From the president of Mozambique to the US Secretary of Commerce, greater US economic engagement in Africa is the dominant theme at this year’s business summit organized by the Corporate Council on Africa. VOA Correspondent Mariama Diallo was there and reports.
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U.S. authorities moved on Thursday to seize a Picasso painting given to American movie star Leonardo DiCaprio and the rights to two Hollywood comedies, as they filed complaints to recover about $540 million they say was stolen from the 1Malaysia Development Berhad sovereign wealth fund.

The U.S. Justice Department filing was the latest legal action tied to alleged money laundering at the fund set up by Malaysian Prime Minister Najib Razak in 2009 to promote economic development. In the complaints, the department alleges more than $4.5 billion was taken from 1MDB by high-level fund officials and their associates.

“This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people,” Kenneth Blanco, acting assistant attorney general, said in a statement. 1MDB could not be immediately reached for comment.

Najib has denied taking money from 1MDB or any other entity for personal gain, after it was reported that investigators traced nearly $700 million to bank accounts that were allegedly in his name.

The assets U.S. authorities are seeking to seize include the rights to Dumb and Dumber To, a 2014 comedy starring Jim Carrey, they allege was financed with tens of millions of dollars stolen from 1MDB, and the 2015 film Daddy’s Home, starring Will Ferrell. Last year, U.S. authorities moved to seize rights to the 2013 film The Wolf of Wall Street, which starred DiCaprio.

The three films were produced by Red Granite, a company founded by Najib’s stepson Riza Aziz. Red Granite said in a statement it was in discussions with the Justice Department “aimed at resolving these civil cases and is fully cooperating.”

U.S. authorities accuse Jho Low, a Malaysian financier, of laundering more than $400 million stolen from the fund through an account in the United States, where he and his friends used the money to pay for lavish parties, gambling and yachts.

Despite the civil allegations, U.S. authorities have not charged Low with any crime.

Low did not immediately respond to a request for comment sent to his Hong Kong-based company Jynwel Capital.

Artwork, Oscar for DiCaprio

Authorities said that in 2014 Low used $3.2 million diverted from a 1MDB bond sale to buy a Picasso painting for DiCaprio.

“Dear Leonardo DiCaprio, Happy belated Birthday! This gift is for you,” a friend of Low’s wrote in a note.

Low also used $9.2 million diverted from 1MDB bond sales to buy a collage made by the New York artist Jean-Michel Basquiat which was also given to DiCaprio. DiCaprio and Low signed a note in March 2014 absolving the star of “any liability whatsoever resulting directly or indirectly from these art-work,” according to the filings.

A spokesman for DiCaprio said in an emailed statement on Thursday the actor last July “initiated the return” of gifts he had received from financiers connected to the 1MDB case. The spokesman said DiCaprio also returned an Oscar won by actor Marlon Brando which was given to DiCaprio by Red Granite “to thank him for his work on The Wolf of Wall Street,” the statement said.

DiCaprio’s spokesman said the star accepted the gifts to raise funds in an auction for his environmental foundation.

Complaints against 1MDB

Fraud allegations against 1MDB go back to 2009, the Justice Department said, and the fund is subject to money laundering investigations in at least six countries, including Switzerland and Singapore.

The complaints allege that officials at 1MDB, their relatives and other associates allegedly laundered the funds using complex transactions and shell companies with bank accounts located in the United States and abroad.

That allowed the origin, source and ownership of the funds to be hidden and ultimately passed through U.S. financial institutions, with the money being used to buy and invest in assets in the United States and overseas, according to the complaints.
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The White House lacks a unified plan to increase the government’s borrowing cap as a likely September deadline is drawing near, said Mick Mulvaney, director of the Office of Management and Budget.

A failure by Congress to raise the debt ceiling could send dangerous shock waves through the global economy. The federal government could be at risk of defaulting on obligations such as interest payments on bonds as well as temporarily halting benefit programs.

The White House budget director suggested in an interview Thursday with reporters that neither the Trump administration nor Capitol Hill lawmakers had set their terms for an agreement.

“It’s fair to say we haven’t settled on a final way to address the debt ceiling any more than the Hill has,” Mulvaney said.

The former South Carolina congressman added that none of this was necessarily “unusual.”

Possible extension

Under the current borrowing restrictions, the government has already been taking extraordinary measures and will likely be unable to pay its bills at some point in September. But Congress still has a recess scheduled in August that could create time pressures. Private analysts say the debt ceiling deadline could be extended into October.

Mulvaney said he would like to see the debt ceiling raised in July.

But Trump administration officials still have yet to resolve internal differences on the best strategy to increase the legal cap on government debt, which already exceeds $19.8 trillion.

Mulvaney suggested he would like to have any increase in the borrowing authority be attached to other spending changes, a move that could attract Republican support but alienate Senate Democrats. President Donald Trump’s budget proposal seeks to beef up spending on the military and border security while cutting many social programs.

Treasury Secretary Steve Mnuchin has indicated he would like a “clean” bill to raise the debt ceiling, so it would not have to be tied to any spending changes, but Capitol Hill conservatives are resisting the idea.

“Secretary Mnuchin believes it needs to be clean. I think the vast majority of the Republican conferences would not agree,” said Representative Mark Meadows R-N.C., chairman of the Freedom Caucus, a group of strongly conservative House Republicans.

Mulvaney said Mnuchin would ultimately be in charge of handling the debt ceiling push “once we do settle on our formal policy, if we do.”

A 2011 standoff between Republicans and the Obama administration over the debt ceiling led to tighter controls on spending. That standoff was not resolved until the 11th hour and prompted Standard & Poor’s to impose the first-ever downgrade to the country’s credit rating.

Talks with lawmakers

The administration is also engaged in talks with House and Senate Republican leaders about what kind of increase they could possibly pass. Mulvaney said the issue was not a source of division inside the White House or the Republican Party.

The discussions involve whether the House should increase the debt limit enough to last through the 2018 election or the president’s first term.

“It would be foolish of us to come up with a policy devoid of having talked to the Hill,” Mulvaney said.

Congress also faces pressure to pass a budget in September for next fiscal year, as well as to address administration priorities that include a tax code rewrite and the proposed repeal of former President Barack Obama’s 2010 health insurance law.

Failure to pass spending bills could cause a government shutdown and cause nonessential government agencies to close. Trump suggested on Twitter last month that he might welcome a shutdown to help shake up the government.

Mnuchin told the Senate Budget Committee this week that “at times there could be a good shutdown,” though he cautioned it’s not the administration’s “primary objective.”

With action on the budget front otherwise stalled, the House Appropriations Committee on Thursday approved the first of 12 spending bills, an $89 billion measure that contains generous increases for veterans programs and Pentagon construction projects.

But the White House and its GOP allies — much less opposition Democrats — haven’t come up with an overall plan for implementing Trump’s promises to increase the Pentagon budget and advance more than $500 billion worth of annual domestic agency spending bills.
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American tourists strolling the ample squares and narrow streets of colonial Havana may not know it, but from novelist Ernest Hemingway’s famed Floridita bar to Sloppy Joe’s eatery, they are probably patronizing businesses owned by Cuba’s military.

It is that lucrative line of business that President Donald Trump will target when he rolls out his new Cuba policy Friday in Miami, the heart of the country’s hard-line exile community, according to U.S. officials who have seen a draft presidential memorandum.

Trump will significantly restrict U.S. companies from doing business with some military-linked enterprises, the officials said.

“Any ban on using military-owned tourism facilities would make it very difficult to bring groups larger than seven people, because for logistical reasons you need to work with the government,” said Collin Laverty, president of Cuba Educational Travel.

The number of Americans traveling to Cuba, mostly in large groups because of U.S. regulations, has nearly tripled in recent years and was expected to reach around 400,000 in 2017, according to U.S. travel agencies.

Trump’s expected limits on U.S. business deals will target the Armed Forces Business Enterprises Group (GAESA), a conglomerate involved in all sectors of the economy that is led by General Luis Alberto Rodriguez, reportedly President Raul Castro’s son-in-law.

That is bad news for the pro-engagement U.S. politicians and hundreds of businesses that flocked to Cuba in the last few years in search of new opportunities.

Lone hotel deal

The only hotel deal struck to date may prove the last for now, at least in the capital. Starwood Hotels & Resorts Worldwide, which is owned by Marriott International, signed on to manage a Gaviota hotel in Havana under the Sheraton brand, which opened in 2016.

Gaviota is part of GAESA, and tourism development projects in Havana and other choice locations are almost exclusively in its hands.

U.S. Gulf Coast ports and the Port of Virginia, which have signed letters of intent to work with the new Mariel container terminal, will most likely have to look elsewhere for shipping partners because it is controlled by Almacenes Universales, another GAESA company.

The terminal feeds a surrounding Chinese-style development zone that allows investors 100 percent ownership and that was visited by dozens of U.S. business delegations beginning in 2015, though no deals were signed. It also is controlled by Almacenes Universales.

GAESA does not run Cuba’s airports, or its cruise ship terminals, meaning U.S. airlines and cruise operators might not be directly affected, but it does control the marinas.

All the state hotels, stores and eateries in colonial Old Havana are owned by Habaguanex, which was recently taken over from the city historian’s office by GAESA.

GAESA began modestly enough in the 1980s as an effort to bring modern management to the civilian sector mired in the ways of Soviet-style administration.

It has grown dramatically over the last decade since Raul Castro took over for his ailing and now deceased older brother, Fidel.

Today GAESA boasts dozens of companies that control 40 percent to 60 percent of the Caribbean island’s foreign exchange earnings, according to Cuban economists.

GAESA’s books, like those of other state-run companies, are not public.

Military’s self-interest

Some Cuba experts and diplomats believe the military is feathering its own nest and perhaps preparing to cash in if the government falls.

But others believe revenues flow to the cash-strapped state.

A former British ambassador to Cuba, Paul Hare, who lectures at Boston University’s Pardee School of Global Studies, said the military was viewed as a guardian of the Revolution.

“Their function is to ensure that private Cubans and foreign investors do not undermine the principles of ‘socialism,’ ” he said.

The holding company controls virtually all of the thousands of stores, supermarkets and malls in the country that sell imported products ranging from food and beverages to clothing and appliances, and hundreds of gas stations and eateries.

That means when you enter a shop in Cuba to purchase a bottle of water, soda or beer, you probably are patronizing a military establishment.

If you want to rent a condominium or satellite TV service, you have to go through a GAESA company.

The holding company also controls two banks and all credit card and money transfer transactions through Fincimex. RAFIN, the conglomerate’s mini-hedge fund, owns shares in the telecommunications monopoly ETECSA.
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Foreign fishing in Indonesian waters has long been a concern for the government, for which it has recently taken a literally explosive approach: blowing up illicit fishing boats. But the country’s wildly popular Minister of Marine Affairs lobbied the United Nations last week to declare illegal, unreported and unregulated fishing (IUUF) an organized crime, signaling growing frustration and a new approach from Jakarta.

That said, even if the U.N. takes this step, Indonesia faces an uphill battle in protecting its fisheries. As the world’s largest archipelagic nation, it has somewhere between 15,000 and 17,000 islands and many kilometers of unsecured coastline. President Joko “Jokowi” Widodo created a task force to address illegal fishing in October 2015, which reports directly to him and gives the Navy, the National Police and the Maritime Security Agency wide jurisdiction to deter illegal fishing by any means necessary.

But the fleet and law enforcement personnel are still small given the scale of the problem, which costs Indonesia, by one estimate, $3 billion a year.

Surprisingly empowered task force

Task forces, or “Satgas” (satuan tugas in Bahasa Indonesia) are almost a punchline in Indonesian governance because they are created for a wide variety of issues and often with unclear mandates. But the fishing task force feels different, according to Mas Achmad Santosa, head of the IUUF Fisheries Task Force.

“This is the first time for Indonesians that the president has set up a task force and it actually works well,” Santosa told VOA. “Every element needed for enforcement is there: investigators [from the Ministry of Marine Affairs and Fishery, Marine Police, Coast Guard, and Navy], prosecutors under the attorney general’s office, and several experts from fields like money laundering and environmental law.”

There are about 60 dedicated members of this task force, but they work closely with the above institutions so their effective numbers are larger, Santosa said.

The task force only directly prosecutes cases with “elements of serious crime,” said Santosa, and they have prosecuted 42 such cases over the last year.

“But our fleet is far from sufficient, we must admit,” Santosa said. “Compared to our oceans, which are huge, the technology is limited.” They only have four patrol boats, for instance.

Since Jokowi took office in 2014, Indonesia has blown up over 300 illegal fishing boats, taking out 81 near Ambon over a single weekend last April. The eye-catching strategy has become something of a local tourist attraction. Its symbolic impact, though, could be larger.

“Blowing up boats is just one of our treatments. But we hope it creates a general deterrent effect,” Santosa said.

Charismatic leader

Indonesia’s Fisheries Minister Susi Pudjiastuti, known as “Bu Susi,” is a high school dropout turned entrepreneur with a knack for viral photo opportunities (smoking on a paddleboard, sleeping in an airport) and a no-nonsense style that has raised the profile of her relatively obscure ministry.

“It’s very important to have a strong leader, and she is a person of integrity who leads by example,” Santoso said.

Foreign fishing is concentrated in Maluku, Sumatra, and the Indian Ocean, according to the maritime ministry. Beyond that, there are also illicit Indonesian vessels that engage in what Santoso calls “unsustainable fishing that will destroy ecosystems.” So international cooperation is not a silver bullet;  the task force’s inroads on domestic fishing will be equally important, and somewhat harder to attack in such a spectacular manner.

Domestic agenda

The Peoples Coalition for Fishery Justice (KIARA) has urged the maritime ministry to revise regulations that they say hinder the development of the local fishing industry.

“Today the biggest challenge faced by coastal communities, especially fishermen, is the investment from and development through foreign capital,” KIARA secretary-general Susan Herawati Romica told VOA. For instance, she said, on the island of Gili Sunut, Lombok, there are 109 households who have been displaced by construction on a Singaporean beach resort to more dangerous cliffside areas.

“Today, 90 percent of Indonesian fishermen are traditional fishermen with vessels that average below 10 gross tons,” she said. “They rely heavily on marine and coastal areas, but they still face major challenges in accessing the coast.”

According to KIARA data, there have been at least 34 recent cases of mine reclamation or development that have displaced local communities. “To that end, we say, if the country wants to push fisheries to provide the maximum benefit to coastal communities, then access to the sea [for local communities] should be guaranteed by the state.”
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New data show the U.S. job market becoming a bit stronger, while credit card costs are increasing for American consumers.

Thursday’s report from the Labor Department says the number of newly-laid off workers signing up for assistance fell 8,000 last week to a nationwide total of 237,000. Experts say any level below 300,000 indicates strong demand for workers and a healthy job market.  Jobless claims have been under this benchmark now for well over two years, the longest streak since 1970.

On Wednesday, the U.S. central bank cited the improving job market as evidence that the economy no longer needs the boost it has been receiving from ultra-low interest rates. The Federal Reserve increased the key interest rate by a quarter of a percent. It is the latest in a series of gradual increases intended to bring interest rates closer to the average rates seen over the past few decades.

While economists say the increases are a vote of confidence in the economy, higher rates also raise costs for consumers who have run up credit card bills. The business group WalletHub says U.S. consumer credit card debt will likely exceed $1 trillion this year, a record high. The company says that means a quarter of a percentage point interest rate hike will cost consumers an extra $1.5 billion this year.

Wednesday’s action is the latest of several rate increases, and if all the higher costs are tallied, the bill for consumers will be $6 billion more this year than it would have been in the past.
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The U.S. Senate voted 98-2 Thursday to approve sweeping sanctions against Russia and make it harder for President Donald Trump to ease punitive measures against Moscow.

“We have no time to waste,” said Republican Senator John McCain of Arizona. “The United States of America needs to send a strong message to [Russian President] Vladimir Putin and any other aggressor that we will not tolerate attacks on our democracy.”

“We must not allow this kind of interference in our elections become a normal process,” said Democratic Senator Jeanne Shaheen of New Hampshire.

Adopted overwhelmingly as an amendment to an Iran sanctions bill, the measure targets Russia’s cyber espionage entities, energy sector, financial interests, and the flow of Russian weaponry to war zones like Syria.

“It expands the list of where sanctions can apply to the energy projects and foreign financial institutions,” said Ben Cardin of Maryland, the top Democrat on the Senate Foreign Relations Committee. “It provides for actors undermining cyber security being subject to sanctions. It provides sanctions against suppliers of Russian arms to Syria. It’s comprehensive.”

The measure also asserts a role for Congress if the White House opts to ease any sanctions against Moscow.

“The president can’t remove a sanction until he’s given Congress notice and an opportunity to review,” Cardin said. “We can have congressional hearings, we can put a spotlight on it. And then we have an expedited process where we could reject the president’s decision to give relief. And all during that process, the sanctions remain in place.”

The Trump administration reportedly is weighing the return of Russian compounds on U.S. soil seized by the Obama administration, and the president has repeatedly expressed a desire for better relations with Moscow while downplaying the impact of Russia’s cyber activities.

“It’s particularly significant that a bipartisan coalition is seeking to reestablish Congress, not the president, as the final arbiter of sanctions relief,” said Senate Minority Leader Chuck Schumer, a New York Democrat.

McCain described existing punitive measures against Russia as “modest” and “reversible at the discretion of the president.”

“We must take our own side in this fight, not as Republicans, not as Democrats, but as Americans,” McCain said.

The White House has not said if Trump would sign or veto the legislation, which would have to be passed by the House of Representatives before it could go to the president‘s desk. Testifying this week on Capitol Hill, Secretary of State Rex Tillerson acknowledged the need to take action against Russia but warned against measures that would cut off dialogue with Moscow.

“We would ask for the flexibility to turn the heat up when we need to, but also to ensure that we have the ability to maintain a constructive dialogue,” Tillerson said.

The underlying bill imposed new sanctions on Iran for its ballistic missile program and support for international terrorism. Lawmakers of both parties stressed the measures in no way target Iran’s nuclear program or the landmark international nuclear accord with Tehran.

“We see destabilizing act after destabilizing act [by Iran], from missile launches to arms transfers to terrorist training to illicit financial activities to targeting Navy ships and detaining American citizens,” said the chairman of the Senate Foreign Relations Committee, Republican Bob Corker of Tennessee.

“It’s past time for us to take steps to protect the interests of the United States and our allies. This bill is the first time Congress has come together since the JCPOA, the Iran nuclear deal, to do just that,” Corker added.

“This bill will impose sanctions on Iran for its non-nuclear violations,“ Cardin said. “The debate we have here is on the non-nuclear activities of Iran that violate international norms and international agreements.”

 
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President Donald Trump on Thursday ordered more money and a bigger role for private companies in designing apprenticeship programs meant to fill some of the 6 million open jobs in the U.S.

 

Trump signed an executive order to roughly double to $200 million the taxpayer money spent on learn-to-earn programs. The money would come from existing job training programs. The executive order would leave it to industry to design apprenticeships under broad standards to be set by the Labor Department.

 

“We’re training people to have great jobs and high paying jobs,” Trump said at a White House ceremony. “We’re here today to celebrate the dignity of work and the greatness of the American worker.”

 

Trump is directing the government to review and streamline some 43 workforce programs across 13 agencies. Senior administration officials have said Trump was reluctant to spend more federal funds on apprenticeships, so the boost would come from existing money, perhaps from the streamlining process. The officials spoke Thursday on condition of anonymity to preview Trump’s order.

 

Companies have long complained that they can’t find trained people to fill highly technical jobs, and apprenticeship programs have sprung up around the country. Companies now have to register with the Labor Department and adhere to government guidelines.

 

There are about 500,000 apprenticeship positions in the U.S.

 

Trump had campaigned on creating jobs. The executive order addresses the nation’s “skills gap” that have left millions of open jobs unfilled. Apprenticeships would give students a way to learn skills without the crippling debt of four-year colleges, and expand those opportunities to women, minorities and other populations underrepresented among the nation’s roughly 505,000 apprentices.

 

Trump accepted a challenge earlier this year from a CEO to create 5 million new apprenticeships.

 

The Trump administration has said there’s a need that can be met with a change in the American attitude toward vocational education and apprenticeships. A November 2016 report by former president Barack Obama’s Commerce Department found that “apprenticeships are not fully understood in the United States, especially” by employers, who tend to use apprentices for a few, hard-to-fill positions but not as widely as they could.

 

The shortages for specifically trained workers cut across multiple job sectors, from construction trades to agriculture, manufacturing, information technology and health care.

 

Critics say Trump can’t be promoting apprenticeships while he proposes cutting federal job training funding by as much as 40 percent – from $2.7 billion to $1.6 billion. There also are questions about oversight of apprenticeship programs that begin and operate almost completely under the control of the company.

 

Apprenticeships are few and far between. Of the 146 million jobs in the United States, about 0.35 percent – or slightly more than a half-million – were filled by active apprentices in 2016. Filling millions more jobs through apprenticeships would require the government to massively ramp up its efforts.

 

“Scaling is the big issue,” said Robert Lerman, a fellow at the Urban Institute.

 

Another complication: only about half of apprentices finish their multi-year programs. Fewer than 50,000 people – including 11,104 in the military – completed their apprenticeships in 2016, according to Labor Department.

 

Trump’s resume includes the hit television show, “The Apprentice.”
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The U.S. central bank raised its benchmark interest rate Wednesday amid concerns about sluggish growth, a slowdown in consumer spending and low inflation. But the head of the U.S. Federal Reserve says the one-quarter of 1 percent increase in the federal funds rate demonstrates the committee’s confidence in the overall health of the U.S. economy. Mil Arcega has more.
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The real estate firm owned by the family of Jared Kushner has withdrawn a request for a big tax break for one its buildings in Jersey City, New Jersey, the latest setback for the company in the area.

 

The Kushner Cos. sent a letter withdrawing its application for a 30-year break from city taxes for a planned two-tower project in the struggling Journal Square section of the city, Jersey City spokeswoman Jennifer Morrill said Wednesday. Opponents of the tax breaks marched downtown earlier this year and the city’s mayor recently came out against the Kushner request.

 

Jared Kushner was CEO of the family company before stepping down to become a senior adviser to his father-in-law, President Donald Trump.

Committed to area

 

Kushner Cos. spokesman James Yolles said the company is committed to the “much-needed investment” in that area of the city.

 

The loss of the tax break is the latest blow for the company in a city where it is major real estate developer.

 

The 79-story building, One Journal Square, gained attention last month after Jared Kushner’s sister, Nicole Kushner Meyer, mentioned her brother in a presentation in Beijing where she had hoped to attract Chinese investors in the building. Marketing material noted the “celebrity status” of her family.

 

Government ethics experts blasted the family for what they said was an attempt to profit off Jared Kushner’s position in Washington, and the Kushner Cos. canceled upcoming investor presentations in the country.

 

The company said Meyer wasn’t trying to use her White House ties to attract investors.

EB-5 visa program

 

The Kushner family is seeking 300 wealthy Chinese to invest a total of $150 million in One Journal Square. The family was trying to raise money through the EB-5 visa program that grants temporary U.S. residency to wealthy foreigners in exchange for investments of at least $500,000 in certain U.S. projects

 

The company also is in danger of losing another tax break for the building. The shared office space firm WeWork recently pulled out as anchor tenant. That has put in doubt a state tax break tied to WeWork.

 

Another project is off, too. The Kushner Cos. once considered bidding to develop a 95-acre industrial site along the Hackensack River in the city for housing, called Bayfront. Last month, it was revealed the family had withdrawn from those plans last year.

 

The Kusnher Cos. has said politics had nothing to do with its decision to withdraw from Bayfront, and that “economics of the deal” drove the move.

 

As for One Journal Square, company spokesman Yolles said the project will provide 4,000 construction jobs and $180 million in tax revenue for the city over 30 years.

Tax breaks an issue

 

Jersey City Mayor Steven Fulop, a Democrat, is running for re-election this fall, and tax breaks to developers have become a major issue.

 

Unlike neighboring Hoboken, Jersey City has granted dozens of tax breaks in recent years. Fulop had campaigned to reform the practice, but critics say he has done little.

 

Another Kushner property in the city overlooking the Hudson River got a five-year tax break soon after Fulop was elected mayor. That 50-story building has licensed the Trump name and is called Trump Bay Street. The building was also partly financed with EB-5 visa money from abroad.

 

The Kushner family owns or manages 20,000 apartments, 13 million square feet of office space and industrial properties in several states, including New York, New Jersey, Maryland and Illinois. 
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A new report by the International Labor Organization (ILO) says getting more women into the world labor market would add trillions of dollars to the global economy and boost tax revenues. 

According to the report, the ILO World Employment and Social Outlook: Trends for Women 2017, just more than 49 percent of women globally are in the labor force, a rate nearly 27 percent lower than that for men.

The ILO is calling for a narrowing of the gender gap, which it says is widespread, persistent and substantial, in the world of work. But unfortunately, ILO says, this situation is expected to remain unchanged in 2018.

G-20 commitment

Deborah Greenfield, ILO deputy director for policy, says the Group of 20 (G-20) leaders have committed themselves to reducing the gender gap in work participation rates between men and women by 25 percent by the year 2025.

Greenfield says huge benefits would accrue to women, society and the economy if this goal is met.

“This would have the potential to add $5.8 trillion, measured in U.S. dollars, to the global economy,” Greenfield said. “This could also unlock large potential tax revenues. We estimate roughly $1.5 trillion globally, most of it in emerging and developed countries.”

Areas that would benefit most

The report says North Africa, the Arab states and southern Asia have the lowest number of women in paid labor. It says these regions would benefit most from narrowing the gaps, which exceed 50 percentage points, in participation rates between men and women.

The ILO says society must change its attitudes toward the role of women in the world of work and not fall back on the excuse that it is unacceptable for a woman to have a paid job.
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The sanctions imposed by Saudi Arabia and other Arab states on Qatar have been a blessing for Mohammed Kuwari and his al-Rawa brand of yoghurt. With competing Saudi products off the shelves, his business is booming.

“Our sales doubled! There’s lots of production as you can see and we have a big share in the market now,” said the 30-year-old dairy factory owner.

Previously he struggled to compete against products trucked in from Saudi firms like the Middle East’s biggest dairy, Almarai.

But last week Saudi Arabia, the United Arab Emirates, Egypt and Bahrain imposed an economic and diplomatic boycott on Qatar, accusing the small Gulf state of funding terrorism and cosying up to their enemy Iran, which Qatar denies.

The measures have disrupted imports in Qatar, which buys most of its food from the neighbors that have ostracized it.

Change in trading patterns?

Qatar’s own mostly small consumer businesses say they are finding new suppliers, which could alter established trading patterns in the Gulf.

Plastic and cardboard that Kuwari’s company uses to make packaging are stuck in containers in Dubai, he said.

“We were stunned at first. Our supply of raw materials was completely cut off,” said Kuwari. “But we took action.”

Kuwari says he will terminate contracts for raw materials from the Dubai-based conglomerate JRD international worth 30 million riyals ($8.21 million) a year. Instead he is forging deals with Turkish, Indian and Chinese companies to secure future supplies that will be shipped to Qatar via ports in Oman and Kuwait.

Pulling plug on contracts

Qatar typically imports perishable goods through its land link with Saudi Arabia. Millions of dollars of other goods and materials also come every month via Dubai’s Jebel Ali port which serves as a major re-export hub for the Gulf.

Businesses in Qatar say they are pulling the plug on UAE and Saudi contracts, and don’t expect to resume them even if the diplomatic storm blows over.

“We are not working with them again. They didn’t honor their agreements. Our products are being held up there,” said Ahmed al-Khalaf, chairman of International Projects Development Co. and owner of a Qatari meat processing plant that imports materials from the UAE.

“We may not have many factories in Qatar but we have the money to buy from other sources.”

Richest country

Qatar is the world’s richest country per capita, with just 2.7 million residents and income from the world’s biggest exports of liquefied natural gas. Nearly 90 percent of its population are foreign guest workers, mostly from South Asia or poorer countries in the Middle East.

Dubai offers lower costs and shorter shipping times than many other ports in the Middle East. But Oman’s Sohar port has been trying to compete by expanding its capacity. Business from Qatar could help that effort.

On Monday, Qatar launched two new shipping services to Omani ports as the gas-rich country seeks to secure food supplies closed off by the Saudi-led boycott.

 
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Wind and solar accounted for more than 10 percent of U.S. electricity generation for the first time in March, the Energy Department’s Energy Information Administration said on Wednesday.

Wind and solar power capacity has been growing in the United States, accounting for an average of up to 7 percent of electricity in 2016.

Texas, a wind power giant, accounted for the largest total amount of wind and solar electricity generation in 2016, according to the EIA.

Meanwhile, Iowa ranked as the state with the highest share of renewable energy in its electricity mix, with 37 percent of electricity generation from wind and solar.

A separate report released on Wednesday by Deloitte found that consumer and business preference will continue to drive demand for renewable energy.

The report found that 61 percent of customers wanted a certain percentage of electricity to come from renewable energy.

 

 
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Top officials of the U.S. central bank raised the benchmark interest rate slightly on Wednesday, as the recovering economy no longer seems to need quite as much of the boost it gets from ultra-low rates.

The Federal Reserve raised its short-term rate a quarter of a percent, to a range between one and 1.25 percent.  

To cope with the recession that started in 2007, the Fed cut interest rates nearly to zero, a record low, in a bid to cut the cost of borrowing and encourage economic activity and cut unemployment.  

With the jobless rate cut from 10 percent to just 4.3 percent recently, the recovering economy no longer needs so much help from low interest rates.  Wednesday’s action is just the latest in a gradual series of rate hikes that are moving interest rates back toward the rates usually seen over the past few decades.  

Officials worry that keeping rates too low for too long could spark a burst of inflation that could hurt the economy. Fed officials have been trying to get inflation to rise to a low but manageable rate of about two percent.  The inflation rate remains below this target.  

Fed officials also said they would reduce the central bank’s huge holding of bonds and other securities later this year. During the recession, the Fed purchased $4.3 trillion worth of financial products in a complex bid to further boost growth by cutting long-term rates. The plan calls for gradually reducing these holdings in ways that do not disrupt markets.  

The Fed’s leaders say they expect the world’s largest economy to grow at a 2.2 percent annual rate this year, and expand a bit more slowly in 2018 and 2019. They predict a slight decrease in the unemployment rate, and a slight rise for the inflation rate.
…

China’s three big Internet-driven companies, Alibaba, Tencent, and Baidu, are set to influence a vast section of the country’s business because they control data concerning the consumer and social behavior of millions of people. The awesome power comes from the government’s drive to develop a “big data” industry, which is thriving in China.

Several other players, including utilities like phone companies and retail chains, are also trying to dip into the newly discovered pot of money from buyers who need information to understand buying preferences of potential customers, and design their products and strategies in line with the data flows.

“It [big data] is an improvement to do [a] better job, but unfortunately your [consumer’s] lifeline is more and more dependent on these big three guys,” said Chiang Jeongwen, a professor of marketing at the China Europe International Business School.

Recent studies have shown that nearly 90 percent of China’s 731 million online users have made at least one online purchase, often involving the use of Baidu’s search facilities, e-commerce sites and third-party transactions using mobile phone apps.

Predicting trends

“People are buying things and using their third party payment systems. [That] information [is] also being captured by Tencent and Alibaba. That is huge because now they know both offline and online information of consumers,” said Chiang.

These companies own a wide range of businesses that makes it possible for them to gather both online and offline data that is generated when a customer uses a phone app to make payments at a physical shop.

Alibaba owns Alipay while Tencent runs the highly popular WeChat service which offers mobile payment options. Baidu is China’s biggest internet search engine and holds the kind of influence that Google does in other countries.

“They have diversified the services [that] they offer. Alibaba, they are big in e-commerce. The kind of data they generate comes from anything ranging from what you buy online to your bill payments, travel bookings you do with, for example, the Alipay app,” said Shazeda Ahmed, visiting academic in the technology and economics division of Mercator Institute of Chinese Studies.

“People use the same platforms to make purchases, so there is a sense of extreme power in this situation because you can do all of these on one platform,” she explained.

These companies have a very strong predictive power that comes from a vast store of historical data and real-time data that they are collecting from users of different services. “They kind of able to anticipate the next thing a user might want before the user himself is aware of it,” she said.

Trading in data

The expansion of big data has given rise to serious concerns about the privacy of millions of people, who reveal both their transaction information and facets of social behavior through social media.

China has seen the rise of a black market for data. Data sellers offer a wide range of data on a targeted person, business or community by cracking into official databases and privately run sites.

But Chinese officials insist the government has put in place strong safeguards.

“There is a very strong firewall built before the big data center was established,” Zhang Bin, a senior official of the main big data center established by the Chinese government in Guiyang city. “We also made strict policy to control the data leaks from the government, so these are the two ways to protect information not to be leaked to the private companies for illegal use.”

The government has established a big data exchange center in Guiyang to encourage private and state-run companies to trade in data in a transparent manner, and help the industry find out the real price of the information. The center has come in for some praise by foreign companies who visited it but some questions remain unanswered.

“Having a legitimate place to trade data is an idea, but how does an exchange ensure that the data controllers has to requisite rights to sell data and it’s not breach of privacy?” Gagan Sabharwal, director of the National Association of Software and Service Companies in India, said after a recent visit.
…

Panama’s business community on Tuesday cheered the Central American country’s decision to establish full diplomatic ties with China and ditch Taiwan, hoping to deepen links with a key customer of the nation’s shipping canal.

Although there was regret at the cost to Taiwan, an ally of various Central American nations, there was broad support for President Juan Carlos Varela’s decision to throw his lot in with China, whose growing global ambitions contrast with U.S. President Donald Trump’s isolationist rhetoric.

“I’m sure it wasn’t an easy decision, given the long-term links we’ve had with Taiwan, but nonetheless, [China] is a global superpower, the world’s No. 2 economy, the second biggest user of the canal – and so we think this is a positive development that will result in more business and investment in Panama,” said Inocencio Galindo, president of Panama’s Trade, Industry and Agriculture chamber.

The diplomatic U-turn comes as China attempts to position itself as a defender of free trade in the face of the “America First” policy of Trump, who was elected in November 2016.

Chinese officials also celebrated the news.

Wang Weihua, the permanent representative in the Office of China-Panama Trade Development and Beijing’s top representative in the country, said various attempts had been made over the years without success to establish formal ties.

Late last year, more advanced talks began with Varela’s team that concluded only this week, said Wang, who added he was involved in the discussions.

China is interested in Panama for its strategic location, and as a trade and logistics hub, he added.

“China has made a big bet on Latin America, where it has strategic investments, and Panama, which didn’t have diplomatic relations, was losing out on those advantages,” he said in an interview. “Now Panama will be able to enjoy what our country can offer it in various sectors.”

Almost a fifth of the cargo crossing the isthmus last year went to or from China, which has been taking an increasing interest in the Panama Canal.

In March, the canal’s administrator, Jorge Quijano, said Chinese state firms were considering developing land around the waterway, which was recently expanded.

A spokesman for the canal said Quijano would address the implications of the diplomatic change for commerce on Thursday.

Bright Future

Taiwanese economic aid has helped support Central America, a region in the United States’ backyard that relies heavily on agriculture and struggles with law and order.

Its remaining allies were guarded about what the future held for their ties with Taiwan, which China considers a renegade province.

Panama’s foreign minister, Isabel de Saint Malo, said Varela had expressed an interest a decade ago in establishing ties with China. She hoped the move would lead to trade, investment and tourism opportunities, especially for “exporting more goods from Panama to China.”

According to Panamanian statistics, total trade between Panama and China was worth $1.1 billion in 2016 – roughly 12 times the value of the nation’s commerce with Taiwan. Chinese exports accounted for the vast majority of it.

Alvin Weeden, a former comptroller of Panama, said the decision to break ties with Taipei in favor of Beijing would boost business and should have been taken years ago, given Panama’s reliance on global trade and Chinese shipping.

“Every day, Taiwan is more isolated,” he said, adding he did not expect the move to hurt Panama’s ties with the United States, the top canal customer. “This is a reality that’s happening, a geopolitical reality.”

Octavio Vallarino, a partner of Desarrollos Bahia, a local real estate firm, said he hoped direct flights would soon be established between the two countries, and that the commercial real estate market would be bolstered by arriving Chinese firms.

Sara Pardo, president of Panama’s hotel association, said the accord could help make travel between the two countries easier.

“This is definitely going to strengthen the economy,” she said.
…

Mexico’s ancient civilizations cultivated crops such as maize, tomatoes and chilies for thousands of years before the Spanish conquerors arrived — and now those native plants could hold the key to sustainable food production as climate change bites, said a leading ecologist.

José Sarukhán Kermez, who helped set up Mexico’s pioneering National Commission for the Knowledge and Use of Biodiversity (CONABIO), said that analyzing the genetic variability of traditional crops, and supporting the family farmers who grow most of the world’s food offered an alternative to industrial agriculture.

“We don’t need to manipulate hugely the genetic characteristics of these [crops] … because that biodiversity is there — you have to just select and use it with the knowledge of the people who have been doing that for thousands of years,” said Sarukhán, CONABIO’s national coordinator, in a telephone interview.

The emeritus professor and former rector of the National University of Mexico (UNAM) recently won the Tyler Prize for Environmental Achievement, often referred to as a “Nobel for the Environment.”

Making use of the knowledge held by indigenous groups is “absolutely essential,” Sarukhán told the Thomson Reuters Foundation.

That requires working with a wide range of people, from local cooks to small-scale farmers, especially in states like Oaxaca and Chiapas in the south of Mexico where indigenous farmers have a strong traditional culture, he said.

“They haven’t gone to university, and they don’t have a degree — but they damn well know how to do these things,” he said.

For example, they discover and incorporate new knowledge as they exchange seeds with peers from different areas.

Key is funding

CONABIO is hoping to win some $5 million in funding from the Global Environment Facility for a five-year project worth more than $30 million to speed up research into indigenous crops.

The aim is to enrich the commission’s vast online database of biodiversity, with a view to influencing national agricultural policy, said Sarukhán.

CONABIO’s information on the genetic adaptability of native plants will enable scientists to develop new lines that can tolerate wetter or more arid conditions as the climate changes, he said.

Highlighting the potential of climate-adapted native crops, Sarukhán said around 60 types of maize are grown across Mexico, from the coast to 3,000 meters (9,843 feet) above sea-level, while only a handful of species are sold commercially.

Forest protection

With Mexico’s hugely varied ecosystems and biodiversity under threat, the ecologist urged a greater focus on schemes to boost local incomes rather than giving grants to encourage people to maintain vast swaths of the country’s forest.

Projects like growing organic coffee in Oaxaca’s forests or ecotourism in Chiapas are helping provide communities with a decent income and an incentive to protect the environment, he said.

Rural and indigenous communities own 60 to 70 percent of all Mexico’s forests and natural ecosystems, he noted.

“That is the patrimony they have — they don’t have anything else to live on,” Sarukhán explained. “There are ways in which you can combine the sustainable management of the forest with more attractive incomes for the owners of the forest.”
…

With a record-breaking 26.5 million people going hungry in the Horn of Africa, development banks are increasing their humanitarian funding to fill a gap left by traditional donors, a high-level mission said on Tuesday.

Food rations for 7.8 million Ethiopians are due to run out in July due to funding shortages, while neighboring Somalia is on the verge of its second famine in six years.

In an unprecedented move, the World Bank is giving $50 million to the International Committee of the Red Cross (ICRC) and the U.N. Food and Agriculture Organization to distribute emergency food, water and cash in Somalia.

“We are demonstrating not just that we appreciate the kind of pressure that Somalia is facing but the importance of the humanitarian and development actors working together,” said Mahmoud Mohieldin, a senior World Bank official.

Consecutive failed rains have led to widespread crop failures, hurting farmers and livestock herders across the region, many of whom are hungry and on the move in search of grazing, water and work.

The African Development Bank (ADB) has also announced $1.1 billion to combat drought in six countries, mostly in the Horn of Africa.

Officials from the U.N., World Bank, ADB and African Union held a news conference in Nairobi after meeting displaced people in Ethiopia’s Somali region and Somalia’s Gedo region.

The greatest needs are in Ethiopia, where numbers are predicted to rise due to poor spring rains, and South Sudan, where 5.5 million people are short of food, with some areas already in famine, the U.N. says.

“We have both the biggest food insecurity crisis and the biggest displacement crisis this region has ever faced,” said Dirk-Jan Omtzigt, an analyst with the U.N. Office for the Coordination of Humanitarian Affairs in Nairobi.

The number of refugees and asylum seekers in East Africa has almost tripled to 4.3 million since 2011, he said, driven by conflict, climate change and economic shocks like falling livestock prices during drought.

In a “Grand Bargain,” struck at last year’s World Humanitarian Summit, donors promised to make their funding more flexible to respond to growing humanitarian crises globally.

The World Bank has started funding humanitarians to deliver aid in countries like Somalia and Yemen, where a rapid response is needed but conflict has weakened governments’ ability to reach needy populations, Mohieldin said.
…

Sheltering under planks on his boat moored at a waterside slum in Lagos, fisherman Thomson Pascal is trying to protect his six children from the rain flooding into what is now their new home.

He is one of 30,000 residents who have been living in boats, shacks or in the open since bulldozers escorted by policemen destroyed their slum dwellings as competition for building land heats up in Nigeria’s booming commercial capital.

The site of their former settlement is now guarded by police and young men. A developer has unveiled plans to build a luxury residential and commercial complex there.

As with most things in Lagos, home to 23 million, the housing problem is magnified by the sheer size and energy of Nigeria’s megacity. Space is scarce as a result of new building projects, a high birth rate and the arrival of thousands of people every day from all over the country looking for work.

The Lagos State government said it had evicted the fishing community from the Lekki peninsula because their slum was a hideout for kidnappers and posed a risk to public health.

Authorities ignored a court injunction banning any demolition.

Residents and rights groups say this was an excuse to help a local businessman get rid of a settlement that had existed for decades so he could build more skyscrapers, hotels and malls.

“We don’t have anywhere else to go to. I sleep in this boat with my family,” said Pascal, cradling one of his young children in a makeshift cabin built from wooden planks saved from his former home.

“The government sent police to chase us out of our land with guns,” he said, an account confirmed by other residents and rights groups such as Lagos-based JEI and Amnesty International.

At least two people were killed, residents say.

They ended up in another slum, mooring their boats or moving into already crowded shacks. Locals already struggling to survive refuse to allow the newcomers to catch fish.

“We are too many now, for instance 12 to 15 people sleeping in a small flat,” said Agbojete Johnson, head of Pascal’s new community. “If government is not ready to relocate them … we shall have no other choice than to chase them away.”

Living in a leaky three-room wooden house, Johnson said he struggled to feed his 20 children. “This man has even 32 kids,” he said, pointing to another community leader sitting next to him.

The Lagos state commissioner for information, Steve Ayorinde, did not to respond to phone calls.

Demolition

“The demolition of #OtodoGbame was carried out as a security measure in the overall interest of all Lagosians,” a Lagos State body tweeted in April.

Officials also had warned of an “environmental disaster” after a fire destroyed much of the Otodo Gbame settlement due to a conflict between residents in November.

But residents said youths from another community claiming the land had set their wooden houses on fire while police had prevented them from extinguishing the blaze and later sent in a bulldozer to flatten the wreckage.

That was a month after the Lagos government had set a one-week deadline for the slum dwellers to move out.

A Lagos construction firm has announced plans to build an “eco-friendly” business city for 44 billion naira ($145 million) in the area. It denied, via local media, any involvement in the demolition but confirmed it had approval for the project.

The firm could not be reached for comment.

Police denied any involvement but residents and rights groups say they have seen policemen, including senior officers, during the demolitions.

Population

Nigeria’s population is set to nearly double to 400 million by 2050, making it the third most populous country after China and India, according to U.N. estimates.

Massive building projects, fueled by oil money, are in the works in Lagos. Aliko Dangote, Africa’s richest man, is building an oil refinery and petrochemicals plant, while more luxury flats are planned in Lekki, one of the city’s most desirable areas.

Such projects attract thousands of job seekers every day from across the country. Most Nigerians live in poverty as the oil wealth benefits only a small elite.

Officials say the influx has grown in the past two years due to the failure of several cash-strapped federal states to pay civil servants’ salaries and the Boko Haram Islamist insurgency in the north.

That makes it hard to plan roads, schools or transport in Lagos. By the time a project is finished it must cater to a much larger number of residents than expected.

Liborous Oshoma, a lawyer, said the Lagos government made the problem worse by removing slums to build luxury towers that are too expensive even for people on regular incomes.

“If you see the way Lagos State Government is going about grabbing, you know, waterfronts for the rich, it’s almost as if the Lagos State Government is trying to push out … the poor,” he said. “Many new buildings … are empty.”

The slum clearances have not only uprooted the fishermen.

“I haven’t been back to my school since April as it’s far away and I cannot afford the transport fee of 1,200 naira [$4],” said Edukpo Tina, a 21-year-old university student who has been living in a shack since being evicted from Otodo Gbame. “My daddy is a fishermen while my mum sells fish and none of them is doing their job anymore,” she said.
…

The World Bank on Tuesday approved financing worth more than $500 million for Afghanistan to support a string of projects to boost the economy, help improve service delivery in five cities and support Afghan refugees sent back from Pakistan.

The bank said the six grants, including donor money, worth some $520 million would help the Afghan government “at a time of uncertainty when risks to the economy are significant.”

The international troop withdrawal, which began in 2011, and political uncertainties have impacted Afghanistan’s economy, while a worsening security situation has added to budget pressures, the World Bank said.

“The package will help Afghanistan with refugees, expand private-sector opportunities for the poor, boost the development of five cities, expand electrification, improve food security and build rural roads,” the World Bank said in a statement.

In May, a World Bank report said economic growth in the country was likely to pick up this year but not enough to provide jobs needed by its growing population.

The largest chunk of the package, some $205.4 million, will go toward supporting communities affected by refugees returning from Pakistan, the World Bank said. Some 800,000 Afghans have been sent back from Pakistan and Iran, many of them left to rely on subsistence income in rural areas or low-paid work in towns.

In addition, $100 million will support reforms and business development for the poor; $20 million will go to improving services in five provincial capital cities; $29.4 million will help establish wheat reserves and improve grain storage; and $60 million will boost electricity in the western Herat province.
…

The Trump administration is proposing to curb the authority of the consumer finance watchdog created following the economic crisis as it drives toward easing restrictions on banks and financial institutions.

The Treasury Department issued Monday the first part of a review that was ordered by President Donald Trump in one of his earliest acts as president.

The report reviewing the Dodd-Frank financial oversight law also urges changes to rules for banks that were put in place under the 2010 law. The law aimed to restrain banks – which received hundreds of millions in taxpayer bailouts – from the kind of misconduct that many blamed for the crisis.

The law was enacted by President Barack Obama and Democrats in Congress to tighten regulation after the 2008-09 financial crisis that sparked the Great Recession that cost millions of Americans their jobs and homes.

Trump, however, has called Dodd-Frank a “disaster” that has crimped lending, hiring and the overall economy. He promised to do “a big number” on it.

“Properly structuring regulation of the U.S. financial system is critical to achieve the administration’s goal of sustained economic growth, and to create opportunities for all Americans to benefit from a stronger economy,” Treasury Secretary Steven Mnuchin said in a statement Monday.

The report outlines what it calls core principles of financial regulation – including overhauling the Consumer Financial Protection Bureau and having more “efficient” bank rules.

The CFPB oversees the practices of companies that provide financial products and services, from credit cards and payday loans to mortgages and debt collection. It has been a prime target of Republican lawmakers, who accuse it of regulatory overreach.

The new report urges Congress to remove the agency’s authority to supervise banks and financial companies, returning that power to other federal and state regulators, respectively. And it proposes enabling the president to remove the CFPB director at will without citing a cause for firing. That’s the subject of a battle now in federal court.

The CFPB’s structure and broad regulatory powers have led to “abuses and excesses,” and hindered consumer choice and access to credit, the report says.

The Treasury report comes a few days after the Republican-led House approved sweeping legislation to undo much of Dodd-Frank, repealing about 40 of its provisions. That was passed on a largely party-line vote of 233-186, but is unlikely to clear the Senate in its current form.

The administration’s report is narrower in scope and ambition than the House-passed legislation. It could provide a blueprint for regulators to rewrite the Dodd-Frank rules, as Trump continues to fill out his team of top financial overseers.

Mnuchin said in separate congressional testimony Monday that he expects to be able to work with the regulators on 70 to 80 percent of the proposed changes. But Congress would need to pass legislation to actually revamp the law – for example, to change the CFPB’s authority.

Among the banking rules, the new report focuses closely on the so-called Volcker Rule, established by Dodd-Frank to generally bar banks from trading for their own profit instead of for customers. The idea behind the rule was to prevent high-risk trading bets that could imperil federally insured deposits.

The report proposes exempting from the rule banks with less than $10 billion in assets and those that have over $10 billion with few trading assets. The House legislation would repeal it altogether.

So-called living wills, the plans that big banks must submit to regulators detailing how they would reshape themselves in the event of failure, should be required every two years instead of the current annual mandate, the report says.

Aaron Klein, a Treasury Department official in the Obama administration, said the proposed changes were unlikely to achieve the economic growth Trump is seeking.

“The financial regulatory system isn’t what is stopping 3 percent economic growth,” said Klein, now a fellow at the Brookings Institution. “If you’re looking in the wrong place, you’re not likely to find the answer.” Better for the administration to find ways to promote investment in the U.S., he suggested.

Klein said the changes proposed for the CFPB would inject more politics into financial regulation. He did see some positive ideas, however, such as increased coordination among financial regulators.

Bank industry groups, which had consulted with Mnuchin and other Treasury officials as they prepared the report, expressed approval of it Monday.

Looking outside Dodd-Frank, the report calls for a task force to reconsider the Community Reinvestment Act, a 1977 law designed to monitor banks’ practices in low-income and minority communities, such as new branch openings. Regulators can fine or sanction banks under the law when they find patterns of discrimination.

The law is widely promoted by Democratic lawmakers and community and civil rights groups.
…

Britain’s descent into political crisis just days before Brexit talks begin has sapped confidence among business leaders and infuriated bosses who were already grappling with the fallout from the vote to leave the EU.

The failure by Prime Minister Theresa May to win a parliamentary majority in last week’s election has pushed the world’s fifth largest economy towards a level of political uncertainty not seen since the 1970s.

May called the election to secure a mandate for her vision of a “hard Brexit” – driving down migration by taking Britain out of the single market and the customs union. Instead, she got a hung parliament in which no single party has a majority. Business leaders demanded a re-think.

“The U.K. has had a reputation, earned over the generations, for stability and predictability in its government,” a senior executive at a multi-national company listed on the London FTSE 100 told Reuters on condition of anonymity. “That reputation in 12 months has been destroyed, truly destroyed. First by Brexit and now through this election.”

A survey by the Institute of Directors (IoD) found only 20 percent of its nearly 700 members were now optimistic about the British economy over the next 12 months, compared with 57 percent who were quite or very pessimistic.

The IoD survey, taken after the election, found a negative swing of 34 points in confidence in the economy from its previous survey in May.

“It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could — if not addressed immediately — be disastrous for the U.K. economy,” said Stephen Martin, director general of the IoD.

The collapse in confidence, which follows a short-term drop after last year’s Brexit vote, coincides with a slowdown in the wider economy that has taken hold since the start of this year, as rising inflation pushes up the price of goods.

Figures from credit card firm Visa showed British consumers turned more cautious even before the shock election result, with households cutting their spending for the first time in nearly four years last month.

The Confederation of British Industry (CBI) warned there was now a risk businesses would cut back on investment which has largely held up since last year’s Brexit vote.

And the trade group that represents manufacturers, the EEF, said its members were having to navigate the most uncertain political territory in Britain for decades.

Both groups called on the government to rethink its approach to Brexit, saying the country needed tariff-free access to the single market and a steady flow of migrant workers.

Some executives hoped the political paralysis would lead to a ‘softer Brexit’, with access to markets prioritized over a clamp down on immigration.

“Here we are again: another bolt from the blue, a political earthquake that we didn’t think used to happen in the U.K.,” CBI Director General Carolyn Fairbairn said at a conference hosted by the Resolution Foundation. “But I do think there are opportunities in this, and it is an opportunity to refocus back on the economy to talk about jobs, growth, future prosperity.”

Having slid to its lowest for nearly two months against the dollar on Friday, the pound fell broadly again on Monday.

Left in limbo

Business executives warned the political uncertainty could be felt across a wave of sectors.

Leaders of the drugs industry warned of the hazards of government limbo at a critical time for the highly regulated sector as companies seek clarity on the rules that will govern their business after Brexit.

Andy Bruce, the CEO of Lookers, one of Britain’s biggest car dealerships, said the lack of a clear result meant the highly successful industry had now entered “uncharted waters” in terms of how many new cars it could sell.

And Martin Sorrell, CEO of WPP, the world’s largest advertising agency, told Reuters he feared increased economic uncertainty, which meant “weak investment and postponement of decision making.”

“Now it seems that we could have no deal because of the short time fuse and lack of decisive government decision making, or a soft Brexit, the latter with more movement and membership of the single market,” he said.

Bankers, at the heart of London’s huge financial center, cautioned of the impact on takeover activity.

“So long as uncertainty is there I don’t see that as particularly positive for M&A in the short term,” Karen Cook, chairman of investment banking at Goldman Sachs said at the Reuters Global M&A summit.

Gareth Vale, marketing director at recruitment group Manpower, said its clients were very apprehensive, and had not yet fully grasped the impact that Brexit would have.

“I think the uncertainty around Brexit, and more recently the general election, has created a sense of almost inertia, which has prevented them from considering some of the bigger seismic shifts that are on the horizon.”
…

The Trump administration has a backup plan to keep the government from defaulting on its financial obligations even if Congress misses an August deadline to raise the debt limit, Treasury Secretary Steven Mnuchin told a congressional panel Monday.

Mnuchin had previously set an August deadline for the federal government to avoid a catastrophic default. Mnuchin said he still prefers that Congress increase the government’s authority to borrow before lawmakers leave on a five-week break in August.

However, he said he is “comfortable” that the Treasury Department can meet the government’s financial obligations through the start of September. Private analysts say Mnuchin probably has even greater leeway.

“If for whatever reason Congress does not act before August, we do have backup plans that we can fund the government,” Mnuchin said without elaborating. “So I want to make it clear that that is not the timeframe that would create a serious problem.”

The federal government technically hit the debt limit in March, but Treasury has been using accounting steps known as “extraordinary measures” to avoid a default.

Shortly before Mnuchin testified, a Washington think tank projected that despite the slowdown in revenues, the government will have enough cash to pay its bills until October or November.

The Bipartisan Policy Center says that revenue results from this month’s quarterly tax payments could clarify the deadline, but for now it forecasts that Mnuchin has sufficient maneuvering room to keep the government solvent into the fall. The policy center says a big Oct. 2 payment into the military retirement trust fund could trigger default.

As of Friday, the Treasury had a cash balance of $148 billion, down from $204 billion a month ago. The national debt is nearly $20 trillion, including money owed to several federal programs.

Vote on debt limit

Raising the debt limit has become a politically-charged vote in Congress, even though economists believe that an unprecedented default would be catastrophic for the economy. Republicans, who control Congress and the White House, are struggling to come up with a strategy to raise the debt limit, with some GOP members demanding spending cuts in exchange for their vote.

But since Republicans have many members who simply refuse to vote for a debt increase, GOP leaders such as Speaker Paul Ryan of Wisconsin may have no choice but to seek help from Democrats, who are demanding that any debt limit hike be “clean” of GOP add-ons.

Lawmakers are trying to deal with the debt limit while at the same time a House panel is beginning work on spending bills to fund the government.

Republicans controlling the House are taking the first steps to approve President Donald Trump’s big budget increase for veterans’ health care and the Pentagon.

Spending bill

At stake is an $89 billion spending bill for the Department of Veterans Affairs and Pentagon construction projects that’s scheduled for a preliminary panel vote on Monday. The bill would give the VA a 5 percent budget hike for the budget year beginning in October as the agency works to improve wait times and correct other problems.

The Defense Department, meanwhile, would receive a $2 billion, 10 percent increase for military construction projects at bases in both the U.S. and abroad.

“This legislation includes the funding and policies necessary to deliver on our promises to our military and our veterans,” said House Appropriations Committee Chairman Rodney Frelinghuysen, a Republican from New Jersey.

Republicans are still struggling to come up with a broader budget that would dictate spending levels for other agencies. Trump has proposed sharp cuts to many domestic agencies and foreign aid as a means to pay for increases for the military. But many GOP lawmakers have already signaled that they disagree with Trump.

Under Washington’s arcane budget rules, lawmakers are first supposed to pass an overall fiscal blueprint called a budget resolution before tackling the annual round of spending bills. This year, that budget plan is also the key to unlocking action later this year on legislation to overhaul the tax code, a top GOP priority.

Instead, Republicans are split into three camps on spending: defense hawks who want even more money for the military than proposed by Trump; pragmatists who are defenders of domestic programs; and conservatives who agree with Trump’s plan to cut domestic agencies and deliver the proceeds to the Pentagon.

For now, those GOP divisions have meant an impasse for Trump’s overall budget and tax agenda.
…

Israel will reduce electricity supplies to the Gaza Strip after the Palestinian Authority limited how much it pays for power to the enclave run by Hamas, Israeli officials said Monday.

The decision by Israel’s security cabinet is expected to shorten by 45 minutes the daily average of four hours of power that Gaza’s 2 million residents receive from an electricity grid dependent on Israeli supplies, the officials said.

The West Bank-based Palestinian Authority (PA) blamed Hamas’ failure to reimburse it for electricity for the reduction in power supplies.

But PA spokesman Tareq Rashmawi coupled that explanation with a demand that Hamas agree to Palestinian President Mahmoud Abbas’ unity initiatives, which include holding the first parliamentary and presidential elections in more than a decade.

“We renew the call to the Hamas movement and the de facto government there to hand over to us all responsibilities of government institutions in Gaza so that the government can provide its best services to our people in Gaza,” he said.

Hamas spokesman Fawzi Barhoum said Israel and the Palestinian Authority “will bear responsibility for the grave deterioration” in Gaza’s health and environmental situation.

Any worsening to Gaza’s power crisis — its main electrical plant is off-line in a Hamas-PA dispute over taxation — could cause the collapse of health services already reliant on stand-alone generators, many of them in a poor state of repair, said Ashraf al-Qidra, spokesman for the Health Ministry in Gaza.

Israel charges the PA 40 million shekels ($11 million) a month for electricity, deducting that from the transfers of Palestinian tax revenues it collects on behalf of the Authority.

Israel does not engage with Hamas, which it considers a terrorist group.

Last month, the Palestinian Authority informed Israel that it would cover only 70 percent of the monthly cost of electricity that the Israel Electric Corporation supplies to the Gaza Strip.

At the security cabinet session late on Sunday, ministers decided that Israel would not make up the shortfall, the officials said.

“This is a decision by [Abbas] … Israelis paying Gaza’s electricity bill is an impossible situation,” Israeli Public Security Minister Gilad Erdan said on Army Radio.

Israeli military and security chiefs backed the move, despite concern Hamas could respond by increasing hostilities with Israel.

Hamas seized control of the Gaza Strip from Abbas’s Fatah movement in 2007, and several attempts at reconciliation, most recently in 2014, have failed. Hamas has accused Abbas of trying to turn the screw on them to make political concessions.
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