Category: Economy

Feb 08

World Economic Forum opens debate on sexual harassment and “fake news”

The World Economic Forum will be transformed from tomorrow on again to where leaders together with civil society and business leaders will address the world’s major problems, but also open up current debates such as sexual harassment and post-truth.

The meeting in Davos is seen as a unique platform to set the world agenda at the beginning of each year, since unlike the G20, the G7 and other international summits, not only brings together more leaders than any other forum, but also more than 3 thousand participants from the economic, political, social, cultural, academic and scientific world.

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As many as 5,000 soldiers and Swiss Army and Police chiefs will do security and, as usual, Davos airspace will be closed during the annual meeting.

The Forum will begin on Monday to warm up its engines by updating the International Monetary Fund’s (IMF) economic outlook and delivering the Crystal Awards to actress Cate Blanchett, singer Elton John and Bollywood star Shah Rukh Khan for their leadership in the defense of refugees, in the fight against HIV and the rights of children and women.

Although the 70 heads of state and government that will travel to Davos this year will inevitably play a key role, several leaders from Latin America, Europe, the Middle East and Africa, as well as the President of the United States, Donald Trump – travel to Switzerland after the government shutdown – the Forum wants to look beyond the rulers.

With over 1,900 corporate executives, 230 media representatives, nearly 40 cultural leaders, 35 international entrepreneurs, 80 youth leaders, 32 technology pioneers and 70 trade union, religious and civil society World Economic Forum becomes a place for debate on many topical issues.

In more than 400 panels and work sessions, participants will discuss how to “create a shared future in a fractured world”, the motto of this 48th edition, which will open on Tuesday with the keynote address of India’s Prime Minister Narendra Modi , as representative of the world’s largest democracy.

The idea behind this theme is to foster cooperation among all actors in society, according to founder and CEO of the World Economic Forum, Klaus Schwab.

But not only to confront conflicts, but also to seek common solutions to end gender discrimination, generate more inclusive growth and trade, lessen the effect of the digitization of industry on workers, fight against climate change and sexual harassment, to combat cyber threats and to adapt to new technologies.

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Thus, Davos addresses current issues like the #MeToo (Me too) movement, which began in Hollywood, but which affects more spheres of the political, artistic and business world – with a panel titled “Gender, Power and Face Sexual Harassment.”

As a sign of support for women, the Forum wanted to give a signal: the meeting from January 23 to 26 will be co-chaired by women alone, who are 21% of the 3,000 participants.

Davos will also have room for a debate over “fake news” and post-truth, a term used in the US because of President Donald Trump’s election to indicate that facts are not so important when it comes to influencing opinion as to appeal to emotion and personal beliefs.

The emergence of new technologies in the digital economy and in finance, such as blockchain technology, a digital technology that guarantees the veracity of operations over the Internet, will be another current issue analyzed.

In addition, the Forum will host a number of sessions devoted to cyber threats, taking into account recent global attacks on companies and Russian interference across networks in different elections, and will also launch the Global Center for Cybersecurity to foster cooperation.

Jan 25

Bank of England raises interest rate to 0.5%

The Bank of England has announced a rise in the UK’s benchmark interest rate from 0.25% to 0.5%, the first increase in a decade.

The monetary policy committee decided by seven votes in favor and two against applying this increase, which reverses the 0.25% drop applied in August 2016 to resist the effects of the vote favorable to Brexit (British exit of the European Union, EU) in the referendum on June 23 of that year.

The Bank of England has estimated that the British economy, which has annualized growth of 1.5%, is sufficiently consolidated to resist this increase, aimed at containing the advance of inflation, which stood at 3% in September.

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This is the first increase in interest rates in this country since July 2007, before the global credit crunch exploded, which plunged the UK into a recession.

To address this crisis, the bank lowered interest rates to 0.5% in March 2009, at which level they remained until the reduction to a new all-time low in August 2016.

The Bank of England has also decided to keep its quantitative expansion program intact – to stimulate the economy – in which it has invested a total of £ 445 billion to buy mostly public-private bonds.

In its report released today, the institution predicts that the British economy “will grow modestly in the next few years,” while consumption, an economic engine, “will remain fragile in the short term” until eventually, it will rise to wages.

The bank acknowledged that although the effects of Brexit were lower than expected, they “affected business investment” despite benefiting exports.

“Inflation is expected to fall next year, eventually reaching the 2% target,” the institution said, noting that any future interest rate increases will be “moderate and gradual.”

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With unemployment at 4.3 percent – its lowest in 12 years – the UK economy held up better than expected to the effects of Brexit’s trading with Brussels and rose 0.4 percent in the third quarter, up from 0, 3% of the previous two quarters.

This generates an annualized growth of 1.5%, slightly below 2% estimated by the Government last March.

Nonetheless, low wages and rising household debt, which plagued domestic demand, have led many analysts to believe that today’s increase in interest rates will be timely rather than the beginning of a series of increases.

Jan 25

US economy grew at a 3.2% pace in the third quarter of 2017

The US economy grew at an annual rate of 3.2 percent in the third quarter of 2017, slightly below the previous estimate of 3.3 percent, the US government said on Thursday.

The US Department of Commerce today released the latest of its three calculations on the evolution of the Gross Domestic Product (GDP) between July and September.

Despite the slight downward revision, the growth rate of 3.2% is the highest recorded since the beginning of 2015.

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The number is slightly lower than analysts’ estimates, which had anticipated a 3.3% expansion.

The data was driven by a smaller increase in consumer spending, which accounts for two-thirds of economic activity, and grew 2.2%, compared to 2.3% previously anticipated.

Sustained economic improvement in the US has led the Federal Reserve to raise interest rates three times this year, the last one a week ago, to leave them at between 1.25% and 1.5% %.

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President Donald Trump reached the White House in January this year with a promise to achieve annual growth of more than 3 percent underpinned by an ambitious plan that would represent the country’s biggest tax reform over decades and cut corporate and many Americans.

After overcoming a number of obstacles, the plan was approved by both Houses of Congress on Wednesday and promises, according to Republicans, to accelerate economic growth to about 4% per year.

Jan 25

World Bank Methodology hurt countries in competitiveness ranking

The World Bank has changed the methodology for calculating one of its main reports unfairly over a number of years, which has affected the position of countries like Chile in the rankings on corporate competitiveness, the American daily The Wall Street Journal “.

World Bank chief economist Paul Romer told the Journal that he will correct and recalculate national business competitiveness rankings for the past four years in the Doing Business report.

Romer explained that the revisions will especially affect Chile, whose position in the ranking has varied greatly in recent years due to “political motivations” in the World Bank.

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The chief economist said changes in methodologies “severely penalized” Chile’s position under Michelle Bachelet’s administration. Corrections will “focus” accordingly.

“I want to apologize personally to Chile and any other countries against which we have given the wrong impression,” said Romer, who considered the report’s problems to be “his fault.”

“We did not make things clear enough,” Romer said.

The BM is starting the process of correcting reports and resubmitting the corrected rankings.

Chile fell from the 25th to the 57th position of 2006, a period that alternated in power Michelle Bachelet and Sebastián Pinera in the government. While with Bachelet the position fell repeatedly in the rankings, on the other hand, rose with Piñera.

According to a preliminary analysis of Romer, during the last four years, the fall of Chile in the list occurred because of “new metrics” used to calculate the index and not to changes in the economic environment of the country.

“Based on the things we measured before, economic conditions did not worsen in Chile under Bachelet. I realized later that I did not trust the integrity of the report’s data,” he said.

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The “Doing Business” report ranks countries by using metrics such as the number of days needed to open a business in the countries or the costs to get a construction permit. The World Bank updates the methodology over time.

During Bachelet’s administration, the new components of the calculation made a lot of impact in Chile. The country fell from 33rd place in the index of ease to pay taxes in 2015 to 120th position the following year. The drop occurred because of a new metric to calculate the time companies spend to pay taxes.

Romer took the post at the World Bank in October 2016, and the changes in the reports occurred before he took office. Since then, he has questioned other officials about the clarity and conciseness of the reports, notes the Journal.

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