YCLOAK

Zimbabwe’s public sector unions were divided on Wednesday over whether to launch a national strike after wage talks with the government failed, leaving the country on edge over the possibility of more unrest.

Zimbabwe was rocked by violent protests for three days in mid-January that led to a brutal security crackdown.

The security forces’ heavy-handed response raised fears that under President Emmerson Mnangagwa, the country was sliding back into the kind of authoritarianism seen during Robert Mugabe’s 37-year rule.

Mnangagwa’s spokesman said troops would stay on the streets and the state would block the internet again if violence flared.

Teachers and other state workers are demanding wage rises and payments in dollars to help them stave off spiralling inflation and an economic crisis that has sapped supplies of cash, fuel and medicines in state hospitals.

Rights groups say at least 12 people were killed this month after a three-day stay-at-home strike over a fuel price hike led to street protests and a crackdown by security services. The government says three people died.

At a meeting with unions, the government proposed to give land to build houses and food hampers for employees, union officials said. Public sector unions had on Monday issued the government with a 48-hour ultimatum to make a new salary offer or face a strike.

The Apex Council, which represents 17 public sector unions, then failed to agree on whether to hold a strike during a short meeting that broke down as officials accused each other of either working for the opposition or the government.

“The Apex Council meeting ended prematurely and people walked out. There is no consensus. How do we go on strike when our fellow unions are coming and saying some unions were paid?” said Raymond Majongwe, secretary general of the Progressive Teachers Union of Zimbabwe.

He said his union was among those accused by colleagues of being paid by the opposition and donors to go on strike and cause violence, charges he denied.

The biggest teachers union has called for a strike on Feb. 5.

‘Bread and butter’

Mnangagwa — who came to power in November 2017 after long-time ruler Mugabe was forced to resign in a coup — promised to revive the economy and break with Mugabe politics. But frustration over the economic crisis is building and analysts say the pace of economic and political reform is too slow for impatient citizens.

Mnangagwa on Wedneaday picked a 24-member advisory council to advise him on economic reforms, a government source said.

The 76-year-old leader has promised to investigate the crackdown on protesters and to bring in measures to tackle the economic crisis but the opposition does not trust him.

His spokesman said it would take time to rebuild an economy that had been suffering for decades.

“There are key bread and butter questions which government cannot dodge, things are tough,” George Charamba told a state-owned Harare radio station.

“But it would be a sad day to think that the only way that we can remedy such a problem is by causing further damage to that already damaged economy through mayhem, through looting, through chaos.”

Charamba said police and soldiers would stay on the streets and that government would shut the internet again if violence broke out. He previously said the crackdown was a foretaste of how the government would react to future protests.

 
…

France’s energy regulator is proposing a 5.9 percent increase in regulated power prices but faces opposition from the government which had promised not to increase the cost after the “yellow vest” protests.

Following the first wave of protests in November over the cost of living, the government scrapped fuel tax hikes planned for 2019. It also said last month that it would prevent utility EDF from raising power prices this winter.

But capping regulated power prices is more complicated as these are set by the independent CRE energy regulator via a formula which includes the cost of generation, transport and distribution. A third of retail power bills is made up of taxes.

The government has three months to respond to the CRE proposal, but said Wednesday it would keep its promise.

“We will use legal delays in order to protect households from too big an increase in their power bill at a time of high consumption,” an environment ministry official said.

Thousands of “yellow vest” demonstrators again marched in Paris and other French cities last Saturday in protests that brought sporadic clashes with police and suggested that President Emmanuel Macron has yet to defuse public discontent after 11 weeks of demonstrations.

Confirming a report in financial daily Les Echos, a CRE official said the regulator proposes a 7.7 percent increase excluding taxes from March 1, or 5.9 percent tax included.

The proposed increase would be the highest in years and would be applicable to the 25.6 million consumers who still subscribe to EDF’s regulated tariffs.

EDF shares were up 3.4 percent and were the sixth-best performer in the SBF 120 index.

The proposed rise mainly reflects the increase of wholesale power market prices. A doubling of back-up power capacity prices also contributed.

Year-ahead wholesale power prices have risen from 35 euros per megawatt hour in early 2017 to 41 euros in early 2018 and 59 euros in December 2018.

EDF has been losing some 100,000 customers a month to competitors, but at the end of September the former monopolist still had a 79.3 percent market share.

Power price freezes by previous governments have been overruled by the courts as smaller power vendors challenged them, saying they distort competition.

CRE said one way for the state to limit power bills would be to reduce the CSPE tax, which helps finance renewable energy subsidies and social tariffs for low-income families. It accounts for 15 percent of a consumer’s bills, and raised 3 billion euros ($3.4 billion) last year.

CRE said Spain and Italy were also increasing power tariffs by up to eight percent. At 171 euros/MW, regulated French pre-tax power prices are below the 200 euro EU average and just two-thirds of the 300-290 euros paid in Germany and Belgium.
…

Democrats in the U.S. Congress introduced a bill on Wednesday morning to ensure equal pay for women and transparency from employers. 

The legislation would require employers to prove that current pay disparities between the sexes are job-related. 

Women make up nearly half the workforce in the United States and earn more college degrees than men each year, according to the Institute for Women’s Policy Research (IWPR), which conducts research on social science and analyzes policy. 

On average, white women working full time earn 80.5 cents for every dollar earned by a white man in the same position. Black women earn 61 cents, and Hispanic women earn 53 cents for every dollar earned by a white man. 

Rep. Rosa DeLauro of Connecticut has introduced the Paycheck Fairness Act to every sitting Congress since 1997. 

“For more than two decades we pushed, we battled to strengthen the 1963 Equal Pay Act,” DeLauro said to members of Congress. “Nothing is more right, and nothing would make more of a difference to working families in this country.” 

The bill also prevents employers from firing or retaliating against employees who discuss pay, and it prevents employers asking candidates about prior salaries so new salaries are not based on prior discrimination. 

Additionally, it supports employers by implementing wage data collection technologies and salary negotiation training programs for female employees. 

Economic boost predicted

Enforcing equal pay for women would add $513 billion to the national economy and cut poverty in houses with working women in half, according to an IWPR report. 

If this bill or subsequent bills fail to pass, the IWPR predicts it will take until 2059 for white women, 2119 for black women and 2224 for Hispanic women to reach equal pay with white men. 

This version of the bill was introduced before the most female Congress in history, on the 10-year anniversary the Lilly Ledbetter Fair Pay Act that allowed workers to challenge pay discrimination in the courts.

Debra L. Ness, president of the National Partnership, a nonprofit organization that fights for policies to improve the lives of American women, spoke before Congress on behalf of the bill. 

“If we’re going to prioritize the concerns of the women across this country, then we have got to do more than just think about the wage gap,” Ness said. “Join us in this fight.”
…

Brazilian miner Vale SA identified concerns around its tailings dams in 2009 and studied but did not implement several steps that could have prevented or lessened the damage from last week’s deadly disaster, according to a corporate presentation seen by Reuters.

    

A tailings dam, used to store the muddy detritus of the mining process, collapsed on Friday, killing at least 65 in one of Brazil’s largest industrial accidents on record.            

    

The Brumadinho disaster, coming just over three years after a similar incident at another mine partially controlled by Vale, has fueled calls for a management overhaul and erased more than 70 billion reais ($18.61 billion) in Vale’s market value.      

But a decade ago, the world’s largest iron ore miner was considering ways to use fewer tailings dams, including alternative uses for the waste rock, according to the 73-page presentation.

The presentation pointed to the rising volume of tailings produced at the company’s mines, with some locations producing hundreds of thousands of tons of tailings daily.

    

The report suggested Vale make building materials from tailings, including bricks, a step that would give the company another revenue source and lessen the volume needing to be stored using dams.

    

The 2009 Vale report had recommended the company undertake a project to be called “Zero Dams” that would have involved drying out tailings, among other steps. It was not known whether the report reached the top levels of Vale management nor why it was not implemented.

    

Vale declined to comment. The report’s author, Paulo Ricardo Behrens da Franca, left Vale a year after submitting it and now works as an industry consultant. Reached by Reuters, he did not comment.

    

‘Inherently Dangerous Structures’

Vale’s Brumadinho facility was built using the cheapest and least-stable type of tailings dam design, a commonly used structure in mining known as “upstream construction.”

    

Chile, Peru and other earthquake-prone countries ban the design, in which tailings are used to progressively construct dam walls the more a mine is excavated. Brazil is not as earthquake-prone as its western neighbors, but even small seismic activity has been shown to affect tailings dams.

Because these types of tailings dams are waterlogged, they are easily susceptible to cracks and other damage that can cause bursts like the one that occurred last week near Brumadinho.

“A tailings dam may look safe, but it’s still retaining a lot of moisture behind it,” said Dermot Ross-Brown, a mining industry engineer who teaches at the Colorado School of Mines. “They’re inherently dangerous structures.”

    

Tailings dams tend to be shorter in height than conventional water dams, but often are far wider in span.

    

The disaster’s cause remains unknown. Vale said the dam had not received tailings for about two and a half years and was in the process of decommissioning, a step that should have lessened risk, engineers said.

    

“It’s really puzzling to me this happened as the (dam) was closing,” said Cameron Scott of SRK Consulting, a mining engineering firm. “This disaster will make future mine permitting harder.”

   

The dam had passed a September 2018 inspection by the German firm TUEV SUED AG and Vale Chief Executive Fabio Schvartsman said equipment had shown the dam was stable on Jan.

10.            

 

On Tuesday, Brazilian state prosecutors arrested three Vale employees and two TUEV SUED employees.                

    

Risk

Brazil has nearly 4,000 dams that are classified as having “high damage potential” or being at high risk, with 205 of those dams containing mineral waste, the country’s Regional Development Minister Gustavo Canuto said.             

Analysts and engineers said that the Brumadinho disaster will hopefully push the industry to stop storing wet tailings and instead move toward the more-expensive-but-safer process of storing dry tailings.

That process requires drying the tailings and storing them on-site, abrogating the risk of a dam burst. The approach is becoming more popular in Canada and other countries with stricter mining regulations.    

“The industry doesn’t yet fully realize the risk its taking on with those type of wet tailings dams,” said Matt Fuller of Tierra Group International Ltd, a tailings engineering consulting firm.

 

Officials in Brazil’s Minas Gerais state, where the disaster occurred, say they are now going to push for legislation requiring dry mining and forcing miners to tear down tailings dams when they are located above communities.

A similar proposal failed last summer, with its defeat attributed by the bill’s sponsor to lobbying pressure from mining companies.

    

Brazil is still reeling from the 2015 collapse of a larger dam, owned by the Samarco Mineracao SA joint venture between Vale and BHP, that killed 19 people.

    

After Samarco, the International Council on Mining and Metals (ICMM) issued updated guidelines for its members to try to safeguard tailings dams used to store waste left over from mining operations.

    

The ICCM said on Saturday that the mining industry still has “lessons to learn” from Samarco and similar events.            

Mining companies typically hire engineering firms that specialize in tailings dams to build the structures, not necessarily dam contractors themselves, a step that some industry observers hope changes soon.     

“The mining companies are not placing dam safety at the forefront of their preoccupations,” said Emmanuel Grenier, a spokesman for the International Coalition of Large Dams (ICOLD), a non-governmental organization focused on dam engineering.

The group “is recommending that dams, especially large dams, be built by dam professionals, but it is too rarely the case for tailing dams,” Grenier said.

($1 = 3.7614 reais)
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The U.S. has imposed sanctions on Venezuela’s state-owned oil company, PdVSA, in an increased effort to pressure Nicolás Maduro to relinquish power to Juan Guaidó, now recognized by the U.S. and a number of other nations as the country’s legitimate president. VOA’s diplomatic correspondent Cindy Saine reports from the State Department.
…

Brazil eyes management overhaul for Vale after dam disaster

Brazil’s government weighed pushing for a management overhaul at iron ore miner Vale SA on Monday as grief over the hundreds feared killed by a dam burst turned into anger, with prosecutors, politicians and victims’ families calling for punishment.

By Monday night, firefighters in the state of Minas Gerais had confirmed that 65 people were killed by Friday’s disaster, when a burst tailings dam sent a torrent of sludge into the miner’s offices and the town of Brumadinho.

There were still 279 people unaccounted for, and officials said it was unlikely that any would be found alive.

Brazil’s acting president, Hamilton Mourao, told reporters a government task force on the disaster response is looking at whether it could or should change Vale’s top management.

Public-sector pension funds hold several seats on the board of the mining company, and the government holds a “golden share” giving it power over strategic decisions.

“The question of Vale’s management is being studied by the crisis group,” said Mourao, who is serving as acting president for some 48 hours while President Jair Bolsonaro recovers from surgery. “I’m not sure if the group could make that recommendation.”

Shares of Vale, the world’s largest iron ore and nickel producer, plummeted 24.5 percent on Monday in Sao Paulo, erasing nearly $19 billion in market capitalization. A U.S. law firm filed a shareholder class action lawsuit against the company in New York, seeking to recover investment losses.

Igor Lima, a fund manager at Galt Capital in Rio, said the severe threats from the government and prosecutors drove the shares even lower than many analysts had estimated.

“This reaction has brought quite a lot of uncertainty about the size of the financial punishment Vale will have to handle,” he said.

Senator Renan Calheiros, who is in the thick of a Senate leadership race, on Twitter called for Vale’s top management to be removed urgently “out of respect for the victims … and to avoid any destruction of evidence.”

One of Vale’s lawyers, Sergio Bermudes, told newspaper Folha de S. Paulo that management should not leave the company and said that Calheiros was trying to profit politically from the tragedy.

Vale’s senior executives have apologized for the disaster but have not accepted responsibility, saying the installations met the highest industry standards.

Brazil’s top prosecutor, Raquel Dodge, said the company should be held strongly responsible and criminally prosecuted.

Executives could also be personally held responsible, she said.

Repeated Failures

The disaster at the Corrego do Feijao mine occurred less than four years after a dam collapsed at a nearby mine run by Samarco Mineracao SA, a joint venture by Vale and BHP Billiton, killing 19 and dumping toxic sludge in a major river.

While the 2015 Samarco disaster unleashed about five times more mining waste, Friday’s dam break was far deadlier as the wall of mud hit Vale’s local offices, including a crowded cafeteria, and tore through a populated area downhill.

“The cafeteria was in a risky area,” Renato Simao de Oliveiras, 32, said while searching for his twin brother, a Vale employee, at an emergency response station. “Just to save money, even if it meant losing the little guy. … These businessmen, they only think about themselves.”

As search efforts continued on Monday, firefighters laid down wood planks to cross a sea of sludge that is hundreds of meters wide in places, to reach a bus in search of bodies inside. Villagers discovered the bus as they tried to rescue a nearby cow stuck in the mud.

Longtime resident Ademir Rogerio cried as he surveyed the mud where Vale’s facilities once stood on the edge of town.

“The world is over for us,” he said. “Vale is the top mining company in the world. If this could happen here, imagine what would happen if it were a smaller miner.”

Nestor José de Mury said he lost his nephew and coworkers in the mud. “I’ve never seen anything like it, it killed everyone,” he said.

Vale Chief Financial Officer Luciano Siani told journalists on Monday evening that, despite interrupting operations in Brumadinho, the company would continue royalty payments to the municipality. He said Vale royalties made up about 60 percent of the town’s 140 million reais in revenue last year.

Siani said a donation of 100,000 reais will be made to each family that lost a relative in the disaster and said Vale would step up investments in dam safety.

Safety Debate

The board of Vale, which has raised its dividends over the last year, suspended all shareholder payouts and executive bonuses late on Sunday, as the disaster put its corporate strategy under scrutiny.

Since the disaster, courts have order a freeze on 11.8 billion reais of Vale’s assets to cover damages. State and federal authorities have slapped it with 349 million reais of administrative fines.

German insurer Allianz SE may have to cover some of the costs of the dam collapse, two people familiar with the matter told Reuters.

“I’m not a mining technician. I followed the technicians’ advice and you see what happened. It didn’t work,” Vale CEO Fabio Schvartsman said in a TV interview. “We are 100 percent within all the standards, and that didn’t do it.”

Many wondered if the state of Minas Gerais, named for the mining industry that has shaped its landscape for centuries, should have higher standards.

“There are safe ways of mining,” said Joao Vitor Xavier, head of the mining and energy commission in the state assembly. “It’s just that it diminishes profit margins, so they prefer to do things the cheaper way — and put lives at risk.”

Reaction to the disaster could threaten the plans of Brazil’s newly inaugurated president to relax restrictions on the mining industry, including proposals to open up indigenous reservations and large swaths of the Amazon jungle for mining.

Environment Minister Ricardo Salles said in a TV interview on Monday that Brazil should create new regulation for mining dams, replacing wet tailings dams with dry mining methods.

Mines and Energy Minister Bento Albuquerque proposed in a Sunday newspaper interview that the law be changed to assign responsibility in cases such as Brumadinho to the people responsible for certifying the safety of mining dams.

“Current law does not prevent disasters like the one we saw on Brumadinho,” he said. “The model for verifying the state of mining dams will have to be reconsidered. The model isn’t good.”

($1 = 3.7559 reais)
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British officials are war-gaming various strategies for coping with the disruption of Britain leaving the European Union without an exit deal, including declaring a state of emergency and martial law to avert disorder provoked by possible food shortages and energy outages.

Details emerged of Operation Yellow Hammer, the contingency planning underway for a so-called no-deal Brexit, ahead of important parliamentary votes this week that could result in Britain postponing its departure by nine months or even more.

Operation Yellow Hammer has provoked the wrath of hardline Brexiters, who say the war-gaming is excessive and the leaking of what the government is considering is just designed to scare rebel lawmakers into accepting the Brexit Withdrawal Agreement the House of Commons rejected earlier this month.

As the exit day of March 29 looms, the government and businesses are scrambling to prepare for possible chaos wrought by a no-deal exit, which some fear could severely disrupt supply chains, energy networks and basic cross-border services, from banking to travel. Downing Street admits a no-deal exit would bring disruption “but as a responsible government we are taking the appropriate steps to minimize this disruption and ensure the country is prepared.”

Some civil servants have compared the likely disruption to the impact of a war. Defense officials told Sky News Sunday the army is stockpiling food, fuel, spare parts and ammunition in readiness. “An army marches on its stomach. If supply lines break down, they struggle,” an official said.

Earlier this month, nearly 100 trucks took part in a drill to test Britain’s contingency plans for coping with likely customs and security delays in the event of a no-deal Brexit. The port of Dover normally sees 10,000 trucks pass through every day, bringing vital supplies from the continent and sending Britain’s exports to the European Union and beyond. The fear is a large part of southeast England could see unmanageable traffic lines.

 

Hardline Brexiters, like former foreign secretary Boris Johnson, have dismissed the no-deal Brexit warnings as hysteria. “These doom-laden predictions are so hyperbolical as to suffer from the law of diminishing returns. Brexiteers have, for months, been arguing that a no-deal exit is manageable and government warnings are overblown,” Johnson said recently.

The House of Commons is set to vote Tuesday on whether Britain should delay the March 29 exit if a withdrawal deal that will garner sufficient support from lawmakers cannot be reached with Brussels.

More than a dozen ministers are warning they’ll resign if May fails to commit to avoiding a no-deal Brexit, although they’re prepared to give her two weeks to try to conclude a new withdrawal deal first.

In the event she can’t, parliament would have to pass new legislation to delay an exit. But delaying Britain’s departure would also require unanimous agreement from the 27 other EU member states, and Brussels has warned the exit could only be postponed for a handful of months.

Ironically, rebellious hardline Euro-skeptics in May’s ruling Conservative party, who were key in the heavy defeat of May’s Brexit Withdrawal Agreement earlier this month, appear to be softening their opposition to her deal; while pro-EU Conservative rebels and middle-of the-roaders appear to be moving closer together in an alliance determined now to bury it for good.

May’s proposed deal would see Britain locked in a customs union with the European Union for several years while it negotiates a vaguely defined free trade settlement.

In the temporary customs union, Britain would be unable to influence EU laws, regulations and product standards it would have to observe. The transition was reached to avoid customs checks on the border separating Northern Ireland and the Irish Republic, but British lawmakers fear Britain could be trapped indefinitely in the transition.

Leading Brexiters say if May can get a sunset clause written into the agreement to allow Britain to escape the transition agreement later on, if it wished, or if the transition was time-limited, they might reverse their opposition and back the deal.

The possible change of heart is being determined by their fear that pro-EU lawmakers are gaining in parliamentary strength. But it isn’t clear Brussels or the other 27 member states will agree such a clause, they insist there can’t be substantial changes to the deal they agreed on after two years of haggling.

Pro-EU lawmakers across all parties appear emboldened and determined to negotiate a much softer agreement that would see Britain stay in a customs union with the bloc permanently.

 
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The U.S. Treasury has lifted sanctions on three Russian companies connected to Russian billionaire Oleg Deripaska, reversing a move which wreaked havoc on global aluminum markets last year.

To the Treasury and supporters of the move, it was an example of sanctions working as they should by changing a target’s behavior in nine months under suffocating restrictions on trade. Due to the sanctions, Deripaska, a tycoon who has been close to the Kremlin, agreed to reduce his shareholdings to below 50 percent.

Congressional Democrats and some Republicans, however, worry that Deripaska could retain significant influence, even as he himself stays under sanctions.

Here is a look at Deripaska, his companies, and possible consequences of the Treasury ruling.

Putin ally

With his cropped hair and scruffy beard, Deripaska was a familiar face to Russians long before he was dragged into in the U.S. furor over the 2016 election.

Amid the economic chaos that followed the Soviet Union’s collapse, the trained physicist became a major player on the Russian metals market even before his 30th birthday. Even among Russian billionaire businessman, Deripaska’s also notable for his closeness to Russian President Vladimir Putin. A leaked U.S. diplomatic cable from 2006 described him as “among the 2-3 oligarchs Putin turns to on a regular basis.”

As special counsel Robert Mueller investigates alleged collusion between President Donald Trump’s 2016 electoral campaign and Russian interests, Deripaska’s links to former Trump campaign chairman Paul Manafort have come under scrutiny. Manafort, who was convicted last year in the United States of tax and bank fraud, was a former business partner of Deripaska.

The Belarusian model and self-described sex coach Anastasia Vashukevich — known by her pseudonym Nastya Rybka — said last year that she had obtained details of Deripaska’s alleged role in U.S. election meddling while spending time on his yacht. Vashukevich was arrested in Thailand last February and deported this month. She is now in Russia.

Vashukevich earlier indicated she would turn over the recordings she claimed to have if the U.S. could help secure her release, but she later withdrew the offer, suggesting that she and Deripaska had reached an agreement. Deripaska won a Russian defamation suit against Vashukevich and another man last year.

Sanctions collateral damage

The U.S. decision in April 2018 to sanction Rusal — the massive aluminum producer then controlled by Deripaska — had a big impact. Shares in the company plunged over 50 percent, and supply chains around the world were disrupted.

That exposed both the power and the limits of U.S. policy toward Russia, says Tom Adshead of Moscow-based consultancy Macro-Advisory.

Previous sanctions had been written to minimize damage to other sectors of the economy, and in particular Western businesses buying Russian commodities. That changed with Deripaska.

By barring almost any commercial relationship with one of the world’s largest producers of a metal key to international supply chains, U.S. policymakers ensured this time the economic pain would be felt not only in Russia.

“There was collateral damage that wasn’t desirable,” Adshead said. Besides an immediate jump in aluminum prices, that included economic uncertainty for Rusal’s employees outside Russia in countries like Sweden and Ireland.

The Rusal experience could mean the U.S. is more cautious about sanctioning major market players in future, Adshead predicted.

After the sanctions were removed from Rusal on Monday, shares in the company rose to their highest since April, though they remained at only around two-thirds of their value prior to the sanctions.

The price of aluminum largely held steady as other companies have stepped into the void left by Rusal and increased supply, analysts say.

The main winners have been state-owned metal producers in China — just the ones the Trump administration has sought to stymie by imposing tariffs on Chinese aluminum.

Enforcing conditions

The key condition of lifting sanctions on Rusal and Deripaska’s other companies is that the companies “reduced Oleg Deripaska’s direct and indirect shareholding stake in these companies and severed his control,” the Treasury said.

Whether that will actually prove to be the case was a key bone of contention in Congress, which voted this month to try to block the administration’s efforts to remove the sanctions. In the House, 136 Republicans joined Democrats to disapprove the deal while in the Senate 11 Republicans supported the move but fell short of the 60 votes needed.

Deripaska remains a significant minority shareholder — his En+ group says he holds “no more than 44.95 percent” — and other shares are held by smaller shareholders and independent trustees under an agreement with the Treasury.

There’s no other shareholder of the same size and a number of the other shareholders would probably agree with him on many strategic issues,” Adshead said. “Therefore it will almost certainly be run in the way he wants it to be run, but the point is that he no longer has as much freedom or control as he wanted.”

 
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The longest-ever partial U.S. government shutdown cost the country’s economy $3 billion in lost economic activity that won’t be recovered, the Congressional Budget Office concluded Monday.

The CBO said its assessment of the effects of the 35-day shutdown on the U.S. economy, the world’s largest, showed that $3 billion in economic activity was lost in the waning days of 2018 after the government closures took effect December 22, and another $8 billion in January, extending to last Friday when the shutdown was ended.

However, the CBO said with 800,000 federal workers who were furloughed or forced to work without pay being paid back wages in the coming days and government operations resuming, all but $3 billion in economic activity “will eventually be recovered” in the coming weeks.

CBO estimated that about $18 billion in federal discretionary spending was delayed during the shutdown, although most of that is likely to resume again — unless there is another shutdown in less than three weeks.

President Donald Trump and Democratic and Republican congressional leaders agreed to end the shutdown and created a bipartisan panel to negotiate security provisions along the U.S.-Mexico border.

The shutdown was spawned over Trump’s demand for $5.7 billion for a border wall to thwart illegal immigration, perhaps his most prominent 2016 campaign pledge during his successful run for the presidency. Opposition Democrats, however,have refused his demand for border wall money while saying they are willing to offer more funding for other security measures, including tightened controls at ports of entry, more border agents and increased use of technology to monitor illegal border crossings.

Trump said Sunday he thinks there is less than a 50 percent chance the congressional border security negotiators will be able to reach an agreement he would accept by their self-imposed Februay 15 deadline.

He said another government shutdown is “certainly an option” if there is no agreement or he could declare a national emergency and attempt to build the wall without congressional approval by tapping unspent government funds.

However, several prominent Republican lawmakers have urged Trump to not declare a national emergency, an action that would draw quick Democratic lawsuits in opposition.

Smaller GDP

The CBO said the $3 billion permanently lost to the U.S. economy means the projected 2019 gross domestic product of more than $19 trillion will be .02 percent smaller than it otherwise would have been.

But its report said “underlying those effects on the overall economy are much more significant effects on individual businesses and workers.

Among those who experienced the largest and most direct negative effects are federal workers who faced delayed compensation and private-sector entities that lost business. Some of those private-sector entities will never recoup that lost income.”

Still, the CBO said that “all of the estimated effects and their timing are subject to considerable uncertainty. In particular, CBO is uncertain about how much discretionary spending was affected by the partial shutdown, how affected federal employees and contractors adjusted their spending in response to delayed compensation, and how agencies will adjust their spending on goods and services now that funding has resumed.”
…

China is moving quickly to push forward a draft version of its first Foreign Investment Law this week.

 

Among other things, the proposed law bans forced technology transfers, guarantees national treatment for foreign investors and steps up intellectual property right protections — all key issues in the ongoing trade dispute with Washington.

 

It also supports a negative-list management for foreign investment. A list unveiled in June last year cut the number of restricted items down to 48 from 63 and removed access restrictions in several sectors, according to state media.

Analysts note, however, that the way the law is being “rushed through” and the vague wording of many of its 39 clauses is casting some serious doubts on authorities’ ability to enforce the legislation after it is passed.

Being rushed through?

Lester Ross, who chairs the China Policy Committee of the American Chamber of Commerce (AmCham) in Beijing, said he’s concerned about the draft’s expedited review, including a two-day legislative session for the draft bill that begins Tuesday.

The meeting comes before the period of solicitation of public comments is set to end in late February.

China’s largely rubber-stamp legislature, the National People’s Congress, is working to fast-track the bill’s passage during its annual meeting in March, which may serve as an olive branch to ease trade tensions with Washington, said Liu Meng-chun of the Chung-Hua Institution of Economic Research (CIER) in Taipei.

While acknowledging the draft’s consistency with the “competitive neutrality” principal, which encourages fair competition between domestic and foreign businesses, Ross said the draft has many shortcomings.

“The problem is that there are many provisions in the law, which do not address the concerns of foreign investors and in addition, the provisions are in some cases so broadly-worded that they actually create a basis for mistreatment of foreign businesses,” he said.

Additional hurdles

For example, article 20 allows the state to take control of foreign investment in the interest of the public. Yet what defines public interest isn’t clear. As is the case when article 33 states the need for safety reviews on foreign businesses, which “influence or are likely to influence national security.” That, Ross said, creates an additional hurdle when the law is intended to reduce hurdles.

As a principal, he urges China to keep restrictions on foreign investment to a minimum in accordance with international norms and China’s own WTO commitments.

Walker Wallace, partner at the U.S. international law firm O’Melveny & Myers’ office in Shanghai, finds the draft’s article 39 problematic. As it is currently worded, the article only gives foreign businesses a five-year grace period to reorganize their existing corporate structure — mainly joint ventures or wholly foreign-owned enterprises.

A problematic deadline

“Putting the five-year term limit basically puts the gun to the heads of the joint venture parties and says you have five years to try and reopen… a deal that was closely negotiated before where people made trade-offs one way or another. And that opens up the possibility for all kinds of mischief,” Wallace says.

He said China should allow foreign-invested enterprises to retain their existing corporate structures till the end of their current contract so that no shareholders, for example, a Chinese land owner and a foreign hotel company with an agreement longer than five years, use the opportunity to unfairly renegotiate.

Another issue, he adds, is the bill fails to spell out the consequences foreign businesses will face if they’re unable to complete such reorganization within the time frame.

Wallace also urged China to add provisions to the draft that would allow foreign businesses to be able to freely establish domestic subsidiaries just like their local competitors.

It remains to be seen whether foreign companies will be governed by China’s Company Law after the bill takes effect. If so, the Company Law presents another set of problems, said Ross.

For example, he added, foreign businesses will find it unacceptable to set up a Communist Party branch within the companies, as required by article 19.

Enforceable assurances?

Compared to the 2015 draft, the earlier version of the law, the new bill further opens up the Chinese market to foreign investment through deregulation and institutional reform.

But how that will all play out in practice remains to be seen as the law’s enforcement will be handled by local governments, CIER’s Liu noted.

“China has often embraced protectionist policies at the local level. If the open-up policy involves sectors that have long been dominated by local government-owned enterprises, it means these government-run companies will now face foreign competition. Given that their performance is tied to local governments’ fiscal [health], it remains to be seen if local authorities will fully execute the central government’s policies,” the economist said.

In other words, the removal of hidden hurdles for foreign businesses that contradict to the law upon its adoption will be key, he added.

Those hurdles include bureaucratic red tape, taxation practices or the level of priorities given to foreign businesses in listing queues, all of which have, in the past, added difficulties to the operation of foreign investment there, observers say.

 

 

 
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Malawi is the latest African country to look at legalizing cannabis, the plant that produces hemp and marijuana, after similar moves in Lesotho, South Africa, and Zimbabwe. As Malawi’s tobacco industry, the country’s biggest foreign exchange earner, has dwindled due to anti-tobacco campaigns, farmers are now looking to grow cannabis. 

Malawi has long relied on tobacco, which accounts for 13 percent of its gross domestic product and 60 percent of its foreign exchange earnings.

But as tobacco prices per kilogram have fallen, farmers like Phineas Chimombo have struggled. 

Chimombo says in most cases farmers like him who are already poor struggle to find money to transport tobacco to the market and sell their tobacco as low as 50 cents per kilogram.

Health campaigns have eaten into tobacco profits, so farmers like Chimombo are looking to cannabis, the plant that produces marijuana and hemp. 

Chimombo says once one grows hemp, just a small portion of it fetches more money than one can get from any crops a farmer can grow. 

Malawi is joining African nations Lesotho, South Africa, and Zimbabwe in looking to legalize cannabis after years of debate.

In March, legislators will consider a bill on legalizing medical marijuana and hemp products. 

Malawi parliament member Boniface Kadzamira has long pushed for the legalization of cannabis.

“We were the first in this part of Africa to start discussing this thing. Those countries that came after us have gone ahead of us and have already started issuing licenses,” Kadzamira said.

Malawi’s anti-drug campaigners worry legalizing medical marijuana will encourage more recreational use. 

Nelson Zakeyu is the executive director of Drug Fight Malawi.

“And because local marijuana is commonly used in the country, then [it is] is legalized, [it] is like they are telling young people to use local marijuana. And that is what we are fearing,” Zakeyu said.

But supporters of legalizing cannabis appear to have won the debate, that it is better to regulate the trade and help Malawi’s economy to grow.
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The World Economic Forum summit in Davos, Switzerland, that wrapped up Friday, had some notable absentees, including U.S. President Donald Trump.

With a backlash against a perceived ruling elite gaining ground in many countries, analysts say some leaders steered clear of a gathering often seen as an inaccessible club for the world’s super-rich. Others argue it is vital they get together to discuss urgent issues like climate change and world trade.

On the surface, though, it was business as usual: On a sealed off, snowbound mountaintop, world leaders rubbed shoulders with global executives, lobbyists and pressure groups. It remains a vital gathering of global decision-makers, said Leslie Vinjamuri, head of the U.S. and the Americas Program at policy group Chatham House.

“They’re there to do business, they’re there to engage in an exchange of ideas. And so I think it’s still tremendously important.”

President Trump stayed away because of the partial U.S. government shutdown, which ended Friday. China’s President Xi Jinping wasn’t there, neither was Britain’s Theresa May, nor France’s President Emmanuel Macron.

“They’re tremendously preoccupied with the troubles they face at home, which isn’t a good sign for globalism. The criticism and the critique that surrounds Davos is extraordinary. People say, ‘You know, it’s where all those people go to have dinner with each other, it has nothing to do with the rest of us.’ And, of course, it’s about a lot more than that, but the optics are tremendously negative at this point in time,” Vinjamuri said.

Behind the heavily guarded security perimeter, delegates were well aware of a growing global backlash beyond.

David Gergen of the Harvard Kennedy School echoed the concerns of many at Davos during a debate at the summit.

“It’s worth remembering we’ve just had the longest bull run in our stock market in history. We’ve had good economic times. Incomes have gone up in a number of countries and yet the discontent is deep and it’s threatening our democracies. And there’s something that’s not working here that we need to figure out,” Gergen told an audience Wednesday.

The absence of many big players means others have stolen the limelight. Ethiopia’s Prime Minister Abiy Ahmed Ali has been widely praised for making peace with Eritrea. Speaking at the forum, he said African countries must deepen their ties.

“We believe integration must be viewed not just as an economic project but also as crucial to securing peace and reconciliation in the Horn of Africa,” Ali said.

Other issues also rose up the Davos agenda, notably climate change. New Zealand’s Prime Minister Jacinda Ardern urged action.

“This is about being on the right side of history. Do you want to be a leader that you look back in time and say that you were on the wrong side of the argument when the world was crying out for a solution? And it’s as simple as that I think,” Ardern said.

The Davos 2019 will likely be remembered, however, for the lack of global leadership, according to Vinjamuri of Chatham House.

“That space has been vacated and nobody necessarily even wants to take things forward at the level of providing a vision,” Vinjamuri said.

The lack of such a vision at a time of profound global change sent a chill far beyond the confines of this winter resort.
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Impatient with the lack of World Trade Organization rules to cover the explosive growth of e-commerce, 76 countries and regions agreed on Friday to start negotiating this year on a set of open and predictable regulations.

The WTO’s 164 members were unable to consolidate some 25 separate e-commerce proposals at the body’s biennial conference at Buenos Aires in December, including a call to set up a central e-commerce negotiating forum.

In a gathering on the sidelines of the World Economic Forum in Davos, ministers from a smaller group of countries including the United States, the European Union and Japan, agreed to work out an agenda for negotiations they hope to kick off this year on setting new e-commerce rules.

“The current WTO rules don’t match the needs of the 21st century. You can tell that from the fact there are no solid rules on e-commerce,” Japan’s trade minister Hiroshige Seko told reporters in Davos.

Asked whether China could join the negotiations, Seko said: “What’s very important is to first set high-standard rules. If China could join, we would welcome that.”

The WTO failed to reach any new agreements at a ministerial conference in December, which ended in discord in the face of stinging U.S. criticism of the group. The stalemate dashed hopes for new deals on regulating the widening presence of e-commerce.

The emergence of the coalition willing to press ahead with new e-commerce rules, despite others’ reservations, reinforces a trend toward the fragmentation of WTO negotiations and away from global “rounds” of talks that have run out of steam.

“We will seek to achieve a high-standard outcome that builds on existing WTO agreements and frameworks with the participation of as many WTO members as possible,” members of the coalition said in a joint statement issued on Friday.

“We continue to encourage all WTO members to participate in order to further enhance the benefits of electronic commerce for businesses, consumers and the global economy.”

E-commerce, which developed largely after the WTO’s creation in 1995, was not part of the Doha round of talks that began in 2001 and eventually collapsed more than a decade later.

Many countries insist that Doha-round development issues must be dealt with before new issues can be tackled. But other countries say the WTO needs to move with the times, and note that 70 regional trade agreements already include provisions or chapters on e-commerce, according to a recent study.

U.S. President Donald Trump’s administration says the WTO is dysfunctional because it has failed to hold China to account for not opening up its economy as envisaged when Beijing joined in 2001.

To force reform at the WTO, Trump’s team has refused to allow new appointments to the Appellate Body, the world’s top trade court, a process which requires consensus among member states. As a result, the court is running out of judges, and will be unable to issue binding rulings in disputes.

 
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A Republican U.S. representative on Thursday introduced White House-drafted legislation that would give President Donald Trump more power to levy tariffs on imported goods in an effort to pressure other countries to lower their duties and other trade barriers.

The measure offered by Representative Sean Duffy, which has been touted by Trump administration officials, has already been declared unacceptable by some Republican senators, including Senate Finance Committee Chairman Chuck Grassley.

Democrats, who control the House of Representatives and its legislative agenda, are unlikely to grant Trump more executive authority, especially as a standoff over the partial government shutdown drags on. A spokesman for House Speaker Nancy Pelosi could not immediately be reached for comment.

The Reciprocal Trade Act, which Trump was expected to highlight in his now-delayed State of the Union address, would give him authority to levy tariffs equal to those of a foreign country on a particular product if that country’s tariffs are determined to be significantly lower than those charged by the United States.

It would also allow Trump to take into account non-tariff barriers when determining such tariffs.

Trump has invoked trade laws passed in the 1960s and 1970s to levy tariffs on steel and aluminum on national security grounds and has applied tariffs on imports from China based on U.S. findings that Beijing is misappropriating U.S. intellectual property through forced technology transfers and other means.

The United States has lower tariffs than many other countries, such as its 2.5 percent levy on imported passenger vehicles compared with the European Union’s 10 percent tariff.

But increasing them and applying them in a country-specific manner would effectively be a violation of the World Trade Organization’s most fundamental rule, that tariffs must be applied globally and cannot be raised unilaterally except in anti-dumping and anti-subsidy cases.

“The goal of the U.S. Reciprocal Trade Act is not to raise America’s tariffs but rather to encourage the rest of the world to lower theirs,” Duffy said in a statement, adding that the authority would be a negotiating tool to pressure other countries to lower their tariffs.
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European Trade Commissioner Cecilia Malmstrom said on Thursday that Europe should be more ambitious on issues such as climate change as a way to unite the bloc around a single vision.

“We need a great debate on the future of Europe,” she said in a wide-ranging debate at the World Economic Forum in Davos on the state of the continent and the rise of populism. Europeans vote for a new European parliament in May, at a time when citizens in many countries are backing populist parties.

Italy’s Foreign Minister Enzo Moavero Milanesi said the European Union had become like an archipelago of separate islands. “There is no real European vision at the moment, such as the vision which moved the founders. We need to find things that mobilize people, that make the heart beat faster, not just the wallet.”

 
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The European Union on Wednesday warned countries running lucrative schemes granting passports and visas to rich foreigners to toughen checks on applicants amid concern they could be flouting security, money laundering and tax laws.

EU countries have welcomed in more than 6,000 new citizens and close to 100,000 new residents through golden passport and visa schemes over the past decade, attracting around 25 billion euros ($28 billion) in foreign direct investment, according to anti-corruption watchdogs Transparency International and Global Witness.

 

In a first-ever report on the schemes, the EU Commission said that such documents issued in one country can open a back door to citizenship or residency in all 28 states.

 

Justice Commissioner Vera Jurova said golden visas are the equivalent of “opening the golden gate to Europe for some privileged people.”

 

“We want more guarantees related to security and anti-money laundering. We expect more transparency,” she told reporters in Brussels.

 

Bulgaria, Cyprus and Malta offer passports to investors without any real connections to the countries or even the obligation to live there by paying between 800,000 and 2 million euros ($909,000 to $2.3 million).

 

Twenty EU states offer visas in exchange for investment: Britain, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, France, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia and Spain.

 

 Investment can range from 13,500 euros to over 5 million euros ($15,350 to $5.7 million) in the form of capital and property investments, buying government bonds, one-time payments to the national budget or certain donations to charity.

 

Cyprus toughened up vetting procedures last year after it was accused of running a “passports-for-cash” scheme. It said passport numbers would be capped at 700 a year.

 

The Mediterranean island introduced the scheme in the wake of a 2013 financial crisis that brought the country to the brink of bankruptcy and forced it to accept a multibillion-euro rescue program from creditors. One Cyprus lawmaker has estimated that the scheme generated around 4.8 billion euros ($5.4 billion) between 2013 and 2016.

 

In compiling the report, Commission researchers struggled to obtain clear information about how the schemes are run, the number of applicants and where they come from, as well as how many are granted or refused visas. They noted that EU countries exchange little or no information about the applicants.

 

But the report did find that the security checks run on applicants are insufficient, and it recommends that EU computer databases like the one controlling Europe’s passport-free travel area be used routinely. Tougher “due diligence” controls are also needed to ensure that money laundering rules are not circumvented, while more monitoring and reporting could help tackle tax evasion.

 

Migration Commissioner Dimitris Avramopoulos said the Commission “will monitor full compliance with EU law.”

 

“The work we have done together over the past years in terms of increasing security, strengthening our borders and closing information gaps should not be jeopardized,” he warned.

 

The Commission proposed setting up a working group with EU member countries to study the schemes by year’s end.

 

The report angered Cyprus President Nicos Anastasiades, who underlined that, over the past five years, the number of citizenships granted by Cyprus under its scheme amounts to 0.3 percent of the EU’s total.

 

He said that Cyprus has the toughest citizenship criteria among all 20 countries, “and despite this, Cyprus is being targeted.”

 

“These double standards must finally come to an end and I want to be strict about this,” Anastasiades said.

 

Malta welcomed the Commission report, but said it has “reservations on a few issues,” notably that people it accepts under the schemes undergo far more rigorous checks than others granted residency or citizenship. It also underlined that physical presence in Malta is mandatory.

 
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The hottest job of the future might be app developer. All you have to do is look at what you’re holding in the palm of your hand to figure out why.

“All of us use our cellphones probably more than we should be every day, and that is what is driving the demand for app developers,” said Stacy Rapacon, online editor at personal finance website Kiplinger.com, which has identified the best jobs for the future. “More apps mean more people to develop them.”

The median salary for app developers is $100,000, and the industry is expected to grow by 30 percent over the next decade, according to Kiplinger.

Nurse practitioner is the next best job on Kiplinger’s list. The median income for nurse practitioners is $103,000, and the field is expected to grow 35 percent between now and 2027.

“The field, in general, is booming because of the aging population,” Rapacon said. “Physical therapists, for example, have plenty of patients to work with, especially as people are growing older and health care treatments are improving. Older people who suffer from heart attacks or strokes or other ailments are able to survive those issues and then may need physical therapy or occupational therapy to continue being able to live independently.”

Half of the jobs in the Top 10 — including physician, physician assistant, health services manager and physical therapist — are in the health care field.

That’s likely because, for the first time in history, older people are going to outnumber children in the United States. By 2035, 78 million Americans will be over the age of 65, according to the U.S. Census Bureau.

Other occupations on the Top 10 Best Jobs of the Future list include financial manager; marketing research analyst (beneficiaries of the big-data boom); computer systems manager (most businesses use computers); and information security analyst (company computers need to be protected from hackers and others).

On the opposite end of the spectrum are the professions that are dying. These include watch repairer (fewer people are wearing time pieces); builder of prefab homes (a shrinking segment of the U.S. housing market); and textile machine operator — but there is an alternative for those currently working in manufacturing.

“What’s disappearing are the low-skill jobs,” Rapacon said. “So, if there’s a way you can apply more of a human touch to your work, if there’s a way in manufacturing to learn to manage some of the technology that is being put in place in these production processes, then you can still work in those industries and find opportunities.”

Other worst jobs for the future include fabric mender (replaced by technology); shoe machine operator (replaced by technology); and movie projectionist (fewer theaters and less demand for people to work in them).

Kiplinger used available data to develop its lists of the best and worst jobs of the future. However, the job market is changing rapidly and the available data on new and emerging industries is limited.

It’s always possible that the hottest jobs of the next decade haven’t even been invented.
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The annual World Economic Forum opened today in Switzerland against a backdrop of anxieties over trade disputes, Brexit and a growth slowdown that some fear could tip the world economy. VOA’s Mariama Diallo reports.
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The White House on Tuesday said high-level trade talks with Beijing were proceeding uninterrupted, quickly rebutting media reports that progress toward resolving their trade war had faltered.

Chinese Vice Premier Liu He is to meet his U.S. counterparts in Washington next week as the two sides work to resolve their trade disagreements by March 1, when a 90-day truce is due to expire, allowing U.S. import duties on Chinese goods to increase sharply.

Washington and Beijing imposed tit-for-tat tariffs on more than $360 billion worth of goods in two-way trade last year.

Trump initiated the trade war because of complaints over unfair Chinese trade practices — concerns shared by the European Union, Japan and others.

The Financial Times and CNBC both reported Tuesday afternoon that Washington had canceled a preliminary meeting set for this week ahead of Liu’s visit.

American officials had reportedly cited a lack of progress on the most difficult issues in the trade dispute — including allegedly forced technology transfers and far-reaching structural reforms to China’s economy.

The reports sent Wall Street even further into the red. U.S. stocks had already opened lower on downgraded forecasts for global economic growth.

But, shortly before the close of trading in New York, top White House economic aide Larry Kudlow flatly denied the reports during an appearance on CNBC.

“With respect, the story is not true,” Kudlow said. “There was never a planned meeting that was canceled.”

Stock prices recovered some of their losses following his remarks but still finished substantially lower for the day.

Kudlow said the United States continued to press the Chinese on the subject of intellectual property and state intervention in markets, among other matters.

He also said American officials were insisting that any agreement have teeth to ensure Beijing’s compliance.

“Enforcement is absolutely crucial to the success of these talks,” Kudlow said.

“Will it be solved at the end of the month? I don’t know. I wouldn’t dare predict and want to make sure people understand how important that is to put it on the table.”

If both sides fail to reach a resolution to the trade war, U.S. duty rates on $200 billion in Chinese goods are due to rise to 25 percent from their current 10 percent, a prospect that has shaken markets in recent months.

Last year, the Chinese economy posted its slowest annual growth in nearly three decades, according to official figures published Monday in Beijing, underscoring concerns the trade conflict with the United States could sap the strength of the world’s second-largest economy and harm global growth in the process.
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Nigeria is to send a bill recommending a national minimum monthly wage rise of 50 percent to 27,000 naira ($88) to lawmakers in the national assembly, the labor minister said on Tuesday.

Cost of living is a major campaign issue ahead of a presidential election on 16 February and unions want the minimum wage to be raised from 18,000 naira.

Inflation stood at a seven-month high of 11.44 percent in December.

Disagreements over the minimum wage saw labor unions striking across Nigeria in September. President Muhammadu Buhari said in January that he would increase the minimum wage, but did not specify by how much.

“The 27,000 naira minimum wage is the benchmark,” Labor Minister Chris Ngige told reporters in Abuja on Tuesday. Ngige said some government workers could receive a higher salary of 30,000 naira a month.

The minister did not say when the bill would be sent to lawmakers. Any change would need to be signed into law by Buhari. ($1 = 306.3000 naira)
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Brazilian President Jair Bolsonaro will headline the first full day of the World Economic Forum in Davos, Switzerland, with a speech to political and business leaders.

 

The nationalist leader is attending an event that has long represented business’s interest in increasing ties across borders. But globalism is in retreat as populist leaders around the world put a focus back on nation states, even if that means limiting trade and migration.

 

After Bolsonaro’s speech on Tuesday, German Chancellor Angela and Japanese Prime Minister Shinzo Abe will address the gathering on Wednesday.

 

But several key leaders are not attending to handle big issues at home: U.S. President Donald Trump amid the government shutdown, British Prime Minister Theresa May to grapple with Brexit talks, and France’s Emmanuel Macron to face popular protests.

 

 
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Economists warn that political uncertainties and trade tensions could undermine global economic growth. Rights groups warn of the dangers of growing economic inequality. About 3,000 political and economic leaders have gathered in the Swiss resort town of Davos to discuss global business and economic trends at an annual economic forum. VOA’s Zlatica Hoke reports.
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The United Nations is forecasting that the global economy will grow by around 3 percent in 2019 and 2020, but says waning support for multilateralism, escalating trade disputes, increasing debt and rising climate risks are clouding prospects

The United Nations is forecasting that the global economy will grow by around 3 percent in 2019 and 2020, but says waning support for multilateralism, escalating trade disputes, increasing debt and rising climate risks are clouding prospects.

The U.N.’s report on the World Economic Situation and Prospects 2019 also stresses that economic growth is uneven and often doesn’t reach countries that need it most.

Per capital income is expected to stagnate or see only marginal growth this year in parts of Africa, western Asia, Latin America and the Caribbean.

U.N. Secretary-General Antonio Guterres says in the forward of the report launched Monday that while economic indicators remain “largely favorable,” the report “raises concerns over the sustainability of global economic growth in the face of rising financial, social and environmental challenges.”   
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British Prime Minister Theresa May unveiled her Brexit Plan B on Monday — and it looks a lot like Plan A.

May launched a mission to resuscitate her rejected European Union divorce deal, setting out plans to get it approved by Parliament after securing changes from the EU to a contentious Irish border measure.

May’s opponents expressed incredulity: British lawmakers last week dealt the deal a resounding defeat, and EU leaders insist they won’t renegotiate it.

Opposition leader Jeremy Corbyn of the Labour Party accused May of being in “deep denial” about her doomed deal.

“This really does feel a bit like Groundhog Day,” he said, referring to the 1993 film starring Bill Murray, in which a weatherman is fated to live out the same day over and over again.

Outlining what she plans to do after her EU divorce deal was rejected by Parliament last week, May said that she had heeded lawmakers’ concerns over an insurance policy known as the “backstop” that is intended to guarantee there are no customs checks along the border between EU member Ireland and the U.K.’s Northern Ireland after Brexit.

May told the House of Commons that she would be “talking further this week to colleagues … to consider how we might meet our obligations to the people of Northern Ireland and Ireland in a way that can command the greatest possible support in the House.

“And I will then take the conclusions of those discussions back to the EU.”

The bloc insists that it won’t renegotiate the withdrawal agreement.

“She is wasting time calling for a revision or clarification over the backstop,” said German politician Udo Bullmann, head of the socialist group in the European Parliament.

Amendments

While May stuck doggedly to her deal, she also acknowledged that control over Brexit wasn’t entirely in her hands. She noted that lawmakers will be able to amend her plan when it comes to a vote in the House of Commons on Jan. 29, exactly two months before Britain is due to leave the EU.

Groups of “soft Brexit”-backing lawmakers — who want to keep close economic ties to the bloc — are planning to use amendments to try to rule out a “no-deal” Brexit and make May ease her insistence that leaving the EU means quitting its single market and customs union.

Britain and the EU sealed a divorce deal in November after months of tense negotiations. But the agreement has been rejected by both sides of Britain’s divide over Europe. Brexit-backing lawmakers say it will leave the U.K. tethered to the bloc’s rules and unable to forge an independent trade policy. Pro-Europeans argue it is inferior to the frictionless economic relationship Britain currently enjoys as an EU member.

After her deal was thrown out last week by a crushing 432-202 vote in Parliament, May said she would consult with lawmakers from all parties to find a new way forward.

But Corbyn called the cross-party meetings a “stunt,” and other opposition leaders said the prime minister didn’t seem to be listening.

On Monday, May rejected calls from pro-EU lawmakers to delay Britain’s departure from the bloc or to hold a second referendum on whether to leave.

In a nod to opposition parties’ concerns, she promised to consult lawmakers, trade unionists, business groups and civil society organizations “to try to find the broadest possible consensus” on future ties between Britain and the EU, and said the government wouldn’t water down protections for the environment and workers’ rights after Brexit.

May also said the government had decided to waive a 65 pound ($84) fee for EU citizens in Britain who want to stay permanently after Brexit.

Guy Verhofstadt, the head of the EU Parliament Brexit steering group, welcomed news that the fee was being dropped for 3 million EU nationals, saying it had been a “key demand” for the EU legislature.

Irish border

May’s immediate goal is to win over pro-Brexit Conservatives and her party’s Northern Irish ally, the Democratic Unionist Party. Both groups say they won’t back the deal unless the border backstop is removed.

The backstop proposes to keep the U.K. in a customs union with the EU in order to avoid checks on the Irish border. It is meant as a temporary measure that would last until a permanent solution is found. But pro-Brexit U.K. lawmakers fear Britain could become trapped in it, indefinitely bound by EU trade rules.

Polish Foreign Minister Jacek Czaputowicz broke ranks with EU colleagues Monday by suggesting the problem could be solved by setting a five-year time limit on the backstop.

The idea got a cool reception. Irish Foreign Minister Simon Coveney said that “putting a time-limit on an insurance mechanism, which is what the backstop is, effectively means that it’s not a backstop at all.”

Britain’s political impasse over Brexit is fueling concerns that the country may crash out of the EU on March 29 with no agreement in place to cushion the shock. That could see tariffs imposed on goods moving between Britain and the EU, sparking logjams at ports and shortages of essential supplies.

Threat of ‘no deal’

Carolyn Fairbairn, director-general of the Confederation of British Industry, said Monday was “another bleak day for business.”

“Parliament remains in deadlock while the slope to a cliff edge steepens,” she said.

Several groups of lawmakers are trying to use parliamentary rules and amendments to May’s plan to block the possibility of Britain leaving the EU without a deal.

One of those legislators, Labour’s Yvette Cooper, said May was shirking her responsibility to the country by refusing to take “no deal” off the table.

“I think she knows that she should rule out ‘no deal’ in the national interest because it would be so damaging,” Cooper told the BBC. “She’s refusing to do so, and I think she’s hoping that Parliament will do this for her. That is not leadership.” 
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