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World Bank sees sharp world growth slowdown, ‘hard landing’ risk for poorer nations

The World Bank on Tuesday cut its forecasts for economic growth in the United States, the Euro area and China and warned that high debt levels, rising income inequality and new coronavirus variants threatened the recovery in developing economies.

It said global growth is expected to decelerate “markedly” to 4.1 percent in 2022 from 5.5 percent last year, and drop further to 3.2 percent in 2023 as pent-up demand dissipates and governments unwind massive fiscal and monetary support provided early in the pandemic.

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The forecasts for 2021 and 2022 – the first by a major international institution – were 0.2 percentage point lower than in the bank’s June Global Economic Prospects report, and could be knocked even lower if the Omicron variant persists.

The International Monetary Fund is also expected to downgrade its growth forecasts in its update on Jan. 25.

The bank’s latest semiannual forecast cited a big rebound in economic activity in advanced and developing economies in 2021 after contractions in 2020, but warned that longer-lasting inflation, ongoing supply chain and labor force issues, and new coronavirus variants were likely to dampen growth worldwide.

“Developing countries are facing severe long-term problems related to lower vaccination rates, global macro policies and the debt burden,” World Bank President David Malpass told reporters, citing troubling reversals in poverty, nutrition and health data and permanent impacts from school closures.

Seventy percent of 10-year olds in low- and middle-income countries cannot read a basic story, up from 53 percent, he said.

Ayhan Kose, author of the World Bank report, told Reuters the rapid spread of the highly contagious Omicron variant showed the continuing disruption caused by the pandemic, and said a surge that overwhelmed healthcare systems could knock up to an additional 0.7 further percentage point off the global forecast.

“There is a pronounced slowdown underway,” Kose said. “Policy support is being withdrawn and there is a multitude of risks ahead of us.”

COVID-19 has caused more than 300 million reported infections worldwide and over 5.8 million deaths, according to data compiled by Reuters. While 59 percent of the world’s population has received at least one dose of a COVID-19 vaccine, only 8.9 percent of people in low-income countries have received at least one dose, according to the Our World in Data website.

Malpass described a “growing canyon” in growth rates between advanced and developing economies, which World Bank economists say could spark increased social tensions and unrest.

Kose said the risks of a “hard landing” for developing countries were increasing given their limited options to provide needed fiscal support, coupled with persistent inflationary pressures and elevated financial vulnerabilities.

The report forecast growth in advanced economies declining to 3.8 percent in 2022 from 5 percent in 2021, and dropping further to 2.3 percent in 2023, but said their output and investment would still return to their pre-pandemic trend by 2023.

The bank cut its 2021 US gross domestic product growth by 1.2 percentage points to 5.6 percent, and forecast sharply lower growth of 3.7 percent in 2022 and 2.6 percent in 2023. It said Japan’s GDP growth would reach 1.7 percent in 2021, 1.2 percentage points less than forecast in June, rising to 2.9 percent in 2022.

China’s GDP was expected to expand by 8 percent in 2021, about 0.5 percentage point less than previously forecast, with growth seen slowing to 5.1 percent in 2022 and 5.2 percent in 2023.

Growth in emerging and developing economies is expected to drop to 4.6 percent in 2022 from 6.3 percent in 2021, edging lower to 4.4 percent in 2023, which means their output would remain 4 percent below the pre-pandemic trend.

Fragile and conflict-affected economies will remain 7.5 percent below their pre-pandemic trend, while small island states, rocked by the collapse of tourism, will be 8.5 percent below.

The bank noted that rising inflation — which hits low-income workers particularly hard — was at its highest since 2008 in advanced economies, and the highest since 2011 in emerging and developing economies.

Rising interest rates posed additional risks, and could further undermine the growth forecasts, especially if the United States and other large economies begin jacking up rates this spring, months earlier than expected, Kose said.

He said the pandemic had also pushed total global debt to the highest level in half a century, and concerted efforts were needed to accelerate debt restructuring efforts for countries facing debt distress, and get private-sector creditors engaged.

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Peru inflation surprises as social unrest continues to ease

Inflation in Peru’s capital came in above expectations in March, slowing less than expected, as protests that disrupted key supply chains in the mining, tourism and agribusiness industries eased.

Consumer prices in Lima in March rose 8.4 percent from a year earlier compared to the 8 percent median forecast of five economists surveyed by Bloomberg.

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On a monthly basis, inflation rose by 1.25 percent, according to statistics agency INEI, faster than expected by any of the six economists surveyed by Bloomberg. The median forecast was for a price rise of 0.9 percent.

Peru’s central bank is combating stubbornly high inflation that has been made worse by anti-government protests. The unrest peaked in January and has been easing since, with protests now isolated in the Andean region of Puno near Bolivia.

Peru’s central bank has held the interest rate at 7.75 percent for two consecutive months, after its steepest series of hikes ever. The bank will reassess its benchmark rate at its monthly meeting in April.

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Humans vs. machines: A deep dive into the fight to copyright AI art

Last year, Kris Kashtanova typed instructions for a graphic novel into a new artificial-intelligence program and touched off a high-stakes debate over who created the artwork: a human or an algorithm.

“Zendaya leaving gates of Central Park,” Kashtanova entered into Midjourney, an AI program similar to ChatGPT that produces dazzling illustrations from written prompts. “Sci-fi scene future empty New York….”

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From these inputs and hundreds more emerged “Zarya of the Dawn,” an 18-page story about a character resembling the actress Zendaya who roams a deserted Manhattan hundreds of years in the future. Kashtanova received a copyright in September, and declared on social media that it meant artists were entitled to legal protection for their AI art projects.

It didn’t last long. In February, the US Copyright Office suddenly reversed itself, and Kashtanova became the first person in the country to be stripped of legal protection for AI art. The images in “Zarya,” the office said, were “not the product of human authorship.” The office allowed Kashtanova to keep a copyright in the arrangement and storyline.

Now, with the help of a high-powered legal team, the artist is testing the limits of the law once again. For a new book, Kashtanova has turned to a different AI program, Stable Diffusion, which lets users scan in their own drawings and refine them with text prompts. The artist believes that starting with original artwork will provide enough of a “human” element to sway the authorities.

“It would be very strange if it’s not copyrightable,” said the 37-year-old artist of the latest work, an autobiographical comic.

A spokesperson for the copyright office declined to comment. Midjourney also declined to comment, and Stability AI did not respond to requests for comment.

Smashing records

At a time when new AI programs like ChatGPT, Midjourney and Stable Diffusion seem poised to transform human expression as they smash records for user growth, the legal system still hasn’t figured out who owns the output — the users, the owners of the programs, or maybe no one at all.

Billions of dollars could hinge on the answer, legal experts said.

If users and owners of the new AI systems could get copyrights, they would stand to reap huge benefits, said Ryan Merkley, the former chief of Creative Commons, a US organization that issues licenses to allow creators to share their work.

For example, companies could use AI to produce and own the rights to vast quantities of low-cost graphics, music, video and text for advertising, branding and entertainment. “Copyright governing bodies are going to be under enormous pressure to permit copyrights to be awarded to computer-generated works,” Merkley said.

In the US and many other countries, anyone who engages in creative expression usually has immediate legal rights to it. A copyright registration creates a public record of the work and allows the owner to go to court to enforce their rights.

Courts including the US Supreme Court have long held that an author has to be a human being. In rejecting legal protection for the “Zarya” images, the US Copyright Office cited rulings denying legal protection for a selfie snapped by a curious monkey named Naruto and for a song that the copyright applicant said had been composed by “the Holy Spirit.”

One US computer scientist, Stephen Thaler of Missouri, has maintained that his AI programs are sentient and should be legally recognized as the creators of artwork and inventions that they generated. He has sued the US Copyright Office, petitioned the US Supreme Court and has a patent case before the UK Supreme Court.

Meanwhile, many artists and companies that own creative content fiercely oppose granting copyrights to AI owners or users. They argue that because the new algorithms work by training themselves on vast quantities of material on the open web, some of which is copyrighted, the AI systems are gobbling up legally protected material without permission.

Stock photo provider Getty Images, a group of visual artists and owners of computer code have separately filed lawsuits against owners of AI programs including Midjourney, Stability AI and ChatGPT developer OpenAI for copyright infringement, which the companies deny. Getty and OpenAI declined to comment.

Sarah Andersen, one of the artists, said granting copyrights to AI works “would legitimize theft.”

‘Hard questions’

Kashtanova is being represented for free by Morrison Foerster and its veteran copyright lawyer Joe Gratz, who is also defending OpenAI in a proposed class action brought on behalf of owners of copyrighted computer code. The firm took on Kashtanova’s case after an associate at the firm, Heather Whitney, spotted a LinkedIn post by the artist seeking legal help with a new application after the “Zarya” copyright was rejected.

“These are hard questions with significant consequences for all of us,” Gratz said.

The Copyright Office said it reviewed Kashtanova’s “Zarya” decision after discovering the artist had posted on Instagram that the images were created using AI, which it said was not clear in the original September application. On March 16, it issued public guidance instructing applicants to clearly disclose if their work was created with the help of AI.

The guidance said the most popular AI systems likely do not create copyrightable work, and “what matters is the extent to which the human had creative control.”

‘Completely blown’

Kashtanova, who identifies as nonbinary and uses “they/them” pronouns, discovered Midjourney in August after the pandemic largely shut down their work as a photographer at yoga retreats and extreme-sports events.

“My mind was completely blown,” the artist said. Now, as AI technology develops at lightning speed, Kashtanova has turned to newer tools that allow users to input original work and give more specific commands to control the output.

To test how much human control will satisfy the copyright office, Kashtanova is planning to submit a series of copyright applications for individual images chosen from the new autobiographical comic, each one made with a different AI program, setting or method.

The artist, who now works at a start-up that uses AI to turn children’s drawings into comic books, created the first such image a few weeks ago, titled “Rose Enigma.”

Sitting at a computer in their one-bedroom Manhattan apartment, Kashtanova demonstrated their latest technique: they pulled up on the screen a simple pen-and-paper sketch they had scanned into Stable Diffusion, and began refining it by adjusting settings and using text prompts such as “young cyborg woman” and “flowers coming out of her head.”

The result was an otherworldly image, the lower half of a woman’s face with long-stemmed roses replacing the upper part of her head. Kashtanova submitted it for copyright protection on March 21.

The image will also appear in Kashtanova’s new book. It’s title: “For My A.I. Community.”

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Lebanon central bank extends ceiling-free sales of US dollars until end of April

Lebanon’s central bank on Friday extended its arrangement allowing banks to purchase an unlimited amount of US dollars on its Sayrafa exchange platform until the end of April, a central bank statement said.
A circular on the arrangement was first issued at the end of 2021 and has been regularly extended since. Governor Riad Salameh said earlier this month the central bank would sell unlimited US dollars at the rate of 90,000 pounds to prop up the collapsing pound.
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