YCLOAK

With its colonial mansions, landscaped gardens and ornate fountains, the town of Petropolis, a traditional haunt of Brazil’s last monarch Dom Pedro II, retains a grandeur that has not faded since he was forced into exile in 1889.

 

But beneath the opulent surface of the former summer imperial capital, resentment simmers against a special tax, the proceeds of which continue to go directly to the king’s descendants – more than a century after he was ousted.

For many of the 300,000 people living in the hill town, a 2.5 percent tax on real estate transactions is a symbol of social injustice in Latin America’s biggest country where inequality has widened amid its worst recession on record.

Brazil is one of the world’s most unequal places for property distribution with almost half of the land owned by one percent of the population. Colonial-era laws exacerbate the problem, analysts said.

“People aren’t happy to pay this tax,” Isabela Verleun, who works at the Imperial Museum of Petropolis, told the Thomson Reuters Foundation. “It shouldn’t exist.”

Petropolis, known as the Imperial City, is the closest mountain resort to Rio. Just 65 kms (42 miles) northeast of Brazil’s second biggest city, it’s a favored getaway for Rio residents with its forested hills and waterfalls.

It is well known for its 19th century architecture and home of the Imperial Museum, one of Brazil’s most visited museums.

Dom Pedro II and his family spent summers there after 1845 to escape the sweltering heat of then capital Rio de Janeiro.

 

Inside what is now a tourist attraction, children slide along wooden floors as adults marvel at a grand dining room complete with crystal chandelier.

“Ancient and Hereditary”

The town’s special property tax – known as laudemio – dates back to before Brazil’s independence in 1882.

The tax was imported to Brazil by its former colonial master Portugal to ensure land was passed from European settlers to their heirs. In colonial years, Brazil’s land was deemed the property of the Portuguese crown.

Despite becoming an independent republic in 1889, the special tax has never been repealed and is now criticized for continuing to earn money for a few privileged families.

“This ancient tax is hereditary and perpetual,” said Vitor Fernandes, a property law expert at the University of Campinas.

Marco Antonio de Melo Breves, a senior official with Brazil’s federal tax department, could not provide figures on how much revenue is paid annually under the royal property tax or how much it costs the average homeowner.

“There is not a unified database where it’s possible to obtain this,” Breves told the Thomson Reuters Foundation.

Payments are generally made through notaries, or private lawyers who certify documents, Breves said, so the government doesn’t have information on how many royal descendants are receiving benefits from property taxpayers.

Dom Joao Henrique de Orleans e Braganca, a businessman and photographer popularly known as Prince Bishop Johnny, is the great-great-grandson of the final monarch, and counts prominent politicians and artists among his friends.

In an interview with the Brazilian newspaper Valor, Braganca acknowledged some resent the royal family’s continued perks.

The prince said he received “very little money” from Petropolis under the special tax, without giving an amount, but added payments must continue as they are part of a “legal contract” in the city.

Royal Rewards

A fan of the British TV series “The Crown” which showcases the hectic schedules of the U.K. royal family, Braganca said that he does useful work “traveling all over Brazil doing talks in favor of respect for democracy and citizenship.”

The former royal family is not the only institution to benefit from the laudemio and a related land tax known as enfiteuse. The navy and the Catholic Church also levy similar property taxes, said Ely Machado, a lawyer in Rio de Janeiro who helps clients navigate Brazil’s complex housing rules.

A lack of clear property ownership and complex land registration policies are ongoing problems in Brazil, government officials said.

Half the population cannot prove full legal ownership of their homes, according to the Ministry of Cities.

While taxing homeowners based on colonial history may seem archaic, removing the special land tax would require a series of complex legal changes, said Ana Paula Bueno, a lawyer with the Land Governance Group at the State University of Campinas.

When Brazil emerged from military dictatorship and launched a new constitution in 1988 some people pushed for the tax to be abolished, said Verleun, but their lobbying was unsuccessful.

“We have to live with it,” Ana Paula Bueno told the Thomson Reuters Foundation.
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When they are not tending to international affairs, diplomats based in Havana can be found these days stewing in interminable queues at gas stations and concocting ways to increase the octane in fuel as Cuba’s premium gasoline shortage takes its toll.

Cuba sent around an internal memo last week advising that it would restrict sales of high-octane, so-called “special fuel” in April. That is not an issue for most Cuban drivers, whose vintage American cars and Soviet-era Ladas use regular fuel.

But it is for the embassies that use modern cars whose engines could be damaged by the fuel at most Havana gas stations. So the diplomats are taking a leaf out of the book of Cubans, used to such shortages, and becoming resourceful.

Given the U.S. trade embargo, Cubans have for decades had to invent new ways to keep their cars on the road, replacing original engines with Russian ones and using homemade parts.

“I bought octane booster, and the embassy has bought lubricants, meant to help the motor deal with rubbish gasoline,” said one north European diplomat, who got a relative to bring the booster in his luggage given it is unavailable in Cuba.

“At the moment we are using the car that runs on diesel, so we can ‘survive’,” said an Eastern European diplomat.

Cuba has not announced the measure officially yet. According to the memo, “the special fuel remaining in stock at gas stations from April will only be sold in cash and to tourists until the inventory is depleted.”

“It’s very serious. I have already suspended a trip to Santiago de Cuba for fear of lack of gas,” said one Latin American diplomat, adding that it seemed like the problem would last. “Diplomats are very worried.”

Some embassies in Havana have people scouting out which stations still have some higher-octane fuel and are sending around regular updates to staff. One gas station worker said they were getting small deliveries of fuel each day still.

The embassies are also advising people to carpool or use the diplomatic shuttle.

Meanwhile the European Union has requested from the ministry of foreign affairs that one or more service centers be set aside for diplomats with special gas, according to a European diplomat.

Cuba has become increasingly reliant on its socialist ally Venezuela for refined oil products but the latter has faced its own fuel shortage in recent weeks.

Meanwhile, the Communist-ruled island cannot easily replace subsidized Venezuelan supplies as it is strapped for cash.

Although the memo referred to April, it is not clear how long the shortage will last. Cubans joke that once something disappears in Cuba, it is never to return, referring to products that have disappeared from their ration book like cigarettes, beef and condensed milk.

The Peugeot dealership in Havana has sent its clients lists of technical tips how to protect their motors while using lower-grade gasoline, including more frequent maintenance and ensuring vehicles at running at optimum temperature before driving.

The shortage is also impacting others using modern cars such as taxi drivers, tourists and workers at joint ventures.
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The airlines are getting better at sticking to their schedules and are losing fewer bags. Their customers seem to be complaining less often.

Those are the findings of an annual report on airline quality being released Monday by researchers at Wichita State University and Embry-Riddle Aeronautical University.

 

The researchers use information compiled by the U.S. Department of Transportation to rate the airlines for on-time performance, baggage handling, bumping passengers off oversold flights, and complaints filed with the government.

 

They planned to release their list of the best airlines later Monday.

 

The report’s general observations:

 

On time performance: The percentage of flights that arrived on time or close enough rose to 81.4 percent in 2016 from 79.9 percent in 2015. Of 12 leading U.S. carriers, only American, JetBlue and Virgin America got worse.

 

Lost bags: The rate of bags being lost, stolen or delayed fell 17 percent.

 

Bumping passengers: Your chances of getting bumped by the airline dropped 18 percent, which doesn’t include people who voluntarily gave up their seat for money or a travel voucher.

 

Fewer complaints: The rate of complaints filed with the government dropped about one-fifth, with complaints rising only for Hawaiian and Virgin America.

 

The official complaint rates don’t include the larger number of complaints that passengers file directly with the airline. The airlines are not required to report those figures.

 

Clearly, however, airlines still have a perception problem. It’s not hard to find passengers who complain about a miserable flight, a missed connection, or shabby treatment by airline employees. Comments like that abound on Twitter.

 

“People don’t look at the numbers,” said Dean Headley, a marketing professor at Wichita State and co-author of Monday’s report. “They just know what happened to them, or they hear what happened to other people.”

 

The Wichita State and Embry-Riddle researchers have been doing their report for more than 25 years, making it useful for comparing airlines. But some observers of the airline industry dismiss their number-crunching approach, and there are many other surveys that purport to rank the airlines.

 

The Transportation Department counts a flight as being on time even if it arrives up to 14 minutes late. “Airlines are happy with that (grace period) because it makes them look better and misleads the passenger,” said aviation consultant Michael Baiada. He said airlines can do better, and besides, travelers pay to be on time — not 14 minutes late.

TripAdvisor releases rankings

 

More broadly, a statistical analysis of government data “really doesn’t take into consideration how the customer is treated,” said Bryan Saltzburg, an executive with travel site TripAdvisor LLC. “`How comfortable are they on the plane? How helpful is the staff? What’s the value for what the customer paid?”

 

TripAdvisor released its own airline rankings Monday, which it said were based on analysis of “hundreds of thousands” of reviews posted by users. It placed JetBlue and Alaska Airlines among the top 10 in the world, and it rated Delta ahead of American and United among the largest U.S. carriers.

 

Other outfits including J.D. Power and Skytrax also put out ratings. Airlines boast when they win. Recently, American Airlines started putting stickers on all 968 of its planes to note that a trade publication, Air Transport World, named it airline of the year.

 
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India and Bangladesh signed a slew of agreements on Saturday, including a $4.5 billion concessionary line of credit from India for development projects in Bangladesh, as the South Asian neighbors try to deepen their ties.

Indian Prime Minister Narendra Modi and his Bangladeshi counterpart, Sheikh Hasina, held wide-ranging talks in New Delhi, exchanging views on defense, regional security and cooperation in combating international terrorism.

Officials from the two sides signed 22 agreements, including a framework deal for defense cooperation over the next five years and an additional $500 million for Bangladesh to buy military equipment from India.

The two sides also signed an agreement on civil nuclear cooperation under which India will help Bangladesh develop its civilian nuclear program.

Modi said Hasina’s visit marked the “golden era” of India-Bangladesh relations and described India as “a long-standing and trusted development partner of Bangladesh.”

India and Bangladesh share a nearly 4,100-kilometer (2,545-mile) border. The two countries have had a close relationship since 1971, when Bangladesh, aided by India, gained independence from Pakistan following a bloody nine-month war.
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India and Bangladesh signaled deepening ties Saturday as New Delhi committed a $4.5 billion line of credit to Dhaka for development projects, and the two countries signed their first-ever pact on defense cooperation. 

Indian Prime Minister Narendra Modi announced an additional $500 million in credit for Bangladesh to buy military equipment from India during the visit to New Delhi by Bangladeshi Prime Minister Sheikh Hasina.

Calling India a “long standing and trusted development partner,” Modi said that the new credit lines “bring our resources allocation to Bangladesh to more than $8 billion over the past six years.” 

Both leaders reaffirmed their close ties during the Bangladeshi prime minister’s first visit to India in seven years, with Modi speaking of a “golden era” in their friendship and Hasina saying their friendly ties would benefit South Asia.

The two countries signed 22 agreements, including one on civil nuclear cooperation that aims to help Bangladesh develop its civilian nuclear program.

Many in New Delhi see the deal for defense cooperation over the next five years as the key breakthrough that will help reduce Bangladesh’s reliance on China for its military needs.

Worried by the growing Chinese influence in its neighborhood, New Delhi has made a concerted push in recent years to grow strategic ties with neighboring countries. Bangladesh’s purchase of two submarines from China last year deepened those concerns in India.

Calling the defense pact a feather in India’s cap, Sukh Deo Muni, a South Asia expert at New Delhi’s Institute of Defense Studies and Analyses, said,“India does not want China to consolidate defense ties just next to its belly, that is true.”

Although the political opposition in Bangladesh has denounced the pact, independent analysts in Dhaka was optimistic that it will help achieve balance.

“Approximately 80 percent dependency at this moment you see on China, so it should be brought down. That actually reduces our vulnerability,” said Abdur Rashid, Executive Director of the Institute of Conflict, Law and Development Studies in Dhaka. “If one is interrupted we can depend on the other.”

 A new rail link between the Indian city of Kolkata and Khulna in Bangladesh, and a bus link between Kolkata and Dhaka also were inaugurated, while another old rail link was restored to coincide with Hasina’s visit. The Bangladeshi leader said the greater connectivity is vital for the region’s development.

A key water-sharing agreement that Dhaka has long pushed for, however, eluded Hasina.

Although New Delhi favors such an arrangement, opposition from West Bengal state in India, through which the Teesta River flows into Bangladesh, has prevented the two countries from clinching a deal.

As Modi assured her of his commitment to conclude a deal, the Bangladeshi leader sounded a note of optimism. “I believe we shall be able to get India’s support in resolving these issues expeditiously,” said Hasina.

The two countries have had a close relationship since 1971, when India helped Bangladesh gain independence from Pakistan following a bloody nine-month war.

  

 
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March was a disappointing month for job seekers, with the U.S. Labor Department reporting that the private sector added only 98,000 jobs last month. But one industry is looking beyond the job numbers and toward distant shores as President Donald Trump meets for the first time with Chinese President Xi Jinping to talk about trade. Mil Arcega reports.
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Kostas Argyros’s unpaid electricity bills are piling up, among a mountain of debt owed to Greece’s biggest power utility.

His family owe 850 euros to the Public Power Corporation (PPC), a tiny fraction of the state-controlled firm’s 2.6 billion euros ($2.8 billion) in unpaid bills.​

Argyros picks up only occasional work as an odd-job man.

“When you only work once a week, what will you pay first?” said the 35-year-old, who lives in a tiny apartment in an Athens suburb with his unemployed wife and four small children.

The Argyros family are emblematic of deepening poverty in Greece following seven years of austerity demanded by the country’s international creditors. They burn wood to heat their home in winter, food is cooked on a small gas stove, and hot water is scarce.

The only evening light is the blue glare of a TV screen, for fear of racking up more debt.

Five-watt lightbulbs provide a dim glow and Argyros worries about the effect on their eyesight. More than 40 percent of Greeks are behind on their utility bills, higher than anywhere else in Europe.

People in poor neighborhoods are also increasingly turning to energy fraud, meaning that the problem for PPC is much higher than the mountain of unpaid bills suggests.

Power theft is costing PPC around 500-600 million euros a year in lost income, an industry official said, requesting anonymity because he was not authorised to divulge the numbers.

PPC declined to comment on the figure. Public disclosures by the Hellenic Electricity Distribution Network Operator HEDNO, which checks meters, show that verified cases of theft climbed to 10,600 last year, up from 8,880 in 2013 and 4,470 in 2012.

Authorities believe theft is far higher than the cases verified by HEDNO, another official said, declining to be named.

Households in the country are equipped with analog meters, which are easy to hack. One of the most common tricks is using magnets, which slow down the rotating coils to show less consumption than the real amount, a HEDNO official said.

Some websites even offer consumers tips and tricks on power fraud.

Burden of Arrears

For households who have had their electricity cut off, a group of activists calling themselves the “I Won’t Pay” movement have taken it upon themselves to reconnect the supply. The group says it has done hundreds this year.

PPC, which has a 90 percent share of the retail market and 60 percent of the wholesale market, is supposed to reduce this dominance to less than 50 percent by 2020 under Greece’s third, 86 billion euro bailout deal.

The lenders also want PPC to sell some of its assets, but the company is toiling under the debt of unpaid bills, a problem opposition lawmakers say will force a fire-sale.

In little over a year from June 2015, overdue bills to the 51-percent state-owned firm grew by nearly a billion euros to 2.6 billion, Chief Executive Manolis Panagiotakis told lawmakers in March.

Analysts estimate PPC’s cash reserves have shrunk to about  00 million euros, forcing it to secure a 200 million euro bank loan to repay a bond due in May.

The tangle has left it with little leeway for new investments or to fund a switch to cleaner forms of energy from coal to improve environmental standards.

“It is often said that PPC is undergoing the most critical phase of its history,” Panagiotakis told lawmakers. “I will not argue with that.” He declined a Reuters request for an interview.

The burden of arrears for PPC is now “so big that some worry it will not be able to lift it for much longer”, said energy expert Constantinos Filis.

The apartment building where the Argyros family live is a testament to that. Many tenants struggle even to pay the 25 euro annual fee to light communal areas such as staircases.

Ground Zero

PPC has tried to recoup unpaid bills with phased repayment plan. A total of 625,000 customers owing a total of 1.3 billion euros had signed up to the plan by January.

The Argyros family have also entered the plan with the help of Theofilos, a local charity, which also contributes towards their monthly bills.

Meanwhile, PPC’s provisions for bad debt remain high. The plans drove the figure down to 453 million euros in the nine months to September last year from 690 million a year earlier.

Analysts expect PPC to swing back to a profit of between 63-109 million euros in 2016, with provisions of below 600 million euros.

Filis, the energy expert, said the more things stayed the same, the closer PPC was to “ground zero” and he drew comparisons with the Greek state’s brushes with near bankruptcy during the debt crisis.

“It’s reasonable to say that PPC is too big to allow it to collapse, particularly regarding energy security,” he said. “On the other hand, a few years ago some argued that no country could fail either.”
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A torrid summer and devastating fires across central Chile’s wine belt have forced an earlier harvest this year, but there are no signs that volume or flavor will be affected, local industry experts said on Thursday.

High temperatures can lead to excessive sugar and alcohol in the grapes and the harvest needed to take place as soon as the right level was reached, they said.

Climate change is contributing to record droughts, heat and wildfires in Chile, the world’s No. 4 exporter of wine by volume and the biggest among New World producers, threatening crops and spurring growers to move south to cooler climes.

In December, temperatures in central Chile hit their highest level in a century. The hot, dry conditions sparked the biggest wildfires in the country’s modern history, burning homes and forests and blanketing the entire region in thick smoke.

Most vines had escaped the flames and the bigger worry was the effect of the smoke on the flavor of the grapes, said Angelica Valenzuela, commercial director of industry body Wines of Chile.

“The number of vines burnt was low. But there could be an effect from the smoke which we will see when the harvest is done,” she said in an interview at the Undurraga vineyard near Talagante, 22 miles (35 kilometers) southwest of the capital of Santiago. “For now, the first results are not showing signs of any problems.”

Close to where some of the worst fires raged, Undurraga produces around 2 million cases a year, some 70 percent of which is exported.

The hot conditions in the southern hemisphere summer had forced growers like Undurraga to bring forward the harvest by about a month, with the first varieties picked as early as January, company spokesman Fernando Anania said.

That earlier-than-usual harvest was a challenge to Chile’s winegrowers in logistics terms, but should not have a major effect on volumes or taste, said Anania in an interview.

Exports of Chilean wine grew 0.9 percent in 2016 by volume and 3.5 percent by value, according to Wines of Chile. Last year, for the first time, China overtook the United States to become the industry’s top export destination.
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Serbian President-elect Aleksandar Vucic likes to use the past to explain the future.

In 1947, as Josip Broz Tito was consolidating Yugoslavia, he built a railway through Bosnia that linked Serbs, Croats and Muslim Bosniaks, friend and foe after World War II.

“Tito wasn’t stupid,” Vucic told Reuters. “People had to work together, build together, then travel together, live together. That’s what we need — connecting.”

Together again

Yugoslavia broke up in war 26 years ago, spawning seven states. Now, the European Union has taken up a project put forward by Vucic that would see five of them — plus Albania — joined once more, this time in a common market.

It would abolish all remaining tariff barriers, lift obstacles to the free movement of people, commodities and services and introduce standard regulations across the region.

The EU wants an outline agreed to in July, seizing on the idea as a way to re-engage with Balkan states unnerved by the bloc’s evaporating enthusiasm for further enlargement and exposed to the growing influence of Russia.

But it has received a mixed reception.

Some apprehensions

Kosovo, for one, fears being roped back into a Serbian-dominated union of the kind it fought to leave; others worry it will only slow their accession to the EU, or worse still replace it.

The EU has delegated development of the plan to the Regional Cooperation Council. Its head, Goran Svilanovic, told Reuters Balkan leaders were “increasingly realistic” about the reduced appetite in Brussels for EU enlargement.

“They see what’s up in the EU,” he said.

But they will work together on the Balkan market plan and with the EU “when it comes to something they see is … bringing change to their daily lives.”

Market of 20 million

For years, the prospect of EU accession has stabilized relations and driven reform in a turbulent and impoverished region. But since Croatia followed ex-Yugoslav Slovenia in joining in 2013, the EU has been beset by problems of migration, Brexit and right-wing populism.

A year later, European Commission President Jean-Claude Juncker ruled out any further expansion until at least 2020.

Stability and democracy in the Balkans have suffered.

Juncker was stating a fact, a senior EU official told Reuters, but in hindsight he had made “a huge mistake.”

“A lot of things that were in progress just stopped,” the official said. Another EU diplomat said Brussels had “dropped the ball” and was trying to re-engage.

Start with market, trade

One of the results is the Western Balkans Common Market, which would build on the Central European Free Trade Area, CEFTA. All six countries are members of CEFTA, but the pact has struggled to stimulate trade within the region and some barriers remain.

Backers of the plan say a single economic space with a market of 20 million people would be more attractive to investors than six small states each with their own red tape.

“Investors would be banging down our doors,” said Vucic, Serbia’s prime minister who was elected president Sunday.

The EU says it would mark a step toward membership, not an alternative.

But it did not go unnoticed that enlargement had no place in a March document by Juncker that set out the options for the EU after Britain leaves in 2019.

“Create your own common market [because you are not joining ours],” was the headline of an opinion piece last month by Kosovo analyst Besa Shahini on the Pristina Insight website.

Kosovo threw off Belgrade’s repressive rule in a 1998-99 war, and is wary of Serbia as the biggest country in the region and a friend of Russia.

“We don’t want to see a Serbia that behaves in the style of Russia, trying to politically dominate the region,” Kosovo Foreign Minister Enver Hoxhaj said of the initiative Tuesday.

Prime Minister Isa Mustafa took to Facebook: “We share different experiences of the past,” he wrote. “We do not want that past to return, repackaged.”

Sokol Havolli, an adviser to Mustafa, told Reuters the project risked slowing the region’s EU integration.

Alternative narratives

Asked if a common market may become a substitute for EU enlargement, Vucic said that “should not and must not” happen but said he had heard, unofficially, of such fears in Montenegro.

The office of Montenegrin Prime Minister Dusko Markovic told Reuters Podgorica had yet to receive a detailed proposal, but that it supported greater regional cooperation.

An Albanian official, who spoke on condition of anonymity, said Tirana was “skeptical.”

Kristof Bender, deputy chairman of the European Stability Initiative, a Brussels-based research group, said he would be surprised if creating a club of poor economies would do much to address the region’s woes.

Nor could it be a “credible alternative” to the narrative of prosperity and stability inside the EU.

“If this narrative evaporates, Balkan politicians will need to look for other narratives,” Bender told Reuters. “Given recent history, this is dangerous.”

Railroad holds lessons

Today, the railway Tito built speaks less of the future than the folly of the past: as trains cross between Bosnia’s two ethnically-based regions, different crews take over, reflecting how power was divided up in order to end the 1992-95 war. Part of the line is no longer used.

Vucic said critics of his idea argued they simply wanted to leave the Balkans behind and join the EU.

So does Serbia, he said. “But does that mean we should lose the next three, four, five years when we know we’re not going to become a member?”
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