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Argentina’s President Mauricio Macri vowed to press ahead with reforms to the country’s tax, labor and retirement systems in a speech on Monday, a week after his “Let’s Change” coalition swept to victory at the polls in midterm elections.

The government will present a tax reform proposal this Tuesday or Wednesday, and an amnesty plan for companies that hired workers informally in the coming days, Macri said. He added that the government would convene a commission to propose changes to the retirement system in coming weeks.

The speech marked a roadmap for the second half of Macri’s four-year term, as he seeks to implement business-friendly reforms to attract investors who avoided the country during more than a decade of populist rule.

“We need lower taxes, more public works, and all this we need to achieve with fiscal balance,” Macri told a gathering of lawmakers, governors, union leaders, judges and others.

Investors have been encouraged by the reforms Macri has implemented since taking office in December 2015, including lifting foreign exchange controls, settling with holdout creditors, and lowering export taxes.

But significant investment has not arrived. Companies have demanded lower costs, while credit agencies are concerned about a deep fiscal deficit.

Macri’s coalition swept the five most populous areas in midterm elections, giving him a broader mandate to pass reforms, though it still lacks majorities in both chambers of Congress.

Macri said his government had reduced the country’s tax burden, and wanted to make the system “simpler, clearer, and fairer.”

He reiterated the government’s aim of slashing Argentina’s fiscal deficit by one percentage point of gross domestic product per year.

And he also vowed to reform the country’s retirement system, a large driver of government spending.

“We need to start a mature and honest conversation about our retirement and pension system,” Macri said. “Our retirement system hides serious inequities, and it is not sustainable.”

While Macri has said he does not plan major changes to the country’s labor code, he has said the government plans to provide incentives to companies to formalize undeclared workers and work with unions in specific sectors to lower costs.

Macri also pledged reforms to the country’s justice system to combat corruption. Cabinet Chief Marcos Pena told journalists that the resignation on Monday of chief prosecutor Alejandra Gils Carbo, appointed during the former administration of President Cristina Fernandez, was a step towards making the judiciary more independent.
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Chile’s frontrunning center-right presidential candidate, Sebastian Pinera, on Monday unveiled a $14 billion, four-year spending plan focused on proposed reforms to the country’s tax and pension systems and new investments in infrastructure and hospitals.

The former president, who governed from 2010 to 2014, said he would pay for his proposals by cutting “unnecessary” government spending and simplifying the tax code to encourage investment and boost growth and the country’s coffers.

Recent opinion polls show Pinera, 67, with a wide lead over his seven rivals in the Nov. 19 first-round election. Pinera would also beat his two closest contenders, leftists Alejandro Guillier and Beatriz Sanchez, in a runoff if no candidate receives at least 50 percent of the vote, according to pollster CEP last week.

Guillier, the frontrunner on the left, has yet to put a price tag on his proposals, which track the policies of outgoing center-left President Michelle Bachelet. Sanchez has proposed a $13.4 billion plan of deeper social and economic reforms, paid for in part by a tax on the “super-rich.”

The 67-year-old Pinera, a billionaire who has campaigned on a program of fiscal austerity, is benefiting from disenchantment with Bachelet, whose program of progressive reforms coincided with a downturn in the price of copper, which can account for as much as 15 percent of gross domestic product in Chile, the world’s top producer.

“Half of the financing for my program will come from reallocations drawn from ineffective government programs … and a reduction of unnecessary spending in the public sector,” Pinera said in a 124-page paper detailing his proposals.

Pinera’s plan to reform the pension system would cost about $3 billion and include new subsidies to raise pensions for women and the middle class, as well as incentives to encourage workers to retire later, Pinera said in the document.

The current retirement system, introduced in the 1980s during Augusto Pinochet’s dictatorship, was historically seen as a model by many economists, but it has been criticized in recent years on a number of fronts, including what many see as insufficient payouts.

Pinera, a businessman-turned-politician, has also called for a $2.7 billion overhaul of Bachelet’s tax reform, to provide “more certainty and incentives for saving and investment,” as well as $3 billion of investment in hospitals and infrastructure.
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The leaders of Azerbaijan, Turkey and Georgia launched an 826-km (500-mile) rail link connecting the three countries on Monday, establishing a freight and passenger link between Europe and China that bypasses Russia.

The line, which includes 105 km of new track, will have the capacity to transport one million passengers and 5 million tons of freight.

The three countries are linked by the BP-led Baku-Tbilisi-Ceyhan oil pipeline and the Baku-Tbilisi-Erzurum gas line, but trade links between Turkey and the Caucasus region are limited. The new Baku-Tbilisi-Kars railway (BTK) promises to provide an economic boost to the region.

“Baku-Tbilisi-Kars is part of a big Silk Road and it’s important that we have implemented this project using our own funds,” Turkish President Tayyip Erdogan said at the railway’s inauguration ceremony attended by Azeri President Ilham Aliyev and Georgian Prime Minister Giorgi Kvirikashvili.

Starting in Baku, the capital of Azerbaijan, trains will stop in the Georgian capital Tbilisi, pass through gauge-changing facilities in the Georgian town of Akhalkalaki and end their journey in the Turkish town of Kars.

The project’s total cost rose to more than $1 billion from an initial estimate of about $400 million. The bulk of that financing came from Azerbaijan’s state oil fund.

The rail link between Azerbaijan and Georgia was modernized under the project, which was launched in 2007. Its completion had been postponed several times since 2011.

“Several European countries have expressed an interest in this project and Azerbaijan is in talks with them,” Aliyev said, adding Kazakhstan and other countries in Central Asia were interested in transporting their goods via the BTK.

The new link will reduce journey times between China and Europe to around 15 days, which is more than twice as fast as the sea route at less than half the price of flying.

Trains can depart from cities in China, cross into Kazakhstan at the Khorgos Gateway, be transported across the Caspian Sea by ferry to the New Port of Baku and then be loaded directly onto the BTK and head to Europe.
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The African Development Bank has called off a loan to Nigeria that would have helped fund the country’s budget, instead redirecting the money to specific projects, a vice president at the lender said on Monday.

The African Development Bank had been in talks with Nigeria for around a year to release the second, $400 million tranche of a $1 billion loan to shore up its budget for 2017, as the government tried to reinvigorate its stagnant economy with heavy spending.

But Nigeria refused to meet the terms of international lenders, which also included the World Bank, to enact various reforms, including allowing its currency, the naira, to float freely on the foreign exchange market.

Rather than loan Nigeria money to fund its budget, the African Development Bank is likely to take at least some of that money and “put it directly into projects,” Amadou Hott, African Development Bank vice president for power, energy, climate change and green growth, told Reuters in an interview during a Nordic-African business conference in Oslo.

Because prices for oil, on which Nigeria’s government relies for about two-thirds of its revenues, have risen and the naira-dollar exchange rate has improved, the country is relying less than expected on external borrowing, Hott said.

No one from the Nigerian finance ministry was immediately available to comment.

Nigeria’s 2017 budget, 7.44 trillion naira, is just one in a series of record budgets that the government has faced obstacles funding, pushing it to seek loans from overseas.

In late 2016, the AfDB agreed to lend Nigeria a first tranche of $600 million out of $1 billion. But negotiations over economic reform later bogged down, blocking attempts to secure the second tranche of $400 million, sources told Reuters then.

Now, AfDB’s loans will be more targeted, Hott said.

“It’s hundreds of millions of dollars, just in one go, that we were supposed to provide in budget support, but we will move into real projects … ” he said.

Earlier this month, the head of Nigeria’s Debt Management Office said the country is still in talks with the World Bank for a $1.6 billion loan, which will help plug part of an expected $7.5 billion deficit for 2017.

The administration is also trying to restructure its debt to move away from high-interest, naira-denominated loans and towards dollar loans, which carry lower rates.
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U.S. President is expected to nominate Federal Reserve Governor Jerome Powell as the next chairman of the central bank, senior administration officials said Monday.

Powell is a Republican centrist who appears inclined to continue the Fed’s strategy of gradual interest rate hikes.

But officials say Trump hasn’t made up his mind and could change it.

Powell would represent a middle-ground pick for Trump, who is also considering current Democratic Fed Chair Janet Yellen as well as Stanford University economist John Taylor and former Fed Governor Kevin Warsh.

Powell could, however, relax some of the stricter financial rules that were enacted after the 2008 financial crisis. Trump has complained that those rules have been too restrictive.

The decision over the Fed’s next leader is overshadowing this week’s meeting of the Federal Reserve’s policy meeting.

Trump said Friday he has “someone very specific in mind” for the Fed. “It will be a person who, hopefully, will do a fantastic job,” Trump said in a short video message posted on Instagram and Twitter.

Many conservative members of Congress had been pushing Trump to select Taylor, rather than Powell, for Fed chairman. Taylor, one of the country’s leading academics in the area of Fed policy, would likely embrace a more “hawkish” approach — more inclined to raise rates to fight inflation than to keep rates low to support the job market. Taylor is the author of a widely cited policy rule that provides a mathematical formula for guiding rate decisions. By one version of that rule, rates would be at least double what they are now.

 

Yellen, who was selected as Fed chair by President Barack Obama, has been an outspoken advocate for the stricter financial regulations that took effect in 2010 to prevent another crisis.
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President Donald Trump’s plan for overhauling the U.S. tax system faced growing opposition from interest groups on Sunday, as Republicans prepare to unveil sweeping legislation that could eliminate some of the most popular tax breaks to help pay for lower taxes.

Republicans who control the U.S. House of Representatives will not reveal their bill until Wednesday. But the National Association of Home Builders, a powerful housing industry trade group, is already vowing to defeat it over a change for home mortgage deductions, while Republican leaders try to head off opposition to possible changes to individual retirement savings and state and local tax payments.

Trump and Republicans have vowed to enact tax reform this year for the first time since 1986. But the plan to deliver up to $6 trillion in tax cuts for businesses and individuals faces challenges even from rank-and-file House Republicans.

House and Senate Republicans are on a fast-track to pass separate tax bills before the Nov. 23 U.S. Thanksgiving holiday, iron out differences in December, send a final version to Trump’s desk before January and ultimately hand the president his first major legislative victory. Analysts say there is a good chance the tax overhaul will be delayed until next year.

The NAHB, which boasts 130,000 member firms employing 9 million workers, says the bill would harm U.S. home prices by marginalizing the value of mortgage interest deductions as an incentive for buying homes. The trade group wants legislation to offer a $5,500 tax credit but says it was rebuffed by House Republican leaders.

“We’re opposed to the tax bill without the tax credit in there, and we’ll be working very aggressively to see it defeated,” NAHB chief executive Jerry Howard told Reuters.

Republicans warned that the Trump tax plan is entering a new and difficult phase as lobbyists ramp up pressure on lawmakers to spare their pet tax breaks.

“When groups start rallying against things and they succeed, everything starts unraveling,” Senator Bob Corker, a leading Republican fiscal hawk, told CBS’ Face the Nation.

Anxiety in high-tax states

One of the biggest challenges involves a proposal to eliminate the federal deduction for state and local taxes (SALT), which analysts say would hit upper middle-class families in high income tax states such as New York, New Jersey and California. The states are home to enough House Republicans to stymie legislation.

The top House Republican on tax policy gave ground over the weekend, saying he would allow a deduction for some local taxes to remain.

“We are restoring an itemized property tax deduction to help taxpayers with local tax burdens,” House Ways and Means Committee Chairman Kevin Brady said in a statement.

But the gesture appeared to do little to turn the tide of opposition to SALT’s elimination.

“I’m not going to sign onto anything until the full package is fully analyzed by economists,” Representative Peter King of New York told the Fox News program Sunday Morning Futures. “The fact that we’re getting it at the eleventh hour raises real issues with me,” he added.

A lobby coalition representing state and local governments, realtors and public unions rejected Brady’s statement outright, saying the move would “unfairly penalize taxpayers in states that rely significantly on income taxes.”

House Republicans have also faced opposition from Trump and others after proposing to sharply curtail tax-free contributions to 401(k) programs and move retirement savings to a style of account that allows tax-free withdrawals, rather than the tax-exempt contributions that are popular with 401(k) investors.

House Republicans now say they could permit higher 401(k) contribution limits but continue to talk about tax-free withdrawals. “We will expand the amount that you can invest. But we’ll also give you an option to actually not be taxed later in life,” House Republican leader Kevin McCarthy told Fox News.

The current cap on annual 401(k) tax-free contributions is $18,000.

Corker said congressional tax committees seem to be falling short of their goal to eliminate $4 trillion in tax breaks to prevent the Trump plan from adding to the federal deficit.

“They’re having great difficulty just getting to $3.6 trillion,” said the Tennessee Republican, who has vowed to vote against tax reform if it increases a federal debt load that stands at more than $20 trillion.

Ohio’s Republican governor, John Kasich, told Fox News Sunday that spending on entitlement programs such as Medicare, Medicaid and Social Security should also be reviewed as part of the effort to pay for tax cuts.

“It may be separate from the tax bill, but it needs to happen,” Kasich said.
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Xavier Gabriel can take some credit if the tiny Catalan mountain town of Sort is one of the most famous in Spain.

He runs a lottery shop called La Bruja de Oro, or The Golden Witch, in a town whose name, aptly, means “Luck” in Catalan. Its fortune in having sold many prize-winning tickets has made it a household name and a successful online business.

But the crisis surrounding Catalonia’s push for independence has changed life for 60-year-old Gabriel. He joined more than 1,500 companies in moving their official headquarters out of the wealthy region in recent weeks. Their main fear: that they would no longer be covered by Spanish and European Union laws if Catalonia manages to break away, dragging their businesses into unknown territory.

“The time had come to make a decision,” said Gabriel, who employs 16 people and describes himself as a proud Catalan.

​Hedging their bets

Like Gabriel’s, the vast majority of companies that moved their headquarters didn’t transfer workers or assets, such as bank holdings or production equipment. So far, it’s mainly a form of legal insurance. But as the political crisis escalates, the risk is that companies are deferring investments and hiring. There is evidence that tourists are holding off booking, perhaps frightened by images in the media of police crackdowns, street demonstrations and strikes.

And the situation risks getting worse before it improves: the central government’s decision Friday to take control of the region could spiral out of control if there is popular resistance, whether by citizens or local authorities like the Catalan police force.

“There is absolutely no doubt that the crisis is having a very damaging effect on the economy,” said Javier Diaz Gimenez, an economics professor at Spain’s prestigious IESE Business School.

Financial markets in Spain have so far fallen only modestly, reflecting investors’ apparent belief that the tensions will eventually be resolved. The Spanish government has called a regional election in Catalonia for Dec. 21 and could later consider revisions to the constitution that might placate some of the independence supporters.

But that could take some time, Diaz Gimenez says, given how confrontational both sides have been.

Banks leave

The list of businesses moving headquarters includes Catalonia’s top two banks, Caixabank and Sabadell, which are among Spain’s top five lenders. Then there is the Codorniu cava sparkling wine maker for which Catalonia is famous. Another well-known cava maker, Freixenet, is also planning to follow if the independence drive continues. Publishing giant Planeta, the world’s leading Spanish-language publisher and second biggest publisher in France, has also moved its official address out of Catalonia.

Caixabank says it suffered a moderate but temporary run on deposits because of the crisis, but said it has since recovered and was adamant the move was permanent.

Shares for Caixabank, Sabadell and some other companies have been volatile, falling after the Oct. 1 vote for independence and jumping sharply when they announced their decision to move headquarters.

Tip of the iceberg

Lottery shop owner Gabriel says ticket sales this month are up nearly 300 percent over last year, a rise he attributed to popular support for his decision to move his business.

Diaz Gimenez said the decisions to move headquarters, while not immediately affecting jobs, were “just the tip of the iceberg.”

“Plans to relocate firms or invest elsewhere are going to accelerate and some of it is going to go to, say, Poland, and it’s never going to come back,” he said.

“People that were thinking about investing in Spain and Barcelona are starting to think again,” he said. “It’s not just Catalonia. It’s the mismanagement by Spain, which is proving that it’s not a serious country because it cannot solve this thing.”

Spanish economy humming

The turmoil, ironically, comes just as Spain has been enjoying some of the fastest economic growth in Europe.

Its economy, the fourth-largest in the 19-country eurozone, grew by a hefty quarterly rate of 0.9 percent in the second quarter. The government has maintained its forecast for growth in 2017 at 3.1 percent, but revised its estimate for 2018 from 2.6 percent to 2.3 percent because of the political crisis. Moody’s credit rating agency has warned that a continued political impasse and, ultimately, independence for Catalonia would severely hurt the country’s credit rating.

Billions at stake

Tourism seems to be taking the biggest hit so far.

Experts say spending in the sector in Catalonia in the first two weeks of October — that is, following the independence referendum — was down 15 percent from a year earlier.

Tourism represents about 11 percent of Spain’s 1.1-trillion euro ($1.3 trillion) gross domestic product, with Catalonia and its capital, Barcelona, providing a fifth of that, being the most popular destinations for visitors.

Exceltur, a nonprofit group formed by the 25 leading Spanish tourist groups, expects growth in tourism this year to ease from an estimated 4.1 percent to 3.1 percent.

Reservations in Barcelona alone are down 20 percent compared with last year, it said. If the trend continues in the final three months of the year, it could lead to losses of up to 1.2 billion euros ($1.41 billion) in the sector, which in turn could affect jobs.

Analysts fear that the independence movement’s stated aim of continuing to create as much social and economic chaos for Spain as possible could exacerbate the situation. The Catalan National Assembly group has been openly talking about a boycott against Spain’s top companies and major strike activity.

“Spain, its tourism, everything is very dependent on image,” Diaz Gimenez said. “And this is just killing it.”
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At the 2015 Paris summit, world leaders pledged to take steps to avoid catastrophic climate change. This November in Bonn, Germany, U.N. negotiators will be back, working out the details of how to cut emissions of planet-warming gases. It is the first conference since President Donald Trump said the United States would withdraw from the agreement. That leaves questions about the direction of U.S. greenhouse gas emissions. As VOA’s Steve Baragona reports, the answer is not straightforward.
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Artisans in Mali are hoping that Bogolan, a traditional cotton fabric, will continue to fascinate Western fashion designers and provide jobs at home. VOA’s Teffera Girma Teffera and Bagassi Koura visited a small neighborhood in central Bamako where artisans are hard at work. Salem Solomon narrates.
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Things are weird, as usual, in Key West.

A pair of Vikings push a stroller full of stuffed chimps down Duval Street. A man with a ponytail swallows a steel sword. People dressed only in body paint and glitter wander and jiggle from bar to bar.

Fantasy Fest, one of Key West’s major tourist draws of the year, is in full swing. And that’s a relief for Florida Keys business owners trying to weather the economic storm that hit after Hurricane Irma battered the middle stretch of the tourism-dependent island chain.

Bucket list trip

The festivities have not disappointed Gary Gates from Buffalo, New York, who planned this “bucket list” trip 10 months ago with six friends.

“We were coming whether there was a hurricane or not,” the former NFL cameraman said. “I’ve never seen anything quite like this. To come down here and actually see people dressed in all kinds of costumes — or no costumes at all — was something that I needed to see.”

Gates flew into Key West and has not left during its annual 10-day festival of costume parties and parades, so he has not seen the devastation that lingers more than a month since Hurricane Irma made landfall Sept. 10 about 20 miles north of the city.

​Middle Keys hit hardest

The mostly residential middle stretch of the island chain took the brunt of the hurricane’s 130-mph winds. The area is almost entirely brown, with debris piled alongside the highway and mangroves stripped bare. A stranded boat was christened the SS Irma with spray paint and offered “free” to drivers passing by.

But at opposite ends of the 120-mile-long island chain, tourist attractions in Key Largo and Key West escaped significant damage.

Dolphins Plus Bayside was ready for visitors three days after Irma’s landfall, but business has been down by half compared to last fall, said Mike Borguss, the third generation in his family to run the Key Largo attraction.

Some staff now live with friends or in temporary trailers parked outside their damaged homes, but the dolphins swim up to the water’s edge to check out new people toting cameras, and an adjacent hotel property is open for weddings and other events that had to be canceled elsewhere in the Keys because of Irma, said Art Cooper, Borguss’ cousin and curator at Dolphins Plus Bayside.

“The water’s pretty, the weather’s beautiful and we wish you were here,” Cooper said.

​Tourism down significantly

Scott Saunders, president and CEO of Fury Water Adventures, estimated tourism in Key West has been about a third of what it was at this time last fall, even though the city’s hotels, restaurants, cruise ship operations and beaches quickly reopened after the storm.

“There’s no reason not to be doing everything we did last year,” Saunders said before one of his fleet’s sunset cruises. “We should be having that tourist base down here, but we haven’t had any.”

Jodi Weinhofer, president of the Lodging Association of the Florida Keys and Key West, blames news coverage of Irma, but not the hurricane itself, for the downturn.

“There was over a $100 million worth of negative press,” Weinhofer said.

Tourism big business in Keys

Tourism is a $2.7 billion industry in the Keys, supporting 54 percent of all jobs in the island chain, according to Monroe County’s Tourist Development Council.

Some jobs have been lost to Irma. Last week, Hawks Cay Resort on Duck Key, about 35 miles northeast of Irma’s landfall, let go 260 workers amid ongoing repairs. The Islamorada Resort Company said its four properties in the Middle Keys will be closed for renovations over the next six months.

But up and down the island chain, bars, marinas and mom-and-pop establishments able to reopen have been hiring laid-off workers and keeping people from moving away, Daniel Samess, CEO of the Greater Marathon Chamber of Commerce.

About 70 percent of roughly 35 hotels and motels in the Middle Keys are open, though those rooms mostly are filled by displaced residents and state and federal recovery workers. Officials plan to provide alternative housing and open those hotel rooms fully to tourists within the next two months, Samess said.

Final sweeps for debris in some parts of the Keys are scheduled Sunday, which also is the finale for Fantasy Fest. So far, the amount of broken tree branches and remnants of homes and belongings wrecked by Irma could fill over 133 Goodyear Blimps, according to Monroe County officials.

The cleanup will help create a good impression for visitors to Key West long before they arrive in the southernmost city in the continental U.S., said Key West Mayor Craig Cates.

“It’s a scenic cruise in your car coming down, and it’s very important that they get it cleaned up,” he said.
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