Nigeria has asked the World Bank and African Development Bank for a $3.5 billion loan.

The request comes as Africa’s largest economy grapples with a $15 billion budget deficit in the wake of the oil crash that has seen prices fall about 70% in the last year and a half.

Nigeria’s finance minister, Kemi Adeosun said these loans aren’t an “emergency” measure, but merely the cheapest way for the country to shore up its finances.

Nigeria produces about 1.8 million barrels of oil per day and 35% of its GDP comes from the oil and gas sector; 90% of Nigeria’s export revenue comes from the sale of petroleum.

The important takeaway, however, is that while the crash in oil prices seen during 2014 and 2015 was stunning, it isn’t until this year and beyond that we’ll start to see the real impacts on both private corporate and government budgets from the sustained decline in prices.

Nigeria’s package might be composed of $2.5 billion from the World Bank and $1 billion from the African Development Bank. The loans would likely be priced at below-market rates.

There is a rising risk of violence inside the country disrupting its oil production, a development that could boost international prices but would certainly further stress Nigeria’s financial position.

The proposed package of loans made to Nigeria wouldn’t come with the strings usually attached with a loan from the IMF — which often include extensive “structural reforms,” which is basically short-hand for coming up with additional revenue to ensure repayment — the IMF will be expected to endorse a loan from the World Bank.

David Rothkopf writes:  Davos bashing is easy. Saving the world is hard. The venerable gathering of global elites on that frosty Swiss mountaintop is regularly the target of criticism and speculation about its relevance. But if this past year’s event is any indication, there is also still a greater and higher sense of purpose to the gathering than one finds at many other similar events, and there is much to be learned for the visitor who ventures up the mountain to listen rather than to be heard or seen.

There is no doubt that most of the people who have never been to the World Economic Forum’s annual meeting in the alpine ski resort are happy to accept the idea that the gathering lies somewhere on a spectrum between being an odious, self-congratulatory mogul-palooza and a shadowy gathering to plot a conspiracy to oppress the masses. Many of the people who actually attend are also put off by aspects of the meeting, ranging from the difficulty of getting into formal sessions to the lingering sense that it is at secret, informal ones that the really good stuff is happening.

The event has become much more corporatized and formal over the years, making real brainstorming tough to do. And of course, as it has in past years, this year’s Davos was dogged by the fact that the audience suffered from a numbing sameness of its participants. Once again, women, minorities, people from emerging markets, and the young were under-represented, as were artists, scientists, technologists, and religious leaders.

In other words, a meeting with the purported goal of changing the world was missing the people most essential to that discussion.

Some of the speeches are tired. Some of the speakers are the usual suspects. The sidewalks aren’t shoveled, and every year a handful of innocent global titans flop down on the ice and break something. Even the celebrity sightings are getting a bit boring. .

Davos is in its own extremely earnest, rather dry way, actually serious about its mission of making the world a better place. Davos, more than any other similar gathering, shifted the debate of world leaders toward taking climate issues more seriously. It has focused attention on regions in crisis, the need for better infrastructure, and on emerging issues that are worthy of debate — like this year’s discussion on the “fourth industrial revolution.” In my few days there, I sat with world leaders who took a break from their usual intellectual fare as they discussed issues of faith, archaeological evidence as to why civilizations fail, the big questions associated with intelligence in the cyber-age (I actually moderated that discussion), and the future of the Americas.

I was also fascinated to watch discussions about ongoing turmoil in the Middle East become seemingly overshadowed, in terms of generating foreboding among the delegates, by the prospect of a Donald Trump presidency. It was interesting to hear once again predictions of global downturn play in a kind of counterpoint to individual CEOs of very big companies saying, “It’s going to be a bad year for the world but not for us.” It was enlightening to hear why China does not worry so many despite its downturn; why Iran is so appealing to so many European companies; why Brazil is the universally acknowledged big emerging-market basket case to watch for the year ahead; and to see the mixed reactions to the consequences of low-priced oil and a downturn in the commodity supercycle.

But this meeting is the target of criticism for a reason.

It is the granddaddy of the world’s big high-level conferences, and it has an important role to play in the world.

It is the granddaddy of the world’s big high-level conferences, and it has an important role to play in the world. People watch it closely; it attracts the skeptical views it draws precisely because it actually makes a difference, whether it is regarding how a leader or policy initiative is viewed by markets or how a particular threat (from climate to regional unrest) might be assessed or addressed. What is more, if it were to change, it could actually make an even bigger difference. No other single event is in position to do as much were it to evolve to be more of a 21st-century global summit. And that is the Davos story you won’t be reading this year. Because you typically only get two extremes: ass-kissing paeans to the superrich or written Molotov cocktails.

But the reality of what transpires each year high on the mountain is actually not so simple. There’s life and value in this old meeting, if only its curators would take the time to give it one of those rejuvenating sheep-placenta injections that Swiss spas are so famous for.

Martin Guzman writes:  Mauricio Macri’s election as Argentina’s president brought to an end 12 years of government led by Néstor and Cristina Fernández Kirchner. Macri’s administration inherits a delicate economy. If he is not careful, Argentina could face a balance-of-payments crisis, owing to deteriorating external conditions and macroeconomic mismanagement, especially since 2011.

Some aspects of Argentina’s economic situation, however, are highly desirable – not least its low debt-to-GDP ratio. As a result, Macri’s government faces a much less daunting task than the one confronting Kirchner in 2003, after a decade-long experiment with Washington Consensus policies (financial deregulation, trade liberalization, and privatization), together with the peso’s peg to the US dollar, ended in disaster. When Kirchner took office, Argentina had just experienced its most severe economic crisis ever. Unemployment, inequality, poverty, and the national debt had all risen. Massive deindustrialization and deep weaknesses in its education system did not bode well for the future.

In a favorable global environment, the more competitive exchange rate set the stage for reindustrialization, creating jobs for many who had been excluded from labor markets during the previous decade. As a result, from 2003 to 2008, GDP growth averaged more than 8% per year. Argentina’s Economy

Carmen Reinhart writes:  Currency-market volatility has been around for decades, if not centuries. Wide gyrations in exchange rates became a staple of international financial markets after the Bretton Woods system broke down in the early 1970s, and mega-depreciations were commonplace later in the decade and through much of the 1980s, when inflation raged across much of the world. Even through much of the 1990s and early 2000s, 10-20% of countries worldwide experienced a large currency depreciation or crash in any given year.

And then, suddenly, calm prevailed. Excluding the mayhem associated with the global financial crisis of late 2008 and early 2009, currency crashes were few and far between from 2004 to 2014 (see figure). But recent developments suggest that the dearth of currency crashes during that decade may be remembered as the exception that proves the rule.

The near-disappearance of currency crashes in the 2004-2014 period largely reflect low and stable international interest rates and large capital flows to emerging markets, coupled with a commodity price boom and (mostly) healthy growth rates in countries that escaped the global financial crisis. In effect, many countries’ main concern during those years was avoiding sustained currency appreciation against the US dollar and the currencies of other trade partners.

That changed in 2014, when deteriorating global conditions revived the currency crash en masse. Since then, nearly half of the sample of 179 countries shown in the figure have experienced annual depreciations in excess of 15%. True, more flexible exchange-rate arrangements have mostly eliminated the drama of abandoning pre-announced pegged or semi-pegged exchange rates. But, thus far, there is little to suggest that the depreciations have had much of a salutary effect on economic growth, which for the most part has remained sluggish.

The average cumulative depreciation versus the US dollar has been almost 35% from January 2014 to January 2016. For many emerging markets, where depreciations have been considerably greater, weakening exchange rates have aggravated current problems associated with rising foreign-currency debts.

J. Bradford DeLong writes:  Until very recently, one of the biggest challenges facing mankind was making sure there was enough to eat. From the dawn of agriculture until well into the Industrial Age, the common human condition was what nutritionists and public-health experts would describe as severe and damaging nutritional biomedical stress.

Some 250 years ago, Georgian England was the richest society that had ever existed, and yet food shortages still afflicted large segments of the population. Adolescents sent to sea by the Marine Society to be officer’s servants were half a foot (15 centimeters) shorter than the sons of the gentry. A century of economic growth later, the working class in the United States was still spending 40 cents of every extra dollar earned on more calories.

Today, food scarcity is no longer a problem, at least in high-income countries. In the US, roughly 1% of the labor force is able to grow enough food to supply the entire population with sufficient calories and essential nutrients, which are transported and distributed by another 1% of the labor force. That does not account for the entire food industry, of course. But most of what is being done by the remaining 14% of the labor force dedicated to delivering food to our mouths involves making what we eat tastier or more convenient – jobs that are more about entertainment or art than about necessity.

The challenges we face are now those of abundance.  Economic Problems in the Age of Abundance

Denmark may not have a lot in common with North Korea and Somalia but all three nations placed first in their respective categories on the 2015 Corruption Perceptions Index released Wednesday by Transparency International, a Berlin-based organization that tracks perceived levels of public sector fraud and dishonesty worldwide.

For the second year running Denmark, the index showed, is the country with especially “high levels of press freedom; access to budget information so the public knows where money comes from and how it is spent; high levels of integrity among people in power; and judiciaries that don’t differentiate between rich and poor, and that are truly independent from other parts of government.”

North Korea and Somalia, were the joint-worst performers. The United States came 16th out of 167 nations, its best ever showing since the survey began in 1995.

Not a single country in the world is corruption-free, according to the survey, and some 68% of nations have what Transparency International calls a “serious problem with corruption,” meaning the high-level abuse of power that benefits the few at the expense of the many is especially pronounced in more than two-thirds of countries worldwide.

Here are the top 10 nations perceived to be the least corrupt:

• Denmark
• Finland
• Sweden
• New Zealand
• Netherlands
• Norway
• Switzerland
• Singapore
• Canada
• Germany

And the top 10 worst-performing countries:

• North Korea/Somalia
• Afghanistan
• Sudan
• South Sudan
• Angola
• Libya
• Iraq
• Venezuela
• Guinea-Bissau
• Haiti

The overall mood was described by many as “gloomy” at the World Economic Forum. Others were “cautiously optimistic.” Discussions focused on whether China’s transition to a new growth model will continue to unsettle markets, whether the flow of refugees will fracture Europe’s unity, whether robots will replace people and jobs, and whether the global economy can start to fire on all cylinders to produce more sustainable and inclusive growth.

The road ahead is going to be bumpy, these transitions can be broadly helpful to the global economy — provided they are well managed and that countries implement smart policies.

The International Monetary Fund are supporting our 188 member nations in that effort. We do this through our core activities — lending, policy advice, and technical assistance — as well as by helping to deal with a set of emerging issues that are of increasing importance to them: female empowerment, energy and climate change, and reducing excessive inequality.

These issues are what we call “macro-critical” — essential to boost growth that is both durable and inclusive.

Christine Lagarde speaks out for equaity:

Take inequality, for example. The traditional argument has been that income inequality is a necessary by-product of growth, that redistributive policies to mitigate excessive inequality hinder growth, or that inequality will solve itself if you sustain growth at any cost.

Based upon world-wide research, the IMF has challenged these notions. In fact, we have found that countries that have managed to reduce excessive inequality have enjoyed both faster and more sustainable growth. In addition, our research shows that when redistributive policies have been well designed and implemented, there has been little adverse effect on growth.

Indeed, low growth and high inequality are two sides of the same coin: Economic policies need to pay attention to both prosperity and equity.

Increasing women’s economic participation in the labor market is another potentially game-changing contributor to greater and more equitable growth. In reviewing 143 countries, we found that almost 90 percent of them have at least one important legal restriction that makes it difficult for women to work.

Moreover, women face a double disadvantage in the job market: They are less likely to have a paid job than men and, if they get a job, they will earn significantly less than their male colleagues — even with the same level of education and in the same occupation.

Eliminating these employment gender gaps could boost GDP significantly — for instance, by 5 percent in the United States, 9 percent in Japan, and 27 percent in India. The potential to spur growth and reduce inequality also applies to the environment and energy policies. Like many others, I was encouraged when the world leaders signed the global climate agreement in Paris last December. But this is only the beginning. Signed agreements now need to be implemented.

Again, IMF research has indicated that carbon pricing could be transformative, both in freeing up additional resources for investments in health and education and in helping to preserve the planet.

These issues are key to a better global economy that benefits everyone. But there is no silver bullet. The drivers of inequality — of opportunity as well as outcome — vary across countries, and there is no one-policy-fits-all solution.

What is crystal clear, however, is that excessive inequality is a burning issue in most parts of the world, and that too many poor and middle-class households increasingly feel that the current odds are stacked against them. The overriding challenge facing policy makers in 2016 is to prove them wrong.

What Pope Francis has called “the globalization of indifference” must be addressed. More than anything else, that is what was on my mind when I left Davos last week.

David Cameron has defended the deal UK authorities have struck with Google over tax, saying the Conservatives have done more than any other government.

The PM told the Commons the tax “should have been collected under [the last] Labour government”.

Google agreed to pay £130m back in tax to HM Revenue and Customs – which said that was the “full tax due in law”.

But European MPs have described it as a “very bad deal”, and Labour said it amounted to a 3% tax rate.

The vice-chairwoman of a European tax committee said the deal showed the UK was preparing “to become a kind of tax haven to attract multinationals”.

French MEP Eva Joly said the settlement was “bad news for everybody”.

She said it was difficult to know on what basis the figure was reached and she criticised the attempt to “make publicity out of it” by talking about large-sounding figures which she said were a fraction of what should be paid.

Ms Joly, who is vice-chairwoman of the Special European Parliamentary Committee on Tax Rulings, said: “We will ask him [Mr Osborne] to come and explain and I hope he will.”

Mr Osborne has already faced criticism from some politicians in the UK over the tax deal. Shadow chancellor John McDonnell has written to him demanding details of how the settlement was reached.

And Conservative MP Mark Garnier, a member of the Treasury select committee, said the agreement represented a “relatively small” amount of money compared with Google’s UK profits.

Reports in Wednesday’s Times newspaper say Italy is poised to strike a far tougher tax deal with Google than the UK’s. It refers to stories in Italian media that suggest Google will pay £113m in back taxes to the Italian government, equating to a 15% tax rate.

The deal has not yet been completed so it is not known how many years it covers.

The Italian finance minister can also expect a call to appear before the MEPs, Ms Joly said.

Google is one of several multinational companies to have been accused of avoiding tax, in spite of making billions of pounds of sales in Britain.

Senior figures at the company said it would follow new rules which would see it pay more taxes in future.

Head of Google Europe Matt Brittin said last week: “We were applying the rules as they were and that was then and now we are going to be applying the new rules, which means we will be paying more tax.”

China’s top statistician was detained on Tuesday as part of a graft investigation, making him the latest senior economic official to fall from grace as the country battles economic and financial headwinds.

The Communist Party’s anti-graft watchdog made the dramatic announcement about National Bureau of Statistics chief Wang Baoan just as state radio aired comments Wang made earlier in the day at a press conference on the economy.

The sound bites were broadcast on state radio’s main daily news bulletin. But minutes later the news presenter read out a brief statement about the investigation into Wang. The apparently hasty arrangement is rare given the tight editorial and censorship procedures at top state media.

The Central Commission for Discipline Inspection said Wang was under investigation for “suspected serious violations of discipline”, a phrase that often refers to corruption. The CCDI’s statement was brief and did not suggest what the case might involve.

Wang, 52, was appointed as the bureau’s chief in April.

Before that, he spent 17 years in the finance ministry, joining in 1998 as a deputy director of its general office. He was later appointed head of the ministry’s policy planning office.

In 2007, Wang became head of the ministry’s economic construction office, which oversees the budget for state investment in infrastructure and is responsible for approving financial investment. One year later, Beijing announced a 4 trillion yuan stimulus package to revive the ailing economy amid the global financial crisis. The package involved a huge amount of government spending on infrastructure, must of which came under the jurisdiction of Wang’s office.

Wang left the economic construction office at the end of 2009, when he was appointed assistant financial minster.

In 2012, he was promoted to vice minister overseeing the offices of finance, social welfare. He was also the major promoter of the public-private partnership model of financing infrastructure projects.

Earlier on Tuesday, Wang gave a press briefing in Beijing, saying that the yuan had no ground to depreciate in the long term, and that international demand for the yuan was on the rise. He said the fluctuations in the stock market would only have a limited impact on the country’s economy, and he was confident about the market’s performance.

Last week, Wang also hosted a closely watched press conference held to release China’s gross domestic product figure for 2015, which hit a 25-year low of 6.9 per cent.

Wang is just the latest cadre with an extensive financial background to be investigated in Beijing’s massive anti-graft campaign. Yao Gang, vice-chairman of the China Securities Regulatory Commission, the country’s securities watchdog, was investigated in November. And Zhang Yujun, an assistant chairman overseeing brokerages and fund houses at the CSRC ,was probed in September.

Former statistics chief Qiu Xiaohua was jailed in 2007 for bigamy but made a comeback as an economics adviser for several state-owned enterprises after his release in 2008.

Yanis Varoufakis writes: The ‘haves’ of the world are always convinced that they deserve their wealth. That their gargantuan income reflects their ingenuity, ‘human capital’, the risks they (or their parents) took, their work ethic, their acumen, their application, their good luck even. The economists (especially members of the so-called Chicago School. e.g. Gary Becker) aid and abet the self-serving beliefs of the powerful by arguing that arbitrary discrimination in the distribution of wealth and social roles cannot survive for long the pressures of competition (i.e. that, sooner or later, people will be rewarded in proportion to their contribution to society). Most of the rest of us suspect that this is plainly false. That the distribution of power and wealth can be, and usually is, highly arbitrary and independent of ‘marginal productivity’, ‘risk taking’ or, indeed, any personal characteristic of those who rise to the top. In this post I present a body of experimental work that argues the latter point: Arbitrary distributions of roles and wealth are not only sustainable in competitive environments but, indeed, they are unavoidable until and unless there are political interventions to keep them in check.  Haves and Have Nots