When former UK prime minister Tony Blair organised a conference in London last week to promote new policy ideas for a radical centre in politics, he chose erstwhile US treasury secretary Larry Summers as the keynote speaker.
Mr Summers is enjoying a revival of his reputation for opposing US President Joe Biden’s economic programme because it would stoke inflation. But his latest analysis was deeply disturbing – and not for the reasons he would wish. The American economist struck an off note, one that displayed why centrist politicians haven’t been giving the answers that can resonate in the West.
Indeed, for almost a decade, the moderate politicians' tool of using obvious logical reasoning to propel politics hasn’t paid dividends. And in the face of double-digit inflation, rising interest rates and ravaged government finances, the signs are that centrists such as Mr Summers still don't have the solutions the voters are craving.
One reason was that Mr Summers's projected outlook for the big western economies made for hard listening. “The lesson of economic history is largely that soft landings don't happen when you have very low unemployment and you have very high inflation,” he said at Mr Blair’s event. “You get recessions within the next two years. Sometimes the inflation hurts financial conditions and erodes people's income so they don’t spend and you get recessions.
The moderates are tuned for inevitable doom and reforms are nowhere on the horizon
“Sometimes the central bank has to take strong actions to contain the inflation and you get recessions. I think the likelihood is that there will be a recession within the next two years.”
He did go on to describe an oncoming recession as something that could be capitalised on by the political elite. “We need to be prepared to use that recession as an opportunity,” he said. “The best time for people to be trained is when they would otherwise be unemployed – not when it's taking them away from jobs.”
An article in The Wall Street Journal earlier in the week took issue with Mr Summers's view that this is the kind of recession we have to have. Arthur Laffer and Stephen Moore, both experts on economics, wrote that the best way to head off trouble wasn’t by steeling for downturn. It was to cut taxes, regulations and tariff barriers, as well as taking the monetary measure of selling down public debt.
Speaking later in interviews, Mr Blair noted how lucky he had been in own heyday, because inflation wasn’t much of an issue and there was no large-scale demand for strikes – as is currently the case in the UK.
Another speaker at Mr Blair’s event, British economic expert Paul Johnson, provided an analysis on the country’s upside-down economic structure, pointing out that retired people now earn the same amount annually as those in the prime of their working lives. He noted that structural reforms are needed to reverse this but the political class refuses to take these on because of the potential of a backlash from older and wealthier voters.
At a separate briefing by Citi Global Wealth, there was some insight for me into how these accumulated problems are handicapping today’s economy and markets.
David Bailin, the chief investment officer, does not think there is going to be a recession in the top economies, though he acknowledges that profitability of the type of firms his company invest in is taking a big hit. Mr Bailin’s great fear is that central banks, having inflated the economies but mistimed their interventions, are going to pursue the wrong policies on the flip side.
From his perspective, the current inflation problem can be defined in two parts. The first is inflation that comes from wage/price spirals that is often self-sustaining. A second type of inflation comes in the form of shocks provided by energy and food prices for reasons that are outside the central banks' control. Overall he thinks up to two-third of the current inflation comes from this latter category. He also adds that the supply chain shocks – stemming from Covid-19 disruptions to goods such as bicycles – is over and the shelves are full again.
Therefore, Mr Bailin worries that projected higher interest rates in Europe and the US will come at a time when shoppers are cutting back and stores are full and, thus, can turn a downturn into a regression. “We really are concerned that the tipping point to a recession is not due to anything other than what the central banks decided to do,” he said.
Looking at Citi Global Wealth’s network of retail investors in the UK and the UAE, the team sees clients shying away from risky investments to access the extra income from dollar deposits. But caution is not something confined to the smaller investor. Among the group’s European clients one-fifth of the holdings is in cash, perhaps 10 times the advisable allocation.
None of this should be a cause for wonder. The moderates are tuned for inevitable doom and reforms are nowhere on the horizon. A kind of doom loop forms.
Centrism is necessary so that politics delivers on its promise of an improved social contract. Right now, however, it is hog-tied by the dismal fear that things will only get worse.
Company Profile
Company name: Yeepeey
Started: Soft launch in November, 2020
Founders: Sagar Chandiramani, Jatin Sharma and Monish Chandiramani
Based: Dubai
Industry: E-grocery
Initial investment: $150,000
Future plan: Raise $1.5m and enter Saudi Arabia next year
Winners
Ballon d’Or (Men’s)
Ousmane Dembélé (Paris Saint-Germain / France)
Ballon d’Or Féminin (Women’s)
Aitana Bonmatí (Barcelona / Spain)
Kopa Trophy (Best player under 21 – Men’s)
Lamine Yamal (Barcelona / Spain)
Best Young Women’s Player
Vicky López (Barcelona / Spain)
Yashin Trophy (Best Goalkeeper – Men’s)
Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)
Best Women’s Goalkeeper
Hannah Hampton (England / Aston Villa and Chelsea)
Men’s Coach of the Year
Luis Enrique (Paris Saint-Germain)
Women’s Coach of the Year
Sarina Wiegman (England)
Company%20Profile
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UAE currency: the story behind the money in your pockets
Which honey takes your fancy?
Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Our Time Has Come
Alyssa Ayres, Oxford University Press
The%20specs
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
Results
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The%C2%A0specs%20
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What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
About Takalam
Date started: early 2020
Founders: Khawla Hammad and Inas Abu Shashieh
Based: Abu Dhabi
Sector: HealthTech and wellness
Number of staff: 4
Funding to date: Bootstrapped
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
VERSTAPPEN'S FIRSTS
Youngest F1 driver (17 years 3 days Japan 2014)
Youngest driver to start an F1 race (17 years 166 days – Australia 2015)
Youngest F1 driver to score points (17 years 180 days - Malaysia 2015)
Youngest driver to lead an F1 race (18 years 228 days – Spain 2016)
Youngest driver to set an F1 fastest lap (19 years 44 days – Brazil 2016)
Youngest on F1 podium finish (18 years 228 days – Spain 2016)
Youngest F1 winner (18 years 228 days – Spain 2016)
Youngest multiple F1 race winner (Mexico 2017/18)
Youngest F1 driver to win the same race (Mexico 2017/18)
More on animal trafficking
The specs
Engine 60kwh FWD
Battery Rimac 120kwh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry
Power 204hp Torque 360Nm
Price, base / as tested Dh174,500
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
Batti Gul Meter Chalu
Producers: KRTI Productions, T-Series
Director: Sree Narayan Singh
Cast: Shahid Kapoor, Shraddha Kapoor, Divyenndu Sharma, Yami Gautam
Rating: 2/5
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
