YCLOAK

Zimbabwean entrepreneurs could soon use movable assets, including livestock and vehicles, to secure loans from banks, according to a bill brought before the country’s Parliament this week.

The southern African country’s economy is dominated by informal business following the formal sector’s contraction by as much as 50 percent between 2000 and 2008, according to government data, after President Robert Mugabe’s seizure of white-owned farms decimated the key agriculture sector.

The Movable Property Security Interest Bill, introduced Tuesday by Finance Minister Patrick Chinamasa, seeks to make it easier for Zimbabwe’s burgeoning informal sector to access bank funds.

A copy of the bill seen Wednesday by Reuters defines movable property as “any tangible or intangible property other than immovable property.”

New economic reality

Presenting the bill, which still has to go through several stages before becoming law, Chinamasa said the majority of small businesses did not have the immovable assets that banks require as collateral for loans.

“The Reserve Bank of Zimbabwe Act will be amended to achieve the objective of this bill, and the assets to be considered include any type, such as machinery, motor vehicles, livestock and accounts receivable,” Chinamasa told lawmakers.

The finance minister said banks had failed to adjust to Zimbabwe’s new economic reality, in which the informal sector, mostly made up of small businesses, plays a dominant role.

Loans to small businesses amounted to $250 million in the year to date, Chinamasa said, out of total bank loans of nearly $4 billion.

“As minister in charge of financial institutions, I feel there is need for a change of attitude by our banks to reflect our economic realities,” Chinamasa said.

The bill provides for a collateral registry to be set up by the central bank, which would maintain a database of all movable assets put up as loan security.

“The purpose of the registry is to facilitate commerce, industry and other socioeconomic activities by enabling individuals and businesses to utilize their movable property as collateral for credit,” reads part of the bill.

Pitching the proposed law to legislators, Chinamasa cited several developing economies — including those of Liberia, Ghana, Malawi, Kenya, Lesotho, Peru and Ukraine — that he said used movable assets as collateral to increase lending to small businesses.

“Their access to banking finance increased by 8 percent [on average], while interest rates declined by 3 percent per annum,” he said.

Foreign currencies

Zimbabwe’s economy enjoyed a temporary reprieve after it adopted the use of multiple foreign currencies — mainly the U.S dollar and South Africa’s rand — in 2009 to replace its inflation-ravaged local unit.

The currency move initially paid dividends, with the economy expanding by an average 11.3 percent between 2010 and 2012, according to World Bank data, while inflation came down to single digits.

However, declining exports from the mineral-dependent country following weaker mineral commodity prices coincided with a sharp rise in imports, triggering an acute foreign currency shortage and slowing down the economy as credit to businesses dried up.
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President Donald Trump said Wednesday that his administration would not label China a currency manipulator, backing away from a  campaign promise, even as he said the U.S. dollar was “getting too strong” and would eventually hurt the economy.

In an interview with The Wall Street Journal, Trump also said he would like to see U.S. interest rates stay low, another comment at odds with what he had often said during the election campaign.

A U.S. Treasury spokesman confirmed that the Treasury Department’s semiannual report on currency practices of major trading partners, due out this week, would not name China a currency manipulator.

The U.S. dollar fell broadly on Trump’s comments on both the strong dollar and interest rates, while U.S. Treasury yields fell on the interest rate comments, and Wall Street stocks slipped.

Trump’s comments broke with a long-standing practice of both U.S. Democratic and Republican administrations of refraining from commenting on policy set by the independent Federal Reserve. It is also highly unusual for a president to address the dollar’s value, which is a subject usually left to the Treasury secretary.

 

A day-one promise

“They’re not currency manipulators,” Trump told the Journal about China. The statement was an about-face from Trump’s election campaign promises to slap that label on Beijing on the first day of his administration as part of his plan to reduce Chinese imports into the United States.

The Journal paraphrased Trump as saying that he’d changed his mind on the currency issue because China has not been manipulating its yuan for months and because taking the step now could jeopardize his talks with Beijing on confronting the threat from North Korea.

Separately Wednesday, at a joint news conference with NATO Secretary General Jens Stoltenberg, Trump said the United States was prepared to tackle the crisis surrounding North Korea without China if necessary.

The United States last branded China a currency manipulator in 1994. Under U.S. law, labeling a country as a currency manipulator can trigger an investigation and negotiations on tariffs and trade.

Senate Democratic leader Chuck Schumer said in a statement that Trump’s decision to break his campaign promise on China was “symptomatic of a lack of real, tough action on trade” against Beijing.

“The best way to get China to cooperate with North Korea is to be tough on them with trade, which is the number one thing China’s government cares about,” Schumer said.

Yellen’s future

Trump also told the Journal that he respected Federal Reserve Chair Janet Yellen and said she was “not toast” when her current term ends in 2018.

That was also a turnaround from his frequent criticism of Yellen during his campaign, when he said she was keeping interest rates too low.

At other times, however, Trump had said that low rates were good because higher rates would strengthen the dollar and hurt American exports and manufacturers.

“I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me. But that’s hurting — that will hurt ultimately,” Trump said Wednesday.

“It’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency,” Trump told the Journal.

The dollar fell broadly Trump’s comments on the strong dollar and on his preference for low interest rates. It fell more than 1.0 percent against the yen, sinking below 110 yen for the first time since mid-November.

“It’s hard to talk down your currency unless you’re going to talk down your interest rates, and so obviously he’s trying to get Janet Yellen to play ball with him,” said Robert Smith, president and chief investment officer at Sage Advisory Services in Texas.

Trump’s comments on the Fed were his most explicit about the U.S. central bank since he took office in January, and they suggested a lower likelihood that he plans to try to push monetary policy in some unorthodox new direction.

Fed overhaul

Some key Republicans have advocated an overhaul of how the Fed works, using a rules-based policy that would most likely mean higher interest rates, not the lower ones Trump said he prefers.

The Fed in mid-March hiked interest rates for the second time in three months, increasing its target overnight rate by a quarter of a percentage point.

“Maybe he’s learning on the job,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago, noting that with Trump’s transition from candidate to president he was now being counseled by more orthodox voices sensitive to what is needed to keep global bond markets on an even keel.

The president is also “very close” to naming a vice chair for banking regulation and filling another open seat that governs community banking on the Federal Reserve Board, U.S. Treasury Secretary Steven Mnuchin said during the interview.
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United Airlines saw its stock price decline by 4 percent or more after a viral video showing a passenger being dragged off a flight and injured sparked outrage in the U.S. and several nations. One airline analyst says he has never seen such a “parade of incompetence.”
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Russia is struggling to source gas turbines for two new power plants it is building in Crimea, Russian Energy Ministry Alexander Novak said Wednesday.

European Union sanctions bar European individuals and companies from providing energy technology to Crimea, which Russia annexed from Ukraine in 2014. The Black Sea peninsula has suffered electricity shortages since then.

Three sources told Reuters last year that turbines for the Crimean plants would be made by Siemens Gas Turbine Technologies LLC, a joint venture in which Siemens has a 65 percent share.

The German company categorically denied it intended to send turbines to Crimea.

The joint venture’s factory is the only one in Russia capable of making turbines which will be compatible with the Crimean power plants.

“Work is continuing despite problems related to the delivery of equipment from a Western company. We are working on buying other equipment,” Novak told the upper house of Russia’s parliament on Wednesday. He did not name the Western company.

Novak later told reporters Russia was considering various options, including sourcing equipment from other countries, using Russian machinery, or using foreign equipment on Russian territory that was imported before sanctions were introduced.

The two new power plants were due to be commissioned at the end of 2017, but Novak said last month their launch had been delayed by a few months.
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Former Rio de Janeiro Mayor Eduardo Paes, the moving force behind organizing last year’s Olympics, is being investigated for allegedly accepting at least 15 million reals ($5 million) in payments to facilitate construction projects tied to the games.

Paes is one of dozens of top politicians implicated in a sweeping judicial corruption investigation in which construction giant Odebrecht illegally paid billions to help win contracts.

Paes’ name appears in documents published Tuesday by Brazil’s top court, and could stand trial if the country’s attorney general decides to prosecute.

In a statement Wednesday from his spokeswoman, Tereza Fayal, the former mayor strongly denied the allegations made in several plea bargains signed by former and present Odebrecht employees, calling the accusations “absurd and untruthful.”

“He vehemently denies that he has accepted bribes to facilitate, or to benefit, the interests of the Odebrecht company,” the statement said.

Paes stepped in forcefully about two years before the Olympics opened, shortly after International Olympic Committee Vice President John Coates called Rio’s preparations “the worst” he’d ever seen and woefully behind schedule.

The IOC repeatedly credited Paes with speeding up preparations and cutting through red tape.

As rumors swirled around Olympic preparations, Paes often challenged reporters to find any corruption in city-hall contracts.

Days after the trouble-plagued Olympics ended, Paes and Carlos Nuzman — an IOC member and the president of the organizing committee — were awarded the “Olympic Order” by IOC President Thomas Bach.

In a statement Wednesday to The Associated Press, the IOC said Paes should be regarded as innocent until proven otherwise.

“These are allegations which he (Paes) strenuously denies,” the IOC said.

Odebrecht was involved in building many Olympic-related projects, including several arenas at the Olympic Park in suburban Barra da Tijuca, a subway-line extension, and the renovation of Rio’s port area.

The Supreme Court documents showed Paes received more 11 million reals ($3.5 million) in local bank accounts, and the rest in off-shore accounts.

In the statement, Paes said “he’s never had off-shore accounts.”

Paes left office on Jan. 1 after a term-limited eight years. He was once viewed as a presidential candidate, hoping to use the Olympics as a springboard. He recently said he hoped to run next year for governor of the state of Rio de Janeiro.

He is referred to in the Odebrecht documents as “The Little Nervous One.”

Sidney Levy, the CEO of the Rio organizing committee, which operated independently from the government, repeatedly pledged his body was being run “without corruption.” His name did not come up in the documents.

Plea bargains also indicate that irregularities — none of them involving Paes — were seen in awarding contracts for at least three stadiums for the 2014 World Cup: Sao Paulo, Recife and Brasilia.

In the case of the Sao Paulo stadium of Brazilian club Corinthians, plea bargains showed that Vicente Candido, a federal congressman and former official of the Brazilian Football Confederation, appeared to receive 50,000 reals ($16,000) from Odebrecht to help secure public financing.

Odebrecht built the stadiums in Sao Paulo and Recife. Brazilian constructor Andrade Gutierrez built the stadium in Brasilia.
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President Donald Trump told a group of chief executives Tuesday that his administration was revamping the Wall Street reform law known as Dodd-Frank and might eliminate the rules and replace them with “something else.”

At the beginning of his administration, Trump ordered reviews of the major banking rules that were put in place after the 2008 financial crisis, and last week he said officials were planning a “major haircut” for them.

“For the bankers in the room, they’ll be very happy because we’re really doing a major streamlining and, perhaps, elimination, and replacing it with something else,” Trump said Tuesday.

“That will be the minimum. But we’re doing a major elimination of the horrendous Dodd-Frank regulations, keeping some obviously, but getting rid of many,” he said.

The many provisions of the Dodd-Frank measure were aimed at decreasing risks in the U.S. financial system. The White House is not unilaterally able to upend Dodd-Frank’s rules, almost all of which are implemented by independent regulatory agencies like the Securities and Exchange Commission and the Federal Reserve.

A sweeping change to the law would require congressional action, though in some cases regulators may also have wiggle room to make changes through a formal rule-making process.

Report on regulations

In February, Trump issued an executive order requiring Treasury Secretary Steve Mnuchin to consult with U.S. regulators and submit a report outlining a proposal for possible regulatory and legislative changes that will help fuel economic growth and promote American business interests.

That report, due to be released in June, will most likely serve as a blueprint for possible changes down the road. However, congressional action on a Wall Street bill is not expected in the near term, as Congress focuses primarily on health care and tax reform.

Participants in the Tuesday meeting included Rich Lesser, chief executive of Boston Consulting Group; Doug McMillon, chief executive of Wal-Mart Stores; Indra Nooyi, chief executive of PepsiCo; Jim McNerney, former chief executive of Boeing; Ginni Rometty, chief executive of IBM; and Jack Welch, former chairman of General Electric.

The business leaders are part of Trump’s “Strategy and Policy Forum” that last met with him in February.

Trump also reiterated his criticism of the North American Free Trade Agreement between the United States, Canada and Mexico.

“NAFTA is a disaster. It’s been a disaster from the day it was devised. And we’re going to have some very pleasant surprises for you on NAFTA, that I can tell you,” he said.
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United Airlines saw its stock price decline by 4 percent or more after a viral video showing a passenger being dragged off a flight and injured sparked outrage in the U.S. and several nations. One airline analyst says he has never seen such a “parade of incompetence.”
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South Asian migrants powering the construction boom in oil-rich Gulf countries are often illegally made to pay for their own recruitment, adding to hardships of poor working conditions and wages, according to an investigation released Tuesday.

Millions of migrants seeking a way out of poverty by working in Gulf nations from Qatar to the United Arab Emirates must routinely pay fees that can equal a year’s salary, U.S. researchers said in a report.

“Recruitment is not free,” said report co-author David Segall of New York University’s Stern Center for Business and Human Rights. “Somebody does have to bear these costs, but that of course should be the employing company.”

The findings came as conditions for construction workers from India, Nepal and Bangladesh in the 2022 FIFA World Cup host, Qatar, have drawn scrutiny from rights groups who say migrants live in squalor and work without proper access to water and shelter.

In five fact-finding missions to the Gulf and South Asia, the researchers found workers are typically made to pay for their airfare from South Asia and their work visa, often at inflated prices.

Selling visas for profit is illegal in the six Gulf countries the researchers investigated — Saudi Arabia, Kuwait, Qatar, Oman, the United Arab Emirates and Bahrain. But violations rarely lead to prosecution and punishment, the report said.

Fees highest for Bangladeshis

Bangladeshi workers paid as much as $5,200 in recruitment fees, according to the study, the highest price among other South Asian construction workers, who number some 10 million people in the Gulf.

In rare cases, construction companies took on expenditures to recruit their workers, the study found. The fees had the effect of pushing already destitute migrants further into poverty by tying them to high-interest loans.

“These are people who are already desperate enough that they feel that they need to undertake this journey, leave their families in order to just achieve the possibility of economic success,” Segall told the Thomson Reuters Foundation. “For them to be in debt before they even start this journey is really an injustice.”

Reports of abuse of migrant domestic workers have prompted countries such as Kenya, Ethiopia, Uganda and Indonesia to ban their citizens in recent years from seeking jobs in the Middle East.

The New York University report expanded on the findings of an investigation conducted in Qatar and released last week, which concluded hundreds of Asian workers had paid recruitment fees.
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“No one should ever be treated this way,” reads part of a new public statement issued Tuesday by United Airlines CEO Oscar Munoz, following Sunday’s incident when a passenger was bloodied after being dragged off an overbooked United airliner at Chicago’s O’Hare Airport.

“I continue to be disturbed by what happened on this flight,” the Munoz statement also says.

The incident has gone viral through social media after being captured on other passengers’ cell phones.

Munoz added that the company will conduct a review of how the airline handles overbooking situations and how it interacts with airport authorities and law enforcement. He said the company will release the results of its review April 30.

 

Munoz released two earlier statements staunchly supporting the crew, saying in a statement late Monday that United attendants “followed established procedures” when the passenger was forcibly removed.

White House spokesman Sean Spicer said President Donald Trump has seen what Spicer describes as the “troubling” video recorded on the United Airlines flight. Besides the global social media firestorm, the incident also has stirred up threats of a boycott.

Spicer told reporters at a White House briefing Tuesday the incident was “unfortunate” but does “not necessarily need a federal response,” adding there are “plenty” of law enforcement agencies available to conduct an investigation.

Because the Chicago to Louisville flight was overbooked, the crew asked passengers to voluntarily take another flight in exchange for financial compensation. According to media reports, the airline needed to make room for four of its employees.

No one volunteered, so the airline randomly selected four people, one of whom refused to leave – resulting in his forced removal by three men who were identified as Chicago aviation security officers.

 

 

Video showing the man, who appeared to be of Chinese descent, being dragged from the plane and later returning with a bloodied face was widely circulated on social media, drawing angry reactions. One passenger, Audra Bridges, who posted video of the incident, said the passenger was very upset when he was chosen and explained he was a physician who needed to get home in order to see patients the next morning. Bridges said the man appeared disoriented when he ran back onto the aircraft moments later.

Crew members eventually ordered everyone off the plane and did not let them return until the injured passenger was removed again on a stretcher.

Bridges said the passengers were “shocked and appalled” at the incident, which prompted threats of a boycott as the busy summer travel season begins.

The online backlash intensified when CEO Munoz used the euphemism “re-accommodate” in a Twitter posting Monday to describe the forcible removal of the passenger. Munoz. However, he also said the airline was reaching out to the passenger “to talk directly to him and further address and resolve this situation.”

In the letter to employees, Munoz said the passenger “raised his voice and refused to comply” when he was initially asked to leave, and became “more disruptive and belligerent” in response to subsequent requests.

Crew members had “no choice” except to call Chicago Aviation Security officers to help remove the passenger, Munoz wrote.

In a statement late Monday, the Chicago Department of Aviation said the incident was “not in accordance with our standard operating procedure and the actions of the aviation security officers are obviously not condoned by the department.”

The statement added one officer involved has been placed on administrative leave, pending a review of the incident.

Munoz admitted to employees that the airline could learn from the incident but reiterated on his support of his employees’ actions. “I emphatically stand behind all of you,” he wrote.

Sunday’s incident follows another controversial occurrence in late March in which two girls, one estimated to be about 10 years old, were prevented from boarding a flight in Denver because they were wearing leggings, a violation of the airline’s dress code under a program for United employees.

The negative publicity may be adversely affecting the value of the airline. United’s stock price dropped nearly 4 percent during late morning trading Tuesday in New York, but by the close of the market it had dropped only about 1.1 percent.

For United Airlines, a global carrier that launched nonstop service to China in 1986, and bills itself as offering “more nonstop U.S.-China flights” to more cities in China “than any other airline,” comments on China’s lively social media were just one more problem Tuesday.

One commentator said: “Reading the news of the United Airlines’ violent removal of a passenger reminds me of three nightmarish trips with United Airlines. [It] provides the world’s worst service ever, not just one of the worst.”

Another commented: “I would like to give the passenger thumbs up. Although lots of American Chinese are discriminated against, they are afraid of speaking out due to [losing] face.”

 

Tourists’ remarks

VOA’s Mandarin service interviewed some Chinese tourists visiting Washington.

“I feel very angry. I feel this shouldn’t have happened in the U.S.,” said Xiaotian Liu. “It happened to be an Asian-American. I do not think they had a target.”

“I hope [United Airlines] can improve its service after this incident,” said Liu. “We will probably choose different airlines next time.”

“We happened to fly [United Airlines] on this trip,” said Xuhai Lu. “We flew a Chinese airline last time. Chinese airlines provide better service than American ones.”

VOA’s Mandarin service contributed to this report.
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China Southern Airlines has flown its inaugural Guangzhou to Mexico City flight, via Vancouver, the first route operated by a domestic Chinese carrier to the Latin American nation, the Mexican government said on Tuesday.

China’s interest in Mexico, including tourism and investment, has been on the rise in recent years. In 2016, 74,300 Chinese tourists visited Mexico, up 33.5 percent from a year earlier.

Mexican authorities expect over 100,000 Chinese tourists to visit this year.

China and Mexico recently pledged to deepen ties at a meeting between their top diplomats following the U.S. presidential election victory of Donald Trump, who has tested Washington’s relationship with both countries.

 
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Several minutes after a passenger recorded a video watched around the world that showed security officers dragging another passenger off an overbooked United Express flight at Chicago’s O’Hare International Airport, a smaller snippet of video showed an even more troubling scene.

There stood the passenger who had been dragged on his back to the front of the plane, appearing dazed as he spoke through bloody lips and blood that had spilled onto his chin.

 

“I want to go home, I want to go home,” he said.

 

The treatment of the passenger on Sunday night prompted outrage and scorn on social media, and anger among some of the passengers on the flight as the unidentified man was evicted.

 

The incident risks a backlash against United from passengers who could boycott the airline as the busy summer travel season is about to begin. For Chicago, it is another public relations nightmare, adding to its reputation as a city unable to curb a crime wave in some neighborhoods, which President Donald Trump has highlighted with critical tweets.

 

The embarrassing incident spiraled out of control from a common air travel issue – an overbooked flight. United was trying to make room for four employees of a partner airline, meaning four people had to get off the flight to Louisville.

 

At first, the airline asked for volunteers, offering $400 and then when that didn’t work, $800 per passenger to relinquish a seat. When no one voluntarily came forward, United selected four passengers at random.

 

Three deplaned but the fourth, a man who said he was a doctor and needed to get home to treat patients on Monday, refused.

 

Three men, identified later as city aviation department security officers, got on the plane. Two officers tried to reason with the man before a third came aboard and pointed at the man “basically saying, ‘Sir, you have to get off the plane,’ ” said Tyler Bridges, a passenger whose wife, Audra D. Bridges, posted a video on Facebook.

 

One of the security officers could be seen grabbing the screaming man from his window seat, across the armrest and dragging him down the aisle by his arms.

 

Other passengers on Flight 3411 are heard saying, “Please, my God,” “What are you doing?” “This is wrong,” “Look at what you did to him” and “Busted his lip.”

 

“We almost felt like we were being taken hostage,” said Tyler Bridges. “We were stuck there. You can’t do anything as a traveler. You’re relying on the airline.”

 

United Airlines’ parent company CEO Oscar Munoz late Monday issued a letter defending his employees, saying the passenger was being “disruptive and belligerent.”

 

While Munoz said he was “upset” to see and hear what happened, “our employees followed established procedures for dealing with situations like this.”

 

Chicago’s aviation department said the security officer who grabbed the passenger had been placed on leave.

 

“The incidence on United Flight 3411 was not in accordance with our standard operating procedure and the actions of the aviation security officer are obviously not condoned by the Department,” the department said in a statement.

 

After a three-hour delay, United Express Flight 3411 took off without the man aboard.

 

Airlines are allowed to sell more tickets than seats on the plane, and they routinely overbook flights because some people do not show up.

 

It’s not unusual for airlines to offer travel vouchers to encourage people to give up their seats, and there are no rules for the process. When an airline demands that a passenger give up a seat, the airline is required to pay double the passenger’s one-way fare, up to $675 provided the passenger is put on a flight that arrives within one to two hours of the original. The compensation rises to four times the ticket price, up to $1,350, for longer delays.

 

When they bump passengers, airlines are required to give those passengers a written description of their compensation rights.

 

Last year, United forced 3,765 people off oversold flights and another 62,895 United passengers volunteered to give up their seats, probably in exchange for travel vouchers. That’s out of more than 86 million people who boarded a United flight in 2016, according to government figures. United ranks in the middle of U.S. carriers when it comes to bumping passengers.

 

ExpressJet, which operates flights under the United Express, American Eagle and Delta Connection names, had the highest rate of bumping passengers last year. Among the largest carriers, Southwest Airlines had the highest rate, followed by JetBlue Airways.

 

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Associated Press Writer David Koenig contributed to this report.

AP-WF-04-11-17 1128GMT
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