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Russian lawmakers Tuesday unanimously approved, in first readings, legislation to retaliate against the United States and other Western countries for last month’s imposition by Washington of sanctions on some of Russia’s biggest companies and business people.

One measure would empower the Kremlin to impose sweeping “counter-sanctions” in response. Another would make it a criminal offense to observe sanctions imposed by the U.S. on Russia or to provide any information or advice on the punitive action.

Refusing to supply services or do business with Russian oligarchs or companies sanctioned by the U.S. would be punishable by up to four years in prison, under the proposed legislation. The proposed measures have prompted investor alarm and opened up the prospect of a tit-for-tat cycle of retaliation.

After the measures secured their first reading, Kremlin official Alexander Sinenko said the Russian government supports the parliamentary response to the sanctions aimed at punishing Moscow for its alleged meddling in the 2016 U.S. presidential election and other “malign activities.” U.S. President Donald Trump ordered the measures last month.

‘Absolutely unfriendly’

“The U.S. sanctions are of an absolutely unfriendly type,” said Vyacheslav Volodin, speaker of Russia’s lower house of parliament, the State Duma. “They affected over 400 Russian companies and about 200 citizens of our country. We are granting broad powers to our president and government to protect our country, our economy and workplaces.”

Prime Minister Dmitry Medvedev last month pledged that the Kremlin would help companies targeted by U.S. sanctions. The proposed legislation would halt all cooperation with the U.S. in the nuclear, missile and aircraft-building spheres and introduces restrictions on various American imports. The proposed measures also allow Russian companies to produce various goods copyrighted in the West.

Initially, Russian lawmakers said they would impose restrictions on a wide range of specific goods and services from the United States, including medicine and agricultural products; but, in the draft legislation approved Tuesday, language that targeted specific goods to soften the impact on Russian consumers and industries was removed.

Small impact expected

The U.S. is Russia’s fourth-largest trading partner, and imports of American goods totaled $12.7 billion last year. Cars, pharmaceuticals and medical equipment were among the top items. Russian exports to the U.S. totaled $17 billion in 2017.

The Russian retaliation would have negligible impact on the U.S., given trade flows are insignificant as far as America is concerned, but the retaliation envisaged would exacerbate already highly fraught U.S.-Russian relations, which analysts describe as being at their lowest point since the Cold War.

The U.S. sanctions imposed on Russia in April, targeting two dozen Kremlin insiders and oligarchs close to Russian President Vladimir Putin, have proven to have had a greater impact on Russia than had been expected, say analysts. But they’re doing nothing at this stage in turning ordinary Russians against the Kremlin or undermining the Russian leader’s overall popularity, if recent polling data is accurate.

The ruble suffered its worst week in four years in the immediate wake of the April 6 announcement of new sanctions on 24 extremely wealthy Russians and 14 companies.

‘Game-changer’

When the West imposed its first sanctions on Russia, following Moscow’s annexation of Crimea and fomenting separatism in eastern Ukraine, the effect was limited, according to analyst Nigel Gould-Davies of Britain’s Chatham House research group, and Russia found ways to adapt.

“But America’s latest financial sanctions, announced on April 6, are a game-changer,” he argued in a recent commentary, noting the latest sanctions have created bigger uncertainty.

“No one knows who might be targeted next,” he continued. “Russia faces a new systemic risk: expectations about U.S. sanctions are now as important as the oil price for assessing its prospects.”

The British government is starting the process of introducing legislation that will block Russian oligarchs and officials linked to human rights abuses from doing business in the country and buying property in Britain.

Russia-Crimea link

As Russian lawmakers debated the retaliatory measures, President Putin opened a controversial bridge linking southern Russia and the Crimean peninsula that Moscow annexed from Ukraine in 2014.

Before driving an orange truck on the 19-kilometer bridge that cost $3.6 billion to build, Putin told construction workers (and reporters): “I want to sincerely congratulate you with this remarkable, festive and, in the full sense of the word, historic day.”

“Even under the Tsar, people were dreaming of building this bridge,” he said, in reference to Russia’s last Tsar, Nicholas II, who had wanted to span a bridge across the Kerch Strait. In the 1930s, Communist autocrat Joseph Stalin also had proposed a Kerch Strait bridge.

Ukraine condemned the opening. “The Russian occupying powers, which have temporarily occupied Crimea, are continuing to act outside international law,” said Ukrainian Prime Minister Volodymyr Groysman.

 
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The United States has imposed sanctions on the head of Iran’s central bank Valiollah Seif , accusing him of helping funnel millions of dollars to Lebanon-based militant group Hezbollah.

“Iran’s Central Bank Governor covertly funneled millions of dollars on behalf of the IRGC-QF (the Islamic Revolutionary Guard Corps-Quds Force ) through Iraq-based al-Bilad Islamic Bank to enrich and support the violent and radical agenda of Hezbollah,” said Treasury Secretary Steve Mnuchin in a statment. “The United States will not permit Iran’s increasingly brazen abuse of the international financial system. The global community must remain vigilant against Iran’s deceptive efforts to provide financial support to its terrorist proxies.”

Also blacklisted were Ali Tarzali, assistant director of the international department of Iran’s central bank, and chairman of al-Bilad Islamic Bank, Aras Habib.

Mnuchin said the Tuesday action “cuts off Iran’s use of a critical banking network and follows last Thursday’s disruption of an IRGC-QF-associated currency exchange network procuring millions of dollars through the UAE.”

The United States and the United Arab Emirates said the currency exchange network allowed hundreds of millions of dollars to be transferred to the IRGC-QF to fund its insurgent operations in the Middle East.

“These actions build upon President Trump’s May 8 decision to cease the United States’ participation in the Joint Comprehensive Plan of Action (JCPOA) and begin reimposing U.S. sanctions that had been lifted under the JCPOA, including against the Central Bank of Iran,” Secretary Mnuchin said Tuesday, referring to the 2015 Iran nuclear agreement.
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A Kenyan court on Monday rejected a plea for a change to the laws on how property should be split in divorce cases, a ruling activists said was a blow for women’s rights in the country.

Kenya’s High Court dismissed a 2016 petition from the Federation of Women Lawyers in Kenya (FIDA), an advocacy group that had argued the Marriage Properties Act was unconstitutional because it entitled each partner only to what they contributed.

The constitution states that married couples are entitled to equal rights and the group argued that the law unfairly impacted women, who were more likely to suffer financially from a marriage breakup.

In its ruling, the court said that changing the law would “open the door for a party to get into marriage and walk out of it in the event of divorce with more than they deserve.”

In response, FIDA head Josephine Mong’are said it was a “sad day for Kenyans.”

“Every year millions of women in Kenya still find themselves fighting to hold onto their property after a divorce or the death of their husband,” she said in a statement.

Less than seven percent of title deeds are held by women alone or jointly with men in Kenya, according to a 2014 survey by the United Nations Conference on Trade.

Land is usually passed on to sons, making it hard for women to secure rights except through their husbands. Women and their children are often evicted if the husband dies or they divorce.

Less than two percent of title deeds issued in Kenya since 2013 went to women, according to the Kenya Land Alliance, an advocacy network.
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The Turkish lira is increasingly under siege amid mounting international investors’ concerns. The publication Monday of unexpectedly poor economic data saw the lira approach record lows. The increasing financial turbulence comes as opposition parties begin to narrow the gap ahead of the June 24 presidential and general elections and voter concerns over the economy grow.

“We are in such a knife-edge situation,” said analyst Atilla Yesilada of Global Source Partners. “There is extremely fragile sentiment toward the lira. Sentiment is negative for emerging markets in general and in particular for Turkey. Investors smell blood and they are going to keep coming after the Turkish lira unless significant counter steps are taken.”

With double-digit inflation, investors have increasingly been warning the Turkish economy is overheating. In the last year, the government has spent billions of dollars to boost the economy in a process that has accelerated with elections. With opinion polls indicating a galvanized opposition narrowing the lead, President Recep Tayyip Erdogan has announced 2,000 lira (approximately $460) payments to all pensioners, at a cost of $5 billion.

International investors are pressing for a substantial increase in Turkish interest rates to support the lira and help to cool down the economy; but Erdogan Friday appeared to rule out such a move, describing interest rates as the “mother of all evil.” He pledged that Turkey will “emerge victorious in its fight against interest rates” after the June elections. On Sunday, he repeated his message before flying to London for a three-day visit.

Erdogan adheres to the unorthodox economic view that interest rates cause inflation instead of reducing it. While the Turkish central bank is ostensibly independent, there is an awareness that the president has the final say.

“It’s always difficult for the central bank to substantially raise rates given very strong political opposition and very shortly, before the election, it will be very difficult,” said economist Inan Demir of Nomura International Plc.

“But the costs of a rate hike will be much lower than letting the currency depreciate. Unless this happens, the likelihood is the currency will depreciate further and possibly lead to a slowdown in the economy,” added Demir.

Economic concerns are cited as the No. 1 issue of concern in many opinion polls.

“People are hungry and angry,” analyst Yesilada said. But a major interest rate increase would bring financial woe to the large numbers of voters with big credit card debts. “It’s an issue no one is talking about, but we have an explosion in credit card debt in Turkey,” political columnist Semih Idiz of Al-Monitor website said.

Turkey’s indebted construction industry, the major driver of the economy, would also, analysts warn, be hit hard by interest rate increases.

“Construction is a magnet industry, in the sense that it draws input from various indigenous industries, and it’s labor intensive. When construction stops, recession spreads,” analyst Yesilada said. “Construction companies are usually loyal supporters and contributors of the ruling AKP, so to lose their favor just before an election is not a good idea.”

An increase in borrowing costs would likely hit demand for new housing. Construction companies are already struggling to sell existing stock, with reports many firms are close to defaulting on bank loans. Analysts say construction company debts account for more than 10 percent of Turkish bank loans.

Erdogan’s opposition to interest rate increases could be tested further. On Wednesday, a New York court is set to sentence Hakan Atilla, a senior executive of Turkey’s state-owned Halkbank, on Iranian sanctions violation charges. Atilla’s sentencing opens the door to potential multibillion dollar fines on Halkbank and other Turkish banks, a prospect that analysts warn could further unnerve investor concerns over Turkey, leading to further currency falls and more pressure to increase rates.

Investors are also increasingly focusing on the outcome of the June election and the potential for political deadlock if opposition parties form the next government and Erdogan is re-elected. 

“The scenario markets would dislike most is a divided presidential parliamentary power scenario. That would create more uncertainties for the markets. I think the markets will watch the opinion polls with an eye on that possibility,” economist Demir said.

Turkey’s central bank is due to meet next month, and there is the expectation it may raise rates modestly. Analysts say that with Erdogan aware of the tightening polls, he will likely seek to perform a delicate balancing act in averting a currency collapse without a major rate increase before the elections.
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Eurasian Economic Union includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan
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Key U.S. lawmakers on Monday attacked President Donald Trump’s call to help save jobs at the Chinese technology giant ZTE, contending it overlooks American national security concerns.

Sen. Marco Rubio, one of Trump’s former rivals for the Republican presidential nomination in 2016, said on Twitter the “problem with ZTE isn’t jobs & trade, it’s national security & espionage. Any telecomm firm in China can be forced to act as tool of Chinese espionage without any court order or any other review process. We are crazy to allow them to operate in U.S. without tighter restrictions.”

The Florida lawmaker added, “I hope this isn’t the beginning of backing down to China.”

Senate Democratic leader Charles Schumer parodied Trump’s “Make America Great Again” political slogan, saying, “One of the few areas where the president and I agreed, and I was vocally supportive, was his approach towards China. But even here he is backing off, and his policy is now designed to achieve one goal: make China great again.”

Democratic Sen. Ron Wyden questioned the timing of Trump’s call to help ZTE “get back into business fast” after a U.S. trade ruling severely crippled the company and order to the U.S. Commerce Department “to get it done!”

“Unilateral concessions before an upcoming trade negotiation,” Wyden said. “This may be the art of the deal for China, but it’s a big loser for American workers, companies, and national security.”

Trump said Sunday he is working with Chinese President Xi Jinping to ease the economic fortunes of ZTE, which employs 80,000 workers and is China’s second-largest maker of telecommunications equipment.

The U.S. leader’s Twitter comments on ZTE came as the United States and China, the world’s two biggest economies, are locked in contentious talks about tariffs each has threatened to impose on hundreds of billions of dollars worth of each other’s exports. Recent U.S.-China trade talks in Beijing proved fruitless, but the discussions are resuming again this week in Washington.

For its part, Chinese Foreign Ministry spokesman Lu Kang said Monday that China “greatly appreciates the positive U.S. position on the ZTE issue.”

After Trump tweeted that he had “instructed” the Commerce Department to resolve the dispute over ZTE, the White House said that the president expected Commerce Secretary Wilbur Ross to make an independent decision.

“Too many jobs in China lost,” Trump tweeted Sunday, days after ZTE announced it had ceased “major operating activities.”

The U.S. had cut off exports of U.S.-made parts to ZTE — more than 25 percent of the components ZTE needs to build its wireless stations, optical fiber networks and smartphones.

The U.S. cutoff came after ZTE was, in the words of one expert, “caught red-handed” putting the U.S. technology into products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.

The U.S. fined ZTE $1.2 billion last year. But the U.S. said last month ZTE lied about punishing the employees believed to be involved in skirting the sanctions, paying them bonuses instead.

The Commerce Department cut off ZTE’s access to U.S. components until 2025, forcing it to shut down operations at its factory in Shenzhen.

“China and the United States are working well together on trade, Trump said in a second tweet Sunday, “but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries. But be cool, it will all work out!”

Douglas Jacobson, an attorney who represents suppliers who do business with ZTE, told VOA that Trump’s order to help ZTE is a stunning decision and one bound to make U.S. law enforcement officials unhappy by going over their heads.

“This has caught all of those in the exports and sanctions world certainly by surprise and with some degree of shock and awe,” Jacobson said. “This is unprecedented that the president of the United States would intervene in what really is a law enforcement case.”

But Jacobson said the ZTE matter is not a sign of a general thaw in trade tensions between the U.S. and China, including the recent tit-for-tat tariffs.

Jacobson said he believes Trump may be willing to make a concession on China in exchange for China’s help with North Korea.

Ira Mellman contributed to this report.

 
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President Donald Trump says he is looking for a way to let a Chinese technology firm “get back into business fast” after a U.S. trade ruling severely crippled the company.

“Too many jobs in China lost,” Trump tweeted Sunday, days after ZTE announced it had ceased “major operating activities.”

The U.S. had cut off exports of U.S.-made parts to ZTE — more than 25 percent of the components ZTE needs to build its wireless stations, optical fiber networks and smartphones.

The U.S. cutoff came after ZTE was, in the words of one expert, “caught red-handed” putting the U.S. technology into products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.

The U.S. fined ZTE $1.2 billion last year. But the U.S. said last month ZTE lied about punishing the employees believed to be involved in skirting the sanctions, paying them bonuses instead.

The Commerce Department cut off ZTE’s access to U.S. components until 2025, forcing it to shut down operations at its factory in Shenzhen.

Trump has often complained about China stealing U.S. jobs. But he tweeted he is working with Chinese President Xi Jinping to ease the economic fallout at ZTE and ordered the U.S. Commerce Department “to get it done!”

“The president’s tweet underscores the importance of a free, fair, balanced, and mutually beneficial economic trade and investment relationship between the United States and China,” White House Deputy Press Secretary Lindsay Walters said Sunday. “The administration is in contact with China on this issue, among others, in the bilateral relationship.”

The U.S. and China are due to hold their latest round of trade talks this week in Washington.

“China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries,” Trump said in another tweet. “But be cool, it will all work out!”

Douglas Jacobson, an attorney who represents suppliers who do business with ZTE, told VOA that Trump’s order to help ZTE is a stunning decision and one bound to make U.S. law enforcement officials unhappy by going over their heads.

“This has caught all of those in the exports and sanctions world certainly by surprise and with some degree of shock and awe,” Jacobson said. “This is unprecedented that the president of the United States would intervene in what really is a law enforcement case.”

But Jacobson said the ZTE matter is not a sign of a general thaw in trade tensions between the U.S. and China, including the recent tit-for-tat tariffs.

Jacobson said he believes Trump may be willing to make a concession on China in exchange for China’s help with North Korea.

Steve Herman, Ken Bredemeier, Ira Mellman and Kenneth Schwartz contributed to this report.

 
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There’s a push to level the playing field for women in India, where women account for 42 percent of university graduates but only 24 percent are hired as entry level professionals. Of these, 19 percent are likely to reach senior level management. To make matters worse, the number of women who leave the work force is also higher than men. As Ritul Joshi reports, a specially designed management course for women in New Delhi is teaching them to make their way in a male dominated work force.
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Senior officials from the United States, Canada and Mexico ended the latest round of talks on the North American Free Trade Agreement without any major breakthroughs on how to renegotiate the deal.

U.S. Trade Representative Robert Lighthizer said Friday after a week of talks in Washington that the United States will continue to work with its partners to update the 1994 trade pact. 

“The United States is ready to continue working with Mexico and Canada to achieve needed breakthroughs on these objectives,” he said.

The talks involved all three of the top officials in the NAFTA negotiations: Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo.

The talks have come under increased pressure to produce a deal quickly after U.S. House Speaker Paul Ryan said this week he would need to be notified of a new agreement by May 17 to give the current Congress a chance to pass it this year.

Guajardo said Friday that revising the deal will take time. “We’re not going to sacrifice the quality of an agreement because of pressure of time. We’ll keep engaged,” he said.

Freeland echoed those comments. “The negotiations will take as long as it takes to get a good deal.”

She told reporters that there was a long “to-do” list to finish a renegotiation of NAFTA, but said the talks were making progress.

U.S. President Donald Trump again heaped criticism on NAFTA during a meeting with auto executives Friday at the White House. “NAFTA has been a horrible, horrible disaster for this country. And we’ll see if we can make it reasonable,” he said.

Trump has long criticized NAFTA, blaming it for the loss of millions of manufacturing jobs that hurt the U.S. economy.

The auto industry has featured prominently in the NAFTA talks, with one of the key sticking points being a U.S. demand to increase the U.S.-made components in vehicles that receive duty-free status in NAFTA.

Trump praised Fiat Chrysler chief Sergio Marchionne on Friday for plans to move production of its popular Dodge Ram truck back to the United States from Mexico.

“Right now, he’s my favorite man in the room,” Trump said.
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British Prime Minister Theresa May and U.S. President Donald Trump agreed in a phone call Friday that talks were needed to discuss how U.S sanctions on Iran would affect foreign companies operating in the country.

Trump’s decision to pull the United States out of the Iranian nuclear deal and revive U.S. economic sanctions has alarmed the leaders of Britain, France and Germany who remain committed to the deal and who have significant trade ties with Tehran.

“The prime minister raised the potential impact of U.S. sanctions on those firms which are currently conducting business in Iran,” her spokeswoman said. “They agreed for talks to take place between our teams.”

The spokeswoman said May had told Trump that Britain and its European partners remained “firmly committed” to ensuring the deal was upheld as the best way to prevent Iran from developing a nuclear weapon. Iran says its nuclear program is for peaceful purposes only.

The two leaders also condemned Iranian rocket attacks against Israeli forces earlier this week and strongly supported Israel’s right to defend itself.

“They agreed on the need for calm on all sides and on the importance of tackling Iran’s destabilizing activity in the region,” the spokeswoman said.
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Mexico will not be rushed into revamping the North American Free Trade Agreement (NAFTA) just to get a deal, Economy Minister Ildefonso Guajardo said on Friday ahead of trilateral talks with his U.S. and Canadian counterparts.

Guajardo said he would meet at 1 p.m. EDT (1700 GMT) with Canada’s Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer, and that the three are closer to agreeing new rules for autos that are vital for a deal.

However, Guajardo, who is eager to reach an agreement on all the principal aspects of a modernized NAFTA before sealing a new deal, said plenty of other issues were outstanding.

“I have to make very clear [that] the quality of the agreement and the balance of the agreement has to be maintained. So we are not going to sacrifice balance and quality for time,” he told reporters on the doorsteps of Lighthizer’s office.

“We believe there is a way to solve autos. I think we are trying to make a very good effort … We are looking at the whole set of items we have to solve. So it’s not autos, it’s everything else.”

Guajardo and Freeland have been meeting Lighthizer separately since the start of the week. Friday’s trilateral meeting will be the first held this week.

Drafting new rules of origin governing what percentage of a car needs to be built in the NAFTA region to avoid tariffs has been at the center of the talks to update the 1994 deal. It forms a key plank of the Trump administration’s aim to boost jobs and investment in the United States.

Officials and industry sources say the three sides have been gradually narrowing their differences on autos.

However, several other major issues are still unresolved, including U.S. demands for a five-year sunset clause that would allow NAFTA to expire, and elimination of settlement panels for trade disputes.

U.S. House Speaker Paul Ryan set a May 17 deadline to be notified of a new NAFTA to give the current Congress a chance of passing it. The United States will hold elections in November for a new Congress that will be seated early next year.

Mexico’s top trade official, however, said time was running short to meet such a deadline. Mexico will hold its presidential election on July 1.
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Motorists with the money can now explore off-road in luxury or just make a statement dropping the kids off at school.

Rolls-Royce unveiled its first SUV on Thursday. The Cullinan, named for the diamond in Britain’s Crown Jewels, carries a $325,000 price tag plus an estimated $5,000 gas-guzzler tax.

The Cullinan’s 6.75-liter, twin-turbo V12 engine has 563 horsepower. The SUV includes Rolls’ “magic air ride,” but drivers can press an “off-road” button to hit the trails.

Deliveries are expected to begin in 2019.

Rising sales of SUVs and pickup trucks are driving auto sales in the U.S. Autodata Corp. said in March that truck and SUV sales rose 16.3 percent, while car sales plunged 9.2 percent. Nearly two-thirds of all vehicles sold were trucks or SUVs.
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Burden or business opportunity? A new U.N.-backed study of refugees from the World Bank’s International Financial Corporation argues for the latter. The IFC researchers examined one of Africa’s oldest and largest refugee camps, Kakuma in northwest Kenya. What they found is a growing consumer base they say is ripe for more private investment in sectors like mobile banking and energy. The IFC took VOA’s Daniel Schearf on a tour of the camp. He has this report.
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A senior United Nations official says trade protectionism, rising private and corporate debt, and shortcomings in revenue raising are growing challenges to the economic outlook for the Asia Pacific.

Shamshad Akhtar, executive secretary of the UN’s Economic and Social Commission for Asia and the Pacific (UNESCAP), noted the threats of trade wars undermining the region’s positive economic growth outlook.

The United States has pressed states, notably China, to reduce trade and current account deficits with the U.S., recently imposing tariffs on steel exports from several countries.

Akhtar said such trade protectionism represents “quite a big threat” along with nontariff barriers, which have been rising since the 2008 global financial crisis, such as cross border restrictions that further limit trade.

“If you look at the trends, there has been a post-2008 crisis, there has been an increase in nontariff barriers that face the Asia Pacific region as a whole. [The U.S. tariff increases] have been classified as a trade war eventually, if at all those [measures] are invoked there will be a counter reaction,” Akhtar said.

Trade war and growth

She said a trade war would directly impact the region’s economic growth, especially affecting small- and medium-sized enterprises in the Asia Pacific that have trading links to economies such as China, a key target of the U.S. tariffs.

“Yes, growth in itself would be impacted, and it’s happening at a time when we have just seen a recovery; both in terms of growth as well as trade,” Akhtar told VOA.

She said the trade conflicts represented a challenge to the long-standing multilateral rules set down under the World Trade Organization (WTO).

But economists with the Singapore/London based Capital Economics, say recent trade talks between the U.S. and China, and slowing global growth may have eased the threat of a trade war.

China trade surplus leveling

Capital Economics Senior China economist, Julian Evans-Pritchard, in a May commentary, said that while the trade surplus with the U.S. remains near an all-time high, there were “some signs” of it leveling off.

Evans-Pritchard said China’s export performance was also easing as global growth may have peaked.

“This will hopefully encourage [China] to adopt a pragmatic approach to trade negotiations in order to try to avoid the imposition of tariffs and an even sharper slowdown in export growth,” he said.

Outlook for 2018-2019

UNESCAP’s annual economic survey for the Asia Pacific, released this week, remained upbeat for the region’s economic growth at 5.5 percent in 2018 and 2019, with a “slight moderation” in China, offset by a recovery in India, with steady growth elsewhere in the region.

But Akhtar said there are still significant economic headwinds going forward, including infrastructure financing, estimated to be as much as $1.7 trillion.

To meet such demand, she said there is a need to reform taxation administration “in some of the Asia Pacific economies” through simplified tax regimes that could mobilize as much as $60 billion.

Mounting debt

The survey warned of “potential financial vulnerabilities” in regions of high private and corporate debt, particularly in China, South Korea, Malaysia and Thailand, in order to avoid a repeat of the Asian financial crisis of 1997-1998.

“It’s very clear to me we need to tackle the issue of private and corporate debt because from our previous experiences any overexposure in terms of whether the debt is private, corporate or household can induce a huge amount of domestic financial vulnerability,” Akhtar said.

Akhtar noted progress achieved in reducing poverty from almost 44 percent in 1990 to around 12 percent in early 2010.

But poverty levels remain “relatively high” in South and Southwest Asia. The Asia Pacific region still has some “400 million people living in poverty.”

Another issue is growing income inequalities in key economies, with the most marked changes in China and Indonesia, and to a lesser extent in India and Bangladesh.

“Given that we have steep inequalities with countries, it basically means that people don’t have access to basic economic and social services,” which can also sustain poverty rates, she said.

Akhtar said in the medium term “potential economic growth” appeared on a downward trend in several countries because of aging populations and a need to boost investment in human resources, such as education.
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Mexico on Thursday indicated time was running out to see whether NAFTA nations could agree a new deal in the short term while Canada struck a upbeat tone, saying top-level talks this week had achieved a great deal.

Major differences remain between the three members of the North American Free Trade Agreement after more than eight months of largely slow-moving negotiations launched at the insistence of Washington, which wants major changes to the 1994 pact.

A source close to the talks said U.S. officials have told Canada and Mexico that May 17 or 18 is the deadline for a text that could be dealt with by the current U.S. Congress. A second source confirmed that those dates had been discussed.

Need solutions before elections

Mexico’s Economy Minister Ildefonso Guajardo said he expected to learn by the end of Friday whether a new deal was possible in the short term.

“I think we will be finding out through the day and tomorrow … if we really have what it takes to be able to land these things in the short run,” Guajardo told Reuters.

Top-level talks between the three members this week hit an obstacle as the United States and Mexico sought to settle differences over the key issue of automobiles.

U.S. Trade Representative Robert Lighthizer wants a quick agreement to avoid running into complications caused by a Mexican presidential election on July 1 and U.S. midterm Congressional elections in November.

‘Getting closer’

Canadian Foreign Minister Chrystia Freeland said the three nations had “made a lot of progress since Monday … we are definitely getting closer to the final objective.”

Freeland, speaking to reporters after meetings with senior U.S. legislators on Capitol Hill, sidestepped questions as to when an agreement might be reached.

Guajardo told Reuters that “we have suitcases for two weeks if necessary.”

U.S. President Donald Trump regularly threatens to walk away from NAFTA, underscoring uncertainty over the pact. Business executives complain that the lack of clarity is hitting investment.

Mexico has launched a counterproposal to U.S. demands to toughen automotive industry content rules and boost wages. U.S. President Donald Trump blames cheaper wages in Mexico for manufacturing job losses in the United States.

Many major issues remain

Many other major issues crucial to a deal are still unresolved, including U.S. demands for a five-year sunset clause, and elimination of settlement panels for trade disputes.

After meeting with Lighthizer on Thursday, Guajardo told reporters that the talks were not just covering autos.

“You cannot think that in a process of negotiations we’re going to solve one item without reviewing the overall balance of the agreement,” he said. “We’re going over all the items. It’s very important to stress that.”
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Virginia Wallen is a wife, a mother of three, and a woodworker. She achieved what she has never imagined she would — turning her carpentry hobby into a business. The entrepreneur isn’t just succeeding in her new career, she’s tearing down stereotypes and building a new role model.

It happens for a reason

Wallen, who grew up helping out on her family’s farm, developed all the skills required by a professional woodworker early on.

“It wasn’t so much as a passion — growing up doing woodworking – as much as a requirement: help mend a fence or work on the farm or do things like that,” she recalls. “When given a choice in high school between home economics and woodshop class I picked woodshop and welding. But the passion happened a lot later when the HGTV [TV channel for home improvement] came out.”

Still, carpentry wasn’t her first career choice. Wallen worked for 11 years with an IT company.

“I was pretty certain that that was my career path for the rest of my life,” she says. “So when I got laid off I was devastated. I just never expected that I would ever be laid off. I was applying for jobs everywhere but because I’m so type A. I can’t sit around and do nothing. And, I was driving my husband crazy.”

New career

Inspired by her dogs, Penny and Chloe, Wallen returned to her hobby… and made a crate for them. Then, she posted the pictures on line.

“That week I had five people reached out to me asking if I would build them one,” she says. “I wasn’t expecting that feedback. But I took it as divine intervention, maybe I need to change. I told my husband I was going to start building dog kennels.”

That surprised her husband, Kevin Wallen, who works in IT and also enjoys carpentry as hobby.

“I thought she was crazy,” he admits. “But after the first one was well-received, it was great. It was like ‘OK, this is going to take off.’”

And it did. But that wouldn’t have been possible without her husband’s help.

“I took over Mr. Mom,” he explains. “I kind of stepped in and had to be more hands on with kids and more hands on with the school stuff and dinners and things like that because her work was focused on building the business. So it was a big change, but being married that’s what you got to do. You got to step up every now and then.”

Wallen is thankful for her husband’s support.

“Kevin can also help pick up that slack when I need it,” she says. “He can come down here when I need help building and he can help me do that. If I need help putting kids to bed because I’m here building until eleven o’clock at night, he can do that too.”

That gave Wallen the time she needed to build her brand, Ginny Bins. Her products are made of recycled wood and have a warm, vintage look. She markets them on-line.

On line at the right time

Around the same time Wallen started her business, psychologist Heather Abbott was in the process of starting a day care center, Little Oaks Montessori Academy. She went online searching for furniture.

“I didn’t want to get the standard, just ordered off the Internet pieces, I wanted something very customized that looked like it would go into a home,” she says. “I saw Ginny Bins, Virginia woodwork business. I liked it. I contacted her.

Abbott says Wallen understood what she wanted, from the whimsical to the practical.

“One of the things that I really was looking for is a book shelf that looks like a tree,” Abbott says. “She’s like, ‘you know I’ve never made anything like this, but I’m going to give it a shot.’ She did it and it happens to be one of the children’s favorite pieces in the school. She made boards with little clips. A table for the staff kitchen. The angle of the room was weird and she had to make it small enough to fit in. She did Dutch doors on all the classrooms so we wouldn’t have to shut the doors, we don’t have to close it all completely. ”

Abbott loves each of these items and the message of unlimited possibilities behind them. “It’s to teach our teachers, our students, our families that pass by, so they know that Virginia made those pieces and they can say this is a stereotype that we’re breaking.”

Woodworker Virginia Wallen doesn’t like stereotypes and believes it’s time for women to ignore them and just do what they want.

That’s what she’s doing. And that’s how she’s found her passion, woodworking- the work she has fun doing every day.

 

 

 

 

 

 

 

 
…

Wall Street surged on Wednesday as surging oil prices boosted energy stocks following U.S. President Donald Trump’s decision the previous day to quit a nuclear agreement with Iran.

Gains were broad and volume was high, with all but the utilities and telecom sectors advancing as investors who had moved to the sidelines in recent days ahead of Trump’s decision returned to the market.

“It’s classic ‘buy on the terrible news,’ ” said Ian Winer, director of trading at Wedbush Securities in Los Angeles, referring to the wider market’s rally. “People had gotten way too nervous about this.”

Trump’s decision for the United States pull out of the international agreement aimed at preventing Iran from obtaining a nuclear weapon was good news for investors betting on a rise in oil prices. Crude hit its highest level in 3½ years as investors bet the U.S. withdrawal would increase risks of conflict in the Middle East and curtail global oil supplies.

The S&P energy index jumped 2.03 percent, bringing its gain this quarter to 12.6 percent, more than any other sector.

“The rise in oil is helping energy sector, which is expected to be a pretty big growth sector. A lot of analysts are expecting strong earnings as oil rebounds, and that hasn’t really played out so much early this year,” said Shawn Cruz, senior trading specialist at TD Ameritrade in Chicago.

The Dow Jones industrial average rose 0.75 percent to end at 24,542.54 points, while the S&P 500 gained 0.97 percent to 2,697.79. The Nasdaq Composite added 1 percent to finish the session at 7,339.91.

Volatility Index down

The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility for the S&P 500, closed down 1.29 points at 13.42, its lowest close since January  26.

Worries lingered that rising oil prices would perk up inflation. The U.S. 10-year Treasury yield rose to a two-week high and above the key 3 percent level on expectations of higher interest rates.

With March quarter reports mostly wrapped up, S&P 500 earnings per share appear to have surged by 25.9 percent, helped by deep corporate tax cuts introduced this year, according to Thomson Reuters I/B/E/S.

In stock trading, Google-owner Alphabet Inc. rose 2.87 percent, providing more lift than any other stock to the S&P 500. It was followed by Facebook Inc., which rose 2.09 percent.

Walmart Inc. fell 3.13 percent after the retailer took a majority stake in Indian e-commerce firm Flipkart for about $16 billion.

Walt Disney dipped 1.79 percent despite reporting a quarterly profit above Wall Street estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.71-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored advancers.

The S&P 500 posted 40 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 168 new highs and 52 new lows.

Volume on U.S. exchanges was 7.1 billion shares, compared with the 6.6 billion-share average over the last 20 trading days.
…

 A New York hedge fund founder was arrested Wednesday on charges that he exaggerated his company’s performance by over $200 million to impress and preserve investors.

Anilesh Ahuja, 49, of Manhattan, was charged with conspiracy, securities fraud and wire fraud.

Federal officials said that the founder, chief executive officer and chief investment officer of the investment firm Premium Point Investments LP had carried out a fraud from 2014 through 2016 that was designed to make investors believe that the firm’s hedge funds were doing much better than they were. Between 2008 and 2016, the firm managed billions of dollars in assets, exceeding $5 billion at one time at its peak, authorities said.

Amin Majidi, 52, of Armonk, New York, a former Premium Point portfolio manager, and Jeremy Shor, 46, of Manhattan, a former trader at the firm, also were charged. A lawyer for Ahuja did not immediately comment. A lawyer for Majidi declined comment. An attorney for Shor did not immediately return a message.

“By allegedly cooking the books, Ahuja and his co-defendants made the fund appear more attractive to would-be investors and dissuaded current investors from withdrawing their investments,” said Audrey Strauss, a federal prosecutor.

William F. Sweeney Jr., head of the New York FBI office, said in a release that the defendants’ “alleged practice of intentionally misleading investors and mismarking securities held in the funds they managed allowed them to charge higher fees and hold captive money that would have likely been withdrawn had their clients been aware of the hedge fund’s actual value.”

According to an indictment, Ahuja started his firm in 2008 and launched the company’s flagship mortgage credit fund a year later. After the firm began overstating the net asset value of its funds by more than $200 million at times, it was able to charge investors higher management and performance fees and could forestall redemptions, authorities said.

Prosecutors also announced Wednesday that the firm’s former chief risk officer and a former salesman at a broker-dealer have pleaded guilty to charges and are cooperating.

The Securities and Exchange Commission also filed civil charges against Ahuja, Majidi and Shor.

“Investors rely on their investment advisers to fairly and accurately value securities, and that is especially true when the securities trade in opaque markets,” said Daniel Michael, chief of the SEC’s Complex Financial Instruments Unit.  “As we allege, Premium Point masked its true performance, which denied investors the opportunity to make informed investment decisions.”
…

Saudi Arabia is monitoring the impact of the U.S. withdrawal from the Iran nuclear deal on oil supplies and is ready to offset any shortage but it will not act alone to fill the gap, an OPEC source familiar with the kingdom’s oil thinking said.

U.S. President Donald Trump on Tuesday abandoned a nuclear deal with Iran and announced the “highest level” of sanctions against the OPEC member. The original agreement had lifted sanctions in exchange for Tehran limiting its nuclear program.

Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries after Saudi Arabia and Iraq.

During the last round of sanctions, Iran’s oil supplies fell by around 1 million barrels per day (bpd), but the country re-emerged as a major oil exporter, especially to refiners in Asia, after sanctions were lifted in January 2016.

“People shouldn’t take it for granted that Saudi Arabia will produce more oil single-handedly. We need to assess first the impact if there is any, in terms of disruption, in terms of a reduction of Iran’s production,” the OPEC source said Wednesday.

“We have managed to put together this new alliance between OPEC and non-OPEC. Saudi Arabia will not in any way act independently of its partners.”

Riyadh is working closely with the United Arab Emirates (UAE), which holds OPEC’s presidency in 2018 and non-OPEC producer Russia for “coordination and market consultations,” the OPEC source said.

He said any action would be taken in coordination with all OPEC and non-OPEC partners, if needed.

OPEC’s oil supply-cutting deal with non-OPEC producers such as Russia has helped to clear a global oil supply glut and boost prices. The agreement is due to expire at the end of 2018.

OPEC officials from Saudi Arabia, the UAE and Russia along with few other producers in the pact are due to meet in Saudi Arabia on May 22-23 as part of a monthly meeting for the Joint Technical Committee which monitors the oil market.

Saudi Arabia, the world’s largest oil exporter and top OPEC producer, is concerned about any negative impact from the potential oil supply shortage for oil-consuming countries, the OPEC source said.

But Saudi Arabia has enough oil production capacity — currently at 12 million barrels per day (bpd) — to maintain oil market stability, the OPEC source also said.

Iran produces about 3.8 million bpd. Since the Iran nuclear deal went into effect, its exports have risen to about 2.5 million bpd, from less than 1 million bpd. A majority goes to Asia, with Europe receiving about 600,000 bpd.

Analysts now expect Iran’s supplies to fall by between 200,000 bpd and 1 million bpd, depending on how many other countries fall in line with Washington.

Trump and oil prices

Expectations that new U.S. sanctions could hit Iranian crude exports and feed tensions in the Middle East had pushed oil prices higher in the past few weeks.

Brent crude was trading about $77 at a 3-1/2 year high on Wednesday, raising concerns that prices were going too high too fast.

Trump accused OPEC last month of “artificially” boosting oil prices in a message on Twitter, the first time he has mentioned OPEC on social media.

His tweet was seen by OPEC sources as the U.S. president’s way to appease a domestic audience unhappy about a rise in gasoline prices.

A key U.S. ally, Saudi Arabia welcomed Trump’s decision to withdraw from the nuclear agreement with Iran and to reimpose economic sanctions.

Riyadh also said it would work with OPEC and non-OPEC to lessen the impact of oil shortages in a clear indication that the country has been coordinating with Washington ahead of time, sources familiar with the matter said.

“You need to work with your partners in dealing with any potential effect on supply,” the OPEC source said.

“But it should be done in a collective coordinated way and that can only happen when you start to be able to assess what would be the impact.”

OPEC and non-OPEC meet next in June and they are widely expected to keep supply curbs in place until the end of 2018.

But a drop in Iranian exports due to U.S. sanctions, plus supply disruptions in other OPEC members, such as Venezuela, could reduce supply more than planned, leading to a potential price spike.

But the OPEC source said a rise in prices due to the market’s worries about supply should not be the parameter for OPEC to adjust output.

The OPEC source said any decision in June to raise output “should be driven by a potential physical shortage or reduction in production from any oil supply source not only Iran.”

“You only handle [output] when you have a semi-clear idea of what would be the potential impact. It is too early now to do that,” the source said.

He also said Saudi Arabia does not expect any physical impact on the oil market from the U.S. Iran sanctions until the third or fourth quarter of this year.

OPEC’s objective is still to reduce global oil inventories to an acceptable level, and any adjustment in production targets should be done in a coordinated way, the OPEC source said.

“This way you do not disrupt a mechanism that we have worked hard to put together and to sustain just to address a short-term issue,” the source said.
…

U.S. producer prices barely rose in April after strong gains in the first quarter, held back by a moderation in the cost of services such as hotel accommodation and healthcare, which could ease fears that inflation pressures were rapidly building up.

The slowdown in wholesale price growth reported by the Labor Department on Wednesday is, however, likely temporary as manufacturers have been reporting paying more for raw materials. Economists also expect oil prices to surge after President Donald Trump on Tuesday pulled the United States out of an international nuclear deal with Iran.

“Inflation isn’t breaking out, although with Trump exiting the Iran nuclear deal, higher energy prices could kick-start a new round of inflation at the producer level,” said Chris Rupkey, chief economist at MUFG in New York.

The Labor Department said on Wednesday its producer price index for final demand edged up 0.1 percent last month after increasing 0.3 percent in March. That lowered the year-on-year increase in the PPI to 2.6 percent from 3.0 percent in March.

Economists polled by Reuters had forecast the PPI gaining 0.2 percent last month and rising 2.8 percent from a year ago.

A key gauge of underlying producer price pressures that excludes food, energy and trade services also nudged up 0.1 percent last month. The so-called core PPI had increased by 0.4 percent in each of the past three months.

In the 12 months through April, the core PPI rose 2.5 percent after jumping 2.9 percent in March. Core goods prices increased 0.3 percent in April, matching March’s gain.

Stocks on Wall Street were trading higher, with shares of energy companies getting a boost from surging oil prices after the United States exited the Iran nuclear deal and imposed the ‘highest level’ of sanctions against the OPEC member. Crude prices rose to 3-1/2-year highs. U.S. Treasury yields rose while the dollar was little changed against a basket of currencies.

Inflation near target

Inflation is flirting with the Federal Reserve’s 2 percent target. The U.S. central bank’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, increased 1.9 percent year-on-year in March and is expected to breach its target in the coming months.

This comes as last year’s big declines in prices of cell phone service plans drop out of the calculation.

Fed officials have in recent days signaled they would not be too concerned if inflation overshot the central bank’s target, reiterating a message in a statement issued at the end of a two-day policy meeting last Wednesday.

In that statement, policymakers said they expected annual inflation to run close to the “symmetric” 2 percent target over the medium term. The U.S. central bank left interest rates unchanged last week. The Fed hiked rates in March and has forecast at least two more increases for this year. “This report should help calm Fed hawks,” said Chris Low, chief economist at FTN Financial in New York.

In April, the price of services ticked up 0.1 percent. That followed two straight monthly increases of 0.3 percent.

Services were restrained by a 3.2 percent drop in the cost of hotel accommodation, which was the biggest decline since September 2009. The cost of healthcare services fell 0.2 percent after increasing 0.3 percent in March. Those costs feed into the core PCE price index.

Prices for goods were unchanged last month after rising 0.3 percent in March. Wholesale food prices declined 1.1 percent last month, the largest drop since August 2016, after surging 2.2 percent in March. Gasoline prices fell 0.4 percent in April after dropping 3.7 percent in the prior month.

In a separate report on Wednesday, the Commerce Department said wholesale inventories increased less than initially estimated in March amid declines in the stocks of motor vehicles and a range of other goods.

Stocks at wholesalers rose 0.3 percent instead of the 0.5 percent gain it reported last month. They increased 0.9 percent in February.

The component of wholesale inventories that goes into the calculation of gross domestic product – wholesale stocks excluding autos – rose 0.4 percent in March.

 

 
…

For generations, farmers planted the lush earth of Awedai and nearby areas in eastern Ethiopia with coffee trees, earning a livelihood from a crop that is now the country’s main export.

But the centuries-long practice is now being abandoned in favor of khat, a leafy plant chewed as a stimulant in the Horn of Africa and the Arabian Peninsula.

“Coffee comes only once a year. But you can harvest khat twice a year,” said Jemal Moussa, a 45-year-old farmer and father of six who depends on the narcotic leaf for income. “Khat is much more useful.”

He said it was in the early 2000s that farmers in the Awedai area started planting khat as its popularity rose and coffee prices remained stagnant.

One kg of coffee sells for between 50 and 60 birr. A bunch of khat, while not measured in kilograms, goes for 100 birr. Jemal said by this year, the entire economy of Awedai, a small town 35 km outside the ancient city of Harar, relied on the leaf.

Trucks piled with khat head out of the town every 30 minutes, dispersing their produce to the nearby Ethiopian Somali Region and Hargeisa, in the neighboring semi-autonomous region of Somaliland.

Illegal in several Western nations, the leaf is immensely popular in the region, giving the chewer a mild amphetamine-like high.

In addition to cash incentive of khat, coffee growing is being affected by dwindling forest coverage as well as drought.

Farmers believe the characteristic flavor of Ethiopian coffee is derived from growing it in the shade of larger trees — leaving it vulnerable if trees are stunted or removed.

And in 2015/16, a drought induced by the El Nino phenomenon — the warming of surface sea temperatures in the Pacific — ravaged the country’s east, before below average autumn rains in the southern and southeastern parts of the country led to a new drought in lowland pastoralist areas the following year.

Indeed, some 5.6 million people required emergency food assistance in the country in 2017.

“The harvesting is already delayed by three and a half weeks. By now we would have processed 85-plus percent. But now we have not even picked that much as you can see,” said Aman Adinew, chief executive of Metad Agricultural Development, which processes coffee in Yirgacheffe in southern Ethiopia.

Yirgacheffe is one of the best known coffee brands for Africa’s biggest producer of the bean.

“The coffee is still green on the tree — it needs rain to turn red. We are hoping it comes soon,” said Aman. “But if this trend continues, it is going to adversely impact the farmers and businessmen like us the growers like us and the country.”

While coffee is heavily dependent on rain, Khat needs less, making it a more attractive option for some farmers.
…

A United Nations agency said on Tuesday an “unjust” U.S. financial and trade embargo on Cuba had cost the country’s economy $130 billion over nearly six decades, coming up with the same estimate as the island’s communist government.

Although many U.S. allies join Washington in criticizing Cuba’s one-party system and repression of political opponents, the United States has lost nearly all international support for the embargo since the collapse of the Soviet Union.

The U.N. has adopted a non-binding resolution calling for an end to the embargo with overwhelming support every year since 1992. In a report ahead of the vote last year, Cuba estimated total damage from the embargo at $130 billion.

“This country which welcomes us today .. is testing its own ways to face the brutal human costs that it has sustained during an unjust blockade,” the head of the U.N.’s regional economic body for Latin America, ECLAC, Alicia Barcena told its biennial meeting in Havana on Tuesday.

“We evaluate it every year as an economic commission and we know that this blockade costs the Cuban people more than $130 billion at current prices and has left an indelible mark on its economic structure,” she said, without detailing how the organization came to that estimate.

After agreeing to a historic U.S.-Cuban detente in 2014, former U.S. President Barack Obama eased the embargo, which was fully put into place in 1962. But U.S. President Donald Trump last year tightened travel and trade restrictions again. Only the U.S. Congress can lift it in full.

“Despite the difficulties the Cuban economy is faced with, particularly due to the intensification of the blockade imposed on Cuba… we will continue to focus on the development goals set,” Cuban President Miguel Diaz-Canel said in his opening remarks at the meeting, attended also by U.N. Secretary-General Antonio Guterres.

Cuba’s Soviet-style, centralized economy has grown just 2.4 percent on average per year over the past decade, official statistics show, much less than the 7 percent annual expansion the government has estimated it needs in order to develop.

Cuba hoped market reforms introduced in the last decade would boost growth, but they have so far borne mixed results.

The ruling Communist Party earlier this year admitted implementation had been harder than expected.

ECLAC will support Cuba’s reform program, Barcena said.
…

President Donald Trump will allow year-round sales of renewable fuel with blends of 15 percent ethanol as part of an emerging deal to make changes to the federal ethanol mandate.

 

Republican senators and the White House announced the deal Tuesday after a closed-door meeting, the latest in a series of White House sessions on ethanol.

 

The Environmental Protection Agency currently bans the 15-percent blend, called E15, during the summer because of concerns that it contributes to smog on hot days. Gasoline typically contains 10 percent ethanol. Farm-state lawmakers have pushed for greater sales of the higher ethanol blend to boost demand for the corn-based fuel.

 

Iowa Sen. Chuck Grassley called the agreement good news for farmers and drivers alike, saying it would increase ethanol production and consumer choice at the pump.

 

Texas Sen. Ted Cruz said the deal will save the jobs of thousands of blue-collar workers at refineries in Texas, Pennsylvania and other states.

 

“Terrific final decision from @POTUS meeting,” Cruz tweeted. “This is a WIN-WIN for everyone.”

 

The decision allowing E15 to be sold year-round will provide “relief to refiners” and “protect our hardworking farmers and refinery workers,” White House spokeswoman Lindsay Walters said. “The president is satisfied with the attention and care that all parties devoted to this issue.”

 

Trump met Tuesday with Grassley, Cruz, Iowa Sen. Joni Ernst and Pennsylvania Sen. Pat Toomey, as well as EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue.

 

The EPA oversees the decade-old Renewable Fuel Standard, commonly known as the ethanol mandate, which sets out how much corn-based ethanol and other renewable fuels refiners must blend into gasoline. The program’s intent was to address global warming, reduce dependence on foreign oil and bolster the rural economy by requiring a steady increase in renewable fuels over time.

 

The mandate has not worked as intended, and production levels of renewable fuels, mostly ethanol, routinely fail to reach minimum thresholds set in law.

 

Environmental groups criticized the deal, saying it would worsen air pollution during summer months.

 

“Waiving clean-air standards at the behest of one favored industry would not only set a precedent for bad policy, it could cost lives,” a coalition of environmental groups said in a statement.

 

Ernst said allowing year-round sale of E15 “will drive up domestic ethanol production and consumption” while helping to “maintain already low prices” for fuel credits that oil refiners must buy if they can’t blend ethanol into their fuels.

 

She and Grassley also said they were encouraged that the Trump administration will take a closer look at “hardship” waivers that have been granted to small refineries, a practice they say has hurt biofuels and undermined the RFS.

 

The EPA has reportedly granted a waiver to a refinery owned by billionaire Carl Icahn, a former Trump adviser, as well as other small refineries. The agency has not disclosed which refineries received the waivers, saying it did not want to reveal private business information.

 

Cruz said the president also agreed to consider his proposal to include fuel credits for ethanol that is produced domestically and exported. The proposal is meant to make it easier for the industry to meet annual sales volumes required under the renewable-fuel mandate.

 

“This is good for farmers, refiners and America,” Cruz said in a statement.

 

But the Renewable Fuels Association, an industry group, said allowing exports to qualify for RFS compliance could dramatically reduce domestic demand and result in retaliatory trade barriers from countries that import U.S. ethanol.

 

The group’s president, Bob Dinneen, called the export idea a “disgrace” and said ethanol producers and farmers would bear the brunt of any retaliatory tariffs.
…

Sub-Saharan African nations are at growing risk of debt distress because of heavy borrowing and gaping deficits, despite an overall uptick in economic growth, the International Monetary Fund said Tuesday.

The sober assessment came as African countries continue to tap international debt markets and issue record levels of debt in foreign currencies, spurred on by insatiable investor demand for yields.

“What really we’re concerned about is the pace of increase, rather than the average,” IMF Africa Director Abebe Aemro Selassie told Reuters at the launch of its economic outlook for the region in Accra.

“What we’re calling for right now is that those countries are going to need to go through fiscal consolidation,” he said, adding that oil producers and other resource-dependent economies were seeking the sharpest growth in their debt loads.

The Fund projected the rate of economic expansion would rise to 3.4 percent this year, up from 2.8 percent in 2017, boosted by global growth and higher commodity prices.

Slower growth in South Africa and Nigeria — the continent’s two largest economies — weighed on the region-wide average, but the IMF expects growth to pick up in around two-thirds of African nations. However, under current policies, that rate is expected to plateau below 4 percent over the medium term.

Growth seen slowing

Meanwhile, around 40 percent of low-income countries in the region are now in debt distress or at high risk of it, the IMF report said. And refinancing that debt could soon become more costly.

“The current growth spurt in advanced economies is expected to taper off, and the borrowing terms for the region’s frontier markets will likely become less favorable … which could coincide with higher refinancing needs for many countries across the region,” it said.

African governments issued a record $7.5 billion in sovereign bonds last year, 10 times more than in 2016. And they have issued or plan to issue over $11 billion in additional debt in the first half of 2018 alone, the report said.

Foreign currency debt increased by 40 percent from 2010-13 to 2017 and now accounts for about 60 percent of the region’s total public debt on average, IMF data showed. Average interest payments, meanwhile, increased from 4 percent of expenditures in 2013 to 12 percent in 2017.

Six countries — Chad, Eritrea, Mozambique, Congo Republic, South Sudan and Zimbabwe — were judged to be in debt distress at the end of last year. And the IMF’s ratings for Zambia and Ethiopia were changed from moderate to “high risk of debt distress.”

The IMF conceded that Africa’s enormous needs will continue to demand heavy investments to build infrastructure and social development. But to do so while avoiding the risk of a debt trap, the continent, which currently has the lowest revenue-to-GDP ratio in the world, will need to become more self-reliant.

“Borrowing to finance spending is part of the macroeconomic policy tool kits which all countries use,” Selassie said. “But over the medium to long-term they have to rely more on domestic revenues, tax revenues to address their development spending needs.”
…