tv Counting the Cost Al Jazeera June 4, 2022 12:30pm-1:01pm AST
from the marshes see the promises to help have just been quote, ink and paper. linda showed that the government did not do anything for the marshes, no strategic plans, no health or educational projects. the residents are deprived of everything. the boat industry flourished once, but now the marshes are getting smaller and people rely on fewer boats. climate change is the main factor. it will become worse with summer evaporation levels. also upstream dams. in turkey and iran mean more than 40 river tributaries are totally cut off. the water buffaloes are an important part of the local dairy industry. but human and animal based is also a challenge for the fragile ecology. but making in this pristine habitat and its ancient heritage are all at risk. and without immediate action, this unique marshland is pushed closer to extinction every day. sullivan jo without the ra, a hot or southern iraq ah,
color we're going to headlines and al jazeera, the regional head of lou hands says ukrainian forces have recaptured about 20 percent of last territory and the eastern city of give you arrows on. yes, russian troops are now in control of half of the strategic city after weeks of fighting. hundreds of african refugees have held protests in islamabad, demanding the right to work in pakistan. they also want to be recognized as asylum seekers. most of the professors are from the has our ethnic minority who faced centuries of persecution. the un secretary general has condemned the killing and protest her into gun crowds were marching to demand justice for a 128 people killed during a crackdown on approach a mockery protest. 3 years ago, argentinians are demanding actions and violence against women. thousands marched on parliaments on friday. one woman was killed in argentina every 35 hours last year.
those are the headlines on al jazeera up next, it's counting the calls thanks for watching, bye bye, for now. on the moon on what the problem was. so we need to know that this is, i don't need to be here with you to look at this when you get this message, can you open the home and ya today? and we're going to give you what we said as well. they didn't put me in, i'm a lot of them at the hospital gave me when i know, i mean, i mean,
i shooting off the edge of the talk to al jazeera. we ask you, be more specific, how many troops are you asking for? and what kind of military equipment we listen, ask the people of cuba industry. if there is a difference between donald and joe, but for them, we meet with global news makers. i'm talk about the store restock matter. on al jazeera, i hello, i'm molly inside. this is counting the cost on al jazeera,
your weekly look at the world of business on economics. this week, energy prices are storing ahead of the world. buying says it's enough to trigger a global recession by itself. so ease of contraction of the world's economy inevitable. which nations are most at risk? also this week the british government takes aim at expensive energy bills. can the $19000000000.00 aid package ease the squeeze on incomes, or could the cost of living crisis get even worse? on pakistan's teetering economy, the country with ages. second, fastest, inflation rates is seeking critical financing from the i'm f, accounting, the pakistani government implement the required reforms. ah, the cost of almost everything from food to fossilize, this is soaring, causing consumers to spend less as government's aim to bring down the cost of
living containing inflation without pushing economies into slow down is difficult. and that's all, while rushes worn ukraine and pandemic disruptions continue to constrain supply chains darkening the outlook for the month ahead. so should we be ready for global recession, while the head of the well bank has worn that russia's invasion of ukraine could cause a global recession? david mal pass told an event hosted by the us chamber of commerce, a germany called me the well the 4th largest has already slowed significantly while the us in china also thing flow of growth. he added the fertilizer shortage could work in economic conditions elsewhere. the world bank has already caught its global growth forecasts for this year by nearly a full percentage point to 3.2 percent from 4 point one percent. well, the international monetary fund has also declined to rule out a global recession,
but it says, well, the economy still has a cushion against contraction. there are many headwinds to the global economy. the war could escalades, you could have sanctions and come to sanctions. we of central bankers around the world type thing, monetary policy finance should conditions could tighten much more rapidly than we want. the seen and growth in china is flowing. so all of these posed downside risks to our forecast. so again, globally, i would say 3.6 percent, there is a buffer at the same time, there are countries that are getting hit hard new countries in europe that are getting hit hard by the war where we could certainly see technical recession. now let's have a look at some of the recession factors cited by financial institutions. the m. s. c, i will stock index fell more than 18 percent since a pink in early january. and there's been a sell off in bombs, industrial metals, gold and crypto assets. china's g d. p growth has flowed because of strict coven 19
loc downs. the countries retail sales fell 11 percent year on year in april, while industrial production was down, 3 percent and unemployment is rising. the u. s. is increasing interest rates and tightening its monetary policy to slow economic growth and bring inflation down. meanwhile, europe's household a suffering a cost of living crisis is prices rise much faster than incomes limiting spending. and the recovery from the pandemic found the situation could be worse than many developing markets where fears of a food crisis announcing to discuss all of this on join now from new york by megan green. megan is a senior fellow at harvard kennedy school. i'm the global chief economist at the cro institute. thank you for joining the program. meghan. now the last global recession was brought on by the us subprime crisis 10 years ago. we entering similar territory. no. so i think we're in
a very different position from where we were before the global financial crisis. i spend all of my time looking for bubbles everywhere that could potentially burst. and it's actually hard to figure out where the exact bubble is in part. everything's kind of a bubble, but i, i can't imagine any of them bursting in quite a spectacular fashion as they did before the global financial crisis. that being said, we are slowing down pretty significantly in the u. s. the government is re trenching massively relative to last year. rates are going up, so the investment environment is, is less conducive towards spending. consumption is, is weakening, that actually remains pretty strong. and the external demand picture for and demand is really weak, particularly as china is slowing significantly there. 8 a lot of worries that the u . s. is going into recession, particularly because the central bank is hiking so aggressively. i actually don't think we need to worry about that in the next 12 months. mainly because of the
health of the u. s. consumer and the consumer drives about 70 percent of growth in the u. s. households have massive cash balances. so to businesses for that matter, there are 11 and a half unfilled jobs in the u. s, so i can't see the labor market really deteriorating massively. any time too soon, that being said, you know, the next 12 months, i think we'll continue to slow the 12 months after that. or when i think we need to worry about a recession as rates go up even higher. make in the i. m f has also said that the world economy still has a buffer against recession. is that what you referring to? full employment? people saving, still intact and so on. that's right. so there is a huge cash buffer, particularly across the u. s. economy given how big the stimulus measures were, the government pushed out 2 and a half trillion dollars into household bank accounts. and so the bottom cor tile buy income of the u. s. is burn through that cash cushion. but the rest of. a
hasn't yet, and so i think there's a lot of space for people to go ahead and use their savings to spend and keep consumption up over the next 12 months. at the same time, companies use the opportunity during the pandemic to build a massive cash position. so even the rates are going up and earnings are probably going down the risk there to the downside. they have big cash buffers to burn through before they really have to retrench. and it's when everybody has to retrench when we can expect a recession to come. i think that that's coming certainly down the line, but i don't think it's imminent. i don't think it will happen in the next year. the buzzword seems to be stag placement at the moment where countries face sustain periods of low growth, but high prices at the same time. it's a very tricky combination, isn't it for policy makers to tackle? yeah, it's every central bankers, worst nightmare, because central banks are supposed to try to support growth and demand, but also to lean against inflation and keep prices stable. so if you have an
environment where you have very weak or virtually no growth in very high inflation and central banks have to choose which one they're going to support, rather than doing both. if they hi greets aggressively, they'll kill off growth. but we'll be able to bring inflation down if they don't high grades aggressively then a supports growth, but inflation can become run away. and that's, that's, you know, a repeat of the 1970 s as every central banks, worst nightmare. so stagflation is something to be avoided to be sure that being said, i don't think the u. s. is going to be instead inflation over the next year. i think the euro zone is actually at the greatest risk of being in stagflation, with incredibly weak growth. this year and very high inflation, you mentioned china that spin on to lockdown, which has weighed heavily on the global picture growth picture. but they've started easing restrictions. is that going to make a huge difference? certainly it will help you, you know, will get a kick back and growth from china as shanghai in particular is reopen. and then
also more directly for the west. in particular, all these factory shutdowns will be reversed and so we can hopefully see an easing of some of the global supply chain snarls that we've been stuck with over the past at least year. and so that is one factor that's driving up inflation in the developed economies. and so if those factories stop shutting down, that should certainly help take some of the upper pressure offers inflation. one of the other issues in developed countries we're seeing is countries imposing exports on goods like india, lately restricting the flow of malaysia finding the export of chicken, given the state of food protect protectionism. what is going to be the outlook for developing countries? so i think that, you know, we are absolutely facing a global in food insecurity crisis and a lot of emerging markets, particularly in north africa and the middle east will feel the squeeze because
they're so dependent on imports for their food. i think we will see more more export controls. unfortunately, i think it's the wrong response. but given that we live in an environment of protectionism globally, i think it's the most likely response. if you impose export controls, of course, you're just imposing rigidities and markets. they are not allowing markets to function in clear as they should, that ultimately just ends up putting, pushing prices up higher, and that pushes inflation up even higher. but unfortunately, i think that's probably where we're headed and left the major food importers and major for an export, or go ahead and agree that you know, the export or just aren't going to impose export controls so far. i don't see that kind of coalition coming together that kind of announcement being made if what we should hope for, but i'm not particularly optimistic megan green really get to talk to megan senior fellow at harvard kennedy school. thank you. the,
the rising cost of everyday items has pushed inflation in the united kingdom to its highest level in 40 years. millions of persons have seen the energy bills increase spot and least 54 percent. that's an additional $863.00 a year, on average for every household. the government has announced a $900000000000.00 package to soften the impact of the cost of living crisis. part of the money would come from a temporary windfall tax and the profits of oil and gas firms of around 25 percent . and the government says the measures would target the most vulnerable, including disabled people and retirees. in particular, more than a 1000000 of the countries, lowest income households will receive a one time government payment off at least $800.00. that's in addition to around $500.00 discounts on energy bills for every household. well, the government help comes off to the bank of england has raised the cost of borrowing from
a pandemic airline. no point one percent best team year high of one percent. this is in an attempt to rain and inflation, but the spot, the efforts to bring down the cost of living a recent survey showed persons can't afford to eat every day and all skipping meals as food prices rise. they bunker reports from london. o trouble at the tills. the price of staple foods his sword in recent months, with as many as to in every $5.00 britons now buying less to eat. and for the 1st time in 40 years, inflation, the gradual increase of the cost of goods and services across a year, rose to 9 percent with the governor of the bank of england warning of apocalyptic food price hikes. further back the supply chain, the middle men, a trying their best to absorb the rising costs. this is london's biggest wholesale food market where the industry's experiencing
a perfect storm of problems from the pandemic to breaks it. and more recently, the war in ukraine, the crisis go on in ukraine. ah, with the floods going on in spain, diverse marketing costs, fuel costs breaks as an alps as well, in terms of all the, the extra paper it has to be done. who knows what's around the corner? if the war continues, is gonna get worse, the winter may a worse look, look, go, we're looking at an hour. yeah. the, the cost of heating, the cost of electricity, is all going up and up and up. russia and ukraine, some of the world's largest producers of cooking oils fertilizes, and grains uses everything from bread to animal feed for the conflict means goods are stuck in ports or rotting in fields produces the sellers are used to dealing with unpredictable situations from low yields, to economic pressures to supply chain problems, but rarely have the issues come this thick and fast, leaving no time for companies to recover, leaving everybody from feel to for counting the cost. and what's
a worry for wealthy western consumers is potentially catastrophic for some of the wells poorest in somalia already cripple by drought, the worn ukraine's push fuel and fertilizer prices up by 40 percent. while in india, a decision to ban grain exports to protect domestic supplies. that is to push global we price is even higher in the u. k. the national dish, fish and chips is the canary. the coal mine oil has gone up, pets has gone up, they've gone. it all adds on everything. and joy public's paying for it. well, pay for it, and how much more can we pay for the cost of cooking oils increase 30 percent in 3 months. and cotton hartwick are becoming more expensive as global warming, striving fish stocks per the new hosting fishermen to spend longer at sea. and now russian fish has disappeared. the market industry bosses be
a 3rd of the u. k. sufficient chip shops to close in the next 9 months. as the world bounces back from the pandemic. it's now out of the frying pan and into the fire. greg swenson joins is not from london. greg is the founding part and london based match and bank bring mcadam, thank you for joining the program. greg, what do you make of the new british household aid package? is that enough to ease the cost of living crisis? well, molly and i don't think it's enough to ease it completely, it will surely help. and that's the problem with subsidies and, and these type of welfare payments or transfer payments. you know, they definitely ease the pain a little bit or they, they definitely eat, you know, will help lower income communities. and with the, with the costs. the higher costs are the cost of living crisis, but it never solves the problem. and that's, i think that's the problem is that more spending more subsidies will help in the short run, but actually creates more inflationary pressure in the medium and long term. and so
that's inflationary in itself. so it's not a solution. i think it's an unwise government policy. greg, the opposition also says measure is poorly targeted and will benefit those who are better off. do you think that's fair? i don't think it's necessarily accurate, mulling so it, it is targeted and it does. it's clued people who make over a certain threshold. so i think the design of the, the strategy is compassionate because it's helping people that need it. the most inflation by nature always hurts the people on the lower end of the income scale the most because they spend more of a higher percentage of their income on basics like food and energy. so it's always more hostile to, to lower income people. and that's where this is targeted, but a, it won't work in the long run and solving the problem and be, they're not fixing the supply issue, which is really one of the factors that's causing inflation. but as i said earlier,
you know, printing more money to, to help people in the short run is compassionate, but it's not going to solve the problem to make inflation worse bars. johnson's government has previously resisted winful taxes. he said it's a deter and for investment. so what's changed here, it is, it's, it's her, and i think we were all disappointed in here in the case to see the, the windfall tax announcement. i think there was some political pressures, you know, with party gate. they felt like there was a need to get a, you know, maybe change the headlines from the focus on party gate to something that's helping voters and it is a vote getter welfare typically is where government spending it typically is. so you know that, but the fundamentals haven't changed the party right now for us and, and the chance we're sound more like labor that's what's changed is that the,
the conservative party is governing. like they're not really conservative. and i think that's, that's a big change. a winful tax in itself was the labor idea, wasn't it? so let's look at the dilution. we've seen the bank of england increase interest rates for times in just the last 6 months in an attempt to contain the hi and rising inflation. how much further do you expect interest rates to rise in order to get on top of this? it's a great point, marlene and i expect rates will continue to rise. granted, there have been 4 increases, but they're very, very small in nature. whereas you've seen the fed actually increase that, you know, at a 50 basis points rather than the normal 25. so i think the, the bank of england has been a bit too incremental. they have to do it a lot more. it really has to be to the point where the interest rates that they said are above the inflation rate. right now they're below the inflation rate.
inflation came in at 9 percent. we expected to go to 10 percent. and as long as rates are lower, that is what we call a negative real rates where the, the, the actual inflation adjusted rates are still below 0. and that's the case now. so in many ways, it's too little, too late. they have to do more, the cost of living crisis is, is happening all over. whenever europe, elsewhere in the world. how much worse do you think it's going to get in the u. k. and especially with attempts to get less dependent on russian energy. all they're going to be able to deal with it. yes, you know, in many ways, you case in a better position than the rest of europe because they were only buying 3 percent of their natural gas. for example, from the russians. it was very easy for the u. k. to stop buying any energy product products from or energy supplies from russia, whereas the dependency is much greater in the rest of the continent. we've all talked about germany, you know, importing 40 percent of their, of their not gas in
a significant amount of their energy overall. so i think the challenges will be greater in europe. as you mentioned, the bank of england has at least started the process of raising rates, whereas the e. c. b is, is way behind. they haven't indicated that their 1st height will be until july. it's way too little too late. craig swenson from london base merchant bank brig mccadden. thank you for your time. thanks. molly. soaring inflation, a high current account deficit and foreign exchange reserves barely enough to cover 2 months of imports. pakistan is struggling to keep its economy afloat, raising the prospect that one of the wells most populous nations could soon follow sri lanka on default on its debt. lead is on seeking to revive a $6000000000.00 bailout package from the international monetary fund to help pay the bills. pakistan needs more than $36000000000.00 in financing for the fiscal year starting june. and the government has increased the cost of petrol by 20
percent to pave the way for a deal with the i m f. the prime minister has been reluctant to end energy subsidies on rollback on funded subsidies to oil and power sectors. which all key demands by the i m f. the measures could hook pakistan. he's wallets and spark a public backlash at a time of political instability. on the decision to increase fuel prices comes a day off. the 2 sides ended week long talks without reaching an agreement to revive the loan. out there, some a bunch of aid spoke to the countries finance minister miss smile. withholding discussions with the m f in cup of capital, joe ha. watson continues to face a depleting foreign to those a spiraling currency and a current account deficit which continues to rise. and those are the challenges that a month old government is facing while facing unrest on the streets in pockets on
the business to discuss it. is the finance minister focused on mr. mr. smith? thank you very much for speaking to us. you've been in talks with the i m f for what have you achieved and various bargenson headed. we've talked about this year's budget, we've talked about next year's budget. and in particular, we've talked about petra subsidies that the previous government had given against an agreement with the m f. and we've talked about how to resolve those things, how to unwind the subsidies and how to move forward in the coming year. so that the crux is that unless you remove those subsidies, unless you experientially increase the price of petroleum products, as well as some tax issues in august on the i, m. f is not going to continue its program. and that jitters, confidence from other investors in buckets on other lenders to focus on as well. how are you going to build that confidence because your government seems to be facing a lot of resistance and it might be on its way out. first of all, i mean, let me just say that there's a broad base consensus in focused on amongst all the collectors that the m f
program has to continue and that whatever necessary changes that we need to make, in particular to pass on the real prices of of these foreign imported commodities, boyd and diesel, etc, that they're, that we have to pass this on to the consumers. that's a broad base agreement, even including opposition parties that said, i mean, they may do politics with it, but that's, that's, that's a consensus. so, you know, it doesn't really matter whether i stand by the violence, mr or somebody else comes in. if i mr. or whether argument is or not, we will continue to work with the i m f. and i'm pretty sure that we would very soon reach an agreement with the, with our government in place. and now the situation in buckets on seems to be a precarious, at best, where your government is being accused of heavy handedness. political activists are being rounded up. how are you going to stabilize by august on when you're not letting the democratic spirit stay on the streets at?
that's absolutely not true. we're absolutely not going to disrupt democratic the demonstration or the sub democratic peaceful democratic demonstration. but when somebody, as you know that you know, we have got our police have got arms, no arms arms, and you know, in garza political opponents. so as long as p t, i promise to be school, i think they will be allowed. and in fact, i think the courts have allowed them to demonstrate peacefully, but they don't have the right to disrupt live. they don't have to write to occupy central government offices. they don't have to write to occupy main boulevard, to disallow us to go to offices. but other than that, i mean, and i've been doing wonderfully after the after another the last month. and he's very come to go on pakistan and in speak, his mind very quickly. you've a few weeks away from presenting the 1st budget of the government. very difficult economic decisions to be made. how confident are you that you are going to present the budget, which is going to be people's friendly when you're facing an increase in inflation
and entries in commodity prices and even energy prices? how, what is your plan? what i mean, we take the in the next 3 to 4 months, we are going to get a handle on, on these increased prices. and, and that be the type monetary policy that we have. and it's likely consolidating a fiscal policy. we will get hold of inflation, we will capture the control inflation. and once that happens, then we can loosen the monetary policy and allow growth again to flourish. so i think we have a plan. we revert to the, the, i may be reached, you know, some conclusions about where we want the economy to be headed. and in very short period of time, you will see both an agreement with the i m f and a budget which is inclusive, which targets for target subsidies towards the poor and which will not leave anybody behind. that is also the way to get in touch with us by 3. think
me at marlene site and do you have like a j b when you do or drop us an e mail counseling the call at algebra dot net address. but this movie online at al jazeera dot com slash ptc, they'll take you straight to our page, which has individual report links, an entire episode you to catch that's it for this edition accounting because i'm on inside the whole team. thanks for joining us. nice on out there. ah, do on al jazeera as watches, invasion, cream approaches, the 100 day mark. we bring you the latest from on the ground and the wars global impact. and you 3 part series describes the struggle for the return of african art, funded by colonialism and still housed in european museums today. the g 7, a nato hold key summits with the water, ukraine, and the growing global food and the cost of living crises. this much to discuss is
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