Sri Lanka's financial crisis is intensifying as country grapples with fast depleting foreign currency reserves but Sri Lankan capital bank asserts that country is not on the verge of a debt free fault. Central bank assures that it has taken necessary measures to secure alternative foreign exchange inflows.

Sri Lanka Central Bank: Not on verge of sovereign default

Amid the ongoing financial crisis in Pakistan, the cash-strapped nation has raised a $1 billion loan through the Sukuk bond at a record 7.95% interest rate to keep forex reserves afloat.

Pakistan raises $1 billion loan through the Islamic bond at a record 7.95% interest rate

Former Lebanese Prime Minister Saad Hariri said that he was suspending his role in political life. Announcing that he would not run in the upcoming parliamentary elections this comes as a shock for the West Asia nation that is dealing with its worst financial collapse in decades.

Former Lebanese Prime Minister Saad Hariri suspends political career

Lebanon's financial collapse since 2019 is a story of how a vision for rebuilding a nation once known that Switzerland of middle east was derailed by mismanagement. Lebanon is grappling with a deep economic crisis after successive governments they piled up debt following 1975 to 1990's civil war with little to show for their spending binge.

Lebanon's middle class squeezed by economic crisis

Sri Lanka is battling a financial crisis. What is the way forward for the debt ridden island-nation? Former Sri Lankan PM Ranil Wickremesinghe in an exclusive interview with WION.

Straight Talk: Former Sri Lankan PM Ranil Wickremesinghe on island nation's financial crisis

Chinese foreign minister Wang Yi was in Sri Lanka over the weekend to mark 65 years of diplomatic ties between the two nations and during his two-day visit Colombo sought to reschedule its huge Chinese debt burden.

Chinese FM Wang Yi wraps up Sri Lanka visit, likely to reschedule island nation's debt burden

Sri Lanka continues to plunge deeper into financial crisis as inflation rises to record level. Country's former Prime Minister Ranil Wickremesinghe speaks to WION about the worsening crisis.

Ruling govt's decision to reduce VAT escalated crisis, says Ranil Wickremesinghe

Chinese foreign minister Wang Yi was in Sri Lanka over the weekend to mark 65 years of diplomatic ties between the two nations and during his two-day visit Colombo sought to reschedule its huge Chinese debt burden. Now, Wang Yi came at a time when the South Asian nation is crippling under an acute financial crisis with inflation at its highest level in decades.

Chinese foreign minister Wang Yi visits Sri Lanka amid latter's worsening financial crisis

Sri Lanka may be on a brink of bankruptcy as the island country faces an acute financial crisis topped by a blow to a food supply. As 2022 begins, Sri Lanka is looking to face record-high inflation, financial crisis, exorbitant food prices, humanitarian crisis, and pandemic-induced disruptions. The Sri Lankan government had decided to temporarily ban the use of chemical fertilizers in May 2021. The ban led to protest by farmers ultimately leading to a drastic drop in cultivation in Sri Lanka. Moreover, long queues were seen outside shops for bare necessities lie milk, sugar, and rice. Also, several shops in the markets were shut. Opposition MP Harsha de Silva told Sri Lankan parliament that the country would go bankrupt.

Sri Lanka may go bankrupt in 2022? From financial to food crisis Sri Lanka’s woes amid Covid

Global debt surged to a record USD226 trillion last year. This is the largest one-year surge since World War II. Can this trigger the next financial crisis? Palki Sharma tells you about the risks.

Gravitas: This giant tsunami of debt could trigger the next financial crisis

China's second-largest property developer by sales, Evergrande, slides into more financial trouble as it racks over $300 Billion worth of debt. Fitch, a major credit rating agency declares the firm a defaulter.

China's real estate firm Evergrande racks up debt of over $300 Billion

Pakistan Prime Minister Imran Khan said that the rising foreign debts coupled with low tax recovery had become a "national security" issue because the government did not have enough money to run the nation.

Pakistan PM Imran Khan says rising foreign debt a 'national security' issue

'Pakistan is running out of money. The sustainability of our country is at stake, there's no money to run the nation,' says PM Imran Khan. Inflation is battering the economy, it has surged by almost 9.2% in October from 2020, prices of everyday goods are on the rise.

'Pakistan is running out of money,' says PM Imran Khan

The crisis at Evergrande rattled the global markets and triggered a series of defaults within China's real estate sector. But, the hidden debt of local governments poses a much bigger threat to the Chinese economy. Palki Sharma tells you more about China's $8 trillion debt time bomb.

Gravitas: A $8 trillion debt time bomb that China hid

Recent developments—such as the pandemic’s impact, the US withdrawal from Afghanistan, its nuclear submarine deal with Australia and the release of Huawei’s CFO Meng Wanzhou—once again raise the question of whether the US remains the world’s sole superpower with its hegemony unchallenged. As is the won't in matters concerning the United States, analysts are divided on the subject, as they have been since the global financial crisis of 2008. &nbsp;

Soon after the collapse of the Soviet Union, in 1990, prominent voices in the West hailed the end of the Cold War as a ‘unipolar moment’ on the premise that the centre of world power is the unchallenged superpower, i.e. the United States. Few disagreed with the triumphalist declaration, at least until the international financial downturn, which saw the West’s developed economies in a funk. Developing economies like India and China bucked the trend and moved ahead, while the US and the West were struggling to recover from the collapse. The emerging economies did far better than the world’s economic powerhouse.&nbsp;

Not long after its failure to provide financial leadership to the world’s beleaguered economies at a time of great difficulty, in the second decade of the millennium, the US began looking to cut its losses elsewhere. Notable among these is Afghanistan, where the US had been stuck since 2001 with its troops as well as that of its allies for over a decade. Convinced of the futility of persisting with its military occupation of a country that had in the past seen off other imperialist invaders, the US began exploring ways to retreat without loss of face. Accordingly, it began talks with leading elements of the Taliban. Beginning with covert and shadowy engagements, the process involved Taliban leaders being released and some of them re-settled in Qatar for negotiations. Eventually, in the latter part of President Donald Trump’s term, Washington realised and accepted that it had no choice but to pull out of Afghanistan. &nbsp;&nbsp;

Long before the last act of this great game gone awry, the COVID-19 epidemic showed up the US to be as bad as any ‘third world’ country when it came to dealing with an international public health emergency. It lacked the health infrastructure, the conviction, the courage, the medical and human resources, the power of policy and the force of authority to act in the interests of the public good. When it did act, the US was confused, predatory in the acquisition of the equipment and supplies required, wilfully negligent of the needs of other nations and utterly bereft of any mark of leadership. Only because of its military power, evident in hundreds of bases worldwide, could the US commandeer whatever it needed to cope with the pandemic.&nbsp;

Even as the pandemic raged and time was running out for its troops in Afghanistan, the Capitol riots or “insurrection” that preceded the US presidency’s ugly and violent transition bared the rot in the underbelly of the much-vaunted democracy that was once declared to be the world’s only “indispensable country”. The shocking spectacle of the assault on the pillars of this once great but now declining democracy exploded the post-War myth that has long been fostered through pulp fiction, Hollywood films and institutional propaganda of the US being the planet’s greatest power, one that could save the earth even from an alien invasion.&nbsp;

Far from shining bright as a mighty star in the firmament, on the ground, in the war against Afghanistan, for all its immense resources, massive technological superiority and military might, the US, along with its allies, had to bite the dust in one of the world’s poorest countries. In the 20 years since September 11, 2001, the US spent more than $2 trillion on a war that further bled Afghanistan and impoverished its 40 million people. At the end of it, in August 2021, the US forces virtually fled the scene under cover of darkness after executing a scorched-earth policy.&nbsp;

The US had failed in its mission to eliminate the Taliban, crush terrorism and create conditions for peace, stability and reconciliation. The US let down the people of Afghanistan, its neighbours and the region as a whole including India—which had contributed immensely to that country’s all-round development. Structures and processes, besides institutions and people, bear testimony to India’s massive developmental effort in Afghanistan estimated at more than US$ 3 billion in the last 20 years.&nbsp;

US forces fleeing the ‘Heart of Asia’ revived memories of American troops abandoning Saigon in the 1970s with not a thought for those who believed US militarist supremacy to be invincible at all times in all places. Even before Washington could recover from the blow this ignominious exit had dealt to US prestige and influence, came the nuclear submarine deal with Australia—which torpedoed an existing agreement between Australia and France. The US-UK pact for nuclear submarines to Australia at the expense of France has not gone down well with America’s allies; and, a disillusioned European Union is now set to chart its own course in global affairs. &nbsp;

This has consequences for NATO especially as EU foreign, defence and security policies would no longer be dovetailed to US interests across the globe. The EU, and not just France, no longer trusts Washington or its leadership in world affairs including in dealing with China and Russia. The US, and its defence industry, must be in a very bad way if it needs to snatch away deals from its own close military allies—at least that seems to be the perception gaining ground in many capitals. Such a perception reinforces the view that the US is growing weaker and not stronger on the world stage.&nbsp;

Close on the heels of these successive blows to American power and prestige and the “betrayal” of France by leaders of the “democracy bloc”, comes news of China prevailing against the US, and Canada in getting Huawei’s Chief Financial Officer Meng freed from “persecution”. &nbsp;

At one level, this shows China gaining as a power pole, rising to challenge the US as the centre of world power; hastening to end the latter’s unipolar moment; reviving the balance-of-power politics; and, with that, pushing the world back to a state of multipolarity.&nbsp;

At another level, when Meng, a “dictatorship’s daughter”, fares better than Julian Assange, a “democracy bloc’s crusader for freedom” in a world where the US-led democracies are the pre-eminent power, there is much rethinking to be done especially by countries like India. It says a lot about the democracy bloc that Assange, and not Meng, is the (greater) victim of “hostage diplomacy”. &nbsp;

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)

Recent developments—such as the pandemic’s impact, the US withdrawal from Afghanistan, its nuclear submarine deal with Australia and the release of Huawei’s CFO Meng Wanzhou—once again raise the question of whether the US remains the world’s sole superpower with its hegemony unchallenged.

Recent developments—such as the pandemic’s impact, the US withdrawal from Afghanistan, its nuclear submarine deal with Australia and the release of Huawei’s CFO Meng Wanzhou—once again raise the question of whether the US remains the world’s sole superpower with its hegemony unchallenged. As is the won't in matters concerning the United States, analysts are divided on the subject, as they have been since the global financial crisis of 2008. Soon after the collapse of the Soviet Union, in 1990, prominent voices in the West hailed the end of the Cold War as a ‘unipolar moment’ on the premise that the centre of world power is the unchallenged superpower, i.e. the United States. Few disagreed with the triumphalist declaration, at least until the international financial downturn, which saw the West’s developed economies in a funk. Developing economies like India and China bucked the trend and moved ahead, while the US and the West were struggling to recover from the collapse. The emerging economies did far better than the world’s economic powerhouse. Not long after its failure to provide financial leadership to the world’s beleaguered economies at a time of great difficulty, in the second decade of the millennium, the US began looking to cut its losses elsewhere. Notable among these is Afghanistan, where the US had been stuck since 2001 with its troops as well as that of its allies for over a decade. Convinced of the futility of persisting with its military occupation of a country that had in the past seen off other imperialist invaders, the US began exploring ways to retreat without loss of face. Accordingly, it began talks with leading elements of the Taliban. Beginning with covert and shadowy engagements, the process involved Taliban leaders being released and some of them re-settled in Qatar for negotiations. Eventually, in the latter part of President Donald Trump’s term, Washington realised and accepted that it had no choice but to pull out of Afghanistan. Long before the last act of this great game gone awry, the COVID-19 epidemic showed up the US to be as bad as any ‘third world’ country when it came to dealing with an international public health emergency. It lacked the health infrastructure, the conviction, the courage, the medical and human resources, the power of policy and the force of authority to act in the interests of the public good. When it did act, the US was confused, predatory in the acquisition of the equipment and supplies required, wilfully negligent of the needs of other nations and utterly bereft of any mark of leadership. Only because of its military power, evident in hundreds of bases worldwide, could the US commandeer whatever it needed to cope with the pandemic. Even as the pandemic raged and time was running out for its troops in Afghanistan, the Capitol riots or “insurrection” that preceded the US presidency’s ugly and violent transition bared the rot in the underbelly of the much-vaunted democracy that was once declared to be the world’s only “indispensable country”. The shocking spectacle of the assault on the pillars of this once great but now declining democracy exploded the post-War myth that has long been fostered through pulp fiction, Hollywood films and institutional propaganda of the US being the planet’s greatest power, one that could save the earth even from an alien invasion. Far from shining bright as a mighty star in the firmament, on the ground, in the war against Afghanistan, for all its immense resources, massive technological superiority and military might, the US, along with its allies, had to bite the dust in one of the world’s poorest countries. In the 20 years since September 11, 2001, the US spent more than $2 trillion on a war that further bled Afghanistan and impoverished its 40 million people. At the end of it, in August 2021, the US forces virtually fled the scene under cover of darkness after executing a scorched-earth policy. The US had failed in its mission to eliminate the Taliban, crush terrorism and create conditions for peace, stability and reconciliation. The US let down the people of Afghanistan, its neighbours and the region as a whole including India—which had contributed immensely to that country’s all-round development. Structures and processes, besides institutions and people, bear testimony to India’s massive developmental effort in Afghanistan estimated at more than US$ 3 billion in the last 20 years. US forces fleeing the ‘Heart of Asia’ revived memories of American troops abandoning Saigon in the 1970s with not a thought for those who believed US militarist supremacy to be invincible at all times in all places. Even before Washington could recover from the blow this ignominious exit had dealt to US prestige and influence, came the nuclear submarine deal with Australia—which torpedoed an existing agreement between Australia and France. The US-UK pact for nuclear submarines to Australia at the expense of France has not gone down well with America’s allies; and, a disillusioned European Union is now set to chart its own course in global affairs. This has consequences for NATO especially as EU foreign, defence and security policies would no longer be dovetailed to US interests across the globe. The EU, and not just France, no longer trusts Washington or its leadership in world affairs including in dealing with China and Russia. The US, and its defence industry, must be in a very bad way if it needs to snatch away deals from its own close military allies—at least that seems to be the perception gaining ground in many capitals. Such a perception reinforces the view that the US is growing weaker and not stronger on the world stage. Close on the heels of these successive blows to American power and prestige and the “betrayal” of France by leaders of the “democracy bloc”, comes news of China prevailing against the US, and Canada in getting Huawei’s Chief Financial Officer Meng freed from “persecution”. At one level, this shows China gaining as a power pole, rising to challenge the US as the centre of world power; hastening to end the latter’s unipolar moment; reviving the balance-of-power politics; and, with that, pushing the world back to a state of multipolarity. At another level, when Meng, a “dictatorship’s daughter”, fares better than Julian Assange, a “democracy bloc’s crusader for freedom” in a world where the US-led democracies are the pre-eminent power, there is much rethinking to be done especially by countries like India. It says a lot about the democracy bloc that Assange, and not Meng, is the (greater) victim of “hostage diplomacy”. (Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)

Opinion | On the Margin: Is US past its unipolar moment?

China's Evergrande is missing its debt payments. At least 70,000 retail investors have suffered losses. Molly Gambhir tells you how the crisis at Evergrande has popped China's real estate bubble.

Gravitas: China's $300 billion debt bomb: Evergrande is missing payments

Are world leaders ignoring an impending global financial crisis? China's Evergrande crisis has rattled global markets. While Treasury Secretary Janet Yellen has warned the US could default on its debt obligations. Palki Sharma tells you more.

Gravitas US Edition: Are world leaders ignoring an impending financial pandemic?

It can be the biggest test of China’s financial system and on the checks and balances that are applied in world’s economic powerhouse. The Evergrande crisis is snowballing into a contagion that can roil the global economic recovery.&nbsp;

Beginning of the crisis

The crisis started with China’s crackdown on real estate firms last year, putting a cap on the debt they can hold. Evergrande acted swiftly to bring down the $305 billion worth of debt, which was too much for the firm with a market cap of $50 billion, by selling off properties. This led to a further problem in the market, where the firm couldn’t find buyers even for its discounted properties. And despite that fire sale, the Evergrande hasn’t been able to generate enough cash to make interest payments on its high debts, giving rise to fears of default—much of which is coming due this Thursday.&nbsp;

Debt bomb

Evergrande has around $305 billion worth of liabilities, the largest by a property developer in the world. It’s a giant in Chinese dollar bond market as it accounts for about 16 per cent of outstanding notes. The moment of truth will come this Thursday for the company that contributes to around 2 per cent of China's GDP. Interest worth $83.5 million on a five-year dollar bond are due and failure to pay within 30 days may constitute a default.&nbsp;

China's Lehman crisis in the making?

The Evergrande liquidity crisis has been in months in the making, and its shares have plunged by 85 per cent since the beginning of the year. However, it is still too early to call the Evergrande crisis a repeat of the Lehman crisis of 2008, when the sub-prime mortgage crisis that started in US led to a global economic slowdown. Some analysts say that while the crisis is big, it is small compared to what happened in 2008. Also, the Chinese economy is big and, while Evergrande’s liabilities could be 2% of China's GDP, its contribution is relatively less for many other global economies and that the debt is not widely held by other countries or companies.

It can be the biggest test of China’s financial system and on the checks and balances that are applied in world’s economic powerhouse. The Evergrande crisis is snowballing into a contagion that can roil the global economic recovery.

It can be the biggest test of China’s financial system and on the checks and balances that are applied in world’s economic powerhouse. The Evergrande crisis is snowballing into a contagion that can roil the global economic recovery. Beginning of the crisis The crisis started with China’s crackdown on real estate firms last year, putting a cap on the debt they can hold. Evergrande acted swiftly to bring down the $305 billion worth of debt, which was too much for the firm with a market cap of $50 billion, by selling off properties. This led to a further problem in the market, where the firm couldn’t find buyers even for its discounted properties. And despite that fire sale, the Evergrande hasn’t been able to generate enough cash to make interest payments on its high debts, giving rise to fears of default—much of which is coming due this Thursday. Debt bomb Evergrande has around $305 billion worth of liabilities, the largest by a property developer in the world. It’s a giant in Chinese dollar bond market as it accounts for about 16 per cent of outstanding notes. The moment of truth will come this Thursday for the company that contributes to around 2 per cent of China's GDP. Interest worth $83.5 million on a five-year dollar bond are due and failure to pay within 30 days may constitute a default. China's Lehman crisis in the making? The Evergrande liquidity crisis has been in months in the making, and its shares have plunged by 85 per cent since the beginning of the year. However, it is still too early to call the Evergrande crisis a repeat of the Lehman crisis of 2008, when the sub-prime mortgage crisis that started in US led to a global economic slowdown. Some analysts say that while the crisis is big, it is small compared to what happened in 2008. Also, the Chinese economy is big and, while Evergrande’s liabilities could be 2% of China's GDP, its contribution is relatively less for many other global economies and that the debt is not widely held by other countries or companies.

China's Evergrande crisis: A global financial crisis in the making

Evergrande is China's biggest real estate player. It is on the brink of bankruptcy. Evergrande is short on cash and has liabilities worth over $300 billion. Will China export a financial crisis, after a pandemic? Palki Sharma tells you why the world needs to worry.

Gravitas:Is a global financial crisis brewing in China?

Gravitas: Is a global financial crisis brewing in China?

Sri Lanka's former finance minister is set to lead the Sri Lanka central bank. This comes after the former governor resigned due to the deepening financial crisis in Sri Lanka.

Sri Lanka's former finance minister set to lead the Sri Lanka central bank

FC Barcelona can reverse their poor financial situation within a year and a half, president Joan Laporta told a news conference on Monday, after saying the club ended last year 451 million euros ($531 million) in the red. 
 
"I reckon that in a couple of years the club will be healthy," he told reporters, adding that the team have many potential sponsorship deals open to them. 
 
With their finances in dire straits after years of wage inflation and expensive transfers, the club could not afford to renew its contract with star striker Lionel Messi, leading to his shock departure to Paris St Germain last week. [nL1N2PH0LE] 
 
Still, Laporta said he was optimistic for the future, stressing that the club had many options open to it, including some 17 investors interested in Barca Studios, which groups together the club`s audiovisual businesses and serves as a hub for events. 
 
"We have a lot of proposals and this is obviously encouraging, our morale is very high," he said. 
 
Barca`s previous management had contracted investment bank Goldman Sachs to seek potential investors for the club`s commercial arm but none of the proposals were satisfactory, Laporta said. 
 
The club`s debts total 1.35 billion euros, 673 million of which are owed to banks, Laporta said. 
 
Last week Reuters reported that Goldman had agreed to lend 1 billion euros to private equity firm CVC`s planned multibillion euro investment in Spain`s top soccer league, LaLiga, a deal which Barcelona opted out. 
 
Along with rivals Real Madrid and Athletic Bilbao, Barca voted against the proposal at a general assembly last Thursday. 
 
Laporta had previously slammed the deal as "mortgaging the club`s television rights for the next 50 years", even though the cash injection could have allowed Messi to stay at the Camp Nou.

FC Barcelona can reverse their poor financial situation within a year and a half, president Joan Laporta told a news conference on Monday, after saying the club ended last year 451 million euros ($531 million) in the red.

FC Barcelona can reverse their poor financial situation within a year and a half, president Joan Laporta told a news conference on Monday, after saying the club ended last year 451 million euros ($531 million) in the red. "I reckon that in a couple of years the club will be healthy," he told reporters, adding that the team have many potential sponsorship deals open to them. With their finances in dire straits after years of wage inflation and expensive transfers, the club could not afford to renew its contract with star striker Lionel Messi, leading to his shock departure to Paris St Germain last week. [nL1N2PH0LE] Still, Laporta said he was optimistic for the future, stressing that the club had many options open to it, including some 17 investors interested in Barca Studios, which groups together the club`s audiovisual businesses and serves as a hub for events. "We have a lot of proposals and this is obviously encouraging, our morale is very high," he said. Barca`s previous management had contracted investment bank Goldman Sachs to seek potential investors for the club`s commercial arm but none of the proposals were satisfactory, Laporta said. The club`s debts total 1.35 billion euros, 673 million of which are owed to banks, Laporta said. Last week Reuters reported that Goldman had agreed to lend 1 billion euros to private equity firm CVC`s planned multibillion euro investment in Spain`s top soccer league, LaLiga, a deal which Barcelona opted out. Along with rivals Real Madrid and Athletic Bilbao, Barca voted against the proposal at a general assembly last Thursday. Laporta had previously slammed the deal as "mortgaging the club`s television rights for the next 50 years", even though the cash injection could have allowed Messi to stay at the Camp Nou.

Football - Barcelona can escape financial hole in 18 months, says Laporta

The impact of the deadly <a href="https://www.wionews.com/topics/coronavirus">coronavirus</a> on the ‘world of work’ is four times worse than the 2008 economic crisis that brought years of recession, the United Nations (UN) has claimed.

This pandemic had a "devastating" and "cataclysmic"&nbsp;effect that has led to a lot of tiredness and frustration, the UN’s International Labour Organization (ILO) said on Monday.

Also read |&nbsp;<a href="https://www.wionews.com/world/work-from-home-employees-are-quitting-instead-of-returning-to-the-office-389202">Work from home: Employees are quitting instead of returning to the office</a>

"Taken as a whole, this represents a world of work crisis four times as severe as the one triggered by the financial crisis of 2008 and 2009," ILO director-general Guy Ryder said.

In its first-ever virtual International Labour Conference (ILC), the focus this year was fostering “human-centered” recovery from the deadly coronavirus which has taken millions of lives around the world and has negatively affected everyone’s lifestyle.

<a href="https://www.wionews.com/videos/8-tips-to-make-work-from-home-easy-and-productive-292277">WATCH |</a>

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/8-tips-to-make-work-from-home-easy-and-productive-292277/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

"The working experience of this pandemic for some has been of inconvenience, tedium, stress, and frustration. For others it has been about fear, poverty, and survival," Ryder said.

As per the report, the pandemic has taken several jobs and has also majorly deteriorated the number of quality jobs. It has also pushed more than 100 million people into poverty.

Another major issue that has come up in this pandemic is the increased working hour. As companies shifted to work from home, employees were asked to put in extra hours, leading to increased fatigue, frustration, and decreased job satisfaction and good mental health.

Experts believe the unemployment rate can affect nearly 205 million people in 2022, which is much higher than the number of 187 million in 2019.

The impact of the deadly coronavirus on the ‘world of work’ is four times worse than the 2008 economic crisis that brought years of recession, the United Nations (UN) has claimed.

The impact of the deadly coronavirus on the ‘world of work’ is four times worse than the 2008 economic crisis that brought years of recession, the United Nations (UN) has claimed. This pandemic had a "devastating" and "cataclysmic" effect that has led to a lot of tiredness and frustration, the UN’s International Labour Organization (ILO) said on Monday. Also read | Work from home: Employees are quitting instead of returning to the office "Taken as a whole, this represents a world of work crisis four times as severe as the one triggered by the financial crisis of 2008 and 2009," ILO director-general Guy Ryder said. In its first-ever virtual International Labour Conference (ILC), the focus this year was fostering “human-centered” recovery from the deadly coronavirus which has taken millions of lives around the world and has negatively affected everyone’s lifestyle. WATCH | "The working experience of this pandemic for some has been of inconvenience, tedium, stress, and frustration. For others it has been about fear, poverty, and survival," Ryder said. As per the report, the pandemic has taken several jobs and has also majorly deteriorated the number of quality jobs. It has also pushed more than 100 million people into poverty. Another major issue that has come up in this pandemic is the increased working hour. As companies shifted to work from home, employees were asked to put in extra hours, leading to increased fatigue, frustration, and decreased job satisfaction and good mental health. Experts believe the unemployment rate can affect nearly 205 million people in 2022, which is much higher than the number of 187 million in 2019.

Impact of coronavirus four times worse than 2008 financial crisis: UN

Barcelona's annual financial report has revealed that the Spanish giant have a mammoth debt due to the coronavirus pandemic and some big-money transfers in recent seasons.

ALSO READ:&nbsp;<a href="https://www.wionews.com/sports/watch-zlatan-ibrahimovic-romelu-lukaku-involved-in-heated-war-of-words-during-milan-derby-359696" hreflang="en">Watch: Zlatan Ibrahimovic, Romelu Lukaku involved in heated war of words during Milan Derby</a>

According to the Barcelona's financial reports released on Wednesday, the club revealed debt reaching $1.5 billion, along with the short-term debt of roughly $886 million. As per the release, Barcelona's biggest area of spending is its wage bill, an area of spending that represents 74 per cent of the club's income.

The release also revealed that club owes around $153 million to other clubs for the transfer deals that took place in recent years. The Catalan giants owe $35 million to Liverpool for the signing of Philippe Coutinho, $19million to Ajax for Frenkie de Jong and nearly $12 million to Bordeaux for Malcolm, with each requiring payments by June 30. The club also owes money to Gremio and Bayern Munich for the purchases of Arthur and Arturo Vidal, who are no more a part of the club.

Club's revenue from match tickets has been null since fans have not been allowed in the stadium due to coronavirus pandemic for almost a year now. The club was set to earn $68 million in the ongoing season with the return of the fans but the surge in cases has put the plan on hold, keeping the stadium empty.&nbsp;

The only way the club can survive the current crisis is by letting their star forward Lionel Messi go. Messi's wages have been taking the club's financial situation from bad to worse, and if the Argentine decides to stay in the club, he will have to undergo a cut in salary.&nbsp;

Barcelona's annual financial report has revealed that the Spanish giant have a mammoth debt due to the coronavirus pandemic and some big-money transfers in recent seasons.

Barcelona's annual financial report has revealed that the Spanish giant have a mammoth debt due to the coronavirus pandemic and some big-money transfers in recent seasons. ALSO READ: Watch: Zlatan Ibrahimovic, Romelu Lukaku involved in heated war of words during Milan Derby According to the Barcelona's financial reports released on Wednesday, the club revealed debt reaching $1.5 billion, along with the short-term debt of roughly $886 million. As per the release, Barcelona's biggest area of spending is its wage bill, an area of spending that represents 74 per cent of the club's income. The release also revealed that club owes around $153 million to other clubs for the transfer deals that took place in recent years. The Catalan giants owe $35 million to Liverpool for the signing of Philippe Coutinho, $19million to Ajax for Frenkie de Jong and nearly $12 million to Bordeaux for Malcolm, with each requiring payments by June 30. The club also owes money to Gremio and Bayern Munich for the purchases of Arthur and Arturo Vidal, who are no more a part of the club. Club's revenue from match tickets has been null since fans have not been allowed in the stadium due to coronavirus pandemic for almost a year now. The club was set to earn $68 million in the ongoing season with the return of the fans but the surge in cases has put the plan on hold, keeping the stadium empty. The only way the club can survive the current crisis is by letting their star forward Lionel Messi go. Messi's wages have been taking the club's financial situation from bad to worse, and if the Argentine decides to stay in the club, he will have to undergo a cut in salary.

Barcelona gets hit by major financial turmoil as club's debt nears $1.5 billion

Singapore's prime minister warned on Saturday that the negative economic effects of the coronavirus outbreak will likely be deeper and more prolonged than the 2008 financial crisis.

"The economic hit will likely be more serious than the global financial crisis, and longer-lasting too, even beyond the end of the pandemic," Lee Hsien Loong said in a Facebook post. He said the pandemic will likely last at least this year, and possibly longer.

With 200 infections, the Asian travel hub has signalled that there is a chance of a recession this year and has cut its growth forecasts.

Also read: <a href="https://www.wionews.com/world/world-markets-plunge-deepens-as-coronavirus-panic-worsens-286011">World markets plunge deepens as coronavirus panic worsens</a>

Lee's comments came a day after Singapore revised its electoral boundaries, in a move usually seen as a precursor to calling a vote.

Singapore must hold elections by early 2021. Before the virus hit the Asian city-state late in January, the government had been expected to call a vote within a few months.

Lee said the government could hope that the situation will stabilise before the end of its term so that it can hold elections "under more normal circumstances".

Also see: <a href="https://www.wionews.com/business-economy/tanker-rates-surge-as-traders-hunt-for-ships-to-store-cheap-oil-285462">Tanker rates surge as traders hunt for ships to store cheap oil</a>

"Or else call elections early, knowing that we are going into a hurricane, to elect a new government with a fresh mandate and a full term ahead of it, which can work with Singaporeans on the critical tasks at hand," he added.

If the elections have to be held before the outbreak is over, he said the government would take necessary precautions for parties to campaign and people to vote.

Singapore's prime minister warned on Saturday that the negative economic effects of the coronavirus outbreak will likely be deeper and more prolonged than the 2008 financial crisis.

Singapore's prime minister warned on Saturday that the negative economic effects of the coronavirus outbreak will likely be deeper and more prolonged than the 2008 financial crisis. "The economic hit will likely be more serious than the global financial crisis, and longer-lasting too, even beyond the end of the pandemic," Lee Hsien Loong said in a Facebook post. He said the pandemic will likely last at least this year, and possibly longer. With 200 infections, the Asian travel hub has signalled that there is a chance of a recession this year and has cut its growth forecasts. Also read: World markets plunge deepens as coronavirus panic worsens Lee's comments came a day after Singapore revised its electoral boundaries, in a move usually seen as a precursor to calling a vote. Singapore must hold elections by early 2021. Before the virus hit the Asian city-state late in January, the government had been expected to call a vote within a few months. Lee said the government could hope that the situation will stabilise before the end of its term so that it can hold elections "under more normal circumstances". Also see: Tanker rates surge as traders hunt for ships to store cheap oil "Or else call elections early, knowing that we are going into a hurricane, to elect a new government with a fresh mandate and a full term ahead of it, which can work with Singaporeans on the critical tasks at hand," he added. If the elections have to be held before the outbreak is over, he said the government would take necessary precautions for parties to campaign and people to vote.

Singapore PM: Virus hit to economy likely worse than 2008 crisis

Libya to face a 'Catastrophic' financial crisis this year because of a blockade of oil terminals and oil fields by Libyan General Khalifa Haftar.

Libya to face 'Catastrophic' financial crisis this year

<a href="https://www.wionews.com/world/in-lebanon-protestors-ditch-rioting-and-turn-revolution-into-rave-257684">Lebanese protesters</a> hurled rocks and metal barricades at security forces blocking a road near parliament on Monday ahead of a budget debate as Lebanon grapples with a deep financial crisis.

Some protesters have rejected a new cabinet formed last week and accuse the political elite of ignoring demands that include an independent government and fighting corruption.

<img alt="Lebanese protesters" data-entity-type="file" data-entity-uuid="01a44b24-51a8-4c48-aa02-cbc36fb6bd16" src="//cdn.wionews.com/sites/default/files/inline-images/Untitled%20design%20%2812%29_7.jpg" />

MPs are expected to vote on a budget that was first drafted by the Saad al-Hariri-led government that quit in October, prompted by the protests.

Parliament's finance and budget committee have introduced changes since then. Its chairman, Ibrahim Kanaan, told Reuters on Friday the latest projection was for a budget with a deficit of 7 per cent, instead of the originally hoped-for 0.6 per cent&nbsp;reflecting the crisis.

Lebanese protesters hurled rocks and metal barricades at security forces blocking a road near parliament on Monday ahead of a budget debate as Lebanon grapples with a deep financial crisis.

Lebanese protesters hurled rocks and metal barricades at security forces blocking a road near parliament on Monday ahead of a budget debate as Lebanon grapples with a deep financial crisis. Some protesters have rejected a new cabinet formed last week and accuse the political elite of ignoring demands that include an independent government and fighting corruption. MPs are expected to vote on a budget that was first drafted by the Saad al-Hariri-led government that quit in October, prompted by the protests. Parliament's finance and budget committee have introduced changes since then. Its chairman, Ibrahim Kanaan, told Reuters on Friday the latest projection was for a budget with a deficit of 7 per cent, instead of the originally hoped-for 0.6 per cent reflecting the crisis.

Lebanese protesters throw rocks at police near parliament

Finally, Jet Airways chief Naresh Goyal quits

Pakistan has come out of the financial crisis with the help of friendly countries and the economy has been set on the right path, the governor of the cash-strapped country's central bank has claimed.&nbsp;

Governor of the State Bank of Pakistan Tariq Bajwa's remarks coincided with the announcement by Saudi Arabia that it would invest 420 billion in Pakistan under various projects.

Bawja told an audience at a private university in Lahore on Monday that uncertainty in the economy had ended, while the government was on the right path and it was capable of meeting all economic challenges, Dawn reported.

The governor spoke about the current account deficit, which had hit the economy badly during the current financial year.

The current account deficit was the real cause of concern for the new government headed by Prime Minister Imran Khan. Khan visited friendly countries like China, Saudi Arabia, the UAE, Malaysia and Turkey to seek investment and managed to get financial help to bridge the external deficit.

Bajwa said a plan had been prepared to eliminate the current account deficit. He said the deficit was the biggest hurdle for the country and the government was still negotiating with the International Monetary Fund for a package to minimise it.

Pakistan has come out of the financial crisis with the help of friendly countries and the economy has been set on the right path, the governor of the cash-strapped country's central bank has claimed.

Pakistan has come out of the financial crisis with the help of friendly countries and the economy has been set on the right path, the governor of the cash-strapped country's central bank has claimed. Governor of the State Bank of Pakistan Tariq Bajwa's remarks coincided with the announcement by Saudi Arabia that it would invest 420 billion in Pakistan under various projects. Bawja told an audience at a private university in Lahore on Monday that uncertainty in the economy had ended, while the government was on the right path and it was capable of meeting all economic challenges, Dawn reported. The governor spoke about the current account deficit, which had hit the economy badly during the current financial year. The current account deficit was the real cause of concern for the new government headed by Prime Minister Imran Khan. Khan visited friendly countries like China, Saudi Arabia, the UAE, Malaysia and Turkey to seek investment and managed to get financial help to bridge the external deficit. Bajwa said a plan had been prepared to eliminate the current account deficit. He said the deficit was the biggest hurdle for the country and the government was still negotiating with the International Monetary Fund for a package to minimise it.

Pakistan is out of financial crisis, claims central bank governor 

The IMF will conduct a proper debt sustainability analysis of <a href="http://www.wionews.com/opinions/where-is-debt-ridden-pakistan-heading-175637">Pakistan</a> before granting it any loan, a senior official has said, amid concerns that Islamabad is seeking a multibillion-dollar bailout package from the <a href="http://www.wionews.com/south-asia/pakistan-ready-to-share-details-of-cpec-debts-with-imf-for-bailout-package-finance-minister-umar-171414">global financial body</a> to pay back Chinese creditors.

Cash-strapped Pakistan is seeking US $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy.

A recent meeting between the IMF and Pakistan ended in a stalemate.&nbsp;

"Clearly debt transparency is essential to conduct a proper analysis of the sustainability of a country's debt. That's what the IMF does when we are going into a programme with our member countries. So that will be the case in Pakistan," IMF Director Communications Gerry Rice told reporters at a news conference here on Thursday.&nbsp;

China is making huge infrastructure investments as part of its Belt and Road Initiative (BRI). The BRI's flagship project is the US $60 billion <a href="http://www.wionews.com/south-asia/no-imf-money-to-pakistan-to-repay-chinese-debt-us-183669">China-Pakistan Economic Corridor (CPEC)</a> that is planned to run from northwest China's Xinjiang province to Gwadar port in Pakistan's Balochistan province.&nbsp; 
There are concerns that given Pakistan's growing Chinese debt, the same could happen to the Gwadar port and other major CPEC-linked projects in Pakistan.

But China has rejected criticism that the CPEC projects have saddled Pakistan with expensive debt.&nbsp;

Following Pakistan's request for financial support, IMF team visited Islamabad in November for talks.&nbsp;

"The discussions are active. They continue to work reaching an understanding on the policy priorities and reforms to stabilise the economy, lay the foundations for sustainable and inclusive growth," he said.&nbsp;

Rice was responding to questions on a US statement that it q making all efforts to ensure that any IMF loan to Pakistan is not used to repay its Chinese debt.&nbsp;

"One of the things that we do in every programme is to have a very detailed debt sustainability analysis to ensure that indeed the country's debt profile is sustainable. So kind of information and that level of detail will be available at such times as we reach conclusions on discussions and go forward with the programme,"&nbsp;he said.

Rice said debt sustainability in a country's debt profile is one of the priority issues that the IMF looks at in the context of a programme discussion with a member.&nbsp;

"So that definitely will be the case in the case of Pakistan. This level of detail and granularity will become public actually at the time of the programme agreement," he said.&nbsp;

The IMF will conduct a proper debt sustainability analysis of Pakistan before granting it any loan, a senior official has said, amid concerns that Islamabad is seeking a multibillion-dollar bailout package from the global financial body to pay back Chinese creditors.

The IMF will conduct a proper debt sustainability analysis of Pakistan before granting it any loan, a senior official has said, amid concerns that Islamabad is seeking a multibillion-dollar bailout package from the global financial body to pay back Chinese creditors. Cash-strapped Pakistan is seeking US $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. A recent meeting between the IMF and Pakistan ended in a stalemate. "Clearly debt transparency is essential to conduct a proper analysis of the sustainability of a country's debt. That's what the IMF does when we are going into a programme with our member countries. So that will be the case in Pakistan," IMF Director Communications Gerry Rice told reporters at a news conference here on Thursday. China is making huge infrastructure investments as part of its Belt and Road Initiative (BRI). The BRI's flagship project is the US $60 billion China-Pakistan Economic Corridor (CPEC) that is planned to run from northwest China's Xinjiang province to Gwadar port in Pakistan's Balochistan province. There are concerns that given Pakistan's growing Chinese debt, the same could happen to the Gwadar port and other major CPEC-linked projects in Pakistan. But China has rejected criticism that the CPEC projects have saddled Pakistan with expensive debt. Following Pakistan's request for financial support, IMF team visited Islamabad in November for talks. "The discussions are active. They continue to work reaching an understanding on the policy priorities and reforms to stabilise the economy, lay the foundations for sustainable and inclusive growth," he said. Rice was responding to questions on a US statement that it q making all efforts to ensure that any IMF loan to Pakistan is not used to repay its Chinese debt. "One of the things that we do in every programme is to have a very detailed debt sustainability analysis to ensure that indeed the country's debt profile is sustainable. So kind of information and that level of detail will be available at such times as we reach conclusions on discussions and go forward with the programme," he said. Rice said debt sustainability in a country's debt profile is one of the priority issues that the IMF looks at in the context of a programme discussion with a member. "So that definitely will be the case in the case of Pakistan. This level of detail and granularity will become public actually at the time of the programme agreement," he said.

IMF to check Pakistan's debt sustainability before loan: Official

By&nbsp;Iosif Kovras 
 
It has been ten years since the global recession hit – and the perfect opportunity to rethink and reassess the crisis with the benefit of time. Much of the focus so far has been on economic or policy failures, with the question of accountability left out of the discussion. In stark contrast to the grassroots calls for punishing those responsible, political leaders were not overly concerned with accountability, leaving bankers off the hook. 
 
This was a mistake. To give only one example, in the US and the UK, this post-crisis impunity – along with other political factors – have had deleterious effects on democratic politics, setting the stage for demagogues to emerge and ride a tide of popular discontent.

Our comparative research, carried out with Kieran McEvoy Neophytos Loizides, reveals that Iceland stands out from the rest. Iceland, a tiny European nation of 330,000 inhabitants, offers valuable lessons on the importance of accountability and suggests how to deal with such issues if or when the world suffers another financial crisis.

Days after the collapse of 97 per cent of its banking industry, Icelandic authorities designed a comprehensive policy of accountability, based on two overlapping objectives: establishing the truth and punishing those responsible. An independent truth commission was mandated to document the causes of the meltdown, and the newly established Office of the Special Prosecutor was tasked to thoroughly investigate and prosecute those responsible for any crimes committed in the run-up to the crisis. Both mechanisms have been remarkably successful.

Published in 2010, the truth commission’s 2,200-page report not only documented the manifold failings of the financial system in Iceland but also offered specific recommendations to protect state institutions from a future crisis. The report instantly became a bestseller, with copies sold in supermarkets. It was a popular gift – parents even gave it to their children to help them avoid making the same mistakes.

The Office of the Special Prosecutor successfully prosecuted 40 bank executives. This is remarkable, especially given the small population of the island and the comparative experience of other European countries affected by the recession, such as Ireland, Cyprus, or the UK (table below).

Populism is based on a simplistic view that divides society between the “real people” and the “corrupt elites”. In the aftermath of a financial crisis, bank executives were often – and still are – seen as the “greedy elites”, responsible for their people’s suffering; that explains why the public finds it so hard to forgive them. By not properly investigating the causes of the crisis as has happened in Iceland, skilful demagogues elsewhere have been able to frame political elites and the judiciary as part of a corrupt establishment.

Below are four key things that Iceland did in the wake of the global recession, that others countries can learn from.

1. Establish resources for special investigations 
​​​​​​​ 
As we show in our ongoing research with Stefano Pagliari, even though the judiciary is independent, politicians can take steps to boost the effectiveness of prosecutors. Excessive or reckless risk-taking is not always punishable by law, so prosecutors must prove bankers intended to break the law. This means expertise in white collar crime is indispensable to a criminal investigation. Iceland had this capacity but most other crisis-affected countries did not.

2. When truth leads, justice follows 
 
Uncovering the truth and punishing those responsible are equally valuable objectives. But they can be mutually reinforcing only in a particular sequence: truth leads and justice follows. For example, the Icelandic commission created a safe space for participants to reveal the whole truth, premised on the understanding that their evidence would not be used in court. Bankers would have been understandably reluctant to share sensitive information about their activities had prosecutions run parallel to the commission.

A similar commission in Cyprus, comprised of three former judges and with a legalistic mandate, resulted in guarded testimonies and concealment rather than a revelation of the truth. Yet in Iceland, once the commission’s report revealed the shocking details of the banks’ failings, the ensuing momentum allowed the special prosecutor to start bringing charges.

3. Use of forensic technologies 
 
The application of forensic technologies is the real secret of Iceland’s success story. By analysing millions of data points, commissioners reconstructed patterns of activity in the lead-up to the crisis.

In addition, while Irish and Cypriot prosecutors had difficulty explaining the technical details of white-collar cases to a judge or jury, in interviews I found out that Iceland’s Office of the Special Prosecutor developed a simulator able to reconstruct banking interactions. Converting data into visuals provided sufficient clarity to ensure convictions.

4. Don’t prosecute politicians 
 
Iceland wasn’t right about everything. The most important mistake was the decision to set up a special court for the former prime minister, the first and only political leader in the Western world convicted for his role in the crisis, for “gross negligence” – failing to inform his cabinet of major developments in the crisis, which led to three national banks failing. Even politicians of the opposition now acknowledge it was a mistake that needlessly polarised Icelandic politics.

The comparative experience of other countries, such as Greece, shows that prosecuting politicians can have deleterious effects on much-needed consensus-building in times of crisis. An endless blame game will have an adverse impact on economic recovery. Political leaders should be punished in the ballot box, not in a courtroom.

Iceland’s most remarkable achievement is that demagogues have not appeared. True, other factors have played a significant role in protecting democratic politics from the emergence of populist leaders. Here I point to the country’s swift economic recovery and its electoral system.

Yet by pursuing accountability, the state signalled it was performing its duty to uphold the rule of law and, by doing so, it may have protected democratic politics for decades to come.

In a post-truth political era, a report of the Special Investigation Commission (SIC) in Iceland established the truth about the causes of the crisis. This limited “the range of permissible lies” – to cite Michael Ignatieff the famous Canadian academic – and thwarted conspiracy theories. Meanwhile, in Greece, populist politicians still contest the figures of state deficits that triggered the crisis. They maintain that deficits were artificially inflated to force Greece into external supervision. Think, for example, of the waves of indictments against the former head of the Greek statistical authority.

The policy recommendations of the commission set the stage for a comprehensive set of institutional reforms, geared at protecting democratic institutions from a future financial crisis. At the same time, the Office of the Special Prosecutor developed unparalleled expertise in white-collar crime investigation. In contrast, other European countries do not have a better capacity to investigate corporate crimes now than they did ten years ago.

The experience of Iceland shows that pursuing policies of accountability after a crisis may protect democracies from political instability and strengthen state institutions, thus protecting that country from a future crisis.

 
(Iosif Kovras is Reader in Comparative Politics, City, University of London) 
 
(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/how-to-deal-with-the-next-financial-crisis-take-some-lessons-from-iceland-104354">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
&nbsp;

By Iosif Kovras It has been ten years since the global recession hit – and the perfect opportunity to rethink and reassess the crisis with the benefit of time. Much of the focus so far has been on economic or policy failures, with the question of accountability left out of the discussion.

By Iosif Kovras It has been ten years since the global recession hit – and the perfect opportunity to rethink and reassess the crisis with the benefit of time. Much of the focus so far has been on economic or policy failures, with the question of accountability left out of the discussion. In stark contrast to the grassroots calls for punishing those responsible, political leaders were not overly concerned with accountability, leaving bankers off the hook. This was a mistake. To give only one example, in the US and the UK, this post-crisis impunity – along with other political factors – have had deleterious effects on democratic politics, setting the stage for demagogues to emerge and ride a tide of popular discontent. Our comparative research, carried out with Kieran McEvoy Neophytos Loizides, reveals that Iceland stands out from the rest. Iceland, a tiny European nation of 330,000 inhabitants, offers valuable lessons on the importance of accountability and suggests how to deal with such issues if or when the world suffers another financial crisis. Days after the collapse of 97 per cent of its banking industry, Icelandic authorities designed a comprehensive policy of accountability, based on two overlapping objectives: establishing the truth and punishing those responsible. An independent truth commission was mandated to document the causes of the meltdown, and the newly established Office of the Special Prosecutor was tasked to thoroughly investigate and prosecute those responsible for any crimes committed in the run-up to the crisis. Both mechanisms have been remarkably successful. Published in 2010, the truth commission’s 2,200-page report not only documented the manifold failings of the financial system in Iceland but also offered specific recommendations to protect state institutions from a future crisis. The report instantly became a bestseller, with copies sold in supermarkets. It was a popular gift – parents even gave it to their children to help them avoid making the same mistakes. The Office of the Special Prosecutor successfully prosecuted 40 bank executives. This is remarkable, especially given the small population of the island and the comparative experience of other European countries affected by the recession, such as Ireland, Cyprus, or the UK (table below). Populism is based on a simplistic view that divides society between the “real people” and the “corrupt elites”. In the aftermath of a financial crisis, bank executives were often – and still are – seen as the “greedy elites”, responsible for their people’s suffering; that explains why the public finds it so hard to forgive them. By not properly investigating the causes of the crisis as has happened in Iceland, skilful demagogues elsewhere have been able to frame political elites and the judiciary as part of a corrupt establishment. Below are four key things that Iceland did in the wake of the global recession, that others countries can learn from. 1. Establish resources for special investigations As we show in our ongoing research with Stefano Pagliari, even though the judiciary is independent, politicians can take steps to boost the effectiveness of prosecutors. Excessive or reckless risk-taking is not always punishable by law, so prosecutors must prove bankers intended to break the law. This means expertise in white collar crime is indispensable to a criminal investigation. Iceland had this capacity but most other crisis-affected countries did not. 2. When truth leads, justice follows Uncovering the truth and punishing those responsible are equally valuable objectives. But they can be mutually reinforcing only in a particular sequence: truth leads and justice follows. For example, the Icelandic commission created a safe space for participants to reveal the whole truth, premised on the understanding that their evidence would not be used in court. Bankers would have been understandably reluctant to share sensitive information about their activities had prosecutions run parallel to the commission. A similar commission in Cyprus, comprised of three former judges and with a legalistic mandate, resulted in guarded testimonies and concealment rather than a revelation of the truth. Yet in Iceland, once the commission’s report revealed the shocking details of the banks’ failings, the ensuing momentum allowed the special prosecutor to start bringing charges. 3. Use of forensic technologies The application of forensic technologies is the real secret of Iceland’s success story. By analysing millions of data points, commissioners reconstructed patterns of activity in the lead-up to the crisis. In addition, while Irish and Cypriot prosecutors had difficulty explaining the technical details of white-collar cases to a judge or jury, in interviews I found out that Iceland’s Office of the Special Prosecutor developed a simulator able to reconstruct banking interactions. Converting data into visuals provided sufficient clarity to ensure convictions. 4. Don’t prosecute politicians Iceland wasn’t right about everything. The most important mistake was the decision to set up a special court for the former prime minister, the first and only political leader in the Western world convicted for his role in the crisis, for “gross negligence” – failing to inform his cabinet of major developments in the crisis, which led to three national banks failing. Even politicians of the opposition now acknowledge it was a mistake that needlessly polarised Icelandic politics. The comparative experience of other countries, such as Greece, shows that prosecuting politicians can have deleterious effects on much-needed consensus-building in times of crisis. An endless blame game will have an adverse impact on economic recovery. Political leaders should be punished in the ballot box, not in a courtroom. Iceland’s most remarkable achievement is that demagogues have not appeared. True, other factors have played a significant role in protecting democratic politics from the emergence of populist leaders. Here I point to the country’s swift economic recovery and its electoral system. Yet by pursuing accountability, the state signalled it was performing its duty to uphold the rule of law and, by doing so, it may have protected democratic politics for decades to come. In a post-truth political era, a report of the Special Investigation Commission (SIC) in Iceland established the truth about the causes of the crisis. This limited “the range of permissible lies” – to cite Michael Ignatieff the famous Canadian academic – and thwarted conspiracy theories. Meanwhile, in Greece, populist politicians still contest the figures of state deficits that triggered the crisis. They maintain that deficits were artificially inflated to force Greece into external supervision. Think, for example, of the waves of indictments against the former head of the Greek statistical authority. The policy recommendations of the commission set the stage for a comprehensive set of institutional reforms, geared at protecting democratic institutions from a future financial crisis. At the same time, the Office of the Special Prosecutor developed unparalleled expertise in white-collar crime investigation. In contrast, other European countries do not have a better capacity to investigate corporate crimes now than they did ten years ago. The experience of Iceland shows that pursuing policies of accountability after a crisis may protect democracies from political instability and strengthen state institutions, thus protecting that country from a future crisis. (Iosif Kovras is Reader in Comparative Politics, City, University of London) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

How to deal with the next global financial crisis 

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