З початку року загальна кількість платіжних карток в Україні зросла до понад 78 млн штук
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Ще в понеділок і вівторок минулого тижня, 8 і 9 листопада, торги завершувалися на рівні 26 гривень 7,5–9,5 копійки за долар, а станом на 12:45 19 листопада котирування сягнули 26 гривень 58–60 копійок за долар
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«Укренерго» констатувало, що з 01:00 години 18 листопада (за київським часом) імпорт електроенергії з Білорусі припинився
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Торги на українському міжбанківському валютному ринку відбуваються на рівні 26 гривень 45–47 копійок за долар
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In its annual report on the status of global trade, the World Trade Organization finds that the increasing interconnectedness of the world’s economies is a double-edged sword. 

While this globalization makes individual countries more vulnerable to short-term shocks, the WTO says, it also allows them to recover far more quickly than they would have in the past. 

The report finds, among other things, that global trade in merchandise, after plummeting sharply in the early months of the coronavirus pandemic, has already rebounded to above pre-pandemic levels. By the middle of 2022, trade volumes will have caught up with the pre-pandemic trend, meaning that the amount of goods being bought and sold internationally will be at the same level that economists would have predicted if there had been no pandemic at all. 

In a foreword to the report, WTO Director-General Dr. Ngozi Okonjo-Iweala said the global response to the COVID-19 pandemic is an example of both the challenges and the benefits of increased globalization. 

“The deep interconnections of travel, trade and financial flows that characterize our era allowed the novel coronavirus and its associated economic shocks to spread around the world in a matter of weeks. Earlier pandemics took months, even years, to go global,” she wrote.

“Yet, globalization was also at the heart of why this virus was met with vaccines in record time. Scientists were able to share ideas and technology across borders, backed by public and private funding for research and development,” she wrote. “As the new vaccines proved to be safe and effective, supply chains cutting across hundreds of sites in a dozen or more countries came together to provide the specialized inputs and capital goods needed for vaccine production on a large scale — all within a year.” 

Shortages in the US 

Scott Lincicome, a senior fellow in economic studies at the Cato Institute and a frequent writer on trade issues, told VOA that the WTO’s analysis holds up to scrutiny. 

“We’ve seen this play out during the pandemic,” Lincicome said. “Companies that were more domestically oriented really didn’t end up better off than more globally diversified companies.” 

In the United States, he said, some of the most significant shortages and price increases involved goods the United States largely produces on its own, like pickup trucks and food. 

“Pickup trucks were in higher shortage last year than sedans, and we import more sedans,” he said. “If you look at food production this year, most of our food production is domestic. But some of the biggest shortages and price hikes we’re seeing are on food.” 

Interconnectedness tied to stability 

The report also found that the more diversified a country’s trading relationships were with the rest of the world, the less likely they were to experience significant economic volatility. 

Drawing on data collected by the International Monetary Fund, the authors established that countries with high levels of trade diversification in 2008 were likely to suffer far less volatility, measured as deviation from average annual Gross Domestic Product, over the 10-year period ending in 2018. 

“Trade allows a country to diversify its sources of demand and supply, thereby reducing the country’s exposure to country-specific demand and supply shocks,” the report finds. “For example, when a country has multiple trading partners, a domestic recession or a recession in any one of its trading partners translates into a smaller demand shock for its producers than when trade is more limited.” 

‘Reshoring’ production may not be helpful 

The report also warns against the temptation of “reshoring,” that is, the effort some countries are making to become self-sufficient in key industries.

Especially in the early months of the pandemic, there were calls in many countries, including the United States, to reduce reliance on foreign suppliers for critical medical equipment, personal protective gear and vaccine components. 

In another example, former President Donald Trump placed tariffs on foreign-made steel in an effort to force the return of steel production to the United States, saying it was necessary for national security to be self-sufficient in the production of the metal.

Trump’s effort was ultimately unsuccessful, and if the report is correct, that may be reason for U.S. companies that use steel to be grateful. 

“Restricting trade and promoting national self-sufficiency almost inevitably render national economies less efficient in the long run, as such policies ultimately drive up prices of goods and services and restrict access to products, components and technologies,” the report warns. 

Lincicome said the ultimate goal of the WTO in dissuading countries from reshoring production is to maintain healthy economic ties across borders.

“The WTO is responding to a pretty significant threat from certain policymakers, whose knee-jerk response to the pandemic is to employ more protectionism,” he said. “In terms of economics, that’s a bad idea. But also, I think in terms of geopolitics, the more that countries turn inward, the more likelihood there is for there to be some sort of future tensions.” 

 
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Marco Metzler of Switzerland gets 2,000 new followers a day on LinkedIn, all watching to see what will happen to his money. Metzler invested $50,000 last month in the offshore bonds of real estate developer China Evergrande Group to see if he would get any returns. The former Fitch Ratings analyst is not expecting much. He’s out to prove a point about China’s troubled property sector by chronicling the fate of his investment on social media. 

“I was concerned about what was going on, and from my past I’m able to read rating reports and also to see what’s going on in the world in economics, and I felt obligated to speak out to the world and to warn about that situation,” Metzler told VOA. “We didn’t invest to get the money back, so I’m fully aware this will be lost.” 

Evergrande has struggled since last year, when the Chinese government began clamping down on the country’s property sector to rein in excessive debt and cap speculation.

Towering apartment blocks today extend far into the suburbs of major Chinese cities, but many flats are unoccupied, owned instead by absentee speculators and their banks. Evergrande Group, one of China’s biggest property developers by revenue, is now selling assets and may be staring down a massive restructuring to ease debt. 

Companies or governments that invest in offshore bonds, and individuals who trade stocks listed outside mainland China and its $15.42 trillion economy, are coming to terms — albeit more quietly than Metzler — with the Chinese property crisis of 2021. These troubles are threatening bond returns, lowering some stock prices and could erode at least a quarter of the world’s second largest economy. 

“I don’t think anyone debates the importance of the real estate market on the Chinese economy,” said James Macdonald, head of the property services firm Savills Research in Shanghai, who estimates real estate at 25% to 30% of China’s economy. 

“If we do see a significant slowdown in the real estate market, it will have an impact in terms of domestic economic growth rates, and that could have a knock-on effect in terms of global economy,” Macdonald said. 

As many analysts have noted, any major economic shocks that hit China, a country closely tied to the global manufacturing supply chain, and whose massive consumer base importers and exporters rely on, are inevitably felt around the world. 

Property crisis: Evergrande and beyond 

Evergrande is a bellwether firm that is more than $300 billion in debt. Hong Kong-listed shares in Evergrande have tumbled since February, though the developer averted default in October by paying interest on an overseas bond. 

Another Chinese development giant, Kaisa Group Holdings, faces limited funding access and uncertainty over refinancing a “significant amount” of U.S.-dollar bond payments into next year “in light of ongoing capital-market volatility,” Fitch said in an e-mailed news release last month. 

Smaller property developers are likely to rattle bond markets outside China because they are “less sound” than bigger ones, said Lillian Li, a vice president-senior credit officer at the Moody’s ratings service. 

“We see that the offshore bond market has actually shown larger volatility than the domestic market in front of these regulatory crackdowns, including in the property sector,” Li said. 

The Hang Seng Properties Index in Hong Kong, where foreigners are allowed to trade shares of Chinese companies, has lost about 1.2% year to date. 

Municipal officials in some cities capped home purchase prices in September to deter speculators, further hobbling property momentum in China. The domestic property market could shrink by half a percent in 2022, Li said. Last month, prices for new as well as resale homes fell amid a fall in construction starts. 

What happens next 

Evergrande has offered its investors cash payment by installments as well as putting forth actual structures as repayment assets, the state-run China Daily news website says. 

Central government officials hope to contain property speculation and leave property for people to occupy, the official Xinhua News Agency reports. 

About $52 billion in Chinese property bonds will mature next year and $44 billion the following year, said Henry Chin, Asia Pacific research head with the real estate services firm CBRE. Other bond issuers will default, he forecasts. 

No offshore investors want the bonds now, said Liang Kuo-yuan, president of the Taipei-based Yuanta-Polaris Research Institute, though he believes Taiwanese insurers and pension funds have invested in the past. 

“Taiwan’s insurers more or less will buy high-yield and high-risk investment products, because the interest rates on policies they’ve sold in the past are too high,” Liang said. 

Evergrande was once seen as the epitome of a Chinese property mainland market, Liang added. China’s real estate sector, the world’s largest, grew briskly from 2010 to 2018, says investment bank J.P. Morgan. 

But not all is lost, some analysts say. 

Investors in private equity for distressed debt could get a lift from China’s property spillover if companies look for new ways to repay debt, said Chin of CBRE. Some stock-buying vehicles have made money, too. Shares of the TAO-Invesco China Real Estate exchange-traded fund of Chinese stocks including Evergrande, for example, has grown 65% year to date. 

But back in Switzerland, Metzler wrote on LinkedIn that Evergrande had “officially defaulted on overdue interest payments” and that his current company, DMSA, would file a bankruptcy case against the group. He calls China’s property market “a first domino” in a broader financial and economic crisis. 

“The old system needs to come down before a new system will be established,” he told VOA. 
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María Ribeiro da Silva, 64, spent a hot afternoon hawking a new contraption to acquaintances and friends who passed by her small grocery store on the outskirts of São Paulo, Brazil’s largest city and home to more than 12 million people.

Everyone who passed by received the same invitation from her: “Come, come and see my stove. It’s beautiful. I made it.”

Each guest received the same explanation: “I built a real wood fire oven, with a chimney and everything. No more smoke, no more heat.”

It had been almost 50 years since Ribeiro da Silva cooked with firewood. Since she arrived in São Paulo in 1974, fleeing drought, hunger and poverty in the impoverished northeast region of Brazil, she has only cooked with gas.

“I spent my childhood using firewood. We didn’t have gas. We didn’t have the money to have a real stove. But since I arrived in Sao Paulo … wood was in the past,” she told VOA. 

But with the Brazilian economy worsening, and the devastating effects of the COVID-19 pandemic on the poorest parts of the population, firewood has become the only option for millions of families like Ribeiro da Silvas’. 

It was a slow and gradual process for Ribeiro da Silva. First, firewood was only used in extreme cases when the gas ran out and there was not enough money to replace it. But when she lost her job as a cleaner at a company in downtown São Paulo six months ago, firewood became the primary fuel to cook food.

“Now, I only use the gas stove for simple things like making coffee or heating the food I cooked on firewood. I don’t have any more money to buy gas. The price is too high. It’s impossible,” she said. 

Skyrocketing fuel prices

According to data from the Brazilian Institute of Geography and Statistics, at least 25% of the Brazilian population is using wood as their primary cooking source.

This was before the onset of the COVID-19 pandemic.

“Due to the pandemic, the Brazilian Statistical Institute stopped carrying out quarterly in-person surveys, so we don’t have data for 2020 and 2021,” said Adriana Gioda, a professor in the department of chemistry at Pontifical Catholic University of Rio de Janeiro and a leading researcher on firewood consumption by Brazilian families. 

“But since 2016, when the federal government cut subsidies for residential gas and tied the fuel price policy to the international prices, there has been a steady growth in the use of firewood to make food,” she told VOA. 

Fuel prices have been rising steadily over the past five years but have skyrocketed since President Jair Bolsonaro took office in 2019. He promised not to interfere with the country’s state oil company and allow fuel prices to follow the international market.

This year alone, the price of residential gas rose by an average of 35%. Liquefied petroleum gas is the primary fuel for food production in Brazil, and its cost is linked directly to the price of the oil barrels.

‘Back in time’ 

“In the interior of Brazil, in rural and more isolated areas, using firewood is a tradition. But what impressed us most is that the use of wood is advancing precisely in the most urban areas, in large Brazilian cities, such as Rio de Janeiro and São Paulo,” Gioda said. 

And it is rising in areas such as Jardim Marajoara, a poor neighborhood of migrants from the northeast region of Brazil on Sao Paulo’s outskirts, where Ribeiro da Silva lives. It is in these regions that the poorest and those most affected by the economic crisis are concentrated.

Juarez Viana, a bus driver who also lost his job during the pandemic, has turned to firewood to cook. He, like Ribeiro da Silva, lives in a suburb of São Paulo that is sprawling into the last green areas of the city. Once a week, he crosses the street and enters a small forest to fetch wood.

“It’s hard work, and it seems like I’ve gone back in time,” said Viana, who is also a migrant from the Brazilian northeast. At 49, he remembers cooking with wood as a child. “But it’s worth it. We do not have more money to buy gas. The price is out of control. I’ve never seen anything like this.”

“We are going back in time, going back at least half a century,” said pulmonologist Elie Fiss, a research director at Hospital Alemão Oswaldo Cruz. “Since the 1960s, we no longer saw respiratory problems related to the use of firewood for cooking. But with so many people going back to the firewood, this is a problem that will soon return to hospitals.”

 
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