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The Debilitating Cost of Remittances | Economic Empowerment | GZERO Media

The debilitating cost of remittances

Dilip Ratha knows how hard it is to work abroad and send money home. Why? Because he had to go through the same hoops when he was a migrant.

It's the inconvenience and the cost, the World Bank's head of KNOMAD and lead economist says during a livestream conversation on closing the global digital gap hosted by GZERO in partnership with Visa.

Still, Ratha points out, these flows are a lifeline for millions of poor families around the world. And they keep the lights on in remittance-dependent economies like El Salvador or Lebanon.

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Firefighters at the site of a Russian missile attack in Zaporizhzhia, Ukraine.

State Emergency Service of Ukraine via Reuters Connect

What We’re Watching: G7 stands up to Putin, Israel and Lebanon reach maritime deal, South Korea touts missile shield

The war grinds on

Following another day of sound and fury as Russia fired more missiles into Ukrainian cities on Tuesday, G7 leaders announced “undeterred and steadfast” military and financial support for Ukraine’s defense and warned Vladimir Putin’s government that any Russian use of chemical, biological, or nuclear weapons in Ukraine would be met with “severe consequences.” Ukrainian air defenses shot down some of Russia’s missiles on Tuesday, but Ukraine’s President Volodymyr Zelensky told G7 leaders that more and better systems were an urgent priority. On Wednesday, Putin is expected to meet with Turkey’s President Recep Tayyip Erdoğan at a security conference in Kazakhstan, and the Kremlin spokesman told reporters the two leaders might discuss the possibility of peace talks. So, in a week of dramatic images from Ukraine, what has really changed? Ukraine has proven it still has partisans inside Crimea that can inflict real damage on important Russian infrastructure. Putin has demonstrated that he’s willing to satisfy the demands of Russian nationalists to punish Ukrainian civilians, though he says the next steps will continue to be incremental. Russia’s dwindling stockpile of precision-guided missiles, which Western export controls will make hard to replace, dwindled further. And despite pleas for peace from foreign governments, neither Russia nor Ukraine has signaled any credible basis for compromise.

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From left to right, Lega leader Matteo Salvini, Forza Italia leader Silvio Berlusconi, and Brothers of Italy leader Giorgia Meloni during a campaign rally in Rome.

REUTERS/Yara Nardi

What We're Watching: Italian election, Chinese anti-corruption drive, Lebanese bank shutdown

Italy votes!

Italians head to the polls on Sunday and are likely to elect Italy’s first far-right leader since World War II. Giorgia Meloni, 47, who heads the Brothers of Italy Party (which has neofascist roots) is slated to become Italy’s next PM. Polls indicate Brothers will win about a quarter of the vote, while her three-party coalition, including Matteo Salvini’s far-right Lega Party and Berlusconi’s Forza Italia, is projected to secure around 45%. Four years ago, Brothers – established in 2012 – reaped just 4% of the vote, but it has benefited recently from the left’s implosion as well as Meloni’s refusal to back the centrist Draghi government, which collapsed this summer, making her the most formidable opposition figure (Salvini and Berlusconi backed Draghi). Italy has convoluted voting rules but will be voting on 400 seats in the Chamber of Deputies (lower house) and 200 seats in the Senate – the winning coalition needs a majority in both. Meloni aims to dilute the EU’s power over Italian affairs, though she believes Rome must preserve close ties with Brussels, and she supports EU and NATO efforts to contain Russian aggression. Read this primer to learn more about what Meloni does – and doesn’t – stand for.

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Paige Fusco

Hard Numbers: EU energy tax, Lebanese bank 'hold-up,' Russian election meddling, Chile-Ecuador soccer drama

140 billion: The EU hopes to raise 140 billion euros with its proposed windfall tax on energy companies that don’t burn natural gas but have made a killing from sky-high electricity costs driven by gas. Brussels would use the money to pay for consumer subsidies such as an EU-wide price cap on gas. The bloc has notably not followed through on talk of capping Russian gas prices.

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A closed gas station in Beirut, Lebanon.

Mohamed Azakir via Reuters

Hard Numbers: Lebanese fuel subsidies slashed, Belgian terror trial, forced labor and marriage surge, Imran Khan’s bail extended

20,000: The cost of 20 liters of gas jumped by 20,000 pounds in Lebanon on Monday after the country’s central bank lifted its last fuel subsidies, following a year-long process to replace fuel and some food subsidies with cheaper social welfare programs. This was a massive price hike in a country already accustomed to price volatility and economic collapse.

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REUTERS/Dado Ruvic

Hard Numbers: EU hungry for oligarch assets, Lebanese pound hits rock-bottom, Taliban sell coal, Lumumba's tooth

9.9 billion: The EU wants to eliminate legal obstacles so member states can confiscate up to 9.9 billion euros ($10.62 billion) in frozen assets from Russian oligarchs to fund Ukraine's reconstruction. But making sanctions-busting a criminal offense across the entire bloc won't be easy, and some member states fret about violating due process and property rights.

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Supporters of the Christian Lebanese Forces party react as votes are being counted in Lebanon's parliamentary election.

REUTERS/Mohamed Azakir

What We're Watching: Lebanon's future, Russian dissent, Latin Americans ditch US summit

What Hezbollah’s loss means for Lebanon

Days after Lebanese voters went to the polls for the first time since the economy imploded three years ago, Hezbollah – Iran-backed militants dubbed a terrorist group by the US – has lost its parliamentary majority. Its coalition, which includes Amal, another Shia party, and the Free Patriotic Movement, a Christian bloc, won 61 seats, down from 71. Reformist parties that emerged amid mass protests over economic inequality and corruption in recent years reaped about 10% of seats. The Saudi-allied Lebanese Forces also gained new seats, suggesting that many Lebanese voters support warmer ties with Riyadh in hopes it can help ease their economic woes. Still, only 41% of eligible voters turned up, reflecting widespread apathy and disdain for the political elite, who have enriched themselves for decades while large swaths of the population descended into poverty. The election was notably plagued by allegations of voter fraud. Things will get thorny this fall when President Michael Aoun, a Hezbollah ally, finishes his term. The presidency is a powerful post in Lebanon, charged with appointing the PM and leading the military. Hezbollah will push hard for a replacement who will safeguard their – and Iran’s – regional interests, likely impeding progress on political and economic reforms needed to unlock foreign loans.

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Supporters of Lebanon's Hezbollah leader Sayyed Hassan Nasrallah hold flags during an election rally in Tyre, Lebanon.

Reuters

Can this election save Lebanon?

Corruption and mismanagement have become the hallmarks of Lebanese governance.

In 2019, the country’s ill-managed economy imploded thanks to a self-serving political elite, and in 2020, an explosion resulting from government negligence killed 230 people at a Beirut port. Subsequent attempts to stonewall the criminal investigation of the blast again exposed the greed and malice of those in charge.

In short, things need to change.

Voters will cast their ballots on May 15 in general elections for the first time since all hell broke loose three years ago. Is there any hope for a political turnaround, or will the country continue rolling over a cliff?

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