gave me the opportunity to be part of this competition. i didn't know for sure that i was going to be going, and at this event they, they announced that and i was very shocked because i was not aware i'm very excited to be part of the no high space which is fine. will be going against seems like brazil, columbia, bolivia, mexico, very nervous about because i feel like they have soccer in their blood. so, but i think the composition will be a learning experience and very good, comfortable friends to help us. but our game or level our game of i'm very excited for this is laura, i was going to stay longer at least experience one of the games, but i, i'm so that we watching everyone the girls have games

all my teammates are, i think all of us are mexican american or at least have hispanic background? i feel like everyone in the other countries are expecting you know, americans actual like americans, born in america, parents home, erica. but we're going with parents immigrant. parents make them proud and show them what we can do. a this is al serra and these are the top stories. now nato member states are sending more missile defense systems to ukraine. key will also receive drone jammers, or this follows a 2 day meeting of nato defense ministers in brussels. while speaking, after that meeting concluded, us defense secretary though the austin warned against what he called russia's nuclear saber rattling nato poses no threat to russia and seeks

no confrontation with russia. but our defensive alliance will, as it always has protect every inch of middle territory. maidens preeminent task has not changed to defend each and every allied sovereignty enter. authorial integrity in america, remains profoundly committed to but tasks into our nato allies. and to article far international monetary fund has again warned that the risk of a global recession is rising. it says 48 countries have been severely affected by food shortage is due to the fighting in ukraine. more than 500 people have died in nigeria is worst flooding in a decade. the government is conducting operations to rescue thousands of stranded people after floods blocked roads and destroyed villages. a jury in florida has recommended life in prison without parole to the parkland school shooter. nicholas

cruz had pleaded guilty last year to killing 14 students and 3 staff. the us school in 2018. iraq's parliament has finally elected a new president. cynthia, you wrote kurdish politician abdullatif. rashid once served as a minister for water resources of our kind of already made 3 failed attempts this year to elect a new head of state. the u. s. house let committee which investigating last year's capitol hill right, is holding its final public hearings. as are the headlines needs continues here. we don't just hear a softer inside story. ah, the whist is yet to come. that's the warning from the international monetary fund

as it paints a grim picture of the global economy. but what's behind the spiraling crisis, and what should be done to stop it? this is inside story. ah, hello, welcome to the program. i'm tom a crime. the international monetary fund and the world bank holding their annual meetings in washington dc to discuss a number of global issues the war and you crying persistence, supply chain disruptions and a looming recession. a topping the agenda just to name a few. the i am, if says the world economy is hitting for what it calls stormy waters. as the many risk fact as accumulates, a downgraded it's global growth projections for next year, and warned of a harsh world wide recession. if the fight against inflation is mishandled. a

3rd of the global economy expected the contract this year, or next, the 3 largest economies, the united states, china, and the your area will continue to stall. in short, the worst is yet to come. and for many people, 2023 will feel like a recession. well now the question remains, who will pick up the pieces we'll live in on the economic collapse, for example, is accelerating in the absence of a government recovery plan, the international community has made clear the only way out of the crisis through a deal with the i m f, but we'll get to our guests in a moment. but 1st this report from st. honda in beirut, lebanon's economic crisis is heading into his 4th year. the state is nearly bankrupt. it can't buy fuel for electricity

infrastructure. it's falling apart. while institutions struggle to afford basic operating, call that a desperate need for hard currency. the international community made clear any funding will only come from the international monetary fund. that means reforming a dysfunctional system blamed on decades of the management and corruption. but there hasn't been political, will the ruling elite doesn't toronto, and these reforms because it will undermine the structure of their power at has been going on for 30 years now. the country's leaders have refused to open the books at the central bank. they fail to pass laws to investigate all financial crimes and stop billions of dollars being transferred abroad. instead,

the shared interests of the political and financial elite have lead to bank customers, suffering losses and being denied access to their savings. any financial program between the i m, f and lebanon would involve passing structural reforms, and anti corruption measures to improve governance that's likely to hurt the interests of politicians accused of using the states for the interest of themselves and their associates. this was once a middle income country, but the local currency has lost value and its financial losses are estimated to amount to $72000000000.00. that is 4 times the size of the economy. officials say they remain committed to the path laid out by the i m f. but there's still no consensus on a recovery plan. major reforms normally economic and was, can go on with a normal circumstances in lebanon. we need stability on the b one if you could live in all the while. one of the world's worst meltdowns deepens by the day. seneca,

there alger zito, battled me well. it's spring in august now in brussels. we have daniel grosse, director of the center for european policy studies in new delhi, mcnair. decide economist and a member of the u. k. house of lords and, and i, roby, come such a financial advisor and ceo of rich management, or will welcome to will. thank you very much for being on this edition of inside story. daniel, if i can start with you, you used to work at the i. m is how solid over liable are these forecasts mean the american it's always extremely careful. it collects information from all member countries, templates for purpose staff, all the ticket tours. so i think these forecasts are as reliable as you can do them

right now. but if you have all the holes in the publication, there's great uncertainty, little uncertainty above it might be a little bit better, but also lots of uncertainty below so it might get worse. that's all. but one could say at this point, economics, it's not a physical science as always, a lot of uncertainty. the can mignon, do you agree with the i miss grim outlook. the global economy is hitting half a stormy waters. and how bad do you think things could get? yes i, i think i normally agree with the ivr a down grading the growth rate. i think it is going to be much more serious than even the i am a realizes because we're seeing a repetition of what we saw in the 19 seventy's. we have an energy price increase ria. we just received it by inflationary creation of money. and now

we're going to also be in a war situation because of the russia ukraine war. and i think be outreaching a long cycle of strike solution. and there is nothing that the normal sandra banking policy can do to avoid that russian. all that the central bank can do is to cause aggregate demand, but that is not the answer. so we are going to be in a very tough time. so we just have to like, and i'm in the right, one about that. so, so the global economy just has to ride it out. that's what is known as india, the global economy, which is going to smooth l. yeah. ok, eli can the, i me, i am if chief said of all regions africa is in the most precarious position. you know, with a, with a massive food crisis there, what specifically can the, i am, if did it alleviate the problems in africa?

well, i, i think, come, you know, the african situation has been coming at us for quite a while. africa over borrowed during the good times, you know, when we were in that moment, which lasted more than a decade of disneyland economics, when money was cheap, and now we got a situation where the cost of servicing this debt or has risen inexorably high. for example, nigeria, a 102 percent of its revenues now are destined for debt service. clearly an unsustainable position. so i think africa is going to rely very heavily on the likes of the i m f and the world bank. but it's going to take a lot of a money to rebalance the situation. just to go back to what both your earlier speakers was saying, america, you know what we had now is a very strong dollar. it's highly likely the euro goes back to record lowes. it's

highly likely dollar yet goes to something like $160.00, and this is going to put immense pressure on emerging and frontier market economies . and i think therefore, these economies are essentially going to be looking for debt restructuring and debt rescheduling. but because of the nature of this crisis, which is a poly crisis and it's got cascade effects, you know, it's 1st come, 1st served. so in africa, zambia hit you, lemme 1st salad the gate. he's going to resolve the matter, hopefully. but others i think, are going to be really left in the dust here. which countries are you talking about specifically? well, i'm talking specifically about countries like a nigeria. i'm talking about, which just simply, you know, the political class really haven't got a handle on things. but this is the problem we're seeing in many other places around the world. it's not just a phenomena we're seeing in africa. you see the trust in quoting show. i mean,

these people are not competent. and in africa we've got plenty of policy makers who i think are not on top of the situation. so it, zambia is a positive example on egypt, has a lot of support from its international institutions and deep pocketed gulf allies . but you know, if you look at places like ethiopia fighting a civil war, essentially with a $1000000000.00 of reserves is it's broke out. they're continuing the sexy central battle. and there are so many cases like that across the continent. but, you know, you start to, you will show with lebanon, and let me say this, it strikes me that europe is not much different to lebanon. it had leverage from russia, in terms of its gas supplies. $20000000000.00 of gas supported a 2 trillion euro economy in germany. that's more leverage than leman. and i think by december, what we're seeing in lebanon will be replicated in many capitals around europe. i'm

afraid so it's a very, very big problem. i don't think the majority of policy makers have truly understood the scale of the issue. daniel, i see you smiling along there. is that something that you agree with that we're going to see? are, you know, the, what's happened in lebanon happening in and some other, your european countries? it is true that europe must pay a price and a heavy price for an over reliance on russian gas. but i say, so, europe is a little bit better government than lebanon. we have constant squabbles in my home member states, but in the end they usually agree on the common line. and that seems to be the case . also, no european, most many european countries already have saved a lot of gas. the price for consumers has increased and that is good. so because therefore further cost savings will be forthcoming. and therefore i am quite confident that europe will be able to pose through this painter not easily. there

will be problems, but we all know that these are temporary problems. and in the end, europe has also a very strong industrial base. our export us has been able also to increase their price. so there are some offset to the high gas prices. and overall, i think europe will come through it with a recession in between. but in one year from now, i think the recession should be behind us in europe. okay. can we just talk a little bit about, you know, the real people, if i could put it that way the, the people on the street with think, you know, everyone right around the world, paying more for power more for food. more on the mortgage is basically everything is getting more expensive. other be plenty of people watching this, wondering how much worse it's going to give mic. ned, how, when do you think there will be some relief? will it be in a year's time? the thing is that we can take

a short run perspective on this problem, this problem, and i'm going to go away anytime soon. because this, what, what is previous be concerned about, you know, will be slightly better off than middle eastern countries or african country. but everybody is going to be in a city church, only country rich producers of energy and can deliver energy to people who are in demanding position. they are the only ones until the rest of the world is going to so i would assume yours. so that keep on saying, and all that the central banks will do is to make the decision worse. that is what the federal reserve is doing by making the dollars strong. it's going to ruin the situation in us and everyone else. unfortunately, we haven't found a way of finding vision. we got to call this issue. and that is where the problem

lies. and i am, if you the very with your part of that the solution. okay. eli can, you mentioned a little while ago i did. and 60 percent of low income countries are now at high risk or already in debt distressed. that's according to the i'm, if i'm obviously many poor countries are going to face major economic disruption and potentially default on that debt. how big a risk is that? do you think? how likely is it to happen? oh, it's entirely likely to happen. you're looking at, we're looking at the i m f is looking at the following metric. they're looking at debt versus g, d, p. and, and, and looking at that metric, really the number you got to look at is debt service versus revenues. and in so many countries, the debt service number is now higher than the total government revenue number. so it's the so basically these balance sheets are shocked to bits. and, and unless there is enormous debt forgiveness or you know, it's a,

it's an unsustainable situation. the freight train, we can see the lights were in the tunnel and it's coming out of tremendous speed. and there's no way of sight stepping it unless a countries are you know, unless the like the i m f, the big credit is a go through a massive round of debt forgiveness and look at restructuring these balance sheets . little bit like a dead under nicholas brady. and the brady plan when latin america over borrowed all those years ago. your previous speaker was speaking about elegy, i didn't think it's a sanity, it's a, you know, you can't print elegy and food. and those countries that have energy and food, and ironically counter intuitive, let's russia and the us, they are the most, they're the strongest economies in the current scenario. if you can't, if you can't print those things, and this is the european challenge of unfortunately, amongst other countries, challenges. so i don't see cost of living relief coming anytime soon. we have

a mickey mouse monetary policy who has been able to bring in shouldn't down when inflation is 8.2 percent in the us with interest rates below fall. i've never seen that happen. it's not going to work. you've got to get interest rates much higher, and that's the only way you're going to bring inflation down and the cost of living until we have that happen. the cost of low will continue to increase and it puts undue pressure on people at the bottom of the pyramid who experienced much more of that pressure. okay, i'd like to keep talking about policy for a little bit, daniel, the, i'm, if chiefs it politicians have to avoid any policy missteps and have to act urgently . what exactly do you want to see those in power do and how fast do they need to act? so we don't see any more. mickey mouse like him, eli can just mentioned cause it depends

on what 3rd country in the world you're talking about. the united states is notably fitting pretty it has enough oil and gas to keep its own economy afloat. so for its own good interest, just keep inflation down and that will require a strong dollar for a time in europe. but you have to do is to combine 2 things. you have to give people incentives to save on gas and energy in general. that means high prices. but you also have, have to help our poor ones to support themselves and to be able to pay those prices . and that, for example, being done right now in germany where people get a certain base amount of energy for free. and for the rest of the market have to pay the market price so that they are have actually incentive to, to save pretty cars, of course, very different story. but again, africa, one of my task now do years, a country which is a big exporter of energy, of petro,

of crude oil, and the crude oil prices currently very high. why is nigeria not doing very well right now? so these are really various serious internal governance problems that people have beforehand. and i think these are the most urgent bonds that have to be addressed in africa course along with fiscal policy. but one without the other. we're not work. okay, obviously the war in ukraine is exacerbating all of these issues. the i'm if laid out a whole lot of challenges, but basically inflation is the top priority l account. do you think it can be timed inflation? that is, while the war and ukraine is still going on, do you think the war has to wind before inflation? can be put under control? i think, particularly for europe where, you know, german inflation, for example, has hit a 40 year high until that situation resolves itself. and the supply

of not only gas oil, the europeans now want to sanction russian oil or put a price gap on it. it is a boomerang effect, it defeats be how the european policy bakers pursue this sanction policy, which is a boomerang and hitting their economy $34.00 times as hard as it's hitting the intended for the, the, the intended adversary. so look until that relaxes inflation. what relaxed in europe, in particular and, and globally as well. but what, what we really have the biggest problem here in i traded short term interest rates . i've never seen a lag between interest or between policy rates and inflation rates that we currently have. the germans, for example, a had a bank called the bund us bank. i mean interest rates in germany at this point in time. if the button to spank we're in control would be at 12 percent. and essentially it would break the back of the inflationary problem. but we don't live

in those times. we live in a time of still fine to see economics about where people still think they can print or all kinds of commodities, which they can't. daniel, is there any country that we can look to now that's doing a good job that we can go. that's the way to handle this crisis. yes, you might look, for example, at the nordic countries which have been very careful with their energy supplies. they have insulated their homes, actually are doing quite well under the circumstances, switzerland, another country vitreous noticed and noted for its tired fiscal and monetary policies. but even at switzerland you have seen price increases. so one thing is you cannot avoid all the price increases. and the other thing is, if you have a strong domestic governance, then you can actually minimize the effect. but let me add one thing. it is not necessary for the ukrainian war to finish,

for inflation to come down in europe. it is sufficient that energy prices just stabilize at the very high level of which they are right now. and then inflation on its own will come down because there will be no further increases in energy prices . and that would be enough for europe or to see inflation coming down to accept the levels in one or 2 years. so europe can pull through even if the war continues for a long time. ok, ellie can't do you think that term the poor are going to be unduly hit through this crisis that they are, the ones that are going to be, were started, inequality is, is just gonna grow even further from here. so that's been one of the trends that we've seen over the last 12 to 18 months, significant increases inequality, more people being put into poverty. and i'm afraid that trend is amplifying as, as the global economy softens. and of course, you know, if you take somewhere like africa the, the average individual is spending up to 40 percent of their income on food. and

therefore increases in food prices. have a much more severe effect on, on, on the, on the income and spending power of those people. so, you know, i don't want to be a terrible pessimist, but i'm really concerned and i think that's why this whole. busy social safety net idea really has to be rolled out for the most needy people across the globe. and i think, you know, this is the moment when you really have to put those sorts of programs and safety nets into place. daniel is theora, is there a silver lining here? as we talked about, the train coming towards us in the tunnel with the lights on is the really light at the end of the tunnel. i think the current try energy markets are actually reassuring. the gas price has almost half call was the last 2 months. the oil price is coming slightly, don't all, xo hope back has decided to reduce its production. so i think we might, yeah,

that actually in the winter where oil prices moderate, even though the war continues, and that will take off some pressure on inflation. that might also allow the federal reserve to a little bit soft, not, and therefore to the dollar to return to more manageable level for many emerging markets. so that is the good scenario. okay, well, that least something just before we go, i'd like to ask you both this question. we'll start with you can do you think that the i am, if it's still relevant in this day and age for the process, the sludge? absolutely, i think it's more relevant than ever. i mean, the question then becomes, where is it going to be? is it being effective in the need for an organization i that i'm at this moment in time is math. if everybody needs the i m f as far as i can see. but the question

is, are they had, they got sufficient resources to apply at this time at this moment in time? and are they applying those resources effectively? but definitely, you know, the institution is required as, as the world bank, this is the very time that these institutions are needed. the moment we find ourselves in. okay, daniel, the same question to you will, i guess, does the i'm, if have the sufficient resources to deal with us. do you think that's true of the i m f didn't exist today, you would have to invent it? and i think it has a thought as enough resources, because the countries which need financing are typically poor countries who is financial and deeds are not that large compared to the resources of the industrialized countries and therefore of the i m s. and therefore, i think it's not a question of resources. it's a question of what the i m f can do at this point. if in these countries,

the governments stay as corrupt as they have been in the past because that is what brought these countries to the point at which they are right now. okay, we'll have to leave it there. thank you both so very much. that is daniel growth in brussels for us. and eli come thought you in earlier, we spoke to make them decide. thank you very much for being on the program and thank you for watching. you can see the program again anytime by visiting our website, l g, a dot com and for further discussion, go to our facebook page. that's facebook dot com, forward slash i j inside story. you can also join the conversation on twitter. handle is at ha, inside story from me told mccrae and the entire team here and so. bye for now. i ah.

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