TV where guests can browse the services your hotel offer, from breakfast serving times to the food on offer.
How much electricity does your business use a day? How much water is wasted?
Try looking at introducing motion sensitive lighting to avoid empty rooms being lit. Also, while it can be tricky to encourage guests to think about the water they use, you can get your staff to set an example by switching off taps when not in use. Even small changes can both save energy and money.
Hospitality businesses see a lot of waste, especially hotels. There’s paper waste, bottles, and food waste to consider, among other things.
Having a robust recycling system in place can help to keep your business sustainable. Introduce recycling bins in guest bedrooms and have these in offices too to encourage best practice.
Additionally, separate food waste bins for your restaurant are an essential part of waste management. By keeping food waste separate, it can be easily removed from the premises.
As with any waste management, there are risks here. Staff could cut themselves on glass or encounter other injuries, so think about how to keep your team safe while they do their job. Arm protection and overalls, for instance, can be useful.
Look at the décor
As well as the day-to-day operations in your business, it’s worth thinking about the materials used in the design and décor. Where possible, try to source reclaimed furniture and trawl the vintage and flea markets for beautiful pieces that could work well in your hotel foyer or guest rooms.
By taking the time to reassess the way your business runs, you could find that you’re lowering your carbon footprint and becoming more sustainable.
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