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World Insights: Cooperation, globalization under spotlight at World Economic Forum

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1 year ago

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DAVOS, Switzerland, Jan. 17 (Xinhua) — As this year’s World Economic Forum (WEF) Annual Meeting commenced here on Monday, a series of issues that perplex humanity have come under global spotlight, including the energy crisis, high inflation and geopolitical conflicts.

Under the theme of “Cooperation in a Fragmented World,” the annual meeting focuses on solutions and public-private cooperation to tackle the world’s most pressing challenges. Many expect to get more insights from the five-day event on how countries could join hands to strive for a brighter future for globalization and the world economy.

BLEAK ECONOMY

Two-thirds of chief economists from private and public sectors expect a global recession in 2023, according to a survey released on Monday at the annual meeting.

According to a WEF statement on the survey, there was a strong consensus that the prospects for growth in 2023 are bleak, especially in Europe and the United States.

The surveyed economists anticipate further monetary tightening in the United States and Europe this year, and they see geopolitical tensions continuing to shape the global economy.

Some 18 percent of the respondents, more than twice the number in the previous survey in September 2022, considered a world recession “extremely likely.” Only a third of them viewed it as unlikely this year.

“The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable,” WEF Managing Director Saadia Zahidi said in the statement.

“Leaders must look beyond today’s crises to invest in food and energy innovation, education and skills development, and in job-creating, high-potential markets of tomorrow. There is no time to lose,” she added.

However, there are still positive signs. China’s optimized COVID-19 strategy and further opening will have “a very positive impact” on the world economy, said Leslie Maasdorp, vice president and chief financial officer of the New Development Bank.

“There will be a much faster pace of recovery in the Chinese economy,” Maasdorp said, adding that many institutions predicted that China’s economic growth in 2023 will be much higher than originally projected.

Besides, a number of modestly encouraging data released in the final quarter of 2022 provided some room for optimism about the medium-term inflation outlook in 2023, according to the survey.

According to an IMF forecast in October 2022, global inflation is projected to decline to 6.5 percent in 2023 from 8.8 percent in 2022 due to rapid, synchronized monetary tightening, stabilizing supply conditions and commodity prices, as well as easing demand pressures, said the survey.

CALLS FOR GLOBALIZATION, COOPERATION

The manifold political, economic and social forces are creating increased fragmentation on a global and national level, said Klaus Schwab, founder and executive chairman of the WEF, ahead of the annual meeting.

Schwab stressed the need to reinforce cooperation between the government and business sectors. “At the same time there must be the recognition that economic development needs to be made more resilient, more sustainable and nobody should be left behind.”

Protectionism and geopolitical conflicts are slowing global growth, WEF President Borge Brende told Xinhua prior to the annual meeting’s opening, stressing that “what we hope for our annual meeting in Davos is that nations should again try to find areas to cooperate and not only work against each other.”

China’s optimization of COVID-19 response will contribute to global growth and “will lead to stronger and more prosperous growth, even if this immediate situation is a bit challenging,” said Brende ahead of the WEF.

Brende also expressed his recognition of China’s viewpoint that the only way to deal with global problems is through multilateral cooperation among countries.

“The one positive lesson we can learn from COVID-19 is the interconnection of the world and the need for us to come up with multilateral solutions,” Maasdorp said, adding global challenges cannot be solved by one country alone.

Maasdorp also noted that China has played a critical role in multilateral institutions like the World Bank and the New Development Bank, stressing the country’s commitment to globalization and profound integration into the global supply chains.

Bob Moritz, global chairman of PricewaterhouseCoopers, emphasized the importance of globalization, as more trade and business cooperation between China and the rest of the world will be needed.

“Globalization has been thought about sometimes … (as having) no meaning anymore. I would disagree with that,” he said. “The world needs global trade.”

“The world is dealing with problems that are not country specific and bounded by geographic borders … We have to rewire the world thinking about how to solve our problems. We have to get all the players at the table,” he said.

Source(s): Xinhua

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Business

MTCC reports staggering 82.9% net profit drop

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19 hours ago

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01/05/2024

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Maldives Transport and Contracting Company (MTCC) has reported a staggering 82.9% net profit decline for Q1-2024.

According to MTCC, it earned just MVR 5.2 million in net profit for the review quarter, which came down from MVR 30.8 million in the last quarter of 2023.

The company’s revenue for Q1-2024 stood at MVR 664.4 million, which is a 15.8% drop from MVR 789.2 million generated in the Q4-2023.

Moreover, MTCC reported a whopping 94.5% decline in its Gross Profit for the review quarter, registering MVR 2.5 million in Q1-2024 compared to MVR 44.3 million.

The operating profit for the review quarter stood at MVR 41.8 million, which is a 26% drop from MVR 56.5 million in Q3-2023.

The net asset value per share dropped from MVR 227.95 in Q4-2023 to MVR 226.98 to Q1-2024, while earnings per share saw a notable decline from MVR 3.83 in the preceding quarter to just MVR 0.65 in the review quarter.

Source(s): sun.mv

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STO opens showroom in Hulhumale’

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1 week ago

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24/04/2024

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State Trading Organization (STO) has opened a showroom specialized for construction in Hulhumale’.

The showroom was inaugurated by Construction Minister Dr. Abdulla Muthalib during a special ceremony held on Tuesday night.

Speaking at the ceremony, STO’s Managing Director Shimad Ibrahim stressed the role of the company’s former managements and board members in carrying forward the company and therefore extended them gratitude.

Situated at the same location as STO’s Hulhumale’ shop – next to STO’s Smart Store near Hulhuamle’ Hospital – the construction solutions showroom was opened following renovations up to modern standards.

STO reports that all construction-related products sold by the company will be available at the showroom including some of the most renowned brands sold by the company; Makita tools, Nippon paint and concrete from prominent mix designing brands among others.

The state-owned company is prominent in the local construction industry as STO’s constructions solutions is the largest importer and seller of construction-related products in the Maldives.

STO noted that customers can now place orders for construction-related products including Makita tools and Nippon paint via the Hulhumale’ showroom which would eliminate the need to travel to Male’ to make the purchases. Arrangements have been made in the showroom to prepare the colors of Nippon paint ordered by the customers on demand.

Henceforth, they attributed the opening of the new showroom as something which would bring easements to the lives of Hulhumale’ residents and construction industry partners operating in the suburb.

Source(s): sun.mv

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Economy thrives, projects speed ahead despite challenges

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2 weeks ago

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18/04/2024

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Before President Dr. Mohamed Muizzu assumed office, the economic condition of the Maldives was significantly deteriorating. Experts attribute the primary reason for the depreciation of the Maldivian currency to the excessive printing of money by the previous administration.

According to statistics from the Maldives Monetary Authority (MMA), more than USD 518.04 million was printed over the last three consecutive years, marking a historic high compared to USD 388.53 million printed over 40 years.

Additionally, upon assuming office, President Muizzu inherited a heavy debt burden. The total debt amounted to over USD 7.71 billion, with a significant portion owed to companies for upcoming parliamentary elections and previously initiated projects, totaling USD 584.88 million.

Despite these challenges, President Muizzu has been proactive in rejuvenating the Maldives’ economic status. Within three months of his tenure, USD 35 million has been deposited into the sovereign development fund. The President estimates that more than USD 100 million will be deposited into the fund by the end of the year.

discontinuation of printing money has been regarded as a pivotal step towards economic progression for the Maldives

President Muizzu’s commitment to revitalizing the Maldivian economy without resorting to the printing of money is indeed a significant pledge. By discontinuing the practice of printing money, the government aims to address economic challenges while ensuring fiscal responsibility and long-term sustainability.

The decision to immediately halt the printing of money upon assuming office underscores President Muizzu’s determination to prioritize sound monetary policy. This move reflects an acknowledgment of the risks associated with excessive money printing, including inflation and currency devaluation, and signals a commitment to addressing these challenges through prudent financial management.

Furthermore, President Muizzu’s plans to boost the country’s prosperity and income by reducing reliance on loans and settling debts owed to both foreign and domestic entities demonstrate a holistic approach to economic revitalization.

attracting a vast pool of investors

The efforts of the present administration to attract a wide range of investors reflect a strategic approach to addressing the significant development needs of the Maldives. By engaging in investment forums both domestically and abroad, the government has been successful in showcasing the diverse investment opportunities available in the country.

The decision to host investment forums in countries like China and the UAE demonstrates a proactive approach to international investment promotion. These forums serve as platforms for highlighting the potential for investment in key sectors such as infrastructure, tourism, and hospitality. By creating awareness about these opportunities, the government aims to attract investors who are interested in contributing to the development of critical projects, including the establishment of bridges, domestic airports, and resorts.

Over 500 projects underway

The continuation of 527 projects, including those that faced interruptions due to non-payment to companies during the government transition, underscores the commitment of President Muizzu’s administration to ensure continuity and progress in ongoing initiatives. Despite the challenges encountered, efforts have been made to address issues such as delayed payments and optimize project expenses to keep important projects on track.

It’s notable that the current year’s budget, initially approved by the prior administration, may not have fully aligned with President Muizzu’s priorities and rules for project implementation. This misalignment may have resulted in some projects not receiving adequate budget allocations or not being included in the budget at all. However, the administration has taken steps to optimize expenses and prioritize projects that align with President Muizzu’s vision for development

Initiatives to enhance economic growth and foster sustainable growth

The International Monetary Fund (IMF) has recognized President Muizzu’s initiatives as some of the strongest implementations seen among world leaders, emphasizing their potential for substantial progression. The IMF applauded the government’s decision not to overdraw the government’s account and expressed its readiness to provide any assistance needed. This endorsement from the IMF underscores the effectiveness of President Muizzu’s economic policies and strategies.

Additionally, the Maldives National Chamber of Commerce and Industries has voiced support for the government’s initiatives, recognizing them as favorable for the Maldivian future as a growing economy. Despite challenges such as a shortage of dollars for small businesses, the Chamber remains optimistic that the government’s decisive actions will lead to economic growth and stability in the value of the dollar.

The government has projected a 5.5 percent economic growth rate for this year, indicating confidence in the trajectory of the economy under President Muizzu’s leadership. Furthermore, President Muizzu revealed a significant reduction in the country’s primary debt balance, from USD 103.61 billion last year to USD 8.68 million in the current year. This reduction in debt, achieved within just four months, demonstrates the government’s commitment to fiscal responsibility and its ability to effectively manage the country’s finances.

Overall, these developments indicate that the government’s economic rejuvenation efforts have been successful, earning the confidence of global financial institutions in the Maldives’ future economic prospects.

Source(s): PsmNews

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