| | | 1 | Debtors Demand New Rules | | As debtor-rights groups from the U.S. to Asia demand relief on what they see as exploitative practices by creditors, the African Forum and Network on Debt and Development (AFRODAD) has called for the continent to have a role in drafting new global financial rules. | | We have this tagline, ‘Africa the Rule Maker, not the Rule Taker,’ and therefore we need to be at the table when global rules on financial architecture decisions are being made... - Jason Braganza, AFRODAD executive director  | | “We have this tagline, ‘Africa the Rule Maker, not the Rule Taker,’ and therefore we need to be at the table when global rules on financial architecture decisions are being made and being designed,” said Jason Braganza, AFRODAD executive director, last week in Washington, D.C., at the IMF-World Bank annual meetings. A new analysis by the Britain-based activist group, Debt Justice, found that the relative strengthening of the U.S. dollar will increase the burden of foreign debt repayments by 14% for lower-income nations, while interest rates on new loans taken by low-income countries will increase by 5.7 percentage points — nearly triple the rate increase for borrowers in the United States. Braganza’s remarks come as many African debt organizations push for African states to have a higher voting quota with the International Monetary Fund and World Bank — a fundamental reform in the international financial and debt architecture. The IMF revealed last week that public debt amounts to about 60% of sub-Saharan Africa’s gross domestic product, with 19 of the region’s 35 low-income nations currently facing debt distress or the risk of it. AFRODAD’s demand that African nations must help to shape the rules that govern their loans is part of a larger, international movement for debtor rights. “Millions of people around the world are caught in multiple crises of public health, economic recession and climate change. Mounting debts mean mounting debt service, resulting in cuts to budgets for healthcare, and education, decent housing and other essentials,” said Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development, in a statement. Nacpil said many countries had already defaulted, or were at risk of default, even after years of debt servicing and meeting austerity demands by creditor nations, while sacrificing their own needs. “Governments should have changed their debt payment and borrowing policies and also demanded debt cancellation before they reached that point,” Nacpil said. She also noted that debt burdens have prevented many governments from addressing climate change. In the U.S., debt debates center on the $1.7 trillion in student loans collectively owed by 45 million individual borrowers — and whether it is advisable, or ethical, for the cost of higher education to effectively saddle graduates with debt that many are forced to repay over decades or the rest of their lives. In August, President Biden announced a new program of debt relief for qualifying borrowers of federal student loans. According to U.S. debt-abolition advocate Astra Taylor, “People who are in debt have to worry about making that next payment. It’s a source of anxiety and stress. It changes your psychology.” |
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| | |  | | 1 | Even Goldman Sachs Is Losing Value | | Goldman Sachs will combine its private wealth businesses and asset management into one entity, according to an announcement that comes after the investment bank reported a net earnings drop of 47%, to $2.93 billion, during the first six months of the year as compared to 2021. Goldman Sachs is one of the largest investment banks globally, with assets worth $1.6 trillion, and nearly $2.5 trillion under its management, as of June 30. (Sources: Bloomberg, Reuters, The Wall Street Journal) |
| | 2 | Meta Is Losing Value Too | | Meta Platforms Inc., formerly Facebook, has seen its share price decline by 60% nearly a year after it rebranded to focus on the virtual-reality world known as the metaverse. According to the tracking website Companies Market Cap, Meta has lost hundreds of billions of dollars after reaching a market capitalization of $1.07 trillion in August 2021, only to fall to a current value of around $340 billion. This is the result of the company’s user base declining in Western countries; although subscriber numbers grow globally, advertisers prefer to reach wealthy audiences. Forecasts for the company’s profits next year have declined by around 50%. (Sources: The Economist, The Wall Street Journal) | | Meta Platforms Inc., formerly Facebook, has seen its share price decline by 60% nearly a year after it rebranded to focus on the virtual-reality world known as the metaverse. |
| | 3 | Under Water, Argentina to See Income Tax Relief | | Argentina’s Economy Minister Sergio Massa has raised the income tax-free threshold in a change that will take effect Nov. 1. Workers have seen inflation erode their monthly salaries, with the annualized inflation rate reaching 83% last month — heavily driven by the rise in staple food prices. Nationally, the average monthly minimum wage is around $487, while the cost of groceries for a family of four amounts to $1,193. Massa said in a radio interview that the new income tax-free threshold will be set at 330,000 pesos ($2,176). (Source: Reuters) |
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| | |  | | 1 | UK Will (Try to) Cap Household Energy Bills | | On Monday, the embattled U.K. government opened a new program to support major energy firms in delivering affordable services. The endeavor was first announced last month as part of Prime Minister Liz Truss’s plan to curb energy prices that have soared due to the Russia-Ukraine War. The plan would keep annual gas and electricity bills for a U.K. household at or below $2,230, with the Bank of England issuing a 100% guarantee to applicable energy firms. Such firms have three months to apply for participation in the program. (Sources: Bloomberg, UK Treasury) |
| | 2 | Germany Doesn’t Want China to Control Key Seaport | | German security bosses have warned that shipping firm China COSCO Shipping Corporation Limited could use a potential acquisition of one of the country’s three critical port terminals as political leverage. This warning comes amid plans by CCSCL to buy a stake in one of Germany’s three terminals at the Port of Hamburg. This port is Germany’s largest by volume and the third-busiest port in Europe. “We are very, very critical of the participation of China in critical infrastructure,” said Bruno Kahl, Germany’s head of the foreign intelligence service, at a parliamentary hearing. (Source: Reuters) |
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Life's too short to not dream big! The OZY Genius Awards support college students' young, bright minds. Application Deadline is October 31, 2022! Don't wait! | | |
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| | |  | | 1 | Japan Hit With Higher Prices, Weaker Currency | | The Bank of Japan is expected to raise its inflation projection for the current year to above 2.5% owing to a weakening yen and the soaring costs of importing crude oil, coal and liquefied natural gas due to the Russia-Ukraine War. The yen has lost 22% of its value this year relative to the dollar, making imports all the more costly. Masakazu Tokura, who heads Japan's largest business lobby group, told reporters on Monday that consumers and businesses alike are battling rising energy and food costs. (Source: Reuters) |
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What role should debtor nations have in determining the rules of loan repayment? What about students? | | |
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