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European concerns over data privacy decline- Report

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A new report by IE University’s Center for the Governance of Change (CGC) highlights profound shifts in European sentiments to technological change, particularly in light of the Covid-19 pandemic. To discuss the findings, a live webinar was held on June 1st which included a panel of experts and research contributors.

European Tech Insights 2020 is the second edition of a report by the CGC that focuses on European perceptions of technology and the future. The survey was conducted in January this year, and then again in April, involving 2,883 different respondents from 11 countries.

In his opening remarks for the online event, Diego del Alcázar, the co-chair for the CGC and executive vice-president of IE University, wanted people to know that this year the information had even greater relevance and resonance.

“Given the Covid-19 situation, we have been able to include data on the impact of this year’s disruption, making this survey of maximum interest,” he said.

The second round of questions was conducted in 4 countries, those considered the hardest hit by the pandemic at the time:  Spain, Italy, and for comparison, China and the United States.

Questions related to topics such as the future of work and automation, the growth and regulation of technological companies, the gig economy, global supply chains, and climate change.

Some of the Key Findings

While the researchers compiled a list of the key findings, 3 areas in particular received focused attention during the discussions of the webinar.

Concern for data privacy has decreased

In Italy and Spain, 79% and 67% of people respectively support a Chinese-style restrictive tracking system, something that many people might find surprising. Additionally, after COVID-19 arrived in Europe, the number of citizens who agree to share their personal data for health reasons has grown by an additional 11% in Spain and 13% in Italy.

Support for laws limiting automation has increased

After the onset of the pandemic, support for limiting automation doubled in China, from 27% to 54%, and there was a 33% increase in Spain. The researchers suggested that anxiety over a weakening job market is a likely explanation.

Europeans favour regulation and higher taxes for Big Tech companies

Europeans are increasingly concerned about the big tech giants: 31 % of Europeans believe that governments should limit the size or even deescalate companies like Google, Apple, Facebook, and Amazon because “they are bad for competitiveness and democracy.”

A further 45% of Europeans find it “ethically regrettable” to use services like Uber and Deliveroo due to the way these companies treat their workers. More than half of these respondents are in favour of forcing such companies to comply with the same work regulations as traditional companies.

Expert discussion

Privacy and freedom of movement

“The first thing that we found is that Covid-19 is decreasing concerns about privacy. We saw clear support for a Chinese-style tracking system…[which] entails a significant degree of restriction of freedom of movement, but also surveillance of personal information,” one of the authors of the report, the webinar animator and academic director of the CGC, Dr Oscar Jonsson explained.

Another finding was that the pandemic has made people more willing to reduce their privacy for either growth or for public safety reasons: questions were framed around job creation or security concerns, such as combatting terrorism.

Data privacy seems to be something that is very easily conceded, explained another of the report’s authors, Dr Carlos Lastra-Anadón, who is assistant professor at the School of Global and Public Affairs, and research coordinator of the CGC.

Doctor Lastra believed that when you are talking about how more data might help to grow the economy or to enhance public safety, people seem to have become less concerned about privacy.

“Whether this is a permanent change or not, is hard to say. My take is that the concern about data privacy is something that is rather abstract. It’s like dessert: optional, particularly for young people,” he said.

“As soon as things get serious, it’s basically the first thing that goes away,” he said, adding that he would be surprised if the public continued to be concerned over the next few years about data privacy.

Automation

Certain disparities are present in the data regarding automation. While Europeans under 55 show a willingness to limit automation to safeguard jobs, those over 55 are less worried, and in fact the majority of them are against such legislation.

Most European countries are split with the exception of France, where a strong majority of citizens, some 59% of them, are “very willing” to limit automation.

These attitudes have notably shifted in some of the countries worse affected by the pandemic.

“What I found particularly interesting to see was the change in sentiment in China…on a backdrop of an economy that has expanded enormously, in large part, due to manufacturing and the adoption of robots,” Dr Carl B. Frey, an economist, economic historian, and contributor to the report, explained during discussion.

Creative destruction in employment can be an extremely painful process for society, especially if it coincides with other issues, Dr Frey explained, adding that naturally “during recessions and economic downturns, sentiments towards automation tend to become more sour.”

Regulation on Big Tech

On attitudes towards large technology companies, the researchers said that they had seen a very interesting difference between the US and China, where most of the big tech companies are located, as compared to Europe, which has an ongoing problem with the lack of big technology companies.

In Spain and Italy, the survey found that there was majority support for taxing big tech companies in order to finance the economic recovery after Covid-19. On the other hand, in the US and China, respondents believed that either all companies should share in the burden, or there should not be additional taxes imposed in order to manage the economic fallout.

“In general, Europeans were more willing to regulate, limit, deescalate tech than the Chinese and the US,” summarised Dr Oscar Jonsson.

Europeans not having any of the large tech companies means that they are more eager to tax and regulate them than the Chinese and the Americans are, Dr Frey observed.

“And I think that that’s only natural: the asymmetries when it comes to tech companies mean that different places have very different stances and attitudes on them,” he said.

When asked if he thought that regulation was something that might be preventing the development of large, successful technology companies in Europe, Dr Frey expressed scepticism.

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Critical Reforms Needed to Reduce Inflation and Accelerate the Recovery

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While the government took measures to protect the economy against a much deeper recession, it would be essential to set policy foundations for a strong recovery, according to the latest World Bank Nigeria Development Update (NDU).

The NDU, titled “Resilience through Reforms”, notes that in 2020 the Nigerian economy experienced a shallower contraction of -1.8% than had been projected at the beginning of the pandemic (-3.2%). Although the economy started to grow again, prices are increasing rapidly, severely impacting Nigerian households. As of April 2021, the inflation rate was the highest in four years. Food prices accounted for over 60% of the total increase in inflation. Rising prices have pushed an estimated 7 million Nigerians below the poverty line in 2020 alone.

The report acknowledges notable government’s policy reforms aimed at mitigating the impact of the crisis and supporting the recovery; including steps taken towards reducing gasoline subsidies and adjusting electricity tariffs towards more cost-reflective levels, both aimed at expanding the fiscal space for pro-poor spending. In addition, the report highlights that both the Federal and State governments cut nonessential spending and redirected resources towards the COVID-19 response. At the same time, public-sector transparency has improved, in particular around the operations of the oil and gas sector.

The report however, notes that despite the more favorable external environment, with recovering oil prices and growth in advanced economies, a failure to sustain and deepen reforms would threaten both macroeconomic sustainability and policy credibility, thereby limiting the government’s ability to address gaps in human and physical capital which is needed to attract private investment.

“Nigeria faces interlinked challenges in relation to inflation, limited job opportunities, and insecurity”, said Shubham Chaudhuri, the World Bank Country Director for Nigeria. ”While the government has made efforts to reduce the effect of these by advancing long-delayed policy reforms, it is clear that these reforms will have to be sustained and deepened for Nigeria to realize its development potential.”

This edition of the Nigeria Development Update proposes near-term policy option organized around three priority objectives:

  • Reduce inflation by implementing policies that support macroeconomic stability, inclusive growth, and job creation;
  • Protect poor households from the impacts of inflation;
  • Facilitate access to financing for small and medium enterprises in key sectors to mitigate the effects of inflation and accelerate the recovery.

“Given the urgency to reduce inflation amidst the pandemic, a policy consensus and expedite reform implementation on exchange-rate management, monetary policy, trade policy, fiscal policy, and social protection would help save lives, protect livelihoods, and ensure a faster and sustained recovery” said Marco Hernandez, the World Bank Lead Economist for Nigeria and co-author of the report.

In addition to assessing Nigeria’s economic situation, this edition of the NDU also discusses how the COVID-19 crisis has affected employment; how inflation is exacerbating poverty in Nigeria; how reforming the power sector can ignite economic growth; and how Nigeria can mobilize revenues in a time of crisis.

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Indonesia: How to Boost the Economic Recovery

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Indonesia’s economy is projected to rebound from the 2020 recession with 4.4 percent growth in 2021. The rebound is predicated on the pandemic being contained and the global economy continuing to strengthen, according to the World Bank’s latest Indonesia Economic Prospects report (“Boosting the Recovery”), released today.

The report highlights that although consumption and investment growth were subdued during the first quarter of 2021, consumer sentiment and retail sales started to improve during the second quarter suggesting stronger growth momentum. However, it also notes that pandemic related uncertainty remains elevated due to risks of higher viral transmission.

“Accelerating the vaccine rollout, ensuring adequate testing and other public health measures, and maintaining strong monetary and fiscal support in the near term are essential to boosting Indonesia’s recovery,” said Satu Kahkonen, World Bank Country Director for Indonesia and Timor-Leste. “Parallel reforms to strengthen the investment climate, deepen financial markets, and improve fiscal space for longer-term sustainability and growth will be important to further build consumer and investor confidence.”  

The report recommends the government to develop a well sequenced medium-term fiscal strategy, including clear plans to improve tax revenues and fiscal space for priority spending. It also highlights the importance of maintaining accommodative monetary policy and stimulating private credit to support the real sector while monitoring external and financial vulnerabilities.

The report highlights the critical role of adequate social assistance in mitigating rising poverty risks. It finds that maintaining the 2020 social assistance package in 2021 could potentially keep 4.7 million Indonesians out of poverty.  

This edition of the report also looks at the possibilities for Indonesia to boost higher productivity jobs and women’s economic participation.

“Indonesia has reduced poverty through job creation and rising labor incomes over the past decade. The next stage is to create middle-class jobs that are more productive, earn higher incomes, and provide social benefits,” said Habib Rab, World Bank Lead Economist for Indonesia. “While the crisis risks have exacerbated Indonesia’s employment challenges, it is also an opportunity to address the competitiveness and inclusion bottlenecks to creating middle-class jobs and strengthening women’s participation in the economy.”

The report recommends a four-pronged reform strategy to address these jobs-related challenges:

  • Mitigate employment losses by maintaining adequate job retention programs, social assistance, training, and reskilling programs until the recovery is stronger.
  • Boost productivity and middle-class jobs by promoting competition, investment, and trade.
  • Equip the Indonesian workforce to hold middle-class jobs by investing in education and training systems and programs to improve workers’ skills.
  • Bring more women into the labor force and reduce earning gaps between men and women by investing in child and elderly care and promoting private sector development in the care economy.

The Indonesia Economic Prospects Report is supported by the Australian Department of Foreign Affairs and Trade.

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Inequality Has Likely Increased in PNG, with Bottom 40% Hit Hardest by Latest Outbreak

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A joint World Bank and UNICEF report based on mobile phone surveys of Papua New Guinean families has found that while there was a slight recovery in employment between June and December 2020, people in the bottom 40% of wealth distribution remain the hardest hit by the Coronavirus pandemic.

Conducted in December 2020, this second World Bank survey (the first was conducted in June 2020), shows that inequality has likely increased in PNG in the year since the pandemic began, and that the current COVID-19 outbreak is expected to deepen inequalities even further.

“According to the report, there were positive signs that PNG was starting to recover from the initial shocks of the pandemic between June and December 2020,” explained Stefano Mocci, World Bank Country Manager for Papua New Guinea. “However, it was largely wealthier households who were experiencing the fastest recovery in employment and income. In contrast, in areas with above average poverty, there were still high job losses.”

“Given a possible third wave of COVID-19 infections has strong potential to cause further declines in employment and income, social and economic support needs to be targeted to those most vulnerable – the bottom 40% – to try and lessen the widening inequality gap.”

“Little is known about how COVID-19 affects children in PNG,” expressed Judith Bruno, acting UNICEF PNG Representative. “Overwhelmingly, households with children under the age of 15 considered COVID-19 as a major threat to household finances and reported decreases in access to basic services, including water supply, sanitation, health care, and mental health and psychosocial support.”

“This World Bank and UNICEF collaboration will help policy makers and responders to better protect children from the virus, promote safe and continued access to services, and prevent children and their families from further economic hardship.”

Other key findings from the second of five planned World Bank surveys include:

·        For those still working, more than 75% of respondents reported receiving the same income as usual in the past week, compared to less than 50% in June (the strongest gains were for those in the top 40% of wealth distribution);

·        Rural households, and those in the bottom 40% of wealth distribution, were most likely to see decreases in money sent by friends or family.

·        77% of households were somewhat worried, or very worried, about their household finances in the next month.

·        33% of households in the bottom 40% of wealth distribution were unable to buy their preferred protein, compared to just four percent of households in the top 40%.

·        Less than 10% of primary and elementary school students participated in distance learning while schools were closed, but there were no significant differences between boys and girls returning to school and no evidence that the pandemic has widened the education gender gap.

·        Compared to the rest of the country, households in the National Capital District (NCD) were more likely to report deteriorations in theft, alcohol and drug abuse, violence by police and domestic abuse since June 2020 – all indicators of rising tensions in the capital, Port Moresby.

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