Sinister Text Messages Reveal High-tech Front in Ukraine War

Television journalist Julia Kirienko was sheltering with Ukrainian soldiers and medics two miles (three kilometers) from the front when their cellphones began buzzing over the noise of the shelling. Everyone got the same text message at the same time.

“Ukrainian soldiers,” it warned, “they’ll find your bodies when the snow melts.”

Text messages like the one Kirienko received have been sent periodically to Ukrainian forces fighting pro-Russian separatists in the eastern part of the country. The threats and disinformation represent a new form of information warfare, the 21st-century equivalent of dropping leaflets on the battlefield.

“This is pinpoint propaganda,” said Nancy Snow, a professor of public diplomacy at the Kyoto University of Foreign Studies.

The Associated Press has found that the messages are almost certainly being sent through cell site simulators, surveillance tools long used by U.S. law enforcement to track suspects’ cellphones. Photos, video, leaked documents and other clues gathered by Ukrainian journalists suggest the equipment may have been supplied by the Kremlin.

The texts have been arriving since 2014, shortly after the fighting erupted. The AP documented nearly four dozen of them, including the one that Kirienko received on Jan. 31 in Avdiivka, a battle-scarred town outside the principal rebel-held city of Donetsk.

The messages typically say things such as “Leave and you will live” or “Nobody needs your kids to become orphans.” Many are disguised to look as if they are coming from fellow soldiers.

Fake towers

In 2015, Ukrainian soldiers defending the railroad town of Debaltseve were sent texts appearing to come from comrades claiming their unit’s commander had deserted. Another set of messages warned that Ukrainian forces were being decimated. “We should run away,” they said.

“They were mostly threatening and demoralizing, saying that our commanders had betrayed us and we were just cannon fodder,” said Roman Chashurin, who served as a tank gunner in Debaltseve.

Ukrainian military and intelligence services had no comment on the phenomenon, but government and telecommunications officials are well aware of what’s going on.

A 2014 investigation by a major Ukrainian cellphone company concluded that cell site simulators were to blame for the rogue messages, according to an information security specialist who worked on the inquiry. He spoke on the condition that neither he nor his former firm be identified, citing a nondisclosure agreement.

Col. Serhiy Demydiuk, the head of Ukraine’s national cyberpolice unit, said in an interview that the country’s intelligence services knew the devices were being used as well.

“Avdiivka showed that the Russian side was using fake towers,” he said. “They are using them constantly.”

Cell site simulators work by impersonating cellphone towers, allowing them to intercept or even fake data. Heath Hardman, a former U.S. Marines signals analyst who operated the devices in Iraq and Afghanistan, said they were routinely used by American military intelligence officers to hunt insurgents.

Sending mass text messages in wartime isn’t entirely new. The Islamic militant group Hamas sent threatening messages to random Israelis during the 2009 conflict over Gaza, for example, though it is not clear how that was done.

Effectiveness of texts

Cell site simulators significantly sharpen the ability of propagandists to tailor their messages to a specific place or situation, according to Snow, the academic.

“There’s just something about viewing a message on your phone that just makes people more susceptible or vulnerable to its impact,” she said.

The type of hardware involved remains a matter of speculation. But last year, the Ukrainian investigative website InformNapalm published a video and photographs appearing to show a LEER-3, a Russian truck-mounted electronic warfare system, in the Donetsk area. InformNapalm also disclosed what it described as leaked Russian military documents discussing the LEER-3’s deployment to the Luhansk area of eastern Ukraine.

A 2015 article in Russia’s Military Review magazine said the LEER-3 has a cell site simulator built into a drone that is capable of acting over a 6-kilometer-wide area and hijacking up to 2,000 cellphone connections at once. That makes it a “pretty plausible” source for the rogue texts in Ukraine, said Hardman, the former signals analyst.

Russia’s Defense Ministry did not return a request for comment. Moscow has long denied any direct role in the fighting in Ukraine, despite a wealth of evidence to the contrary.

The effectiveness of the propaganda texts is an open question. Soldiers say they typically shrug them off.

“I can’t say that it had any influence on us,” said Chashurin, the former tank gunner. “We were even joking that they must be so afraid of us the only thing they can do is to spam us with these texts.”

But Svetlana Andreychuk, a volunteer who has made frequent trips to the front line to distribute food and supplies, said the threats and mockery sometimes hit a nerve in a grinding conflict that has claimed more than 9,900 lives.

“Some people are psychologically influenced,” she said. “It’s coming regularly. People are so tired. You see people dying. And then you face this.”

What’s Holding Back Self-driving Cars? Human Drivers

In just a few years, well-mannered self-driving robotaxis will share the roads with reckless, law-breaking human drivers. The prospect is causing migraines for the people developing the robotaxis.

A self-driving car would be programmed to drive at the speed limit. Humans routinely exceed it by 10 to 15 mph (16 to 24 kph) — just try entering the New Jersey Turnpike at normal speed. Self-driving cars wouldn’t dare cross a double yellow line; humans do it all the time. And then there are those odd local traffic customs to which humans quickly adapt.

 

In Los Angeles and other places, for instance, there’s the “California Stop,” where drivers roll through stop signs if no traffic is crossing. In Southwestern Pennsylvania, courteous drivers practice the “Pittsburgh Left,” where it’s customary to let one oncoming car turn left in front of them when a traffic light turns green. The same thing happens in Boston. During rush hours near Ann Arbor, Michigan, drivers regularly cross a double-yellow line to queue up for a left-turn onto a freeway.

 

“There’s an endless list of these cases where we as humans know the context, we know when to bend the rules and when to break the rules,” said Raj Rajkumar, a computer engineering professor at Carnegie Mellon University who leads the school’s autonomous car research.

 

Although autonomous cars are likely to carry passengers or cargo in limited areas during the next three to five years, experts say it will take many years before robotaxis can coexist with human-piloted vehicles on most side streets, boulevards and freeways. That’s because programmers have to figure out human behavior and local traffic idiosyncrasies. And teaching a car to use that knowledge will require massive amounts of data and big computing power that is prohibitively expensive at the moment.

 

“Driverless cars are very rule-based, and they don’t understand social graces,” said Missy Cummings, director of Duke University’s Humans and Autonomy Lab.

 

Driving customs and road conditions are dramatically different across the globe, with narrow, congested lanes in European cities, and anarchy in Beijing’s giant traffic jams. In India’s capital, New Delhi, luxury cars share poorly marked and congested lanes with bicycles, scooters, trucks, and even an occasional cow or elephant.

 

Then there is the problem of aggressive humans who make dangerous moves such as cutting cars off on freeways or turning left in front of oncoming traffic. In India, for example, even when lanes are marked, drivers swing from lane to lane without hesitation.

 

Already there have been isolated cases of human drivers pulling into the path of cars such as Teslas, knowing they will stop because they’re equipped with automatic emergency braking.

 

“It’s hard to program in human stupidity or someone who really tries to game the technology,” says John Hanson, spokesman for Toyota’s autonomous car unit.

 

Kathy Winter, vice president of automated driving solutions for Intel, is optimistic that the cars will be able to see and think like humans before 2030.

 

Cars with sensors for driver-assist systems already are gathering data about road signs, lane lines and human driver behavior. Winter hopes auto and tech companies developing autonomous systems and cars will contribute this information to a giant database.

 

Artificial intelligence developed by Intel and other companies eventually could access the data and make quick decisions similar to humans, Winter says.

 

Programmers are optimistic that someday the cars will be able to handle even Beijing’s traffic. But the cost could be high, and it might be a decade or more before Chinese regulators deem self-driving cars reliable enough for widespread public use, said John Zeng of LMC Automotive Consulting.

 

Intel’s Winter expects fully autonomous cars to collect, process and analyze four terabytes of data in 1 { hours of driving, which is the average amount a person spends in a car each day. That’s equal to storing over 1.2 million photos or 2,000 hours of movies. Such computing power now costs over $100,000 per vehicle, Zeng said. But that cost could fall as more cars are built.

 

Someday autonomous cars will have common sense programmed in so they will cross a double-yellow line when warranted or to speed up and find a gap to enter a freeway. Carnegie Mellon has taught its cars to handle the “Pittsburgh Left” by waiting a full second or longer for an intersection to clear before proceeding at a green light. Sensors also track crossing traffic and can figure out if a driver is going to stop for a sign or red light. Eventually there will be vehicle-to-vehicle communication to avoid crashes.

 

Still, some skeptics say computerized cars will never be able to think exactly like humans.

 

“You’ll never be able to make up a person’s ability to perceive what’s the right move at the time, I don’t think,” said New Jersey State Police Sgt. Ed Long, who works in the traffic and public safety office.

Iraq, Algeria Support Extension of Oil Production Cuts

Iraq and Algeria support the extension of oil production cuts by OPEC and non-OPEC producers through the end of the year to try to boost prices, they said in a joint statement Thursday.

The oil ministers of the two countries held a press conference in Baghdad where Iraqi Oil Minister Jabar Ali al-Luaibi said “there might be new ideas to be presented” at an OPEC meeting on May 25, without providing further details.

In late November, the Organization of the Petroleum Exporting Countries agreed to cut production by 1.2 million barrels a day, the first such reduction agreement since 2008. The following month, 11 non-OPEC oil-producing countries pledged to cut an additional 558,000 barrels a day, reaching an overall reduction of 1.8 million.

In March, OPEC announced the possibility that such cuts would be extended.

Iraq – OPEC’s second-largest producer and a country that relies on oil revenues for nearly 95 percent of its budget – committed to reduce daily production by 210,000 barrels to 4.351 million.

News of a possible extension of the OPEC cuts and reports that U.S. crude stockpiles have dropped by 5.2 million barrels last week slightly boosted worldwide oil prices.

Crude oil sold for over $100 a barrel in the summer of 2014, before bottoming out below $30 a barrel in January 2016. Brent Crude, used to price international oils, now trades at around $50 a barrel in London.

Alaska Natives Look to Arctic Council to Preserve Pristine Region, Way of Life

The foreign ministers of the eight Arctic Council nations will meet to discuss climate change this week, amid news last month that temperatures in the pristine region are warming at twice the rate of the rest of the world.

A high-level meeting with U.S. Secretary of State Rex Tillerson and his counterparts from Russia, Greenland, Canada, Norway, Finland, Sweden and Iceland begins Thursday in Fairbanks.

As Tillerson joins the talks, the Trump administration has not yet decided whether to remain a party to the 2015 U.N. Paris Agreement on responding to climate change.

Watch: Alaskan Natives Look to Arctic Council to Preserve Waters, Way of Life

Any changes to U.S. climate policy would directly affect the lives of Alaska Natives, who depend on the Arctic Sea to survive.

In recent reports, scientists said the temperatures in the Arctic were warming at twice the rate of the rest of the world, sea ice was at record lows and permafrost was thawing.

If current warming rates hold, the world could see an ice-free Arctic by 2040, researchers said.

Worrisome

The studies have alarmed Alaska Natives.

Gabe Tegoseak spoke to VOA about growing up in an Inuit household.

“To put that in perspective, I grew up with no running water most of my life,” Tegoseak said. “A very old-school tradition, my parents they favored it that way and it humbles me.

“I had to walk to a freshwater lake, break some ice on my sled — and this is a wooden sled I used to pull around and break it up — and then bring it home, and that was our drinking water, this big block of ice,” he said.

As the ice block melted, Tegoseak’s family first used it for drinking water, then to wash their faces and bodies, and then to clean the floor, not wasting a drop, he said.

Many people in Alaska, including indigenous people, depend on the oil and gas industry for a paycheck, he told VOA. But he said he thought an executive order signed this month by President Donald Trump to reverse Obama administration policy and open up Arctic waters to drilling was shortsighted.

“We’re trading our rights and our ability to subsistence hunt and live traditionally, which is over 10,000-plus years old, for a cash economy, which [is a] different mindset. So when we catch a whale, for instance, we share it all,” Tegoseak said.

“Our view is that everybody gets to [have] a piece of whale, and it doesn’t matter, creed or color. Everybody gets a fair share,” he stressed.

Tegoseak said he had asked many Alaska Natives on the North Slope about what they’d do if they had to choose between having their beloved whale meat, called muktuk, or an iPad. They responded that they’d choose muktuk, he said.

Seen as shortsighted

Many environmental experts agree that drilling in the Arctic is risky and shortsighted, including Sally Yozell of the Stimson Center, a nonpartisan research center in Washington.

“I think it’s rather shortsighted for a number of reasons. You know the Arctic waters are cold, and it’s hard to — we have not figured out yet how to address an oil or gas calamity up there at all. I mean, the cold water, all one has to do to is to have witnessed what happened with the Exxon Valdez many years ago to see that that oil stayed in those waters for 20 years,” Yozell said.

The Valdez tanker struck a reef in Prince William Sound on March 24, 1989. Nearly 11 million gallons of oil was spilled.

Experts said the accelerated melting of Arctic Sea ice will most likely lead to more shipping, drilling and other economic activity in the region.

 

Mark Royce of Conservatives for Responsible Stewardship told VOA he was concerned.

“Unfortunately, the retreating ice, the diminution of the perpetual winters there, and the warming of their environment is giving rise to still more steam for plans for rapacious exploration and exploitative development,” Royce said. “It’s a vicious cycle. But what we’re seeing in the Arctic, in the very seas around Alaska, presents just a particularly virulent form of this at a crucial time.”

Tillerson’s remarks will most likely be followed closely by the other seven Arctic Council partners, who want to make climate change a focus of the final statement when the meeting concludes Thursday.

Uber Chases GrabTaxi in Myanmar, Expanding in Southeast Asia

Uber is launching its private ride-hailing service in the Myanmar commercial capital of Yangon on Thursday, aiming to tap into one of the world’s youngest and fastest-growing online markets.

The launch follows Singapore-based GrabTaxi’s debut by about two months.

Uber is one of the world’s largest on-demand transportation platforms. It is seeking an alliance with the government to smooth acceptance of the use of private vehicles for commercial transport.

A taxi ride in Myanmar usually involves negotiating prices, no use of meters and a lack of air conditioning or seat belts. Using a ride-hailing app is still a relatively new concept, though the practice has been gaining in popularity.

Local travel services start-up Oway and Hello Cabs, a rival service run by a construction and auto dealership tycoon, also provide ride-hailing services. 

“I definitely want to try Uber,” said Nyan Zay Htet, 26, a company worker who was haggling with a driver over a fare on a downtown street in Yangon. “I welcome having international companies come in because it can be more convenient for us if we don’t have to bargain over prices and can just hop in and go.”

More than two-thirds of Southeast Asians are younger than 40 and the number going online to buy goods and services is soaring. A recent research report by Google and the Singaporean investment arm Temasek put the potential ride-sharing market in six larger regional markets at $13 billion by 2025, up from $2.5 billion in 2015.

With more than 50 million people, Myanmar is growing fast and its public transport networks are not keeping up. Taxis are plentiful in Yangon, with local media reporting authorities estimate there are more than 50,000 on the city’s jammed roads. The industry is something of a free-for-all, with non-licensed drivers turning their cars into taxis as they please. But the government has said it intends to crack down on that.

Incomes for most people are still low, so price competition may be key.

An online Uber fare estimator put the base fare in Yangon at 1,500 kyats (pronounced chuts) ($1.09) with a minimum charge of 1,800 kyats ($1.31).

Uber has faced trouble from regulators in various markets, including China, France, Spain and Mexico. But generally they target services transporting paying customers using private vehicles that are not registered for public transport, not ride-hailing that uses smartphone apps to call licensed taxis.

Study: US Foreclosure Activity Drops to Lowest Level Since 2005 

Housing foreclosure activity in the United States dropped to the lowest level since 2005 last month, according to a business research group.

ATTOM Data Solutions tracks default notices, auctions and bank repossessions across the nation and says the number of actions dropped 23 percent from a year ago. That means more than 77,000 homeowners missed payments, and banks took some kind of action to encourage the repayment of their loans.

Severe problems in the U.S. housing market, and sales of securities backed by sometimes-faulty mortgages, played a key role in the financial crisis, which is one reason that investors and economists watch the housing market closely.

Seattle, a city in the Pacific Northwest state of Washington, did the best in this study, with the number of foreclosure notices dropping 38 percent from the same time a year ago. Atlantic City, New Jersey, had the worst foreclosure problem in this study, with one out of every 237 housing units getting a notice of some kind.

China Simulates Extended Moon Stays Amid Space Drive

China is testing the ability for future astronauts to stay on the moon for extended periods, as Beijing accelerates its space program and looks to put people on the surface of the moon within the next two decades.

The official Xinhua news agency said volunteers would live in a “simulated space cabin” for between 60-200 days over the next year helping scientists understand what will be needed for humans to “remain on the moon in the medium and long terms”.

Chinese President Xi Jinping has called for China to become a global power in space exploration, with plans to send a probe to the dark side of the moon by 2018, the first ever such trip, and to put astronauts on the moon by 2036.

“While it remains unclear exactly how long China’s first lunar explorers will spend on the surface, the country is already planning for longer stays,” Xinhua said.

Two groups of four volunteers will live in the simulated cabin “Yuegong-1” to test how a life-support system works in a moon-like environment. A similar 105-day trial was carried out successfully in 2014.

The system, called the Bioregenerative Life Support System (BLSS), allows water and food to be recycled and is key to any Chinese probes to the moon or beyond.

“The latest test is vital to the future of China’s moon and Mars missions and must be relied upon to guarantee the safety and health of our astronauts,” Liu Zhiheng of the Chinese Academy of Sciences told the news agency.

The Yuegong-1 cabin has a central living space the size of a “very small urban apartment” and two “greenhouses” for plants.

In March, China announced plans to launch a space probe to bring back samples from the moon this year, while the country’s first cargo space craft docked with an orbiting space lab in April, a major step as Beijing looks to establish a permanently manned space station by 2022.

Despite the advances in China’s space program for military, commercial and scientific purposes, China still lags behind the United States and Russia.

China: Silk Road Plan Not Tied to Xi Presidency

China’s President Xi Jinping initiated the ambitious Belt and Road development plan but it has become a world plan not tied to his presidency, the Commerce Ministry said Wednesday, days before Xi hosts a global forum on the initiative.

The forum in Beijing next week will draw heads of state to discuss Xi’s plan to expand trade links between Asia, Africa and Europe through billions of dollars in infrastructure investment.

Representatives from more than 100 countries will attend China’s biggest diplomatic event of the year, though only one leader from the Group of Seven (G7) industrialized nations, Italian Prime Minister Paolo Gentiloni, is set to join.

China says that between 2014 and 2016, its businesses signed projects worth $304.9 billion along inland and maritime corridors of the plan, also known as the New Silk Road. But some of the projects could be in development for years.

Judging by recent precedent in China’s political system, Xi is slated to step down from the presidency in early 2023 at the end of his second five-year term.

Asked what guarantee the world had that the initiative would go on after Xi’s second term, Vice Minister of Commerce Qian Keming told a news briefing that its vitality lay in countries’ hopes for development and not in the idea of “who proposed it or what term in office there is later.”

“The Belt and Road initiative was proposed by President Xi in 2013, but this initiative is not an individual proposal, or merely left at a proposal level. Rather it is an initiative that has been widely received by the whole world. It is jointly owned by everyone,” Qian said.

China has repeatedly rebuffed concern that the plan is part of a grand strategy to expand its economic interests for selfish gain and to seek global dominance, saying that anyone can join the plan to boost common prosperity.

Xi has used the initiative to help portray China as an open economy, distinct from a rising wave of global protectionism.

However, the government has faced criticism from foreign business groups and governments alike, who say it has done little to remove discriminatory policies and market barriers that favor Chinese companies.

Foreign business groups have questioned whether multinational companies would be able to compete with Chinese firms through the plan in transparent bidding processes.

Zhang Xingfu, an official from the Commerce Ministry’s cooperation department, played down such concerns.

“Chinese enterprises conducting investment and cooperative business in countries along the Belt and Road initiative will … actively participate in project bidding, and cooperate and compete with international enterprises in the same industries on the same platform,” Zhang said.

Tesla Selling Solar Tiles, Says They Look Like Traditional Roof

Electric carmaker Tesla has added another product to its lineup: Solar roof tiles.

As of Wednesday, customers worldwide could order a solar roof on Tesla’s website. Installations will begin next month in the U.S., starting with California. Installations outside the U.S. will begin next year, the company said.

The glass tiles were unveiled by Tesla last fall just before the company merged with solar panel maker SolarCity Corp. They’re designed to look like a traditional roof, with options that replicate slate or terracotta tiles. The solar tiles contain photovoltaic cells that are invisible from the street.

Guaranteed for life of home

Tesla CEO Elon Musk said one of the drawbacks to home solar installations has been the solar panels themselves: They’re often awkward, shiny and ugly. Buyers will want Tesla’s roof, he said, because it looks as good or better than a normal roof.

“When you have this installed on your house, you’ll have the best roof in the neighborhood. The aesthetics are that good,” Musk said in a conference call with media.

The roof is guaranteed for the life of the home, which is longer than the 20-year lifespan for a typical, nonsolar roof, Musk said. It has gone through the same hail, fire and wind testing that normal roofs endure.

Tesla’s website includes a calculator where potential buyers can estimate the cost of a solar roof based on the size of their home, the amount of sunlight their neighborhood receives and federal tax credits. They can also put down a refundable $1,000 deposit to reserve a place in line.

$42 per square foot

Tesla said the solar tiles cost $42 per square foot to install, making them far more costly than slate, which costs around $17 per square foot, or asphalt, which costs around $5. But homes would only need between 30 and 40 percent of their roof tiles to be solar; the rest would be Tesla’s cheaper nonsolar tiles, which would blend in with the solar ones.

It would cost $69,100 to install a solar roof with 40-percent solar tiles on a 2,600-square-foot roof in suburban Detroit, according to Tesla’s website. That includes a $7,000 Tesla Powerwall, a battery unit that stores the energy from the solar panels and powers the home. The roof would be eligible for a $15,500 federal tax credit and would generate an estimated $62,100 in electricity over 30 years. Over that time period, Tesla estimates, the homeowner would save $8,500.

Tesla said the typical homeowner can expect to pay $21.85 per square foot for a Tesla solar roof. The cost can be rolled into the homeowner’s mortgage payments and paid for over time, the company said.

Sales to be slow at first

Musk wouldn’t say how many orders the company expects to get this year. He expects the initial ramp-up to be slow.

“It will be very difficult and it will take a long time, and there will be some stumbles along the way. But it’s the only sensible vision of the future,” Musk said.

Palo Alto, California-based Tesla Inc. is making the solar tiles at its Fremont, California, factory initially. But eventually all production will move to a joint Tesla and Panasonic Corp. factory in Buffalo, New York. Panasonic makes the photovoltaic cells used in the solar tiles.

Tesla said it would be installing equipment in the Buffalo factory over the next few months.

Amazon Trounces Rivals in Battle of the Shopping ‘Bots’

Earlier this year, engineers at Wal-Mart Stores Inc. who track rivals’ prices online got a rude surprise: the technology they were using to check Amazon.com several million times a day suddenly stopped working.

Losing access to Amazon.com Inc.’s data was no small matter. Like most big retailers, Wal-Mart relies on computer programs that scan prices on competitors’ websites so it can adjust its listings accordingly. A difference of even 50 cents can mean losing a sale.

But a new tactic by Amazon to block these programs — known commonly as robots or bots — thwarted the Bentonville, Arkansas-based retailer.

Its technology unit, @WalmartLabs, was unable to work around the blockade for weeks, forcing it to retrieve Amazon’s data through a secondary source, according to a person familiar with the matter who was not authorized to speak publicly.

The previously unreported incident offers a case study in how Amazon’s technological prowess is helping it dominate the retail competition.

Now the largest online retailer in the world, Amazon is best known by consumers for its fast delivery, huge product catalog and ambitious moves into areas like original TV programming. But its mastery of the complex, behind-the-scenes technologies that power modern e-commerce is just as important to its success.

Dexterity with bots allows Amazon not only to see what its rivals are doing, but increasingly to keep them in the dark when it undercuts them on price or is quietly charging more.

“Benchmarking against Amazon is going to become hard,” said Guru Hariharan, a former Amazon manager who now sells pricing software to retailers as chief executive of Mountain View, California-based Boomerang Commerce.

A Wal-Mart spokesman declined to discuss the January episode but said the company improves its technology regularly and has multiple tools for tracking items. He said the company offers value not only through pricing but from discounts for in-store pickup and other benefits.

A spokeswoman for Amazon said the company is aware of competitors using bots to check its listings and denied any “campaign” to stop them. “Nothing has changed recently in how we manage bots on our site,” she said. Still, she said, “we prioritize humans over bots as needed.”

Bots can slow down a website, a big motivator for retailers to block them.

Reuters interviewed 21 people familiar with bots and how they are deployed, including current and former Wal-Mart employees, former Amazon employees and outside specialists. Many spoke only on condition of anonymity because they were not authorized to discuss the issues publicly.

Most pointed to Amazon’s leadership in the burgeoning bot wars.

The company’s technological edge has been good for its profit margin, and it’s proving a winning formula for investors.

Shares of the internet powerhouse have risen about 15-fold since the market’s bottom in March 2009, while the S&P 500 has more than tripled in value. Amazon hit $100 billion in annual sales in 2015 — faster than any company in history, it said.

Brave new world

Bot-driven pricing has represented a massive change for the retail industry since Amazon helped pioneer the practice more than a decade ago.

Traditionally, brick-and-mortar stores changed prices no more than weekly because of the time and expense needed to swap labels by hand.

In the world of e-commerce, though, retailers update prices with ease, sometimes multiple times a day, helped by algorithms that consider inventory levels, sales forecasts and rivals’ pricing data.

To stay in the game, companies such as online wholesaler Boxed, based in New York, depend on a variety of methods including bots to ensure they do not lag others’ price moves for even 20 minutes.

“That’s like a lifetime during Christmas,” said Chief Executive Chieh Huang, whose company sells bulk staples like toilet paper and pet food. “If we’re not decently priced, we’ll see it almost immediately” in sales declines.

  

Disguised as humans

Using bots to view massive amounts of data on public websites — a process known as crawling or scraping — has many purposes. Alphabet Inc.’s Google, for example, constantly crawls the Web to gather information for its search engine results and to sell ads.

In e-commerce, though, the use of bots has developed into a cat-and-mouse game. Companies try to thwart the practice on their own websites while aiming to penetrate their competitors’ defenses. Third-party services abound to help less-savvy retailers.

To protect data from rivals, some retail websites use what’s known as a “CAPTCHA” — typically a distorted string of letters and numbers that humans can read but most bots can’t. Amazon shies away from the practice because it annoys some customers.

For merchants seeking to evade such defenses, disguising their computer programs as real shoppers is key. Some pricing technology experts have programmed computer cursors to meander through a Web page in the way a person might, instead of going directly to the prized data. Another technique is to use multiple computer addresses so that retailers cannot track a barrage of clicks to a single source.

“It is an arms race,” said Keith Anderson, a senior vice president at e-commerce analytics firm Profitero, based in Ireland. “Every week or every month, there’s some new approach from both sides.”

Amazon’s maneuver that halted Wal-Mart in January took aim at a specialized Web browser called PhantomJS. Unlike, say, Internet Explorer, this browser is designed specifically for programmers — a telltale clue that its users are not typical shoppers. Amazon put up a digital curtain to hide its listings from PhantomJS users, according to three people familiar with the situation.

It was unclear how the move, which was not aimed at Wal-Mart in particular, affected other companies.

Tests conducted in recent weeks for Reuters show that among major U.S. retail chains, Amazon had by far the most sophisticated bot detection in place, both for its home page and for two popular items selected by Reuters because they change price frequently — a De’Longhi coffee maker and a Logitech webcam.

The tests were run by San Francisco-based Distil Networks, which sells anti-bot tools. In one of the tests, Distil programmed bots to hit each retailer’s website 3,000 times, but slowly enough to mimic a person clicking through listings. This tricked most retail behemoths, but not Amazon.

Blocked bots would not have seen, for instance, that Amazon’s price for the De’Longhi espresso machine changed four times in a single 24-hour period starting on the morning of April 25, according to price tracking website camelcamelcamel.com. During that time, the price swung by more than 10 percent, from a low of $80.06 to $88.16.

Swarming with bots

Despite Amazon’s capabilities, the sheer volume of crawling on its site is staggering. At times, as many as 80 percent of the clicks on Amazon product listings have been from bots, people familiar with the matter say, compared with just a third or more of the traffic on other large sites.

In addition to rivals seeking price data, that traffic includes bots from university researchers studying competition, search engines, advertising services and even fraudsters trying to break into Amazon accounts.

For Wal-Mart, a small group in Silicon Valley directs its automated pricing strategy while dozens of engineers in India and around the world handle the code, current and former Wal-Mart employees said.

Amazon had about 40 engineers who would covertly extract and organize rivals’ data with bots as of several years ago, one of the people interviewed said. Amazon did not discuss the size or structure of its teams working with bots.

According to one U.S. patent application, Amazon is working on encryption technology that would force bots, but not humans, to solve a complicated algorithm to gain access to its Web pages.

“Amazon has both the competency to detect bot traffic and the wherewithal to do something about it,” said Scott Jacobson, a former Amazon manager and now managing director of Madrona Venture Group. That “isn’t the case for most retailers.”

 

Microsoft Adds Tools to Flag Bad Content in Amazon, Google Faceoff

Microsoft Corp. on Wednesday turned up the heat on other technology giants by launching new image and video recognition products which could help it court businesses worried about running ads next to offensive content.

The Redmond, Washington-based company said its new Video Indexer can identify faces, voices and emotions in moving pictures. Separately, its Custom Vision Search lets companies build apps that recognize images with just a few lines of code.

For brands, knowing what’s in the videos that they sponsor has become a hot-button issue since major companies began canceling ad deals with Alphabet Inc’s Google this year over hate speech playing on its subsidiary YouTube.

Microsoft’s Video Indexer has similarities to a tool Google launched in March; Amazon.com Inc also said last month it could flag insulting images via a cloud-based service.

Microsoft’s latest moves underscore how its focus has evolved from its staple Windows software to the cloud, where it is competing with Amazon to sell data storage and computing power. Extra analytics such as image recognition may prove key to luring Web developers.

“It’s hard to understand what’s in the video” the longer it is, said Irving Kwong, a senior product director at Microsoft, in an interview ahead of the company’s developer conference Build. He said Video Indexer, which analyzes videos far faster than humans can, could help a user “harness and get more out of the video content that you have.”

The tools launched in preview by the Microsoft Cognitive Services unit on Wednesday, including a decision recommendation service, have one aim apart from winning business: data.

Microsoft views the tools as a way to put powerful computing into people’s hands and improve the tools at the same time, because processing more data is key to reaching artificial intelligence. Others including Amazon are pursuing this strategy, with the prize being a new revenue stream.

Research firm International Data Corporation has forecast the market for such tools will balloon to over $47 billion in sales in 2020 from $8 billion in 2016.

Microsoft pulled back the curtain on experiments that are further afield, too. It announced a new Cognitive Labs unit and the so-called Project Prague: technology to allow people to control computers simply with hand gestures.

Facebook to Play Down Links to Websites With Deceptive Ads

Facebook is planning to intensify its crackdown on so-called clickbait websites, saying it will begin giving lower prominence to links that lead to pages full of deceptive or annoying advertisements.

The downgrade of the links was expected to take effect beginning on Wednesday on News Feed, the home page of Facebook where people go to see posts from friends and family.

Facebook said it wanted to downplay links that people post to websites that have a disproportionate volume of ads relative to content, or that have deceptive or sexually suggestive ads along the lines of “5 Tips to be Amazing in Bed” or “1 Crazy Tip to Lose Weight Overnight!”

Links to websites with pop-up ads or full-screen ads also would be downplayed, it said.

People scrolling through their News Feed are often disappointed when they click on such links and do not find valuable information, Andrew Bosworth, Facebook’s vice president of ads and business platform, said in an interview.

“People don’t want to see this stuff,” he said. “We’re just trying to figure out how to find it and rank it further down News Feed when possible.”

Facebook uses a computer algorithm to determine which posts people see first from friends and family, and it frequently refines the algorithm to keep up with spam or other concerns.

The company said in August it was adjusting the algorithm to downplay news stories with clickbait-style headlines, a style of headline that intentionally withholds information or misleads people to get them to click on them.

In December, facing criticism that hoaxes and fake news stories spread too easily on Facebook in the run-up to the U.S. presidential election on November 8, the company made it easier for people to report those kinds of posts.

Facebook, the world’s largest social media network with 1.9 billion monthly users, has enormous power with its algorithms to potentially drive traffic to media publishers or stymie it.

The company said it reviewed hundreds of thousands of websites linked to from Facebook to identify those with little substance but lots of disruptive or shocking ads.

Bosworth declined to name any websites Facebook wants to target. He said only publishers of spam needed to worry about seeing less traffic, and other publishers could see their traffic go up.

“This is a small number of the worst of the worst,” he said.

New Study Warns of Wage Theft in US

Analysts at a liberal research institution in Washington say U.S. employers are stealing $15 billion a year from workers by failing to pay legally required minimum wages.

The Economic Policy Institute says the wage theft hits nearly one-fifth of low wage workers in the 10 largest U.S. states. The study’s authors say affected workers lose an average of $64 a week, or $3,300 a year out of their modest salaries.

Young people, women, minorities and immigrants are often stuck in low-level jobs and thus are most likely to be affected by wage theft. EPI says the shortfall obviously hurts workers, but also slows demand for goods and services, which can crimp economic growth.

On Thursday, government officials will look at the job market from a different angle, when the weekly jobless claims are published.  Economists track the number of Americans who sign up for unemployment assistance to gauge the health of the market.

A survey of economists shows most experts expect the number of such layoffs to rise slightly but still remain at a relatively low level consistent with a strong job market. A separate study produces the U.S. unemployment rate, which was just 4.4 percent in April, less than half the rate during the worst of the recession. Some analysts say with fewer unemployed workers seeking jobs, employers may have to boost wages to attract and keep staff members.  

Higher wages could contribute to inflation, and so could rising prices of imports, including oil. Friday, officials will report the latest data on price changes at the retail level with the Consumer Price Index. Experts predict the study will show inflation rose about 2 percent over the past year, a moderate level.  

U.S. central bank officials are supposed to guide the economy in ways that keep prices stable and unemployment low. They try to cool inflation by raising interest rates, but do so cautiously to avoid stalling the economy and hurting job growth. That is why experts quoted in the financial press say the Federal Reserve will raise rates again, slightly, at their June meeting.

In Vitro Fertilization Could Help Restore Vulnerable Coral Reefs

It’s no secret that the world’s coral reefs are at risk. Pollution, dredging, overfishing and, especially, acidic, warming waters are pushing these complex ecosystems to the brink of destruction, and marine scientists and researchers have been stymied in attempts to restore their health.

Saving them isn’t just the right thing to do, it’s a necessity if we want to keep our oceans healthy and viable. Coral reefs provide nurseries for nearly a quarter of the ocean’s fisheries, help protect shorelines from storms, and offer underwater wonders for snorkelers and divers.

Now, a project at San Francisco’s California Academy of Sciences offers hope for what marine biologist Bart Shepherd calls ‘one of the most magical and beautiful places on Earth’. “It’s this incredible city of organisms that all learn to live together.  All these animals are competing to try and take over space and try to get access to sunlight, to nutrients in the water.”

Shepherd is director of the Academy’s Steinhart Aquarium, and, with the Academy’s curator of ichthyology, Luiz Rocha, directs the appropriately-named Hope for Reefs initiative.

Reefs under stress

Human activity and increasingly warm and acidic ocean water are taking a heavy toll on the world’s coral reefs. A recent aerial survey found more than two-thirds of the coral in Australia’s Great Barrier Reef is experiencing “shocking” amounts of bleaching, and Rocha says human-induced climate change is devastating other reefs as well.

“When coral gets stressed, in most cases because of warm water, it expels the algae,” he explains. Algae have a symbiotic relationship with the coral polyps. The coral provides a protective environment for the algae, which provide corals with essential nutrients and their incredible colors. “So,” Rocha adds, “when the algae gets out, the coral gets bleached and becomes white.” That bleaching can lead to the coral’s death.

Restoring the reef

Various methods have been tried to bring back reefs. The most successful so far has been artificially accelerating a natural process called fragmentation. Researchers purposefully break off coral branches, allow the pieces to recover and grow, and then plant them back onto the reef.

But Shepherd points to a long-term problem with that approach. “You are producing thousands of identical genetic clones of the same coral from one parent colony. So, you’re really reducing the genetic diversity that’s out there on the reef and the ability of the coral to respond, perhaps, to things we don’t even know are going to happen.”

So, the Hope for Reefs crew turned to a unique method pioneered by the coral conservation group Secore International.  In 2011, it began using in vitro fertilization to restore the health of dying coral reefs. Endangered elkhorn coral off the coast of its field station in Curaçao was the test case. Shepherd says, “So, we actually have proven that you can go and collect gametes – sperm and eggs, fertilize them and grow them in a laboratory for a short period of time, plant that baby coral back out on the reefs and, within five years, it will grow up and spawn with its wild counterparts on the reef.”

A small window of opportunity

Corals only spawn once a year, at night around a full moon. During those couple of nights, millions of the corals’ sex cells float to the surface, but, Shepherd explains, more than 99 percent don’t make it.

“What we’re able to do is intercede at a point where most of the sperm and eggs will be eaten by fish. We put a net over the coral and we collect those sperm and eggs, bring them back to the lab, cross-fertilize them and go from there.”

Hope for Reefs doesn’t stop with restoration. Shepherd says educating local governments and community stakeholders to save their coral reefs is key to the success of the project — and time is crucial.

 

“We need communities that want to help manage their reefs, that are going to look at the environmental conditions and why they are the way they are and what we can do to improve them. Reducing sewage outflow, reducing sedimentation, reducing the fishing pressures on herbivores, and there’s a holistic approach to managing reefs that really needs to be in place in order for this to work.”   

And, says project co-director Luiz Rocha, that approach includes communication. “We don’t safeguard our results. We know that it is urgent. We know that we have to talk about it as soon as possible. So, we are working on our scientific publications that take quite a while to be published, but we also take to the field with us a media person, a science writer, a photographer that will be talking about our results in real time, most of the time.”

Looking ahead

Hope for Reefs has just finished the first year of its five-year project and everyone involved is optimistic.  The challenge is to scale up in vitro fertilization to restore endangered coral reefs worldwide before they are lost. The project hopes to seed one million global corals by 2021.

With a commitment of nearly $13-million from the California Academy of Sciences, and a new partnership with The Nature Conservancy, twenty new expeditions are planned. First up, the degraded reef at Secore International’s field station in Curaçao and, then, on to the Yucatan Peninsula and the Great Maya Reef.

 

Yemen Minister: 60 Percent of Population in Dire Poverty

Yemen’s planning minister says 60 percent of the country’s population is in dire poverty more than two years since the Shi’ite rebels forced the country’s internationally recognized government and president out of the capital.

 

Mohamed El-Saadi says 22 million Yemenis are in need of humanitarian relief, a figure that exceeds the U.N.’s recent estimate that 19.8 million in Yemen need assistance.

El-Saadi spoke during a meeting on Wednesday in the Saudi capital, Riyadh, attended by the Gulf Cooperation Council and international organizations.

 

He warned that the “general security, political and humanitarian situation has witnessed an unprecedented decline.”

 

A Saudi-led coalition has been battling Yemen’s Houthi rebels March 2015. The war has killed more than 10,000 civilians and pushed a large portion of the population to the brink of famine.

 

Common Painkillers Linked to Increased Risk for Heart Attack

A widely used family of over-the-counter painkillers may increase the risk of having a heart attack, a new study suggests.

According to researchers at the University of Montreal Hospital Research Center (CRCHUM), non-steroidal anti-inflammatory drugs (NSAIDs) can raise the risk of heart attacks “as early as in the first week of use and especially within the first month of taking high doses of such medication.”

Common forms of NSAIDs include diclofenac, ibuprofen and naproxen.

“Given that the onset of risk of acute myocardial infarction occurred in the first week and appeared greatest in the first month of treatment with higher doses, prescribers should consider weighing the risks and benefits of NSAIDs before instituting treatment, particularly for higher doses,” the researchers said.

Prior studies had pointed to an increase in heart attack risk from using NSAIDs, but this study looked at timing, dose and the duration of taking the medicine.

For the study, the researchers looked at past studies on NSAIDs from Canada, Finland and the United Kingdom. there were 446,763 people studied, and 61,460 had a heart attack.

“The study found that taking any dose of NSAIDs for one week, one month, or more than a month was associated with an increased risk of heart attack,” researchers said in a statement.

The overall risk of heart attack was between 20 and 50 percent higher than those not using NSAIDs, the researchers said.

“To put this in perspective, as a result of this increase, the risk of heart attack due to NSAIDs is on average about one percent annually,” researchers wrote. “The type of analysis the researchers used allowed them to conclude with greater than 90 percent probability that all NSAIDs studied are associated with a heightened risk of heart attack.”

They added that the increased risk was higher with higher doses during the first month of use. The risk did not continue to increase over a longer treatment duration.

“It remains prudent to use NSAIDs for as short time as possible,” researchers wrote.

The researchers said the study did not consider other potential factors for increased risk of heart attack.

The study was published this week in BMJ.

Measles Hit Minnesota Somalis Amid Low Vaccination Rates

Any outbreak of measles is cause for concern, but the current outbreak in Minneapolis, Minnesota stands out for two reasons. One, almost none of the victims were vaccinated against the disease. Two, nearly all of the victims are ethnic Somalis.

Doctors say the situation is the result of the disproven, but persistent, belief the vaccine for measles, mumps and rubella (MMR) can cause a child to develop autism.

Dr. Mohamed Hagi Aden, an internal medicine specialist at Regions Hospital in neighboring St. Paul, says more than 50 percent of Somali-American children in the area never get the MMR vaccine, due to autism fears.

 

The result is seen in the measles outbreak statistics. As of Tuesday, the Minnesota Department of Health had recorded 50 cases of measles in the state. It said 45 of those infected were confirmed to be unvaccinated against measles, and 45 of the cases were Minnesotan Somalis (or Somali Minnesotans, as the department put it).

Dr. Aden says opposition to the MMR vaccine stems from a perceived high rate of autism within the local Somali-American community. A report by the University of Minnesota showed that in 2010, about one in 32 Somali children in Minneapolis between the ages of 7 and 9 was identified as having autism spectrum disorder (ASD).

“And while parents were looking for answer, they found a study by a British researcher that linked the autism and the MMR vaccine, and that has created fear and suspicion with the community,” Dr. Aden told VOA’s Somali Service.

The study he cites is real; it was published in the British medical journal The Lancet in 1998. But the journal retracted the finding 12 years later, saying it contained errors.

 

In the meantime, multiple studies have failed to find any evidence to back up the original study’s claims. One study of 95,000 American children found “no harmful association between MMR vaccine receipt and ASD,” even in cases where kids’ older siblings had been diagnosed with autism.

“There is no link between the MMR vaccine and autism,” says Dr. Aden.

Making the case for vaccination

As the outbreak grows, the Minnesota Department of Health is working to win back trust in vaccines.

 

It’s harder than it used to be, says the department’s infectious disease director, Kris Ehresmann.

 

“You used to be able to get up and say, ‘I’m a scientist and X percent of people did Y, and everyone said, ‘Oh yes, OK, we need to change our behavior,'” she said. Now, she says, “It’s a different world.”

And in the case of the Somali-American community, where a large number of people are immigrants and refugees who are less assimilated, “It’s more of getting the community to own the issue and own the solutions.”

 

That means a lot more community outreach. In the past few years, the Department of Health has hired two Somali outreach workers. One visits mothers’ groups, day care centers and charter schools to talk about vaccines.

 

Another Somali worker talks to parents about autism and the resources available for special-needs children.

 

“The community does have very real concerns about autism,” Ehresmann said. “By saying, ‘Oh, vaccines don’t cause autism,’ that’s not sufficient.”

 

Some of the most important voices advocating for vaccines have been Somali doctors and other health professionals, and the imams from the hardest-hit areas, Ehresmann said.

 

“These folks are really stepping up to the plate and speaking out on the value of vaccines on their own. It is coming from within the community leadership. That is really important,” she said.

 

Taiwan Rejection From WHO Assembly Further Strains Relations With China

Taiwan’s already precarious relations with old rival China took another step back this week after the self-ruled island said Beijing blocked it from the annual World Health Organization assembly, a move that may prompt Taipei to rethink how they treat the other side.

Officials in Taipei said Tuesday the deadline had lapsed to receive an invitation to the May 22-31 World Health Assembly in Geneva. They blamed China for using its clout in the World Health Organization (WHO) to block the invitation.

“If the other side overlooks our appeals and grave reminders, that is sure to severely hurt people’s feelings and spark a backlash in Taiwan public opinion, even causing cross-Strait (China-Taiwan) relations to drift further,” said Chiu Chui-cheng, spokesman for the Taiwan government’s Mainland Affairs Council.

“We want to appeal once more to the other side not to offend Taiwan public opinion,” Chiu said. “The Beijing authorities should reflect deeply on avoidance of old-fashioned, hawkish policy mentalities and actions that could cause huge harm to a resumption of cross-Strait relations.”

Beijing sees self-ruled Taiwan as part of its territory rather than a state entitled to membership in international organizations. The two sides have been separately ruled since the Chinese civil war of the 1940s, when Chiang Kai-shek’s Nationalists fled to Taiwan.

Taiwan is unlikely to retaliate in real terms over the WHO slight, but the flap brings a string of other China issues into sharper focus and may increase popular anger in Taiwan while prompting a new search for ways Taipei can work with Beijing without selling down local autonomy.

“Taiwan people will feel frustrated with the assertive response of China,” said Huang Kwei-bo, associate diplomacy professor at National Chengchi University in Taipei. “Beijing’s image will get worse.”

Over the past year, China sailed an aircraft carrier around Taiwan, scaled back Taiwan-bound tourism and, since March, has detained a Taiwanese activist without announcing any formal charges against him.

Under former Taiwanese President Ma Ying-jeou, Beijing let Taipei observe the World Health Assembly every year since 2009 as “Chinese Taipei,” implying a link to China.

A spokesman for the Communist government’s Taiwan Affairs Office said Monday Taiwan could not observe this year’s assembly, where the WHO sets policies and approves a budget, because current President Tsai Ing-wen has not endorsed the Beijing view that both sides belong to a single China – a term Ma accepted.

Tsai’s Democratic Progressive Party takes a guarded view of relations with China. Some party members want Taiwan to declare formal independence from Beijing.

China’s actions “will definitely push Taiwan people further and further away and severely destroy peace and stability between the two sides,” Tsai’s party said in a statement Tuesday. “The authorities in Beijing must reflect and correctly see this negative outcome.”

Taiwanese see the world health assemblies as opportunities to learn from the 192 WHO member states and share their own experience in infectious disease control, and improve medical services in developing countries.

Taiwan has just 21 diplomatic allies compared to more than 170 that recognize Beijing, making it hard for Taiwan to gain access to international bodies.

“The only barrier is politics and to speak more specifically, it’s just China,” ruling party legislator Yeh Yi-chin said Monday. “But where we’d like to appeal and remind everyone is, does the whole world want to let China, one country, destroy the global medical safety net?”

Beijing periodically uses its diplomatic connections and clout as the world’s second largest economy to block Taiwan from joining the United Nations, of which the WHO is a special agency. Last year Taiwan was rejected from observing a session of the U.N. International Civil Aviation Organization and from participating in the U.N. Framework Convention on Climate Change.

Those barriers would keep affecting how Taiwanese see Beijing. “We need to see what happens next time at the United Nations,” Huang said.

Some Taiwanese may pressure Tsai to find a way of negotiating with China that lets the other side open doors again internationally without making Taiwan give up autonomy. Some scholars expect Tsai to propose a new formula for China relations in the second half of 2017.

The U.S. State Department backed Taiwan’s cause of joining the World Health Assembly this year, saying it supports the island’s “meaningful participation” in international bodies that require statehood.

“The United States remains committed to supporting Taiwan as it seeks to expand its already significant contributions to addressing global challenges,” a spokesperson said this week. “We encourage authorities in Beijing and Taipei to engage in constructive dialogue, on the basis of dignity and respect.”

US Under Increased Pressure to Remain Committed to Climate Change Efforts

Pressure is mounting on the U.S. administration to remain committed to the Paris agreement on climate change. European Union leaders, a former United Nations chief and former U.S. President Barack Obama have joined the chorus of voices emphasizing the need for action to reduce greenhouse emissions worldwide. On Tuesday, the White House announced that President Trump is postponing his decision regarding the climate treaty for the second time. Zlatica Hoke has more.

For One Chinese City, New ‘Silk Road’ Leaves Old Problems Unsolved

In August, 2014, planners in the northeastern Chinese city of Hunchun argued in state media that it should be included in the “One Belt, One Road” project, Beijing’s vision laid out the previous year of a new Silk Road across Asia to Europe.

In 2015, the official Xinhua news agency ran stories about how Hunchun was accelerating its “OBOR” plans, and early in 2016, China’s cabinet released a list of Chinese cities included in “OBOR:” Hunchun was on the map.

The fact that the list came about slowly, and that some cities felt moved to lobby to be included, underlines how the pet project of Chinese President Xi Jinping is as amorphous as it is ambitious.

The challenge of defining exactly what OBOR means will come to the fore later this month, when heads of state and senior officials from around the world gather in Beijing for the first major summit dedicated to the project.

“Frankly, I don’t really know what the belt and the road are. The reason being that I think Beijing doesn’t know either,” said Tom Miller of Gavekal Dragonomics, who recently wrote a book on the New Silk Road.

Reality is complicated

In theory, incentives for cities, companies and countries to be involved are strong: hundreds of billions of dollars are expected to be spent on roads, railways, pipelines, ports and industrial zones stretching from Sri Lanka to Djibouti.

But as Hunchun shows, the reality of OBOR can be complicated and requires buy-in from other countries.

The city’s position at the apex of Russia, North Korea and China is a blessing and a curse. While Russia is gradually opening up to more trade, North Korea has stalled.

Tantalizingly close to the sea but without a sea port after Russia’s annexation in 1860, local businesses said they wanted to ship more goods via Rason, a nearby North Korean port earmarked as an export hub to China, Japan, South Korea and beyond.

That would open a shipping route to southern China, but with sanctions in place against Pyongyang, global tensions rising over its arms programme and Rason developing slowly, expectations of progress are low.

“We currently transport goods by rail to southern China. We’d like to ship from Rason, but at present that’s not happening,” said Wang Hai, general manager of Guanghai Import and Export Trading Company in Hunchun, a small firm with 12 staff, both Chinese and Russian. “Hunchun is a hub for northeast Asia, so in theory it should play a big role in ‘One Belt, One Road,’ but for now it hasn’t been able to get its act together.”

Russia more promising?

North Korea remains largely shut to the outside world, and China, while remaining its main economic and diplomatic backer, has signed up for tough U.N. sanctions against it.

But China said on Tuesday that North Korea would be sending a delegation to the upcoming OBOR summit.

Russian President Vladimir Putin will also attend, reflecting his country’s importance in China’s OBOR strategy; in Hunchun, some enterprises are already seeing benefits from mutual trade.

Xingyang Seafood, for example, imports 90 percent of its seafood from Russia and 10 percent from North Korea, said chairman Zhao Yang.

“The main advantage of being in Hunchun is that we are close to Russia,” Yang told Reuters. The company is headquartered in northern China’s Shandong province, but in 2015 it opened a branch in Hunchun to exploit its proximity to Russia.

“How does North Korea help us? It doesn’t help us at all, they have hardly any seafood left there.”

Trade with Russia

Hunchun’s spokesman Hao Qiang declined to comment about the city’s relationship with North Korea, because of the “current political situation,” and would not say how many North Koreans were working in the city. “But we can talk about Hunchun’s trade with Russia, the city’s clean air and successful tree-planting initiatives,” he said.

In addition to oil and gas export opportunities between Russia and China, Putin has spoken of roads and bridges being built to strengthen links.

Russia has struggled, however, to lure enough people to sparsely populated regions bordering China’s northeast, and there are concerns among Russians of creeping colonization if too much land is leased to the Chinese.

“They [Chinese] will live there, their relatives will come, they will deepen their roots there, they will take Russian women as wives,” firebrand opposition politician Vladimir Zhirinovsky said in 2015, when proposals to lease Russian land to Chinese farmers were put forward. “We will only have problems. I see no advantages.”

For Hunchun, OBOR is the latest in a series of development programs aimed at revitalizing Jilin province and China’s northeast.

Benefits of investments are clear

In the 1990s, the United Nations backed the Tumen River Area Development Project, which became the Greater Tumen Initiative linking China, Mongolia, South Korea and Russia.

The benefits of large-scale state investment are clear. From 25th place among smaller cities in Jilin in terms of economic growth, Hunchun now stands third. Foreign trade has doubled since 2011, according to city statistics.

Whether OBOR can add value over the longer term is uncertain, Peter Cai wrote in a report for the Lowy Institute, an Australian think-tank.

“If the Chinese government fails to connect its domestic projects with overseas components, OBOR will be little different from other domestic infrastructure programs, greatly diminishing its economic and strategic value.”

Mexico Targets Suppliers, Buyers in Move Against Fuel Theft

Mexico is embarking on a strategy to combat illegal pipeline thefts that includes going after those who purchase and deal in stolen fuel as well as the thieves, the country’s treasury secretary said Tuesday.

 

Jose Antonio Meade said it’s a problem that costs Mexico somewhere between 15 billion and 20 billion pesos a year, or $780 million to $1 billion, and one that requires a holistic approach to solve.

 

Mexico’s government wants to reduce the siphoning of gasoline and diesel from illegal pipeline taps by attacking “not only the supply but also the demand,” Meade said, according to a transcript of remarks during a Q&A session released by the Treasury Department.

 

Besides quick-response actions against thieves, authorities must work to make the illicit business less profitable and make those who buy it face consequences, he said.

Armed gangs add to problem

The topic is front-and-center in Mexico these days after gun battles between the army and suspected thieves killed four soldiers and six gunmen last week in the central state of Puebla. Armed gangs have gotten involved in the business of fuel thefts, and gunmen were said to have used civilians as human shields in one of the clashes.

 

Fuel thieves are also suspected of being behind a shocking crime in Puebla on May 2, when eight assailants raped a woman and her 14-year-old daughter, killed her toddler son, beat her husband, stole the family’s pickup truck and left on them on a highway at night. In March, three state detectives were abducted and killed by a fuel theft gang allegedly with the help of the local mayor and police officers.

 

Meade said those who “tear at the social fabric, who in a very cowardly fashion hide behind … women and children,” cause problems for communities and are “terribly dangerous.”

Corrupt workers a concern

 

Meade acknowledged it’s “very likely” that corrupt workers at state oil company Petroleos Mexicanos, or Pemex, are involved in facilitating pipeline thefts. He said officials are working with the company to identify them.

Officials are also looking at gas stations that may be selling stolen fuel, as well as the mass transportation sector. To that end, authorities raided 13 gas stations last month after detecting irregular fuel-buying patterns, Meade said.

 

“There was even a gas station that had been shut down (by authorities) for a year but was continuing to sell gasoline, which of course was stolen,” he said.

Looking for help from Senate

The secretary said authorities are looking into technology that would allow them to better track illegal pipeline taps and “mark” gasoline to help identify fuel that has been stolen.

 

Meade also noted legislation passed in the Chamber of Deputies and pending in the Senate would make it easier to prosecute fuel theft.

“The theft is illegal, but possession of stolen gasoline … since we don’t catch them physically and flagrantly stealing, we often find it impossible to take legal action,” he said.

Stolen fuel part of local economy

 

The Puebla state Public Security Department reported Tuesday that in a series of raids it seized over 21,000 liters (5,600 gallons) of fuel and 12 vehicles apparently involved in thefts.

 

Some communities in Puebla and elsewhere have come to base much of their economies on selling fuel stolen from the thousands of taps that are drilled into state-owned pipelines each year. It can also be dangerous — on Sunday one such illegal tap exploded into flames.

Meade said Puebla is the state with the highest incidence of fuel theft, followed by Guanajuato and Veracruz.