Observations of an expat: While you are Covid distracted

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The world’s other problems have not disappeared while we struggle with coronavirus. Here is a sample. There are lots more.

Climate Change: The big item pre-pandemic and possibly bigger post-pandemic. Clear skies, uncongested roads, a drop in petrol prices, fresh air and birdsong are prompting a quality of life re-think. Many countries are planning increased facilities for cyclists and the French are considering banning domestic air flights. But can this environmental impetus survive the desperate need to return to work when the lockdown ends?

Locusts: Almost totally absent from the news headlines has been successive locust plagues in East Africa—the worst in 70 years.  This is a human and economic disaster for an estimated 300 million which will have a knock-on effect for many more.

Globalisation: The concept of an increasingly interconnected world was under attack before the pandemic by nationalist leaders fighting the exportation of jobs. Climate change and health fears and concern about national economic security have added a new level of opposition. Set against that is lower prices, and improved global stability that comes through economic interdependence.

Arms Control: The last remaining major Cold War Treaty—START or the Strategic Arms Reduction Treaty—expires in February 2021. If it is to be renewed then talks need to be held now. There is little sign of that happening. The Russians want it renewed. Trump says no unless China is included and Beijing is showing a distinct lack of interest. Failure means a new arms race with a new generation of deadlier weapons.

Brexit: The EU wants to postpone the end of year deadline because of coronavirus. Boris says no. Talks are taking place virtually. The EU negotiator Michel Barnier says Brussels and London are miles part on a whole range of issues. We could be heading for a December no deal Brexit and WTO rules on top of a massive Covid-created contraction in the British economy.

Israel: Benny Gantz’s Blue and White Party is finally in government. But he has had to pay the price of allowing Benjamin Netanyahu to remain as PM for another 18 months and go ahead with his annexation of a big chunk of the West Bank, despite international law. EU sanctions have been discussed. Secretary of State Mike Pompeo recently flew to Jerusalem to urge caution.

Iran: Pompeo’s trip to Israel was focused as much on Iran as on the West Bank. US-Iranian relations remain on a knife-edge and on the 18th of October UN sanctions against Tehran come up renewal. Iran has threatened “grave consequences” if they are renewed. Trump—ironically– is pushing for the Iranians to recommit to the Nuclear Accord which he pulled out of. The Russians have indicated that they will veto any US attempt to renew sanctions.

International Debt: Our children, grandchildren and possibly great-grandchildren will be paying the muti-trillion dollar debt that the world’s nations are accumulating to fight the coronavirus pandemic and support infrastructures. This inevitably means more and higher taxes. It could also involve a major shake-up of world financial institutions.

The list goes on and on. It could for instance easily include the impact of the drop in oil prices, the continued war in Yemen, economic and political problems in China, American presidential elections, the growing rift in Sino-American relations, mounting problems within the EU….

 

* American expat journalist Tom Arms is a regular contributor and author of the forthcoming book “America: Made in Britain.”

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6 Comments

  • 200 of the 300 billion debt the UK racked up to fight the virus is covered by QE and held by the BoE, as is an even larger chunk of the national debt… much more likely it will be writen off than than our descendants will be scrabbling around trying to pay it off. This time round we only got away with – in terms of the value of Sterling – because the other big Western countries did the same. If the Left was in control they would have gone for 3 trillion rather than 300 billion, mass nationalization and Sterling down to half a dollar… post virus expect the Asian countries to have much stronger currencies and hence bigger GDP’s in terms of dollars…

  • Peter Martin 15th May '20 - 2:54pm

    @ Frank West,

    For historical reasons, due to the one time backing of the pound by gold, the issue of currency isn’t counted as ‘National Debt’, whereas the issue of gilts is counted. In other words if the government issues gilt IOUs which might pay as little as 0.1% interest that is debt. But if it creates cash, or 0% interest IOUs, then it isn’t debt.

    This clearly makes no sense at all! But that’s mainstream economic theory for you!

  • Peter Martin 15th May '20 - 3:06pm

    @ Tom Arms,

    “Our children, grandchildren and possibly great-grandchildren will be paying the muti-trillion dollar debt that the world’s nations are accumulating to fight the coronavirus pandemic and support infrastructures.”

    No they won’t.

    Like all previous generations, the standard of living of subsequent generations will be determined by what they can produce at the time. They can’t send anything back in time to repay debts. Anything we try to send forward in time will probably be obsolete and little more than a curiousity. .

    If we are concerned about grandchildren etc we need to be sure we leave them the best possible environment with minimal climate change. That’s all that will matter. They won’t care a jot about so called debts. Just like we didn’t care about debts incurred during WW2. The post war generation did OK. Debts didn’t do them any harm. At least that’s the consensus of opinion!

  • We will cope with the debt.That which has been borrowed from abroad we will have to pay off. After WW2 it took 20yrs to pay it off .No rush.Plus if we produce the money (QE) that is an internal BofE problem/solution
    CLIMATE CHANGE will come back for the whole World to cope with. Locusts are just one problem we will have to face with climate

  • BREXIT rears it’s ugly head next year. The boss of WHO is leaving a year early.Who will take his place? Trump will be happy (so will free traders).A Covid economic disaster along with a WHO empty space and a no deal at the end of the year will be a double problem ffor the countries economic future. Will migrants be back on cheap wages or will UK people be able to have rising wages to compensate.?

  • @n hunter – “Will migrants be back on cheap wages or will UK people be able to have rising wages to compensate.?”
    Interesting consideration; if the government really are interested in controlling CoViD19, the days of mass immigration (ie. circa 700,000 people coming to the UK each year) are over. But then that is what many people wanted when they voted Leave in 2016.

    The benefit is that, yes wages will need to go up, but as you are paying UK residents, more of that money will remain in the UK and so get spent and taxed in the UK – helping the domestic economy.

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