Recession a looming threat for global economy — World Bank

A man is walking in front of the World Bank Building in Washington DC on September 25, 2020. (Photo courtesy: AFP/File)
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Updated 10 January 2023
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Recession a looming threat for global economy — World Bank

  • In annual report, the World Bank has slashed forecast for global growth this year by nearly half
  • If that forecast proves accurate, it would be the third-weakest annual expansion in three decades

WASHINGTON: The global economy will come “perilously close” to a recession this year, led by weaker growth in all the world’s top economies — the United States, Europe and China — the World Bank warned on Tuesday.

In an annual report, the World Bank, which lends money to poorer countries for development projects, said it had slashed its forecast for global growth this year by nearly half, to just 1.7 percent, from its previous projection of 3 percent. If that forecast proves accurate, it would be the third-weakest annual expansion in three decades, behind only the deep recessions that resulted from the 2008 global financial crisis and the coronavirus pandemic in 2020.

Though the United States might avoid a recession this year — the World Bank predicts the US economy will eke out growth of 0.5 percent — global weakness will likely pose another headwind for America’s businesses and consumers, on top of high prices and more expensive borrowing rates. The United States also remains vulnerable to further supply chain disruptions if COVID-19 keeps surging or Russia’s war in Ukraine worsens.

And Europe, long a major exporter to China, will likely suffer from a weaker Chinese economy.

The World Bank report also noted that rising interest rates in developed economies like the United States and Europe will attract investment capital from poorer countries, thereby depriving them of crucial domestic investment. At the same time, the report said, those high interest rates will slow growth in developed countries at a time when Russia’s invasion of Ukraine has kept world food prices high.

“Russia’s invasion of Ukraine has added major new costs,” World Bank President David Malpass said on a call with reporters. “The outlook is particularly devastating for many of the poorest economies where poverty reduction is already ground to a halt and access to electricity, fertilizer, food and capital is likely to remain limited for a prolonged period.”

The impact of a global downturn would fall particularly hard on poorer countries in such areas as Saharan Africa, which is home to 60 percent of the world’s poor. The World Bank predicts per capita income will grow just 1.2 percent in 2023 and 2024, which is such a tepid pace that poverty rates could rise.

“Weakness in growth and business investment will compound the already devastating reversals in education, health, poverty and infrastructure and the increasing demands from climate change,” Malpass said. “Addressing the scale of these challenges will require significantly more resources for development and global public goods.”

Along with seeking new financing so it can lend more to poorer countries, Malpass said, the World Bank is, among other things, seeking to improve its lending terms that would increase debt transparency, “especially for the rising share of poor countries that are at high risk of debt distress.”

The report follows a similarly gloomy forecast a week earlier from Kristina Georgieva, the head of the International Monetary Fund, the global lending agency. Georgieva estimated on CBS’ “Face the Nation” that one-third of the world will fall into recession this year.

“For most of the world economy, this is going to be a tough year, tougher than the year we leave behind,” Georgieva said. “Why? Because the three big economies — US, EU, China — are all slowing down simultaneously.”

The World Bank projects that the European Union’s economy won’t grow at all next year after having expanded 3.3 percent in 2022. It foresees China growing 4.3 percent, nearly a percentage point lower than it had previously forecast and about half the pace that Beijing posted in 2021.

The bank expects developing countries to fare better, growing 3.4 percent this year, the same as in 2022, though still only about half the pace of 2021. It forecasts Brazil’s growth slowing to 0.8 percent in 2023, down from 3 percent last year. In Pakistan, it expects the economy to expand just 2 percent this year, one-third of last year’s pace.

Other economists have also issued bleak outlooks, though most of them not quite as dire. Economists at JPMorgan are predicting slow growth this year for advanced economies and the world as a whole, but they don’t expect a global recession. Last month, the bank predicted that slowing inflation will bolster consumers’ ability to spend and power growth in the United States and elsewhere.

“The global expansion will turn into 2023 bent but not broken,” the JPMorgan report said.


American Airlines jet collides with helicopter near Washington’s Reagan Airport

Updated 8 sec ago
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American Airlines jet collides with helicopter near Washington’s Reagan Airport

  • A web camera shot from Kennedy Center in Washington showed an explosion mid-air across the Potomac around 2047 ET with an aircraft in flames crashing down rapidly
  • There has not been a fatal US passenger airplane accident since February 2009, but a series of near-miss incidents in recent years have raised serious safety concerns

WASHINGTON: An American Airlines regional passenger jet and a US Army Black Hawk helicopter crashed into the Potomac River after a midair collision near Reagan Washington National Airport on Wednesday night, officials said.
The Washington Post said multiple bodies had been pulled from the water. Senator Ted Cruz of Texas said on social media that “we know there are fatalities,” though he did not say how many.
An American Airlines source told Reuters that 60 passengers, along with two pilots and two crew members were scheduled to be on the flight. Three soldiers were aboard the helicopter, a US official said.
There has not been a fatal US passenger airplane accident since February 2009, but a series of near-miss incidents in recent years have raised serious safety concerns.
NBC reported that four people had been pulled alive from the Potomac River.
A web camera shot from the Kennedy Center in Washington showed an explosion mid-air across the Potomac around 2047 ET with an aircraft in flames crashing down rapidly.
The US Federal Aviation Administration said a PSA Airlines regional jet collided midair with the helicopter while on approach to Reagan.
PSA was operating Flight 5342 for American Airlines, which had departed from Wichita, Kansas, according to the FAA.
Police said multiple agencies were involved in a search and rescue operation in the Potomac River, which borders the airport.
Dozens of police, ambulance and recuse units, some ferrying boats, staged along the river and raced to positions along the tarmac of Reagan airport. Live TV images showed several boats in the water, flashing blue and red lights.
The airport said late on Wednesday that all takeoffs and landings had been halted as emergency personnel responded to an aircraft incident.
The National Transportation Safety Board said it was gathering more information on the incident.
American Airlines said on social media that it was “aware of reports that American Eagle flight 5342, operated by PSA, with service from Wichita, Kansas (ICT) to Washington Reagan National Airport (DCA) has been involved in an incident.”
American Airlines said it would provide more information as it became available to the company.
Over the last two years, a series of near-miss incidents have raised concerns about US aviation safety and the strain on understaffed air-traffic-control operations.
FAA Administrator Mike Whitaker stepped down on Jan. 20 and the Trump administration has not named a replacement — or even disclosed who is running the agency on an interim basis.
The last deadly major crash involving a commercial airliner in the US was in 2009, when 49 people aboard a Colgan Air flight crashed in New York state. One person also died on the ground.


An aircraft is down near Washington’s Reagan Airport, and takeoffs and landings are halted

Updated 30 January 2025
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An aircraft is down near Washington’s Reagan Airport, and takeoffs and landings are halted

ARLINGTON, Virginia: An aircraft went down near Ronald Reagan National Airport on Wednesday night, and all takeoffs and landings have been halted, according to the airport and law enforcement.
Multiple helicopters, including those from the US Park Police and the D.C. Metropolitan Police Department and US military, were flying over the scene of the incident in the Potomac River. D.C. Fire and EMS said on X that fireboats were on the scene.
Washington, D.C., police said on the social platform X that multiple agencies are conducting a search and rescue effort in the Potomac River after an aircraft crash.
Video from an observation camera at the nearby Kennedy Center shows two sets of lights consistent with aircraft appearing to join in a fireball.
The airport said emergency personnel were responding to “an aircraft incident on the airfield.”
No other details were immediately available.


Trump issues orders to promote school choice, end “anti-American” teaching

Updated 30 January 2025
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Trump issues orders to promote school choice, end “anti-American” teaching

  • Order prioritizes federal funding for school choice programs
  • Second order aims to block federal funding related to “gender ideology or discriminatory equity ideology” in schools

President Donald Trump on Wednesday signed executive orders to promote parental choice in school selection and end federal funding for curricula that he called the “indoctrination” of students in “anti-American” ideologies on race and gender.
The two directives, which come a week after Trump was sworn into his second term of office, are in keeping with his campaign promise to remake the country’s education system in line with a rigorous conservative agenda that Democrats say could undermine public schools.
The first order directs the Department of Education to issue guidance on how states can use federal education funds to support “choice initiatives,” without providing further details.
“It is the policy of my Administration to support parents in choosing and directing the upbringing and education of their children,” the president said in the order. “Too many children do not thrive in their assigned, government-run K-12 school.”
His second directive aims to stop schools from using federal funds for curriculum, teacher certification and other purposes related to “gender ideology or discriminatory equity ideology.”
“In recent years, however, parents have witnessed schools indoctrinate their children in radical, anti-American ideologies while deliberately blocking parental oversight,” it reads.
Trump and his allies throughout the campaign have accused public schools of teaching white children to be ashamed of themselves and their ancestors due to the country’s history of slavery and discrimination against people of color.
The second order, without evidence, claims that teachers have been “demanding acquiescence” to concepts of “white privilege” or “unconscious bias” and thereby promoting racism and undermining national unity.
The executive order will have a “chilling effect” on subjects related to race and ethnicity in schools, said Basil Smikle Jr., a political strategist.
“I would imagine that it would restrict the kind of reading materials that are even available to students outside of the classroom,” he said.
Although that order does not invoke the term “critical race theory” by name, it employs the language often used by CRT opponents to criticize teaching about institutional racism.
A once-obscure academic concept, the theory has become a fixture in the fierce US debate over how to teach children about the country’s history and structural racism. An academic framework most often taught in law schools but not in primary and secondary schools, it rests on the premise that racial bias — intentional or not — is baked into US laws and institutions.
Conservatives have invoked the term to denounce curricula they consider too liberal or excessively focused on America’s history of racial discrimination. Supporters say understanding institutional racism is necessary to address inequality.
Christina Greer, an associate professor of political science at Fordham University, said the order came as no surprise.
“As a candidate, he said there was radical indoctrination of students,” she said. “He’s making sure to frighten students and educators across the country so they can’t teach the real history of the United States.”
It was not clear how the order issued on Wednesday would affect how the history of race relations is taught in American schools. During his inaugural address last week, Trump criticized education that “teaches our children to be ashamed of themselves — in many cases, to hate our country.”

SCHOOL CHOICE

The first order also directs the US Department of Education to prioritize federal funding for school choice programs, a longstanding goal for conservatives who say public schools are failing to meet academic standards while pushing liberal ideas.
Many Democrats and teachers’ unions, on the other hand, say school choice undermines the public system that educates 50 million US children.
Federal test scores released by the National Assessment of Educational Progress on Wednesday underscored the challenge faced by educators in the wake of widespread learning loss during the COVID-19 pandemic.
The scores showed that one-third of eighth graders tested below NAEP’s “basic” reading level, the most in the test’s three-decade history, while some 40 percent of fourth-graders also fell below that basic threshold.
That executive order also directs US states on how they could use block grants to support alternatives to public education, such as private and religious schools.
US education is primarily funded via states and local taxes, with federal sources accounting for about 14 percent of the funding of public K-12 schools, according to Census data.
Trump’s order could affect some $30 billion to $40 billion in federal grants, estimated Frederick Hess, an education expert at the right-leaning American Enterprise Institute.
“This stuff is directionally significant,” said Hess, adding that Trump’s directive represented “the most emphatic support for school choice we’ve ever seen at the federal level.”
The first order also calls for allowing military families to use Pentagon funds to send their children to the school of their choosing. It also mandates that Native American families with students in the Bureau of Indian Education be allowed to use federal funds in selecting their schools.
A number of Republican-leaning states have in recent years adopted universal or near-universal school choice policies, paving the way for vouchers or other methods that allocate taxpayer funds for homeschooling or private tuition.
Josh Cowen, a professor of education policy at Michigan State University, said that Trump’s executive order is aimed at sending “an aggressive statement about his position on vouchers” even if his power to reallocate funds is limited.
Cowen said the bigger potential financial impact on education lies with a bill reintroduced in Congress this week that would create a federal school voucher program with an estimated $10 billion in annual tax credits. 


Rohingya refugees stranded on boat off Indonesia

Updated 30 January 2025
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Rohingya refugees stranded on boat off Indonesia

  • Authorities block migrants from disembarking at tourist beach ‘in case they escape’

JAKARTA: At least 75 Rohingya refugees including four children were stranded aboard a migrant boat off the coast of western Indonesia on Wednesday after authorities blocked them from landing at a tourist beach.

Security officers prevented the Rohingya from disembarking at Leuge beach in Aceh province and ordered them to stay aboard the boat. Police were deployed to monitor the beach, while local residents took photos of the boat and provided the refugees with food.
“For now, they are not allowed to disembark, considering today is a public holiday. Many tourist activities are taking place ... there are concerns that they might blend in with the crowd and escape,” local official Rizalihadi said.
“The temporary policy is for them to remain on the boat while waiting for representatives from the UN High Commissioner for Refugees and the International Organization for Migration to arrive.”

The Muslim minority Rohingya are persecuted in Myanmar, and thousands risk their lives each year on long and dangerous sea journeys to Malaysia or Indonesia.


Meta agrees to pay $25 million to settle lawsuit from Trump after Jan. 6 suspension

Updated 30 January 2025
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Meta agrees to pay $25 million to settle lawsuit from Trump after Jan. 6 suspension

WASHINGTON: Meta has agreed to pay $25 million to settle a lawsuit filed by President Donald Trump against the company after it suspended his accounts following the Jan. 6, 2021, attack on the Capitol, according to three people familiar with the matter.
It’s the latest instance of a large corporation settling litigation with the president, who has threatened retribution on his critics and rivals, and comes as Meta and its CEO, Mark Zuckerberg, have joined other large technology companies in trying to ingratiate themselves with the new Trump administration.
The people familiar with the matter spoke on the condition of anonymity Wednesday to discuss the agreement. Two people said that terms of the agreement include $22 million going to the nonprofit that will become Trump’s future presidential library and the balance going to legal fees and other litigants.
Zuckerberg visited Trump in November at his private Florida club as part of a series of technology, business and government officials to make a pilgrimage to Palm Beach to try to mend fences with the incoming president. At the dinner, Trump brought up the litigation and suggested they try to resolve it, kickstarting two months of negotiations between the parties, the people said.
Meta also made a $1 million donation to Trump’s inaugural committee and Zuckerberg was among several billionaires granted prime seating during Trump’s swearing-in last week in the Capitol Rotunda, along with Google’s Sundar Pichai, Amazon’s Jeff Bezos and Elon Musk, who now owns the platform X, formerly known as Twitter.
Ahead of Trump’s inauguration, Meta also announced that it was dropping fact-checking on its platform — a longtime priority of Trump and his allies.
Trump filed the suit months after leaving office, calling the action by the social media companies “illegal, shameful censorship of the American people.”
Twitter, Facebook and Google are all private companies, and users must agree to their terms of service to use their products. Under Section 230 of the 1996 Communications Decency Act, social media platforms are allowed to moderate their services by removing posts that, for instance, are obscene or violate the services’ own standards, so long as they are acting in “good faith.” The law also generally exempts Internet companies from liability for the material that users post.
But Trump and some other politicians have long argued that X, formerly known as Twitter, Facebook and other social media platforms, have abused that protection and should lose their immunity — or at least have it curtailed.
The Meta settlement comes after ABC News agreed last month to pay $15 million toward Trump’s presidential library to settle a defamation lawsuit over anchor George Stephanopoulos’ inaccurate on-air assertion that the president-elect had been found civilly liable for raping writer E. Jean Carroll.
The network also agreed to pay $1 million in legal fees to the law firm of Trump’s attorney, Alejandro Brito.
The settlement agreement describes ABC’s presidential library payment as a “charitable contribution,” with the money earmarked for a non-profit organization that is being established in connection with the yet-to-be-built library.
The Wall Street Journal was first to report on the settlement.