South Korea's presidential office yesterday called an emergency cabinet meeting and ordered the deployment of air-conditioned buses and freezer trucks after hundreds of scouts at a massive jamboree suffered heat-related illnesses.The situation even prompted scouts from the United Kingdom - reportedly the largest attendance group at around 4,000 - to leave the campsite early.The Korean peninsula is currently in the midst of a heatwave, with average daily temperatures hovering around 35 degrees Celsius and the government issuing its highest-possible heat warning as temperatures soar.About 43,000 people from across the world are currently taking part in the World Scout Jamboree - known as the world's largest youth camp - in Korea's North Jeolla province.Local authorities and organisers said around 600 participants had suffered heat-related illnesses, prompting Seoul officials to order the deployment of military doctors and nurses.Local media outlets have described the situation as a "national disgrace", given the time the country had to prepare for the event.South Korean President Yoon Suk Yeol ordered an unlimited number of air-conditioned buses that scouts can use for brief refuge and refrigerator trucks to provide cold water, presidential spokeswoman Kim Eun-hye said yesterday.Yoon's office added that the emergency meeting would make a decision "regarding the allocation of approximately 6bn won ($4.59mn) in contingency funds".Later yesterday, the World Organisation of the Scout Movement said scouts from the UK are set to leave the site early and travel to the South Korean capital Seoul instead."We have been informed that the contingent from the United Kingdom has decided to depart from the Jamboree campsite early, allowing Scouts to continue their Jamboree experience in Seoul until they are scheduled to travel home," it said in a statement.The United States Forces Korea said about 600 American jamboree participants had been offered the chance to stay at Camp Humphreys, a US army garrison in Pyeongtaek, to avoid the heat.Local broadcasters reported some scouts were "stuck" at the remote campsite despite the heat, citing anonymous staff members."It's hard to even arrange bus rides on your own," one staffer said.Some people online compared the situation to the deadly survival game featured in South Korea's mega-hit Netflix series "Squid Game"."Greetings to Scouts from all around the globe, as you arrive at the K-Survival Game," one quipped on X, above an image of pink Squid Game-style costumes.
An increasing number of people are sleeping rough on the streets of London with campaigners calling on the government to tackle the “root causes” of the problem. UK mortgage rates and rents have been soaring since decades-high inflation fuelled the worst cost-of-living crisis in a generation.Figures released this week by the London Assembly recorded 3,272 people sleeping rough in London between April and June 2023. This marks a nine percent increase compared to the same period last year.Just under half (49%) of the people sleeping rough in London in April-June 2023 were on the streets for the first time, according to the report. The UK government has set a target of ending rough sleeping in England by 2024. But Rick Henderson, chief executive at Homeless Link, said this target is “now looking completely out of reach”.“The government must prioritise prevention, including raising the local housing allowance to include at least the lower third of rents, and finally enacting the Renters Reform Bill so renters have more security,” Henderson said. “We need the government to target the root causes rather than just simply alleviating the symptoms,” said Francesca Albanese, director of policy and social change at Crisis, a homelessness charity.
Russia’s defence minister accompanied North Korean leader Kim Jong-un to a defence exhibition that featured the North’s banned ballistic missiles as the neighbours pledged to boost ties, North Korean state media reported yesterday.The Russian minister, Sergei Shoigu, and a Chinese delegation led by a Communist Party Politburo member arrived in North Korea this week for the 70th anniversary of the end of the Korean War, celebrated in North Korea as “Victory Day”.The nuclear-capable missiles were banned under UN Security Council resolutions adopted with Russian and Chinese support. But this week they provided a striking backdrop for a show of solidarity by three countries united by their rivalry with the US and a revival of what some analysts see as their Cold War-era coalition.Shoigu’s visit was the first by a Russian defence minister to North Korea since the 1991 break-up of the Soviet Union.For North Korea, the arrival of the Russian and Chinese delegations marks its first major opening up to the world since the Covid pandemic. Shoigu gave Kim a letter from Russian President Vladimir Putin, North Korean media reported. “(Kim) expressed his views on the issues of mutual concern in the struggle to safeguard the sovereignty, development and interests of the two countries from the high-handed and arbitrary practices of the imperialists and to realise international justice and peace,” North Korean media said.KCNA did not refer to the war in Ukraine but North Korea’s Defence Minister, Kang Sun Nam, was reported as saying Pyongyang fully supported Russia’s “battle for justice” and protection of its sovereignty. State media photographs showed Kim and his guests at a display of some of the North’s ballistic missiles in multi-axle transporter launchers. Another image showed what analysts said appeared to be a new drone.“We’ve come a long way from when North Korea would avoid showing off its nuclear capabilities when senior foreign dignitaries from Russia and China were in town,” said Ankit Panda of the US-based Carnegie Endowment for International Peace, calling the tour “remarkable”.“The personal tour for Shoigu – and Shoigu’s willingness to be photographed with Kim in the course of this tour – is evidence that Moscow is complacent with North Korea’s ongoing nuclear modernisation,” he said.Kim also met Chinese Communist Party politburo member Li Hongzhong for talks and was handed a letter from Chinese President Xi Jinping, North Korean media reported.The visit by Li’s delegation showed Xi’s commitment to the North Korea-China friendship, Kim was quoted as saying by the North’s KCNA state news agency.State media photographs showed Kim at a large flashy performance flanked by Shoigu and Li, with a backdrop that included a slogan used by the Chinese army during the Korean War vowing to “resist US aggressors”.Later yesterday, North Korea was expected to hold a widely anticipated nighttime military parade to showcase the country’s latest weapons, South Korea’s Yonhap news agency reported.Pyongyang’s state media had not reported on the parade as yesterday night.White House national security spokesman John Kirby said Russia’s overtures to North Korea come as the Kremlin struggles to procure arms.“It’s been no secret ... Putin is reaching out to other countries for help and support in fighting his war in Ukraine. And that includes, we know, some outreach to (North Korea),” he said. North Korea has backed the Kremlin over the Ukraine war and has shipped weapons including infantry rockets and missiles in support of Moscow, the White House has said.North Korea and Russia deny conducting arms transactions.The Russian visit raises the prospect of more open support for North Korea, especially with Russia isolated by the West over its invasion of Ukraine, analysts said.One analyst said Shoigu’s inspection of the North Korean missiles suggested Russian acceptance of Pyongyang’s nuclear weapons programme.“It may signify that the current geopolitical circumstances are starting to erode Russia’s long-standing interest in preserving the global non-proliferation regime,” said Artyom Lukin, a professor at Russia’s Far Eastern Federal University in Vladivostok.The simultaneous visits by high-ranking officials is another sign of a revival of the Russian-Chinese-North Korean coalition that originally existed in the late 1940s and 1950s, though now likely to be led from Beijing rather than Moscow, he added.“It may signify that the current geopolitical circumstances are starting to erode Russia’s long-standing interest in preserving the global non-proliferation regime,” Lukin said. South Korea’s foreign ministry noted it had been Russia’s official position to oppose North Korea’s nuclear programme and said it hoped the visit by Shoigu’s delegation would help the North return to dialogue.
Hollywood A-listers including Emmy winner Bryan Cranston and a group of Oscar winners yesterday led a large rally of striking actors and writers in New York’s Times Square, as the stalemate with studios and streamers dragged on.Academy Award winners Brendan Fraser, Jessica Chastain and F Murray Abraham were among the stars joining the mass of demonstrators. Movie and television production has effectively shut down in the United States since thousands of members of the Screen Actors Guild (SAG-AFTRA) guild walked off the job on July 14, joining writers who have been on strike for weeks. Both guilds are demanding better pay and job security, as well as safeguards against the threat posed by artificial intelligence as they pursue the first industry-wide walkout in 63 years. “We will not be having our jobs taken away and given to robots,” Breaking Bad star Cranston told attendees, referring to fears about AI being used to recreate an actor’s likeness. Surrounded by Times Square’s giant screens, which often advertise the latest movies and streaming series, Cranston delivered a message to Disney boss Bob Iger, the target of the actors’ ire. “We will not have you take away our right to work and earn a decent living and, lastly and most importantly, we will not allow you to take our dignity,” he bellowed, wearing a SAG-AFTRA T-shirt and raising his fists. Abraham, best known for winning an Academy Award for his starring role in the 1984 movie Amadeus, said unionism was “good for America.” “We’re fighting for integrity, respect, and honour,” said the 83-year-old, who recently featured in television hit series The White Lotus.
Countries around the world from China to the United States are battling heatwaves, with the onset of the climate phenomenon El Nino helping push temperatures higher.Scientists told Reuters that climate change and El Nino are the major drivers of extreme heat that have seen temperature records broken in Beijing and Rome, while leaving some 80mn Americans under excessive heat warnings.El Nino is a natural phenomenon that in addition to contributing to higher temperatures in many parts of the world, also drives tropical cyclones in the Pacific and boosts rainfall and flood risk in parts of the Americas, Asia and elsewhere.In June, the US National Oceanic and Atmospheric Administration (NOAA) declared that an El Nino is now under way. The past three years have been dominated by the cooler La Nina pattern.Scientists have warned that this year looks particularly worrying. The last time a strong El Nino was in full swing, in 2016, the world saw its hottest year on record. Meteorologists expect that this El Nino, coupled with excess warming from climate change, will see the world grapple with record-high temperatures.Experts are also concerned about what is going on in the ocean. An El Nino means that waters in the Eastern Pacific are warmer than usual. Globally, sea temperatures hit new records for the months of May and June, according to the European Union’s Copernicus Climate Change Service. That could supercharge extreme weather.“We’re in unprecedented territory,” said Michelle L’Heureux, a meteorologist with NOAA’s Climate Prediction Center.This year’s El Nino could lead to global economic losses of $3tn, according to a study published last month in the journal Science, shrinking GDP as extreme weather decimates agricultural production, manufacturing, and helps spread disease. Governments in vulnerable countries are taking note. Peru has set aside $1.06bn to deal with El Nino’s impacts and climate change, while the Philippines — at risk from cyclones — has formed a special government team to handle the predicted fallout.Here is how El Nino will unfold and some of the weather we might expect:What causes an El Nino?El Nino is a natural climate pattern borne out of unusually warm waters in the eastern Pacific.It forms when the trade winds blowing east-to-west along the equatorial Pacific slow down or reverse as air pressure changes, although scientists are not entirely sure what kicks off the cycle.Because the trade winds affect the sun-warmed surface waters, a weakening causes these warm western Pacific waters to slosh back into the colder central and eastern Pacific basins.During the 2015-16 El Nino — the strongest such event on record — anchovy stocks off the coast of Peru crashed amid this warm water incursion. And nearly a third of the corals on Australia’s Great Barrier Reef died. In too-warm waters corals will expel living algae, causing them to calcify and turn white.This build-up of warm water in the eastern Pacific also transfers heat high into the atmosphere through convection, generating thunderstorms.“When El Nino moves that warm water, it moves where thunderstorms happen,” said NOAA meteorologist Tom DiLiberto. “That’s the first atmospheric domino to fall.”How does El Nino affect the world’s weather?This shift in storm activity affects the current of fast-flowing air that moves weather around the world — called the subtropical jet stream — pushing its path southward and straightening it out into a flatter stream that delivers similar weather along the same latitudes.“If you’re changing where the storm highway goes ... you’re changing what kind of weather we would expect to see,” DiLiberto said.During an El Nino, the southern United States experiences cooler and wetter weather, while parts of the US West and Canada are warmer and drier.Hurricane activity falters as the storms fail to form in the Atlantic due to changes in the wind, sparing the United States. But tropical cyclones in the Pacific get a boost, with storms often spinning toward vulnerable islands.Some parts of Central and South America experience heavy rainfall, although the Amazon rainforest tends to suffer from drier conditions.And Australia endures extreme heat, drought and bushfires.El Nino could offer a reprieve to the Horn of Africa, which recently suffered five consecutive failed rainy seasons. El Nino brings more rain to the Horn, unlike the triple-dip La Nina, which desiccated the region.Historically, both El Nino and La Nina have occurred about every two to seven years on average, with El Nino lasting 9 to 12 months. La Nina, which takes hold when waters are cooler in the Eastern Pacific, can last one to three years.Is climate change affecting El Nino?How climate change might be affecting El Nino is “a very big research question,” said DiLiberto. While climate change is doubling down on the impacts from El Nino — layering heat on top of heat, or excess rainfall on top of excess rainfall — it’s less clear if climate change is influencing the phenomenon itself.Scientists are not sure whether climate change will shift the balance between El Nino and La Nina, making one pattern more or less frequent. If ocean temperatures are rising across the board, it is unlikely the cycle would change, scientists said, as the basic mechanics behind the phenomenon stay the same.However, if some parts of the ocean are warming faster than others, that could influence how El Nino plays out by amplifying temperature differences. — ReutersExtreme heat straining health systemsThe extreme heat in the northern hemisphere is putting an increasing strain on healthcare systems, hitting those least able to cope the hardest, according to the World Health Organisation.The WHO has warned the heat often worsens pre-existing conditions, saying it was particularly concerned about those with cardiovascular diseases, diabetes and asthma.Millions of people across three continents are enduring a sustained spell of dangerous heat as temperature records tumble.“Extreme heat takes the greatest toll on those least able to manage its consequences, such as older people, infants and children, and the poor and homeless,” said WHO chief Tedros Adhanom Ghebreyesus.“It also puts increased pressure on health systems,” he told a news conference.“Exposure to excessive heat has wide-ranging impacts for health, often amplifying pre-existing conditions and resulting in premature death and disability.”The WHO was working with the World Meteorological Organisation (WMO), its fellow Geneva-based UN agency, to support countries in developing hot-weather action plans to coordinate preparedness and reduce the impacts of excessive heat on health, he added.Maria Neira, the WHO’s public health and environment chief, said the agency was particularly concerned about pregnant women and people with diabetes and cardiovascular diseases, and asthma, as air pollution would be part of the problem.Local and national governments needed to identify all those potentially at risk, while hospitals should ensure they had an action plan in place, she added.Neira also said communities needed to get the message out on avoiding sport during the hottest part of the day, finding a cool place indoors, looking out for the vulnerable, and being aware of heat stroke or heat exhaustion.Experts have blamed the heatwaves on climate change, driven by the burning of fossil fuels releasing the greenhouse gas carbon dioxide into the atmosphere.Besides immediate measures to cope with the heat in the coming days, Neira said that in the longer term, countries needed to decarbonise to mitigate the causes of climate change, which is “exacerbating and increasing the frequency, the intensity and the duration of those heatwaves.“That will be helping us to reduce the heatwaves in a very important way.”City officials needed to think through their urban planning to ensure people had refuges in times of extreme heat, she added.The UN’s WMO weather agency has said repeated high overnight temperatures are a particular health risk because the body is unable to recover from hot days, leading to more heart attacks and deaths. — AFP
Philippine President Ferdinand Marcos yesterday signed into law a bill creating a $9bn sovereign wealth fund aimed at boosting economic growth and infrastructure spending, but critics warned it will be prone to misuse.Marcos had pushed Congress for swift approval of the bill, which was filed by his son and cousin late last year.During a signing ceremony at the presidential palace, Marcos said the fund would “leverage a small fraction” of the government’s money without adding to the country’s debt burden.“We will leverage on a small fraction of the considerable but underutilised investable funds of government and stimulate the economy without the disadvantage of having additional fiscal and debt burden,” Marcos said, less than a week before he is due to deliver his second State of the Nation address.But a small group of protesters rallied near the palace in opposition to the law, claiming the fund was a “deception” and would put public money “in danger”.The 500bn-peso “Maharlika Investment Fund” will draw most of its funds from the national government, including the central bank, gaming revenue and two state-owned banks.Private banks and companies will also be allowed to invest.The original proposal was for a $4.9bn fund that would be partly bankrolled by state-run pensions for government and private-sector workers, sparking public fears that retirement savings could be put at risk. The final version of the bill approved by Congress in May said pension funds would not have to contribute.The fund will be allowed to make a wide range of investments, including in corporate bonds, equities, joint ventures and infrastructure projects.Marcos said yesterday the fund would help the government achieve its economic growth targets and reduce reliance on foreign borrowings to pay for new roads and bridges.He insisted the fund would be transparent and only top finance professionals would be hired to manage it. “I assure you that the resources entrusted to the fund are taken care of with utmost prudence and integrity,” Marcos said.Conventional sovereign wealth funds are seeded by windfall government profits from natural resources such as oil or minerals.The word “maharlika” is widely associated with Marcos Jr’s late father and namesake, who presided over widespread human rights abuses and corruption during his two decades in power. He was ousted in 1986.
Huge crowd gathered to pay their final respects to former Kerala chief minister Oommen Chandy at his residence at Jagathy, Thiruvananthapuram.Chandy died at 4.25am in Bengaluru yesterday. He was 79.The Congress leader, who had been unwell since 2019, was undergoing treatment at a private hospital in Bengaluru.He was taken to Germany in November last year after his cancer aggravated. His wife Mariyamma, son Chandy Oommen, daughters Mariya and Achu were by his side at the time of his death.Congress leader Rahul Gandhi condoled Chandy’s demise. Taking to Twitter, Gandhi shared a photo with Chandy clicked during the Bharat Jodo Yatra. “Chandy was an exemplary grassroots Congress leader. He will be remembered for his lifelong service to the people of Kerala. We will miss him dearly. Much love and condolences to all his loved...ones,” tweeted Rahul Gandhi.Leaders from across the political spectrum paid tributes to Chandy.Senior Congress leaders like Mallikarjun Kharge, Priyanka Gandhi and Shashi Tharoor shared their condolences.Prime Minister Narendra Modi condoled the death of the former Kerala chief minister.In a tweet yesterday, Modi wrote: “In the passing away of Oommen Chandy, we have lost a humble and dedicated leader who devoted his life to public service and worked towards the progress of Kerala. I recall my various interactions with him, particularly when we both served as chief ministers of our respective states, and later when I moved to Delhi. My thoughts are with his family and supporters in this sorrowful hour. May his soul rest in peace.”
Swathes of Europe baked yesterday in a heatwave trailed by wildfires and health warnings, as parts of Asia and the United States also suffered under extreme weather.Firefighters battled blazes in parts of Greece and the Canary Islands, Spain issued heat alerts while some children in Italy’s Sardinia were warned away from sports for safety reasons.“You can’t be in the street, it’s horrible,” said Lidia Rodriguez, 27, in Madrid.From California to China, authorities have warned in recent days of the health dangers of the extreme heat, urging people to drink water and shelter from the sun.Several local temperature records were broken in southern France, the weather service said.Meteo France said a record 29.5C (85F) had been reached in the Alpine ski resort of Alpe d’Huez, which sits at an altitude of 1,860m, while 40.6C had been recorded for the first time in Verdun in the foothills of the Pyrenees.In a stark reminder of the effects of global warming, the UN’s World Meteorological Agency (WMO) said the trend of heatwaves “shows no signs of decreasing”.“These events will continue to grow in intensity, and the world needs to prepare for more intense heatwaves,” John Nairn, a senior extreme heat adviser at the WMO told reporters in Geneva.Northwest of the Greek capital Athens, columns of smoke loomed over the forest of Dervenohoria, where one of several fires around the capital and beyond was still burning.Fire spokesman Yannis Artopios called it “a difficult day,” with another heatwave on the horizon for tomorrow, with expected temperatures of 44 degrees Celsius.Still burning was a forest fire by the seaside resort of Loutraki, where the mayor said 1,200 children had been evacuated Monday from holiday camps.In the Canary Islands, some 400 firefighters battled a blaze that has ravaged 3,500 hectares of forest and forced 4,000 residents to evacuate, with authorities warning residents to wear face masks outside due to poor air quality.Temperatures were unforgiving in Italy and in Spain, where three regions were put under hot weather red alerts.The Italian islands of Sardinia and Sicily have been on watch to possibly surpass a continent-wide record of 48.8 degrees Celsius, recorded in Sicily in August 2021.Many throughout Italy sought escape by the sea, including outside Rome, where the midday heat hit 40C.“Certainly it’s better at the beach, you can at least get a little wind from the sea. It’s not even possible to remain in the city, too hot,” said Virginia Cesario, 30, at the Focene beach near the capital.The heatwaves across Europe and the globe are “not one single phenomenon but several acting at the same time,” said Robert Vautard, director of France’s Pierre-Simon Laplace climate institute.“But they are all strengthened by one factor: climate change.”Health authorities in Italy issued red alerts for 20 cities, from Naples in the south to Venice in the north.At Lanusei, near Sardinia’s eastern coast, a children’s summer camp was restricting beach visits to the early morning and forbidding sports, teacher Morgana Cucca told AFP.In the Sardinian capital of Cagliari, pharmacist Teresa Angioni said patients were complaining of heat-related symptoms.“They mainly buy magnesium and potassium supplements and ask us to measure their blood pressure, which is often low,” Angioni said.
The world is about to be hit by a pink tsunami as Barbie — Hollywood’s ironic new take on the doll feminists once loved to hate — opens with a vast marketing campaign.Not even an actors’ and writers’ strike has been able to put brakes on the juggernaut, with the first images of stars Margot Robbie as Barbie, and Ryan Gosling as her square-jawed boyfriend Ken, sending social media into a frenzy of fuchsia.With the movie hitting big screens across Europe from today, and North America from Friday, expectation is building at how director and indie film darling Greta Gerwig has tackled the most flagrant of corporate product-placement vehicles.Many were surprised that the acclaimed feminist maker of Little Women, Lady Bird and Frances Ha would be tempted to take on a doll whose body is said to be so unrealistic she would not be able to walk if she were a real woman.But already in the trailer, it is clear Gerwig’s take on Barbie is nothing if not tongue in cheek.After a few perfect “life in plastic” days with the other Barbies in their bubblegum Californian world, she has her heroine kick off her high heels to put on a pair of sensible Birkenstock sandals to leave Barbie Land behind and plunge into the real world.With Ryan Gosling camping it up as a breezily sexist Ken barechested under a fur coat, the two go AWOL, to the horror of toymaker Mattel.“If you hate Barbie, this movie is for you,” the trailer proclaims.“The movie is packing so much in,” Robbie told AFP on the pink carpet of the London premiere.“There is so much joy, it’s hilarious, it’s very clever and it has a lot to say,” said the Australian actress, who is also one of the film’s producers. “It’s a crazy ride and a visual spectacle. I cannot think of another movie that is like it.”While critics say Barbie has brainwashed generations of young girls with an unattainable ideal of beauty and thinness, others see her as a figure of female emancipation through figures like Astronaut Barbie and Barbie the surgeon.Gerwig, 39, said her approach to tackling Barbie was “by not denying that she’s full of controversy.“In some ways Barbie has been ahead of culture, in some ways she has been behind it,” she told AFP. “But she has definitely been a topic of conversation for 64 years.”Chinese-born Simu Liu, who plays one of the many Kens in the movie, said he admired how Gerwig “doesn’t shy away from some of the criticisms of Barbie, some of the very valid criticisms of body image and of diversity... but still wraps it in an era of optimism and hope.” Issa Rae, of Awkward Black Girl fame, who plays one of the Barbies, said despite all the “negative associations”, for her Barbie went back to core memories of her childhood.“I think about telling stories with Barbies, making Barbies kiss and thinking about all the different questions I had about life, posing that onto Barbie,” she told AFP. “So people are very protective of her in that way.”Gerwig — who wrote her first hits about New York life with her partner, Marriage Story director Noah Baumbach — is next to take on another childhood cultural colossus by adapting the Chronicles of Narnia for Netflix.While Barbie’s makers Mattel seemed happy to be cast as cartoon baddies in the trailer for the film, they are counting on the blockbuster giving their lodestar toy some “girl power” cred as she challenges the patriarchy.But behind Barbie’s Dayglo optimism, the turnover of Mattel’s dolls division fell by nine percent last year.And the old sexist stereotypes have not been easy to airbrush away. Uniformly blonde and white for decades, Barbie has been going through a huge makeover since 2016 with 175 different models reflecting different colours and body types — “curvy, tall and petite” — as well as dolls with physical disabilities.
From defending Spain’s interests within the EU to its tortuous relations with Morocco, there will be no shortage of foreign policy challenges for right-wing leader Alberto Nunez Feijoo if he wins the July 23 election.But the main challenge will undoubtedly be more personal, according to analysts: to assert himself on the international stage to ensure Spain’s voice continues to be clearly heard.At the helm of the right-wing Popular Party (PP) for the past year, Feijoo, 61, “doesn’t have a great track record in international politics,” said Ignacio Molina, senior analyst at the Elcano Royal Institute, a Madrid think-tank.And judging by his campaign, “he is not going to take any decision which will involve any big change in foreign policy, whether that be within the EU, Nato or in the defence of Spain’s interests,” he told AFP.The PP’s programme states that a Feijoo government would continue “military, economic and humanitarian support to the Ukrainian people where necessary” as well as “support for sanctions against Russia”.The PP also said it would raise defence spending to 2.0 percent of Spain’s GDP, the military spending target set for member states by the North Atlantic Treaty Association (Nato).Since Socialist leader Pedro Sanchez became prime minister in 2018, Spain has been very active on the EU stage after years of taking a back seat, and Feijoo’s challenge will be to ensure that continues, Molina said.“The problem for Feijoo will be maintaining this increase in Spain’s influence that there was under Sanchez,” he said.Speaking to CNN in June, Economy Minister Nadia Calvino said Spain had transformed its role within the EU, expressing concern that this could change if the right came to power.“We have brought the voice of Spain to a different level... Spain is now occupying the place that should correspond to the fourth European economy, which was maybe not the case in the past,” she said.And any presence on the international stage is likely to be more complicated for Feijoo who, unlike Sanchez, does not speak English.If elected, Feijoo — who would take over during Spain’s turn at the head of the EU presidency that began on July 1 — would have to reassure Brussels about several worrying issues, notably if the far-right Vox enters government.Among matters of concern are environmental and social issues.Aside from handling the EU, a Feijoo government would have to grasp the nettle of its tricky relationship with Algeria and Morocco, who are powerful but bitter rivals.Feijoo would have to manage a situation complicated by Sanchez’s 2022 decision to abandon Spain’s policy of neutrality on Western Sahara, agreeing to back Morocco’s autonomy plan for the disputed region to end a lingering diplomatic spat with Rabat.The move infuriated Algeria, which backs the Polisario Front, Western Sahara’s independence movement, sending its ties with Madrid into a tailspin, which has notably hit trade.In its programme, the PP pledges to foster “a balanced relationship with the Maghreb countries” although Foreign Minister Jose Manuel Albares told La Vanguardia newspaper it would likely involve “a worrying return to anti-Moroccan positions”.For Feijoo, it will be “very difficult to change” the current policy on Morocco because Rabat has “means of pressure which partly explain the change in Sanchez’s position”, Molina said in a nod to migrant issues.After Madrid’s policy U-turn on Western Sahara, migrant arrivals to Spain fell by a quarter in 2022 compared with a year earlier.Although a Feijoo government would adjust Sanchez’s stated position, “there won’t be an explicit reversal of it because it would be seen as a provocation by Morocco”, Molina said.For Feijoo — who until last year spent most of his political career in the northwestern Galicia region and has never shown any particular interest in foreign policy — the bar remains very high.“It’s going to be a very significant political and personal challenge for him. He will have to learn and decide if he wants to lead foreign policy as Sanchez has wanted to.” — AFP
Egypt risks fuelling its record inflation and putting more pressure on the Egyptian pound if it does not slow an expansion of the money supply which bankers and analysts say has been used to plug widening budget deficits.Central bank figures show “M1” money supply, which includes domestic currency in circulation and demand deposits in Egyptian pounds, jumped by 31.9% in the year to end-May 2023, after growing 23.1% in the fiscal year to end-June 2022 and 15.7% in FY2020/21.The sharp acceleration in money supply growth has come during three years in which Egypt’s underlying economic weaknesses have been exposed by a series of shocks including the Covid-19 pandemic and the war in Ukraine.Its finances have been squeezed by a persistent shortage of foreign currency and rising debt, $20bn of which needs to be refinanced or repaid over the next 12 months.Spending has meanwhile surged as the state has pursued ambitious infrastructure projects including new cities and a vast expansion of roads while seeking to sustain some subsidies in order to prop up sliding living standards.The finance ministry is forecasting a budget deficit of 824.4bn Egyptian pounds ($26.7bn) in the 2023/24 fiscal year that began on July 1, up from an estimated 723bn pounds in 2022/23 and 486.5bn in 2021/22.Ministry data also shows it expects total expenditure to rise to 2.07tn pounds this year from 1.81tn pounds in 2022/23.The rapid creation of more pounds to chase a slower-growing amount of goods and services drives up inflation and further weakens the currency, analysts say.“Given limited access to external financing and a banking sector that is already heavily exposed to government debt, failure to rein in the budget deficit could lead to increased monetisation of the deficit and exacerbate Egypt’s inflation and foreign exchange problems,” Patrick Curran of Tellimer said.The central bank and finance ministry did not respond to requests for comment.Egypt’s headline inflation rate accelerated to 35.7% in June, surpassing the previous all-time high reached in 2017, from 30.6% in April, while core inflation surged to a record 41%.Earlier this week JPMorgan pushed up its forecasts for the new fiscal year, which ends in June 2024, to 22.7% from 21.3% “due to (inflation) pressure persistence and over FX risks”. Core inflation is expected to average 23.5%.The Egyptian pound’s official exchange rate has fallen by half against the dollar since March 2022 and by more on the black market. The FX forwards market sees the pound falling to 40 per dollar over the next year from around 30 now.Much of Egypt’s budget deficit results from rising interest on domestic and foreign borrowing that has mushroomed over the last eight years.The interest bill worsened after the US Federal Reserve began raising rates in early 2022 and as investors turned away from emerging market debt.The finance ministry projects that domestic and external interest payments will soak up 52.3% of revenue in the 2023/24 fiscal year.A $3bn International Monetary Fund loan confirmed in December will be disbursed over 46 months, though the first review of the programme has been delayed amid uncertainty over Egypt’s pledge to move to a flexible exchange rate and raise funds through sales of state assets.Bankers and analysts say a main way the central bank has been expanding money supply is by lending directly to the government, including by purchasing government bonds.This can be seen in the central bank’s “net claims on government”, which leapt to 1.48tn Egyptian pounds as of end-May 2023 from 1.06tn pounds at end-June 2022, central bank data shows.The local interest rate bill could rise further following a 1,000 basis point increase in the central bank overnight rate since March 2022. The interest rate on a one-year treasury bill jumped to 24.07% at the last auction on July 6, from 14.09% a year earlier.Over the last five months, Moody’s, Standard & Poor’s and Fitch have all downgraded Egyptian sovereign debt. In May, Moody’s placed Egypt on review for another possible downgrade, citing slow progress with asset sales.A Moody’s downgrade would move Egypt from B3, or “speculative”, to at least Caa, or “poor standing and subject to high credit risk”. Moody’s says such reviews normally take 90 days. — Reuters
Cooling US inflation is accelerating a decline in the dollar, and risk assets around the world stand to benefit.The dollar is down nearly 13% against a basket of currencies from last year’s two-decade high and stands at its lowest level in 15 months. Its decline quickened after the US reported softer-than-expected inflation data on Wednesday, supporting views that the Federal Reserve is nearing the end of its interest rate-hiking cycle.Because the dollar is a linchpin of the global financial system, a wide range of assets stand to benefit if it continues falling.Weakness in the dollar can be a boon to some US companies, as a weaker currency makes exports more competitive abroad and makes it cheaper for multinationals to convert foreign profits back into dollars.The US technology sector, which includes some of the big growth companies that have led markets higher this year, generates just over 50% of its revenues overseas, an analysis of Russell 1000 companies by Bespoke Investment Group showed.Raw materials, which are priced in dollars, become more affordable to foreign buyers when the dollar declines. The S&P/Goldman Sachs Commodity Index is up 4.6% this month, on pace for its best month since October.Emerging markets benefit as well, because a falling US currency makes debt denominated in dollars easier to service. The MSCI International Emerging Market Currency Index is up 2.4% this year.“For markets, the weaker dollar and its underlying driver, weaker inflation, is a balm for everything, especially for assets outside the US,” said Alvise Marino, foreign exchange strategist at Credit Suisse. The greenback’s tumble has come as US Treasury yields eased in recent days, dulling the dollar’s allure while boosting a wide range of other currencies, from the Japanese yen to the Mexican peso.“That sound you hear is the breaking of technical levels across the foreign exchange markets,” said Karl Schamotta, chief market strategist at Corpay. “The dollar is plunging toward levels that prevailed before the Fed started hiking, and we’re seeing risk-sensitive currencies melt up on a global basis.”A continued fall in the dollar could boost profits for foreign exchange strategies such as the dollar-funded carry trade, which involves the sale of dollars to buy a higher-yielding currency, allowing the investor to pocket the difference.The dollar’s decline has already made the strategy a profitable one this year: An investor selling dollars and buying the Colombian peso would have collected 25% year-to-date, while the Polish zloty has yielded 13%, data from Corpay showed.In the world of monetary policy, the dollar’s decline may be a relief to some countries, as it removes the urgency for them to support their falling currencies.Among them is Japan. The greenback has tumbled 3% against the yen this week and is set for its biggest weekly fall against the Japanese currency since January. Yen weakness has been problematic for Japan’s import-reliant economy and raised expectations Japan would again intervene in markets to support its currency after doing so for the first time since 1998 last year.Though inflation has cooled, the US economy has remained resilient compared with other countries and few believe the Fed will cut rates anytime soon, which could potentially limit the dollar’s near-term downside.Still, Helen Given, FX trader at Monex USA, believes the Fed will wrap up its rate-hiking cycle before most other central banks, sapping the dollar’s long-term momentum.While the dollar may pare some of its recent losses, “looking six months out it’s likely the dollar will be even weaker than it is today,” she said. - Reuters
The debate over using frozen Russian assets to fund Ukraine’s reconstruction is coming to a head. The arguments in favour are compelling. The objections are weak. But there could also be unintended consequences.Canada has passed legislation allowing Russian assets to be redeployed on behalf of Ukraine. In the United States, four members of Congress have introduced legislation to repurpose sovereign Russian assets for Ukraine. And European Union leaders considered the issue at their recent summit, though German Chancellor Olaf Scholz and others expressed concern that any such action might violate international law.The arguments in favour of seizing frozen Russian assets have been conveniently assembled in one place by Lawrence Summers, Philip Zelikow, and Robert Zoellick. Russia possesses the means to finance reconstruction. A vigorous economy will be postwar Ukraine’s best defence. Truth and justice are on Ukraine’s side. Other strongmen tempted to emulate Russian President Vladimir Putin’s imperialism will be deterred.Then there is the pragmatic case. G7 governments are heavily indebted and are confronted with the need to devote additional resources to national defence, to the green transition, and to ageing populations. Already, there are signs of Ukrainian aid fatigue, and critics ask why Western countries should bear the costs of a war they didn’t start.These complaints are heard despite the fact that financial transfers from the US and the EU, amounting to some $3bn a month, pale in comparison with the costs of reconstructing Ukraine. In March, the World Bank put those costs at $411bn. The bill continues to mount with each additional day of fighting.G7 governments will not provide funding on this scale. To be sure, other countries and the multilateral financial institutions will contribute, and foreign direct investment will flow in, though it is unlikely to be sufficient even if provided with war insurance. In these circumstances, $230bn of frozen Russian central bank assets, plus interest, would go a long way toward filling the gap.Some objections are easily dismissed. One worry is that if central-bank currency reserves are garnished, central banks will stop holding reserves, and the international monetary system will become illiquid and unstable. But only central banks whose governments commit the most egregious violations of international norms would be subject to such measures; the risk will not be general. Others worry that the dollar’s international role will be diminished if the US and its allies garnish Russia’s reserves. But this argument neglects the fact that there is no practical alternative to the greenback. China’s renminbi, though much vaunted, remains leagues behind as an international currency.Would the measure be legal? Interpretation of existing law is best left to lawyers. But if legal provisions are all that stand in the way, then the laws in question should be changed.On the other hand, garnishing Russia’s frozen assets would give the Kremlin a powerful propaganda tool with which to paint Russia as victim rather than aggressor. This would make it harder to negotiate a durable armistice, and it would reduce the odds of a transition to a post-Putin government that respected Ukraine’s territorial integrity and reestablished peaceful ties with the West. Offering to return the frozen funds if Russia adheres to its obligations under international law could have the opposite effect.An obvious analogy here is with German reparations after World War I. The war guilt clause of the Versailles Treaty, which assigned blame for the war to Germany, and the massive reparations bill that was subsequently attached had devastating economic and political consequences for the Weimar Republic.The 1923 hyperinflation and ensuing output collapse resulted, in part, from that reparations burden. The hyperinflation occurred when the German government, unable to meet its domestic obligations while paying reparations, forced the central bank to provide monetary finance. As Roger Myerson of the University of Chicago has noted, Chancellor Heinrich Brüning, seeking to demonstrate the urgency of suspending reparations payments, “deliberately drove the German economy into the worst of the Depression” by pushing through spending cuts and tax increases, which greatly aggravated the 1930s slump.These economic catastrophes undermined Germans’ confidence that their elected leaders could manage the country’s affairs and enhanced the appeal of demagogues who blamed the Allies for Germany’s woes, setting the stage for renewed militarism. Today’s situation is different. A reparations levy on Russia would be a one-time event, not an ongoing, festering sore. Russian leaders would not have the same incentive to mismanage their economy in order to wrest concessions from their creditors.For the moment, there is no Russian democracy to preserve. But it is important to contemplate the development of Russia’s domestic and foreign policies once the war is over. At that point, mitigating “Versailles risk” will be a central concern for all. — Project Syndicate
This week, almost every Ukrainian will be looking longingly toward Lithuania’s capital, Vilnius. It is there, at the summit of Nato’s leaders, that our place in Europe and the West will begin to be decided. Although virtually all Ukrainians dream of Nato membership, the brutal fighting in which we have been forced to engage since Russia invaded our country nearly 18 months ago has taught us hard lessons in realism. So, we are well aware that making our Nato dream a reality will be no easy feat. I am certainly aware: in 2008, I co-signed Ukraine’s application letter to Nato’s secretary-general. Yet Ukraine remained outside the alliance – with devastating consequences. No-one expects Ukraine to be offered Nato membership while war rages on our territory. This would, after all, compel the alliance, under Article 5 of its founding treaty, to intervene in the conflict. The idea of a full-scale war between Nato and Russia – a nuclear-armed country that has already demonstrated a criminal degree of recklessness – appeals to no-one, Ukrainians included. But the current war won’t last forever. The skill and bravery of our soldiers, together with the commitment of our allies and friends – not only Nato members, but also dozens of other countries, as far away as Japan – to supplying us with the tools we need to expel Russia from our territory will see to that. Nato membership for Ukraine, then, is about what is needed after the war ends. It is about restoring and maintaining peace in Europe, and thus fulfilling Nato’s most fundamental purpose. Yet, within the alliance, there are doubts about the wisdom of making us members. Let me try to dispel some of them. Some seem to worry that Ukraine will become a kind of free-rider, offering Nato nothing but headaches. But there can be no better evidence to the contrary than our effective resistance – and ultimate defeat – of Russia on the battlefield. In fact, our battle-tested, supremely confident military will be a major asset for transatlantic security for decades to come. On the battlefields of Ukraine, a new type of warfare has been born, and it is Ukrainian troops – not those of Russia – who have devised new and often ingenious tactics. Whereas almost all Nato members have scant experience with large-scale warfare in the twenty-first century, Ukraine’s military – from newly enlisted soldiers to general staff – understands that technology and individual decision-making, down to the platoon level, will be the key to military success in the decades ahead. Ours is the new model army that Europeans will want to emulate in terms of training, tactics, and the responsibility given to every soldier. The fact is that Ukraine’s military is the best fighting force, by far, that one will be able to find in Europe for the foreseeable future. And Nato can be certain that it will always be kept at peak readiness. We paid a heavy price for being unprepared for war in 2014, when Russia first invaded our territory and seized Crimea. That will not happen again. We will be an ally ready and able to defend every inch of Nato territory from the very first day that we join. That solemn commitment to defend our allies is one that I am certain Ukraine will uphold. Nato members should recall that, when the war began, we were “alone” in the same way that Winston Churchill saw the United Kingdom as alone in the spring of 1940. But we did not hesitate to stand and fight. Our unity, tenacity, and steadfastness in those dark hours, days, and weeks should command the respect of all Nato members. Ours is a nation that will fight for liberty no matter the odds. As to the nuclear threat, it is precisely Ukraine’s status as a non-Nato member that has enabled the Kremlin’s nuclear sabre-rattling. No nuclear threats had been heard in Europe for decades before Russia’s full-scale invasion of Ukraine in 2022. But, because Ukraine is not a Nato member, Russia’s leadership has repeatedly threatened to deploy tactical nuclear weapons during the current conflict. There is yet another reason why Ukraine will be an asset to Nato: when the war is over, Russia will still be next door. I possess no crystal ball; I cannot begin to guess who will govern Russia at that point. But I know that ordinary Russians – having endured decades of despotism and having now lost 100,000 or more of their sons in a failed war of aggression – will be looking for an example of the society they wish for themselves. A thriving Ukrainian democracy, fully integrated into Nato and the European Union, can and must be that shining example. We have paid too high a price to settle for anything less. — Project Syndicate l Yuliya Tymoshenko is a former prime minister of Ukraine.
Plastic pollution is a significant global issue with far-reaching impacts on our flora and fauna, marine and human health, and overall health of the planet. Accumulation of plastic waste in the environment, particularly in the oceans, rivers, and landfills has detrimental effects on our ecosystem. To create more awareness on the issue, a global challenge dubbed ‘Plastic Free July’ has been made to involve millions of people in this month’s campaign in the hope of protecting our planet. When plastic waste enters water bodies, it poses a severe threat to marine life. Marine animals like turtles, seabirds, and marine mammals often mistake plastic debris for food or become entangled in it, leading to injury, suffocation, and death. Additionally, the presence of microplastics (tiny plastic particles) in the water contaminate the food chain, affecting marine organisms at various levels. Plastic pollution disrupts entire ecosystems. It affects the behaviour, feeding patterns, and reproduction of marine species, leading to population decline and imbalances in the food web. The loss of marine biodiversity can have cascading effects on the health and stability of coastal and marine environments. Plastics contain toxic chemicals such as phthalates, bisphenol A (BPA), and polychlorinated biphenyls (PCBs). When these chemicals leach out of plastic products, they can contaminate the water, air, and food sources. Human exposure to these chemicals through ingestion, inhalation, or skin contact has been linked to various health issues, including hormonal disruptions, reproductive problems, developmental issues, and an increased risk of certain cancers. Coastal communities that heavily rely on tourism, fisheries, and other marine-related industries mostly suffer due to the degradation of beaches and water quality. The cleanup and management of plastic waste also come with significant costs for governments, municipalities, and waste management systems. One of the most concerning aspects of plastic pollution is believed to be its long-lasting nature. Most types of plastics are non-biodegradable, meaning they do not break down naturally. Instead, they gradually fragment into smaller pieces, creating microplastics that persist in the environment for hundreds of years. A big hurdle for saving plastic is cost. One of the main reasons plastic (especially single-use plastics) became such an integral part of our consumer culture is that it’s cheaper to produce than other materials. “It’s an uncomfortable truth. Virtually all plastic products contain a range of chemical additives that can leach out and enter food, drink, dust and air around us. Some of the smallest and most volatile chemicals can be absorbed through our skin or inhaled,” points out Dr Christos Symeonides, paediatrician and Clinical Research specialist at Minderoo Foundation. “Many of these chemicals are known to be toxic, even at low levels. Babies in the womb and young children are at particularly high risk of plastic-related health effects from everyday use,” Dr Symeonides says. Addressing plastic pollution requires collective efforts at various levels, including reducing plastic consumption, improving waste management systems, promoting recycling and innovation in sustainable alternatives, and raising awareness about the environmental impact of plastic waste. Governments, businesses, communities, and individuals therefore have a role to play in mitigating plastic pollution and protecting the health of our planet.
Prime Minister Shehbaz Sharif emphasised the condemnation of terrorism, in all its forms and manifestations, using “clear and unambiguous terms.” He expressed this viewpoint during his address at the virtual summit of the Shanghai Co-operation Organisation (SCO), which was hosted by India and attended by countries such as Russia and China.He highlighted that the SCO member states share a common interest in ensuring peace and stability in the region, which is crucial for economic development worldwide. Sharif stressed the need to fight against terrorism and extremism vigorously, regardless of whether they are perpetrated by individuals, societies, or states. He cautioned against using terrorism as a diplomatic tool and emphasised that there can be no justification for the killing of innocent people, irrespective of the cause or pretext.Furthermore, the prime minister stated that religious minorities should not be targeted or vilified for domestic political gains. Sharif spoke of Pakistan’s unparalleled sacrifices in combating terrorism, but he also noted that the region continues to face this menace, which poses a significant obstacle to peace and stability. He urged SCO countries to take immediate and coordinated actions, both individually and collectively, to combat terrorism, extremism, and separatism. He emphasised that achieving lasting peace in the region is a common concern and the responsibility of all SCO leaders. Sharif underpinned the critical need for stability in Afghanistan to attain the shared objective. He expressed concern about the current state of the war-torn country and urged the international community to engage meaningfully with the interim Afghan government. He also called upon the Afghan government to take concrete measures to prevent terrorism on its soil. He believed that a peaceful and stable Afghanistan would bring economic benefits to its people and unlock the economic potential of the SCO region, contributing to global peace, security, and progress.Sharif underlined the role of connectivity in the modern global economy, considering it a vehicle for peace and prosperity. He specifically mentioned the China-Pakistan Economic Corridor (CPEC) and its potential to be a game changer for connectivity and prosperity in the region. He highlighted Pakistan’s strategic location as a natural bridge connecting Europe and Central Asia with China, South Asia, and the Middle East as well as the potential of special economic zones under CPEC as conduits for promoting regional trade.
Heavy fighting raged yesterday across the Sudanese capital where witnesses reported a fighter-jet being shot down and artillery and machine gun fire rocking several neighbourhoods.“We saw pilots jumping with parachutes as the plane plunged to the ground,” said a witness in northern Khartoum who, like others, asked not to be named citing security fears.A source from the paramilitary Rapid Support Forces said the RSF had shot down the Sudanese Armed Forces jet.The RSF said they “arrested the pilot after he landed with a parachute”, in a statement that also accused the SAF of “heinous massacres” in greater Khartoum.The armed forces led by Abdel Fattah al-Burhan have been at war with the RSF — led by his former deputy Mohamed Hamdan Daglo — since April 15, in a brutal conflict that has killed nearly 3,000 people and displaced millions.A witness in Omdurman, located across the river from Khartoum’s city centre, also reported “heavy clashes using various types of weapons”. Others said they could see “air strikes in the area of the state television building”, where the RSF had launched an attack this week and fired anti-aircraft weapons yesterday.In the capital’s east, witnesses also reported clashes with machine guns.The army “launched rockets and heavy artillery” on RSF bases in both central and northern Khartoum, another witness reported, with houses damaged and civilians rushed to one of the few hospitals still functioning.Medics warn the death and wounded toll from Sudan’s war is likely much higher than recorded figures, with many casualties unable to reach health facilities, two-thirds of which are out of service.In both Khartoum and the western region of Darfur, fighting has mainly hit densely-populated neighbourhoods, with bombs falling on homes and bodies left in the streets.There have been only brief moments of respite for civilians, most of whom are trapped and have been forced to ration water, food, electricity and medicine for close to three months.About 2.2mn Sudanese have been displaced within the country and 645,000 have fled across borders, according to the International Organisation for Migration.
Now that the brinkmanship over the US federal debt limit has been suspended until January 1, 2025, two major, interdependent fiscal-policy challenges demand attention.First, America’s public debt must be put on a safer, more sustainable trajectory; and second, the country’s leaders need to determine the optimal size of the public sector, as measured by primary public spending (excluding interest payments) as a share of GDP.According to the International Monetary Fund’s April 2023 Fiscal Monitor report, US general government net debt was 94.2% of GDP in 2022, compared to an average of 81.6% across advanced economies and a global average of 74.6%. While the US net debt ratio was already elevated in 2019 (83.1%), it surged to 98.3% in 2020 as Covid-19, and the policy response to it, boosted the numerator and depressed the denominator. These recent figures are not only peacetime records; they also exceed the peaks at the end of World Wars I and II, when the higher ratios were rapidly eroded by (unanticipated) inflation and growth.Fiscal policies should ensure that the net non-monetary debt of the consolidated state (including the central bank) does not exceed the present discounted value of current and future primary surpluses, including non-inflationary seigniorage.While the Federal Reserve will generate some revenues from the issuance of base money net of any interest paid on the outstanding stock of central-bank money, the seigniorage consistent with its inflation target is likely to be less than 0.5% of GDP. Not even acolytes of Modern Monetary Theory could make these numbers work.On the bright side, since the consolidated state’s net non-monetary debt reflects the gross debt minus the fair value of all financial and real assets, it could be reduced.Many of the state’s commercial real assets (including real estate) are not accounted for at all, and poor management of other assets tends to depress their fair value.The situation thus could be improved through appropriately priced privatisation or more effective asset management by a well-designed public wealth fund.On the negative side, the state’s existing balance sheet frequently ignores the fair value of unfunded public-sector pension liabilities and other entitlement programmes.More to the point, the IMF’s forecast shows the US net debt-to-GDP ratio rising in each of the next six years as it approaches 110.5% in 2028.With cyclically adjusted primary balances between -4.1% and -3.4% of potential GDP, this trajectory is clearly unsustainable. The time has come either to stabilise this ratio or – preferably – to bring it down materially.The IMF estimates the US cyclically adjusted primary balance to be -4.1% of potential GDP in 2023, close to its pre-Covid value of -3.7% in 2019.Assuming that the interest rate on public debt will not be consistently lower than the growth rate of nominal GDP, the US needs to achieve a fiscal tightening of at least 4% of GDP (for cyclical and debt-sustainability reasons).For its part, the US department of the treasury argues that, “preventing the debt-to-GDP ratio from rising over the next 75 years is estimated to require some combination of spending reductions and revenue increases that amount to 4.9% of GDP over the period.”I consider the share of public spending in GDP in the US to be too low structurally, even though there are many examples of wasteful public expenditure. The sustainability-driven fiscal tightening therefore should be through higher taxes, rather than through lower public spending.US non-interest public spending as a share of GDP is the lowest in the G7: 39.41% in 2021, compared to 43.37% in Canada (the median) and 57.66% in France (the highest).True, America’s relatively low spending-to-GDP ratio partly reflects a low old-age dependency ratio (25.6% in 2021, the lowest in the G7, compared to 28.2% in Canada and 51% in Japan). But it is more fundamentally the result of a longstanding political equilibrium that opposes “big government” – including, apparently, even spending on decent infrastructure and adequate support for the poor and needy.America’s federal structure may also be a contributing factor, insofar as it encourages tax competition, rather than spending competition, between states.But the political equilibrium may finally be shifting, at least at the federal level. Primary federal spending fell from 28.9% of GDP in 2021 to 23.2% in 2022, and the treasury department projects that it will decrease to 19.9% this year, before gradually inching back up to 23.8% in 2078 (assuming all policies remain constant).Most of that future growth in spending will come from Social Security, Medicare, and Medicaid. Spending by the first two programmes will increase as the population ages; but the growth of Medicaid spending may reflect a greater willingness to engage in fiscally costly poverty-relief programmes.Funding this desired increase in public spending requires a broad-based tax increase. The seemingly obvious solution is to introduce a federal value-added tax, and yet there may be constitutional impediments to this option (which is surprising, given that the US has a federal income tax, a federal corporate-profit tax, and federal excise taxes on gasoline, alcohol, tobacco, airline tickets, and health-related goods and services). The VAT brings in between 4% of GDP in low-income developing countries and more than 7% of GDP in advanced economies.Barring a federal VAT, a broad-based increase in personal and corporate income taxes would be the next-best option. The US needs to change course to achieve public-debt sustainability, and to pay for the structural increases in spending that demographics, climate change, and intra- and intergenerational fairness will require. – Project SyndicateWillem H. Buiter, a former chief economist at Citibank and former member of the Monetary Policy Committee of the Bank of England, is an independent economic adviser.