The economy, a key issue for voters as the November 5 presidential election draws nearer, will have a starring role in the debate tonight between the two candidates, Democratic nominee Kamala Harris and her Republican rival, former President Donald Trump. 

About 8 in 10 adults tell CBS News that the economy is a major factor in their choice at the polls, outpacing issues such as abortion and climate change. 

Each candidate will seek to convince voters that their proposals will lead to better economic conditions, ranging from bigger paychecks to lower inflation. And CBS News polling shows that Trump may have an edge with inflation-weary consumers, with about 4 in 10 voters saying prices are likely to go down if he wins — twice as many as those who believe the same would be the case with a Harris victory. 

“[I]nflation and the high cost of living are deeply impacting lower- and middle-income Americans,” said Liza Landsman, the CEO of Stash, a financial services firm that polled consumers ahead of the debate, in a statement. “What the study did shed sharper light on is how vastly different individuals’ perceive their economic condition depending on their political view.”

For instance, about 7 in 10 Trump supporters told Stash they are deeply concerned about inflation, compared with 2 in 10 Harris voters, the study found.

Economists largely rate the current economy as good, albeit with some weak spots, such as a slowing labor market. But about 42% of Americans incorrectly believe the U.S. is currently in a recession, down from about 48% last year, a new MassMutual survey found. 

“Sometimes it is difficult to separate out various doom-and-gloom factors when it is hitting your wallet directly,” Paul LaPiana, a certified financial planner and head of brand, product and affiliated distribution with MassMutual, told CBS MoneyWatch.

Even so, a number of Wall Street economists are predicting that Harris’ policies are likely to result in stronger economic growth for the U.S., while warning that Trump’s combination of tariffs and tax cuts could both spur inflation while causing the deficit to mushroom by trillions. 

Here’s what to know about three key economic issues that could influence voters. 

Inflation and grocery costs

Inflation has sapped household budgets since 2021, when prices started rising due to the impact of the pandemic, which disrupted global supply chains and prompted the federal government to pump trillions into the economy. (Both Presidents Trump and Biden signed large spending bills into law during the pandemic, authorizing stimulus payments and extra unemployment aid, among other supports).

To temper inflation, the Federal Reserve responded by hiking interest rates to their highest point in 23 years. That’s paying off, with government data on Wednesday expected to show that inflation cooled to 2.6% on an annual basis in August, its lowest since March 2021, according to financial data firm FactSet.

But lower inflation doesn’t mean that prices have come down; instead, it simply means that the rate of price hikes have moderated from their pandemic peak. 

The candidates are likely to discuss their plans to address inflation, which remains a key issue for voters given that grocery costs remain 21% higher than they were prior to the pandemic. That means a cart of groceries in 2020 that cost $150 would now set you back by $182, or $32 more at the register.

Harris has vowed to tackle grocery costs by enacting the first federal law against price gouging by food suppliers and retailers. But economists say they’re skeptical such a law could make much of an impact. 

Trump, meanwhile, has pledged to end the “inflation nightmare.” But his policies, which include adding tariffs to all imported goods, would likely fuel inflation and reverse some of the progress of the last two years, some economists say.

What the candidates are pledging on taxes 

Both Harris and Trump have already made some tax pledges, with Harris vowing to increase the corporate tax rate and Trump proposing a steep cut, taking it down to 15% from its current 21%. 

Trump also wants to extend his Tax Cuts and Jobs Act — his 2017 law that reduced tax rates for most individuals but provided the biggest benefits to the nation’s richest families. Many of those cuts are due to expire at the end of 2025. Trump’s vice presidential running mate, JD Vance, has also floated the idea of a bigger Child Tax Credit.

Harris, meanwhile, wants to enact more generous tax benefits, such as a $6,000 Child Tax Credit for parents of newborns and a bigger Earned Income Tax Credit. One analysis from the nonpartisan Penn Wharton Budget Model found that her proposals would help more low- and middle-income families than Trump’s.

“If Democrats sweep, personal and corporate taxes and benefit spending will likely rise,” Goldman Sachs analysts said in September 3 research report. “If Republicans sweep, they will likely stay mostly unchanged.”

Housing and the American Dream 

Housing remains out of reach for millions of Americans who are now priced out of home-buying due to high mortgage rates and housing prices. 

Harris has proposed providing $25,000 in down payment assistance for Americans who have paid their rent on time for two years, with more support for first-generation homeowners. She’s also proposing tax incentives for builders of starter homes, with the goal of widening the housing supply and lowering home prices.

Trump, meanwhile, has proposed making federal land available to help with housing supply, but his campaign hasn’t offered any details. He’s also vowed to deport between 15 million to 20 million undocumented workers, which he’s blamed for increasing housing demand and pushing up prices.

But the surge in home prices preceded the recent jump in undocumented workers, the New York Times reported. And deporting so many workers, many of whom work in construction, could jeopardize the workforce that builds homes. 

Source

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The debate was heavily focused on US domestic matters—even when questions were on international affairs, both candidates sought to bring the issues back to domestic politics and policies.  

Of most relevance to Australia was the lack of interest in this region. Other than passing references—in heavily political contexts—neither the media nor the candidates raised China in any meaningful way. Notwithstanding the conflicts in Europe and the Middle East, China is the most significant issue globally. 

Without China being prioritised by the two candidates or media today, we can only hope that the next administration will be struck by the realities of Beijing as the pacing military and technological threat to our livelihoods and way of life. Australia and partners like Japan, the Quad and NATO, will need to work together to ensure the next administration is focused on competing with and countering China, and does so by viewing China as a strategic rival first and not as an economic partner. 

Given the next president will immediately face a world in conflict, a further debate that is limited to foreign policy and held before the November election would be best for both US voters and America’s partners. 

On China—Bethany Allen, head of program for China investigations and analysis, and Daria Impiombato, analyst 

While the moderators never asked about China, the topic came up unprompted within the first few minutes of the debate with Harris accusing Trump of inviting ‘trade wars’ but then adding the former President ‘sold us out’ to China. In a sense this focus was not surprising because the Trump administration’s tough turn on China was one of the most significant and controversial foreign policy shifts of his term. The Biden-Harris administration has also made competition with Beijing a key platform. 

More surprising was that, other than brief references, the issue of how to manage China strategically and in the context of potential flashpoints such a Taiwan and the South China Sea did not come up at all. 

Harris and Trump went on to spar over tariffs, microchips and the pandemic response, with Harris accusing the Trump administration of allowing the sale of chips to China that served to modernise the People’s Liberation Army. Trump’s retort that the US ‘barely make any chips anymore’ and that it is Taiwan instead that’s selling them to China again demonstrated the economic lens with which he views these issues.  

This is in line with his latest stances on Taiwan, as he has repeatedly stated that the island should pay the US to defend it, and that they have ‘stolen’ the chip manufacturing business from American companies. Harris, instead, opted to focus on the CHIPS Act and her intention to win the competition with China especially on technology and artificial intelligence. 

On Alliances—Eric Lies, analyst 

What stood out, in particular for US allies the world over, was Trump’s refusal to answer the question as to whether he believes Ukraine should win in the war against Russia. Instead, he repeatedly stated that he would end the war as president-elect. A key element of deterrence is convincing potential adversaries that if they choose violence, they will be met with resolve. Responses like Trump’s, which put Ukraine and Russia on a false equivalence, corrode that confidence in US security promises and will likely make allies in the Indo-Pacific nervous, while emboldening China’s revanchist activities. 

In contrast, Harris unequivocally stated her support for allied efforts within Europe, and how she intends to continue those efforts should she be elected. It meant that a clear foreign policy difference came through between the two candidates—a more isolationist, transactional foreign policy on the one hand and an alliance-driven policy on the other.  

On Ukraine and China—Malcolm Davis, senior analyst 

On Ukraine, Harris clearly demonstrated that she understood the potential implications of a Russian victory in Ukraine. Noting that if such an outcome were realised, ‘Putin would have his eye on the rest of Europe’. This is an accurate interpretation of the stakes at play. In contrast, Trump failed to deliver a convincing response, simply saying ‘he’d get on the phone to Putin and Zelensky’. 

The risk is therefore that a second Trump Administration could reduce support for Ukraine and increase the likelihood of delivering Putin a decisive strategic victory. 

On China, both candidates avoided any real discussion of the defence and national security implications of a rising China. Instead, they focused on trade relations. Whichever candidate wins in November, however, there is a chance that they will be confronted with a major crisis with Beijing over Taiwan. This is an issue that is far more important to the United States than tariffs. 

Generally, the debate avoided any real discussion on critical and emerging technologies and the importance of maintaining US leadership. In fact, as the ASPI Critical Technology tracker shows, China now holds a dominance in high-impact research that was once held by the US. Both candidates should have dealt more with this important issue and will need to do so as president. 

On Disinformation and Migration—Mike Copage, head of the Climate and Security Policy Centre 

As the world grapples with the prospect of AI driving mis and dis-information in democracies, the debate highlighted how vulnerable American political discourse has become to the spread of disinformation without it. Pressed by moderators that there’s no evidence to back claims by vice-presidential candidate JD Vance that Haitian illegal immigrants are eating pets in Springfield, Ohio, Trump responded that he knew it was true because he heard it from ‘people on television’. While ridiculous at face value, the real and serious consequences of a former President and current candidate repeating clearly false, racist and anti-immigrant claims cannot be ignored. The violence perpetuated following the spread of anti-immigrant misinformation in the United Kingdom demonstrates how far that can lead without responsible leadership. 

On the Media and China—Greg Brown, senior analyst, Washington DC 

Harris had a solid showing defined by poise without policy articulation. Her supporters will feel emboldened by the strategy to distance herself from the present Administration—noting during the debate that she was neither Joe Biden nor Donald Trump. 

President Trump had a weaker night—notwithstanding his zingers like ‘wake the President (Biden) up at four o’clock in the afternoon’—and appeared rambling at times. He missed opportunities to attack Harris effectively. 

As usual, the debate moderators (in this case ABC News) and voters were the losers.   

The lone foreign policy issue mentioned with any repetition was migration though with a heavy domestic lens. And neither candidate provided any sense of the drivers of, let alone policy responses to, the weaponization of mass migration. The passing references by both candidates regarding Iran, Ukraine and Russia were pedestrian. 

China, the ​supposed pacing challenge and threat, received little attention. Nor did we have a discussion of the Pentagon’s budget priorities, tariffs as tools of economic warfare, how to revive the US defence industrial base, let alone to US interests across the Pacific. 

On Asia-Pacific—Raji Pillai Rajagopalan, resident senior fellow 

While understandably focused on domestic issues, it was still surprisingly how little interest there was on foreign policy in the presidential debate. Considering the growing chaos the next president will have to deal with, that was unfortunate. 

America’s China and Indo-Pacific policy was not mentioned, nor were any other aspects of foreign and security policy in any detail. We heard only some broad outlines to which we were already familiar, such as a Trump Administration that will be suspicious of its partners because of the worry that America is being exploited, that will be more open to deal-making with adversaries such as Russia, China and North Korea, irrespective of the character of their behaviour and that will potentially raise tariff barriers with wide-ranging economic effects globally. 

On the Democrat side, Vice President Harris reiterated she would strengthen partnerships and stand up to authoritarian leaders, which is a more positive starting point, but all said without much detail. 

From a foreign policy perspective, it was clearly not a substantive debate. Leaving out everything from narrow issues of nuances to nuclear policy to broad issues such as relative commitment to different theatres like Europe, Middle East and Indo-Pacific. 

Source

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Democratic Vice President Kamala Harris and former Republican President Donald Trump traded blows in the first presidential debate of the 2024 race — clashing over issues including abortion, economy and foreign wars.

Fox News proposes second presidential debate

US news channel Fox Newssaid it proposed to hold a second presidential debate in October. 

The channel, which largely caters to a conservative viewership, said it had sent letters to the campaigns for both Democratic Vice President Kamala Harris and Republican rival Donald Trump, before Tuesday night’s debate. 

This invitation aside, Harris’ campaign has already offered a rematch while Trump did not commit to it. 

“The reason you do a second debate is if you lose, and they lost,” he told Fox News host Sean Hannity in the spin room after the first debate. “But I’ll think about it.”

Source

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Source: France 24

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Nepal Electricity Authority and the private sector have been setting up charging stations amid the country’s rising demand for electric vehicles (EVs).

But Nepal still lacks a plan for how and where to set up charging stations, and developments in the EV industry have outpaced government policy.

The Water and Energy Commission Secretariat of the Ministry of Energy, Water Resources and Irrigation has selected a bidder to prepare the Master Plan for Public Charging Infrastructure for electric vehicles on major national highways.

On November 28, the commission issued a letter of its intent to award a contract to a joint venture—of Shrestha Consultant Pvt Ltd, the Cosmopolitan Consultant and Technical Education Centre, and the Rural Infrastructure and Management Consultant Pvt Ltd—to prepare a master plan after a thorough study. The master plan should be prepared within a year after the awarding of the contract, according to the commission.

“The master plan will make its recommendations based on the need and the availability of land, at the points on strategic roads where the charging stations can be set up,” Sushil Chandra Tiwari, secretary at the commission, told the Post. “As the government plans to promote the use of electric vehicles, we should have specific plans for mass installation of charging stations.”

He said that both the government and the private sector could install charging stations after probable locations are identified.

Even though the government has set an ambitious target on adoption of electric vehicles, little has been done in terms of policy support.

In December 2020, Nepal introduced its second Nationally Determined Contribution (NDC) for the 2021-2030 period in line with the Paris Agreement.

As per the NDC, sales of EVs in 2025 will be 25 percent of all sold private passenger vehicles, including two-wheelers, and 20 percent of all four-wheel public passenger vehicle sales.

By 2030, EV sales will make up to 90 percent of all private passenger vehicle sales, two-wheelers included, and 60 percent of all four-wheeler public passenger vehicle sales. The public passenger vehicle target does not cover electric rickshaws and electric tempos.

But insiders say lack of enough charging stations is a big challenge in promoting EVs as per the target. According to the NEA, 51 charging stations have recently been installed in various parts of the country.

“We have the target of installing an additional 500 stations across the country in the current fiscal year,” said Sagarmani Gyawali, chief of the charging station construction project at the NEA. “We are preparing to issue a tender within a month.” He said that the NEA would continue to increase the number of charging stations. “The private sector has so far installed around 200.”

These charging stations are being installed without any national plan at a time the government is yet to set any number target.

“Even though the national plan should have driven the effort to add charging stations, we are acting in view of the growing demand for EVs in the market,” said Gyawali.

According to the Department of Customs, the country imported a total of 4,050 assembled electric vehicles in the fiscal year 2022-23, which is more than double the units imported in the previous year. Nepal had imported 1,807 electric four-wheelers in 2021-22. In addition, 6,914 three wheelers were imported last fiscal year, according to the customs data.

In the first four months of the current fiscal year (2023-24), Nepal imported 2,787 units of EVs, up 174 percent year-on-year, according to the customs department.

“The demand for EVs is soaring. Market enquiries are beating expectations,” Dhurba Thapa, president of the Nepal Automobile Dealers’ Association, told the Post last week. According to him, the sales ratio of EVs to internal combustion engine vehicles is now 60:40.

Stakeholders said considering people’s interest in electric vehicles, the existing charging infrastructure is nowhere close to meeting demand. “There are only around 250 charging stations in the country, said Gyawali.

The government also acknowledges that many individuals are still reluctant to adopt electric vehicles citing reliability issues, which again has to do with the availability of reliable charging stations on the roads, among other reasons.

Studies show that lack of charging stations is a major barrier to adoption of electric vehicles. Most EV owners often have ‘range anxiety’. They are mostly anxious about limited battery capacity, the commission said in its Expression of Interest notice.

This master plan intends to bridge the charging infrastructure gap by establishing a robust network of fast charging stations along major highways, it said.

Source : The Kathmandu Post

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For keepsies: Making an online return? You may end up not having to return it at all. This year, 59% of retailers offer “keep it” policies for such products, up from 26% last year, according to returns services firm goTRG, Reuters reports. The firm surveyed 500 executives at 21 major retailers, among them Amazon and Walmart. As retailers adopt tech to root out excess costs, more are embracing returnless policies for certain online purchases — a trend that obviously retailers do want out there. Online grocery, in some ways, has a similar policy in place. Get the wrong item in your Instacart order? You can report it and get a credit, but in many cases you end up keeping the item anyway. Will consumers start to abuse these systems? Time will tell. —Chloe Riley 

A chicken conundrum: When it comes to rotisserie chickens, it takes a lot to keep ahead of the game. And sometimes it’s a losing battle, according to a deli worker at Costco who explained on Reddit why sometimes the warmer is empty at stores. The main reason is that Costco requires workers to determine how many chickens will be needed for a two-hour span in order to avoid dried out chicken. The employee says the formula is far from scientific, and often the demand is too heavy and the labor power is just not there. Another reason is that there is no limit to how many shoppers can purchase, which sometimes leads to chickens being stacked 40 or 50 high. (That has to be some kind of safety hazard.) Some Reddit readers could relate to the rotisserie circus. One said they “worked chickens for over four years” and it was one of the hardest jobs in the warehouse. It appears chickens are not the only things getting cooked behind that counter. —Bill Wilson

An apple a day keeps the hunger at bay: There was an apple surplus this year, attributable to a couple of different factors. Bumper crops have kept domestic supply high, and exports declined 21% over the past decade, a symptom of retaliatory tariffs from India. Weather also played a role this year, with hail leaving a significant share of apples cosmetically unsuitable for the fresh market. In West Virginia, rather than leaving the apples to rot, the USDA ended up paying for the apples produced by growers. This apple relief program purchased $10 million worth of apples from a dozen growers — which were then donated to hunger-fighting charities across the country from South Carolina and Michigan all the way out to The Navajo Nation. Talk about avoiding food waste. —CR

A killer strategy: Dave’s Killer Bread has a pretty killer story attached to it. After 15-plus years in prison, founder Dave Dahl found his true calling: to make organic, whole-grain bread. This six-minute video from HubSpot examines how Dave’s Killer Bread nailed its target market and leaned into social to tell its story. Dahl wasn’t ashamed of his criminal past, but his advisors begged him not to mention it…So he fired them and became a champion of second-chance employment.That strategy, along with a national rollout following a 2015 acquisition by Flowers Foods, would eventually lead to 50% brand growth within a purpose-driven brand identity. The morale of the story? It pays to be on purpose. —CR

Self-checkout, now even faster: Checkout scanners are far from perfect, and when you add those not trained to work the technology the whole process can become a shopping cart full of frustration. British grocer Tesco, however, is taking that approval beep out of the equation in the self-checkout area. The retailer now has scan-free kiosks at one of its stores. The tech allows the transaction to be completed without scanning a single item. According to a recent survey by retail data supplier PYMNTS, 28% of merchants, including grocers, are investing in in-app scan-and-go capabilities. Surprisingly, shoppers are not jumping in line to take advantage of the fancy gadgets. Another PYMNTS study revealed only one-in-three consumers wanted to take advantage of the store tech. If you’ve ever had to wait for a worker to come help you in self-checkout, you might just think another thought. —BW

Source : Supermarket News

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Meetings of the influential Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, have been rescheduled from Nov. 25-26 to Nov. 30, sending prices down by over $3 per barrel in Thursday intraday trade.

The Ice Brent contract with January delivery was trading at $79.05 per barrel at 13:50 London time, down by $3.40 per barrel. The Nymex WTI contract with January expiry was at $74.40 per barrel, down by $3.37 per barrel.

The OPEC Secretariat, which made the announcement, did not disclose the reason for the postponement.

It was not immediately clear whether the OPEC+ group would be holding a virtual or in-person meeting on Thursday, or whether ministers would still adjourn at the OPEC secretarial headquarters in Vienna.

The new date of the OPEC+ meetings coincides with the first day of the Conference of the Parties climate summit (COP28) in Dubai and represents a key event for both the host United Arab Emirates — the third-largest OPEC producer — and for other Arab energy providers that are tackling the green transition.

Earlier in the day, Bloomberg News issued a report saying the meeting of Sunday could be delayed amid Saudi dissatisfaction over the oil production levels of some countries. A senior OPEC+ delegate, who asked for anonymity because of the sensitivity of the discussion, agreed with the premise, with reference to the compliance levels of some alliance member countries with their respective output pledges.

Saudi Arabia is itself enforcing a 1 million barrel-per-day voluntary production decline until the end of this year, alongside contributing to a separate spate of voluntary output cuts from several OPEC+ members that totals 1.66 million barrels per day and will stretch until the end of next year.

The upcoming meeting faced a challenging market environment, defined by depressed oil prices, a slower-than-expected Chinese demand recovery and petropolitics amid conflict in the Middle East.

High interest rates and banking turmoil largely slumped oil prices in the first half of the year, before a sharp boost from several voluntary supply declines announced independently of OPEC+ strategy. Several OPEC+ members pledged to reduce output by a total of 1.66 million barrels per day until the end of 2024, with Saudi Arabia and Russia topping that with additional respective supply drops of 1 million barrels per day and 300,000 barrels per day until the end of this year.

Prices briefly surpassed $90 per barrel, but have since withdrawn amid a fainter-than-expected recovery in China — the world’s largest crude importer — and resurging tensions in the Middle East.

Prior to the meeting postponement, two OPEC+ delegates, who could only speak under condition of anonymity, faulted the recent price pressures on liquidations in the future markets amid geopolitical risks, with a third attributing market concerns less to supply-demand fundamentals than to global politics, including developments in Israel.

The OPEC+ alliance, including chairman and Saudi energy minister Abdulaziz bin Salman, have been previously frustrated by a perceived disconnect between supply-demand and prices. Famously, the Saudi prince has been at war with market speculators, warning they would “ouch” and should “watch out” in May.

One of the three delegate sources said that the OPEC+ group would have to make an announcement to “support the market” at its upcoming meeting, with a fourth delegate also suggesting cuts could be discussed. The alliance will also discuss baselines —  the level from which quotas are determined and a frequent subject of contention — for certain countries, the last source said.

A fifth delegate meanwhile assessed it is unlikely that the coalition will change its production policy, given uncertainty in the outlook for flows from Iran and Venezuela, where the U.S. has signaled tightening and easing its oil sanctions, respectively.

Source : CNBC

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AFTER years of political turmoil that saw rapid turnover at the prime minister’s office, Anwar Ibrahim’s first 12 months as Malaysia’s leader might feel like a success in itself.

Except a stalled reform agenda has meant the 76-year-old has been unable to boost the nation’s revenues and pare debt, as the rising cost of living hits the pockets of ordinary Malaysians.

The lack of promised reforms — undoing hefty subsidies and broadening the government’s revenue base — is weighing on Malaysian assets, adding to the pressure from a surge in US interest rates and sputtering growth in China, the nation’s biggest trading partner. 

The ringgit has lost almost 6 per cent against the dollar this year, making it the worst performer in emerging Asia. Kuala Lumpur’s benchmark stock index has been one of the biggest losers worldwide.

The political shocks that ushered in four administrations since 2018 have unnerved investors, as have the lack of of promised reforms, which have proved tricky to execute given the country’s fractious political environment. 

“Headlines on the Malaysian political situation don’t boost investor sentiment,” said Jian Shi Cortesi, a Zurich-based fund manager at GAM Investment Management, whose Asia equity strategy has no exposure to the country. “Malaysia doesn’t look particularly attractive.”

Here’s how Anwar’s government has fared and the potential pitfalls it faces:

Political stability

It’s been a striking comeback for Anwar, whose career has included a stint as deputy prime minister and two jail terms that he said were politically motivated.

His promise for reforms had fueled hopes that he would be able to repair Malaysia’s international standing, following the 1MDB investment-fund scandal that led to the jailing of former Malaysian Prime Minister Najib Razak.

Still, political stability hasn’t been a given for Anwar.

A member of his ruling alliance pulled out in September to protest a decision to drop corruption charges against Deputy Prime Minister Ahmad Zahid Hamidi — Anwar’s key ally. The premier has since managed to attract four opposition lawmakers to back him, giving him the support of 151 out of 222 members of parliament.

Voters though are getting impatient with the government’s handling of the economy. The premier’s approval rating dropped to 50 per cent from 68 per cent in December, according to a poll by Merdeka Centre for Opinion Research conducted last month. 

Anwar doesn’t know how to solve the nation’s problems, including a weakening ringgit and the rising cost of living, according to Mahathir Mohammad, a two-time former prime minister.

“A popular person is not necessarily a capable person,” Anwar’s 98-year-old arch rival said. “He does not know how to handle the government.”

Economic direction

Anwar’s administration has spent the year outlining the country’s ambitions, including plans to scale up the nation’s renewable energy mix, while looking at ways to export renewal energy. It wants to mine rare earth minerals and raise wages.

Malaysia still relies heavily on revenue from fossil fuels, with national oil company Petronas paying RM40 billion (S$354 million) in dividends to the government this year.

“The strategy is clear,” said Munirah Khairuddin, the chief executive officer of Principal Malaysia in Kuala Lumpur. “We are waiting to see how that translates into the real economy, the stock market.” 

Anwar has revealed that Malaysia’s debt and liabilities stood at RM1.5 trillion, or 82 per cent of gross domestic product. His administration has also acknowledged the need to find new sources of revenue, though it has resisted introducing a goods and services tax, opting instead to marginally increase service taxes and introduce taxes on luxury goods and capital gains. 

A hefty subsidy bill

A key component of Malaysia’s fiscal position is the hefty subsidy bill it foots every year.

All Malaysians enjoy subsidies on petrol, diesel, cooking oil and locally produced rice. Electricity is also subsidised with lower tariffs for most domestic users. The government’s subsidy bill, which has been growing due to rising global commodity prices since last year, will exceed RM81 billion this year.

“No country can survive” such a hefty subsidy bill, Anwar has said while hoping to shift to a system that targets lower-income groups.

However, a clear plan on how the subsidies will be reallocated has not been presented to the public, and anticipation of possible cuts are raising inflation risks in the country.

“The challenging domestic political landscape constrains the prospects for material revenue reform, subsidy rationalizstion and, ultimately the reversal of the deterioration in its fiscal metrics over the past few years,” said Moody’s Investors Service senior vice-president Christian de Guzman.

The reformist

Anwar has spent decades as the figurehead of the reform movement in Malaysia. His government, however, is still working on several promised pieces of legislation with wide political and social implications. 

A bill to introduce a two-term limit to the office of prime minister and policies to provide equal funding for opposition lawmakers — both of which his coalition advocated — have yet to materialise. Nor has a promise to separate the powers of the attorney general and chief public prosecutor.

A pledge to prohibit smoking appears to be on the back burner, while an attempt to rationalise citizenship laws, especially those concerning children born overseas, has proved to be controversial.

“Despite his clear majority in parliament, the administration does not have the political will to push for much-needed institutional and fiscal reforms,” said Asrul Hadi Abdullah Sani, a former deputy managing director for Bower Group Asia, who is now an independent analyst.

The outlook

Anwar’s ability to execute his economic and fiscal plans within the next two years will key. A series of state elections starting in 2025 will heighten political considerations before federal polls in 2027. 

If Anwar manages the short-term pain of reforming the local economy, Malaysia is poised to benefit from supply-chain realignments and increasingly positive relations with its more developed neighbour, Singapore, said Mark Mobius, the veteran emerging-markets investor, who is considering buying Malaysian stocks.

Concerns about “what reforms are possible” are partly why Malaysia’s ringgit is one of the cheapest among developing currencies that make up MSCI Inc.’s widely followed indexes, said Charlie Robertson, the London-based head of macro strategy at FIM Partners UK.

“Anwar is a smart individual who might be taken as a positive by markets,” Robertson said. “Not a negative.” BLOOMBERG

Source : Business Times

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Startups can be at the forefront of economic recovery, job creation, and a more sustainable future. They are the most innovative actors in the economy and an economic force to be reckoned with. However, while they are the giants of the future, they are more often than not overlooked in policymaking. 

In the last five years alone, startups have been met with a tidal wave of digital regulation. While well-intentioned, overregulation often creates a hostile environment for innovative businesses by implementing market barriers and imposing additional operating and compliance costs.

The 2024 European Union Elections offer an opportunity to reverse this trend by ensuring that startups have a seat at the policy table so that Europe can build smart regulations and at the vanguard of startup innovation.  

Allied for Startups and its Members have published its EU Election Startup Manifesto, a standard with which startup communities and leaders will evaluate the success of any candidate, party, or group seeking a leading role in a democratic Europe in 2024.

While these policy prescriptions are a baseline of the needs of the growing entrepreneurial communities of Europe, support for these entrepreneurs and job creators must be aligned with an acknowledgment of the need for further investment in diversity, equity, and inclusion.

This integrated approach is likely the most effective pathway toward ensuring Europe’s continued growth and economic success.

What do startups need from policymakers?

Policymakers must embrace strategies and initiatives that will foster a growth-oriented environment for startups to deliver on the digital and green transitions as promised.

Hence, we propose a variety of actions, including:

Appointing a dedicated Commissioner for Digital Entrepreneurship, in order to simplify and harmonise all regulation that affects startups in a single place.

Introducing a startup and scale-up test for legislation, essential to creating regulatory frameworks that startups can not only comply with but thrive under.

Streamlining talent acquisition through an efficient EU-wide startup visa and simplifying regulatory processes with an EU company status.

Startups advocate for a harmonised level-playing field that allows them to innovate, emphasizing the importance of safeguarding net neutrality, fortifying the Digital Single Market, and strong research, investment and digital skills framework to nurture a competitive and thriving ecosystem.

What are startups’ expectations across EU institutions?

Startups’ expectations across EU institutions extend to the creation of dedicated groups and teams within the institutions, integrating startup perspectives into relevant deliberations, nominating counterparts, and emphasizing startups and SMEs in official titles.

Effectively, having a seat at every policy table.

While a new Parliament is on the ballot next year, startups recognize the importance of and positive outlook for all EU institutions to build a sustainable, lucrative future for European startups.

Prioritising startups’ needs during this election season holds the potential to transform Europe into an environment where innovation thrives, startups prosper, and Europe secures a prominent role in the global entrepreneurial landscape.

With these 10 items at the forefront of voter outreach and discussion, Europe can re-emphasise its commitment to building a strong startup community and lead the global economy.

Source : Tech EU

The post Startups Should Have a Seat at the Policy Table, Not on the Menu appeared first on Policy Print.

The weak economic momentum, along with the hope for the Federal Reserve’s rate freeze next month and moderating inflation, may prod South Korea’s central bank to keep its policy rate unchanged again this week.

But the Bank of Korea (BOK) is likely to say that it will keep its restrictive monetary policy stance amid still high inflation and soaring household debts.

On Thursday, the BOK is widely predicted to leave the rate, which currently stands at 3.5 percent, unchanged, which would be the seventh straight rate freeze in the face of a murky growth outlook, according to a survey of 13 economists by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The series of rate freezes comes after the BOK delivered seven consecutive hikes in borrowing costs from April last year to January.

South Korea’s economy has been dogged by slumping exports and sluggish consumer spending. For the year, the central bank had expected Asia’s fourth-largest economy to expand 1.4 percent this year, but it is still unclear whether such a forecast would be achieved in the face of a still murky economic outlook.

Weak global demand, led by China’s slowing economy, and a delay in the recovery of the IT sector have been blamed for a slump in the country’s outbound shipments.

But recently, the country’s exports have shown signs of recovering. South Korea’s exports rebounded for the first time in 13 months in October, driven by robust auto shipments, along with signs of an improvement in the chip sector.

Outbound shipments moved up 5.1 percent on-year to US$55 billion last month and logged a trade surplus of $1.64 billion in October, the fifth straight gain.

This week, the central bank will announce its updated growth outlook for the year and next year as well.

The economy grew 0.3 percent, 0.3 percent and 0.6 percent, respectively, in the first, second and third quarters.

Policymakers have also pinned hopes on easing inflation, helping the central bank take a breather in its rate hike moves.

South Korea’s inflation grew at a faster pace of 3.8 percent in October, staying above 3 percent for the third consecutive month, due to higher prices of energy and farm goods.

It is the third month in a row that the annual price growth has picked up pace.

But oil prices have been stabilizing in the face of the Israel-Hamas war, possibly helping inflation ease down the road, a development that supports the central bank’s rate freeze.

The central bank is also paying keen attention to rising household debts.

Household loans extended by banks in South Korea rose for the seventh straight month in October, led by rising home-backed loans amid high borrowing costs.

Banks’ outstanding household loans reached a record high of 1,086.6 trillion won (US$833.6 billion) at end-October, up 6.8 trillion won from a month earlier, accelerating from a 4.8 trillion-won rise the previous month and marking an on-month increase for the seventh month in a row.

Early this month, the Fed held its benchmark lending rate steady at a 22-year high for the second consecutive time as it keeps striving to bring down inflation to its 2 percent target.

The Fed kept the rate between 5.25 and 5.50 percent. But it left open the possibility of a rate change later to achieve “maximum” employment and its inflation target.

Next month, the Fed is widely expected to stand pat again.

Source : Yonhap News Agency

The post BOK Likely to Keep Policy Rate Unchanged on Slowdown, Hope for Fed’s Rate Freeze, Easing Inflation appeared first on Policy Print.