1 ‘Global system under enormous stress’ (Nils Pratley & Jill Treanor in The Guardian) The bad news is that another economic crisis could strike within two years. The good – or better – news is that such a shock is not nailed on. It’s a 50% chance. But the developed world is approaching a T-junction. One road leads to higher growth and a more inclusive form of capitalism while the other turns towards recession, instability and turmoil.
The speaker is Mohamed el-Erian, one of the biggest names in financial markets, who advised President Obama. Born in New York to Egyptian parents, he spent 14 years at Pimco, the world’s biggest bond fund manager. Six of those years were as chief executive before he quit.
This is the nub of El-Erian’s analysis of why the developed world is approaching a fork in the road. The inequality generated by the current low-growth climate has three elements: inequality of wealth, income and opportunity. The last of the three – manifested in high youth unemployment in many eurozone countries, for example – is the most explosive element.
2 Another cyber-attack ‘could be imminent’ (BBC) Another major cyber-attack could be imminent after Friday’s global hit that infected more than 125,000 computer systems, security experts have warned. UK security researcher ‘MalwareTech’, who helped to limit the ransomware attack, predicted “another one coming… quite likely on Monday”.
The virus, which took control of users’ files, spread to 100 countries, including Spain, France and Russia. In England, 48 NHS trusts fell victim, as did 13 NHS bodies in Scotland. Some hospitals were forced to cancel procedures and appointments, as ambulances were directed to neighbouring hospitals free from the computer virus.
MalwareTech, who wants to remain anonymous, was hailed as an “accidental hero” after registering a domain name to track the spread of the virus, which actually ended up halting it. The 22-year-old saaid: “It’s very important that people patch their systems now.
Investigators are working to track down those responsible for the ransomware used on Friday, known as Wanna Decryptor or WannaCry. The virus exploits a vulnerability in Microsoft Windows software, first identified by the US National Security Agency, experts have said.
3 China pledges $124 bn for Belt & Road (Straits Times) Chinese President Xi Jinping has pledged $124 billion for his ambitious new Silk Road plan to forge a path of peace, inclusiveness and free trade, and called for the abandonment of old models based on rivalry and diplomatic power games.
China has touted what it formally calls the Belt and Road initiative as a new way to boost global development since Xi unveiled the plan in 2013, aiming to expand links between Asia, Africa, Europe and beyond underpinned by billions of dollars in infrastructure investment.
The initiative spans some 65 countries representing 60 per cent of the world population and around a third of global gross domestic product. The China Development Bank has earmarked $890 billion for some 900 projects. Belt and Road is seen as a practical solution to relieve China’s industrial overcapacity. But it could also serve Beijing’s geopolitical ambitions.