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Polish Economy to Shrink in 2020 due to Pandemic

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The Polish economy is on course to record its first recession in nearly three decades, with an expected contraction of 3.9 percent this year, according to the latest edition of the World Bank’s Europe and Central Asia Economic Update, released today.

Easing of pandemic-related restrictions, normalization of economic activity in many sectors, the large economic package being implemented by the government, as well as recovery in key trading partners, are expected to support a moderate recovery in 2021.

According to the World Bank, growth in Poland is expected to reach 3.5 percent in 2021. The projected recession in 2020 is less pronounced than the 4.2 percent contraction anticipated in June, while the recovery in 2021 is expected to be faster than the previously-forecasted 2.8 percent. Considerable downside risks to this outlook persist, however.

“The Polish economy was strong when the COVID-19 pandemic hit. Many years of uninterrupted growth, prudent macroeconomic policies, access to EU funds and social programs have helped cushion the effects of the crisis and limit the negative consequences,” says Marcus Heinz, World Bank Resident Representative for Poland and the Baltic States. “At the same time, the pandemic is a reminder that the crisis is sparing no-one. Therefore, we have to start investing in a post-pandemic resilient recovery by strengthening health care, education, and improving the investment climate, among other measures.

The pandemic-induced contraction in 2020 is also expected to increase poverty in all countries in Europe and Central Asia. Based on the $5.50 per day poverty line, customarily used in upper-middle-income countries, an additional 6 million people may slip into poverty. 

The pandemic has adversely affected education and health in the region. The virus has already killed thousands of people, and some people who survive will suffer long-term damage to their health. School closures may lead to learning losses equivalent to one-third to one full year of schooling, and they are likely to exacerbate inequalities by disproportionately affecting students from disadvantaged backgrounds.

A special analysis in the report finds that improving access to and quality of tertiary education and reducing adult risk factors for health are key for a resilient recovery in the region. While countries in the region provide relatively good basic education and health services, as measured by the World Bank’s Human Capital Index, more needs to be done for individuals and countries to succeed in the future.

“Just surviving is not enough, nor is simply completing basic education. Adults need to remain healthy, active and productive throughout their lives,” said Asli Demirgüç-Kunt, World Bank Chief Economist for Europe and Central Asia. “It is especially important to reduce the health risks of obesity, smoking and heavy drinking which can jeopardize active and productive aging, and to ensure higher education institutions prepare students for the challenges of today’s job markets.”

Across the region, more than 18 percent of the population is obese, nearly 23 percent of people are heavy episodic drinkers, and nearly 26 percent are current smokers. These health risks are particularly high in Eastern Europe and Russia, where adult life expectancy is also the lowest in the region. Prevalence of these risks increases not only the likelihood of conditions such as cardiovascular disease, but also the mortality and morbidity consequences of infectious diseases like COVID-19.

Good quality higher education is critical for people to remain competitive in fast-changing labor markets. Improving higher education in countries of Western Balkans, Eastern Europe, South Caucasus, and Central Asia would also help them retain their high-skilled labor force in the face of sustained out-migration.

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UNIDO works to scale up the ICT start-up ecosystem in Iran

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photo: UNIDO

Together with its national counterparts from the Information Technology Organization of Iran’s Ministry of Information and Communication Technologies and in partnership with the Erasmus Centre for Entrepreneurship, the United Nations Industrial Development Organization (UNIDO) is taking the next step to implement the project, “Promoting and upscaling innovative SMEs in the Islamic Republic of Iran”.

The project aims to nurture the entrepreneurial ecosystem for ICT start-ups and scale-ups through international exposure and fostering technology and know-how exchange. In this context, a comprehensive dialogue between governmental institutions and leaders in the private sector has been launched, thereby providing a mechanism for Iranian startups to connect with institutional actors and successfully start scaling up.

An ICT ecosystem mapping exercise has revealed that Iran already possesses extensive scientific, technological, financial and highly qualified human capital to boost its SME sector. However, it is currently not living up to its potential and there is a need to provide a mechanism for establishing linkages with key stakeholders, including access to finance and relevant advisory support. This way the project builds competitiveness and supports the development of innovative enterprises.

Amir Nazemi, Deputy Minister at Iran’s Ministry of Communication and Information Technology, said, “Aiming to diversify its economy and attract foreign investment, Iran has made a considerable effort to develop a dynamic national innovation system and is moving steadily towards a knowledge- and innovation-based economy. As a result, our human capital is now comprises highly educated and motivated workforce, including scientists, entrepreneurs and business people. Knowledge-based entrepreneurship is a key tool in Iran for employment generation, providing new opportunities for labour market integration of young professionals and serving as a powerful impetus for knowledge-based development of the country’s economy as a whole.”

Based on the findings regarding the existing constraints and opportunities of the ICT sector, the UNIDO project team has proposed a roadmap that envisages short-, medium- and long-term interventions in both public and private sectors, addressing several problem areas, such as knowledge generation and transfer; access to finance; nurturing of entrepreneurial talent and skills, as well as stimulating interaction and collaboration within the ICT ecosystem.

“The level of engagement from prominent public and private sector representatives related to the ICT sector has demonstrated the importance such initiatives have in making the ecosystem for ICT startups more vibrant and sustainable,” said Maryam Javan Shahraki, UNIDO representative in Iran.

She added, “UNIDO looks forward to further extending our support to the government of Iran in its efforts to promote internationalization of ICT-related entrepreneurs through the virtual entrepreneurship hub that will become a major platform for knowledge exchange and support services for ICT startups, as well as facilitating partnerships with domestic and foreign partners and inter-institutional networking.”

As part of the public-private initiative, in cooperation with its national and international partners, UNIDO conducted a two-day workshop for major ICT sector stakeholders, including government entities, entrepreneurs and other key players, to present key findings of the initial phase of the project and the forthcoming action plan, while also providing an opportunity for a thorough exchange on how to reduce the existing  development gaps between science and industry thereby raising Iran’s profile as a knowledge-driven economy.

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Should You Be Worried About A Coming Bitcoin Crash?

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Do you already have a wallet full of Bitcoin and are worried about them losing value in a crash like what happened three years ago? Or, are you afraid to open a Bitcoin account today as you don’t want to buy before a crash, either?

Both of those fears are valid, but you may have nothing to worry about. There are a few factors that go into crashes that can usually be seen ahead of time. Of course, nobody can make an accurate prediction based on what has happened in the past because sometimes a wildcard comes into play that nobody could have seen coming.

Should you be worried then? In this article, we are going to take a look at what is different with Bitcoin this time around so you can decide for yourself if this is a good time to buy in.

Why Bitcoin is worth so much right now

Bitcoin has always promised to one day become a global currency that would be adopted by the masses. After the crash of 2018 when Bitcoin lost almost ⅔ of its value in a matter of weeks, it looked like its promise would go unfulfilled.

At that time the people buying in were basing their decision more on the fear of missing out than on actually believing in the cryptocurrency as a mainstream currency that could be used instead of fiat.

At that time you could pay for things using Bitcoin, but because the value kept growing, nobody wanted to part with their Bitcoins.

Now, it has become far more mainstream with a couple of big factors leading the way. For one, many big institutions were buying the currency and even some stores and businesses would accept it as a form of payment. There were more signs of it becoming a viable currency in the year or so after the crash.

Then, more recently, Paypal announced that they would start offering the service for people to buy some cryptocurrency with their Paypal account. This validated the currency in the eyes of many as they trusted Paypal for years already. It suddenly became very easy for people to acquire Bitcoin where before the process may have been intimidating.

Then, Elon Musk announced that Tesla had bought over a billion dollars worth of Bitcoin and that it could be used to buy their cars. This also served as validation and the value jumped very high after the news.

Will it continue to rise?

Anything that goes up must come down, so, yes it will continue to rise but will one day either dip or crash. It is inevitable.

What’s different this time around is that more people are using it for its intended purpose and that is to pay for things. It is finally being adopted. And, if history is a guide, then it will bounce back after any crash and then rise again. Maybe even higher than ever if there is more adoption by the masses.

*This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.

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Credit to Small Firms to Boost Economic Recovery

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The Lao PDR Ministry of Industry and Commerce today launched a $40 million emergency finance support project, backed by the World Bank, to help small and medium-sized businesses recover from the economic slowdown associated with the COVID-19 pandemic. The project was approved by the World Bank Board of Directors in October 2020 and signed by the government in November.

Mme Khemmani Pholsena, Minister for Industry and Commerce, declared the Micro, Small, and Medium Enterprise (MSME) Access to Finance Emergency Support and Recovery Project operational, enabling local banks and financial institutions to provide loans to small businesses that have been affected by closed borders and reduced trade over the past year. According to the Lao Statistics Bureau, over 94% of all Lao enterprises are microbusinesses.

Three banks — Lao-China, Maruhan, and Sacom — have been selected to participate in the project to lend funds to small companies that apply for loans through Line of Credit. The project is providing technical support to the Bank of the Lao PDR, which is managing a credit guarantee facility, and technical assistance to strengthen the capacity of participating businesses. More financial institutions are expected to join the project once negotiations on terms of lending are complete.

This initiative will reinforce the stability of small businesses, which are vital to the Lao economy”, said World Bank Lao PDR Operations Manager Viengsamay Srithirath. “By making it easier for small firms to access credit, the government and banks are removing one of the top three obstacles to business in Laos”.

Ms Viengsamay congratulated the Ministry of Industry and Commerce for the speedy preparation of the project during a time of economic difficulty, and said its execution would build on the success of the World Bank’s Small and Medium Enterprise Access to Finance Project, which closed at the end of 2020 after disbursing around 180 loans to small Lao companies.

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