International
Getting out of the coronavirus economic contraction
By the end of next year, COVID-19’s economic sting is likely to be an ugly but fading memory for the world’s wealthiest economies: Their GDP levels…
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By Indermit Gill, M. Ayhan Kose, Dana Vorisek
By the end of next year, COVID-19’s economic sting is likely to be an ugly but fading memory for the world’s wealthiest economies: Their GDP levels are forecast to be somewhat higher than pre-pandemic projections indicated they would be by 2023. Not so for most emerging market and developing economies (EMDEs), which will remain debilitated well into this decade.
The World Bank’s latest Global Economic Prospects report forecasts that by 2023, just one EMDE region—Europe and Central Asia—will come anywhere close to regaining the GDP level that had been expected before the pandemic (Figure 1). In Latin America and the Caribbean, the Middle East and North Africa, and sub-Saharan Africa, the gap with the pre-pandemic projection is expected to be 4 percent or more. South Asia will be the farthest behind, with its GDP level nearly 8 percent below where it might have been but for COVID-19.
Each of these regions has been hit in ways that warrant customized responses. Four factors make these six regions different, and also provide the clues for quicker recovery and convergence.
Vaccine delays
For many countries, vaccine delays are prolonging the pandemic and forestalling a full economic recovery. In all regions except one, large gaps persist between the quantities of vaccine doses contracted and the amounts delivered. The exception is East Asia and the Pacific—and even there, the gap remains large in many countries other than China.
In sub-Saharan Africa, only about 7 percent of the population was fully vaccinated in early February—compared to more than 50 percent of the population of all EMDEs (Figure 2). That reflects delivery delays and financial constraints, predominantly, but also in-country logistical challenges such as insufficient vaccine storage and vaccine sites and difficulties distributing vaccines to rural populations.
For all EMDE regions, the top priority must be to overcome vaccine challenges—quickly. Success will depend on greater global cooperation, including a swift expansion of vaccine donations by nations that enjoy a vaccine surplus. Wealthy countries should also channel additional financial resources—through international financial institutions and regional development banks—to help poor countries improve their access to vaccines.
Rising Financial Stress
By the end of 2021, GDP-weighted total debt in EMDEs was more than 200 percent of GDP, a 50-year record. The uptick in debt during the pandemic follows a decadelong wave of debt accumulation. In East Asia and the Pacific, business and household debt are at record levels, as is the volume of nonperforming loans held by banks. In Latin America and the Caribbean, South Asia, and sub-Saharan Africa, the largest debt-related risks are in the public sector (Figure 3).
Growing indebtedness means that debt-service burdens in some economies are rising rapidly. At the same time, inflation spiked in 2021 in many EMDEs as energy and food prices rose, demand rebounded along with easing pandemic-related restrictions, and global supply-chain challenges continued. Already, about 40 percent of EMDEs have increased policy interest rates in response. In the near term, central banks in major advanced economies are on the verge of raising interest rates and unwinding exceptional monetary policy support extended during the pandemic. This combination of record-high debt and tightening global financial conditions is perilous, as it makes EMDEs vulnerable to a sudden change in risk sentiment in markets.
Under the circumstances, EMDEs need to carefully formulate their fiscal and monetary policies, focus on rebuilding foreign exchange reserves, keep a close eye on currency risks, and strengthen macroprudential policies. They should also step up efforts to mobilize domestic resources and broaden their tax base.
Volatile Commodity Markets
Two-thirds of EMDEs rely on commodity exports for growth and development. These countries—concentrated in Europe and Central Asia, Latin America, the Middle East and North Africa, and sub-Saharan Africa—are regularly buffeted by boom-and-bust cycles, the causes of which are typically beyond their control. More than half the world’s extreme poor live in some of these commodity-exporting countries. After a sharp decline during the early stages of the pandemic, commodity prices have soared (Figure 4).
Rising Inequality
COVID-19 brought an end to a remarkable era of shared prosperity that started in the 1990s: when the income of the poorest nations began to catch up with those of the wealthiest. Today, inequality in incomes between countries is at levels not seen in a decade. Within-country inequality, which was already higher in EMDEs than in wealthy ones before the pandemic, has also risen. That reflects severe job and income losses, especially among vulnerable groups, including low-income people, youth, women, and informal workers. Latin America and the Caribbean and Sub-Saharan Africa face particularly elevated levels of within-country inequality.
Rising inequality should worry us all. Widening income gaps pose risks to social and political stability. Addressing inequality is all the more important when considering that some regions such as Sub-Saharan Africa have made little progress over the past two decades on catching up to advanced-economy levels of income, while the gains in others (Latin America and Middle East and North Africa) have been partly reversed (Figure 6).
Overcoming the detrimental economic effects of the pandemic will not be easy. But it can be done—and the restoration must start now. Some of these challenges underscore the importance of strengthening global cooperation to foster rapid and equitable vaccine distribution, support health and economic policies, enhance debt sustainability in the poorest countries, and tackle the mounting costs of climate change.
National policymakers can achieve much by prioritizing investment in health and education, and by introducing policies that reduce the number of school dropouts and facilitate the reentry into the workforce for those who lost jobs because of the pandemic. Careful calibration of monetary and fiscal policy given the global financial landscape, as well as quick reactions in the case of financial market stress, could help prevent debt crises. Policy efforts that will pay off in the long term—those encouraging diversification and inclusion—must not be laid aside despite the host of near-term challenges.
economic recovery pandemic coronavirus covid-19 monetary policy vaccine gdp recovery interest rates commodity markets africa europe china
International
Fuel poverty in England is probably 2.5 times higher than government statistics show
The top 40% most energy efficient homes aren’t counted as being in fuel poverty, no matter what their bills or income are.
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The cap set on how much UK energy suppliers can charge for domestic gas and electricity is set to fall by 15% from April 1 2024. Despite this, prices remain shockingly high. The average household energy bill in 2023 was £2,592 a year, dwarfing the pre-pandemic average of £1,308 in 2019.
The term “fuel poverty” refers to a household’s ability to afford the energy required to maintain adequate warmth and the use of other essential appliances. Quite how it is measured varies from country to country. In England, the government uses what is known as the low income low energy efficiency (Lilee) indicator.
Since energy costs started rising sharply in 2021, UK households’ spending powers have plummeted. It would be reasonable to assume that these increasingly hostile economic conditions have caused fuel poverty rates to rise.
However, according to the Lilee fuel poverty metric, in England there have only been modest changes in fuel poverty incidence year on year. In fact, government statistics show a slight decrease in the nationwide rate, from 13.2% in 2020 to 13.0% in 2023.
Our recent study suggests that these figures are incorrect. We estimate the rate of fuel poverty in England to be around 2.5 times higher than what the government’s statistics show, because the criteria underpinning the Lilee estimation process leaves out a large number of financially vulnerable households which, in reality, are unable to afford and maintain adequate warmth.
Energy security
In 2022, we undertook an in-depth analysis of Lilee fuel poverty in Greater London. First, we combined fuel poverty, housing and employment data to provide an estimate of vulnerable homes which are omitted from Lilee statistics.
We also surveyed 2,886 residents of Greater London about their experiences of fuel poverty during the winter of 2022. We wanted to gauge energy security, which refers to a type of self-reported fuel poverty. Both parts of the study aimed to demonstrate the potential flaws of the Lilee definition.
Introduced in 2019, the Lilee metric considers a household to be “fuel poor” if it meets two criteria. First, after accounting for energy expenses, its income must fall below the poverty line (which is 60% of median income).
Second, the property must have an energy performance certificate (EPC) rating of D–G (the lowest four ratings). The government’s apparent logic for the Lilee metric is to quicken the net-zero transition of the housing sector.
In Sustainable Warmth, the policy paper that defined the Lilee approach, the government says that EPC A–C-rated homes “will not significantly benefit from energy-efficiency measures”. Hence, the focus on fuel poverty in D–G-rated properties.
Generally speaking, EPC A–C-rated homes (those with the highest three ratings) are considered energy efficient, while D–G-rated homes are deemed inefficient. The problem with how Lilee fuel poverty is measured is that the process assumes that EPC A–C-rated homes are too “energy efficient” to be considered fuel poor: the main focus of the fuel poverty assessment is a characteristic of the property, not the occupant’s financial situation.
In other words, by this metric, anyone living in an energy-efficient home cannot be considered to be in fuel poverty, no matter their financial situation. There is an obvious flaw here.
Around 40% of homes in England have an EPC rating of A–C. According to the Lilee definition, none of these homes can or ever will be classed as fuel poor. Even though energy prices are going through the roof, a single-parent household with dependent children whose only income is universal credit (or some other form of benefits) will still not be considered to be living in fuel poverty if their home is rated A-C.
The lack of protection afforded to these households against an extremely volatile energy market is highly concerning.
In our study, we estimate that 4.4% of London’s homes are rated A-C and also financially vulnerable. That is around 171,091 households, which are currently omitted by the Lilee metric but remain highly likely to be unable to afford adequate energy.
In most other European nations, what is known as the 10% indicator is used to gauge fuel poverty. This metric, which was also used in England from the 1990s until the mid 2010s, considers a home to be fuel poor if more than 10% of income is spent on energy. Here, the main focus of the fuel poverty assessment is the occupant’s financial situation, not the property.
Were such alternative fuel poverty metrics to be employed, a significant portion of those 171,091 households in London would almost certainly qualify as fuel poor.
This is confirmed by the findings of our survey. Our data shows that 28.2% of the 2,886 people who responded were “energy insecure”. This includes being unable to afford energy, making involuntary spending trade-offs between food and energy, and falling behind on energy payments.
Worryingly, we found that the rate of energy insecurity in the survey sample is around 2.5 times higher than the official rate of fuel poverty in London (11.5%), as assessed according to the Lilee metric.
It is likely that this figure can be extrapolated for the rest of England. If anything, energy insecurity may be even higher in other regions, given that Londoners tend to have higher-than-average household income.
The UK government is wrongly omitting hundreds of thousands of English households from fuel poverty statistics. Without a more accurate measure, vulnerable households will continue to be overlooked and not get the assistance they desperately need to stay warm.
Torran Semple receives funding from Engineering and Physical Sciences Research Council (EPSRC) grant EP/S023305/1.
John Harvey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
european uk pandemicInternational
Looking Back At COVID’s Authoritarian Regimes
After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked,…
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After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked, in March 2020, when President Trump and most US governors imposed heavy restrictions on people’s freedom. The purpose, said Trump and his COVID-19 advisers, was to “flatten the curve”: shut down people’s mobility for two weeks so that hospitals could catch up with the expected demand from COVID patients. In her book Silent Invasion, Dr. Deborah Birx, the coordinator of the White House Coronavirus Task Force, admitted that she was scrambling during those two weeks to come up with a reason to extend the lockdowns for much longer. As she put it, “I didn’t have the numbers in front of me yet to make the case for extending it longer, but I had two weeks to get them.” In short, she chose the goal and then tried to find the data to justify the goal. This, by the way, was from someone who, along with her task force colleague Dr. Anthony Fauci, kept talking about the importance of the scientific method. By the end of April 2020, the term “flatten the curve” had all but disappeared from public discussion.
Now that we are four years past that awful time, it makes sense to look back and see whether those heavy restrictions on the lives of people of all ages made sense. I’ll save you the suspense. They didn’t. The damage to the economy was huge. Remember that “the economy” is not a term used to describe a big machine; it’s a shorthand for the trillions of interactions among hundreds of millions of people. The lockdowns and the subsequent federal spending ballooned the budget deficit and consequent federal debt. The effect on children’s learning, not just in school but outside of school, was huge. These effects will be with us for a long time. It’s not as if there wasn’t another way to go. The people who came up with the idea of lockdowns did so on the basis of abstract models that had not been tested. They ignored a model of human behavior, which I’ll call Hayekian, that is tested every day.
These are the opening two paragraphs of my latest Defining Ideas article, “Looking Back at COVID’s Authoritarian Regimes,” Defining Ideas, March 14, 2024.
Another excerpt:
That wasn’t the only uncertainty. My daughter Karen lived in San Francisco and made her living teaching Pilates. San Francisco mayor London Breed shut down all the gyms, and so there went my daughter’s business. (The good news was that she quickly got online and shifted many of her clients to virtual Pilates. But that’s another story.) We tried to see her every six weeks or so, whether that meant our driving up to San Fran or her driving down to Monterey. But were we allowed to drive to see her? In that first month and a half, we simply didn’t know.
Read the whole thing, which is longer than usual.
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Problems After COVID-19 Vaccination More Prevalent Among Naturally Immune: Study
Problems After COVID-19 Vaccination More Prevalent Among Naturally Immune: Study
Authored by Zachary Stieber via The Epoch Times (emphasis…
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Authored by Zachary Stieber via The Epoch Times (emphasis ours),
People who recovered from COVID-19 and received a COVID-19 shot were more likely to suffer adverse reactions, researchers in Europe are reporting.
Participants in the study were more likely to experience an adverse reaction after vaccination regardless of the type of shot, with one exception, the researchers found.
Across all vaccine brands, people with prior COVID-19 were 2.6 times as likely after dose one to suffer an adverse reaction, according to the new study. Such people are commonly known as having a type of protection known as natural immunity after recovery.
People with previous COVID-19 were also 1.25 times as likely after dose 2 to experience an adverse reaction.
The findings held true across all vaccine types following dose one.
Of the female participants who received the Pfizer-BioNTech vaccine, for instance, 82 percent who had COVID-19 previously experienced an adverse reaction after their first dose, compared to 59 percent of females who did not have prior COVID-19.
The only exception to the trend was among males who received a second AstraZeneca dose. The percentage of males who suffered an adverse reaction was higher, 33 percent to 24 percent, among those without a COVID-19 history.
“Participants who had a prior SARS-CoV-2 infection (confirmed with a positive test) experienced at least one adverse reaction more often after the 1st dose compared to participants who did not have prior COVID-19. This pattern was observed in both men and women and across vaccine brands,” Florence van Hunsel, an epidemiologist with the Netherlands Pharmacovigilance Centre Lareb, and her co-authors wrote.
There were only slightly higher odds of the naturally immune suffering an adverse reaction following receipt of a Pfizer or Moderna booster, the researchers also found.
The researchers performed what’s known as a cohort event monitoring study, following 29,387 participants as they received at least one dose of a COVID-19 vaccine. The participants live in a European country such as Belgium, France, or Slovakia.
Overall, three-quarters of the participants reported at least one adverse reaction, although some were minor such as injection site pain.
Adverse reactions described as serious were reported by 0.24 percent of people who received a first or second dose and 0.26 percent for people who received a booster. Different examples of serious reactions were not listed in the study.
Participants were only specifically asked to record a range of minor adverse reactions (ADRs). They could provide details of other reactions in free text form.
“The unsolicited events were manually assessed and coded, and the seriousness was classified based on international criteria,” researchers said.
The free text answers were not provided by researchers in the paper.
“The authors note, ‘In this manuscript, the focus was not on serious ADRs and adverse events of special interest.’” Yet, in their highlights section they state, “The percentage of serious ADRs in the study is low for 1st and 2nd vaccination and booster.”
Dr. Joel Wallskog, co-chair of the group React19, which advocates for people who were injured by vaccines, told The Epoch Times: “It is intellectually dishonest to set out to study minor adverse events after COVID-19 vaccination then make conclusions about the frequency of serious adverse events. They also fail to provide the free text data.” He added that the paper showed “yet another study that is in my opinion, deficient by design.”
Ms. Hunsel did not respond to a request for comment.
She and other researchers listed limitations in the paper, including how they did not provide data broken down by country.
The paper was published by the journal Vaccine on March 6.
The study was funded by the European Medicines Agency and the Dutch government.
No authors declared conflicts of interest.
Some previous papers have also found that people with prior COVID-19 infection had more adverse events following COVID-19 vaccination, including a 2021 paper from French researchers. A U.S. study identified prior COVID-19 as a predictor of the severity of side effects.
Some other studies have determined COVID-19 vaccines confer little or no benefit to people with a history of infection, including those who had received a primary series.
The U.S. Centers for Disease Control and Prevention still recommends people who recovered from COVID-19 receive a COVID-19 vaccine, although a number of other health authorities have stopped recommending the shot for people who have prior COVID-19.
Another New Study
In another new paper, South Korean researchers outlined how they found people were more likely to report certain adverse reactions after COVID-19 vaccination than after receipt of another vaccine.
The reporting of myocarditis, a form of heart inflammation, or pericarditis, a related condition, was nearly 20 times as high among children as the reporting odds following receipt of all other vaccines, the researchers found.
The reporting odds were also much higher for multisystem inflammatory syndrome or Kawasaki disease among adolescent COVID-19 recipients.
Researchers analyzed reports made to VigiBase, which is run by the World Health Organization.
“Based on our results, close monitoring for these rare but serious inflammatory reactions after COVID-19 vaccination among adolescents until definitive causal relationship can be established,” the researchers wrote.
The study was published by the Journal of Korean Medical Science in its March edition.
Limitations include VigiBase receiving reports of problems, with some reports going unconfirmed.
Funding came from the South Korean government. One author reported receiving grants from pharmaceutical companies, including Pfizer.
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