1 IMF okays $17bn Ukraine bailout (BBC) The International Monetary Fund has approved a $17.1bn bailout for Ukraine to help the country’s beleaguered economy. The loan comes amid heightened military and political tension between Ukraine and neighbouring Russia. The loan is dependent on strict economic reforms, including raising taxes and energy prices. The money will be released over two years, with the first instalment of $3.2bn available immediately.
The head of the IMF, Christine Lagarde, said the IMF would check regularly to ensure the Ukrainian government followed through on its commitments. In March Ukraine put up gas prices by 50% in an effort to secure the bailout. The government has also agreed to freeze the minimum wage. The IMF loan will also unlock further funds worth $15bn from other donors, including the World Bank, EU, Canada and Japan.
In December last year, Ukraine agreed a $15bn bailout from Russia, but this was cancelled after protests forced out pro-Russian President Viktor Yanukovych. On Wednesday, the IMF warned that Russia was “experiencing recession” because of damage caused by the Ukraine crisis. The fund said $100bn would leave Russia this year, partly caused by US and EU sanctions. The sanctions were imposed after Russia annexed the Crimea region from Ukraine last month.
2 In UK, 1.4m on zero-hour contracts (Phillip Inman & Angela Monaghan in The Guardian) The number of workers on zero-hour contracts has almost tripled to 1.4 million since last year’s estimate, according to official data that piled pressure on Vince Cable, the business secretary, to provide more safeguards for workers with no guaranteed minimum hours or pay.
More than one in 10 employers are using such contracts, which are most likely to be offered to women, young people and people over 65. The survey showed half of all workers in the tourism, catering and food sector have no guarantees of work. Retail and the care industry are also big users of zero-hours deals. Labour called on Cable to adopt its plans to clamp down on abuses of casual employment contracts, blamed for creating job insecurity and pushing down wages.
The ONS update shows a huge increase since last autumn, when it estimated that 583,000 people had zero-hours contracts. A report by the National Institute of Economic & Social Research added to the government’s discomfort by showing that Britain’s youngest workers have suffered an unprecedented fall in real wages since 2008. For those under 25, pay was down more than 14% and at levels last seen 16 years ago, in 1998. For workers aged 25-29, real weekly wages, adjusted for inflation, were down 12% at 1999 levels, according to the thinktank.
The ONS said 1.4 million people worked at least a few hours on zero-hours contracts in a two-week period in January, while a further 1.3 million contracts were discovered where employees were not given any hours.
3 India is third largest economy (Issac John in Khaleej Times) India has displaced Japan to become the world’s third biggest economy in terms of purchasing power parity (PPP), as two GCC countries were ranked among the richest in terms of per capita gross domestic product, according to the latest World Bank report. The 2011 round of the bank’s International Comparison Programme (ICP) ranked India after the US and China. The last survey in 2005 had placed the country on 10th place.
According to the report released in Washington, the size of Indian economy in terms of purchasing power parity grew to $5.75 trillion in 2011 surpassing Japan, which had $4.37 trillion economy. In the latest ranking, India’s economy was 37.1 per cent of the US economy compared with 18.9 per cent in 2005.
Qatar, Macao, Luxembourg, Kuwait and Brunei were richest countries, or those with the highest gross domestic product (GDP) per capita on a PPP basis, which is used to compare economies and incomes of people by adjusting for differences in prices in different countries to make a meaningful comparison. The US remained the world’s largest economy (in 2011), but it was closely followed by China, once data was adjusted for comparison on a standard basis, the World Bank said.
GDP by the US in 2011 amounted to $15.533 trillion, over twice of China’s $7.321 trillion. But after a PPP-method adjustment, the figure for China rose to $13.495 trillion, breathing down the neck of the US which has dominated the world economy for over a century. A recent World Bank report said Indian growth would be the strongest among major developing economies between 2013 and 2016.
Eight countries, including Malawi, Mozambique and Liberia, had GDP per capita of less than $1,000. Almost half the world’s $90.6 trillion in total economic output in 2011 came from low- and middle-income countries, the World Bank said.