Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Saturday, June 24, 2017 01:03:56 PM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

2017 — A year of clash of politics and economies

By
06th-Jan-2017       Readers ( 129 )   0 Comments
Comments
Share your thought
Post a comment »
Read all (0) »

Martin Khor :
Yet another new year has dawned.   But 2017 will be a year like no other.
There will be a thunderous clash of policies, economies and politics worldwide.   We will therefore be on a roller-coaster ride, and we should prepare for it and not only be spectators on the side-lines in danger of being swept away by the waves.
With his extreme views and bulldozing style, Donald Trump is set to create an upheaval if not revolution in the United States and the world.
He is installing an oil company chief as the Secretary of State, investment bankers in key finance positions, climate sceptics and anti-environmentalists in environmental and energy agencies and an extreme rightwing internet media mogul as his chief strategist
US-China relations, the most important for global stability, could change from big-power co-existence with a careful combination of competition and cooperation, to outright crisis.
Trump, through a phone call with Taiwan's leader and subsequent remarks, signalled he could withdraw the longstanding US adherence to the One China policy and instead use Taiwan as a bargaining card when negotiating economic policies with China.  The Chinese perceive this as an extreme provocation.
He has appointed as head of the new National Trade Council an economist known for his books demonising China, including "Death by China: Confronting the Dragon".
Trump seems intent on doing an about-turn on US trade and investment policies, starting with ditching the Trans Pacific Partnership Agreement and re-negotiating the North American Free Trade Agreement.
Other measures being considered include a 45% duty on Chinese products, extra duties and taxes on American companies located abroad, and even a 10% tariff on all imports.
Thus 2017 will see a rise in protectionism in the US, the extent still unknown.  That is bad news for those developing countries whose economies have grown on the back of exports and international investments.
Europe in 2017 will also be preoccupied with its own regional problems.  The Brexit shock of 2016 will continue to reverberate and several European countries facing elections will see challenges to their traditional values and established order from xenophobic and narrow nationalist parties.
As Western societies become less open to the world and more inward looking, developing countries should revise their development strategies and rely more on domestic and regional demand and investments.
As North-South economic relations decline, this should also be the moment for expanding South-South cooperation, spurred as much by necessity as by principles.
2017 may be the year when resource-rich China, with its huge Road and Belt initiative and its immense financing capacity, fills in the economic void created by western trade and investment protectionism.
But this may not be sufficient to prevent a finance shock in many developing countries now beginning to suffer a reversal of capital flowing back to the US, attracted by the prospect of higher interest rates and economic growth.
Several emerging economies which together received many hundreds of billions of dollars of hot money in recent years are now vulnerable to the latest downturn phase of the boom-bust cycle of capital flows.
Some of these countries opened up their capital markets to foreign funds which now own large portions of government bonds denominated in the domestic currency, as well as shares in the equity market.
As the tide turns, foreign investors are expected to sell off and transfer back a significant part of the bonds and shares they bought, and this new vulnerability is in addition to the traditional external debt contracted by the developing countries in foreign currencies.
Some countries will be hit by a terrible combination of capital outflow, reduced export earnings, currency depreciation and an increased debt servicing burden caused by higher US interest rates.
As the local currency depreciates further, the affected countries' companies will have to pay more for servicing loans contracted in foreign currencies and imported machinery and parts, while consumers suffer from a rapid rise in the prices of imports.
On the positive side, the currency depreciation will make exporters more competitive and make tourism more attractive, but for many countries this will not be enough to offset the negative effects.
Thus 2017 will not be kind to the economy, business and the pockets of the common man and woman.  It might even spark a new global financial crisis.
The old year ended with mixed blessings for Palestinians. On one hand they won a significant victory when the outgoing President Obama allowed the adoption of a UN Security Council resolution condemning Israeli settlements in occupied Palestinian territories by not exercising a veto.
The resolution will spur international actions against the expansion of settlements which have become a big obstacle to peace talks.
On the other hand the Israeli leadership, which responded defiantly with plans for more settlements, will find in Trump a much more sympathetic President.  He is appointing a pro-Israel hawk who has cheered the expansion of settlements as the new US ambassador to Israel.
With Trump also indicating he will tear up the nuclear power deal with Iran, the Middle East will have an even more tumultuous time in 2017.
Some countries will be hit by a terrible combination of capital outflow, reduced export earnings, currency depreciation and an increased debt servicing burden caused by higher US interest rates.
In the area of health care, the battle for affordable access to medicines will continue, as public frustration grows over the high and often astronomical prices of patented medicines including for the treatment of HIV AIDS, hepatitis C, tuberculosis and cancers.
There will be more powerful calls for governments to curb the excesses of drug companies, as well as more extensive use of the flexibilities in the patent laws to counter the high cost of medicines.
Momentum will also increase to deal with antibiotic resistance which in 2016 was recognised by political leaders meeting at the United Nations to be perhaps the gravest threat to global health.
All countries pledged to come up with national action plans to counter antibiotic and anti-microbial resistance by May 2017 and the challenge will then be to review the adequacy of these plans and to finance and implement them.
The new year will also see its fair share of natural disasters and a continued decline in the state of the environment.  Both will continue to be major issues in 2017, just as the worsening of air pollution and the many earthquakes, big storms and heat-waves marked the previous few years.
Unfortunately low priority is given to the environment.  Hundreds of billions of dollars are allocated for highways, railways and urban buildings but only a trickle for conservation and rehabilitation of hills, watersheds, forests, mangroves, coastal areas, biodiversity or for serious climate change actions.
2017 should be the year when priorities change, that when people talk about infrastructure or development, they put actions to protect and promote the environment as the first items for allocation of funds.
This new year will also be make or break for climate change.  The momentum for action painfully built up in recent years will find a roadblock in the US as the new President dismantles Obama-initiated policies and measures.
The Paris agreement, which was adopted in December 2015 and which came into force in record time in October 2016 as a demonstration of international concern over climate change, may face a major test and even an existential challenge in 2017, if Trump fulfils his election promise to pull the US out.
But Trump and his team will face resistance domestically including from state governments and municipalities which have their own climate plans, and from other countries determined to carry on without the US on board.
Indeed if 2017 will bring big changes initiated by the new US administration, it will also generate many counter actions to fill in the void left in the world by a withdrawing US or to counter its new unsettling actions.
Many people around the world, from politicians and policy makers to citizen groups and community organisers are already bracing themselves to come up with responses and actions.
Indeed 2017 will be characterised by the Trump effect but also the consequent counter-effects.
There are opportunities to think through, alternatives to chart and reforms to carry out that are anyway needed on the global and national economies, on the environment, and on geo-politics.
Most of the main levers of power and decision-making are still in the hands of a few countries and a few people, but there has also been the emergence of many new centres of economic, environmental and intellectual capabilities and community-based organising.
2017 will be a year in which ideas, policies, economies and politics will all clash, thunderously, and we should be prepared to meet the challenges ahead and not only be spectators.
(Martin Khor is Executive Director of the South Centre, a think tank for developing countries, based in Geneva).

0 Comments. Share your thoughts also.
Write a comment
Tariff
Add Rate

News Archive

Inside The New Nation

Editorial »

Safety on highway must be high on card


AS the Eid-ul-Fitr is knocking the door, home-bound passengers are taking long journey on highways and using Railways and Waterways to reach families overnight. There is acrimonious scene all over and we must say the government must ensure discipline at critical places to avoid mishap. The weather is however good ...

Back Page »

Iftar Mahfil welfare approach


Abdul Muqit Chowdhury :Iftar Mahfil has become a tradition in the Holy Ramzan. Such gathering, if it is a positive approach to contribute to fraternal relation in the society, is surely acceptable. Sharing the joy of fasting irrespective of social status and class is praiseworthy.This reflects allegiance to the Islamic ...

City »

BNP Standing Committee Member Barrister Moudud Ahmed, among others, at a discussion on 'Attack on Mirza Fakhrul Islam Alamgir and Amir Khasru Mahmud Chowdhury and Future of Clean Politics of Bangladesh' organised by Swadhinata Forum at the Jatiya Press Club on Friday.


.

Entertainment »

Alia is Raazi for Meghna Gulzar`s next


Alia Bhatt is all set to feature in Meghna Gulzar’s next, Raazi. The actress would be seen playing a Kashmiri girl marries to a Pakistani army officer in the espionage thriller. Raazi portrays the story of a Kashmiri girl married to a Pakistani army officer who would provide Indian intelligence ...

International »

Senate Republicans unveil Obamacare replacement bill after months of closed-door crafting


Reuters, Washington :U.S. Senate Republicans on Thursday unveiled their version of legislation that would replace Obamacare, proposing to kill a tax on the wealthy that pays for it and reduce aid to the poor to cut costs.With Democrats deeply opposed to Republican attempts to overhaul former President Barack Obama's signature ...

Editorial »

Mayors must do more to contain chikungunya in city


THE outbreak of mosquito borne diseases like a new type of fever called chikungunya, in addition to dengue fever in the city and elsewhere is causing additional concern to city dwellers and public health authorities how to protect people from this danger. People in most families in the city are ...

Back Page »

Zum'atul Wida


Abdul Muqit Chowdhury :The last Friday of the Holy Ramzan is called 'Zum'atul Wida'. It means 'departing Zum'a'. The musallies with due religious fervour join the Zum'a congregation and bid farewell to this month of patience and self-restraint. Al-Quran imposes obligation of the Friday prayer in the followingverses : "O ...

Cricket »

Malinga in hot water over 'monkey' comment


AFP, Colombo :Sri Lanka fast bowler Lasith Malinga faced an investigation Thursday after he compared a government minister to a monkey following criticism that the country's cricketers were too fat.Sports minister Dayasiri Jayasekera said he ordered an inquiry after Malinga lambasted him for questioning the endurance of Sri Lankan players ...

Entertainment »

Harry and Sejal grooving on Radha


Jab Harry met Sejal’s first song Radha is out and it’s as refreshing as it can get. The song features Shah Rukh Khan and Anushka Sharma dancing to the tunes of Sukhwinder Singh and Sunidhi Chauhan on the streets. The peppy number with its foot tapping music and catchy lyrics ...

Entertainment »

Samia Rahman’s Eid reality show Rupantor


Entertainment Report :A reality show will be telecasted in five days of Eid holidays and its result will be announced during this time. This short-term reality show Rupantor is planned by Samia Rahman. She will moderate the show. She will select 30 university females among hundred students. Produced by Samia ...

International »

Macron adds new faces to Cabinet after losing 4 ministers


AP, Paris :French President Emmanuel Macron brought several little-known figures into his government Wednesday as part of a reshuffle after corruption scandals started tarnishing his young Cabinet.Macron had planned to rearrange the government after his centrist party won a majority in parliamentary elections Sunday. He was forced to make more ...

Editorial »

Postponement of new VAT, but much more is needed


THE New VAT Act scheduled to become effective from July 1 is facing new crisis as the Finance Minister has been asked by the highest authority of the government to postpone it for the time being and find out why controversies with business communities and other stakeholders still remained unresolved. ...

Cricket »

Darren Sammy remains in Rajshahi Kings


Sports Reporter :The fifth edition of Bangladesh Premier League (BPL) Cricket will be held in this year. Defending runners-up Rajshahi Kings has started to form their team. West Indian star Darren Sammy led Rajshahi Kings in last year's BPL. Rajshahi Kings have retained Darren Sammy for this year's BPL. The ...

City »

Bangladesh Institute of Planners organised a discussion meeting on landslide at Jatiya Press Club yesterday.


Entertainment »

Afzal Sharif’s Eid TVC


Entertainment Report :Actors of the small screen always believe that they must have worked either play or telefilm in Eid. On the other hand, actors of big screen want their acted movie must be released in Eid. As a result, they pass the Eid festival joyfully. But actor Afzal Sharif ...

 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news