YCLOAK

Uzbekistan and Afghanistan signed an agreement Tuesday to extend a railroad connecting the two countries in a move that may eventually give Uzbekistan a direct link to seaports.

Landlocked Uzbekistan’s access to marine shipping is very limited.

In 2011, the Uzbek state railway company, Ozbekiston Temir Yollari, built a short link between Hairatan, a town on the Uzbek-Afghan border, and Mazar-i-Sharif, a major city in northern Afghanistan.

Tashkent has since expressed interest in extending that line to Herat, another Afghan city in the northwest, and a gateway to Iran. 

Another link, already under construction, will connect Herat to Iran, which may eventually enable Uzbekistan to send cargoes to and from its Persian Gulf ports.

Uzbek President Shavkat Mirziyoyev’s office said in a statement that he and visiting Afghan President Ashraf Ghani had signed an agreement on the construction of the Mazar-i-Sharif-Herat railroad. It provided no details, such as cost and funding.

The original, short link was almost fully financed by the Asian Development Bank, which has also financed studies for the expansion project.

Mirziyoyev and Ghani also signed 20 other deals, including an agreement on the construction of a new electric power line and deals for supplies of Uzbek agricultural products, medicines and other goods to Afghanistan.
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The European Union named and shamed 17 states that it accuses of being tax havens Tuesday, and put another 47 countries on notice that they risk being blacklisted, too, unless they start tackling tax evasion.

The blacklist was agreed on after 10 months of investigations and diplomatic wrangling, but transparency activists say it doesn’t go far enough.

After a meeting in Brussels, EU finance ministers announced the blacklist.

The list doesn’t include any European countries, but does name several Caribbean islands, including former British colonies Barbados, Grenada, and Trinidad and Tobago — a reflection, analysts say, of Britain’s reduced political clout in the European Union.

Completing the list are American Samoa, Bahrain, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Tunisia and the United Arab Emirates.

Countries on the list could lose access to EU funds and face further as-yet-undetermined sanctions from the economic bloc.

“To be on a blacklist is, in itself, bad enough and, of course, there will be consequences for these countries,” said Luxembourg’s finance minister, Pierre Gramegna.

Immediate consequences will be felt by multinationals that do business with any of the blacklisted jurisdictions, as they will face additional and burdensome financial disclosure requirements.

The EU move, part of a broader effort to tackle tax evasion, comes less than a month after the publication of the so-called Paradise Papers, an investigation by nearly 100 media outlets into a leak of 13.4 million files from two offshore service providers.

British officials drew comfort from the exclusion of the Cayman Islands and Bermuda from the list; but their omission prompted an outcry from transparency activists, who dubbed the exercise a “whitewash.”  Other transparency campaigners, including Oxfam, argue the blacklist should have included well-established EU tax havens: Ireland, Luxembourg, the Netherlands and Malta, as well as Switzerland.

Another 47 jurisdictions were included Tuesday in a “grey list.” Among those are other British-tied jurisdictions, the Isle of Man and Jersey. The finance ministers deemed them as not currently compliant with EU standards, but all have formally committed to changing their tax rules.

Critics of list

The Tax Justice Network, an advocacy group that campaigns against tax avoidance and corruption, said the European Union had flunked the tax haven test, arguing it had missed an opportunity.

“The list appears to be a politically-led list, that includes only the economically weak and politically unconnected,” it said. The blacklist is hard to take seriously, it added, saying, “EU members like the Netherlands, Ireland and Luxembourg are the greatest procurers of global profit-shifting, but are excluded.”

Pierre Moscovici, the European commissioner for economic and financial affairs, dismissed the complaints, describing Tuesday’s naming and shaming as a vital “first step.”

“This list represents substantial progress. Its very existence is an important step forward,” he said, adding, “It is the first EU list; it remains an insufficient response to the scale of tax evasion worldwide.”

Toomas Toniste, Estonia’s finance minister, agreed that the list was an important step.

“This initiative is already proving its value, as numerous countries have worked to meet the deadline for making commitments on the basis of our criteria,” he said.

Pushing for change

In the past few weeks, countries at risk of inclusion have been scrambling to promise reforms. To remain off the list, countries had to promise to implement “fair tax rules,” which Brussels defines as not offering preferential treatment for companies enabling them to move profits to avoid taxes elsewhere. They also had to pledge to meet international transparency standards of the Organization for Economic Co-operation and Development, or OECD.

Hours before the list was announced, officials from Panama, Samoa, Guam and the Marshall Islands said they thought they had done enough to escape being blacklisted. Several of the named Caribbean islands appealed for exclusion on the basis of the devastation they suffered this year from hurricanes. Several other hurricane-impacted Caribbean islands have been put on probation and their cases will be addressed in February.

Meanwhile, opposition lawmakers in Britain accused the British government of being weak on tax avoidance, criticizing London’s diplomatic efforts to persuade EU finance ministers to go easy on the Caribbean islands. Liberal Democrat leader Vince Cable accused Downing Street of helping the super-rich hide their cash.

Cable argued the British government had a long history of “dragging its heels” when it comes to tax havens, saying he witnessed a lack of action when he was in government.

“Some Caribbean islands in particular were operating to very poor standards, sometimes to the cost of the British government,” the former business secretary said.

British officials dismiss such accusations, saying London is at the forefront of tackling avoidance and ensuring tax transparency.
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The government of Brazil’s President Michel Temer is far from assembling the coalition needed to pass a landmark pension reform, but potential supporters of the measure are now more organized, a key legislator said on Monday.

“We’re still enormously far (from having the needed votes), but we have a party leader committed, a party president committed, one party that’s set to commit,” Brazil’s lower house speaker, Rodrigo Maia, told journalists after an event in Rio de Janeiro.

Pension reform is the cornerstone policy in President Temer’s efforts to bring Brazil’s deficit under control. But the measure is widely unpopular with Brazilians, who are accustomed to a relatively expansive welfare net.

In order to curry support from Congress, Temer and his allies watered down their original proposal in November, requiring fewer years of contributions by private sector workers to receive a pension.

According to several government sources, Temer’s allies have grown more optimistic in the last week about the reform’s chances.

However, speed is essential for the bill’s passage. A congressional recess begins on Dec. 22, and lawmaking thereafter will be hampered by politics, as lawmakers ramp up their campaigns for 2018 elections.
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The finance ministers from the 19 countries that use the euro are deciding who should lead their regular meetings, with Portugal’s Mario Centeno widely tipped to take the helm of a group that has led the currency bloc’s crisis-fighting efforts.

The decision of who will succeed Dutchman Jeroen Dijsselbloem as president of the so-called eurogroup is expected later Monday. Dijsselbloem, who has held the post for nearly five years, has been one of the most high-profile European politicians during a period that saw a number of countries, notably Greece, teeter on the edge of bankruptcy and the euro currency itself come under threat.

Three other candidates are in the frame, too: Luxembourg’s Pierre Gramegna, Slovakia’s Peter Kazimir and Latvia’s Dana Reizniece-Ozola.

Whoever gets the presidency will inherit a eurozone in far better shape than the one that existed during Dijsselbloem’s tenure. The economy is growing strongly while worries over Greece’s future in the bloc have subsided and the country is poised to exit its bailout era next summer.

A victory for Centeno, who in Portugal has favored easing off budget austerity policies, has the potential to mark a new era for the eurozone.

While eurozone governments still insist that countries must keep their public finances in shape, there’s a greater acknowledgement that many people, particularly in southern Europe, have grown weary of austerity. Following the departure of long-time German Finance Minister Wolfgang Schaeuble, a Centeno victory would encapsulate that shift.

Portugal was one of four eurozone countries that had to be bailed out during the region’s debt crisis. In 2011, the country required a 78 billion-euro rescue after its budget deficit grew too large and bond market investors asked for hefty premiums to lend to the government. In return for the financial lifeline, Portuguese governments had to enact a series of spending cuts and economic reforms.

Though the strategy may have worked in bringing Portugal’s public finances into better shape, austerity accentuated a recession and raised unemployment. Since Centeno took office in the Socialist government that came to power in December 2015, Portugal’s deficit has fallen to 2 percent, the lowest in more than 40 years while the unemployment rate is down to an almost 10-year low of 8.5 percent, after peaking at a record 16.2 percent in 2013.

Ahead of the meeting where the vote will take place, Centeno said his aim, should he come out on top, would be to “generate consensus” in the “challenging” period ahead.

“We have showed everyone that we can reach consensus, we can work with other parties, we can work with institutions,” he said. “Portugal is an example of that.”

Dijsselbloem said keeping the eurogroup “together and united” should be the primary purpose of the eurogroup president.

“It’s the only way we take decisions in the eurogroup,” he said.

 
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Workers at several Indonesian palm oil plantations that supply Pepsi and Nestle suffer from a variety of labor abuses, including lower-than-minimum wages, child labor, exposure to pesticides, and union busting, according to a new report from the Rainforest Action Network (RAN).

The report covers three palm oil plantations operated by Indofood, the biggest food company in Indonesia and the country’s only producer of PepsiCo-branded snacks, and follows up on previous reports from the same groups of plantation workers. Indofood remains certified as “sustainable” by the Roundtable on Sustainable Palm Oil (RSPO) despite ongoing labor abuses, which activists say raises the question of what possible incentives there are for a mega-corporation to reform its labor practices.

“Since our first report in June 2016, which broke the scandal, to this one nearly one and a half years later, hardly anything has changed,” said Emma Lierley, RAN’s Communications Manager. “Pepsi hasn’t even issued a public response.”

Pepsi Co., Indofood, and RSPO could not be reached for comment.

Widespread abuse

Workers at palm oil plantations on the islands of Kalimantan and Sumatra reported the same catalog of abuses that they suffered 17 months ago, such as exposure to dangerous pesticides with inadequate protective equipment. They also complain of withheld wages and unpaid overtime, as well as frequent use of daily contract workers and unpaid laborers (like workers’ wives), which the study authors say are all also risk factors for child labor.

“We’re asking that Indofood reform labor practices on its plantations immediately,” said Lierley. “PepsiCo has a significant amount of leverage.” “Indofood could certainly move the needle” as well, she said.

But the RSPO has no clear path forward, admitted Robin Averbeck, a RAN campaigner.

“The RSPO has failed to include workers as critical stakeholders in its system since its creation up until this very day,” said Averbeck. “Fundamentally it will never address labor rights issues in a meaningful way unless workers are integrated as key constituents in the system and play an active role in monitoring and enforcing the standard themselves.”

RSPO has never revoked a company’s sustainability certification for labor violations.

“After nearly a year and a half of an official RSPO complaint containing indisputable evidence documenting widespread labor violations on multiple Indofood plantations, the RSPO has failed to sanction or suspend Indofood,” said Averbeck, who said the inaction was a “fundamental failure” and suggested that the RSPO suspend Indofood immediately.

The palm oil problem

Labor abuse in Indonesia is not unique to the palm oil industry — it has been documented widely across the garment, domestic work, and mining sectors, among others — but in recent years, palm oil has become particularly ripe for exploiting workers.

Palm oil is found in countless household products and foods, from lipstick to potato chips, and it grows very well in the tropical rainforest of Southeast Asia. It is cheap and easy to plant at great scale and swathes of the Borneo rainforest in both Indonesia and Malaysia, have been transformed in recent years into the trademark bright green grids of a palm oil plantation.

But the crop has displaced dozens of indigenous communities and employed thousands of child laborers and unpaid, underpaid, and abused workers. Global demand for palm oil shows no sign of slowing down — the industry is estimated to be worth $93 billion by 2021.

Difficulty of labor reform

The best mechanism for workers’ rights remains trade unions, but there are a number of obstacles to effective organizing among palm oil workers, according to Andriko Otang of Indonesia’s Trade Union Rights Commission.

“For one thing, there is the sheer difficulty of organizing,” said Otang. “A worker has to spend 400,000 rupiah (about $28) for a one-way ticket to the regional capital.” A roundtrip could turn out to be half their monthly salary, he said.

Another factor is the logistical barriers to organizing in places like rural Kalimantan, where there is weak cell signal and low access to information. “If you want to organize even a single strike, it’s so difficult,” said Otang.

Beyond discriminating against actual and potential union members, according to the RAN report, Indofood employs a large impermanent workforce, who cannot unionize. According to its 2016 Sustainability Report, Indofood’s plantation arm, IndoAgri, reported 38,104 permanent workers and 34,782 casual workers.

Despite the formidable odds, said Otang, there have been success stories for palm oil workers: in South Kalimantan and Palembang, workers have organized multi-company collective bargaining agreements and abolished the practice of casual work.

“As long as you have a strong independent union and solidarity between officials and members, labor reform is possible,” he said.
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Venezuelan President Nicolas Maduro says his government will launch a cryptocurrency, or digital currency, to circumvent what he called a financial “blockade” by the U.S. government.

The new currency will be called the “petro,” the leftist leader said in his TV address Sunday. It will be backed by the socialist-run OPEC nation’s oil, gold and mineral reserves.

That will allow Venezuela to advance toward new forms of international financing for its economic and social development, Maduro said.

“Venezuela will create a cryptocurrency – the petro-currency, the petro – to advance in monetary sovereignty, to make its financial transactions, to overcome the financial blockade,” he explained. “This will allow us to move toward new forms of international financing for the economic and social development of the country. And it will be done with a cryptocurrency issue backed by reserves of Venezuelan riches of gold, oil, gas and diamonds.”

Maduro did not give any details what the new currency’s value will be, how it will work or when it will be launched.

The government also announced the creation of a “blockchain observatory” software platform for buying and selling virtual currency.

Opposition leaders objected to Maduro’s announcement, saying the currency would need congressional approval. Some questioned whether the digital currency would even be introduced in the midst of turmoil.

Venezuela’s traditional currency, the bolivar, has significantly declined in recent weeks as U.S. sanctions make it harder for the country to stay current on its foreign debt.
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Venezuela’s President Nicolas Maduro on Sunday gained more powers over the OPEC member’s oil contracts, as a deepening purge looks set to strengthen the leftist leader’s control of the key energy sector amid a debilitating recession.

A months-long crackdown on alleged graft in Venezuela’s oil industry has led to the arrest of some 65 former executives, including two prominent officials who used to lead both the oil ministry and state oil company PDVSA.

Corruption has long plagued Venezuela, home to the world’s biggest crude reserves, but the socialist government usually said “smear campaigns” were behind accusations of widespread graft.

Maduro has recently changed his tack, blaming “thieves” and “traitors” for the country’s imploding economy.

PDVSA’s new boss, former housing minister Major General Manuel Quevedo, said on Sunday that all oil service contracts and executive positions would be reviewed by Maduro as of Monday.

“There aren’t going to be any more contracts backed by the board to keep pillaging, as has happened in some instances,” said Quevedo during a visit to the ailing Paraguana Refining Center.

Further details were not immediately available. PDVSA did not respond to a request for information.

Maduro said former energy minister Ali Rodriguez had been appointed honorary president of PDVSA and had met with Quevedo for six hours over the weekend.

Art, wine, gold chess set

The most recent high-profile sweep saw Diego Salazar, a relative of former oil czar Rafael Ramirez, detained on Friday on charges of helping launder some around 1.35 billion euros to Andorra.

During his Sunday television program, Maduro flashed a painting by Venezuelan painter Armando Reveron and pictures of luxury goods, including bottles from an alleged 300,000-euro wine cellar and a gold chess set, he said belonged to Salazar.

“Thieves!” said Maduro, banging his fist on the table, during the near five-hour broadcast. “All your assets must be expropriated,” he added, stressing that the money should go to state coffers.

Reuters was not able to confirm Maduro’s accusations or contact a representative for Salazar.

His detention has spurred speculation that authorities are after Ramirez, who was the powerful head of PDVSA and the oil ministry for a decade before Maduro demoted him as an envoy to the United Nations in 2014.

A protracted rivalry between Maduro and Ramirez has increased in recent weeks, insiders say, especially after Ramirez wrote online opinion articles criticizing Maduro’s handling of Venezuela’s economy.

Maduro fired Ramirez last week and summoned him back to Caracas, according to people familiar with the clash.

When asked by Reuters on Whatsapp whether Ramirez was being investigated, chief state prosecutor Tarek Saab on Sunday replied there were “no exceptions” in the investigation.
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