The crony capitalists are circling over Ukraine; And, the food inflation problem seems here to stay
Market Watch
Four things to know:
The crony capitalists are circling over Ukraine
With a view to “help bring in investments” for the reconstruction of Ukraine, Blackrock and JP Morgan have been roped in to?run the “Ukraine Development Fund, ” with the stated goal of “creating opportunities for both public and private investors to participate,” in the reconstruction and recovery of Ukraine, reports?Thomas Fazi .
The context: The cost of reconstruction of Ukraine after the war was estimated at $411 billion (twice Ukraine’s pre-war GDP); however, given their failed counteroffensive and the continuing violence, the final cost is now estimated to reach up to $1 trillion.
The details: While Blackrock and JP Morgan are technically acting as “donors”, they will get the first pick of any investment opportunities that emerge in the post-war scenario under the agreement.
Between the lines: In this scenario, it appears war is indeed good for business — a sentiment expressed by?Blackrock’s CEO who said at Davos ?that after the war, he hopes to turn Ukraine into a “beacon of capitalism”, and Goldman Sachs CEO David Solomon saying “as you rebuild, there will be good economic incentives for real return and real investment.”
Of note:?Prabhat Patnaik ?also argues that the IMF’s pivotal role cannot be understated in bringing this about - if - the current crisis in Ukraine is to be traced back to 2014.
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Food inflation: After tomatoes, chillies, jeera, rice appears to be next pain point
Food inflation has?sent the costs of vegetarian and non-vegetarian thalis in India spiking , according to a CRISIL report.
The big picture:?The recent?spike in the prices ?of tomato, tur, and chana dal, as well as high prices of wheat atta, rice, and pulses signal trouble ahead for Indian consumers.
Why this matters:?The rising prices not only impact consumers but also affect the demand faced by agricultural producers, which has implications for farmers’ income and hence the broader economy.
ICYMI