Unemployment is the biggest threat to the global economy

Unemployment is the biggest threat to the global economy

Calls for the G20 to close the stimulus gap

London: “Asharq Al-Awsat”

A survey conducted by the World Economic Forum showed that unemployment is the greatest source of concern over the next ten years for business executives around the world, followed directly by fears of the spread of infectious diseases.
Unemployment rates had risen sharply due to the general isolation measures and other restrictions imposed to address the Corona virus pandemic, and fear spread about the deterioration of conditions in the countries that temporarily laid off workers.
“The employment disruptions caused by the pandemic, the increasing automation, and the shift to more environmentally conscious economies are fundamentally changing labor markets,” said Saadia Zahidi, Managing Director of the World Economic Forum. She added, “As we emerge from the crisis, leaders have a wonderful opportunity to create new jobs, support wages that guarantee a minimum standard of living, and reimagine social safety nets to adequately address future labor market challenges.” The survey of regional risks of doing business, in which the opinions of 12012 business leaders in 127 countries were surveyed, is part of the Global Competitiveness Report to be issued by the World Economic Forum next month.
The survey showed that fears of financial crises, cyber attacks and severe social unrest came in the third, fourth and fifth places, respectively. The forum said climate change risks also rose in its 30-item list of risks, while fears of militant attacks decreased.
The survey comes a day after a shocking World Bank report said that extreme poverty is set to rise this year for the first time in more than two decades. As the Corona virus is expected to push up to 115 million people into this category.
On the other hand, leading organizations in the field of business and labor activity said that the G20 should allow the poorest countries to freeze debt payments for a longer period, and other facilities to protect the global economy from any negative repercussions of the “Covid-19” pandemic in the long term.
The organizations warned of job losses, increasing unemployment, rising child deaths, and increasing business bankruptcy rates in the poorest countries. They urged the finance ministers of the G20 countries, who will hold a meeting by phone next week, to act immediately.
The International Chamber of Commerce, the International Trade Union Confederation and the “Global Citizen” group, which is interested in eradicating extreme poverty by 2030, said in an open letter that “the contribution required from the world’s leading economies is minimal compared to the social and economic cost of inaction.”
The letter, seen by Reuters, said that the freeze imposed by the Group of Twenty on official bilateral debt payments to the poorest countries should be extended until the end of April 2022, and expanded to include low- to middle-income countries and middle-income countries, based on weaknesses. In its health and religion programs.
The organizations pointed to a “gap in the stimulus packages” causing concern with high-income countries that spent about 8 percent of GDP in economic stimulus packages to mitigate the impact of the pandemic, compared to only 1.3 percent spent by low-income countries.
The organizations called on IMF members to feed the Disaster Containment Fund, mitigate its effects, and allow the IMF to extend the freeze on debt payments by the poorest countries until April 2022.
It also called for the reallocation of special drawing rights to the International Monetary Fund, for the benefit of poor countries, and for the issuance of a new large SDR, in a move similar to a central bank printing cash, which was supported by Kristalina Georgieva, Managing Director of the IMF; But it faced opposition from the United States and India.
It is expected that the financial officials of the G20 will support the extension of the debt service suspension initiative announced by the group, for a period of six months, when they meet next Tuesday; However, it is not expected that they will agree to the participation of middle-income countries in the initiative.

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