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      World Bank Warns of Record Debt Costs for Developing Countries

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      The World Bank warned in a new report that poor countries will be stuck in economic “purgatory” without debt relief.Soaring inflation saddled developing countries with a record $1.4 trillion in debt servicing costs last year, the World Bank said in a report published on Tuesday, detailing the precarious state faced by the world’s most vulnerable economies since the pandemic.As central banks around the world raised interest rates to slow rising prices, poor countries with already high debt burdens saw the interest payments on the money that they owed to creditors balloon. While principal balances held steady at around $951 billion, interest payments jumped by a third, to $406 billion. That has left more countries facing fiscal crises and struggling to avoid default.“These facts imply a metastasizing solvency crisis that continues to be misdiagnosed as a liquidity problem in many of the poorest countries,” Indermit Gill, the World Bank’s chief economist, wrote in the report. “It is easy to kick the can down the road, to provide these countries just enough financing to help them meet their immediate repayment obligations. But that simply extends their purgatory.”More than a dozen sovereign nations defaulted on their debt in the last three years, and more than 30 of the world’s poorest countries have experienced “debt distress,” according to the United Nations. In 2023, Belarus, Ghana, Lebanon, Sri Lanka and Zambia were all in default, according to Fitch Ratings.Global financial institutions such as the World Bank and the International Monetary Fund have been working with international lenders to help developing countries restructure their debt, but the process has been slow and painstaking. China, the world’s largest creditor, has been particularly reluctant to alter the terms of its loans as it grapples with its own economic challenges.The Biden administration has been critical of China’s lending practices. Treasury Secretary Janet L. Yellen described them as “opaque” in an interview with The New York Times in October in which she called for accelerating debt relief. She also raised the idea of helping nations find new sources of borrowing by creating coordinated aid packages for “high-ambition countries” that want to invest in clean energy projects.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      in Elections

      A Loss and Damage Fund Is Taking Shape at COP Climate Talks

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      The U.N. climate summit in Azerbaijan has cleared the for way aid to flow when lower-income countries are hit.A long-awaited fund designed to help lower-income countries respond to natural disasters is finally taking shape at the U.N. climate conference in Baku, Azerbaijan.Wealthy nations agreed to create the fund at the 2022 climate summit in Sharm el Sheikh, Egypt, after decades of resistance. Last year, a group of nations, including the United States and the European Union, made the first financial commitments.Now, the fund has a leader and is looking to start distributing money within the next year.Ibrahima Cheikh Diong, who has Senegalese and American citizenship and has held roles at financial firms and at development banks, started this month as the inaugural executive director of the initiative, which is formally known as the Fund for Responding to Loss and Damage.At this year’s climate summit, known as COP29, formal agreements were signed that will allow the fund to begin formally receiving the money that has been pledged and to start distributing it soon. The fund is being managed by the United Nations, and the World Bank is serving as a financial trustee.Sweden this month became the latest country to make a pledge, with its $19 million contribution bringing total commitments to around $720 million.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      in US Politics

      ‘A once-in-a-generation change’: Oregon’s biggest city prepares for monumental overhaul of government

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      When voters in Portland, Oregon, head to the polls next month, they will be tasked not only with selecting new leaders, but also the implementation of a monumental overhaul of the city’s government.Two years ago, residents moved to fundamentally alter their local government structure and adopted what experts have described as some of the most “expansive voting reforms” undertaken by a major US city in recent decades. Come November, the city will use ranked-choice voting to elect a mayor and a larger, more representative city council as Portland moves from a commission form of government to one overseen by a city administrator.The shake-up comes after challenging years for Portland in which the city of 630,000 grappled with a declining downtown, rising homelessness, a fentanyl crisis, growing public drug use and the continued economic impacts of the pandemic years.While some news coverage has portrayed the shift as Portlanders rejecting the city’s historically progressive values, those involved with the project counter that residents are embracing democratic reforms that will lead to a more equitable government better equipped to solve the city’s problems.“It was really clear that this system was, as operated, very inequitable,” said Jenny Lee, managing director of Building Power for Communities of Color, a non-profit that was a key proponent of the effort.“And the challenges in governing are going to be felt the most by those who already have been marginalized in our political system.”Now the city waits to see what the “once-in-a-generation” change will mean for its future.Since 1913, Portland has used a commission form of government. The commission consisted of five people elected citywide and who were responsible for passing policies and also acting as administrators in charge of city departments.The system was briefly popular in other major US cities, but then largely abandoned, said Richard Clucas, a political science professor at Portland State University.“Most cities who adopted that form of government realized there were problems with it,” he said. “Someone may be good as a legislator but it doesn’t make them good as an administrator.”View image in fullscreenAnd Portland’s system had long failed to adequately represent different demographics in the city, Lee said. The city’s elected officials historically have been white men from more affluent areas where residents are more likely to have a higher income and own their homes, according to the Sightline Institute. In 2017, only two people of color had ever been elected to the city council.Under the charter system, simple decisions – such as where to put a bike lane – were politicized, said Shoshanah Oppenheim, the charter transition project manager.“It was based on the political tide,” said Oppenheim, who is also a senior adviser in the city administrator’s office.For more than a century, Portlanders rejected attempts to reform the commission system, but that changed when the 10-year review of the city charter coincided with upheaval and challenges of the pandemic years.The pandemic exacerbated the existing limitations of the city’s form of government, according to a report from Harvard’s Ash Center for Democratic Governance and Innovation chronicling Portland’s reforms.Meanwhile, Portland was the site of widespread racial justice protests and an ensuing federal crackdown, the city’s economic recovery from the pandemic was slow, and residents grew increasingly disillusioned with their leaders’ ability to make meaningful progress tackling homelessness and drug abuse.Those challenges created an opportunity to have meaningful conversations about elections and government, Lee said.Clucas echoed that sentiment: “I think the public was looking and happy to take on some sort of change.”skip past newsletter promotionafter newsletter promotionCommunity leaders had spent years educating themselves about electoral reform, and saw an opportunity to create change in the city, the report stated.With support from community organizations and local activists, the commission brought a measure before voters that would make key changes to the city’s system, allowing voters to rank local candidates in order of preference, expand the city council from five to 12 representatives elected from four newly created districts, and move to a system of government overseen by a professional city administrator.Despite criticism about the complexity of the measure and opposition from political leaders and the business community, 58% of voters approved the package of reforms proposed by the commission.Although the timing coincided with major changes and social issues, Lee said the reforms were not reactionary and instead an example of Portland being willing to try new things, which ties into Oregon’s long history of democratic reforms aimed at making government more participatory.“It was a message about change, but it was definitely a hopeful one,” she said. “It was always about these changes will make our government more effective and equitable.”The city has spent the last two years preparing for a project unlike anything Portland has seen before,Oppenheim said. “We had a really short timeline … It’s been an all-hands-on-deck approach,” she said. “There is no playbook. We are making it up as we go along.”Next month, voters will decided among more than 100 candidates for 12 council seats and 19 candidates for mayor. A recent poll from the Oregonian suggested a once-longshot candidate, whose campaign has focused on ending homelessness, is well positioned to win.In a poll of roughly 300 voters from early October, before election packets were sent out, two-thirds responded that they understood how voting works very well or somewhat well. People tend to understand the system right away given that they rank things every day, Oppenheim said.The city has also developed a voter education program to inform residents about the changes and trained operators on its information line how to explain ranked-choice voting.The hope is that voters will feel the increased power of their vote, Lee said. “Every vote has a lot of power. Your constituents’ voices really matter. Their second- and third-choice rankings actually really matter.”After the election, the other major test comes next year when Portland’s new government takes the reins. “We want to be ready on day one so all the city business can continue,” Oppenheim said.“Portlanders have huge expectations for change and we have a once-in-a-generation opportunity to do things better,” Oppenheim said. “They want a more representative government. We have it in our power to deliver that.” More

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      in Elections

      Trump and Harris Both Like a Child Tax Credit but With Different Aims

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      Kamala Harris’s campaign is pushing a version of the credit intended to fight child poverty, while Donald J. Trump sees the program primarily as a tax cut for people higher up the income scale.Vice President Kamala Harris has made an expanded child tax credit central to her campaign, and former President Donald J. Trump boasts, “I doubled the child tax credit.” With a quick look, voters might think the child-rearing subsidy the rare matter on which the rival candidates agree.It is anything but. The common vocabulary masks profound differences over which parents the government should help and what constitutes fairness for children in a country of great wealth and inequality.Mr. Trump sees the $110 billion program mostly as a tax cut, which as president he increased to $2,000 per child and extended to high-income families. But his policy denies the full benefit to the poorest quarter of children because their parents earn too little and owe no income tax.Ms. Harris would expand the tax cuts and add a large anti-poverty plan, sending checks to millions of parents with low pay or no jobs. That would turn a tax cut into an income guarantee, in a landmark expansion of the safety net.Supporters of the Harris plan say the payments would shrink child poverty. Critics see an expensive welfare scheme that could weaken the willingness to work.“They’re both talking about something called the ‘child tax credit,’ but they’re not at all talking about the same policy,” said Scott Winship of the conservative American Enterprise Institute.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      in US Politics

      The American dream is dead for many. Social democracy can bring it back | Bhaskar Sunkara

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      I love the United States. My parents came here from Trinidad and Tobago the year before I was born, and they and my four siblings eventually became citizens. My parents struggled for many years to get established here, but it has offered us everything – security, belonging, opportunity.Yet for many Americans, particularly those who have been in this country for generations building the foundations of American prosperity, the American dream is not alive and well.This point can’t be debated with measures of the United States’ relative affluence; it’s what American workers are telling us, both through how they respond to polls directly on the question and through the political views they increasingly hold. The question isn’t if the American dream is dead, it’s how we go about reviving it.By the time the writer James Truslow Adams popularized the phrase “American dream” in the 1930s, it had already existed as an ethos for generations. Despite the country’s brutality towards Black and Native people, there is a reason why masses of workers saw the United States as a place without the leftovers of feudalism and aristocratic privilege holding people back. Even Karl Marx himself looked to the world’s “most progressive nation” to lead a “new era of ascendancy” for the working classes after the triumph of Union forces in the civil war.Today, however, few at home or abroad hold such hopes for our country.Since it’s just a broad idea, we can’t measure the American dream in empirical terms. If it’s alive, it would be found in the minds of ordinary citizens who feel like they’re part of a project that is rooted in both their individual advancement and national advancement as a whole. And simply, the American dream is dead because ordinary Americans say it’s dead.Only 27% of people polled this year said “the American dream holds true.” Just 13 years ago, it was double that number. This doesn’t just reflect increasing cynicism in general: a majority of Americans say “the American dream once held true but doesn’t any more.” What’s happened to change so many of our minds?That polling isn’t uniform and correlates closely to both income and education, both proxies for social class. Among Americans who don’t have four-year college degrees only 22% say that American dream still holds true, half the mark of those with postgraduate degrees. Our national crisis of confidence is mostly a working-class problem.Americans as a whole, critics retort, are wealthier than ever. But, rather than argue with them, if we want to figure out why people don’t feel like they’re staying above water, we need to examine issues of income disparity and social wealth.The widening life expectancy gap between poor and rich Americans, which now averages more than 10 years, is perhaps the most dramatic example of a basic point that most of us take for granted: a kid growing up in a wealthy area is likely to have a wildly better life outcome compared to one growing up in a poor one.By most measures, the US has among the lowest rates of social mobility of any rich country. And our income disparity is even more stark when considering not just pre-tax wages, but the more expansive “social wage” provided in other countries. The Harvard economist Raj Chetty has shown the depth of the problem. By his measure, US absolute mobility – the chance a child will earn more than their parents – has fallen from 90% for children born in 1940 to 50% for children born in the 1980s. The problem isn’t just that growth rates have declined. Chetty and his co-authors note that an economy that maintains our current income disparity but restores growth to booming 1940s and 50s levels would only increase absolute mobility to 62%.This problem of social mobility is compounded by issues of social welfare owing from our poorly designed entitlements, which are unable to deliver results as well as universal welfare states in Europe that offer things like childcare for new families, guaranteed national healthcare, and free vocation and trade schools.Another key difference between the US and northern Europe? The role of trade unions and other forms of working-class representation. In 1983, over 20% of Americans belonged to a union. That number is 10% now, compared with almost 70% in countries like Denmark and Sweden.The loss of good union jobs, particularly in manufacturing, persistent poverty and hopelessness have fueled social ills in communities across the country.To name just a few of their consequences: we face a serious problem with drug use and overdoses, with 107,543 people dying last year alone. Alcohol abuse has gone up dramatically, as have alcohol-related deaths. Between mass shootings and ordinary crime, people don’t feel safe, and our politicians seem to accept as natural fact that we’re destined to be a country with eight times the murder rate of Germany or where children need to pay attention during “active shooter” drills.Taken together, it’s obvious that you’d have a better chance of living the American dream in Europe than you would in America.Of course, some of the pessimism that people feel is inflamed by ideological actors. From parts of the left, earnest attempts to right historical wrongs might have fueled an excess of negativity about the progress we’ve made in recent decades. On the right, a much more dangerous tendency is built around the idea that immigration – a key component of the American dream and our economic progress – is a social ill that needs to be combated.Thankfully, the United States has a rich, dynamic economy. That’s a good thing and it allows us to support well-designed universal programs to improve the social mobility and material wellbeing of our poor and working classes. We can pursue taxation policies that better redistribute wealth and create greater state support for health care, childcare, housing and job training. We can shift the funding of K-12 education away from unequal property taxes and to a more equal base of federal support. We can also support worker unionization and expand policies to revitalize domestic manufacturing.As for concerns over immigration, a key part of Donald Trump’s appeal, we can support native-born workers feeling pressure in the job market from immigrants without elevating their situation to a zero-sum, existential battle in which either new Americans or established Americans will survive.We also, however, need to rally behind a vision of politics to go with these social-democratic policies. A vision of politics in which we assert the moral worth of every American and strive together to build a healthier and more optimistic society.We can’t pretend like things are going great in our country. But we also must reject the pessimism that says things must stay like this.

      Bhaskar Sunkara is the president of the Nation, founding editor of Jacobin and author of The Socialist Manifesto: The Case for Radical Politics in an Era of Extreme Inequalities More

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      Republicans Are Right: One Party is ‘Anti-Family and Anti-Kid’

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      In attacking Democrats and Kamala Harris, Republicans have been making a legitimate point: One of our major political parties has worked to undermine America’s families.The problem? While neither party has done enough to support families and children, the one that is failing most egregiously is — not surprisingly — the one led by the thrice-married tycoon who tangled with a porn star, boasted about grabbing women by the genitals and was found by a jury to have committed sexual assault.You’d think that would make it awkward for the Republican Party to preach family values. But with the same chutzpah with which Donald Trump reportedly marched into a dressing room where teenage girls were half-naked, the G.O.P. claims that it’s the Democrats who betray family values.“The rejection of the American family is perhaps the most pernicious and most evil thing that the left has done in this country,” JD Vance said in 2021. Pressed on those remarks last month, he went further in a conversation with Megyn Kelly, saying that Democrats “have become anti-family and anti-kid.”This is gibberish. Children are more likely to be poor, to die young and to drop out of high school in red states than in blue states. The states with the highest divorce rates are mostly Republican, and with some exceptions like Utah, it’s in red states that babies are more likely to be born to unmarried mothers (partly because of lack of access to reliable contraception).One of President Biden’s greatest achievements was to cut the child poverty rate by almost half, largely with the refundable child tax credit. Then Republicans killed the program, sending child poverty soaring again.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      If Kamala Harris Is a D.E.I. Candidate, So Is JD Vance

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      Ever since speculation began that Vice President Kamala Harris might replace President Biden at the top of the Democratic ticket, there has been a steady, ugly chorus on the right. The New York Post published a column that declared that Harris would be a “D.E.I. president,” and quickly the phrase ricocheted across the conservative media ecosystem.The invocation of diversity, equity and inclusion programs meant to bring people from underrepresented backgrounds into institutions of power and influence clearly implied that a Black woman got power because of racial preferences. Black achievement, in this narrative, is always unearned and conferred without regard to merit.Listening to JD Vance’s speech at the Republican convention on Wednesday night, as he laid out his remarkable biography — a young man with roots in an economically devastated backwater who scaled the heights of the American elite — I couldn’t help thinking to myself: If Harris is a D.E.I. candidate, so is Vance. It just depends on what kind of diversity you mean. It depends, indeed, on how you understand the role of identity in shaping the opportunities that define anyone’s life.All politics is, at some level, identity politics — the business of turning identity into power, be it the identity of a candidate or demographic group or political party or region of the country. For modern presidential and vice-presidential candidates, one of their most valuable assets is their life story. Some elements of that story are bequeathed at birth, but what makes politicians successful is their talent at narrating that story in a manner that allows voters to see some version of themselves and their own aspirations in the candidate. This kind of storytelling, embedded in American archetypes and ideals, has shaped our politics.Vance’s entire business and political career has flowed from his life story, which is embedded in identities he did not choose: Born a “hillbilly,” of Scotch-Irish descent, he grew up in poverty, son of a single mother who was addicted to drugs. Overcoming this adversity, these disadvantages, lies at the core of his personal narrative. His ascent would hardly be so remarkable if he started from a life of middle-class comfort. But no one is portraying Vance’s elevation to the Republican ticket as the outcome of some kind of illegitimate identity politics, nor is Vance perceived as having benefited from a political form of affirmative action.And yet he almost certainly did. Race is not the only kind of diversity that gets noticed and embraced. Elite institutions love up-by-your-bootstraps Americans, and that archetype is all over Vance’s life story. A promising white candidate from a county that sends few students to an elite college like Yale would get a strong look, even if that person’s grades and test scores were less impressive than other applicants’. (To be clear, I have no idea what kind of grades or scores Vance had.) Regardless of race, applicants from working-class backgrounds, especially if they were the first in their family to attend college, are deemed to add class diversity.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      in Elections

      Dear Elites (of Both Parties), the People Will Take It From Here, Thanks

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      I first learned about the opioid crisis three presidential elections ago, in the fall of 2011. I was the domestic policy director for Mitt Romney’s campaign and questions began trickling in from the New Hampshire team: What’s our plan?By then, opioids had been fueling the deadliest drug epidemic in American history for years. I am ashamed to say I did not know what they were. Opioids, as in opium? I looked it up online. Pills of some kind. Tell them it’s a priority, and President Obama isn’t working. That year saw nearly 23,000 deaths from opioid overdoses nationwide.I was no outlier. America’s political class was in the final stages of self-righteous detachment from the economic and social conditions of the nation it ruled. The infamous bitter clinger and “47 percent” comments by Mr. Obama and Mr. Romney captured the atmosphere well: delivered at private fund-raisers in San Francisco in 2008 and Boca Raton in 2012, evincing disdain for the voters who lived in between. The opioid crisis gained more attention in the years after the election, particularly in 2015, with Anne Case and Angus Deaton’s research on deaths of despair.Of course, 2015’s most notable political development was Donald Trump’s presidential campaign launch and subsequent steamrolling of 16 Republican primary opponents committed to party orthodoxy. In the 2016 general election he narrowly defeated the former first lady, senator and secretary of state Hillary Clinton, who didn’t need her own views of Americans leaked: In public remarks, she gleefully classified half of the voters who supported Mr. Trump as “deplorables,” as her audience laughed and applauded. That year saw more than 42,000 deaths from opioid overdoses.In a democratic republic such as the United States, where the people elect leaders to govern on their behalf, the ballot box is the primary check on an unresponsive, incompetent or corrupt ruling class — or, as Democrats may be learning, a ruling class that insists on a candidate who voters no longer believe can lead. If those in power come to believe they are the only logical options, the people can always prove them wrong. For a frustrated populace, an anti-establishment outsider’s ability to wreak havoc is a feature rather than a bug. The elevation of such a candidate to high office should provoke immediate soul-searching and radical reform among the highly credentialed leaders across government, law, media, business, academia and so on — collectively, the elites.The response to Mr. Trump’s success, unfortunately, has been the opposite. Seeing him elected once, faced with the reality that he may well win again, most elites have doubled down. We have not failed, the thinking goes; we have been failed, by the American people. In some tellings, grievance-filled Americans simply do not appreciate their prosperity. In others they are incapable of informed judgments, leaving them susceptible to demagoguery and foreign manipulation. Or perhaps they are just too racist to care — never mind that polling consistently suggests that most of Mr. Trump’s supporters are women and minorities, or that polling shows he is attracting far greater Black and Hispanic support than prior Republican leaders.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More