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AID

Swedish think-tank launches ethical aid tool

A Swedish think-tank has launched a new web portal enabling aid-workers and peacekeepers to check that the firms they contract do not also engage in illegal activities.

The Stockholm International Peace Research Institute (SIPRI) said its new information web portal, www.ethicalcargo.org, would “prevent arms and drug traffickers from accessing significant humanitarian aid and peacekeeping funds.”

In an earlier report, SIPRI showed that “more than 90 percent of the air cargo carriers identified in arms trafficking-related reports had also been used for humanitarian aid and peace-keeping operations between 2004 and 2009.”

“In some cases, air cargo companies have delivered both aid and weapons to the same conflict zones,” the think-tank said in a statement.

SIPRI said ethicalcargo.org was “dedicated to transforming the way air cargo and maritime companies behave in conflict zones and fragile states.”

The portal, funded by Sweden’s governmental aid agency SIDA and the country’s foreign ministry, includes a database, model codes of conduct and best practices for negotiations with transport suppliers.

It also uses an alerts system to highlight other dangers posed by transport companies, such as frequent crashes.

For example, Bluebird Aviation, a company that according to its website counts United Nations Development Programme (UNDP) and US government aid agency USAID as clients, has crashed four times in less than six years.

On two of the occasions, its planes were carrying the narcotic khat to Somalia, SIPRI said.

And when supplies were sent to Indonesia for emergency relief after a tsunami devastated the region in late 2004, some of the air cargo companies and individuals contracted by the United Nations and aid groups were involved in illicit arms transfers to Africa, according to SIPRI.

The think-tank said its new web portal did “not recommend banning companies,” but that it hoped to promote awareness and transform company behaviour.

If contracting agencies raise their standards in choosing providers for transport of aid, “the significant sums of money available for such contracts will encourage companies to adopt effective ethical transportation policies in order to increase their market share,” SIPRI’s Hugh Griffiths said.

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FINANCE

‘We’ll be struggling well into next year’: German borrowing to soar amid pandemic

Germany on Friday passed a 2021 budget that once again smashes its "debt brake" rule, promising to shield businesses and workers from the economic hit of the pandemic as cases continue to rise.

'We'll be struggling well into next year': German borrowing to soar amid pandemic
The seating area of a restaurant closed off in Boltenhagen on the Baltic Sea coast. Photo: DPA

Chancellor Angela Merkel's government plans to borrow €300 billion ($364 billion) across 2020 and 2021 combined after the government pledged more than a trillion euros in aid, including through short-time work schemes (Kurzarbeit) and business support.

“The budget is the basis for everyone to be confident that we can provide the necessary economic and social support to get us through this crisis together,” Finance Minister Olaf Scholz told lawmakers.

The budget for 2021, which passed with 361 votes in favour to 258 against, provides for a total of €179.8 billion in new loans and nearly €500 billion in public spending.

It means for both 2020 and 2021, Germany will abandon its cherished “debt brake”, a constitutionally enshrined rule that forbids the government from borrowing more than 0.35 percent of gross domestic product (GDP), before planning to return to no new debt in 2022.

Restrictions to curb the second wave of Covid-19 – including shutting the food-and-drink, leisure and cultural sectors – continue to burden the economy, which previously pushed Berlin to amplify its aid to businesses.

Yet case rates continue to climb. On Friday, Germany reported a record nearly 30,000 new infections and almost 600 deaths in a 24-hour period.

Now, Merkel is facing calls to tighten restrictions again.

READ ALSO: Germany mulls three-week lockdown from December 20th

Aid can't be 'endless'

Despite the “ray of hope” of a vaccine rollout, Scholz said, “we know that… we're going to be struggling well into next year with the health, economic and social challenges that are going to follow from this pandemic.”

Businesses hit by the current closures are entitled to claim aid amounting to up to 75 percent of their revenues for November and December 2019, expected to cost the government some 30 billion euros.

However Economy Minister Peter Altmaier said last week that support for pandemic-hit firms implemented through November and December could not go on “endlessly”.

Nevertheless Altmaier on Friday said he aimed to increase the ceiling for aid from January in the case of a harder lockdown.

Germany's debt-to-GDP ratio will climb to 70 percent this year, Germany's central bank said in a report published Friday.

But public finances will likely improve as coronavirus measures come to an end, it said.

The government expects the economy to shrink by 5.5 percent this year, before rebounding by 4.4 percent next year.
 

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