YCLOAK

Protesters in Argentina clashed with police during marches over government austerity measures on Thursday as labor unions challenged President Mauricio Macri in the first general strike since he took office 16 months ago.

Security forces used high-powered water cannon and tear gas to control picketers who had blocked the Pan-American Highway, the main road leading from the north to capital city Buenos Aires, where normally bustling streets were half-empty and businesses were closed.

Truck and bus drivers, teachers, factory workers, airport employees and the government customs agents who run Argentina’s all-important grains export sector walked off the job at midnight for 24 hours.

“No customs officials are here, so there will be no exports or imports today,” said Guillermo Wade, manager of the maritime chamber at Argentina’s main grain hub of Rosario. The country is the world’s top exporter of soymeal livestock feed and the third-largest supplier of soybeans.

Macri took office in December 2015. He eliminated currency and trade controls and cut government spending, including gas subsidies, a move that steeply pushed up home-heating bills.

The strike came as Macri welcomed hundreds of potential investors and foreign officials to a meeting of the World Economic Forum in Buenos Aires. Blocks away from the hotel where the meeting was held, protesters clamored for wage increases in line with inflation, which was 40 percent last year and expected to be about 20 percent in 2017.

“The situation is dramatic,” Julio Piumato, a spokesman for labor umbrella group CGT, said in a telephone interview.

“Wealth is being concentrated in the hands of a few at the same rate that poverty is growing,” he said. “Urgent measures are needed to create employment. One out of every three Argentines is poor.”

The one-day work stoppage came ahead of an October congressional election that will gauge Macri’s strength going into his 2019 re-election bid. The market is concerned about a political comeback by previous President Cristina Fernandez, who boosted the government’s role in the economy during her eight years in power.

Macri took office promising a wave of foreign investment that has been slow to manifest itself. Investors want to see that his Cambiemos coalition remains the biggest vote-getter in heavily populated areas like Buenos Aires, which will be key to the 2019 election.

He was elected after Fernandez left Argentina with rampant inflation, dwindling central bank reserves and a wide fiscal deficit.
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Brazilian President Michel Temer plans to water down its landmark pension reform proposal to ease lawmakers’ resistance to the controversial bill key to rebalance the government’s depleted finances.

Temer said in a radio interview on Thursday he has authorized the lawmaker sponsoring the plan to alter its terms as long as he maintains the bill’s minimum retirement age. He did not specify what changes could take place.

The reform plan, submitted last year to Congress, sets a minimum retirement age at 65 for both men and women and requires more years on the job for workers to gain full pension benefits.

Those points and others to limit benefits have drawn criticism from public servants and labor unions alike, irking lawmakers who face elections next year.

A newspaper survey of lawmakers on Wednesday showed support for the proposal fell well below the 308 votes necessary to pass the lower house of Congress, with only 92 in favor and 242 against.

Arthur Maia, the lawmaker sponsoring the legislation, told reporters later on Thursday that he will change the proposal to protect the poorest without hurting the “backbone” of the amendment. He is considering altering the transition rules for those nearing the retirement age, easing pension requirements for farmers and agricultural workers while keeping some special benefits to teachers and police.

Maia said he will unveil his proposed changes on April 18.

A revamp of Brazil’s costly pension system is the centerpiece of Temer’s crusade to balance the government budget and reverse the rise in public debt as he seeks to lift Latin America’s largest economy from its deepest recession on record.

Still, some investors fear he could face a rocky road ahead due to a bickering Congress and corruption probes ensnaring senior figures of his administration.

Temer could even be unseated if Brazil’s top electoral court rules that he and former President Dilma Rousseff, under whom he was vice president, used illegal money to fund their 2014 campaign. Rousseff was impeached in 2016.

The Supreme Electoral Tribunal (TSE) on Tuesday delayed any verdict in the trial until at least May, playing into what Temer’s aides have outlined as a defense strategy centered on dragging the case out through 2018.

Still, Temer said in the radio interview he wishes that the issue will be solved “as soon as possible” in order to reduce uncertainty.
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Many companies aim for “Best in Class” status, but some are seeking another “B” — B corporation certification.

Certified B corporations, or “B corps,” address the growing consumer interest in supporting socially and environmentally responsible companies.

B corps are essentially for-profit companies that behave more like nonprofits, tackling global issues such as pollution and income disparity through everyday business practices.

‘Business as a force for good’

“B corporations are companies that are using their business as a force for good,” said Andrew Kassoy, co-founder of B Lab, the nonprofit organization that issues B corp certification. “By having that B corp certification, it makes good easy for the consumer … to know that the company is having a positive impact on society,” he added.

For many companies, doing good may take a back seat to making money. But not for certified B corps.

Multimillion-dollar brands like fashion company Eileen Fisher and ice cream maker Ben & Jerry’s are among businesses certified as B corps.

“In some cases, it’s about the company trying to create more value for its workers, to create opportunity for workers to grow in the economy and have a job with dignity,” Kassoy said.

“In other cases, it might be about creating a product that’s more environmentally sustainable or socially responsible,” he said.

Growing around the globe

B corps are a growing global movement. Brands large and small make up the more than 2,000 certified B corporations, representing 130 different industries in 55 countries.

“Our foreign certifications are outpacing our U.S.-based certifications for the last year,” said Jennifer Warden, B Lab’s global partner manager. “We’ve got partners in 13 different regions — a lot in Latin America, Europe, a lot of momentum now in the Asia Pacific regions and Africa.”

To qualify as a B corp, companies must score at least 80 out of 200 points on an assessment that covers four key areas: corporate governance, employee rights, community outreach and environmental impact. Everything from waste reduction efforts to leadership roles for women and minorities are considered.

“You’re able to measure how you rank in terms of taking care of the community, how you rank in taking care of the environment, how you take care of your customer,” said Sean Cullen, project coordinator at Uncommon Goods, a Brooklyn-based online retailer that is a certified B corp.

Assessments are made every two years. In addition to maintaining a minimum score, certified B corps are also required to revise company bylaws to reflect accountability to workers and customers.

Depending on a company’s size, B corp certification costs $500 to $25,000 annually. For many, the payoff is in being among the best in the business.

Look for the logo

“When you see that certified B Corp logo on different products, you know that you’re getting a good product,” Cullen said.

B Lab maintains a website with a B corporation directory so consumers can look up a company and verify its certification.

“The goal is that one day, all companies will be able to manage and measure their impact with the same rigor as their profits,” Kassoy told VOA.

“And by doing that … all companies will compete to be best for the world, not just best in the world,” he said.
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Many companies aim for B Corporation certification. Certified “B corps” address the growing demand for social and environmental responsibility. And more consumers are letting their wallets do the talking, aligning with business that complement their personal values. VOA’s Tina Trinh reports on the category of companies called B corps.
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Mexico’s central bank chief said Wednesday the bank altered course on how to protect the peso after a couple of tweets by U.S. President Donald Trump in early January pummeled the currency to near historic lows and wiped out the effect of a $2 billion currency intervention.

The Banco de Mexico in early January had sold dollars to fight off the peso’s nosedive to record lows amid fears the protectionist policy pronouncements of then President-elect Trump could further hammer Latin America’s second-largest economy.

“I’ll say it like this, in simple terms: with two tweets from you know who, the effect [of that intervention] vanished,” Mexican Central Bank chief Agustin Carstens said Wednesday.

“It was precisely then we thought that instead of using hard currency like dollars, it would be better to move to a scheme in which there was the possibility of offering hedges” without having to eat into Mexico’s currency reserves, Carstens added.

Carstens did not specify what tweets he was referring to. But Trump in early January targeted Toyota Motor Corp. and General Motors Co. with the threat of a “big border tax” over cars built in Mexico meant for U.S. consumers.

Since then, Mexico’s central bank has moved from intervening directly in the foreign exchange market through dollar sales by implementing an exchange hedging program for up to $20 billion.

The bank earlier Wednesday sold its entire offer of $200 million in foreign exchange hedges in an auction in which demand far outstripped supply, reflecting appetite for the program aimed at supporting the country’s peso currency.

Carstens said that the peso, which fell to a low of nearly 22 per dollar following the U.S. elections in November but has since recouped most of those losses, is still undervalued and has room to appreciate.

Future interest rate decisions by the U.S. Federal Reserve should not cause further depreciation in the peso, Carstens added.

Regarding monetary policy, Carstens also said that depending on the evolution of inflation expectations, the Banco de Mexico may be able to stop following Fed decisions in tandem.
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Asia’s developing economies will see steady growth this year and the next, though the evolving policies of President Donald Trump’s administration are a major uncertainty, the Asian Development Bank said in a report Thursday.

The Manila, Philippines-based lender forecast growth in developing Asia at 5.7 percent in 2017 — unchanged from its previous forecast — and said that pace would continue into 2018.  

 

It said 30 of the 45 countries covered in the report will see sustained growth that will help offset the gradual slowdown in China, Asia’s biggest economy.

U.S. to gradually raise rates

 

However, the risks include unexpected changes to U.S. government policies in areas such as interest rates. The ADB said the uncertainty could undermine the outlook for the region, which accounts for 60 percent of global economic growth.

 

The U.S. Federal Reserve, which raised its benchmark interest rate in March for the second time in three months, plans to gradually raise rates over the next three years as the economy improves.

 

If those rate increases come more rapidly because of stronger than expected U.S. economic growth, the “sharper than expected monetary tightening could have further consequences for developing Asia,” the ADB said in its Asian Development Outlook.

Trump not mentioned

Economies with high corporate or household debt in particular would be most vulnerable to the shock of higher interest rates, the report said.

 

It said that “possible shifts in trade and tax policies, especially policy changes being discussed in the U.S., could create uncertainty for business, investment and export growth in developing Asia.”

 

The report did not mention Trump by name.

 

Trump accused China of unfair trade practices, such as manipulating its currency. He has threatened to impose punitive tariffs on imports from China. Trade is likely to be a big part of the agenda during meetings between Trump and Chinese President Xi Jinping in Florida on Thursday and Friday.

Positive forecast for India

 

The ADB forecast that China’s economic growth will slow to 6.5 percent this year and 6.2 percent in 2018 from last year’s 6.7 percent, a 30-year low.

 

China is due to release its first quarter GDP figures on April 17.

 

In India, growth will accelerate to 7.4 percent in 2017 and 7.6 percent in 2018, from 7.1 percent last year, as the country rebounds from a one-off demonetization of its highest-value currency bills that “temporarily stymied commerce,” the report said.
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With 70 percent of the world’s population expected to live in cities by 2050, getting urban planning right is crucial to ensuring future cities are safe, resilient and fair places, particularly for the poorest residents, experts said Wednesday.

As Africa urbanizes, its cities will need 700 million more homes, 310,000 more schools and 85,000 additional health centers by 2050, said Christian Benimana, a Rwandan architect.

“How we set up all this infrastructure has to be carefully thought through,” said Benimana, who works with MASS Design Group, which focuses on architecture that promotes human dignity.

“It can’t be a random thing, in the way we’ve been doing it for 100 years. We have to think seriously. If we don’t, the current situation where economic inequality is blatantly visible will worsen,” Benimana said.

What not to do

Rapidly expanding Lagos, for instance, a megacity of 23 million, would like to “sanitize” itself and look more like Singapore, said Liz Agbor-Tabi, an associate director at 100 Resilient Cities, a Rockefeller Foundation initiative.

But in its efforts to make that happen, authorities in recent months have demolished swathes of waterfront slums, leaving thousands of people homeless.

“When cities approach their desire to develop this way, it undermines … cohesion, ownership, well-being, belonging and communities,” Cameroon-born Agbor-Tabi said during a panel discussion at the Skoll World Forum on Social Entrepreneurship.

Make poor visible

What needs to happen instead, said Sheela Patel, the chairwoman of Slum Dwellers International, is a genuine rethink of planning efforts to ensure the poor are not seen as invisible or simply an obstacle to growth and development.

“The real fault line in cities is the difference between formal and informal,” said Patel, who directs the Mumbai-based charity. 

“The old rules make all informal [settlements and activities] criminal, illegal and unacceptable,” she said.

That makes it very hard to effectively include slums and poor people in plans to spread the use of clean energy or address climate change, for instance, she said.

When “everybody who is poor is invisible,” city data collected is often inaccurate and that means “the chances you’ll get anything right, even in the next century, seems dismal,” she said.

“Engineering, planning and architecture are very far away from looking at the kind of changes that are needed to create equitable cities that are welcoming to all,” she added.

Better urban life for all

Some cities, however, have shown how changing planning to include the poor can fundamentally improve urban life for all.

As Medellin, Colombia’s second largest city, expanded rapidly a decade ago, slums sprung up in the hills above the city, Agbor-Tabi said.

Without effective transport to reach the city center or opportunities to find work, many slum dwellers ended up working instead for cocaine cartels.

More transit, fewer homicides

When city officials tried to turn things around they not only took on the cartels but consulted with slum residents to try to find out how they could better connect them to the city and give them other opportunities.

In time, cable cars and escalators were installed, linking previously separated parts of the city, and facilities from libraries to cultural centers were built in poor areas.

Eventually the city’s once notorious homicide rate collapsed and poverty was on the decline too, Agbor-Tabi said.

Young and ambitious

Benimana, the Rwandan architect, said good design and planning can help avoid the kind of problems Medellin suffered.

“We strongly believe if we curate the design and construction process as architects we can curb hindrances to economic equality, to gender equality,” he said.

The risks are particularly large as more people gain access to the internet, smartphones and a clear view of how people live in other parts of the world.

World Bank President Jim Yong Kim has called this a “convergence of aspirations” as more people demand a middle-class lifestyle.

“Many people are young, they all have smartphones and they have seriously big aspirations,” Patel said. “They are not like their migrant parents, humble and grateful to be fed two times a day, ready to suffer all injustices.”
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Three years ago, 14-year-old Julius left his family near the lakeside city of Mwanza, Tanzania, to try his luck mining gold.

Today, Julius is in no hurry to leave, despite having one of the riskiest jobs on a chaotic mine site — handling mercury each day with his bare hands.

“It’s good work. I’m paid well,” Julius, who wanted to use only his first name, told the Thomson Reuters Foundation, wearing an orange T-shirt and skinny jeans coated with red dirt.

Julius, now 17, said he has been working with mercury for three years, but no one had ever told him it was dangerous.

There are more than 4 million child laborers in Tanzania aged between 5 and 17, according to a government survey released last year in conjunction with the International Labor Organization. That’s roughly a third of the country’s children.

More than 3 million are doing hazardous jobs, including at illegal mines like the one near Nyaligongo in northern Tanzania, where they are exposed to mercury, heavy dust and work long shifts without safety gear.

Many unaware of laws

The Tanzanian government is aware of the problem but has struggled to keep children out of small, unlicensed mines. Its laws do not allow children under 14 to work, and hazardous work is not permitted for children over 14. Tanzania has signed all major international conventions on child labor and introduced its own laws to prevent the worst child labor.

But not everyone knows of the child labor laws, including families and local officials.

Government workers tasked with enforcing the laws lack the staff and funds for inspections, let alone prosecutions.

“In Tanzania we have a good law and strategy to eliminate all kinds of child labor, but the problem here is who is going to implement this at the local level,” said Gerald Ng’ong’a, executive director of Rafiki Social Development Organization (SDO), an NGO that works on child labor in northern Tanzania.

“Local officials don’t have enough information about the law and how to protect children.”

Lure of gold

The problem is especially hard to tackle in the informal sector, said Emma Gordon, senior Africa analyst at global risk consultancy Verisk Maplecroft, which ranks Tanzania as the 55th-most “at risk” country in its 2017 Child Labor Index, due to be published Wednesday.

“The government’s focus is very much centered around large industrial projects, particularly foreign-owned businesses that would be able to pay fines if violations were discovered,” Gordon wrote in an email to the Thomson Reuters Foundation.

 

In Lake Victoria’s gold belt, where gold has been extracted since the 1890s, licensed and unlicensed small mines operate with major mining firms close by. The scrappy “artisanal” mines provide a crucial source of income to people outside Tanzania’s cities, but like the mining site at Nyaligongo, many operate without government licences.

The majority of children working in gold mines are employed by individuals running these unlicensed mines, observers say. They are among the worst exploited of the mines’ workers, typically earning the equivalent of about 1 euro ($1) a day.

“Pit owners employ children because they’re cheap labor,” said Ng’ong’a.

Legal or not, the lure of the mines — and the harsh poverty of the farming communities around them — keep children coming.

Brothers Petromos and Mayalamos, 12 and 16, left their village outside Mwanza because they heard there was good money to be made at this mine.

“The work is difficult,” said Mayalamos. “But I can only leave this place once I’ve earned enough.”

Nyaligongo village relies on gold to survive.

On the village’s main street, cramped shops sell vegetables, SIM cards and lunch to off-duty miners. Middlemen purchase gold from miners to sell in the closest town, Kahama, where it is resold in bigger cities like Mwanza and Dar es Salaam.

Students leave to work

More than 8,000 people live in Nyaligongo, says Faustine Masasila, the village’s secretary and a mine site owner, and more are still arriving.

“There are people here who used to have very miserable lives,” Masasila said, walking through the buzzing market. “If you work hard, you are guaranteed prosperity.”

At the primary school down the road, teachers are less impressed with mining’s promise of a good future.

A poster on the school office wall is a testament to the number of children who leave to work when they are old enough.

This year, in Class 1, there are 236 students aged 6 and 7, while in Class 7 there are only 40 students aged 13 and 14.

“I feel very frustrated when children leave and go to the mines instead of going on to secondary school,” said Mabula Kafuku, the education officer for the ward. “They don’t even have enough knowledge to mine safely.”

Children dropping out of school is a nationwide problem in Tanzania and a major impediment to the government’s aspiration to become a middle-income nation by 2025. A recent Human Rights Watch report found that in 2016, more than 5 million children aged between 7 and 17 were out of school across the country.

For government workers tasked with inspecting mines for health, safety and labor violations, enforcing the law at the far-flung informal mines sprinkled around the Lake Victoria region is an onerous task.

Masasila, the village secretary, cannot recall ever seeing inspectors at the mining site near Nyaligongo.

“If you have children working in remote areas, you need a budget to visit. We don’t have such things,” said Hadija Hersi, a regional labor officer in Mwanza. “That’s why you have NGOs stepping in to intervene.”

Some success

Several nongovernmental organizations, including Terre des Hommes Netherlands, have been trying to get child workers back in school and help families develop alternate income sources to wean them off their wages.

Since 2014, Terre des Hommes Netherlands, working with Rafiki SDO, has managed to help more than 725 children leave the mines. In Geita, another nearby gold-mining area, U.K.-based Plan International has helped 12,000 children withdraw from small-scale mining work and is trying to reach another 11,600.

But as long as people are struggling to find work outside Tanzania’s cities, there is only so much NGOs can do.

At the mine, Nyanjige Mwendesha looks on as her three children, ages 10, 12, and 15, sit on the red, dusty ground, smashing up rocks with small metal hammers in the midday sun.

Mwendesha brought her family to work here after there wasn’t enough rain on her farm this year. The family needed the money.

“When it starts to rain, I’ll go back to the farm,” she said.
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Some big American coal companies have advised President Donald Trump’s administration to break his promise to pull the United States out of the Paris Climate Agreement — arguing that the accord could provide their best forum for protecting their global interests.

Remaining in the global deal to combat climate change will give U.S. negotiators a chance to advocate for coal in the future of the global energy mix, coal companies like Cloud Peak Energy and Peabody Energy told White House officials over the past few weeks, according to executives and a U.S. official familiar with the discussions.

“The future is foreign markets, so the last thing you want to do if you are a coal company is to give up a U.S. seat in the international climate discussions and let the Europeans control the agenda,” said the official, who asked not to be named because he was not authorized to speak publicly on the issue.

“They can’t afford for the most powerful advocate for fossil fuels to be away from the table,” the official said.

Cloud Peak and Peabody officials confirmed the discussions.

‘Path forward’

In Cloud Peak’s view, staying in the agreement and trying to encourage “a more balanced, reasonable and appropriate path forward” on fossil fuel technologies among signatories to the accord seems like a reasonable stance, said Richard Reavey, Cloud Peak’s vice president of government affairs.

The coal industry was interested in ensuring that the Paris deal provides a role for low-emission coal-fired power plants and financial support for carbon capture and storage technology, the officials said. They also want the pact to protect multilateral funding for international coal projects through bodies like the World Bank.

The Paris accord, agreed by nearly 200 countries in 2015, would seek to limit global warming by slashing carbon dioxide and other emissions from burning fossil fuels. As part of the deal, the United States committed to reducing its emissions by between 26 percent and 28 percent below 2005 levels by 2025.

During his 2016 presidential campaign, Trump vowed to pull the United States out of the pact, tapping into a well of concern among his fellow Republicans that the United States’ energy habits would be policed by the United Nations.

Seeking companies’ advice

But since being elected, he has been mostly quiet on the issue, and administration officials have recently been asking energy companies for advice.

White House spokesman Sean Spicer said last week that the administration expected to make a decision on whether to remain a party to the deal by the time leaders of the Group of Seven wealthy nations meet in late May.

The prospect of the United States remaining in the Paris deal has irritated some smaller miners, including Murray Energy Corp, whose chief executive, Robert Murray helped fund Trump’s presidential bid.

Staying in the Paris accord could also face resistance from within Trump’s party. Republican Congressman Kevin Cramer of North Dakota has been circulating a letter among Republican lawmakers calling on the president to stay in the deal but has gathered only seven signatures so far.
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Michael Evangelista-Ysasaga wants to build a humane wall on the border between the U.S. and Mexico.

That is one reason the Mexican-American answered a call from U.S. Customs and Border Protection for proposals on sections of the wall to be built on the Southwestern border.

Evangelista-Ysasaga said his company, the Penna Group, has experience managing large projects for the government like runways and prisons.

He told VOA that his Texas company has worked for years in the difficult desert environment where mountains, sand, rivers, steep slopes and unusual rock formations complicate the job.  

Evangelista-Ysasaga said if his proposal is one of those accepted, the next step would be to build brief portions of the wall to demonstrate its quality and costs. He said winning a large part of this project could mean work for 150 people for several years.

The Penna Group chief said, however, the job is about more than money. He said he has been concerned about reports that rival companies are offering electric fences or razor wire that he calls “inhumane.”

Evangelista-Ysasaga also said he hoped the controversy over the wall eventually leads to a reformed immigration system that allows people to come to the U.S. who obey the law, pay taxes, and perhaps serve in the military to eventually earn the right to stay here.

High-security

Another company offering proposals is a small manufacturing firm near Boston that is partnering with companies that design and build projects, as well as other firms with experience managing major government contracts.

Riverdale Mills would supply a high-security fence product that CEO Jim Knott said is nearly impossible to climb or cut. He says it also allows border security officers to see through it, so they will not surprised by activity on the other side of the border.

Riverdale already protects nearly 50 kilometers of the border with this product.

It was developed with technology first used to make tough, inexpensive lobster traps, and refined over many years in projects around the world that protect airports, borders, utilities, embassies and industrial facilities.

In a VOA interview, Knott said if the proposal is accepted, its impact on his company will depend on the size of the order for fencing. His company has the capacity to make fencing now, but a really large order might prompt him to hire and train more people or even invest in additional equipment.

The unusual high-security fencing is built inside a factory the size of a small house on a complex manufacturing system that preforms hundreds of welds at a time.
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With legislation overhauling taxes and health care on an uncertain path, President Donald Trump returned to the familiar. Trump brought 52 business leaders from New York City to the White House Tuesday to talk about another favorite campaign issue — infrastructure and economic growth.

 

The U.S. economy has so far proven to be a point of pride for a presidency that has otherwise gotten off to a rocky start. Trump inherited a stable economy from former President Barack Obama, an economic recovery that’s heading toward its eighth year. But Trump believes he can do more for business.

 

Trump and several of his top aides emphasized plans to cut red tape and jumpstart infrastructure projects at Tuesday’s meeting, while also previewing for the CEOs other priorities that include shortening flight times for airplanes, increasing the power grid’s efficiency and targeting programs to improve job training.

 

At one point the president had an aide come on stage to hold up a long scroll of the government’s approval process for building a highway. The president then pledged to eliminate more than 90 percent of the regulations involved and “still have safety.” He provided no details.

 

The administration has committed to directing as much as $1 trillion for infrastructure over the next decade, although it has yet to release policy specifics. Transportation Secretary Elaine Chao recently said she expects a plan will be unveiled later this year.

 

But getting a measure through Congress could be difficult given the Republican majority in both chambers and their desire to reduce tax rates as much as possible. An infrastructure plan that relies on direct funding could possibly raise the budget deficit more than one that uses tax credits.

 

Trump touted the plan he says is in the works, telling the room, “We’re talking about a very major infrastructure bill of a trillion dollars, perhaps even more.”

 

Administration officials stressed that it can take more than 8 years between funding and the start of project construction, a timeline White House officials say is too slow given the commitment of hundreds of billions of dollars a year.

 

Trump wanted the CEOs gathered at the Eisenhower Executive Office Building — many of them involved in real estate — to start building roadways, airports, railways, bridges and other infrastructure as quickly as possible.

 

“If you have a job that you can’t start within 90 days, we’re not going to give you money for it,” Trump said.

 

The president followed up his remarks at the town hall by giving an afternoon speech to the Building Trades Union, pledging to “rebuild our nation.”

 

At the CEO town hall, Gary Cohn, director of the White House National Economic Council, noted that infrastructure upgrades could help growth.

 

A new air traffic control system that relied on GPS instead of radar would shorten flights and save on jet fuel, helping consumers, he said. Cohn also suggested updates to the power grid to avoid the loss of 20 percent of electricity in transmission. Trump’s daughter Ivanka spoke to the CEOs about the value of job training.

 

The sales pitch with its technocratic angle seemed perfectly targeted for the assembled business leaders.

 

“It’s terrific in terms of the stuff you’re trying to do to modernize the government, educate and so forth,” said Stephen Schwarzman, CEO of the Blackstone Group, an investment firm, and chairman of the president’s policy forum.

 

“The outside world doesn’t always get the message that that’s really what is going on,” he said.
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Turkish gold imports rose 17-fold to 28.2 tons in March, as Turks looking to hedge currency risk ahead of a referendum in two weeks time followed President Tayyip Erdogan’s calls to buy gold instead of dollars.

After the sharpest falls in the Turkish lira since the 2008 financial crisis last November, Erdogan called on Turks to sell dollars and buy lira or gold to prop up the local currency. Gold imports have been rising year-on-year ever since.

“People have started opting for gold rather than foreign currencies,” said Mehmet Ali Yildirimturk, a gold specialist in Istanbul’s Grand Bazaar, adding that a moderate recovery in the lira had also made gold more affordable again.

Gold imports to Turkey rose almost eightfold to 36.7 tons in December after Erdogan’s calls, their highest monthly level in just over two years, according to data from the Precious Mines and Metals Markets of the Istanbul bourse.

Prices in Turkey surged from 132 lira ($36) for 24-carat gold in January to 153 lira in February. On Tuesday, gold prices were around 148 liras.

Gold is seen as a safe place to park assets during times of uncertainty. Turkey holds a referendum on April 16 on constitutional changes which would significantly boost Erdogan’s powers, with polls suggesting a tight race.

($1 = 3.6664 liras)
…

Large numbers of job seekers from around the world are filing applications at U.S. federal offices as the season opened Monday for H1-B visas for foreign workers.

 

H1-Bs allow employers – mostly high-tech firms – to hire skilled foreign workers for jobs in the United States for three years. Eighty-five thousand slots are available – 65,000 for applicants with bachelor’s degrees and 20,000 for those with master’s or more advanced degrees.

In recent years, there have been so many applications that the U.S. government stopped accepting them within a week. Visa winners are chosen by a computer-generated lottery.

This year, there is additional pressure because the program’s future is not clear.

President Donald Trump has vowed that he will not allow American workers to be displaced by foreigners holding H1-B visas.

On Monday, as the application process opened, the Department of Justice warned U.S. companies not to discriminate against American workers.

“U.S. workers should not be placed in a disfavored status, and the department is wholeheartedly committed to investigating and vigorously prosecuting these claims,” said Acting Assistant Attorney General Tom Wheeler of the Civil Rights Division.

At the same time, U.S. Citizenship and Immigration Services (USCIS) warned it will take a “more targeted approach” as it makes site inspections across the country.  What it will be targeting includes an inability to find an employer’s basic business information through commercially available data, employers who have a high ratio of H1-B employees to U.S. workers, and employers who petition for H1-B workers to work off-site.

Outsourcing

Overwhelmingly, India has been the biggest recipient of H1-B visas. The Department of Homeland Security (DHS) reports that 71 percent of H1-Bs went to Indians in 2015. China was a distant second with 10 percent of the visas.

India’s success is attributed to its huge outsourcing firms that submit thousands of applications every year, increasing their chances of winning the lottery. Outsourcing firms, which supply services to other companies, are controversial because they are not subject to a federal requirement that they not displace American workers if they pay the H1-Bs at least $60,000 a year.

The H1-B visa program has proponents who argue that there are not enough Americans to fill all the slots for which skilled workers are needed. A research brief filed Monday by the bipartisan group New American Economy said that there are “persistent and dramatic” worker shortages in science, technology, engineering and math.

The group of mayors and business leaders who support immigration reform said that in 2016, there were more than a dozen jobs posted in those fields for every one unemployed eligible U.S. worker.

Competing bills in the U.S. Congress both expand and curtail the H1-B visa program.

H1-B spouses

In the meantime, spouses of H1-B holders, who are allowed to work under a 2015 rule, are still in limbo regarding their eventual employment status.  

The Department of Justice, acting on behalf of the Department of Homeland Security, has asked for additional time to review the rule that allows spouses of H1-B visa holders to work.

Implemented under the administration of U.S. President Barack Obama, the rule has been challenged in court by Save Jobs USA, an organization of information technology workers who claim to have lost their jobs to H1-B visa holders. The group maintains that the rule threatens American jobs.

Before the rule, spouses, who hold H-4 visas, were not allowed to work.

In February, the DHS had asked for 60 days to review the rule. On Monday, that 60-day period closed and the Department of Justice requested a 180-day extension, promising to update the federal appeals court at 60 days.

Save Jobs USA filed a cross motion Monday asking that the additional time be denied.
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An innovator at Kenya’s Lake Victoria has turned an invasion of water hyacinth into a business opportunity, making paper from the weed that he sells in local shops. The initiative is creating jobs and supporting environmental sustainability.

Michael Otieno began making paper from water hyacinth ten years ago. The flowering weed is a nuisance to fishermen. It depletes fish stocks, affecting thousands of livelihoods.

 

Known as the ‘paper man’ by locals, Otieno has perfected his daily routine. Every morning, he goes into Lake Victoria to search for raw material. Once the hyacinth is harvested, it is cut into small pieces before being boiled to soften it.

 

Otieno started his Takawiri Initiative to provide income and jobs for locals.

 

According to the World Bank, Lake Victoria supports around 40 million people in East Africa, with nearly half of those residents living on less than $1.25 a day.

 

Otieno now employs up to 30 people, though the business has its challenges.

“One – is technology; the machines we are using are locally fabricated, and, two, we also, it’s a capital-intensive project, therefore it needs a lot of resources,” Otieno says.

Edward Orato, a local artists, runs a curio shop in Kisumu city on the banks of Lake Victoria. Since he started using the hyacinth paper, he hasn’t looked back.

“I like the paper since it’s not expensive. It’s also easily available. As an artist, I think it has a unique texture. The fibers give my paintings an edge. ”

The Takawiri Initiative got a start-up $60,000 grant from a Kenyan government agency tasked with environmental research and sustainability promotion. Joshua M’Anampiu, a top official with the National Environment Trust Fund (NETFUND), says assistance on the ground-level is important.

 

“Definitely, we understand the scarcity of finance or the inability of finance to trickle down to the people who really need it and that is why NETFUND is there, to ensure that even though there’s a lot of funding that is there for climate change, it must trickle down to the grassroots, to the people who really need it,” M’Anampiu says.

For Otieno and his staff, the water hyacinth is proving to be a blessing in disguise.
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Recent political turmoil in South Africa has come at a cost, with ratings agency S&P Global saying a controversial Cabinet reshuffle and growing pressure on the president to resign have lowered the country’s sovereign credit rating to “junk” status. Economists predict that will result in higher interest rates and higher prices on imported goods. It could, however, also give the South African leaders the opportunity to finally carry out their promise of radically transforming the economy away from minority ownership and toward a more equitable model.

 

The ratings agency did not mince words in its downgrade announcement, pinning the blame for South Africa’s poor credit rating squarely on controversial political decisions made by President Jacob Zuma.

 

On Tuesday, new Finance Minister Malusi Gigaba reassured the nation that under his leadership, South Africa’s economy would remain steady.

“We acknowledge that yesterday’s announcement was a setback. Despite our current challenges, now is not a time for despondency. We have many strengths that we can leverage to grow our economy inclusively,” said Gigaba.

 

News of the downgrade has sent the currency, the rand, tumbling. Top ratings agency Moody’s has also said it is considering downgrading South Africa, a move which will likely scare away international investors over fears that the nation won’t be able to honor its debts.

 

The latest dustup began last week, when the president suddenly announced sweeping changes to his Cabinet. The reshuffle included the dismissal of a well-regarded finance minister who had challenged the president, as well as several other ministers who openly called for Zuma to resign as he sank deeper in public opinion amid long-simmering corruption scandals.

 

The Cabinet changes were met with widespread disapproval — and not just from the usual suspects. In a rare break of party unity, Zuma’s own deputy president and the secretary-general of the party Zuma leads, the African National Congress, publicly criticized the reshuffle.

But, says associate economics professor Christopher Malikane of the University of the Witwatersrand, this downgrade could take pressure off South Africa to strive for the same financial policy goals as developed nations. South Africa’s history of oppression has left it with high levels of inequality, largely along racial lines, which is something the ANC has long vowed to address through a program of “radical economic transformation.”

 

This downgrade, Malikane said, could free up the government to do just that.

 

“The silver lining aspect of it, in my view, has to do with the fact that that this thing is now behind us. The leadership now has to be serious about articulating a clear program of transformation. If they had implemented this program anyway, they would have been downgraded because they would have tampered with the ownership structures that exist in the economy. Now that the downgrade has happened, I think it’s a green light for them to proceed and transform the economy in a radical way, but in a transparent and a well-articulated way so that investors know what concretely is going to happen going forward,” he said.

 

Political analyst Ralph Mathekga said he thinks Zuma and his supporters will dodge the fallout from this downgrade by simply reframing the argument.

 

“The ratings agencies are working on the paradigm that the ANC is beginning to reject openly, or at least some within the ANC. And by the end of the week you’re going to have to discuss, whether we like it or not, the discussion will be whether we should even worry about the ratings agencies,” he said.

 

The political turmoil is sure to continue. Zuma is facing growing clamor from the opposition for a no-confidence vote in parliament, which gained more momentum after the country’s top trade union coalition — a longtime ally of the ANC — said Tuesday that they, too, want him to resign.
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The U.S. plane maker Boeing said Tuesday it agreed to sell 30 of its 737 MAX jets to Iran’s Aseman Airlines, a deal worth $3 billion.

The sale marks the second such Boeing deal made possible by the 2015 nuclear agreement signed by former U.S. president Barack Obama to relieve sanctions on the Middle Eastern country.  IranAir struck a $16.6 billion deal with the company in December for 80 planes.

“Boeing confirms the signing of a Memorandum of Agreement with Iran Aseman Airlines, expressing the airline’s intent to purchase 30 Boeing 737 MAX airplanes with a list price value of $3 billion,” the plane maker said in a statement. “The agreement also provides the airline with purchase rights for 30 additional 737 MAXs.”

Aseman Airlines is scheduled to start receiving the aircraft in 2022, though the deal is still contingent on approval from the U.S. government.

The nuclear agreement limited Iran’s nuclear capabilities in exchange for the lifting of international economic sanctions. U.S. President Donald Trump heavily criticized the deal during his election campaign and has said he would like to see in renegotiated.

Aseman Airlines flies both domestic and international flights from Iran. The European Union banned the airline in December, citing safety concerns.

The deal is expected to create or sustain 18,000 jobs, Boeing said.

 
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South Korea’s Hyundai Motor Co. and Kia Motors Corp. have slashed vehicle production in China, sources said, as diplomatic tensions and competition from Chinese brands play havoc on sales and threaten earnings.

China, the world’s biggest auto market, accounted for over a quarter of the pair’s 2016 overseas sales but their March sales there were smashed by anti-Korean sentiment and competition from the likes of Geely Automobile Holdings Ltd.

Hyundai and Kia saw their combined China sales slump by 52 percent in March from a year earlier, Yonhap news agency reported on Tuesday, endangering not only the automakers’ earnings but those of South Korean suppliers.

Political tensions have soared since late February when South Korea’s Lotte Group agreed to provide land for a U.S.

missile defense system outside Seoul. The move angered Beijing, although Seoul says the system is a response to North Korea’s nuclear threat and is not aimed at China.

South Korean firms including Lotte Group have been targeted in a Chinese backlash involving boycott calls in state media, protests and suspensions of operations.

But analysts and sources said the row was just another headache for the South Korean carmakers, whose long-term challenge has been how to compete in China and the United States where their mainstay sedans have lost market share to sport utility vehicles.

“China is not the goose that lays the golden egg for Hyundai anymore,” said Lee Hang-koo, a senior research fellow at Korea Institute for Industrial Economics & Trade.

Hyundai’s problems were a result of its “failed global strategy,” he added.

 SHIFT CUTS Kia Motors has cut production shifts at its China factories, two of the sources familiar with the matter told Reuters.

Hyundai also had eliminated a second shift from its three factories in Beijing starting mid-March, one of the people said.

The sources declined to be identified because the matter was not public. The automakers declined to comment on Tuesday.

Hyundai had already suspended output at its factory in Hebei from March 24 to April 4. It was unclear how the shift cuts would affect employment.

Hyundai Motor has four passenger car factories in China, with one more plant scheduled to commence production later this year. Kia, Hyundai’s smaller affiliate, has three.

Poor consumer sentiment towards South Korean products in China had likely dragged down overseas sales in March, the companies said on Monday without putting a number on the falls.

One source said Kia Motors’ China sales likely more than halved in March from the year prior.

In the United States, Hyundai Motor posted a sales fall of 8 percent and Kia Motors slumped 15 percent in March from a year earlier. The U.S. market declined 2 percent in March.

Hyundai Motor shares fell 2.6 percent and Kia Motors declined 0.8 percent in the wider market, which was down 0.1 percent as of 0310 GMT.
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The U.S. Department of Homeland Security announced steps on Monday to prevent the fraudulent use of H1B visas, used by employers to bring in specialized foreign workers temporarily, which appeared to fall short of President Donald Trump’s campaign promises to overhaul the program.

Trump had promised to end the lottery system for H1B visas, which gives each applicant an equal chance at 65,000 positions each year.

Lobbyists for businesses who rely on H1B visas, commonly used by the tech sector, had expected Trump to upend the lottery in favor of a system that prioritized workers who are highly skilled and would be highly paid in the United States.

The lottery for fiscal year 2018 opened on Monday without changes.

The start of the lottery was seen by those watching the issue as the unofficial deadline for the Trump administration to enact H1B visa reform, and the failure to meet that deadline signals that Trump’s promised overhaul of the system may be off the table or long delayed.

“More oversight is a good start, but employers can still use the program legally to depress wages and replace American workers. That falls short of the promises President Trump made to protect American workers,” said Peter Robbio, a spokesman for Numbers USA, a Washington-based group that advocates for limiting immigration into the United States.

The White House could not immediately be reached for comment.

In keeping with the practice of former President Barack Obama’s administration, employers and foreign workers will enter a lottery system where 65,000 workers are permitted to enter the United States to work. An extra 20,000 H1B visas are reserved for workers with advanced degrees.

Last year, the lottery remained open less than a week before the program reached its cap.

Tech companies rely on the program to bring in workers with special skills and have lobbied for an expansion of the number of H1B visas awarded.

Proponents of limiting legal immigration, including Trump’s senior adviser Stephen Miller, have argued the program gives jobs that Americans could fill to foreign workers at a less expensive cost.

The measures announced by DHS on Monday focus on site visits by U.S. authorities to employers who use H1B visas.

In future site visits, U.S. Citizenship and Immigration Services agents will investigate incidents where an employer’s basic business information cannot be validated; businesses that have a high ratio of H1B employees compared with U.S. workers; and employers petitioning for H1B workers who work off-site.
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The effects of the 2008 financial crisis are still being felt, says the International Monetary Fund’s Managing Director Christine Lagarde. 

She cites a new IMF study showing global productivity has slowed to 0.3 percent over the last decade, lower than the pre-crisis average of about 1 percent growth per year. Had productivity growth followed pre-crisis trends, Lagarde says the overall GDP in advanced economies would be about 5 percent higher.

Lagarde attributes the slowdown in labor productivity — the amount of goods and services produced by an average worker per hour — to three major headwinds: an aging global population, the slowdown in international trade, and the lasting impact of the 2008 financial meltdown.

The slowdown has been particularly abrupt in continental Europe, where five Eurozone member countries — Greece, Portugal, Ireland, Spain and Cyprus — required various emergency bailouts after being unable to refinance their sovereign debt. 

Lagarde says strong policy actions, such as government-backed innovation, may be required to reverse the slowdown. For example, she says ramping up research and development by 40 percent could increase the gross domestic output (GDP) in advanced economies by as much as 5 percent, significantly improving demand at the same time in developing economies. 

But to be effective, Lagarde says governments must provide clear signals about future economic policy and boost investment in education, worker training and infrastructure.

Lagarde made her comments Monday at the conservative-leaning American Enterprise Institute in Washington, just two weeks before the World Bank and IMF annual spring meeting, at which member countries discuss challenges facing the global economy and ways to ensure financial stability around the world.
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Japanese big manufacturers’ business confidence improved for a second straight quarter to hit a one-and-a-half year high in March, a closely watched central bank survey showed, a sign the benefits of an export-driven economic recovery were broadening.

Service-sector sentiment improved for the first time in six quarters and companies remained upbeat on their capital expenditure plans, the Bank of Japan’s “tankan” survey showed, offering hope the economic recovery will gather momentum in coming months.

The data, which will be among factors the BOJ will scrutinize at its next rate review on April 26-27, reinforces a dominant market view the central bank’s next policy move would be to reduce rather than expand monetary stimulus.

“The tankan showed a balanced improvement in corporate sentiment at manufacturers and service-sector firms,” said Yuichiro Nagai, an economist at Barclays Securities. “Overall, the results support the BOJ’s rosy view on the economy.”

The headline index measuring big manufacturers’ business sentiment rose to plus 12 in March from plus 10 three months ago, the tankan showed on Monday, falling slightly short of market forecasts but marking the highest reading since December 2015.

The index gauging big non-manufacturers’ sentiment improved 2 points from plus 20, rising for the first time in six quarters and hitting the highest level since March 2016, the survey showed.

Brexit, Trump cloud outlook

Big manufacturers and non-manufacturers expect business conditions to deteriorate slightly in the coming three months, as risks to global trade such as Britain’s decision to leave the European Union and U.S. President Donald Trump’s protectionist statements cloud the outlook.

Still, the survey found big firms plan to increase capital spending by 0.6 percent in the fiscal year ending in March 2018, compared with a median market forecast for a 0.1 percent drop.

“There has been talk about the risks of protectionism, but so far Japanese companies are not taking any specific steps related to this,” said Norio Miyagawa, senior economist at Mizuho Securities.

“This tankan will reinforce expectations that the BOJ is on hold for the time being. We certainly don’t see the need to ease or tighten policy,” he said.

Signs of life

Japan’s economy has shown signs of life in recent months, with exports and factory output benefiting from a recovery in global demand.

With inflation expected to accelerate later this year, a growing number of analysts now predict the BOJ’s next move would be to start scaling back its massive monetary stimulus.

The tankan’s sentiment indexes are derived by subtracting the number of respondents who say conditions are poor from those who say they are good. A positive reading means optimists outnumber pessimists.

 
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Training for the Boston Marathon has left Tommy Race feeling spent. His bank account, too: Race’s Boston adventure will cost about $2,000.

 

“It’s a lot of money, but it’s also a vacation,” said Race, a high school math teacher from Bellingham, Washington. “For a runner like myself, I’d much rather throw down money to run Boston than go to Cancun or Europe or some other travel destination.”

 

Race (yes, that’s his real name) has plenty of company. Thirty-thousand athletes from 94 countries will participate in this month’s 121st running of America’s most venerable footrace, and organizers say they’ll pump $192 million into the local economy.

 

That’s the equivalent of $311 for every man, woman and child living in the city of Boston.

 

Sports industry experts say Boston’s payout is part of a lucrative global trend that’s been playing out in Chicago, New York, London and other cities that stage major marathons drawing competitors and spectators from around the world.

 

“People want to be a part of something that Olympians run in,” said Rich Harshbarger, CEO of Running USA, a nonprofit group that promotes the sport.

 

“You’re not going to be able to run the bases at Fenway. But at a big marathon, you get to line up and have the same experience that the pros do,” he said.

 

It’s an affluent bunch: Running USA’s latest national survey, done in 2015, found that more than seven in 10 marathon runners earn more than $75,000 a year, and most are college graduates.

 

Many in the field for the Boston Marathon on April 17 will bring their families along. Another 10,000 runners will descend on Boston for a sister 5K race, swelling not only the size of the crowds but the amount spent on hotels, restaurants, transportation and a weekend running expo hawking expensive gear and swag.

 

“Nearly everyone involved … will patronize local businesses,” said Tom Grilk, CEO of the Boston Athletic Association, which manages the marathon.

 

Included in the $192.2 million projection is $30 million that runners will raise to benefit dozens of charities.

 

And the Boston Marathon’s economic impact is steadily growing. Last year’s race generated $188.8 million, and the 2015 race brought in $182 million, the Association said.

 

Patrick Moscaritolo, president and CEO of the Greater Boston Convention & Visitors Bureau, calls race weekend “an extraordinary kick start” for the tourist season.

 

Other races that are part of the World Marathon Majors – a series that includes Berlin, Boston, Chicago, London, New York City and Tokyo – have an even bigger haul.

 

The TCS New York City Marathon says its economic impact in 2014, the most recent year for which figures were available, was $415 million. The Bank of America Chicago Marathon had an estimated $277 million impact in 2015, organizers say.

Getting to the start line is expensive, “but it’s worth every penny,” said Malinda Ann Hill, bereavement coordinator for Children’s Hospital of Philadelphia, who’s running her first Boston together with her twin sister.

 

After 12 attempts to qualify, Hill doesn’t care what it costs.

 

“My twin won’t total it up, though,” she said. “She doesn’t want to know.”
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 Iraq’s oil minister said on Sunday that his country plans to increase daily crude oil production to 5 million barrels by the end of this year, up from the current rate of about 4.4 million barrels per day, to secure sorely needed cash for its ailing economy.

 

Iraq, where oil revenues make up nearly 95 percent of the budget, has been reeling under an economic crisis since 2014, when oil prices began their descent from a high of above $100 a barrel. The Islamic State group’s onslaught, starting in 2014, has exacerbated the situation — forcing Iraq to divert much of its resources to a long and costly war.

 

Addressing an energy conference in Baghdad, Oil Minister Jabar Ali al-Luaibi didn’t give details on which of the country’s oil fields would supply the increased output.

 

Late last year, Iraq joined a deal by OPEC and non-OPEC members to lower production for six months by 1.8 million barrels a day in order to prop up global oil prices. The mutual production decrease began on Jan. 1. Iraq’s share in the deal is to reduce output by 210,000 barrels a day to 4.351 million barrels.

 

“There are positive elements in that deal and we achieved a lot of its targets,” al-Luaibi told reporters on the sideline of the conference. “Work and cooperation are underway … to reach the 1.8 [million barrels a day] reduction,” he added, without divulging whether Iraq is going to support an extension to that deal.

 

OPEC Secretary-General, Mohammed Barkindo, said the compliance among the participants was 86 percent in January and 94 percent in February. Barkindo told reporters that OPEC members would consider whether to extend the production decrease agreement at a meeting next month.

 

The deal propped up the crude price to around $50 per barrel.

 

Iraq holds the world’s fourth-largest oil reserves. This year, it added 10 billion barrels, bringing its total reserves up to 153.1 billion barrels.

 

Al-Luaibi also said that more 15 billion barrels are planned to be added by 2018.

 

Iraq’s 2017 budget stands at about 100.67 trillion Iraqi dinars, or nearly $85.17 billion, running with a deficit of 21.65 trillion dinars, or about $18.32 billion. That’s based on an estimated oil price of $42 per barrel and daily export capacity of 3.75 million barrels.

 

Iraq is also grappling with a major humanitarian crisis. The U.N. estimates that more than 3 million people have been forced from their homes since 2014. It also faces growing dissatisfaction among residents of areas recaptured from IS who have had their properties demolished and suffer from scarce public services.

 

 
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Investors are plowing ever more into ethical funds to back their views on issues such as global warming and gender equality, but such investments can be confusingly similar to standard funds, except for higher fees and “green halo” marketing.

The $23 trillion “sustainable, responsible and impact” (SRI) investment sector has received a rush of money since the Paris climate agreement and, more recently, in protest against U.S. President Donald Trump’s plans to slash environmental regulations.

Europe is the dominant region for such investments, with $12.04 trillion, followed by the United States, with $8.72 trillion, while Asia lags some way behind.

U.S. investors have poured $1.8 billion into actively managed U.S. equity funds in the socially responsible category from November to January, according to Lipper data, while other funds saw a net outflow of $133 billion.

Even in fossil-fuel-rich Australia and New Zealand, SRI investment rose from $148 billion to $516 billion between 2014 and 2016, and from $729 billion to $1.09 trillion in oil-rich Canada, according to the Global Sustainable Investment Review released Monday.

Gavin Goodhand, a portfolio manager at Sydney-based Altius Asset Management, said the company’s sustainable bond fund tripled shortly after the 2015 climate accord, where nearly 200 countries signed up to measures designed to curb greenhouse gas emissions.

“The Paris conference was the line in the sand for many of our retail customers, particularly the millennial generation, who want to do the right thing for the environment,” Goodhand said.

Green funds may be not so green

Governments are also tapping the trend, selling green bonds to fund projects such as wind farms or low-carbon transport, with Poland, France and Nigeria making their debut this year.

Some managers, however, are skeptical.

“While environmental, social and governance factors should always factor into investment decisions, this is largely a marketing exercise,” said Steve Goldman, a global portfolio manager at Sydney-based Kapstream Capital, which has A$10 billion ($7.6 billion) of fixed-income assets.

Goldman said Kapstream did not have a responsible investment fund because its clients had not asked for it.

The bond market does not have commonly agreed standards or criteria for what constitutes a green bond, and there is no guarantee the proceeds go to the low-carbon project as claimed.

There are similar concerns over equity products.

Stuart Palmer, head of ethics research at Australian Ethical Investment, said there was a danger that some marketing departments would “greenwash” their products to lure investors into funds that were little different to standard products.

Higher fees

There are no agreed definitions on what is considered ethical, sustainable and socially responsible, but ethical investors are typically expected to cough up higher fees.

For example, retail investors pay more than a third higher fees for the sustainability and ethical funds at Sydney-based BT Investment Management (BTIM) than for its standard share fund equivalent.

The three funds hold six or seven of their top-weighted stocks in common, including major banks Australia and New Zealand Banking Group, Westpac Banking Corp, National Australia Bank and miner BHP Billiton , according to December filings.

A BT spokeswoman did not return requests for comment.

Due diligence difficult

For investors, it can be a minefield.

“I find it difficult as a consumer to do the due diligence I would like to do because even the ethical funds are not always totally transparent about what they define as ethical,” said retail investor Meraiah Foley, a Sydney academic.

“One of the ethical funds I have invests very heavily in retail banks in Australia, and those banks themselves may be underwriting projects that the fund itself would not invest in.”

There is also no standard practice on what to do when an existing fund stock breaches a manager’s policies. Some investment managers will sell, but others argue they can influence behavior by retaining their shareholding.

“We believe in engagement rather than divestment,” said Sam Sicilia, chief financial officer at the A$22 billion pension fund Hostplus. “When you sell a share in a ‘bad’ company, it’s a transfer of ownership and does nothing to the company that’s causing the issue, so divestment does not really work.”
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President Donald Trump doubled down on his tough talk on trade with a pair of executive orders Friday, which he says are designed to level the playing field and reduce the $500 billion US trade deficit, more than half of which is with China. As Mil Arcega reports, the issue of unfair trade is likely to come up when the U.S. president meets with Chinese leader Xi Jinping next week.
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