For the head of the World Bank, Microsoft’s Activision Blizzard acquisition announcement is a symbol of what is deeply wrong with the world. The Redmond company is spending much more on a game company than it is on aid for developing countries.
The financial volume of the takeover bid is said to be just under 69 billion dollars. From David Malpass’ point of view, this is simply a flow of capital in the wrong direction at a time when poor countries are fighting for debt restructuring, against Covid-19 and general poverty. Of course, the World Bank chief is not so naïve as to argue that Microsoft should rather allocate the money to development aid.
Rather, his point is to use the example to demonstrate the skewed nature of the global system of economic policy, as can be seen from a report by the news agency Reuters shows. Because it would actually be necessary and quite sensible to channel capital flows more strongly into the developing countries. However, these money movements would be hindered primarily by the fact that the industrialized countries make it incredibly much easier to invest money within their own systems.
A direct comparison shows just how big the disparity has become: the sum budgeted for the acquisition compares with $23.5 billion provided by wealthier nations in December to help the world’s poorest countries weather the aftermath of the Corona pandemic reasonably smoothly – and that amount is to flow over the next three years.
“You have to ask yourself, ‘Wait a minute, is this the best allocation of capital?'” commented Malpass on the Microsoft deal. “This is going to the bond market. You know, a lot of the capital flows into the bond market.” Only a very small portion of developing countries even have access to such bond financing, while too much capital remains pent up in advanced countries.
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