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Daily Archives: October 12, 2020
Posted: October 12, 2020 at 8:08 am
Reporting from: New York City
For the last few days, weve been having an important discussion about the magnitude of the economic challenges in the west; if you didnt read yesterdays letter, I really encourage you to do so before proceeding because its important to understand why the west has truly passed the point of no return.
Simply put, the United States and much of Europe are borrowing an extraordinary amount of money now just to pay interest on the money theyve already borrowed. They cannot even self-fund their mandatory entitlement programs without going into the hole, and their options are limited:
As long as the government CAN do this, they WILL do this. Regardless of their intentions, though, more debt only worsens the situation, creating higher borrowing costs in the long run, and even more debt. As this happens, the pool of buyers begins to dry up, especially from overseas.
The more buyers stop purchasing Treasury securities, the more the Federal Reserve will mop up the excess liquidity. In doing so, the Fed essentially conjures up money and loans it to the government.
No matter what the government monkey statistics say, this is inflationary, plain and simple. The more money they print, the greater the level of inflation in the long-term. Meanwhile, as foreigners simultaneously reduce their US dollar holdings, this inflation will become more acutely felt in the US.
Theres going to come a time when the US government is forced to face its economic reality and make some incredibly deep cuts that would be felt across society, from Wall Street and the military industrial complex to project housing on the other side of the tracks.
Eventually, the debt burden is simply going to be too much, and the most obvious solution will be to default. Politicians will make China out to be the enemy and they will probably invent a war just to have an excuse to default on Chinese owned debt. Americans will wave the flag and celebrate defaulting on their enemies.
In the best traditions of Atlas Shrugged, the government will continue its persecution of the productive class professionals, investors, entrepreneurs, and skilled workers. Existing taxes will rise, new taxes will be created, trade barriers will be enacted, and a maze of cost prohibitive regulations will be passed.
The first option (keeping the party going) is what has been happening for years. Politicians make small concessions to show theyre serious about fiscal discipline, cutting laughably small programs while dumping hundreds of billions of dollars into wars and entitlement programs.
The worse the debt situation becomes, though, the higher the borrowing costs become, and the worse the debt situation becomes. Its not an enviable position. Existing lenders will continue backing away from the US Treasury market, giving option 1 a half-life measured in months at best.
In the longer term, only options 2-5 remain: inflation, austerity, default, and cannibalism. Each of these remaining options will shake the financial system to its core. More importantly, each of these has the power to create widespread social upheaval.
When inflation eats away at a familys already meager standard of living, when austerity eliminates the benefits to which recipients have grown accustomed, when default vanquishes a retirees savings, when high taxes make workers feel like theyre just government serfs this is when the real turmoil will begin:
There are a number of other manifestations, and many are already showing signs of emergence. The US and European police states are alive and well. Crime is on the rise.
In Europe, cops are doing battle in the streets with their citizens. Think it cant happen in the US? Remember tanks in the streets during the LA riots? Remember New Orleans? Remember any number of G8/G20 protests?
Heres the bottom line: all you have to do is glance at the headlines to see what happens when you strip people of their livelihood, of their ability to put food on the table for their families.
The US has been able to kick the can down the road with the most blunt social implications simply because the country benefits so much from a US-oriented financial system. This is coming to an end very, very quickly.
As a rule of thumb, the greater the economic distortion, the harder the collapse. The US economy has been in a fantasy world for so long, and when its dominant primacy is yanked away, the collapse will be at freefall speed.
Listen Im not talking about the end of the world here, Im talking about difficult times ahead, and the things that go beyond economics. Its time to face facts and look at how society will change (and has already changed).
Tomorrow, Id like to write more about what we can do now. Meanwhile, please tell me what you think about this how do you see society changing from this reset of the financial system?
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Posted: at 8:08 am
As of March 2020, the entire world is affected by an evil with which it is incapable of dealing effectively and regarding whose duration no one can make any serious predictions. The economic repercussions of the novel coronavirus pandemic must not be understood as an ordinary problem that macroeconomics can solve or alleviate. Rather, the world could be witnessing a fundamental shift in the very nature of the global economy.
The immediate crisis is one of both supply and demand. Supply is falling because companies are closing down or reducing their workloads to protect workers from contracting COVID-19, the disease caused by the new coronavirus. Lower interest rates cant make up the shortfall from workers who are not going to workjust as, if a factory were bombed in a war, a lower interest rate would not conjure up lost supply the following day, week, or month.
The supply shock is exacerbated by a decrease in demand due to the fact that people are locked in, and many of the goods and services they used to consume are no longer available. If you shut countries off and stop air traffic, no amount of demand and price management will make people fly. If people are afraid or forbidden to go to restaurants or public events because of the likelihood of getting infected, demand management might at most have a very tiny effectand not necessarily the most desirable one, from the point of view of public health.
The world faces the prospect of a profound shift: a return to naturalwhich is to say, self-sufficienteconomy. That shift is the very opposite of globalization. While globalization entails a division of labor among disparate economies, a return to natural economy means that nations would move toward self-sufficiency. That movement is not inevitable. If national governments can control or overcome the current crisis within the next six months or a year, the world would likely return to the path of globalization, even if some of the assumptions that undergirded it (for example, very taut production chains with just-in-time deliveries) might have to be revised.
But if the crisis continues, globalization could unravel. The longer the crisis lasts, and the longer obstacles to the free flow of people, goods, and capital are in place, the more that state of affairs will come to seem normal. Special interests will form to sustain it, and the continuing fear of another epidemic may motivate calls for national self-sufficiency. In this sense, economic interests and legitimate health worries could dovetail. Even a seemingly small requirementfor instance, that everyone who enters a country needs to present, in addition to a passport and a visa, a health certificatewould constitute an obstacle to the return to the old globalized way, given how many millions of people would normally travel.
That process of unraveling might be, in its essence, similar to the unraveling of the global ecumene that happened with the disintegration of the Western Roman Empire into a multitude of self-sufficient demesnes between the fourth and the sixth centuries. In the resulting economy, trade was used simply to exchange surplus goods for other types of surplus produced by other demesnes, rather than to spur specialized production for an unknown buyer. As F. W. Walbank wrote in The Decline of the Roman Empire in the West, Over the whole [disintegrating] Empire there was a gradual reversion to small-scale, hand-to-mouth craftsmanship, producing for the local market and for specific orders in the vicinity.
In the current crisis, people who have not become fully specialized enjoy an advantage. If you can produce your own food, if you do not depend on publicly provided electricity or water, you are not only safe from disruptions that may arise in food supply chains or the provision of electricity and water; you are also safer from getting infected, because you do not depend on food prepared by somebody else who may be infected, nor do you need repair people, who may also be infected, to come fix anything at your home. The less you need others, the safer and better off you are. Everything that used to be an advantage in a heavily specialized economy now becomes a disadvantage, and the reverse.
The movement to natural economy would be driven not by ordinary economic pressures but by much more fundamental concerns, namely, epidemic disease and the fear of death. Therefore, standard economic measures can only be palliative in nature: they can (and should) provide protection to people who lose their jobs and have nothing to fall back on and who frequently lack even health insurance. As such people become unable to pay their bills, they will create cascading shocks, from housing evictions to banking crises.
Even so, the human toll of the disease will be the most important cost and the one that could lead to societal disintegration. Those who are left hopeless, jobless, and without assets could easily turn against those who are better off. Already, some 30 percent of Americans have zero or negative wealth. If more people emerge from the current crisis with neither money, nor jobs, nor access to health care, and if these people become desperate and angry, such scenes as the recent escape of prisoners in Italy or the looting that followed Hurricane Katrina in New Orleans in 2005 might become commonplace. If governments have to resort to using paramilitary or military forces to quell, for example, riots or attacks on property, societies could begin to disintegrate.
Thus the main (perhaps even the sole) objective of economic policy today should be to prevent social breakdown. Advanced societies must not allow economics, particularly the fortunes of financial markets, to blind them to the fact that the most important role economic policy can play now is to keep social bonds strong under this extraordinary pressure.
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Socio-economic inequalities on cancer mortality in nine European areas: The effect of the last economic recession. – UroToday
Posted: at 8:08 am
The effect of inequalities aggravated by economic recessions in the mortality rates of certain diseases has been previously described. In this study, we analyzed the relationship between socio-economic deprivation and cancer mortality. We focused on lung, colon, prostate, and breast cancers in nine European urban areas over three periods: two before (2000-2003 and 2004-2008) and one after (2009-2014) the onset of the 2008 financial crisis.
This is an ecological study of trends. The units of analysis were small areas within nine European urban areas. We used a composite deprivation index as a socio-economic indicator. As a mortality indicator, we used the smoothed standardized mortality ratio, calculated using the hierarchical Bayesian model proposed by Besag, York and Molli. To analyze the evolution of socio-economic inequalities, we fitted an ecological regression model that included the socio-economic indicator, the period of time, and the interaction between these terms.
In men, socio-economic inequalities in all-cancer and lung cancer mortality were observed in most of the cities studied, but did not increase after the onset of the economic crisis. In women, only two cities (Stockholm and London) showed socio-economic inequalities in all-cancer and lung cancer mortality; there was also no increase in inequalities.
Our results did not validate our hypothesis that inequalities increase in times of crisis. However, they emphasize the importance of socio-economic measurements for understanding mortality inequalities, and can be used to inform prevention strategies and help plan local health programs aimed at reducing health inequalities.
Cancer epidemiology. 2020 Oct 07 [Epub ahead of print]
Laia Palncia, Josep Ferrando, Marc Mar-Dell'Olmo, Merc Gotsens, Joana Morrison, Dagmar Dzurova, Michala Lustigova, Claudia Costa, Maica Rodrguez-Sanz, Lucia Bosakova, Paula Santana, Carme Borrell
Agncia de Salut Pblica de Barcelona, Barcelona, Spain; CIBER Epidemiologa y Salud Pblica (CIBERESP), Madrid, Spain; Institut d'Investigaci Biomdica (IIB Sant Pau), Barcelona, Spain. Electronic address: ., Agncia de Salut Pblica de Barcelona, Barcelona, Spain., Agncia de Salut Pblica de Barcelona, Barcelona, Spain; CIBER Epidemiologa y Salud Pblica (CIBERESP), Madrid, Spain; Institut d'Investigaci Biomdica (IIB Sant Pau), Barcelona, Spain. Electronic address: ., Agncia de Salut Pblica de Barcelona, Barcelona, Spain; Institut d'Investigaci Biomdica (IIB Sant Pau), Barcelona, Spain., Institute of Health Equity at the Research Department of Epidemiology and Public Health, University College London, London, United Kingdom., Department of Social Geography and Regional Development, Faculty of Science, Charles University, Prague, Czechia., Centre of Studies in Geography and Spatial Planning, University of Coimbra, Coimbra, Portugal., Agncia de Salut Pblica de Barcelona, Barcelona, Spain; CIBER Epidemiologa y Salud Pblica (CIBERESP), Madrid, Spain; Institut d'Investigaci Biomdica (IIB Sant Pau), Barcelona, Spain; Universitat Pompeu Fabra, Barcelona, Spain., Department of Health Psychology and Research Methodology, Medical Faculty, P. J. Safarik University in Kosice, Kosice, Slovak Republic; Olomouc University Social Health Institute (OUSHI), Palacky University in Olomouc, Olomouc, Czech Republic.
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Posted: at 8:08 am
NEW YORK--(BUSINESS WIRE)--The Milken Institute and The Harris Poll today released the findings of a joint research program called The Listening Project, finding a global void in leadership as the COVID-19 pandemic has killed more than one million people worldwide and has crippled international economies.
The global survey, which was conducted in two phases (before and during COVID-19*) among nearly 30,000 people across 27 countries, found access and affordability to healthcare and communicable/infectious disease containment and prevention tied as the top two priorities on the list. Corruption and transparency rose to the third most urgent problem, as citizens became frustrated with governments handling of COVID-19 around the globe.
The Listening Project demonstrates the widespread lack of support for how countries have handled COVID-19. For example:
The Listening Project confirms the most urgent global priorities for which we and our partners across corporate, government, and philanthropic sectors must develop solutions, said Richard Ditizio, President and COO of the Milken Institute. Through the Milken Institutes convening and programmatic platforms, we help leaders, experts, and influencers step up to the challenges in front of us, whether its rapidly developing vaccines and treatments, increasing access to capital, or delivering on the promise of gender and racial equality globally.
The striking conclusion from our survey is while COVID-19 is a public health crisis, it has also been a contagion across many other socio-economic challenges and government institutions, said John Gerzema, CEO of The Harris Poll. Maybe even more than the virus, our common crippling hardship is the lack of leadership being observed on the world stage. It is inherent upon our leaders both in government, and in business, to unify and collectively refocus their priorities to provide stability and certainty to their stakeholders.
The Milken Institute and The Harris Poll will announce results from The Listening Project during the opening plenary for the Milken Institute Global Conference on Monday, October 12. Additionally, John Gerzema of The Harris Poll will break down findings further during a session on Tuesday, October 13. To watch Mondays session, please click here. For Tuesdays session, click here. Follow along on social media with #MIGlobal.
SOURCE: Milken Institute and The Harris Poll
Additional Key Findings Include:
To download the full report please visit: https://milkeninstitute.org/reports/listening-project.
In all, The Listening Project surveyed a total of 29,125 adults in 27 countries between February and October 2020. The initial survey from February surveyed 10,125 adults in 27 countries asking them to determine which needs out of 48 were the most important to them, their family, and their community. These were then analyzed together as an aggregate across 27 countries to identify clusters of key global socio-economic challenges and ranked based on importance. The ranking was calculated by averaging out these numbers.
To better understand the impact of COVID-19 on the 10 most important socio-economic challenges, the survey was fielded once again from mid-September to October 2 among another 19,000 people in 12 countries. These countries were picked based on varying levels of COVID-19 impact, with six focused on countries that have felt the brunt of the pandemic.
About the Milken Institute
The Milken Institute is a nonprofit, nonpartisan think tank that helps people build meaningful lives in which they can experience health and well-being, pursue effective education and gainful employment, and access the resources required to create ever-expanding opportunities for themselves and their broader communities. For more information, visit https://milkeninstitute.org/.
About The Harris Poll
The Harris Poll is one of the longest-running surveys in the U.S. tracking public opinion and social sentiment since 1963. Harris is a global consulting and market research firm that delivers social intelligence for transformational times, working with clients in building corporate reputation, brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. Learn more by visiting http://www.harrispoll.com and follow Harris Poll on Twitter and LinkedIn.
COVID-19: A Temporary Health Scare Or The Exposure Of A Failed Economic Model? – The Organization for World Peace
Posted: at 8:08 am
A return to normality a phrase repeated countless times by politicians, businesses and most of all the public. After such a severe crisis the old world despite all its caveats is a tempting prospect. A return to employment for most if not all, the devolution of our basic freedom to go just about wherever whenever we please and the general sense of stability that was felt before the pandemic.
What would we be returning to?
However, there can be no return to normal. A return to normal would be a failure to acknowledge the socio-economic problems the virus laid bare. Just over a decade ago, following the great recession: governments, banks and corporations moved quickly to cover up the structural problems our economies faced and return to normal. As a result, the inequality that had been growing at an unprecedented rate since the 1980s continued to spiral out of control. Socio-economic insecurity spread and large swathes of our communities became vulnerable to even very temporary disruptions to their incomes. The 2019 UN Global Poverty report found that poverty is everywhere whilst inequality within countries is massive. Over 1.3 billion people mostly in Asia and Africa were faced with multi-dimensional poverty due to insufficient access to; education, medical services, employment and food.
Economic hardship was by no means reserved for those in the developing world. Estimates by the United Nations found that 1/5 of the British population was living in poverty an astounding figure for the 5th wealthiest country on the planet. In the United States, 3 people held more wealth than the bottom 50% of the population 45 million of whom lived in poverty. Whilst Across the European Union poverty rates had barely recovered from the effects of the 2008 crash.
The exponential rise in inequality was justified repeatedly with a recycled quote from a John F. Kennedy speech in 1963: a rising tide lifts all boats. This metaphor has been the motto of Trickle-Down Economics for decades. The pandemic has confirmed its failure. The rising tide has not bought us all prosperity but instead launched a handful of super-yachts into the stratosphere: leaving millions at the bottom scrambling to stay afloat.
Whilst the number of people struggling to make ends meet increased our environment continued to decay. Environmental policy was side-lined in favour of GDP growth. Promises of reducing fossil fuel use and building more sustainable economies proved to be half-hearted at best, and empty at worst. The COVID-19 must lead to change both economically and environmentally.
What do we build now?
COVID-19 has exposed the dangerous reality of inequality. The wealth and power of the richest members of our society has continued to rise, whilst overall poverty has increased rapidly both in the developed and developing world as people living pay-check to pay-check lost their incomes. Our economic system requires urgent reform. Incremental change will not suffice. Reducing inequality and working towards Environmental sustainability must take centre stage in our recovery plans.
Investment In Education
Access to education has long been considered a levelling force in our society. A UNICEF report found that each additional year of education boosts a persons income by 10 per cent. Countries in both the developed and developing world must increase investment into education. According to the World Bank, developing countries that have had the most success in improving education standards focused heavily on increasing access to primary and secondary education. The International Community should provide support in this matter by ensuring that lenders refrain from demanding debt re-payments that wouldresult in cuts to education budgets.
The developed countries should focus on tertiary education and training programs to meet the demand for high skilled labour. Access to higher education and other training programs must be made accessible to those with lower incomes. This can be achieved via reductions in debt burdens placed on those who need to borrow money to attend university and by offering more flexible re-payment schemes.
Greening Our Economies
The devastation reeked by COVID-19 must not distract us from the most urgent threat faced by humanity: climate change. The old system was failing to come to grips with this issue. Emissions targets were missed, government support continued to flow into the fossil fuel industry the IMF estimated that $5.2 trillion in subsidies per year and sustainable energy initiatives remained underfunded. Following the Great Depression, the United States took a huge leap of faith with the FDRs New Deal to pull the country out of the depths of Economic depression. It is time for this generations leap of faith against an even more pressing threat than economic depression: climate change.
The Green New Deal is a policy initiative that was born in the United States but has since spread across the globe. It has been discussed by leading politicians as well as grassroots climate activists. The deal aims to overcome climate change and environmental degradation via huge state-led investment into renewables along with divestment from the fossil fuel sector.
President Macron of France committed 35 billion of the 100 billion French recovery package to green energy initiatives. This is a positive move from Europes second economy. Others should follow suit and go further with their commitments to a green recovery.
As France has shown these investments will be costly. In a world more riddled by debt than ever, increasing investment may well appear counterintuitive or even impossible. For this reason, certain groups will pressure governments to implement austerity measures to make debt payments. This must be avoided. Austerity will only further contract the economy, increase inequality and prevent necessary structural changes to our economy from being pursued. None the less, the question will have to be answered. How do we fund our recovery?
The answer to the calls for austerity? Tax reform.
No taxation without representation exclaimed the early American colonials as they dumped tea into the Boston harbour. This protest by the colonials in 1773 resonates strangely with the modern world. Due to the failures of governments and intelligence off private interests to ensure our tax systems keep pace with the globalization of finance: loopholes and tax havens have made the ultra-rich immune to taxation. They now haverepresentationwithout taxation. Whilst the majority are overtaxed and under-represented. Joseph Stiglitz, Economics Nobel Laureate, states that a progressive taxation system must replace our current regressive system. Mr Stiglitz puts forward a proposal arguing for the need to remove loopholes and tax heavens whilst the levying of a tax on financial transactions. This will raise funds for investment and increase equality whilst avoiding the need to resort to higher taxes for the majority of people.
The removal of tax-loopholes will guarantee that the tax that ultra-rich and corporations are obliged to pay can be demanded by governments. Estimates vary massively on how much tax is dogged every year, but the figure is in the trillions according to the Tax Justice Network with at least $36 trillion are hidden away in various tax heavens. Collecting these funds is not an attempt to raise taxes but an attempt at preventing the manipulation of tax-rates by those in the top tax brackets. This would do a lot towards resolving theissue of representation without taxation, whilst providing governments with funds for their recovery plans.
A financial transaction tax of just 0.1% on trading transactions in the United States would raise $777 billion over ten years. This tax is inherently progressive due to most large trades being carried out by the very wealthy members of society. Urban-Brookings Tax Policy centre predicts that the top 1% of Americans would pay 40% of the tax whilst the bottom 60% would account for just 11% of the tax. The European Union has already considered the implementation of such a tax estimating that it would raise $66 Billion per year. These funds would contribute greatly to our recovery efforts and reduce spending deficits.
The Chinese word for crisis is comprised of two characters: one representing danger and the other opportunity. The danger is yet to pass, COVID-19 has pushed both the wealth and health of millions into doubt. Despite the lingering threat, a bold plan for recovery must be implemented now. If we wait for the dust to settle the opportunity to build a better future may well pass us by.
Peter has been writing for the OWP since early 2020. He studied Politics with History at the University of Keele where he focused on conflicts in the Middle East, economic development in South East Asia, and the European refugee crisis. He is interested primarily in how economic development can bring about peace and stability in the developing world.
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Posted: at 8:08 am
To paraphrase the words of the American political activist Ralph Nader if youre not turned on to Africa, Africa will turn on you.
Udo Bullmann is the S&D group Coordinator on the European Parliaments Development Committee.
Carlos Zorrinho is an S&D MEP and Co-President of the ACP-EU Joint Parliamentary Assembly.
For decades, the Socialists and Democrats have been turning on to Africa, as a constant theme of our political engagement in the European Parliament. Far from seeing the African continent as a problem, the S&D Group sees the opportunities and every year we curate a fully-fledged event on Africa-EU relations with African personalities, politicians, young people and representatives of civil society joining us to discuss and outline our common future. This year is no exception despite the global Covid-19 pandemic.
The S&Ds 2020 Africa Week will mainly focus on democracy, digital transition, inequality, decent jobs, climate change and a new Africa-EU partnership for sustainable development.
The fact that the fourth edition of Africa Week is organized in a hybrid, half on-site/half remote way sets the tone for the new challenges we face.
The pandemic has hit the two continents like a hurricane. Millions of jobs are being lost. Inequality and poverty are growing, small businesses are closing and many countries are experiencing the worst recession since WWII. Covid-19 has exacerbated existing inequalities within and between countries, and has put at risk the progress made so far in reducing poverty.
A socially just approach is the only way out of this crisis. Our values of solidarity cannot change. On the contrary, they should be our compass to foster a sustainable economic and social transformation.
We will be working to ensure that the new Africa-EU partnership is based on equal footing, respectful dialogue, mutual ownership and shared responsibility, respecting the interests of both sides. In a continuous and bold multilateral effort, we need to work together with the EU Commission and with the African Union to combat the pandemic and overcome its social, economic and health consequences through fair and sustainable growth and cooperation, implementing all aspects of the UNs Sustainable Development Goals.
Multilateralism, Joint Assemblies and fair and trustful exchanges of experiences and best practices are the basis for a common understanding which will benefit all citizens of both continents.
This crisis has shown the precarious nature of todays economy, with 700 million people living in extreme poverty and 1.3 billion unable to meet their basic needs. The vast majority of people living in countries in sub-Saharan Africa are employed in the informal sector and receive no unemployment, sickness or other benefits. And more than a third of all jobs and incomes in Africa could be lost as a result of Covid-19.
While it is true that the population of sub-Saharan Africa is projected to double by 2050, this needs a strategic approach if we are to turn a potential vicious circle into a virtuous circle of opportunities.
To this end, the individual policies the EU is putting forward cannot stand alone but must have a coherent approach across all policies. Each of them should have a positive impact on climate. Each of them should have a positive impact on fighting socio-economic inequalities. This can only be done by empowering younger generations through massive investment in education, human rights, health, digitalisation and democracy.
First and foremost, the EU should invest more in education for all especially for girls as it represents not only one of the pillars of the SDGs but the base for decent work and decent lives. We also have to provide digital knowledge and digital skills to young people in schools and colleges. No one must be digitally left behind.
It will not be sufficient to create jobs. They have to be decent jobs. This means ensuring that the right employment and labour policies are set, the health systems in all African countries are reinforced in order to address the needs of the population and the supply of skills is boosted, as well as the levels of wages and social protection coverage.
It is essential, in considering meeting basic needs, to identify responses that also take into account the new challenges of energy and climate change.
CO2 emissions, global heating, floods and drought know no boundaries. The paradox of climate change lies in the fact that the region that has contributed the least to global emissions, which is also the worlds poorest region and the least able to adapt, is the continent set to be worst hit by extreme weather. 70% of Africans make a living through agriculture, so changing weather patterns, loss of biodiversity and destruction of the natural environment have immediate effects on a huge part of the population.
The EU Green Deal provides a good opportunity to reshape Africa-EU relations based on coherent, fair and climate-proof cooperation. A green recovery in Europe that doesnt take Africa into consideration risks failing to achieve the overall objectives of the Paris Agreement and the SDGs.
We need predictable, accountable and transparent EU support in scaling up climate action and adaptation in African countries. The EU should demonstrate fair burden-sharing and scale-up technical and innovative financial support for the climate-risk-management mechanism in order to address losses and damage on the African continent.
On energy and raw materials, we can no longer turn a blind eye. Due diligence should play a role here and instead of continuing to exploit African raw materials and developing fossil fuel industries in the region, the EU should invest in renewable energy in Africa, in order to counterbalance Chinese economic penetration as well.
Hence, relying on our experience and values, we should urgently assist African countries in developing their Free Trade Area agreement to include a customs union, allowing young people with skills across Africa to seek opportunities without the hindrance of borders.
We are at a crossroads where tough decisions need to be taken. The next Africa-EU summit will be crucial to open a just, progressive and sustainable chapter of our relationship. If we were waiting for an opportune time to demonstrate that progressives, not extremists and the far right, are the solution to the current global challenges, now is the time.
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Posted: at 8:08 am
In this piece, James Emejo writes that beyond the timely submission of the proposed 2021 Budget to the National Assembly, resource mobilisation, discipline, transparency as well as implementation remain crucial towards achieving the much desired recovery and growth of the economy
President Muhammadu Buhari last week presented a N13.08 trillion budget proposal for the 2021 fiscal year to the joint session of the National Assembly.
Dubbed, Budget of Economic Recovery and Resilience, the proposal was obviously drafted to among other things prepare the country for a second recession as clearly predicted by the president.
He said: GDP growth is projected to be negative in the third quarter of this year. As such, our economy may lapse into the second recession in four years, with
significant adverse consequences. However, we are working assiduously to ensure a rapid recovery in 2021. We remain committed to implementing programmes to lift 100 million Nigerians out of poverty over the next 10 years.
This is not surprising given that there had been similar predictions recently by domestic and external commentators, who continued to highlight the deteriorating economic prospects caused by the falling crude oil price amidst the socioeconomic impact of the COVID-19 pandemic in the country as well as the reality of an economy which is largely undiversified.
The Minister of State for Budget and National Planning, Prince Clem Agba, had severally raised concerns that the economy could be headed for another recession unless the Nigerian Economic Sustainability Plan (NESP) was urgently implemented to boost spending and stimulate the economy.
The possibility of yet another recession had also been amplified by the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, who had been reeling out a litany of monetary interventions to stimulate growth and possibly help the country escape a dire economic turbulence.
But going by the performance of key macroeconomic indicators including inflation, GDP, unemployment, poverty among others, it would require patriotism and strong faith to believe that the Nigerian economy will survive a second recession by December.
Nevertheless, in presenting the 2021 appropriation, Buhari said in view of the many challenges confronting the country, the government must accelerate its economic recovery process, promote social inclusion and strengthen the resilience of the economy.
Going by the fiscal assumption and parameters which the budget was based on including benchmark oil price of $40 per barrel, daily oil production estimate of 1.86 million barrels (inclusive of
Condensates of 300,000 to 400,000 barrels per day), exchange rate of N379 per $1 and GDP growth projected at 3.0 per cent and inflation closing at 11.95 per cent, the president is hopeful that the budget would accelerate the pace of our economic recovery, promote economic diversification, enhance competitiveness and ensure social inclusion.
Buhari had proposed an aggregate expenditure of N13.08 trillion, including N1.35 trillion spending by Government-Owned Enterprises and Grants and Aid funded expenditures of N354.85 billion.
He said the 2021 budget deficit (inclusive of Government-Owned Enterprises and project-tied loans), is projected at N5.20 trillion, representing 3.64 per cent of the estimated GDP, slightly above the three per cent threshold set by the Fiscal Responsibility Act, 2007.
He said: It is, however, to be noted that we still face the existential challenge of coronavirus pandemic and its aftermath. I believe that this provides a justification to exceed the threshold as provided for by this law. The deficit will be financed.
Buhari said based on the foregoing fiscal assumptions and parameters, total federally distributable revenue is estimated at N8.433 trillion in 2021; while total revenue available to fund the 2021 Federal Budget is estimated at N7.886 trillion, adding that this includes grants and aid of N354.85 billion as well as the revenues of 60 Government-Owned Enterprises.
He noted that oil revenue is projected at N2.01 trillion, while non-oil revenue is estimated at N1.49 trillion.
According to him, As you will observe, the format of the 2021 Appropriation Bill has been modified to include budgeted revenues, no matter how small, for each MDA, to focus on internal revenue generation.
Accordingly, I implore you to pay as much attention to the revenue side as you do to the expenditure side in the Planned 2021 Expenditure.
The President explained that the budget deficit would be financed mainly by new borrowings totalling N4.28 trillion, N205.15 billion from privatisation proceeds and N709.69 billion in drawdowns on multilateral and bilateral loans secured for specific projects and programmes.
He stressed further that the sum of N484.49 billion provided for Statutory Transfers in the proposal represent an increase of N56.46 billion (or 13 per cent) over the revised 2020 provision.
The president said statutory transfer provisions are Niger Delta Development Commission N63.51 billion; North East Development Commission N29.70 billion; National Judicial Council -N110.00 billion; Universal Basic Education Commission -N70.05 billion; Independent National Electoral Commission -N40 billion; National Assembly -N128.00 billion; Public Complaints Commission -N5.20 billion; Human Rights Commission N3 billion; and Basic Health Care Provision Fund N35.03 billion.
He said in order to enhance national security and human capital development, a major part of the 2021 recurrent cost estimate is allocated to paying salaries and overheads in MDAs providing critical public services.
To this end, the sum of N227.02 billion was budgeted for the Ministry of Interior; N441.39 billion for the Ministry of Police Affairs; N545.10 billion for Ministry of Education; N840.56 billion for Ministry of Defence; and N380.21 billion for Ministry of Health.
The president revealed that the budget of the Ministry of Education had been increased by 65 per cent to develop the education sector.
The key capital spending allocations include Power N198 billion (inclusive of N150 billion for the Power Sector Recovery Plan); Ministry of Works and Housing N404 billion; Ministry of Transportation -N256 billion; Defence N121 billion; Agriculture and Rural Development -N110 billion.
Others are: Ministry of Water Resources: N153 billion; Ministry of Industry, Trade and Investment -N51 billion; Ministry of Education N127 billion; Universal Basic Education Commission -N70 billion; Ministry of Health- N132 billion; Zonal Intervention Projects: N100 billion; and Niger Delta Development Commission N64 billion.
The president stated further that personnel cost remains the largest single item of expenditure, saying the seven months to July 31, 2020, it accounted for 34 per cent of total federal government spending and is projected at 33 per cent of 2021 expenditure.
He assured that his government remained committed to meeting its debt service obligations.
A total of N2.183 trillion has been set aside to service domestic debts while N940.89 billion has been provided for foreign debt service. N220 billion is provided for transfers to the Sinking Fund to pay off maturing bonds issued to local contractors and creditors, he said.
However, while commending the president for the timely manner of submission of the proposed 2021 budget to the National Assembly, analysts have expressed mixed opinion over the some of the parameters adopted.
They particularly praised the executive for among other things factoring the present economic reality occasioned by the COVID-19 pandemic into the drafting of the budget.
Specifically, the analysts in separate interviews with THISDAY hailed some of the fiscal parameters by which the budget was predicated.
They however, voiced their concerns over the countrys rising public debt profile and the attendant huge debt service obligations as well as an over-ambitious growth and inflation targets.
Commenting on the proposal in a chat with THISDAY, Professor of Finance and Capital Markets at Nasarawa State University, Prof. Uche Uwaleke, commended the executive for transmitting the budget proposal in good time adding that it would allow the National Assembly sufficient period to consider and pass the appropriation bill.
He said: I think the assumptions and budget parameters are realistic except for the Exchange rate of N379 to the dollar that may not hold due to the on-going process of unifying Exchange rates across all forex windows by the CBN consistent with the IMF prescription.
Uwaleke however, expressed reservations on the growth projection for next year.
I also think the real GDP growth rate projected at 3 per cent is a little ambitious in view of the impact of COVID-19 on the economy expected to linger till next year. This is why the recent Fitch report on Nigeria projects a GDP growth rate of 1.3 per cent for the country in 2021, he added.
The former Imo State commissioner for finance, however, observed that the budget proposal seemed to have set the right priorities with the bulk of capital spending going to works and housing, power and transport, pointing out that for the first time in many years, the capital allocation to education and health are above that of defense.
I must add however, that new borrowings of over N4 trillion to part finance a deficit of over N5 trillion is worrisome given the already huge amount of over N3 trillion allocated to debt servicing alone.
COVID-19 notwithstanding, the deficit to GDP should have been kept within the 3 per cent threshold stipulated in the Fiscal Responsibility Act 2007.
I hope the National Assembly will consider any amendment within the budget envelope of N13.08 trillion and not end up jerking up the figure.
Also speaking to THISDAY, Managing Director/Chief Executive, Credent Investment Managers Limited, Mr. Ibrahim Shelleng, commended both the oil production and benchmark parameters.
He however, raised objection to the exchange rate parameter, adding that it was not well considered.
He said: With regards to production, it seems to be more realistic based on output figures for the last few years. We used to budget over 2mbpd in previous budgets but never realised more than 1.7-1.8mbpd.
I think the benchmark oil price is fair. The global economy will surely pick up after the pandemic and as such we would expect to see an increased demand for oil and subsequent increase in prices
The exchange rate for me is not well budgeted. One year non-deliverable forward contracts for the Naira are around N500 to the dollar, whilst futures contract for the same tenor are quoted at N385.
This is a decent indication that the N379 per USD budgeted is not realistic. Moreover given the backlog of demand for foreign investors to exit and low oil prices, the pressure on the Naira is expected to persist.
On his part, former Director General of the Abuja Chamber of Commerce and Industry (ACCI), Dr. Chijioke Ekechukwu, however argued that the N10.13 trillion budget proposal was an invitation to more deficit financing and more borrowing.
He expressed concern that in spite of the countrys dwindling economy, the governments expenditure continued to rise with an increased budget stressing that Our debt burden is becoming unmanageable.
Ekechukwu said: A N13.08 trillion budget for 2021 is only invite to more deficit financing and more borrowing. So the effect is that our debt burden will increase more and more by 2021.
This is because the effect of COVID-19 will persist till the third quarter of 2021 and institutions are not likely to recover very quickly to turnaround their growth trajectory.
The benchmarks of $40/barrel oil price, oil output of 1.86milion barrels daily and exchange rate of N379 per Dollar are feasible but in my opinion, GDP growth of 3.0 per cent and inflation rate of 11.95 per cent are not likely to be feasible.
On his part, an Associate Professor of Agricultural Economics at University of Port Harcourt, Anthony Onoja, believed the budget estimates were not realistic.
According to him, The budget is over ambitious. It is not realistic that Nigeria will experience a GDP growth of 3.0 percent. I also do not see how possible it will be to attain a unified or real exchange rate of N379 per US dollar.
With the looming recession, the high cost of electricity, poor allocation of the budget to agriculture and high cost of petroleum products Nigeria should expect a very high rate of inflation by 2021.
Nonetheless, Buhari appealed to both chambers of the National Assembly to hasten the legislative process of budget consideration to ensure its prompt passage to sustain the restoration of a predictable January December fiscal year adding, In this regard, I have directed all Ministers and Heads of Agencies to be personally available for budget defence.
He said: Nigerians expect that the 2021 Budget will contain only implementable and critical projects, which when completed, will significantly address current structural challenges of the economy, improve the business environment and accelerate economic recovery.
But except there is marked departure from the business as usual syndrome, and existing mechanisms strengthened to boost transparency and monitoring, double efforts on resource mobilisation and apply sanctions where there are breaches in the implementation process, the proposed 2021 appropriation when passed into law may fail to meet the expectations of Nigerians.
The history of past budgets was riddled with diversion of budgeted interventions into private pockets, a major limitation to performance and delivery.
In the time being, all eyes is on the legislature to scrutinise the estimates and pass the piece of legislation into law albeit in record time- an assurance already given to Nigerians by President of the Senate, Senator Ahmed Lawan, and Speaker of the House of Representatives, Hon. Femi Gbajabiamila.
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A recovery plan to ‘build back different’ for a greener, fairer, and thriving Liverpool City Region – Bdaily
Posted: at 8:08 am
A new report is offering a fresh approach to build back not only better, but different, to create a more sustainable and inclusive economy.
The Rethinking the Economy for an Inclusive and Sustainable Future research report has launched today (8 October).
It offers an innovative and evidenced-based set of priorities on how Liverpool City Region and the UK can harness its economic potential and overcome the challenges presented by COVID-19 to create a more equal, greener, fairer, and thriving economy.
The report highlights and recommends action and investment on four specific priority sectors, which it says present unique opportunities to accelerate the regions recovery: the social economy, the self-employed and micro businesses, the care sector, and the green economy.
Drawing on a comprehensive research data set, combined with on the ground experience of business and communities, the report provides insights into how the global Coronavirus pandemic has impacted the Liverpool City Regions economy, business ecosystem, and the people at the heart of its communities and presents a road map to achieve an inclusive and more equitable economic recovery.
Published by leading social enterprise, The Womens Organisation, in conjunction with academic advisor Professor Tom Cannon, the report emphasises that priorities should also be to embed inclusivity, diversity, and gender equality within these sectors and that there should be a shift in reimagining how we measure economic wealth.
It shines a light on how challenges faced by specific marginalised groups of society - including BAME people, women, and disabled people - have been deepened by the pandemic, and that due to pre-existing inequalities, different members of the community are experiencing unparalleled socio-economic crises differently and often disproportionately.
Maggie OCarroll, CEO of The Womens Organisation, says: It is essential that any economic recovery plan considers and places a firm emphasis on doing things differently and focusing on areas that will be transformational and produce economic and social gains.
Failure to do so will only serve to delay the recovery, widen existing inequalities, and entrench them even further, which would be a socio-economic disaster on a regional and national scale.
OCarroll is also quick to emphasise that the immediate crisis is far from over and we must keep the local and national lens on the immediate crisis, whilst planning for local and national economic recovery.
Emeritus Professor Tom Cannon, The University of Liverpool, says: This report addresses the impact of COVID-19 on the Liverpool City Region and its business ecosystem in a thoughtful, systematic, and solidly empirical way. Crucially, it has the courage to look forward creatively not only at the challenges but at the opportunities facing the local economy.
The report presents a solid case for moving forward on two interconnected levels. First dealing with the continuing threat of Covid. Second building an economy based on; widening opportunities as happened after the last recession, rethinking ways of organising business, exploiting new opportunities notably the green and knowledge economy. Its core strength lies on practical proposals for action while avoiding blame and the backward look seen too often elsewhere.
The report merits close attention by every policy maker in the City Region and beyond, reflecting The Womans Organisation and the City Regions determination to move forward, aware that good business is good business looking forward.
Cllr Janette Williamson, Leader of Wirral Council, says: This report offers up an innovative and much-needed fresh take on building back not only better, but different, to create a truly sustainable and inclusive regional economy particularly in terms of re-positioning the care sector as a key priority sector, essential to both our economy and communities.
The scale and nature of investment called for in this report is long over-due and targeting areas such as care and social enterprise makes good economic sense and will achieve enormous return on investment. Here at Wirral Council we see how important investing in the care sector is and we were the first across the Liverpool City Region to implement the real living wage for care workers. I am delighted to add my support to this report and would urge colleagues across the City Region to seriously consider the recommendations it makes.
This was posted in Bdaily's Members' News section by Sarah Brown .
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Posted: at 8:08 am
Acting MEC of Health Jacob Mamabolo receives ventilator machines donations by the Solidarity Fund to the Gauteng Provincial Government at Charlotte Maxeke Academic Hospital on August 24, 2020 in Johannesburg, South Africa. The donation is a critical intervention in the fight against the COVID-19 pandemic. (Photo by Gallo Images/Sharon Seretlo)
Finally we are starting to understand Covid-19. After nine months of global disruption and extreme responses, with real numbers starting to trickle in, the true impact and nature of the virus seems clearer. This should mean fewer surprises ahead. But, most importantly, as we learn to coexist with Covid-19, we are better placed to evaluate the actions taken by governments to combat the spread of the virus and assess the economic trade-offs. For now, one thing is certain: while lockdowns may have been necessary, their impact in the developing world has been devastating.
According to the World Bank and United Nations, the number of poor people in the world will double to 500 million this year. Most of this increase will be in Africa. The continent will experience its first recession in 25 years. And with experts warning of economic collapse, increasing inequalities and spiralling epidemics from malaria to tuberculosis (TB), there is widespread fear that the progress made over the past two decades will be reversed.
Were blunt lockdowns the right approach for Africa and appropriate to the African context?
As Covid-19 deaths globally reached one million at the end of September, Africas death toll stood at 3.5% of the total. This is far lower than initial projections. Some have suggested that a combination of Africas youthful population where the median age is 18 versus 41 in Europe, warmer weather and outdoor living, and widespread childhood BCG vaccinations can be attributed to fewer lives lost. The reasons for this are still not clear. The continent appears to have been spared the worst of the disease in terms of loss of life. But the same cannot be said for the enormous loss of livelihoods.
Already constrained fiscally, with high levels of debt before the pandemic started, a combination of rolling lockdowns, a collapse in global demand and disrupted supply chains, the oil price crash and a locust infestation that has decimated export crops, has created a crisis of unprecedented proportions in Africa. What began as a health crisis has rapidly become an economic crisis with widespread starvation, poverty and suffering set to last well beyond 2020.
Despite being praised for taking early decisive action with swift lockdowns in an attempt to flatten the curve, the consequences of these stringent and prolonged measures have had dire consequences for many Africans. The Covid-19 curve may have been flattened, but so too has the curve for economic growth and development. The African economy is expected to contract by 3.2% reducing per-capita income to levels last seen in 2010.
Nearly $16-billion of emergency financial assistance has been requested from the International Monetary Fund by 40 African countries, adding to the mounting debt crisis across the continent. This, along with a spike in deaths from other treatable diseases, skyrocketing unemployment, rising gender-based violence, and social and political unrest signal a concerning reversal of progress in Africa.
In a strange twist of irony, as African governments finally took stock of their poor healthcare systems and geared up for an expected onslaught of coronavirus patients by building capacity in the form of field hospitals, and sourcing scarce equipment like ventilators and personal protective equipment, other serious, but preventable, diseases have become invisible deaths lost in the single-minded focus and chaos in response to Covid-19.
Malaria is a prime example. Around 380,000 of 405,000 malaria deaths recorded globally in 2018 were in sub-Saharan Africa. With malaria-intervention efforts impacted by lockdowns and critical healthcare resources being diverted to coronavirus relief efforts, malaria cases could double from 2019 to 2020. Nigeria alone is expected to record an additional 81,000 malaria deaths in this period. The World Health Organisation is predicting an additional 200,000 deaths from TB this year.
Africas hard-fought battle to grow its middle class will receive a decisive blow and poverty levels will rise for the first time in years. Meanwhile, unemployment will also increase with an estimated 20 million jobs lost as restrictions have stifled small and informal businesses, the lifeblood of the African economy and African households.
Covid-19 has also revealed the fragility of democracy in Africa, exposing the tendency of governments to adopt authoritarian approaches by showing little respect for citizenship and constitutionality through the use of ever-extended state of disasters as a political weapon.
As a second wave of infections is set to hit Europe and North America, which are heading into winter and flu season, the possibility of a second wave hitting African countries and what it will mean for the continent, is front-of-mind. But there should be no more surprises, or excuses, around the course of action countries take in limiting the spread of the virus and managing its impact.
The pandemic will be with us well into 2021. In the spirit of coexistence, governments need to identify the economic trade-offs of their response to the virus, and consider these in a balanced and sustainable approach that fits the particular context. This is particularly relevant in Africa, where countries have a complex set of economic, social and political issues with a fragile foundation. Most lack the capital to sustain their populations during prolonged lockdowns. A straitjacket approach to curbing infections has proven unsustainable. They tend to deliver unintentional and lasting consequences in setting back socioeconomic progress made.
As the phased reopening commences and Africa works to recover, context-driven measures that consider the array of issues Africans confront are critical if countries are to recoup past gains, and achieve their development goals.
The African context and the solutions it requires will be different to the rest of the world. This is not a battle decided by the number of ventilators alone. Africa has reminded us of one certainty: One size does not fit all as we have seen time and time again. DM
Prof Lyal White, Liezl Rees and Nikitta Hahn are with the Research Team at the Centre for African Business at the Johannesburg Business School (JBS), University of Johannesburg (UJ).
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Posted: at 8:08 am
South Africas higher education sector is faced with new technological, financial and collaborative challenges in the face of the Covid-19 pandemic.
These challenges and new areas for growth are some of the most pressing issues for university vice-chancellors. In order to succeed, academic and research institutions will have to reimagine a different future for higher education.
These are some of the key highlights from PwCs Vice-Chancellor Pulse Survey 2020.
Roshan Ramdhany, PwC education industry leader, comments: The Covid-19 pandemic is a catalyst for change in the higher education sector, how the sector can serve the general population as well as equipping its students with the knowledge and skills to make an effective contribution to the South African economy.
Universities will need to take action as quickly as possible to avoid students dropping out of the academic year due to financial pressures, or family and health circumstances. It is notable that not all students have access to the internet or the necessary tools in their habitual areas. While the pandemic has had an adverse impact on the socio-economic state of South Africa, it could nevertheless become the very driver for action in addressing the consequences of social inequalities.
The survey shares insights on several challenges faced by the South African academic and research institutions as well as how these challenges have resulted in new ways of thinking along with providing opportunities to reassess their future investment in technology and the wider formation of partnerships.
Key findings include:
* Overall, every respondent in our survey was of the view that technology has helped support their institution during the crisis. Fifty-three percent believe that technology supported them very well, with the remaining 47% feeling that technology has supported them fairly well.
* 94% of global higher education leaders identified digital transformation to enhance online delivery and remote working arrangements as the number one action to consider in the short-to-medium term to meet the priorities of their respective institutions.
* 87% of institutions expect financial support from government to increase, while 13% believe that there would be no change in levels of assistance from government.
* 74% of survey respondents felt they were prepared in some way for the effects of the COVID-19 pandemic, with 67% believing that they were fairly well prepared and 7% believing they were well prepared. 26% indicated that they werent prepared at all.
* As many as 80% of respondents believe that a return to normal after the COVID-19 pandemic will take between one and three months, with the remaining 20% expecting it to take six months or more.
Worldwide, the Covid-19 pandemic has accelerated the digital agility agenda of higher education. All universities and academic institutions are having to rethink and embrace digital technologies. There has been a shift to online learning, with many universities providing laptops and data bundles to students who had relied on campus facilities to complete their coursework during the lockdown period.
The importance of completing the 2020 academic year remains a top priority and universities have had to ensure that no student is disadvantaged by having to work remotely. 61% of the Global Higher Education Leaders Survey believe that the best scenario for 2020/2012 will be a complete or blended online instruction programme.
The survey highlights the fact that financial sustainability and cost containment is a key priority for leaders of universities. However, due to the current economic climate an increase in cost rationalisation initiatives is expected, as well as opportunities for partnerships and collaboration.
The negative effects of the pandemic on university operations are expected to cause a shortfall in revenue, which means universities will need to look at alternative sources of revenue. Based on the four options provided to recover revenue shortfall, 93% of respondents chose to focus on third-stream revenue. Local and global partnerships were also among the choices of 40% and 53% of respondents, respectively.
Research opportunities were identified as the third most popular choice as 47% of respondents indicated this as a focus area to mitigate the expected revenue and cash shortfall.
The financial sustainability of educational institutions is also impacted by the rise in student debt. More than half of respondents said their institution would resort to legal handover to recover any outstanding debt. 38% of respondents also intimated at a possible write-off of student debt.
It is notable that higher education institutions have shown much resilience and agility in the face of adversity. Seventy-four percent of respondents felt that their institutions were equipped to deal with the effect of Covid-19.
The survey findings anticipate a decrease in the enrolment of students. A decrease of up to 5% is expected by more than half of all respondents, while13% expected a decrease of between 10% and 20%. The remaining third are not expecting a decrease in student enrolments.
Enrolment numbers affect government grants that are calculated according to the student base. Fewer students enrolled means a weaker chance of meeting financial targets for the current investment infrastructure. If student capacity remains the same or improves, institutions might have a stronger path to financial recovery.
Moving beyond Covid-19
It is highly likely that the most resilient universities will be those that focus on a future beyond the pandemic and that have a clear understanding of their own identity and strategy in a post-COVID-19 learning and research environment.
Over the short-to-medium term, the impact on higher education will largely depend on what type of economic recovery scenario the country faces and how long it takes.
In the most optimistic scenario, well probably have a once off impact on student enrolment, a domination of online learning instead of face-to-face learning, a sharp immediate impact on the bottom line and an increase in additional expenses not budgeted for. In the prolonged recession scenario, economic slowdown may create opportunities for graduate enrolment as job seekers look for price-competitive education as a means of gaining a competitive edge.
Ramdhany concludes: Ultimately, and far from being just a threat, Covid-19 has to be considered as an impetus for accelerating long overdue changes within the South African higher education system. Educational institutions will undoubtedly form a critical part of the countrys post-Covid-19 recovery if they successfully align short-term financial sustainability with a clear view of long-term identity and purpose.
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