News Desk

OECD Warning: African Urbanization May Not Yet Be Sustainable

Date: 24 May 2016

The Organization for Economic Cooperation and Development (OECD) published its most recent African Economic Outlook today. In it, the OECD warned that although Africa has been urbanizing at an unprecedented rate, it must take steps to ensure that that process remains sustainable or it could lead to enormous economic collapses.

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Warnings of Brexit Risks Overwhelm British Voters

Date: 23 May 2016

In a plea to British voters to vote to stay in the group, many world leaders are citing the risks of Britain leaving the European Union. Most recently, Bank of Japan Chief Haruhiko Kuroda warned that Britain leaving the EU would have a serious impact on the world’s economy and that it would hurt Japan. "This could be potentially quite serious. If Brexit is agreed, it would have a significant and serious impact on the global economy,” he said at the most recent G7 meeting in Japan.

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Chilean Presidential Address Plagued with Violent Protests

Date: 23 May 2016

President Michelle Bachelet’s state-of-the-union speech was interrupted over the weekend as protesters tossed bombs and damaged property, according to BBC. The public is in an uproar over the government’s failure to fix the economy, including a corruption scandal tarnishing Bachelet’s legacy. One security guard was killed during the violence.

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World Bank Gets into Insurance Business to Combat Global Pandemics

Date: 23 May 2016

Diseases such as Ebola, Zika, and AIDS have long sent shivers down the spines of people around the world thanks to their virulence and capacity for contamination. Many popular television shows and movies have pondered the potential social consequences of such an outbreak, but few think about the potential financial consequences of these illnesses. In reality, pandemics could cripple local economies, national economies, and even disrupt global commerce. Given its mission to help prevent poverty around the world, the World Bank sees the gap in nation-level insurance as a huge potential liability that the world cannot afford. To that end, the World Bank has shifted from its normal role as lender to insurer. The World Bank announced its Pandemic Emergency Financing Facility (PEF) during the G7 ministers meeting in Japan. The Facility will make funds instantly available to help prevent the spread of infectious diseases, thus saving lives and money. As Jim Young Kim, head of the World Bank and an epidemiologist, describes it, "We can't change the speed of a hurricane or the magnitude of an earthquake, but we can change the trajectory of an outbreak…With enough money sent to the right place at the right time, we can save lives and protect economies." Ebola was once a huge problem across Africa. It was eventually contained, but that came at a very high economic cost. Out of the 28,000 people that were infected, 11,000 died in countries like Guinea, Liberia, and Sierra Leone. Donors spent an estimated $7 billion fighting the infections, with the first $100 million of that not actually used until October 2014 after more than 5,000 people had already died. The Bank contends that such a situation is needless, and an enormous waste of life and resources. Had an insurance fund existed, those initial funds could have been delivered for use months earlier, potentially saving hundreds or even thousands of lives and an enormous amount of money. In fact, according to the World Bank's own studies, had the insurance funds been available and delivered at the beginning of the outbreak, the world might have spent a mere 4% of what it ultimately contributed (just $200-$300 million as opposed to $7 billion). The PEF financing structure is exceptionally complicated, taking some 18 months to put together, and is funded through a combination of direct contributions, bond sales, and reinsurance. It will automatically pay funds to nations and health agencies combatting infectious diseases once the number of infected, the number of fatalities, or the number of nations dealing with infections reaches certain predetermined thresholds. The Director of Global Health Policy at the Center for Global Development, Amanda Glassman, described the PEF as plugging an important hole that the World Health Organization has struggled with for years: how to raise contingency funds to deal with a pandemic before it escalates out of control.

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OECD Urges Sweden to Review its Refugee Integration Process

Date: 20 May 2016

Sweden is renowned for its incredible social system. This has drawn record numbers of refugees seeking asylum to the Scandinavian nation. In 2015, 163,000 people applied for asylum in Sweden, more than in any other member nation of the Organization for Economic Cooperation and Development (OECD). In 2013 and 2014, another 100,000 came across the country’s borders.

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Mozambique Looks to China for Financial Assistance

Date: 20 May 2016

President Filipe Nyusi is pivoting to China for financial aid after rejection from the European Union, according to Deutsche Welle. Nyusi contends with a stagnant economy suffering from low commodity prices, and the public is growing increasingly frustrated as living costs and lacking opportunities make life harder. Mozambique has been embroiled in several major scandals, stoking widespread distrust among donors and Western nations.

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The Week in Review: The Fed Fights the Market

Date: 20 May 2016

The Federal Reserve dominated economic news this week, as the central bank prepared America for higher borrowing costs. Citing economic strength despite just 0.5% GDP growth in the first quarter of 2016, the Federal Reserve reiterated its view that June would be an appropriate month to increase its Federal funds rate target. This rate influences the interest rates on many forms of debt, from U.S. Treasuries to mortgages.

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World Bank May Vote to Lift Punitive Ban on Funding to Cambodia

Date: 19 May 2016

Five years ago, the World Bank decided to freeze lending to Cambodia in protest of the government’s practice of forced evictions for public projects. The World Bank may vote this week to remove this ban, effectively allowing it to resume lending money to the nation to continue a project for landless families that has experienced major funding shortages.

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Violence Grows Unsustainable in El Salvador: Mass Exodus Follows

Date: 19 May 2016

Many Salvadorians are fleeing the country in droves as gang violence spins out of control, according to Reuters. El Salvador has over 70,000 gangs that regularly engage in turf wars, armed conflicts with police, and extortion schemes. El Salvador is officially the murder capital of the world due to gang prominence.

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Cameroon Continues Corruption Fight: Opponents Suspect Ulterior Motive

Date: 18 May 2016

Cameroonian authorities have arrested 14 officials tied to corruption, but political opponents argue that the probe is used to silence dissent, according to Voice of America. Officials charged them with embezzling $9 million, but some question the allegations. President Paul Biya changed the constitution allowing him to run for future terms and now may run as president for life.

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Housing Starts, e-Commerce Rise Boosts Inflation

Date: 18 May 2016

More houses are being built in America, and Americans are buying more products online, which is helping inflation rise. New housing starts jumped 6.6% from the prior month to 1.17 million in April, according to a new report by the Census Bureau. Single-family building permits saw a 1.5% rise from March, and are continuing to drive the increase in housing in America.

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Fed Eyes June Rate Hike

Date: 17 May 2016

Mixed economic data persists, but that isn’t stopping the Federal Reserve from raising interest rates. In an attempt to make borrowing more expensive for consumers, the Federal Reserve may increase its Federal rate target in June.

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Latvia to Become OECD’s 35th Member State

Date: 16 May 2016

Last week, the leadership of the Organization for Economic Cooperation and Development (OECD) decided unanimously to invite the European nation of Latvia to join as its 35th member. The Baltic nation had met all of the OECD’s membership requirements, and the decision to invite it to join the OECD was made by unanimous vote of the OECD’s governing council.

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Retail Sales Rebound Hints at Improving U.S. Economy

Date: 16 May 2016

Retail sales in America posted a surprising jump, as consumers are feeling more comfortable about opening their wallets. Retail sales rose 1.4% on a month-over-month basis in April after falling 0.3% in March on a seasonally adjusted basis. Sales also rose 2.7% on a year-over-year basis, with non-store retailers seeing a 10.2% gain on a year-over-year basis.

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