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Coronavirus Pushes Millions of Children Further Into Extreme Poverty

Source: World Bank & UNICEF

Globally, one-in-six children lived in extreme poverty prior to coronavirus. A UN study released in September showed that an additional 150 million children were already pushed into poverty as a result of the pandemic. This number will likely continue to grow from COVID-19’s impact on income generation and food security, according to a report by UNICEF and the World Bank Group. 

Sub-Saharan Africa accounts for 65.8% of children living in extreme poverty, followed by South Asia. Nearly 20% of children under five-years-old in developing countries live in extremely poor households. These regions especially have limited access to resources, such as water, education, food and electricity. Studies show that children in poverty have a higher chance of developing long-term health complications. 

The UN Sustainable Development Goals aim to prioritize funding and international cooperation to help end extreme poverty by 2030. When the public and private sector work together with communities, “change happens: families move out of poverty, children are protected from diseases, girls become students, instead of brides, and much more,” according to the United Nations Foundation. 

Inflation Numbers Grow Among Lasting Pandemic Effects

For many countries, inflation rates hit year-long highs. According to the U.S. National Bureau of Statistics (NBS), the country’s core CPI — an index that accounts for the volatility of energy and food prices — increased 4.58% from October 2021, a year-high. Similarly, departments from the U.K. and China report a year-over-year increase. China’s NBS reported a 1.5% increase for October while the U.K.’s Office for National Statistics reported a 4.2% increase.

For the United Kingdom, inflation is a symptom of rising energy costs as a result of Europe’s gas crisis, statisticians say. Transport is the second-largest contributor to inflation, followed by restaurants and hotels and education. Similarly for China, the rise in inflation is due to a rising cost of energy, as well as a vegetable shortage caused by heavy rainfall.

Automated Trucking Companies Are Raising Larger Deals

While autonomous cars have yet to make a significant impact in consumers’ lives, investors see an opportunity in the automated trucking industry. According to CB Insights, companies have raised an average of $650 million for 2021. These companies cover everything from the actual self-driving truck technology and logistics surrounding fleet coordination.

Waymo, the self-driving subsidiary of Alphabet, the parent company of Google, is the most well-funded company, with a total of $5.7 billion raised throughout its lifetime. It recently announced a partnership with UPS in piloting self-driving trucks in Texas, alleviating supply chain issues caused by the labor shortage. 

Meanwhile, China-based Manbang Group focuses on freight matching — pairing cargo freight with drivers. It has raised a total of almost $3.7 billion. Previously, this was managed by brokers, but automation is increasingly taking the lead. Manbang uses its automation software to connect the 10 million verified truckers with 5 million cargo consignors on its platform. 

There may be other surprising beneficiaries to autonomous trucking, as increased efficiency and lower operating costs could lead to higher congestion in urban centers — making rail a more appealing option.

Financial Institutions Across 45 Countries Make the Net-Zero Pledge

During COP26, Glasgow Financial Alliance for Net Zero (GFANZ) announced that it now includes over 445 financial institutions in 45 countries. The alliance mobilizes more than $130 trillion in private capital. GFANZ was launched in April 2021 to accelerate decarbonization and limit global warming to 1.5 degrees Celsius, as indicated by the Paris Agreement.

Stopping climate change will require coordination across the financial system, and to achieve this goal, GFANZ brings together existing and new net-zero finance initiatives. Participating institutions are required to set science-based goals to reach net-zero emissions — including interim 2030 targets — and commit to transparent reporting in line with the criteria detailed by the United Nations Race to Zero

As more firms in the financial sector align their lending, investing, asset management and underwriting practices with net-zero targets, companies can expect to face increasing pressure to decarbonize and disclose their emissions and climate risks.

The Global Cities Most At Risk of a Housing Bubble

Frankfurt, Toronto and Hong Kong are the cities most at risk of a housing bubble, according to new research by Switzerland-based UBS. Its latest Global Real Estate Bubble Index found nine cities around the world that have a high index score. Meanwhile, Madrid, Milan and Warsaw are deemed to be cities with “fairly valued” housing, and Dubai has a negative index score, indicating that its housing is undervalued.

Overall, bubble risk has increased, along with the potential severity of a price correction, as a result of rising house prices across the world. UBS has found that growth in home prices increased 6% from mid-year 2020 to mid-year 2021 — the highest rate of growth since 2014.

To determine a city’s index score, UBS tracks whether a city shows symptoms of previous real estate bubbles, such as a decoupling of prices from local incomes and rents, and imbalances in the real economy, such as excessive lending and construction activity. In Frankfurt, for example, housing prices have increased steadily every year since 2016, in part due to a focus on building luxury housing, but the average price-to-income ratio has doubled in the last decade, leaving housing unaffordable for many. These trends point to a possible correction if the housing bubble were to burst.

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