Category: Economy

Janet Yellen, U.S. Treasury Secretary, will urge her counterparts at the G20 this week to advance efforts to end the COVID-19 pandemic in developing countries and ensure they have the resources they need for an equitable recovery.

According to the U.S. Treasury official, Yellen is scheduled to attend the meeting of G20 finance ministers and central bank governors, on Thursday and Friday, which will be hosted by Indonesia.

Initially, the finance meeting of G20 was planned in person in Bali. However, the venue was changed to Jakarta in January due to a hybrid gathering with many officials participating virtually.

As per the officials, Yellen will urge the G20 that their policies must be tailored to the particular circumstances of each country in order to ensure an inclusive recovery and to close gaps in vaccine access for poorer countries.

The officials further added that these policies will include supporting efforts by the World Bank, the World Health Organization, The World Trade Organization, and the International Monetary Fund to address global bottlenecks in the deployment of vaccines, therapeutics, and diagnostics.

Issues like intensive climate action to meet carbon emission reduction goals, mobilizing more private capital will also be discussed.

The India-UAE Free Trade Agreement (FTA) is likely to be signed soon between the nation. This agreement is expected to increase the exports of gems and jewelry to the United Arab of Emirates.

Due to the pandemic, the export of gems and jewelry was badly hit. From April 2021- to January 2022, UAE witnessed the highest fall of 41.50% among the top 10 gem and jewelry export destinations. This list was followed by Belgium with a 15.81% fall and Hong Kong with a 3.06% fall as compared to April 2019-January 2020.

The Gem & Jewels Export Promotion Council (GJEPC) has recommended the government for the FTA with UAE to seek abolition of import duty of 5% in UAE for the export of silver, platinum, and silver jewelry from India.

GJEPC’s chairman Colin Shah said, “UAE accounts for 80% of India’s plain gold jewelry exports and 20% of studded jewelry export. UAE is a gateway to the entire Middle East region and the proposed abolition of 5% import duty in UAE would lead to increased prosperity on both sides of Arabian Sea.”

Studded gold jewelry is one of the major export destinations for India to UAE.

Singapore and Cambodia will strengthen their cooperation particularly in new areas of mutual interest like agri-trade, infrastructure development, connectivity, digital economy, and fintech.

Dr. Balakrishnan said, “We both urged the Myanmar military authorities to swiftly and fully implement the FIve-Point Consensus, including by facilitating the Special Envoy’s visit to Myanmar to meet with all parties concerned”.

Dr. Balakrishnan expressed regret that there had been no significant progress in implementing the Consensus. According to the ASEAN “five-point consensus” reached in April of last year, the particular envoy is tasked with gathering and facilitating constructive dialogue amongst all parties involved in Myanmar’s political disaster. The blueprint also calls for the cessation of violence and the facilitation of humanitarian assistance.

On Tuesday and Wednesday (Feb 15-16), Foreign Minister Vivian Balakrishnan will be in Phnom Penh for the official trip. Starting on Wednesday, Dr. Balakrishnan will be present in the two-day ASEAN Foreign Minister’s Retreat. The ASEAN retreat is the first in a series of events that will be hosted by Cambodia as ASEAN chair this year. It will host under the theme “ASEAN A.C.T.: Addressing Challenges Together”.

On Thursday, India’s Commerce and Industry Minister Piyush Goyal and his Australian counterpart Dan Tehan discussed the proposed free trade agreement (FTA). the meeting was aimed to promote the economic ties between the two nations.

Mr. Goyal tweeted, “Had comprehensive talks over lunch with my good friend and Australian Trade Minister Dan Tehan in New Delhi. We had an engaging discussion on easy to further deepen India-Australia economic and trade ties”.

The Australian Minister is in India to advance negotiation on the proposed FTA that is officially dubbed the Comprehensive Economic Cooperation Agreement (CECA). Both nations have agreed to conclude the long-pending CECA by the year-end.

Mr. Tehan said,” The 30 days of hard work could lead to something that is truly historic”. He further pointed out that 75% of Australia’s trade is covered by the FTA’s.

In 2020-2021 the bilateral trade between the countries stood at $12.3 billion against $12.63 in 2019-2020.

Petroleum, medicaments, trains, pearls and gems, jewelry, made-up textiles, and railway vehicles are among India’s main exports to Australia, while its top imports are coal, copper ores and concentrate, gold, vegetables, wool, and other animal hair, fruits and nuts, lentils, and education-related services.

From January to December 2021, the US Census Bureau reported that bilateral trade between India and the US amounted to $113.391 billion. Over $73 billion worth of goods were exported by India, and about 40 billion worth were imported.

US-India bilateral trade has been on an upward trajectory for 20 years and has shrunk year on year only three times since 2002, according to Richard M. Rossow, the Wadhwani Chair in US-India Policy Studies at the Center for Strategic and International Studies.

Trade fell from $92.1 billion in 2019 to a little over 78.2 billion in 2020, which was an unusual year caused by a coronavirus (Covid-19) pandemic and economic restrictions. When this occurred, India exported goods worth $57.8 billion and imported goods worth $34.2 billion.

Richard M. Rossow said, “While we should certainly pause to celebrate the milestone of crossing the $100 billion in bilateral trade, it is not far off the overall trajectory of the trade relationship in this period”. According to him the 45% jump was because of the “deep trough” in 2020 as India and the US dealt with the initial onslaught of the coronavirus.

After pandemic restrictions were relaxed across the country in 2021, the British economy grew by 7.5 percent, its strongest year of growth since the Second World War.

According to The Office for National Statistics, the rise in the gross domestic product, which exceeded Bank of England projections, came despite a 0.2% contraction in the economy in December because of the outbreak of Omicron, which led to tougher restrictions.

With the UK sighting the fastest growth in the G7 last year along with GDP remaining at the GDP pre-pandemic levels in December, Chancellor of the Exchequer, Rishi Sunak said that the government’s $542.44 billion package of the COVID support helped the country’s economy to abide remarkably resilient in 2021.

Mr. Sunak said, “I’m proud of the resolve that whole country has demonstrated and proud of our incredible vaccine program which has allowed the economy to stay open”.

In stark contrast to the robust economic performance in 2021, the economy contracted 9.4 percent in 2020 – the worst drop since 1919 when the demobilization following the First World War was followed by a lockdown caused by the pandemic.

The United Arab of Emirates secured the first position worldwide in the latest Global Entrepreneurship Index. UAE outperformed major global economies like the US, Japan, UK, Canada, South Korea, and some major EU countries.

The nation has the highest total score of 6.8 by a clear margin having approved in 11 of the 13 framework conditions. It was named as the best place to start a new business followed by 6.3 scored by the Netherlands, 6.2 by Finland, 6.1 by Saudi Arabia, Lituania with 6.1 and 5.7 by South Korea.

In the last years, GEI ranked Emirates in the fourth position which is complied by London-based researcher Global Entrepreneurship Monitor.

According to the report, “Of the 47 participating economies, national expert assessments suggest that the UAE has the most supportive environment for entrepreneurship and Sudan the least supportive”.

The report said, “The UAE is the only economy to have scored as sufficient or more for all framework conditions. These changes are the direct result of policy adjustments that have moved increasingly to prompting business conditions for entrepreneurs”. With the high score in most of the framework, conditions may help explain the improvement in entrepreneurial attitudes.

A final stage of talks in Vienna has resulted in progress that led to a 2% drop in oil prices early on Tuesday. Talks to bring Iran and the United States back to the Iran nuclear deal reached a crucial stage.

The New York Stock Exchange reported that as of 10:32 a.m. Eastern Standard Time, WTI Crude was trading at $89.58 a barrel, down by 1.91% on the day. The price of Brent Crude fell 1.88% to $90.93 as diplomats from Iran and the countries still part of the Joint Comprehensive Plan of Action (JCPOA) resumed talks to salvage the deal on Tuesday. In the midst of pressure for results, the talks are in a crucial final phase.

Considering that the United States would be removing sanctions on Iranian oil exports if the talks are revived, market participants will closely monitor the progress of the talks.

In a possible sign of progress, the Obama team restored sanctions waivers to Iran.

On Friday, allowing the country to cooperate internationally on civil nuclear matters. As a result of these difficult talks, the U.S. is expected to remove sanctions on Iranian oil exports if they are successful. The U.S. anticipates these talks will result in either a nuclear crisis or a new deal. 

On Monday, France’s Finance Minister said the country is creating a multi-billion euro fund to boost investment in Europe’s tech sector, so it can compete against US and Asian firms.

Mr. Bruno Le Maire said if European tech start-ups are to reduce their dependence on foreign firms, they will need far higher levels of financing.

On Tuesday, he added that a new fund of funds will be announced along with his German counterpart Christian Lindner, who said it would feed between 10 and 20 funds worth up to one billion euros (S$1.5 billion) to finance tech companies.

Mr. Le Maire said, “Our ultimate target is to have 10 technology companies worth more than 100 billion euros each by 2030”.

According to the German minister said in a statement Berlin will one billion euros to the fund.

It is often too difficult for Europe’s venture capital funds to fund European tech start-ups, leaving them with no choice but to turn to much bigger US funds.

Moreover, many US and Chinese tech companies have benefited from public funding during their development, something that was more difficult for European firms due to strict EU state aid rules in the past.

On Wednesday, India’s Prime Minister Mr. Narendra Modi announced the digital currency’s launch by the RBI and said that the digital rupee can be exchanged for cash. The statement was proposed in the Union Budget will open new opportunities in the fintech sector.

PM said, “The digital rupee will revolutionize the fintech sector by creating new opportunities and lessen the burden in handling, printing, logistics management of cash”. He further added the Central Bank Digital Currency (CDBC) will be in the digital form for the physical rupee which will be regulated by the RBI.

This system will enable the exchange of physical and digital currencies. This will directly help in improving the digital economy within the nation and if anyone which to make payment in the digital currency he will be able to change it into cash.

In addition to its potential to revolutionize the fintech sector, he said the digital rupee will reduce the burden of handling, printing, and storing cash.

As part of its digital currency initiative, Finance Minister Nirmala Sitharaman announced earlier that India will launch a digital currency in 2022-23 based on blockchain and other technologies.