YCLOAK

In Iraq, a major Middle East grain buyer, will cut the irrigated area it plants with wheat by half in the 2018-2019 growing season as water shortages grip the country, a government official told Reuters.

Drought and dwindling river flows have already forced Iraq to ban farmers from planting rice and other water-intensive summer crops. Water scarcity was one of the issues galvanizing street protests in the country this year.

An investigation by Reuters in July revealed how Nineveh, Iraq’s former breadbasket, was becoming a dust bowl after drought and years of war.

This latest move is likely to significantly raise wheat imports.

Deputy Agriculture Minister Mahdi al-Qaisi said irrigated land grown with winter grains, namely wheat and barley, would be halved.

“The shortage of water resources, climate change and drought are the main reasons behind this decision, our expectation is the area will shrink to half,” Qaisi said in an interview.

Iraq’s agricultural plan included 1.6 million hectares of wheat last 2017-2018 season. Of those, around one million hectares were irrigated and the rest relied on rainfall.

“We expect that the irrigated wheat area falls to half of what it was last year,” Qaisi said, implying plantings of 500,000 hectares.

The cut is expected to lower the country’s wheat production by at least 20 percent, implying a significantly higher import bill Fadel al-Zubi, the U.N. Food and Agriculture Organization Iraq Representative said.

Iraq already has an import gap of more than one million tonnes per year, with annual demand at around 4.5 million to 5 million tons.

“Imports will go up as a result of cutting down on production and also as a result of population increase,” Zubi said but he declined to give an exact estimate for size of imports next year.

Haidar al-Abbadi, the head of Iraq’s General Union of Farmers, confirmed the cut saying water shortage was the main reason behind it.

“Irrigated wheat will reach 2 million donhums (500,000 hectares) down from around 4 million last season,” he said.

Qaisi said it was too early to tell the area of land that could be grown with wheat relying on rainfall this season but he hoped it would make up for some of the shortfall.

“We will follow a few programs to increase the crop, like raising yields and bringing Nineveh province back to more production … that can partly make up for shortfall,” he said.

But the rains failed Iraq’s Nineveh last season with the government procuring a little over 100,000 tonnes of wheat this year from a region that used to produce close to one million tons annually before Islamic State took over in 2014.

Iraq imports wheat to supply a rationing program created in 1991 to combat U.N. economic sanctions, including flour, cooking oil, rice, sugar and baby milk formula.

The trade ministry is responsible for procuring strategic commodities, including wheat, for the program.

Trade ministry officials were not immediately available for comment on a potential rise in imports.
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Residents in a Bangkok neighborhood are trying out a renewable energy trading platform that allows them to buy and sell electricity between themselves, signaling the growing popularity of such systems as solar panels get cheaper.

The pilot project in the center of Thailand’s capital is among the world’s largest peer-to-peer renewable energy trading platforms using blockchain, according to the firms involved.

The system has a total generating capacity of 635 KW that can be traded via Bangkok city’s electricity grid between a mall, a school, a dental hospital and an apartment complex.

Commercial operations will begin next month, said David Martin, managing director of Power Ledger, an Australian firm that develops technology for the energy industry and is a partner in the project.

“By enabling trade in renewable energy, the community meets its own energy demands, leading to lower bills for buyers, better prices for sellers, and a smaller carbon footprint for all,” he said.

“It will encourage more consumers to make the switch to renewable energy, as the cost can be offset by selling excess energy to neighbors,” he told the Thomson Reuters Foundation.

Neighborhoods from New York to Melbourne are upending the way power is produced and sold, with solar panels, mini grids and smart meters that can measure when energy is consumed rather than overall consumption.

The World Energy Council predicts that such decentralized energy will grow to about a fourth of the market in 2025 from 5 percent today.

Helping it along is blockchain, the distributed ledger technology that underpins bitcoin currency, which offers a transparent way to handle complex transactions between users, producers, and even traders and utilities.

Blockchain also saves individuals the drudgery of switching between sending power and receiving it, said Martin.

For the pilot in Bangkok’s upmarket Sukhumvit neighborhood, electricity generated by each of the four locations will be initially used within that building. Excess energy can be sold to the others through the trading system.

If there is a surplus from all four, it will be sold to the local energy storage system, and to the grid in the future, said Gloyta Nathalang, a spokeswoman for Thai renewable energy firm BCPG, which installed the meters and solar panels.

Thailand is Southeast Asia’s leading developer of renewable energy, and aims to have it account for 30 percent of final energy consumption by 2036.

The energy ministry has encouraged community renewable energy projects to reduce fossil fuel usage, and the regulator is drafting new rules to permit the trade of energy.

The Bangkok Metropolitan Electricity Authority forecasts “peer-to-peer energy trading to become mainstream for power generation in the long run,” a spokesman told reporters.

BCPG, in partnership with the Thai real estate developer Sansiri, plans to roll out similar energy trading systems with solar panels and blockchain for a total capacity of 2 MW by 2021, said Gloyta.

“There are opportunities everywhere – not just in cities, but also in islands and remote areas where electricity supply is a challenge,” she said.
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Young people are driving the growth of businesses that benefit society and the environment, the organizer of a global gathering of ethical entrepreneurs said as it opens Wednesday.

Some 1,500 people are meeting in Edinburgh as the 10th Social Enterprise World Forum — one of the most important networking events for the sector — returned to its birthplace after being hosted in Melbourne, Seoul and Rio De Janeiro.

“The key thing [that’s changed] in the decade is the transformational views of, and engagement with, young people,” Gerry Higgins, head of CEIS, which convenes the forum, told Reuters.

“Increasingly, young people are looking for careers of purpose, looking at social enterprise as a way of being involved in business and doing social good — and that has to be significant and heartening and positive.”

Scotland is the only country globally with a dedicated 10-year strategy to support social enterprises, or businesses that seek to make a profit while also doing good.

The country of 5 million has almost 6,000 social enterprises, providing about 80,000 jobs, the government says, many of them in poor rural communities.

Higgins, who has worked in the sector for more than 30 years, said he was encouraged by a rise in the number of universities teaching ethical entrepreneurs as well as growing interest from governments around the world.

Scores of universities, from Hong Kong and India to Greece and South Africa, now teach students about social enterprises, typically through work placements or incubating their startups.

Taiwan is sending more than 60 delegates to the forum as the government regards businesses with a social mission “as a way of reaching young people,” said Higgins.

“Ten years ago, when we pitched up in countries speaking with our partners to their government about social enterprise, God it was a hard sell,” he said.

But politicians are increasingly providing ethical firms with policy support, like the rest of the business sector, because they recognize the economic benefits they can deliver, he said.

“There are a lot of communities and individuals being supported by social enterprises around the world in a more sustainable way than existed 10 years ago,” he said.

“Ten years isn’t a long time in the growth of a business movement. We’re really at the start of the work of creating a global business model that’s used by an increasing number of people coming into the market.”
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Plans by South Africa’s government to change the law to allow land expropriation without compensation have provoked an emotional response, even reaching the ears of President Donald Trump, who signaled his disapproval last month in a controversial tweet in which he ordered U.S. officials to investigate the situation.

South Africa’s government says it may change the constitution to allow expropriation of some land without compensation, in a bid to redress historical wrongs that left land mostly in the hands of the white minority. Hearings began last month to look into the feasibility of expropriation without compensation. President Cyril Ramaphosa supports the idea and says any expropriation will only happen if land transfer does not harm the economy or the nation’s food security.

 

Farmers, many of whom belong to the white minority, say they live in fear of losing their land; meanwhile, pro-expropriation activists say returning land to members of the traditionally marginalized black majority is only right. And some analysts say this is nothing but a political ploy as the ruling party faces a tough election next year.

The farm

Casper Willemse grew up working a 2,000-hectare maize farm about an hour south of Johannesburg. For years, he’s toiled in the fields from sunup to sundown, as five generations of his family did before him.

 

He always thought he would die here, and be buried alongside them.

“I’m the sixth generation that was born on this farm,” he said. “My children is the seventh … We are farmers, from the morning until noon to night.”

 

The government hasn’t publicly identified which properties, if any, it will target.

Groups like AfriForum, which calls itself a civil rights watchdog with a focus on the white Afrikaans-speaking minority, have circulated what they say are government lists of potential seizures, but the government denies those.

AfriForum says their biggest fear is of the economic impact of such a policy. But even without that, they say talk about expropriation has provoked a rise in illegal land seizures. The group is among many critics of the plan who say they fear expropriation without compensation will hurt South Africa’s economy and will cause the same economic spiral as was seen in neighboring Zimbabwe, after that country began a series of seizures from white farmers nearly two decades ago.

 

“We are seeing an increase in land invasion throughout the country,” said Ian Cameron, the group’s head of community safety. “So there is a definite threat to property rights at the moment. And the uncertainty being created by government increases that problem.”

Willemse said the uncertainty is what fills him with anxiety – and about more than just his future. In the meantime, he said, he has to carry on: he employs 14 people, and can’t leave them hanging. Besides, he said, he has no backup plan.

He agreed that South Africa’s violent, unequal past was wrong. But why, he asked, should he pay the price?

 

“Taking something without compensation is nothing but stealing,” he said. “Buying the land, and giving that to somebody else, that’s a different story. But just taking it for political reasons, and giving it away – it’s not going to yield anymore, because that guy that’s going to get it, they don’t have passion about it, they don’t have knowledge, they don’t have resources. I think that’s not going to work.”

 

Land on demand

But the Black First Land First Movement says that’s beside the point. The relatively new political movement, which launched in 2015 and calls itself a revolutionary, pan-Africanist socialist movement, says much of South Africa’s land was stolen from its original black owners by white settlers during South Africa’s colonial and apartheid periods. Today, the majority of South African agricultural land is owned by white farmers.

 

The group’s deputy president, Zanele Lwana, said all of this land should be returned and no one has the right to ask what the new owners plan to do with it.

 

“We believe South Africa is a black country,” she told VOA. “And we believe that white people in this country are sitting on stolen property. And the call to call for land expropriation without compensation speaks to historical redress.”

Lwana also told VOA that the group considers land occupation a legitimate tactic if the government does not go through with its expropriation plans.

 

Playing politics?

Analysts and critics say the government is exploiting this sensitive issue to win votes for next year’s elections, a claim Lwana and her movement echo, alleging that Ramaphosa has no actual intention of enacting meaningful land reform.

 

Ramaphosa’s ruling African National Congress has been steadily losing ground at the polls, and analysts say an emotive issue like land redistribution could attract voters, especially lower-income black voters who comprise much of the ANC’s base.

 

“It is a genuine issue, but like all genuine issues, it has been handled with the view of securing short term political gains, unfortunately,” independent political analyst Ralph Mathekga told VOA.

 

Mathekga, who owns a 10-acre farm in the rural Limpopo province, said he understands the emotional aspect of the debate. He got permission from local leadership to farm there about three years ago.

 

“I grew up farming,” he told VOA. “That’s what I did. I used to put together the mules, that’s what I did before I went off to university.”

He said he has issues with the debate’s focus on land reform, though, instead of on agricultural reform. If this is going to work, he said, the government needs to assist new farmers in getting into the economy. If not, this story will not end well, he contends.

 

“I’ve never made a cent out of [the farm],” he said, adding that a recent drought and difficulty in finding eager, competent young workers have made it hard to profit. “It’s a highly risky business, and I think people need to think very carefully about it.”
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The U.S. federal deficit will reach $1 trillion by the end of the fiscal year, the nonpartisan Congressional Budget Office said Tuesday.

The CBO said in previous estimates that it did not expect to hit the milestone until 2020.

Spending rose by $222 billion, or 32 percent, in the first 11 months of fiscal 2018, compared with the same period last year.

In the current period, the deficit has reached $895 billion.

The CBO credited the surge to the new Republican tax law and increased government spending. Expenditures rose by 7 percent, while tax revenue rose by only 1 percent. 
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Amid a worsening tariff battle, China is putting off accepting license applications from American companies in financial services and other industries until Washington makes progress toward a settlement, an official of a business group said Tuesday.

The disclosure is the first public confirmation of U.S. companies’ fears that their operations in China or access to its markets might be disrupted by the battle over Beijing’s technology policy. China is running out of American imports for penalties in response to U.S. President Donald Trump’s tariff hikes, which has prompted worries that Chinese regulators might target operations of U.S. companies.

The license delay applies to industries Beijing has promised to open to foreign competitors, according to Jacob Parker, vice president for China operations of the U.S.-China Business Council. The group represents some 200 American companies that do business with China.

In meetings over the past three weeks, Cabinet-level officials told USCBC representatives they are putting off accepting applications “until the trajectory of the U.S.-China relationship improves and stabilizes,” Parker said.

Chinese authorities have promised to increase foreign access to areas including banking, securities, insurance and asset management.

“There seem to be domestic political pressures that are working against the perception of U.S. companies receiving benefits” during the dispute, Parker said.

As for what improvement might entail, Parker said Chinese officials want an end to Trump’s tariff hikes and a negotiated settlement. He declined to identify the officials but, in a sign Beijing wants foreign companies to help lobby Washington, said the meetings represented “unprecedented access” for his group.

Beijing matched Trump’s earlier tariff increase on $50 billion of imports but is running out of American goods for retaliation due to their lopsided trade balance. China bought American goods worth about $1 for every $3 of goods it exported to the United States.

Trump is poised to decide whether to raise duties on $200 billion of Chinese goods. Beijing has issued a $60 billion list of goods for retaliation.

A foreign ministry spokesman, Geng Shuang, said Monday that China will “definitely take countermeasures” if the tariff hike goes ahead.

Economists have warned Beijing might target service industries such as engineering or logistics, in which the United States runs a trade surplus with China.

Chinese commentators have suggested Beijing might use its multitrillion-dollar holdings of U.S. government debt as a weapon, though that would impose costs on China. State-controlled media have encouraged boycotts of Japanese and South Korean products in past disputes with those governments.

The government said in June it would impose unspecified “comprehensive measures” if necessary. That left U.S. companies on edge about whether Beijing will use its heavily regulated economy to disrupt their operations by withholding licenses or launching tax, anti-monopoly or other investigations.

Chinese leaders reject Trump’s demand to roll back official industry plans such as “Made in China 2025,” which calls for state-led creation of global champions in robotics, artificial intelligence and other technologies.

Washington, Europe and other trading partners say those plans violate Beijing’s market-opening commitments. But Communist leaders see them as a path to prosperity and global influence.

Chinese negotiators agreed in May to narrow their multibillion-dollar trade surplus with the United States by purchasing more American soybeans and other products. Beijing scrapped that deal after Trump’s first tariff increase went ahead July 6.

In addition to rolling back industry plans, the Trump administration wants Beijing to reduce the privileges of state-owned companies and eliminate requirements for foreign companies to hand over technology to Chinese partners.

In their meetings with the USCBC, Chinese officials expressed willingness to buy more American exports but “showed no appetite at all” to talk about industry reform, technology policy or other U.S. priorities, Parker said.

“I don’t consider that to be very positive for any kind of negotiated outcome in the short term or medium term,” he said.

Chinese regulators have shown their willingness to attack foreign companies in disputes with other governments.

Last year, Beijing destroyed South Korean retailer Lotte’s business in China after it sold a golf course in South Korea to the country’s government for construction of a missile defense system opposed by Chinese leaders.

Beijing closed most of Lotte’s 99 supermarkets and other outlets in China. Seoul and Beijing later mended relations, but Lotte gave up and sold its China operations.
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The Trump administration moved closer Tuesday to rolling back Obama-era rules reducing oil and gas industry leaks of methane gas, one of the most potent agents of climate change.

 

The Environmental Protection Agency formally released its proposed substitute for a 2016 Obama administration rule that aimed to step up detection and elimination of methane leaks at well sites and other oil and gas facilities. The agency’s move is part of a broad Trump administration effort to undo President Barack Obama’s legacy programs to fight climate change by cutting emissions from oil, gas and coal.

 

The EPA’s proposal Tuesday conceded that relaxing the Obama-era rule for methane leaks at oil and gas sites would put an additional 380,000 tons (350,000 metric tons) of methane into the atmosphere from 2019 to 2025. The amount is roughly equivalent to more than 30 million tons (27 million metric tons) of carbon dioxide, another fossil-fuel emission that receives far more attention in efforts to slow climate change.

 

The EPA noted that overall increased pollution as a result of its proposal “may also degrade air quality and adversely affect health and welfare.” Relaxing federal oversight will save $75 million in regulatory costs annually, the agency said.

 

Kathleen Sgamma, president of the Western Energy Alliance, a Colorado-based group that represents more than 300 companies, said the proposed changes make the EPA rule more efficient and workable. The previous rule was overly burdensome and “full of red tape. This rule cleans that up, makes it more practical” for industry to comply, Sgamma said in an interview.

 

Oil and gas drillers have “a four-decade long trend to reduce emissions,” and the new EPA rules recognize that reality, Sgamma said, adding that she hopes an Interior rule to be finalized in coming days will show a similar practical streak. The pending rule by the Bureau of Land Management applies to fracking sites on public lands.

 

Environmentalists contend energy companies already have demonstrated they can comply with tougher monitoring and that only poorly operated companies were having trouble with the new requirements.

 

“Once again, the Trump administration is putting the interests of the worst-operated oil and gas companies ahead of the health and welfare of everyday Americans,” said Matt Watson, an associate vice president at the Environmental Defense Fund.

 

Democratic Gov. Jerry Brown of California on Tuesday told a meeting in San Francisco ahead of a climate conference there that President Donald Trump’s proposal to ease monitoring of methane releases is “insane” and “borders on criminality.”

 

“It perhaps is the most obvious and dangerous and irresponsible action by Mr. Trump — and that’s saying quite a lot,” Brown said.

 

The EPA under Obama completed the existing rule in May 2016, and it took effect that August. Industry groups pushed the EPA to reconsider, and the Trump administration put parts of it on hold in May 2017.

 

The rule was reinstated by the U.S. Court of Appeals in Washington, D.C., last year after environmental groups sued, and it remains in effect, according to the EPA.

 

Tuesday’s action opens a 60-day period for public comment ahead of any final decision by the Trump administration.

 

In North Dakota, the nation’s biggest oil-producing state after Texas, drillers scaled back production for a time this summer to keep so-called flaring — burning off of methane and other gases pumped up as waste byproducts with the oil — within state limits.

 

North Dakota Air Quality Director Terry O’Clair said the state typically adopts “nothing more stringent than the federal rules.” State officials would reconsider their recently toughened rules on oilfield gas leaks if federal officials loosen theirs, he said.
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Japan will once again try to get the international ban on whale hunting overturned at the global conference of the International Whaling Commission (IWC), which opened in Brazil on Monday.

The proposal presented by Japan says, “Science is clear: there are certain species of whales whose population is healthy enough to be harvested sustainably.”

While the Japanese proposal is supported by other traditional whaling countries, such as Iceland and Norway, it faces fierce opposition from countries such as Australia and Brazil, and the European Union, as well as from numerous environmental groups.

Japan, which has pushed for an amendment to the ban for years, accuses the IWC of siding with anti-whaling nations rather than trying to reach a compromise between conservationists and whalers.

Whale meat has been a a traditional part of the Japanese diet for centuries.

After the IWC adopted a ban on commercial whaling in 1982, Japan, Norway and Iceland continued to hunt whales. Tokyo justified the practice as a part of scientific research, which was allowed by the moratorium.

But in 2014, the International Court of Justice ruled that Japan’s whaling practice had no scientific basis, but instead it was a way to keep the industry alive.

This year, Japan wants to establish a Sustainable Whaling Committee to oversee the hunting of healthy whale populations for commercial purposes.

But environmentalists say allowing even limited hunting of the mammoth mammals will only again push the species to the brink of extinction. Brazil introduced  proposal Monday that says hunting whales is “no longer a necessary economic activity.”

Australia has vowed to lead the charge against reinstatement of commercial whaling and it has the strong backing of New Zealand, the European Union and the United States.

Japan’s proposal will likely be put to a vote sometime before the conference ends on Sept. 14.
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U.S. Energy Secretary Rick Perry met with Saudi Energy Minister Khalid al-Falih on Monday in Washington, the U.S. Energy Department said, as the Trump administration encourages big oil-producing countries to keep output high ahead of Washington’s renewed sanctions on Iran’s crude exports.

Perry and Falih discussed the state of world oil markets, the potential for U.S.-Saudi civil nuclear cooperation and efforts to share technologies to develop “clean fossil fuels,” the department said in a statement.

The Saudi Embassy in Washington did not immediately respond to a request for comment.

Perry will also meet with Russian Energy Minister Alexander Novak, on Thursday in Moscow, a U.S. source and a diplomatic source said Sunday night.

High oil prices are a risk for President Donald Trump and his fellow Republicans in Nov. 6 congressional elections. Global oil prices have already risen sharply to more than $76 a barrel in recent weeks on concerns about sanctions on Iran’s oil exports that Washington will renew on Nov. 4. 

Trump withdrew the United States in May from the nuclear deal with Iran, and he is pushing consuming countries to cut their purchases of Iranian oil to zero.

It is unclear what the United States may offer big oil producers in return for higher oil production.

Saudi Arabia has been seeking a civilian nuclear agreement with the United States that could allow the kingdom to enrich uranium and reprocess plutonium.

Russia wants the United States to drop sanctions on Moscow. 

OPEC and non-OPEC officials will meet later this month to discuss proposals for sharing an oil output increase, after the groups decided in June to boost output moderately.
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Canadian Foreign Minister Chrystia Freeland will meet U.S. Trade Representative Robert Lighthizer in Washington on Tuesday for another round of talks to renew the NAFTA trade pact, an official said on Monday, as time runs short to seal a deal.

Freeland spokesman Adam Austen did not give details. After more than a year of negotiations, Canada and the United States are still trying to resolve differences over the North American Free Trade Agreement, which also includes Mexico.

U.S. officials say time is running out to agree on a text on which the current Congress can vote. Canadian officials say they are working on the assumption they have until the end of September.

Freeland spent three days in Washington last week and said on Friday as she prepared to leave that she and Lighthizer were making very good progress in some areas, although a deal remained out of reach.

U.S. President Donald Trump, who says he is prepared to tear up NAFTA, has struck a trade deal with Mexico and threatened to push ahead without Canada.

Uncertainly over the future of NAFTA, which underpins $1.2 trillion in trade, is weighing on markets as well as the Canadian and Mexican currencies.

Officials say the main sticking points are Canada’s dairy quota regime, Ottawa’s desire to keep a dispute-resolution mechanism, and Canadian media laws that favor domestically produced content.

U.S. Agriculture Secretary Sonny Perdue, speaking in an interview broadcast on Sunday, said Canada had to scrap a low-price milk proteins policy to reach a deal on NAFTA. U.S. farmers complain Canada is flooding export markets.

Austen, asked whether Freeland might return to Washington later in the week, said no decisions had been taken. She is due to attend a two-day meeting of legislators from the ruling Liberal Party in western Canada on Wednesday and Thursday.

Prime Minister Justin Trudeau said last Wednesday he did not see the need to attend the talks for the time being.
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Greece’s lead creditor warned the country on Monday not to stray from reforms agreed upon before the end of its international bailout, as European monitors arrived to check the nation’s finances.

The five-day inspection is expected to focus on government promises over the weekend to offer tax relief as well as plans to scrap promised pension cuts that are due to take effect in 2019.

Klaus Regling, managing director of the European Stability Mechanism, the eurozone’s rescue fund, told Austria’s Die Presse newspaper that Greece needed to stick to its commitments.

`We are a very patient creditor. But we can stop debt relief measures that have been decided for Greece if the adjustment programs are not continued as agreed,” he said. “The debt level appears to be frighteningly elevated. But Greece can live with that as the loan maturities are very long and the interest rates on the loans are much lower than in most other countries.”

Left-wing Prime Minister Alexis Tsipras is trailing opposition conservatives in opinion polls and must call a general election within the next 12 months. Amid large protest rallies led by labor unions over the weekend, the prime minister said that relief measures promised to taxpayers would not jeopardize fiscal performance targets and would be introduced gradually.

Greece has promised to deliver high primary surpluses — the budget balance before calculating the cost of servicing debt — for years to come, along with a series of reforms in exchange for better debt repayment terms.

The end of the bailout means Greece will have to return to international capital markets to finance itself. However, the country faces a troubled return after the financial turmoil in Turkey and Italy halted a decline in Greek borrowing rates. The yield on Greece’s 10-year-bond remains above 4 percent.

The bailout program ended August 20 but the country’s debt level remains near 180 percent of gross domestic product.
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Zimbabwe’s new finance minister has described his task of reviving the country’s moribund economy as extraordinarily difficult, but he is hopeful of success.

“It’s enormous, it is Herculean. I am very energetic and I am very up to the task. I am starting now, but in the process what I will do is listen,” said Finance Minister Mthuli Ncube, a former chief economist and vice president of the African Development Bank.

He spoke to VOA at the State House after being sworn into office Monday by President Emmerson Mnangagwa.

Nearby, 21-year-old Isaac Madyira is jobless. He dropped out of school seven years ago after his also parents, also unemployed, failed to pay the fees. He now sells cash, which has been in acute short supply for the past two years in Zimbabwe. He says he expects change from the new Cabinet Mnangagwa put into office Monday.

“What we want is corruption to be get rid of. We want development as quickly as possible. I think [on] the issue of money, we need our own currency which is valued as compared to other currencies, then bond notes must go [the last two words in Shona],” he said.

Zimbabwe started printing bond notes about two years ago to ease cash shortages. They were supposed to trade at par with the U.S. dollar, but on the black market the notes are worth about half as much as a dollar and cash shortages have not ended.

Almost as if Ncube had talked to Madyira, the new finance minister said he has to address the currency issue for Zimbabwe’s economy to get back on track.

“Restoring confidence in the economy, I make sure that international investors are interested in the Zimbabwean economy again,” said Ncube. “I will be rolling [out] a plan on the arrears clearance and the whole debt restructuring process, coupled with that is building credit lines globally. Internally I make that on the expenditure side we live within or means or move towards that. We need to strengthen our tax collection systems. Ultimately we need to have the Zimbabwe dollar that is stable, that people have confidence in. To have a domestic currency, you need to build reserves.”

Zimbabwe abandoned its worthless dollar in 2009 and has been using the U.S. dollar, South African rand and British sterling pound for trading.

An economist for the Labor and Economic Development Research Institute of Zimbabwe, Prosper Chitambara, says the Ncube is a good choice for the job.

“It is a good start. He is someone who is credible, a professional. But what has to be done is to begin real work,” he said. “To roll up his sleeves and begin to implement key fiscal policies that will bring back confidence into the economy. Reining down on recurrent expenditure. In general, what we need are fiscal consolidation reforms that curtail drastically recurrent government expenditure.”

Chitambara says Zimbabwe’s government spends much of its revenue on salaries, leaving social services sectors like education and health in dire need unless Western aid agencies, like USAID, assist. Chitambara says Ncube has to change that if the country is to recover.

 

 

 

 

 
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Ford won’t be moving production of a hatchback wagon to the United States from China — despite President Donald Trump’s claim Sunday that his taxes on Chinese imports mean the Focus Active can be built in America.

Citing Trump’s new tariffs, Ford on Aug. 31 said it was dropping plans to ship the Focus Active from China to America.

Trump took to Twitter Sunday to declare victory and write: “This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!”

 

But in a statement Sunday, Ford said “it would not be profitable to build the Focus Active in the U.S.” given forecast yearly sales below 50,000.

 

For now, that means Ford simply won’t sell the vehicle in the United States. Kristin Dziczek of the Center for Automotive Research said that Ford can make Focuses “in many other plants around the world, so if they decided to continue to sell a Focus variant in the U.S. market, there are several options other than building it in the United States.”

 

In April, Ford announced plans to stop making cars in the United States — except for the iconic Mustang — and to focus on more profitable SUVs. It stopped making Focus sedans at a Wayne, Michigan, plant in May. The plan, said industry analyst Ed Kim of AutoPacific, was to pare down the Focus lineup to Active wagons and import them from China. “Without the tariffs, the business case was pretty solid for that model in the U.S. market,” Kim said.

 

The tariffs changed everything. The United States on July 6 began imposing a 25 percent tax on $34 billion in Chinese imports, including motor vehicles. Last month, it added tariffs to another $16 billion in Chinese goods and is readying taxes on another $200 billion worth. China is retaliating with its own tariffs on U.S. products.

 

The world’s two biggest economies are clashing over U.S. allegations that China deploys predatory tactics — including outright cybertheft — to acquire technology from U.S. companies and challenge American technological dominance.

 

 
…

Ford says it has no plans to move production of a small car from China to the United States despite President Donald Trump’s enthusiastic tweet Sunday.

“It would not be profitable to the build the Focus Active in the U.S. given an expected annual sales volume of fewer than 500,000 units,” a Ford statement said.

Ford earlier announced it would not ship the cars from China to the United States because tariffs would make them too expensive, prompting a Trump tweet saying “This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs.”

Ford may keep building the Focus Active in China, but won’t not sell them in the United States.

Trump has imposed tariffs on $50 billion in Chinese imports to remedy what he calls unfair Chinese trade practices. China has retaliated and both countries threaten more tariffs.
…

Greek Prime Minister Alexis Tsipras on Saturday unveiled plans for tax cuts and pledged spending to heal years of painful austerity, less than a month after Greece emerged from a bailout program financed by its European Union partners and the International Monetary Fund.

Tsipras, who faces elections in about a year, used a keynote policy speech in the northern city of Thessaloniki to announce a spending spree that he said would help fix the ills of years of belt-tightening and help boost growth.

But he said Athens was also committed to sticking to the fiscal targets pledged to lenders.

“We will not allow Greece to revert to the era of deficits and fiscal derailment,” he told an audience of officials, diplomats and businessmen.

Tsipras promised a phased reduction of the corporate tax to 25 percent from 29 percent from next year, as well as an average 30 percent reduction in a deeply unpopular annual property tax on homeowners, rising to 50 percent for low earners.

He also said a pledge to maintain a primary budget surplus at the equivalent of 3.5 percent of gross domestic product could be achieved without further pension cuts, and that he would discuss this with the European Commission.

The government had been expected to announce further pension cuts next year — a deeply controversial measure in a country where high unemployment means that pensioners are occasionally the primary family earners. It is also a group that has been targeted for cutbacks more than a dozen times since 2010.

The leftist premier said he would also reinstate labor rights and increase the minimum wage. And he said the state would either reduce or subsidize social security contributions for certain sections of the workforce.
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U.S. President Donald Trump is threatening to impose tariffs on another $267 billion worth Chinese imports, which would cover virtually all the goods China imports to the United States.

The potential tariffs would come on top of punitive levies on $50 billion in Chinese goods already in place, as well as tariffs on another $200 billion worth of goods that Trump says “could take place very soon.”

He told reporters traveling with him to Fargo, North Dakota, on Friday that “behind that, there’s another $267 billion ready to go on short notice if I want.”

“That changes the equation,” he added.

Such a move would subject virtually all U.S. imports from China to new duties.

The president’s comments came one day after a public comment period ended on his proposal to add duties on $200 billion worth of Chinese imports. White House economic adviser Larry Kudlow said Friday that the Trump administration would evaluate the public comments before making any decisions on the new proposed tariffs.

The U.S. trade representative’s office received nearly 6,000 comments during seven days of public hearings on the proposal.

The Trump administration has argued that tariffs on Chinese goods will force China to trade on more favorable terms with the United States. It has demanded that China better protect American intellectual property, including ending the practice of cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

China has retaliated against the U.S. tariffs on $50 billion in Chinese imports with import taxes on an equal amount of U.S. goods. It has also threatened to retaliate against any new tariffs. However, China’s imports from the United States are worth $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.
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Millions of people covered under the Affordable Care Act will see only modest premium increases next year, and some will get price cuts. That’s the conclusion from an exclusive analysis of the besieged but resilient program, which still sparks deep divisions heading into this year’s midterm elections.

The Associated Press and the consulting firm Avalere Health crunched available state data and found that “Obamacare’s” health insurance marketplaces seem to be stabilizing after two years of sharp premium hikes. And the exodus of insurers from the program has halted, even reversed somewhat, with more consumer choices for 2019.

The analysis found a 3.6 percent average increase in proposed or approved premiums across 47 states and Washington, D.C., for next year. This year the average increase nationally was about 30 percent. The average total premium for an individual covered under the health law is now close to $600 a month before subsidies.

For next year, premiums are expected either to drop or increase by less than 10 percent in 41 states with about 9 million customers. Eleven of those states are expected to see a drop in average premiums. In six other states, plus Washington, D.C., premiums are projected to rise between 10 percent and 18 percent.

Insurers also are starting to come back. Nineteen states will either see new insurers enter or current ones expand into more areas. There are no bare counties lacking a willing insurer.

Even so, Chris Sloan, an Avalere director, says, “This is still a market that’s unaffordable for many people who aren’t eligible for subsidies.”

Nearly nine in 10 ACA customers get government subsidies based on income, shielding most from premium increases. But people with higher incomes, who don’t qualify for financial aid, have dropped out in droves.

It’s too early to say if the ACA’s turnabout will be fleeting or a more permanent shift. Either way, next year’s numbers are at odds with the political rhetoric around the ACA, still heated even after President Donald Trump and congressional Republicans failed to repeal the law last year.

Trump regularly calls “Obamacare” a “disaster” and time again has declared it “dead.” The GOP tax-cut bill repealed the ACA requirement that Americans have health insurance or risk fines, effective next year. But other key elements remain, including subsidies and protection for people with pre-existing conditions. Democrats, meanwhile, accuse Trump of “sabotage,” driving up premiums and threatening coverage.

The moderating market trend “takes the issue away from Republican candidates” in the midterm elections, said Mark Hall, a health law and policy expert at Wake Forest University in North Carolina. “Part of the mess is now their fault, and the facts really don’t support the narrative that things are getting worse.”

Market stability also appears to undercut Democrats’ charge that Trump is undermining the program. But Democrats disagree, saying the ACA is in danger while Republicans control Washington, and that premiums would have been even lower but for the administration’s hostility.

“Voters won’t think that the Trump threat to the ACA has passed at all, unless Democrats get at least the House in 2018,” said Bill Carrick, a strategist for Sen. Dianne Feinstein, D-Calif., whose re-election ads emphasize her support for the health law.

As if seconding Democrats’ argument, the Trump administration has said it won’t defend the ACA’s protections for pre-existing conditions in a federal case in Texas that could go to the Supreme Court. A new Kaiser Family Foundation poll found that Americans regardless of partisan identification said those protections should remain the law of the land.

In solidly Republican Arkansas, Democratic state legislator and cancer survivor Clarke Tucker is using the ACA in his campaign to try to flip a U.S. House seat from red to blue. Tucker, 37, says part of what made him want to run is the House vote to repeal the ACA last year and images of Trump and GOP lawmakers celebrating at the White House.

Business analysts say the relatively good news for 2019 is partly the result of previous premium increases, which allowed insurers to return to profitability after losing hundreds of millions of dollars.

“They can price better, and they can manage this population better, which is why they can actually make some money,” said Deep Banerjee of Standard & Poor’s.

Repeal of the ACA’s requirement to carry insurance doesn’t seem to have had a major impact yet, but Banerjee said there’s “a cloud of uncertainty” around the Trump administration’s potential policy shifts. Yet some administration actions have also helped settle the markets, such as continuing a premium stabilization program.

April Box of Spokane Valley, Washington, lives in a state where premiums could rise substantially since insurers have proposed an 18 percent increase. In states expecting double-digit increases, the reasons reflect local market conditions. Proposed increases may ultimately get revised downward.

Box is self-employed as a personal advocate helping patients navigate the health care system. She has an ACA plan, but even with a subsidy her premiums are expensive and a high deductible means she’s essentially covered only for catastrophic illness.

“I’m choosing not to go to the doctor, and I’m saying to myself I’m not sick enough to go to the doctors,” Box said. “We need to figure out how to make it better and lower the price.”

Now in her 50s, Box was born with dislocated hips. She worries she could be uninsurable if insurers are allowed to go back to denying coverage for pre-existing conditions. She might need another hip surgery.

“It needs to be a level playing field for everybody,” said Box. “We need to have universal coverage – that is really the only answer.”

Tennessee is a prime example of the ACA’s flipped fortunes.

Last year, the state struggled to secure at least one insurer in every county. But approved rates for 2019 reflect an 11 percent average decrease. Two new insurers – Bright Health and Celtic_ have entered its marketplace, and two others – Cigna and Oscar – will expand into new counties.

Tennessee Republican Sen. Lamar Alexander called that a “welcome step,” but argued rates could have been even lower if congressional Democrats had supported a market stabilization bill. Democrats blame Republicans for the failure.

To calculate premium changes, Avalere and The Associated Press used proposed overall individual marketplace rate filings for 34 states and D.C., and final rates for 13 states that have already approved them. Data was not available for Massachusetts, Maryland and Alabama. The average rate change calculations include both on-exchange and off-exchange plans that comply with ACA requirements. The government isn’t expected to release final national figures until later this fall.

 
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Hiring picked up in August as U.S. employers added a strong 201,000 jobs, a sign of confidence that consumers and businesses will keep spending despite the Trump administration’s conflicts with U.S. trading partners.

The Labor Department said Friday the unemployment rate remained 3.9 percent, near an 18-year low. 

Americans’ paychecks grew at a faster pace in August. Average hourly wages rose last month and are now 2.9 percent higher than they were a year earlier, the fastest year-over-year gain in eight years. Still, after adjusting for inflation, pay has been flat for the past year.

The economy is expanding steadily, fueled by tax cuts, confident consumers, greater business investment in equipment and more government spending. Growth reached 4.2 percent at an annual rate in the April-June quarter, the fastest pace in four years.

Most analysts have forecast that the economy will expand at an annual pace of at least 3 percent in the current July-September quarter. For the full year, the economy is on track to grow 3 percent for the first time since 2005. 

Consumer confidence rose in August to its highest level in nearly 18 years. Most Americans feel that jobs are widely available and expect the economy to remain healthy in the coming months, according to the Conference Board’s consumer confidence survey.

The buoyant mood is lifting spending on everything from cars to restaurant meals to clothes. Consumers’ enthusiasm is even boosting such brick-and-mortar store chains as Target, Walmart and Best Buy, which have posted strong sales gains despite intensifying competition from online retailers.

In August, factories expanded at their quickest pace in 14 years, according to a survey of purchasing managers. A manufacturing index compiled by a trade group reached its highest point since 2004. Measures of new orders and production surged, and factories added jobs at a faster pace than in July.

Not all the economic news has been positive. Higher mortgage rates and years of rapid price increases are slowing the housing market. Sales of existing homes dropped in July for a fourth straight month.

And wages are still rising only modestly, even after more than nine years of economic expansion and an ultra-low unemployment rate.

Many economists also worry President Donald Trump will soon follow through on a threat to impose tariffs of up to 25 percent on $200 billion of imports from China. That would be in addition to $50 billion in duties already imposed. That move could shave as much as a quarter-point off growth over the next year, Mark Zandi, chief economist at Moody’s Analytics, has estimated. 

For now, there’s little sign that companies are worried enough about a trade war to slow hiring. Businesses are increasingly reluctant to even lay off workers, in part because it would be difficult to replace them at a time when qualified job applicants have become harder to find.

On Thursday, the government said the number of people seeking unemployment benefits — a proxy for layoffs — amounted to just 203,000 last week, the fewest total in 49 years.
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Britain risks huge disruptions to its economy and society, including trade, transport, health care and citizens’ rights, if it leaves the European Union next March without a deal. That’s the conclusion of a new report on the short-term risks of a so-called ‘no-deal Brexit.’ The report comes as lawmakers return to London after a six-week summer break to face growing uncertainty over Britain’s future relations with the EU. Henry Ridgwell reports from London.
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She is many things that would seem to irritate President Donald Trump: a liberal Canadian former journalist.

That makes Foreign Minister Chrystia Freeland an unusual choice to lead Canada’s negotiations over a new free trade deal with a surprisingly hostile U.S. administration.

Recruited into politics by Prime Minister Justin Trudeau, Freeland has already clashed with Russia and Saudi Arabia. Those who know her say she’s unlikely to back down in a confrontation with Trump.

“She is everything the Trump administration loathes,” said Sarah Goldfeder, a former official with the U.S. Embassy in Canada.

Freeland, a globalist negotiating with a U.S. administration that believes in economic nationalism and populism, hopes to salvage a free trade deal with Canada’s largest trading partner as talks resumed Wednesday in Washington. The 50-year-old Harvard graduate and Rhodes scholar speaks five languages and has influential friends around the world.

“I have enormous sympathy for her because she is negotiating with an unpredictable, irrational partner,” said CNN host Fareed Zakaria, a friend of Freeland’s for 25 years.

Freeland cut short a trip to Europe last week after Trump reached a deal with Mexico that excluded Canada. Talks with Canada resumed but Trump said he wasn’t willing to make any concessions.

The Trump administration left Canada out of the talks for five weeks not long after the president vowed to make Canada pay after Trudeau said at the G-7 in Quebec he wouldn’t let Canada get pushed around in trade talks. Freeland then poked the U.S. when she received Foreign Policy magazine’s diplomat of the year award in Washington.

“You may feel today that your size allows you to go mano-a-mano with your traditional adversaries and be guaranteed to win,” Freeland said in the June speech. “But if history tells us one thing, it is that no one nation’s pre-eminence is eternal.”

Despite being the chief negotiator with the Trump administration, Freeland has criticized it when few other leaders of Western democracies have.

“She’s an extremely strong-willed and capable young woman, and I think Trump generally has a problem with that,” said Ian Bremmer, a longtime friend and foreign affairs columnist and president of the Eurasia Group. “She’s not going to bat her eyelashes at Trump to get something done. That’s not Chrystia. She doesn’t play games.”

After Freeland and her department tweeted criticism of Saudi Arabia last month for the arrest of social activists in the kingdom, Canada suffered consequences. The Saudis suspended diplomatic relations and canceled new trade with Canada and sold off Canadian assets.

Peter MacKay, a former Canadian foreign minister, said public shaming like that doesn’t work and said some Americans viewed her June speech in Washington as something less than diplomatic.

“It was around that time, within days, that the U.S. threw Canada out of the room,” MacKay said. “There is sometimes concern that she is taking the lead from her prime minister by playing a little bit to a domestic audience.”

Trudeau personally recruited Freeland to join his Liberal Party while it was the third party in Parliament in 2013. Freeland had a senior position at the Reuters news agency but was ready to move on after setbacks in her journalism career, said Martin Wolf, an influential Financial Times columnist and longtime friend.

Freeland previously had risen rapidly at the Financial Times where she became Moscow bureau chief in her mid-20s during the collapse of the Soviet Union.

Freeland also served as deputy editor of the Globe and Mail in Toronto and the Financial Times. She had designs on becoming editor of the Financial Times but left after a clash with the top editor. She was familiar to many TV viewers in the U.S. because of her regular appearances on talk shows like Zakaria’s.

“She was a godsend for us, frankly, because she is so bright and so talented and articulate,” Zakaria said. “She is as about as impressive a person as I have met.”

Freeland, who is of Ukrainian heritage, also wrote a well-received book on Russia and left journalism for politics in 2013 when she won a district in Toronto. She has been a frequent critic of Russian President Vladimir Putin, who banned her from traveling to the country in 2014 in retaliation for Western sanctions against Moscow.

She remains chummy with journalists, even bringing them frozen treats in 90-degree heat last week while they waited outside the U.S. Trade Representative office in Washington.

Bremmer, who met Freeland in Kiev in 1992, good-naturedly chided her for a strange foible: a habit of writing notes on her hands even when she has notepads.

“I have seen in her environments with foreign ministers and heads of state with stuff on her hands,” he said with a laugh.

Throughout her career, Freeland has cultivated an impressive group of friends. Mark Carney, the Bank of England governor, is a godfather to one of her three children. Friends include Larry Summers, the former U.S. treasury secretary, and billionaires George Soros and Stephen Schwarzman, the Blackstone Group chief executive who once led one of Trump’s disbanded business councils.

“I always found her to be extremely smart and easy to talk with,” Schwarzman said. “She accessible and direct and quick. You don’t get to be a Rhodes scholar by accident.”

Summers is a mentor from Harvard.

“Her clarity of thought, straightforwardness and deep sense of principle make her an ideal leader of the international community as it responds to highly problematic American policy,” Summers said in an email.

Bremmer said Freeland has serious globalist credentials, “but right now, momentum is not with that group globally.”

When Trudeau became prime minister in 2015, he named Freeland to his Cabinet. She served as international trade minister and worked on ensuring that a free trade deal with the European Union didn’t unravel. At one point, she left stalled talks near tears after saying it had been impossible to overcome differences. An agreement was reached not long after that, and Freeland received credit.

Now she’s facing her toughest challenge with the North American Free Trade Agreement, since the U.S. represents 75 percent of Canada’s exports.

“Canada is stuck with the United States. That’s Canada’s trade,” Bremmer said. “Canadians are going to have to swallow a fair amount of pride. They are going have to pretend they like this guy a lot more than they obviously do or they risk getting much more economically punished. That’s just the reality.”
…

Trump administration officials and Canadian negotiators are resuming talks to try to keep Canada in a North American trade bloc with the United States and Mexico.

“We are looking forward to constructive conversations today,” Canadian Foreign Affairs Minister Chrystia Freeland told reporters as she entered a meeting with U.S. Trade Rep. Robert Lighthizer.

Last week, the United States and Mexico reached a preliminary agreement to replace the 24-year-old North American Free Trade Agreement. But those talks excluded Canada, the third NAFTA country.

 

Freeland flew to Washington last week for four days of negotiations to try to keep Canada within the regional trade bloc. The U.S. and Canada are sparring over issues including U.S. access to Canada’s protected dairy market and American plans to protect some drug companies from generic competition.

 

 
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An international money transfer company has launched an online service for East Africans to send and receive money more easily. Analysts say WorldRemit will lower the cost of transferring money and boost African trade and economies.

Africa has become a thriving market for money transfer companies as its telecommunication facilities improve and its economies grow.

WorldRemit, a British-based money transfer company, recently launched a new digital service in four East African countries. The company facilitates the transfer of at least $1.6 billion to Africa each year.

The co-founder and the head of WorldRemit, Ismail Ahmed, told VOA how money transfers in Africa have changed over the years.

“When we launched our services, 99 percent of remittances were cash both on the sending and receiving side. But today that is changing fast and in the next few years we think as much as 50 to 60 percent of international remittances would move from traditional physical cash, traditional remittances, to digital. And that’s why our services has grown very fast in the last few years,” he said.

Ahmed said that as transactions become digital, the cost of each transfer comes down, and tracking money becomes easier.

“It’s easier for businesses and individuals to move within countries but also across countries. It’s easier to fight financial crime because once the transaction becomes digital, there is an audit trail compared to cash where there is no audit trail,” he said.

Gerrishon Ikiara is an international economic affairs lecturer at the University of Nairobi. He said digital money transfers will boost trade within Africa — but notes that some countries still lack the necessary connections.

“Obviously, the main challenge is the level of infrastructure, because a country without the good infrastructure in terms of electricity and telecommunication infrastructure will make it a bit difficult,” said Ikiara.

The World Bank says $37.8 billion was sent to Africa through remittances in 2017. This year, the amount is expected to be $39 billion.
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First it was Argentina, quickly followed by Turkey. Now anxious investors and policy-makers are watching with alarm the plummeting currencies of several emerging-market economies, most of which have borrowed heavily in dollars.

The nosediving currencies are prompting fears of a repeat of the 1997 Asian financial crash or the “Tequila Effect” of Mexico’s 1994 financial crisis. Or is something even worse coming — a financial contagion to compare with 2008?

Argentina’s peso dropped 29 percent against the U.S. dollar in August, the worst performer among major emerging-market currencies. Turkey’s currency followed closely, with a 25 percent slide.South Africa’s rand saw an almost 10 percent drop. The Indonesian rupiah fell to its weakest level since the 1997 Asian financial crisis, while India’s currency slid into unprecedented territory against the dollar.

September has seen no major uplift in those currencies. The Turkish lira is down 40 percent to the U.S. dollar this year, sparking mounting alarm over the sustainability of the country’s sizable dollar-denominated debts held primarily by its banks and businesses rather than the government.

The foreign exchange markets are jittery with traders watching to see if more countries start joining the troubled list, which would indicate contagion is underway. African countries like Angola, Ghana, Ethiopia, and Mozambique could be vulnerable. And in a worst-case scenario even more developed economies like Chile, Poland and Hungary, which are also shouldering large foreign-currency debts above 50 percent of their GDPs, could be impacted, say some financial analysts.

Corporate debt in emerging and developing economies is significantly larger than it was before the 2008 global financial crisis.The bigger the debt, the harder the fall.

“The risk is increasing in those countries,” Bertrand Delgado, director of global markets for Societe Generale in New York, has warned.

There is general consensus why emerging markets are in turmoil. Three main developments are blamed:

1 – The impact on market sentiment from U.S. President Donald Trump’s tit-for-tat trade war with China and others

2 – Rising U.S. interest rate that has prompted global investors to exit emerging markets to chase yield in dollar investments

3 – The winding down of post-2008 quantitative easing by the U.S. Federal Reserve and the European Central Bank, which has reduced liquidity and the availability of cheap money for governments and businesses in emerging markets to borrow.

A global financial crash?

Marcus Ashworth of Bloomberg cautioned last week the emerging-markets sell-off looks contagious.

“The difficulties for emerging markets have entered a new phase.What were once clearly country-specific crises, well contained within their borders, are bleeding across the world,” he warned.

Ashworth, a columnist and a veteran of the banking industry, most recently as chief markets strategist at Haitong Securities in London, added, “One emerging country’s problems have become other emerging countries’ problems, and it’s hard to see how to break the cycle.”

Other analysts dispute that contagion is underway, saying each of the troubled states have their own idiosyncratic problems and country-specific challenges, although they acknowledge the turmoil could mount with the U.S. Federal Reserve expected to raise interest rates several times this year.

In a note to investors, DBS, a Singapore-based international financial services group, warned the currencies of Argentina and Turkey “have been struggling with rising U.S. rates since the start of the year, due to deficits in their fiscal and current account balances.

“Heightened trade tensions threatening to erupt into a full-blown trade war could prompt, DBS said, disorderly capital outflows leading to “financial instability, especially in countries that have high external debt levels.”

Britain’s The Economist magazine argues the weakness in emerging-market currencies “is not fundamentally contagious” and the fallout can be contained.Western lenders including banks will be impacted, it said, as emerging-market borrowers struggle to repay dollar and other foreign-currency debts now worth more in terms of their own currencies. “But it would not threaten their [Western lenders’] solvency,” it said.

Optimists say for all the wider currency woes and the economic weakness of Argentina and Turkey, many major emerging-market countries are doing well.

India’s GDP was growing at an 8 percent rate ending June. Mexico’s peso is steady and it appears to have concluded trade negotiations with the Trump White House, which markets are viewing favorably.

The optimists say the global scare is being fanned by screaming, doom-laden headlines, pointing out that in 2013, when the U.S. Federal Reserve started to cease Quantitative Easing, Brazil, India, Indonesia, Turkey and South Africa all suffered from currency depreciation, but they soon regained their footing.

The biggest emerging-market risk, though, is that rattled global investors could be so alarmed by currency turmoils that they ignore economic fundamentals and stampede away from emerging-market countries, compounding currency falls, triggering indirect contagion, and adding to debt burdens.
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In the era of superfoods, Maine blueberries aren’t so super.

 

The Maine wild blueberry industry harvests one of the most beloved fruit crops in New England, but it’s locked in a downward skid in a time when other nutrition-packed foods, from acai to quinoa, dominate the conversation about how to eat. And questions linger about when, and if, the berry will be able to make a comeback.

 

The little blueberries are touted by health food bloggers and natural food stores because of their hefty dose of antioxidants. They’re also deeply ingrained in the culture of New England, and they were the inspiration for “Blueberries for Sal,” a beloved 1948 children’s book.​

But the industry that picks and sells them is dealing with a long-term price drop, drought, freezes, diseases and foreign competition, and farmers are looking at a second consecutive year of reduced crop size.

At Beech Hill Blueberry Farm in Rockport, this year’s harvest was off by about 50 percent, said Ian Stewart, who runs the land trust that manages the farm.

 

“Our year was a little underwhelming. There was a lot of drought. There was a freeze at a bad time,” Stewart said. “We’re hoping it’s a blip. We’ll see.”

North America’s wild blueberry industry exists only in Maine and Atlantic Canada, and an oversupply of berries in both places caused prices to harvesters to plummet around 2015. Recent years have brought new challenges, such as particularly bad spells of mummy berry disease, a fungal pathogen, and difficulty in opening up new markets.

 

The blueberries grow wild, as the name implies, in fields called “blueberry barrens” that stretch to the horizon in Maine’s rural Down East region. While the plumper cultivated blueberries harvested in states like New Jersey are planted and grown as crops, harvesters of wild blueberries tend to a naturally occurring fruit and pick it by hand and with machinery.

 

Woes in the industry have caused some growers to scale back operations in Maine. Harvesters collected a little less than 68 million pounds of wild blueberries in the state in 2017, which was the lowest total since 2005 and more than 33 million pounds less than 2016. Last year’s price of 26 cents per pound to farmers was also the lowest since 1985, and was more in line with the kind of prices farmers saw in the early 1970s than in the modern era.

This year’s harvest was mostly wrapped by late August, a little earlier than usual, and members of the industry said they believe it was another year of lower harvest. Exact totals aren’t available yet, but signs point to a crop that’s “similar to last year, or even smaller,” said Nancy McBrady, executive director of the Wild Blueberry Commission of Maine.

The industry has tried to focus on growing the appeal of the health aspects of wild blueberries, which are richer in antioxidants than their cultivated cousins, but it has been a slow climb, McBrady said.

 

“For years, the health message and the taste message of wild blueberries has been successful,” she said. “But it’s frustrating when we find ourselves in periods of oversupply and competition.”

 

Nearly 100 percent of the wild crop is frozen, and the berries are used in frozen and processed foods. Prices to consumers at farm stands and grocery stores have held about steady in the face of falling prices to harvesters.

 

The same berries are harvested in Quebec, New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island, and the weakness of the Canadian dollar has also hurt the U.S. industry because Canadian berries sell for less. Some companies operate on both sides of the border, and an equal exchange rate is better for business.

 

Such financial stress played a role in growers harvesting 5,000 fewer acres in the U.S. last year, said David Yarborough, a horticulture professor at the University of Maine. He said he expects a similar drop this year.

 

Other factors, such as poor pollination last year, have also held the crop back, Yarborough said. He stopped short of describing the industry as in full-blown crisis, but he said some smaller growers are in crisis mode.

The industry at large is hoping it doesn’t suffer too many more down years, said Homer Woodward, vice president of operations for Jasper Wyman & Son, a major industry player.

 

“I think the state of Maine is going to pick less pounds than last year. That’s the product of economic downturn,” said Woodward said. “And mother nature was cruel to us this year.”
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