Comcast beat Rupert Murdoch’s Twenty-First Century Fox in the battle for Sky after offering 30.6 billion pounds ($40 billion) for the British broadcaster, in a dramatic auction to decide the fate of the pay-television group.

U.S. cable giant Comcast bid 17.28 pounds a share for control of London-listed Sky, bettering a 15.67 offer by Fox, the Takeover Panel said in a  statement shortly after final bids were made Saturday.

Comcast’s final offer was significantly higher than its bid going into the auction of 14.75 pounds, and compares with Sky’s closing share price of 15.85 pounds on Friday.

Brian Roberts, chairman and chief executive of Comcast, coveted Sky to expand its international presence as growth slows in its core U.S. market.

Owning Sky will make Comcast the world’s largest pay-TV operator with around 52 million customers.

“This is a great day for Comcast,” Roberts said on Saturday. “This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally.”

Comcast, which also owns the NBC network and movie studio Universal Pictures, encouraged Sky shareholders to accept its offer. It said it wanted to complete the deal by the end of October.

Comcast, which requires 50 percent plus one share of Sky’s equity to win control, said it was also seeking to buy Sky shares in the market.

A spokesman for Fox, which has a 39 percent holding in Sky, declined to comment.

The quick-fire auction marked a dramatic climax to a protracted transatlantic bidding battle waged since February, when Comcast gate-crashed Fox’s takeover of Sky.

It is a blow to media mogul Murdoch, 87, and the U.S. media and entertainment group that he controls, which had been trying to take full ownership of Sky since December 2016.

It is also a setback for U.S. entertainment giant Walt Disney, which agreed on a separate $71 billion deal to buy the bulk of Fox’s film and TV assets, including the Sky stake, in June and would have taken ownership of the British broadcaster following a successful Fox takeover.
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British Prime Minister Theresa May’s aides have begun contingency planning for a snap election in November to save both Brexit and her job, the Sunday Times reported.

The newspaper said that two senior members of May’s Downing Street political team began “war-gaming” an autumn vote to win public backing for a new plan, after her Brexit proposals were criticized at a summit in Salzburg last week.

Downing Street was not immediately available to comment on the report.

Meanwhile, opposition Labor leader Jeremy Corbyn said Saturday that his party would challenge May on any Brexit deal she could strike with Brussels, and he said there should be a national election if the deal fell short.

The British government said Saturday that it would not “capitulate” to European Union demands in Brexit talks and again urged the bloc to engage with its proposals after May said Brexit talks with the EU had hit an impasse.

“We will challenge this government on whatever deal it brings back on our six tests, on jobs, on living standards, on environmental protections,” Corbyn told a rally in Liverpool, northern England, on the eve of Labor’s annual conference.

“And if this government can’t deliver, then I simply say to Theresa May the best way to settle this is by having a general election.”

Labor’s six tests consist of whether a pact would provide for fair migration, a collaborative relationship with the EU, national security and cross-border crime safeguards, even treatment for all U.K. regions, protection of workers’ rights, and maintenance of single-market benefits.
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Tensions between China and the United States escalated Saturday as China’s Foreign Ministry summoned U.S. Ambassador to China Terry Branstad to issue a harsh protest against U.S. sanctions set for the purchase of Russian fighter jets and surface-to-air missiles.

The move came hours after China canceled trade talks with the U.S. following Washington’s imposition of new tariffs on Chinese goods.

The statement on the Chinese Foreign Ministry’s website called the imposition of sanctions “a serious violation of the basic principles of international law” and a “hegemonic act.” The ministry also wrote, “Sino-Russian military cooperation is the normal cooperation of the two sovereign states, and the U.S. has no right to interfere.” The U.S. actions, it said, “have seriously damaged the relations” with China. 

China had earlier called on the U.S. to withdraw the sanctions, and speaking to reporters Friday, Foreign Ministry spokesman Geng Shuang said Beijing had lodged an official protest with the United States.

China’s purchase of the weapons from Russian arms exporter Rosoboronexport violated a 2017 U.S. law intended to punish the government of Russian President Vladimir Putin for interfering in U.S. elections and other activities. The U.S. action set in motion a visa ban on China’s Equipment Development Department and director Li Shangfu, forbids transactions with the U.S. financial system, and blocks all property and interests in property involving the country within U.S. jurisdiction.

Meanwhile, The Wall Street Journal reported that China had planned to send Vice Premier Liu He to Washington next week for trade talks, but canceled his trip, along with that of a midlevel delegation that was to precede him.

Earlier Friday, a senior White House official had said the U.S. was optimistic about finding a way forward in trade talks with China.

The official told reporters at the White House that China “must come to the table in a meaningful way” for there to be progress on the trade dispute. 

The official, speaking on condition of anonymity, said that while there was no confirmed meeting between the United States and China, the two countries “remain in touch.”

“The president’s team is all on the same page as to what’s required from China,” according to the official.

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States. 

It has demanded that China better protect American intellectual property, including ending the practice of cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

Earlier this week, the United States ordered duties on another $200 billion of Chinese goods to go into effect on Sept. 24. China responded by adding $60 billion of U.S. products to its import tariff list.

The United States already has imposed tariffs on $50 billion worth of Chinese goods, and China has retaliated on an equal amount of U.S. goods.
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America’s rediscovered prowess in oil production is shaking up old notions about the impact of higher crude prices on the U.S. economy.

It has long been conventional wisdom that rising oil prices hurt the economy by forcing consumers to spend more on gasoline and heating their homes, leaving less for other things.

Presumably that kind of run-up would slow the U.S. economy. Instead, the economy grew at its fastest rate in nearly four years during the April-through-June quarter.

President Donald Trump appears plainly worried about rising oil prices just a few weeks before mid-term elections that will decide which party controls the House and Senate.

“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” Trump tweeted Thursday. “We will remember. The OPEC monopoly must get prices down now!”

Members of The Organization of the Petroleum Exporting Countries, who account for about one-third of global oil supplies, are scheduled to meet this weekend with non-members including Russia.

The gathering isn’t expected to yield any big decisions — those typically come at major OPEC meetings like the one set for December. Oil markets, however, were roiled Friday by a report that attendees were considering a significant increase in production to offset declining output from Iran, where exports have fallen ahead of Trump’s re-imposition of sanctions.

OPEC and Russia have capped production since January 2017 to bolster prices. Output fell even below those targets this year, and in June the same countries agreed to boost the oil supply, although they didn’t give numbers.

Rising oil prices

Oil prices are up roughly 40 percent in the past year. On Friday, benchmark U.S. crude was trading around $71 a barrel, and the international standard, Brent, was closing in on $80.

The national average price for gasoline stood at $2.85 per gallon, up 10 percent from a year ago, according to auto club AAA. That increase likely would be greater were it not for a slump in gasoline demand that is typical for this time of year, when summer vacations are over.

The United States still imports about 6 million barrels of oil a day on average, but that is down from more than 10 million a decade ago. In the same period, U.S. production has doubled to more than 10 million barrels a day, according to government figures.

“Because the U.S. now is producing so much more than it used to, [the rise in oil prices] is not as big an impact as it would have been 20 years ago or 10 years ago,” said Michael Maher, an energy researcher at Rice University and a former Exxon Mobil economist.

The weakening link between oil and the overall economy was seen — in reverse — three years ago. Then, plunging oil prices were expected to boost the economy by leaving more money in consumers’ pocket, yet GDP growth slowed at the same time that lower oil prices took hold during 2015.

Other economists caution against minimizing the disruption caused by energy prices.

“Higher oil prices are unambiguously bad for the U.S. economy,” said Philip Verleger, an economist who has studied energy markets. “They force consumers to divert their income from spending on other items to spending on fuels.”

Since energy amounts to only about 3 percent of consumer spending, a cutback in that other 97 percent “causes losses for those who sell autos, restaurants, airlines, resorts and all parts of the economy,” Verleger said.

Pack leader

The federal Energy Information Administration said this month that the U.S. likely reclaimed the title of world’s biggest oil producer earlier this year by surpassing the output of Saudi Arabia in February and Russia over the summer. If the agency’s estimates are correct, it would mark the first time since 1973 that the U.S. has led the oil-pumping pack.

And that has made the impact of oil prices on the economy a more complicated calculation.

When oil prices tumbled starting in mid-2014, U.S. energy producers cut back on drilling. They cut thousands of jobs and they spent less on rigs, steel pipes and railcars to ship crude to refineries. That softened the bounce that economists expected to see from cheaper oil.

Now, with oil prices rising, energy companies are boosting production, creating an economic stimulus that offsets some of the blow from higher prices on consumers. Oil- and gas-related investment accounted for about 40 percent of the growth in business investment in the April-June quarter this year.

Moody’s Analytics estimates that every penny increase at the pump reduces consumer spending by $1 billion over a year, and gasoline has jumped 24 cents in the past year, according to AAA. That is “a clear-cut negative,” but not deeply damaging, said Ryan Sweet, director of real-time economics at Moody’s.

“Usually with gasoline prices, speed kills — a gradual increase [like the current one], consumers can absorb that,” Sweet said. Consumers have other factors in their favor, he added, including a tight job market, wage growth, better household balance sheets, and the recent tax cut.

Sweet said the boon that higher prices represent to the growing energy sector, which can invest in more wells, equipment and hiring, means that the run-up in crude has probably been “a small but net positive” for the economy.

“That could change if we get up to $3.50, $4,” he said.
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China has canceled trade talks with the United States following Washington’s imposition of new tariffs on Chinese goods.

The Wall Street Journal reports that China had planned to send Vice Premier Liu He to Washington next week for the talks, but has now canceled his trip along with that of a midlevel delegation that was to precede him.

US was optimistic

Earlier Friday, a senior White House official said the U.S. was optimistic about finding a way forward in trade talks with China.

The official told reporters at the White House that China “must come to the table in a meaningful way” for there to be progress on the trade dispute.

The official, speaking on condition of anonymity, said while there was no confirmed meeting between the United States and China, the two countries “remain in touch.”

“The president’s team is all on the same page as to what’s required from China,” according to the official.

Trade imbalance

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

It has demanded that China better protect American intellectual property, including ending the practice of cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

Earlier this week, the United States ordered duties on another $200 billion of Chinese goods to go into effect Sept. 24. China responded by adding $60 billion of U.S. products to its import tariff list.

The United States has imposed tariffs on $50 billion worth of Chinese goods, and China has retaliated on an equal amount of U.S. goods.

Tariffs on all China imports?

Earlier this month, President Trump threatened even more tariffs on Chinese goods — another $267 billion worth of duties that would cover virtually all the goods China imports to the United States.

“That changes the equation,” he told reporters.

China has threatened to retaliate against any potential new tariffs. However, China’s imports from the United States are $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.
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Canada and the United States showed scant sign on Thursday of closing a deal to revamp NAFTA, and Canadian officials made clear Washington needed to withdraw a threat of possible autos tariffs, sources said.

The administration of U.S. President Donald Trump wants to be able to agree on a text of the three-nation North American Free Trade Agreement by the end of September, but major differences remain.

“We discussed some tough issues today,” Canadian Foreign Minister Chrystia Freeland told reporters after meeting with U.S. Trade Representative Robert Lighthizer.

Freeland, who has visited Washington four weeks in a row to discuss NAFTA, gave no further details.

Market fears over the future of the 1994 pact, which underscores $1.2 trillion in trade, have been regularly hitting stocks in all three nations, whose economies are now highly integrated.

While multiple deadlines have passed during the more than year-long negotiations to renew NAFTA, pressure on Canada to agree to a deal is growing, partly to push it through the U.S. Congress before Mexico’s new government takes office on Dec. 1.

Canada says it does not feel bound by the latest deadline.

Asked whether time was running out, Freeland said her focus was getting a deal that was good for Canadians.

Trump came to power last year vowing to tear up NAFTA unless major changes were made to a pact he blames for the loss of U.S. manufacturing jobs.

Trump struck a side-deal on NAFTA with Mexico last month and has threatened to exclude Canada if necessary. He also said he might impose a 25 percent tariff on Canadian autos exports, which would badly hurt the economy.

​Jerry Dias, president of Unifor, Canada’s largest private-sector union, who was briefed on the talks by Canada’s negotiating team, said Ottawa insisted that the tariff threat be withdrawn.

“Why would Canada sign a trade agreement with the United States … and then have Donald Trump impose a 25 percent tariff on automobiles?” Dias told reporters.

“That for us is a deal breaker. It doesn’t make a stitch of sense. … We are a small nation, we’re not a stupid nation,” added Dias.

Freeland said she would return to Canada on Thursday ahead of a two-day meeting of female foreign ministers she is co-hosting in Montreal. Early next week she will be in New York for a United Nations session.

Ottawa is under pressure from some sectors to abandon its insistence that a bad NAFTA is worse than no NAFTA.

Jim Wilson, the trade minister of Ontario — Canada’s most populous province and heart of the country’s auto industry — met federal negotiators on Wednesday and tweeted on Thursday, “It is imperative that the feds reach a deal.”

The Globe and Mail newspaper on Thursday reported that U.S. negotiators want Ottawa to agree to capping its auto exports to the United States at 1.7 million vehicles a year, something that Canadian industry sources dismissed as unacceptable.

Separately, a Canadian source directly familiar with the negotiations said, “We have not discussed a cap.”

Reuters and other outlets reported in August that a side letter with Mexico would cap tariff-free or nearly duty-free Mexican imports to the United States at 2.4 million vehicles.

U.S. automakers privately question why the United States would seek to cap Canadian exports to the United States, given that companies are unlikely to expand production in Canada compared with lower-cost Mexico.
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Seven years after the Arab Spring, little has been done to address youth unemployment in Tunisia, a key factor in extremist groups’ ability to recruit marginalized youth, rights groups and experts warn.

“Someone who is marginalized with nothing to lose, no stability in life, no vision of the future, no hope for change, can become a very easy target for terrorist groups,” Amna Guellali, director of Human Rights Watch’s Tunisia office, told VOA.

The Arab Spring was ignited in Tunisia, in part because of deteriorating economic conditions. A frustrated street vendor set himself on fire outside a local municipal office in Sidi Bouzid to protest repeated harassment from authorities, who often confiscated his goods or fined him for selling without a permit. 

Although economic conditions that force people to eke out a living on society’s margins play a big role in the unrest, Guellali said that unemployment is the central issue in Tunisia.

 “Unemployment stands at 15 percent, rising to 36 percent for Tunisians under 24 years old. Unemployed youths with diplomas are 25 percent, according to the last statistic of 2017,” Guellali added.

The World Bank, which has been helping Tunisia in its development, has also warned that unemployment among young people is a serious issue that needs to be addressed.

Economic growth 

The World Bank says Tunisia has made progress in its transition to democracy and good governance practices, compared with other countries in the Middle East, but still grapples with growing its economy and providing economic opportunities. 

Tunisia’s economic growth in the post-Arab Spring era remains weak despite a modest increase in 2017. According to World Bank data, the economy grew by 1.9 percent in 2017 compared with 1.0 percent in 2016. Since the revolution, the economy has been growing by an average 1.5 percent annually, lower than previous years.

“Tunisian youth don’t see improvement; they actually see that the economic conditions have worsened more than the previous regime,” Darine El Hage, a regional program manager at the United States Institute of Peace (USIP), told VOA. 

El Hage added that the institute’s field research indicates that Tunisian youth are both frustrated and feel hopeless, with some appreciating the previous government of Zine al-Abidine Ben Ali for its relative stability. 

Mohamed Malouche, founder of the Tunisian American Young Professionals organization, agrees. He believes that ordinary Tunisians feel betrayed by the country’s politicians.

“The Tunisian public has been very patient, but they are not seeing that democracy is paying off. They all feel that they have been cheated by politicians,” Malouche said. 

Ripe for extremism

Terror groups such as the Islamic State group and al-Qaida have large numbers of Tunisians among their ranks and are active in various countries in the region.

Youssef Cherif, an independent Tunisian analyst, believes that when young people join militant groups, it is not due to ideological or religious preferences.

“Tunisian youth are trying to find a space where they can feel that they are important and feel a sense of identity and sense of belonging,” Cherif said.

Malouche agrees. “The lack of economic opportunities, the feeling of injustice and the lack of trust in the government institutions force Tunisian youth to take the extremism route,” he said. 

“Tunisia is becoming a fertile ground to extremism recruiters who are taking advantage of vulnerable young men by offering them money and promises,” he added.

Malouche said lack of political representation is also a factor.

“The Tunisian youth are not [seeing] themselves in the political process. They don’t feel that they are truly represented by the current people in power,” he said.

Root causes

Since the toppling of autocrat Ben Ali in 2011, nine Cabinets have been elected, none of which fully addressed high inflation and unemployment.

“The government has not addressed the root causes of the situation. They haven’t adopted comprehensive policies. They only adopted some cosmetic measures,” Human Rights Watch’s Guellali said.

The government is trying to encourage foreign investment, but continued instability has deterred investors, she said. 

Political division

Political differences between President Beji Caid Essebsi and Prime Minister Youssef Chahed further complicate efforts to bring about reforms.

In July, Essebsi urged the prime minister to step down, citing the country’s political and economic problems. Chahed ignored the call.

“A change of government will shake the confidence of Tunisia’s international partners … as economic data will begin to improve by the end of this year [2018],” Chahed told state news agency TAP, responding to the president’s call for his resignation.

The Tunisian government has taken a number of steps to try to address  inflation and unemployment, including efforts to strengthen small businesses in the country and exemption of foreign companies from taxation to encourage more foreign investment. But analysts, like USIP’s El Hage, believe that these solutions are at best easy fixes.

“There are some mobilizations at the level of the government. However, these mobilizations are short-lived and don’t reflect long-term and comprehensive economic reform policy,” El Hage said. 

Some of the information in this report came from Reuters.
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New U.S. claims for jobless benefits fell for the third week in a row, hitting their lowest level in nearly 49 years for the third straight week, the Labor Department reported Thursday.

The new figures suggest the U.S. economy’s vigorous job creation continued unabated this month as the data were collected during the survey week for the department’s more closely watched monthly jobs report, due out next week.

Amid a widely reported labor shortage, employers are reluctant to lay off workers who are difficult to replace.

For the week ended September 12, new claims for unemployment insurance fell to 201,000, down 3,000 from the prior week. Economists had instead been expecting a result of 209,000.

The result was the lowest level since November of 1969, whereas the prior week’s level had been the lowest since December 1969.

However, economists say that in reality the levels are likely the lowest ever, given demographic changes in the United States in the past half century.

Claims have now held below the symbolic level of 300,000 for more than 3.5 years, the longest such streak ever recorded.

Though they can see big swings from week to week, jobless claims are an indication of the prevalence of layoffs and the health of jobs markets.

In a decade of economic recovery, the United States has seen uninterrupted job creation, driving the unemployment rate to historical lows.

In light of these trends, the Federal Reserve is widely expected to raise interest rates next week to prevent inflation from rising too quickly.

 
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Alibaba Chairman Jack Ma said Wednesday that the Chinese e-commerce giant had canceled plans to create 1 million jobs in the U.S., blaming the ongoing trade war for the decision, according to Chinese news agency Xinhua.

“This commitment is based on friendly China-U.S. cooperation and the rational and objective premise of bilateral trade,” Ma told Xinhua. “The current situation has already destroyed the original premise. There is no way to deliver the promise.”

Ma originally pledged to spur job growth by letting American small businesses and farmers sell their goods on Alibaba, which is one of the world’s largest online retailers, when he visited then-President-elect Donald Trump early 2017.

Trump imposed 10 percent tariffs on $200 billion worth of Chinese imports on Monday, threatening to place taxes on an additional $267 billion worth of Chinese imports if China attempts to retaliate.

China placed tariffs on about $60 billion worth of U.S. products the next day as previously planned, though it reduced the size of the tariffs.

At an Alibaba investor conference Tuesday, Ma described the state of economic relations between the two countries as a “mess” with consequences that could last for decades.

Some experts said Ma’s plan to bring 1 million jobs to the U.S. might have been overly ambitious in the first place.
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Chinese technology billionaire Jack Ma has rescinded his offer to create 1 million new jobs in the United States, saying it is no longer possible with the escalation of trade disputes between the world’s two biggest economies.

The Alibaba chief made the U.S. jobs pledge to then-President-elect Donald Trump in January 2017 at Trump Tower in New York, just before Trump assumed power. The prospective U.S. leader declared, “Jack and I are going to do some great things.”

But in an interview published late Wednesday by Xinhua, China’s official news agency, Ma said tit-for-tat tariffs imposed by Washington and Beijing, including new levies this week on billions of dollars of trade between China and the U.S., have scuttled his investment plans in the U.S..

“This promise was on the basis of friendly China-U.S. cooperation and reasonable bilateral trade relations, but the current situation has already destroyed that basis,” Ma said. “This promise can’t be completed.”

Trump this week said he was imposing a 10 percent tariff on $200 billion worth of Chinese imports, with Beijing immediately responding by targeting $60 billion worth of U.S. imports with 5 to 10 percent taxes.

As part of its 1 million jobs pledge, Alibaba, a massive online shopping site, had not planned to build factories or customer product fulfillment centers in the U.S. Rather, it had hoped to boost trade by helping small U.S. businesses sell their products in China and elsewhere in Asia.

Alibaba held a conference in the Midwest city of Detroit last year to encourage small U.S. businesses and farms to sell their products in China through Alibaba’s online portals.

The 54-year-old Ma said in the interview that Alibaba “will not stop promoting the healthy development of China-U.S. trade.”

But he told investors earlier this week that the trade disputes between the two countries could last for 20 years.

“It’s going to last long, it’s going to be a mess,” Ma said. “Trade is not a weapon and cannot be used for wars. Trade should be the propeller of peace.”

Instead, Ma said Alibaba would focus on business opportunities in Europe, South America, Russia and Africa.
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Canada said on Wednesday that it would need to see movement from the United States if the two sides are to reach a deal on renewing NAFTA, which Washington insists must be finished by the end of the month.

Although the administration of U.S. President Donald Trump and its allies are increasing pressure on Canada to make the concessions they say are needed for the North American Free Trade Agreement, Canadian Prime Minister Justin Trudeau made clear he also wanted to see flexibility.

“We’re interested in what could be a good deal for Canada but we’re going to need to see a certain amount of movement in order to get there and that’s certainly what we’re hoping for,” he told reporters in Ottawa.

Shortly afterwards, Canadian Foreign Minister Chrystia Freeland met U.S. Trade Representative Robert Lighthizer for their fourth set of talks in four weeks with the two sides still disagreeing on major issues.

Trump has already wrapped up a side deal with Mexico and is threatening to exclude Canada if necessary. Canadian officials say they do not believe the U.S. Congress would agree to turn NAFTA into a bilateral treaty.

U.S. Chamber of Commerce President Thomas Donohue said it would be extremely complicated, if not impossible, for the administration to pull off a Mexico-only agreement.

“If Canada doesn’t come into the deal there is no deal,” Donohue told a media breakfast in Washington.

Donohue said he believed that if the administration wanted to end the current NAFTA, such a move would be subject to a vote in Congress, which would be difficult to get.

The Chamber, the most influential U.S. business lobby, wants NAFTA to be renegotiated as a tri-lateral agreement, citing how highly integrated the three member nations’ economies have become since the pact came into force in 1994.

Negotiators are arguing over cultural protections, dispute resolution, and a U.S. demand for more access to Canada’s protected dairy market. Sources say Ottawa has made clear it is prepared to make concessions, which would anger the influential dairy lobby.

“For American farmers the Canadian market is a drop in the bucket. For us it’s our livelihood,” Dairy Farmers of Canada vice president David Wiens told reporters in Ottawa. Concessions in past trade deals had already hurt Canadian farmers, he said.

“The dairy sector cannot be negatively impacted again by a new trade agreement,” he said. “Enough is enough.”
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Kenya’s Finance Minister Henry Rotich has cut the government’s spending budget by 55.1 billion shillings ($546.90 million), or 1.8 percent, for the fiscal year from July this year, a Treasury document showed on Wednesday.

The government is facing a tough balancing act after a public outcry over a new 16 percent value added tax on all petroleum products forced President Uhuru Kenyatta to suggest to parliament to keep the VAT and cut if by half.

In the document detailing the new spending estimates, Rotich said the budget had to be adjusted because of the amendments to tax measures brought by lawmakers when they first debated it and passed it last month.

The proposed halving of the VAT rate on fuel has left the government with a funding shortfall, hence the cuts in spending.

Parliament will vote on a raft of proposals, including the 1.8 percent cut on spending, in a special sitting on Thursday.

Kenya’s economy is expected to grow by 6 percent this year, recovering from a drought, slowdown in lending and election-related worries that cut growth in 2017, but investors and the IMF have expressed concerns over growing public debt.

While the next election is still four years away, the government’s economic policies are chafing with citizens angered by increasing costs of living. Fuel dealers protested when the VAT on fuel kicked in this month and citizen groups have gone to court to try to block new or higher taxes.

Separate documents sent by Kenyatta to parliament ahead of Thursday’s sitting underscored the debate in government over how to boost revenues without hurting the poor.

His government has to reduce a gaping fiscal deficit while boosting spending on priority areas such as healthcare and affordable housing.

In order to balance the government’s books after the reduction of the fuel tax, he is trying to reinstate several tax measures struck out by parliament, including a 2 percentage hike on excise duty for mobile phone money transfers to 12 percent.

Kenya’s biggest mobile phone operator Safaricom said in June it was opposed to any tax rise on mobile phone-based transfers, arguing that it would mainly hurt the poor, most of whom do not have bank accounts and rely on services such as its M-Pesa platform.

The president also asked parliament to double the excise duty on the fees charged by banks, money transfer services, and other financial institutions to 20 percent.

Parliament in August threw out an earlier version of proposed fees on bank transfers, a so-called “Robin Hood” tax of 0.05 percent on transfers of more than 500,000 shillings.

The president has not yet signed the budget due to the dispute over the planned tax hikes. Kenyatta’s Jubilee party and its allies have a comfortable majority in parliament.

The Kenya National Chamber of Commerce and Industry this month said the government should widen the tax base. It also urged the state to cut expenditure, reduce wastage of public funds and deal with corruption, which some studies have found lose the government about a third of its annual budget.

 
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Videos of Venezuelan President Nicolas Maduro feasting on steaks at an upscale restaurant have sparked worldwide outrage on behalf of the poverty-stricken people of his country.

One video show celebrity chef Nusret Gokce, also known as “Salt Bae,” carving meat for the president and his wife, Cilia Flores, at the Nusr-Et restaurant in Istanbul, where each cut of meat can cost hundreds of dollars.

Florida Senator Marco Rubio slammed the chef who was filmed with the “dictator,” who was shown eating “a five-star gourmet meal, smoking fine cigars while the people of Venezuela are literally starving.”

“It’s an outrage, disgusting … this is a man starving human beings and [Salt Bae] is celebrating him as some sort of hero – I got pissed,” Rubio told the Miami Herald on Tuesday.

“I don’t know who this weirdo #Saltbae is, but the guy he is so proud to host is not the President of #Venezuela. He is actually the overweight dictator of a nation where 30% of the people eat only once a day & infants are suffering from malnutrition,” Rubio tweeted Tuesday.

The senator also tweeted the address and phone number of the chef’s restaurant in Miami, which is home to scores of Venzeulan-Americans and Cuban-Americans who despise the socialist leader.

Opposition leader Julio Borges, who lives in exile in Colombia, tweeted: “While Venezuelans suffer and die of hunger, Nicolas Maduro and Cilia Flores have a good time in one of the most expensive restaurants in the world, all with money stolen from the Venezuelan people.”

The once-wealthy oil-producing nation has been in an economic crisis for the past five years. The turmoil has left many Venezuelans struggling to find food and medicine and driven masses to flee to other South American countries.

According to the United Nations, more than 2 million Venezuelans have fled since 2014.

A  Meganalisis poll published in the Miami Herald last month found more then 30 percent of Venezuelans say they only ate one meal a day, nearly the same number report eating “nothing or close to nothing” at least one day a week and a staggering 78 percent said they had trouble finding enough food.
…

Mexico’s incoming financial intelligence chief said it was “shameful” how little had been done about bribes that Brazilian construction firm Odebrecht executives said were paid to secure Mexican public works contracts, and vowed to reexamine the case once in office.

Santiago Nieto will head the finance ministry’s Financial Intelligence Unit, which analyzes suspicious financial records, once the new leftist government takes office on Dec. 1. He said in an interview last week that the unit had been misused for political ends, without elaborating.

“It’s shameful that Mexico and Venezuela are the only countries in Latin America that haven’t sanctioned anyone,” he said of the Odebrecht case, which is at the heart of Brazil’s Lava Jato, or Car Wash, corruption investigation that has reverberated across the region in recent years.

“In the case of Odebrecht, and in any other case, the first thing we would have to do is review what there is in the Financial Intelligence Unit related to the case,” he said. Nieto does not yet have access to files and records kept by the unit.

In Brazil, Odebrecht executives admitted to paying bribes within Mexico. Prosecutors in Mexico have said they are probing business between the Brazilian conglomerate and state oil company Pemex.

Pemex has declined to comment on issues related to Odebrecht, citing the ongoing investigation. The office of Mexico’s attorney general, the finance ministry and the Financial Intelligence Unit all declined to comment for this story. Odebrecht acknowledged receipt of an emailed request for comment, but did not respond further.

Anger at widespread corruption scandals, including the alleged bribes from Odebrecht, a lucrative house deal involving the family of President Enrique Pena Nieto, and hundreds of millions of dollars siphoned from government coffers through fake contracts, helped leftist Andres Manuel Lopez Obrador win a landslide presidential victory in July.

Lopez Obrador pledged in his manifesto to clamp down on financial crime, and tighten money laundering, banking and tax regulations. He has given few details of how he will achieve this, but promises to set an example of probity from the presidency.

Tasked with helping to prevent and fight money laundering and terrorism financing, the financial intelligence unit receives and analyzes information that it should then pass on to prosecutors to investigate and construct a case.

A former lead prosecutor for electoral crimes, Nieto was dismissed in 2017 on the grounds that he broke a code of conduct when he gave an interview about his investigation into Odebrecht bribery during the 2012 presidential campaign.

Nieto has admitted his mistake, but denies breaking rules or revealing sensitive information. He said his firing was illegal.

Last month, two incoming administration officials told Reuters that Odebrecht may be blocked from participating in public works projects under the new government.

Odebrecht responded that wrongdoing at the company should not be used to impose sanctions against it in Mexico.

Corrupt System?

Nieto said he would press for more information sharing between federal departments that investigate tax, electoral and organized crime, and investigate possible corruption within the system.

“I have the impression that there is a factor of internal corruption,” he said, without providing specifics.

The Financial Action Task Force, an international organization that sets global standards for fighting illicit finance, said earlier this year that in Mexico “financial intelligence does not often lead to investigations of money laundering, underlying crimes, and terrorist financing.”

Following the report, Mexico’s finance ministry and the attorney general’s office issued a joint statement recognizing shortcomings and promising to improve efforts.

However, the Mexican government seized just 871 million pesos ($46.3 million) and $14.7 million between September 2017 and June 2018, and began just one criminal proceeding, according to official statistics.

Nieto, who called the outcomes “terrible,” pointed to the financial intelligence unit and attorney general’s office as the two “bottlenecks” holding back cases.

“It is a matter of impunity, a complicit government, and a lack of political will to fight corruption,” Nieto said.
…

When Pearl Jam led 50,000 people in a chant of “Save the Showbox” in a Seattle stadium last month, the rockers confronted a question facing many cities: When do the cultural costs of a property boom become too high?

The Showbox is an 1,100-person venue across the street from Pike Place Market, Seattle’s top tourist attraction. It opened in 1939 and has hosted acts from Duke Ellington to Prince, as well as the hometown grunge pioneers Pearl Jam.

The venue now risks becoming the latest casualty of the Pacific Northwest city’s real estate rush – and many in the community are saying enough is enough.

“Today one of our great cathedrals is at risk of being leveled,” said Ben Gibbard, lead singer of indie rock band Death Cab for Cutie, at a Seattle City Council hearing in August. “It’s not just a music venue, but a cornerstone of our cultural heritage. We cannot allow this vital piece of our rapidly changing city to be snuffed out.”

Historic venues are being crushed by real estate development in cities across Britain and the United States.

London has lost 35 percent of its independent music venues since 2007, according to the mayor’s office.

In 2014, The New York Observer documented eight significant music venues the city lost over the previous decade, beginning with punk icon venue CBGB and ending with the Roseland Ballroom, another pre-World War II concert hall.

Experts say that the trend affects more than just music fans, bands, and others in the industry.

“Music venues are an early canary in the coal mine,” said Shain Shapiro, head of Sound Diplomacy, a Britain-based consultancy firm on music in cities.

“It’s not just about developing our music industry and providing a great night out,” he told the Thomson Reuters Foundation by phone from London. “It improves the quality of life in increasingly denser and denser cities.”

Music or Housing

Interventions by city governments to save historic venues are rare, but the past few years have seen a few – usually in response to public pressure.

Fans of the Showbox were outraged in July when the Onni Group, a real estate developer headquartered in neighboring Vancouver, Canada, filed plans to build a 44-story building where the venue now sits.

A “Save the Showbox” online petition has garnered about 100,000 signatures. They include members of R.E.M., Jamie xx, The English Beat, and other musicians who have performed there.

Supporters packed the city hall hearing in August waving “Save the Showbox” signs.

Last month, the municipal government approved an extension of the Pike Place Market Historic District’s boundaries to incorporate the Showbox, which will be valid for 10 months.

The legislative move means additional scrutiny will apply to any proposed real estate development on the site, even though it is zoned to accommodate a 44-story building.

In response, the owners of the building housing the Showbox filed a $40 million lawsuit against the city of Seattle earlier this month.

The lawsuit noted that halting the project would mean losing $5 million in fees from the developer, which would go towards funding affordable housing.

Showbox supporters argue that the amount of money raised by the project would be paltry and could come from elsewhere.

“What we would be losing culturally is far more valuable than the amount of money that would go toward affordable housing,” Gibbard said in an interview.

City council member Lorena Gonzalez said she intends to submit a plan this month to permanently protect the building housing The Showbox.

Onni Group, the developer, did not reply to a request for comment.

Legal Protection

Authorities in Britain have acted to preserve some well-loved venues, as well as spurring the growth of new ones.

Under British law, developers must sign “Section 106 agreements” before gaining permission to proceed with projects.

Shapiro of Sound Diplomacy said that local governments have leveraged the law to push developers into incorporating live music spaces into their plans.

He pointed to Vicarage Field, a new shopping center in the London district of Barking that will host a music venue.

In Cardiff, Shapiro said, a public outcry last year saved a haven for Welsh-language music called Clwb Ifor Bach.

Developers planned plan to build flats in the live music district, but the City of Cardiff Council eventually purchased the land parcel and leased it to the venue.

“Clwb Ifor Bach is one of the best examples of a direct action that a council has taken,” Shapiro said.
…

China says it has no choice but to retaliate to U.S. President Donald Trump’s 10 percent tariffs on $200 billion in Chinese goods, risking a further escalation of trade tensions between the world’s two biggest economies.

In a brief statement posted online Tuesday, China’s Commerce Ministry said, “To protect its legitimate rights and interests and order in international free trade, China is left with no choice but to retaliate simultaneously.”

The statement did not say how China might respond. China has previously said it would respond with a list of tariffs that includes products from liquified natural gas to aircraft.  On Monday, the Communist Party backed Global Times newspaper warned that if Trump went ahead with the tariffs, China would not just play defense.

At about the same time the Commerce Ministry statement was released, a research director for North America and the Pacific at the Commerce Ministry also delivered a commentary on China’s state-run CCTV news network.

The official said the latest round of tariffs have brought uncertainty to ongoing efforts for representatives from both countries to meet again and hold trade talks.

“Under the party’s strong central leadership, China has the resolve and confidence to press ahead and use deeper reforms and deeper opening up as well as the development of our domestic market to counter United States unilateralism,” Li Wei said.

Foreign Ministry spokesman Geng Shuang told a daily briefing Tuesday in Beijing that talks are the only correct way to resolve the issue and accused the United States of being insincere.  Last week, the United States extended an invitation to China’s top negotiator, Liu He, to resume talks later this month in Washington.

“As for what measures China may take in response, that will be announced at an appropriate time,” Geng said.

The $200 billion in U.S. tariffs go into effect in less than a week, on September 24, leaving the two sides little time to sit down.

On Monday, President Trump warned, in a statement announcing his move, if China retaliates against U.S. farmers or other industries, Washington “will immediately pursue phase three, which is tariffs on approximately $267 billion in additional imports.”

The additional $267 billion in tariffs is expected to cover all Chinese imports to the United States.

American and European businesses operating in China say that if Washington presses ahead with more and more tariffs, it is likely to only add to the challenges businesses are already facing.

According to surveys conducted by the American Chamber of Commerce in China and the European Chamber of Commerce, trade tensions are already hitting and hurting supply chains of foreign businesses.  Some companies have begun to move manufacturing away from China and the United States to avoid the impact of growing trade tensions, the European Chamber said.

European Chamber President Mats Harborn said engagement on the part of Washington and Beijing is the answer.

He said that what the United States is doing now is “economic madness” that risks creating a vicious cycle for business that could have an impact in China and elsewhere.  But the root of the trade dispute is that China’s reform is lagging behind its development, creating a “reform deficit.”

“Closing the reform gap will create better private companies in China, foreign companies,” Harborn said.  “And reducing the reform deficit should also help reduce tensions in the ongoing trade war.”

In its annual position paper on European business in China, the chamber lists 828 recommendations for Chinese authorities to address that deficit.

One of the key hurdles both private Chinese enterprises and foreign companies face is the dominant position state owned enterprises (SOEs) enjoy.  State owned enterprises account for around 30 percent of the economy and yet enjoy nearly 70 percent of all financing, the report said.

Unfair trade practices and the way SOEs contribute to an unbalanced playing field in China are key elements of the investigation the Trump administration carried out prior to launching its first round of tariffs.

But how far China is willing to go to change is uncertain.  Later this month, a meeting on SOEs will be held that many are expecting will be an indicator of the future course China’s Communist Party leaders plan to chart.

“We hear that there is a move to make the SOEs stronger, bigger and better,” Harborn said.  “Such ambitions are hindering the further opening and development of the vibrant private Chinese sector.”

If reform of SOEs is not on the agenda at the meeting, that would be seen as a clear provocation, given the current climate, he said. 

 
…

Africa has the globe’s fastest-growing youth population as well as 10 of the poorest countries, a volatile combination that warrants making it “the world’s most important priority for the foreseeable future.”

The Bill & Melinda Gates Foundation lays out that argument in its second annual report on progress toward sustainable development goals set by the United Nations for 2030. This Goalkeepers Data Report, released Tuesday, urges targeting Africa with the same kind of investment intensity that lifted once-poor China and India into the ranks of middle-income nations.

Sixty percent of Africans are younger than 24, numbers that Melinda Gates emphasized in a phone interview earlier this month with VOA’s English to Africa Service.

“If the world makes the right investments in health and nutrition and education,” she said, it could unleash the potential of “an amazing generation that has unbelievable ingenuity.”    

The report notes that while the youth population is booming in Africa, it’s shrinking elsewhere in the world. For example, the median age is 19 in Africa – and 35 in North America. Populations are expected to soar by 2050 in the 10 poorest countries: Benin, Burundi, Central African Republic, Democratic Republic of Congo, Madagascar, Malawi, Nigeria, Somalia, South Sudan and Zambia.

Melinda Gates described the foundation as a “catalytic wedge,” whose investments can fuel beneficial projects and programs.

“We start getting things going” with many partners on the ground “working in culturally, contextually sensitive ways,” she said. “We take some risks, but ultimately it’s the governments who scale them up, and that work is done in deep partnership with many people around the globe.”

The Gates Foundation is the biggest of U.S. funders aiding Africa, such as the Ford, Rockefeller, Conrad N. Hilton, Carnegie and Open Society foundations,  Inside Philanthropy reported in 2016. Earlier this year, the news website observed that charitable giving by Africans is growing, too.    

To date, the Gates Foundation has invested more than $15 billion “in projects relevant to Africa,” the Gatekeepers report says, while promising to spend more. It has targeted three areas for investment: health, education and agriculture.

Health: The foundation subsidizes a range of health programs, from childhood vaccination and good nutrition, but it gives special attention to family planning and HIV interventions.

Among countries that have risen economically, “every one of them allowed voluntary access to contraceptives to women,” Gates told VOA. “We know if men and women can space the births of their children … there are more opportunities then for those children and their families. Girls can stay in school” and, when educated, are better able to provide for their families.

“Those people create amazing opportunities and new jobs in the economy,” Gates added.

The U.S. government is the biggest donor in global family planning and reproductive health, according to the Kaiser Family Foundation (KFF), a nonprofit focused on health issues. U.S. spending on that front was at $608 million in fiscal year 2018, though the Trump administration has proposed reductions for 2019. Funding levels can reflect domestic and international political debates, especially over abortion, KFF’s website notes. It adds that, since 1973, the government has banned “direct use of U.S. funding overseas for abortion as a method of family planning. …”

The report praised Rwanda for building “an effective health system” that has brought about “the steepest drop in child mortality ever recorded.” In 2005, the country recorded 103 deaths per 1,000 lives births; a decade later, the death rate dropped to 50.

As for HIV infections, the report acknowledged progress in Zimbabwe, where a fourth of all adults were infected in 1997, the peak year of the epidemic.

“Since 2010, new infections are down by 49 percent, and AIDS-related deaths are down by 45 percent,” it noted. But it warned that the youth boom could bring a reversal without continued support for treatment and prevention methods.

Education: While school enrollment and literacy rates have improved, as the United Nations reports, that’s not enough.

“We need to get the quality of education to come up, much like Vietnam has done,” Melinda Gates told VOA.

Students in that country, labeled as low income until 2010, ranked among the best in the world in science in the Paris-based Organization for Economic Cooperation and Development’s most recent assessment of 15-year-olds.

Agriculture: “… We need to make sure that we help countries move from subsistence farming to making real investments” supporting larger-scale operations so people can feed themselves, Gates said. 

Ghana provides a good example, she and the report noted.

With its current agricultural productivity and innovations such as new hybrid varieties of maize, the country’s “poverty rate is projected to fall from 20 percent in 2016 to 6 percent in 2030.”

But, the report observed, “There is ample room for Ghana’s agrifood system to keep developing.” For example, “cocoa, the country’s main export crop, is sold raw and processed outside the country. Meanwhile, almost half of all processed foods consumed in Ghana are imported.” Buying food processed in Ghana would keep more money in the country and generate jobs, it said.   

Since 2000, more than a billion people have risen from extreme poverty, a level that the World Bank sets at $1.90 a day. Melinda Gates attributed that rise to “investments the world made systematically in human capital: in health, in education, in agriculture. …

“A lot of the gains that we’ve seen can drop back, particularly with a growing population,” she said. “So our message to the world is keep your foot on the gas. Keep the accelerator going.”
…

The Asian Development Bank said on Tuesday it is expanding its presence in the Pacific islands, at a time of competition for influence there, opening seven new country offices and expecting its loans and grants in the region to top $4 billion by 2020.

The pledge from the Japan-led bank comes amidst a vigorous new campaign by the United States and its allies to check China’s rising sway in the region, where it has sought deeper diplomatic ties and emerged as the second-largest donor.

The battle for influence in the sparsely populated Pacific matters because each of the tiny island states has a vote at international forums like the United Nations, and they also control vast swathes of resource-rich ocean.

The ADB said it will open offices in the Cook Islands, Micronesia, Kiribati, the Marshall Islands, Nauru, Palau, and Tuvalu, as well as expand missions in Samoa, the Solomon Islands, Tonga and Vanuatu.

“The new country offices will allow ADB to have more regular contact and substantive communication with government and development partners,” the bank said in a statement.

Its overall assistance to the Pacific, which stands at $2.9 billion, is expected to surpass $4 billion by 2020, it added, with the money destined for economic and social development projects and disaster resilience.

China has likewise pledged to keep lending to a region where it says its aid is supporting sustainable development.

However, it has spent $1.3 billion on concessionary loans and gifts since 2011, stoking concern in the West that several tiny nations could end up overburdened and in debt to Beijing.

Australia in particular, which has long viewed the Pacific as its backyard, has been critical of some Chinese aid projects, and a former foreign minister has warned that the lending could undermine the long-term sovereignty of recipients.
…

A top economic adviser to President Donald Trump said on Monday he expects U.S. budget deficits of about 4 to 5 percent of the country’s economic output for the next one to two years, adding that there would likely be an effort in 2019 to cut spending on entitlement programs.

“We have to be tougher on spending,” White House economic adviser Larry Kudlow said in remarks to the Economic Club of New York, adding that government spending was the reason for the wider budget deficits, not the Republican-led tax cuts activated this year.

Kudlow did not specify where future cuts would be made.

“We’re going to run deficits of about 4 to 5 percent of GDP for the next year or two, OK. I’d rather they were lower but it’s not a catastrophe,” Kudlow said. “Going down the road, of course we’d like to slim that down as much as possible and we’ll work at it.”

He stated that the biggest factor for revenue was economic growth rate. A quicker pace of growth will bring in more revenue, Kudlow said, and Trump’s economic policies were aimed at boosting the U.S. growth rate.

Kudlow also said he did not expect Congress would be able to make the Trump administration’s recent individual tax cuts permanent before the Nov. 6 midterm congressional elections.

“I don’t think it will get through the whole Congress” before the election, he said, but added that making the personal tax cuts permanent “is a good message” and disagreed with forecasts that they would further increase budget deficits.
…

More than half of all workplace tasks will be carried out by machines by 2025, organizers of the Davos economic forum said in a report released Monday that highlights the speed with which the labor market will change in coming years.

The World Economic Forum estimates that machines will be responsible for 52 percent of the division of labor as share of hours within seven years, up from just 29 percent today. By 2022, the report says, roughly 75 million jobs worldwide will be lost, but that could be more than offset by the creation of 133 million new jobs.

A major challenge, however, will be training and re-training employees for that new world of work.

“By 2025, the majority of workplace tasks in existence today will be performed by machines or algorithms. At the same time a greater number of new jobs will be created,” said Saadia Zahidi, a WEF board member. “Our research suggests that neither businesses nor governments have fully grasped the size of this key challenge of the Fourth Industrial Revolution.”

The “Future of Jobs 2018” report, the second of its kind, is based on a survey of executives representing 15 million employees in 20 economies. Its authors say the outlook for job creation has become more positive since the last report in 2016 because businesses have a better sense of the opportunities made possible by technology.

The WEF said challenges for employers include enabling remote work, building safety nets to protect workers, and providing reskilling for employees. However, the report found that only one in three respondents planned to reskill at-risk workers.

Despite net positive job growth, the WEF anticipates a “significant shift in the quality, location, format and permanency of new roles. Businesses are to expand use of contractors for task-specialized work, engage workers in more flexible arrangements, utilize remote staffing, and change up locations to get access to the right talent.

The report said nearly half of all companies expect their full-time workforces to shrink by 2022, while nearly two in five expect to extend their workforce generally, and over one-quarter expect automation to create new roles in their enterprises.

Germany’s powerful DGB trade union association warned against too rapid change in the world of work.

“People, whether they’re workers or consumers, will only accept and tolerate the consequences if technology serves them — and not they it,” Reiner Hoffmann told daily Welt in reaction to the WEF report.
…

Saudi Arabia’s sovereign wealth fund invested $1 billion Monday in an American electric car manufacturer just weeks after Tesla CEO Elon Musk earlier claimed the kingdom would help his own firm go private.

Tesla stock dropped Monday on reaction to the news, the same day that the Saudi fund announced it had taken its first loan, an $11 billion borrowing from global banks as it tries to expand its investments.

The Saudi Public Investment Fund said it would invest the $1 billion in Newark, California-based Lucid Motors.

The investment “will provide the necessary funding to commercially launch Lucid’s first electric vehicle, the Lucid Air, in 2020,” the sovereign wealth fund said in a statement. “The company plans to use the funding to complete engineering development and testing of the Lucid Air, construct its factory in Arizona, enter production for the Lucid Air to begin the global rollout of the company’s retail strategy starting in North America.”

Lucid issued a statement quoting Peter Rawlinson, its chief technology officer, welcoming the investment.

“At Lucid, we will demonstrate the full potential of the electric-connected vehicle in order to push the industry forward,” he said.

The decision comes after Musk on Aug. 7 tweeted that he had “funding secured” to take Tesla private. Investors pushed Tesla’s shares up 11 percent in a day, boosting its valuation by $6 billion.

There are multiple reports that the U.S. Securities and Exchange Commission is investigating the disclosure, including asking board members what they knew about Musk’s plans. Experts say regulators likely are investigating if Musk was truthful in the tweet about having the financing set for the deal. Musk later said the Saudi Public Investment Fund would be investing in the firm, something Saudi officials never comment on.

Meanwhile Monday, the sovereign wealth fund known by the acronym PIF said it had taken its first loan, an $11 billion borrowing. It did not say how it would use the money, only describing it as going toward “general corporate purposes.”

The Las Vegas-based Sovereign Wealth Fund Institute estimates the Saudi fund has holdings of $250 billion. Those include a $3.5 billion stake in the ride-sharing app Uber.

Saudi Arabia’s 33-year-old Crown Prince Mohammed bin Salman has talked about using the PIF to help diversify the economy of the kingdom, which relies almost entirely on money made from its oil sales.
…

Aid money urgently needs to be redirected to the poorest countries in order to reach the United Nations’ goal of ending extreme poverty by 2030, according to a report.

The London-based Overseas Development Institute (ODI) says middle-income countries receive more aid than the 30 poorest nations. It also warns that at least 400 million people will still be living on less than $1.90 a day, despite government pledges to eliminate all extreme poverty.

In northern Ethiopia, teams of workers dig irrigation channels through orchards and grain fields. Such projects have turned arid plains into fertile farmland, which has quadrupled agricultural production.

The report from the ODI credits Ethiopia’s “Productive Safety Net Program,” launched in 2005, with lifting 1.4 million people out of extreme poverty. It also enabled Ethiopia to avoid another famine during severe droughts in 2010 and 2015.

In contrast, neighboring Uganda has seen extreme poverty levels rise recently, after a rapid reduction in previous years.

“One of the reasons is because climate change is starting to have an impact in that country,” said Marcus Manuel, author of the ODI report. “Now in Ethiopia, they’ve managed, with a lot of support partly from the U.S., to have programs that support farmers when a sudden climate or weather event happens. In Uganda, they didn’t. So when they had a drought, that led to a real increase in poverty. So it’s a matter of having the right systems in place.”

Ethiopia’s program, the largest of any low-income country, pays beneficiaries to work on public works projects such as irrigation, roads, schools and health clinics, which helps to create long-term poverty relief.

Such programs are vital in ending extreme poverty, according to the ODI report. The report says there is an annual funding shortfall of $125 billion in the three core sectors of education, health and what it terms social protection transfers, or welfare.

“You need to do economic growth to do part of things, and you also need investment in the social sectors,” Manuel said. “You need to have both sides of the coin to make this work. Donors are investing both in growth and in social sectors, but they’re not investing it in the right countries to nearly the extent that’s needed. And, in particular, in this report we’ve identified 29 countries which can’t afford the investment needed in the social sectors and donors are not giving enough money to that group of countries.”

The statistics show middle-income countries receive more aid than poorer countries, whose share of global aid has fallen over the past six years from 30 percent to 24 percent.

In addition to better aid allocation, the report says more donor nations need to reach the U.N. goal of allocating at least 0.7 percent of gross domestic product to aid budgets. Without urgent action, the authors warn the goal of eliminating extreme poverty by 2030 will remain out of reach.
…

U.S. media reports said Friday that President Donald Trump has instructed aides to proceed with tariffs on $200 billion more in Chinese products.

Citing sources familiar with the matter, Bloomberg and Reuters said the president wanted to move forward with the additional duties even though Treasury Secretary Steven Mnuchin is trying to restart trade talks with Beijing.

The reports sent stocks falling Friday and led to a drop in the Chinese yuan.

The White House did not immediately comment on the reports.

Bloomberg reported that Trump met Thursday with his top trade advisers to discuss the tariffs, including Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. The meeting was not on Trump’s public schedule.

Before Thursday’s meeting, Trump said on Twitter that he felt “no pressure” to make a deal with Beijing, saying “they are under pressure to make a deal with us.” He also raised questions about whether new talks between the United States and China would happen, saying the U.S. “will soon be taking in Billions in Tariffs & making products at home. If we meet, we meet?”

A public comment period for the proposed new tariffs ended last week. The U.S. trade representative’s office received nearly 6,000 comments on the proposal.

Even more tariffs

Last week, Trump threatened even more tariffs on Chinese items — duties on another $267 worth of goods, which when combined with the others would cover virtually all the products that China sends to the United States.

“That changes the equation,” he told reporters.

The Untied States has already imposed tariffs on $50 billion worth of Chinese goods, leading China to retaliate on an equal amount of U.S. goods. 

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

It has demanded that China better protect American intellectual property, including ending cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

China has threatened to retaliate against any potential new tariffs. However, China’s imports from the United States are worth $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.
…

U.S. President Donald Trump has instructed aides to proceed with tariffs on about $200 billion more in Chinese products, despite Treasury Secretary Steven Mnuchin’s attempts to restart talks with China about resolving the trade war, Bloomberg reported on Friday.

Reuters could not immediately verify the report, which had an immediate effect on financial markets. It led U.S. stocks to trade lower, fueled drops in the Chinese yuan in offshore trading and gains in the dollar index, and sent the S&P 500 index negative.

The step comes exactly one week since Trump raised the possibility of duties on the $200 billion of imports and also threatened tariffs on $267 billion worth of goods. Trump has already levied duties on $50 billion worth of Chinese goods.

The United States only imported $505 billion in goods imported from China last year. But 2018 imports from China through July were up nearly 9 percent over the same period of 2017, according to U.S. Census Bureau data.
…

The Turkish central bank caught international markets by surprise Thursday as it aggressively hiked interest rates in an effort to strengthen consumer confidence, stem inflation and rein in the currency crisis. 

Interest rates were increased to 24 percent from 17.75 percent, which is more than double the median of investor predictions of a 3 percent hike. The Turkish lira surged above 5 percent in response, although the gains subsequently were pared back.

International investors broadly welcomed the move. “TCMB [Turkish Republic Central Bank] did show resolve in hiking the one-week repo rate substantially and going back to orthodoxy,” chief economist Inan Demir of Nomura International said.

The central bank had drawn sharp criticism for failing to substantially raise interest rates to rein in double-digit inflation and an ailing currency. The lira had fallen by more than 40 percent this year.

The rate hike is an apparent rebuke to Turkish President Recep Tayyip Erdogan, who has been opposed to such a move.

Only hours before the central bank decision, Erdogan again voiced his opposition to increasing interest rates. The Turkish president reiterated his stance of challenging orthodox economic thinking, arguing that inflation is caused by high rates, although that runs contrary to conventional economic theory. Erdogan also issued a presidential decree banning all businesses and leasing and rental agreements from using foreign currency denominations.

The central bank indicated further rate hikes could be in the offing. “Tight stance monetary policy will be maintained decisively until inflation outlook displays a significant improvement,” the central bank statement reads.

The strong commitment to challenge inflation was welcomed by investors. “Most importantly, the CBT seemed to be vocal about price stability risks,” wrote chief economist Muhammet Mercan of Ing bank.

‘Crazy’ spending

Fueled by August’s sharp fall in the lira, which drove up import costs, inflation is on a rapid upward trajectory. Some predictions warn inflation could approach 30 percent in the coming months.

While international markets are broadly welcoming the central bank’s interest rate hike, economist Demir warns more action is needed.

“This rate hike does not undo the damage inflicted on corporate balance sheet, and market concerns about geopolitics will remain in place. So this is not the hike to end all problems,” said Demir.

The World Bank and IMF repeatedly have called on Ankara to rein in spending, which they say is fueling inflation. Perhaps in response, Erdogan has announced a freeze on new state construction projects.

In the past few years, he has embarked on an unprecedented construction boom, including building one of the world’s largest airports and a multibillion-dollar canal project in Istanbul, which the president himself described as “crazy.”

Trade tariffs

Investors also remain concerned about ongoing diplomatic tensions between Ankara and Washington. The two NATO allies remain at loggerheads over the detention on terrorism charges of American pastor Andrew Brunson.

Brunson’s detention saw U.S. President Donald Trump impose trade tariffs on Turkey, which triggered August’s collapse in the lira. Trump has warned of further sanctions.

“If we somehow sort out our problems with the United States and adopt an orthodox austerity program, we may find a way out of this mess,” said political analyst Atilla Yesilada of Global Source Partners.  “Turkey is a country that has a net foreign debt of over $400 billion, and where 40 percent of [Turkish] deposits are in foreign currency, so the game could be over in a day.”

Turkey has a long tradition of carrying out business in foreign currencies to mitigate the threat of inflation and a falling lira. The growing danger of the so-called “dollarization” of the economy and the public abandonment of the lira are significant risks to the currency.

Turkish companies are paying the cost for the depreciation of the lira. Analysts estimate about $100 billion in foreign currency loans have to be repaid by the private sector in the coming year. Companies and individuals borrowing in local currency, however, will be facing higher repayments. And most analysts predict the Turkish economy is heading into a recession.

Economist Demir says, though, that the situation could have been far worse.

“In the absence of an [interest rate] hike, the rollover pressures on banks would get even worse, damage on corporate balance sheets would intensify, and local deposit holders’ confidence would have weakened further. So this hike, although it doesn’t eliminate other risks, eliminates some of the worst outcomes for the Turkish economy,” he said.

Thursday’s rate hike appears to have bought time for the Turkish economy and the nation’s besieged currency. Analysts say investors are watching to see if Turkey’s decision-makers use that time wisely.
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Cuba’s street vendors are bringing back the pregon, the art of singing humorous, rhyming ditties with double entendres about the goods they are selling, with some modernizing the tradition by setting their tunes to reggaeton.

The pregon is a centuries-old tradition that has inspired famous songs like “El Manisero” (the peanut vendor), composed in the late 1920s by Cuban musician Moises Simons on son music, the backbone of salsa.

It faded out in Cuba after Fidel Castro’s 1959 revolution did away with most free enterprise. With the tentative liberalization of the centralized economy over the last few decades, however, it has made a comeback.

Cubans can now get a permit to make and sell their own goods on the street, from coconut ice cream to juices. Vendors often opting for that option, rather than opening a shop, which remains an onerous venture given ongoing restrictions on private business.

Others just illegally sell wares from stores at a mark-up, hoping to avoid authorities and a fine.

Not all street vendors bother with the pregon. Some just shout out what they are selling and their prices in a blunt manner on a loop, often using loudspeakers that they strap to rickety carts or bicycles, adding to the urban cacophony.

Cuba’s pregoneros however, like Lyssett Perez, who hawks paper cones of roasted peanuts to tourists in Old Havana, believe their ditties help them stand out.

“Firstly, it’s so people listen to me. Secondly, so they love me,” said Perez. “For me the pregon means joy.”

Perez has opted for more traditional pregons. She dresses up in colonial-style dresses with voluminous skirts and white aprons in order to catch the eye of potential clients.

“If you want to have fun by the mouth, buy yourself a peanut cornet,” she sings in a deep, melodious voice as she meanders up and down Old Havana’s pebbled and picturesque streets.

Other pregoneros are updating the genre. Gilberto Gonzalez raps about his wares to the beat of reggeaton that blends reggae, Latin and electronic rhythms.

“Toilet paper, so the chorus goes, buy me my people, to clean your bottom, hands in the air!” he raps in a video captured by a passer-by that subsequently drew tens of thousands of views on YouTube.

The video appeared just months after shortages of toilet paper in Havana, adding to its humorous appeal. Cubans are notorious for dealing with constant shortages of basic goods by making fun of them.

Such was its success that one of Cuba’s top DJs, DJ Unic, did a remix that further spread Gonzalez’s peculiar renown. Sporting a cap that reads “Money on my Mind,” Gonzalez said he was just trying to “make ends meet.”
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Even before U.S.-China trade tensions began escalating dramatically, foreign businesses who operate in China were warning about the impact tariffs could have. And now, according to a newly released joint survey from the American Chamber of Commerce in China and AmCham Shanghai, many are already feeling the pinch.

More than 60 percent say the initial $50 billion in tariffs rolled out by the United States and China are having a negative impact on business, increasing the demand of manufacturing and slowing demand for products.

That number is expected to rise to nearly 75 percent if a second round of tariffs, an additional $200 billion in tariffs from Washington and another $60 billion from Beijing, goes ahead.

The administration of President Donald Trump has threatened it could go ahead with $200 billion in tariffs and, if needed, $267 billion more after that.

Unexpected consequences

William Zarit, chairman of AmCham China said while there are expectations in Washington that an additional onslaught of tariffs could force Beijing to wave the white flag, it risks underestimating China’s capability to continue to meet fire with fire, he said.

“It seems that American companies will be more harmed by the American tariffs than they will by the Chinese tariffs. I don’t think that this necessarily is a result that was expected,” Zarit said.

President Trump argues that China is stealing jobs from the United States and not doing enough to address the huge trade deficit between the two economies. The tariffs are seen by proponents as a way of pressuring China to move away from its state-led economy and policies that force technology transfers.

Zaritt said it remains to be seen whether some of the Trump administration’s tactics and tariffs will address big problems, such as Chinese protectionism, state capitalism and other things such as preferential loans and subsidies. He said one key approach that could go a long way to help ease tensions is for the focus to shift toward equal and reciprocal treatment.

“The Chinese have acknowledged that as their economy is evolving away from an export driven/investment driven to a more consumption/domestic demand driven economy, that they really need to open their market. And so, the big question is why would you not do that if it is in your interest?” Zarit said.

Private vs public economy

In Beijing, some have framed the trade tensions as an attempt by the United States to thwart China’s rise. Others, however, have suggested that instead of opening up markets and giving private enterprises more space, the opposite should happen. An article written by Wu Xiaoping, a veteran financier and columnist argues it is time for private enterprises to think about exiting the market.

In the article, he argued China should move toward a large scale centralized private-public mixed economy. He also said the private economy shouldn’t expand blindly.

“The private economy has accomplished its mission to help the public economy develop and it should gradually step aside,” he wrote in the article.

The article has sparked a backlash online and even state media reports have criticized Wu’s views. The fact that the idea was able to circulate so widely before being heavily censored on Thursday is a signal that the government might be sending out a trial balloon.

Others analysts argue the publication of the article could have been motivated by a fear for some that Beijing was preparing to make major concessions.

Zhang Yifan, an associate economics’ professor at the Chinese University of Hong Kong, said despite the widespread criticism, the idea was worrisome.

“President Xi’s government, they believe [in a] strong government,” Zhang said. “So, there is a trend that they strengthen the power of the government and I am worried that market forces will play a smaller and smaller role.”

More trade talks

On Thursday, China’s Foreign Ministry confirmed that both Washington and Beijing are preparing for another possible round of talks and trade negotiations.

A spokesman from the Foreign Ministry welcomed the invitation from Washington and the two were discussing details about the proposed talks. U.S. Treasury Secretary Steven Mnuchin invited his counterparts in China along with Vice Premier Liu He to attend the talks, which could happen in the coming weeks.

The fact that higher ranking officials would attend the talks is being seen as a positive sign. The last round of talks were carried by lower-ranking officials.

Joyce Huang contributed to this report

 
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A new report by Transparency International suggests foreign bribery is alive and well. 

The report, by the Berlin-based, anti-corruption watchdog, suggests little has changed in recent years in the way governments enforce their anti-bribery laws. Today, only seven major exporting countries actively crack down on companies that offer bribes to foreign officials in exchange for favorable business deals.

The United States is one of the seven countries, which together account for 27 percent of world exports, Transparency International said. The others are Germany, Israel, Italy, Norway, Switzerland and the United Kingdom. 

2016 a record year

Between 2014 and 2017, the United States launched at least 32 investigations, opened 13 cases and concluded 98 cases involving foreign bribery, according to the report. Enforcement activity surged in 2016, resulting in a record $2.5 billion in penalties levied by U.S. authorities. 

Among several high-profile foreign graft cases adjudicated in the United States, the report cited a case in which British aircraft engine maker Rolls-Royce payed law enforcement authorities in the United States, Britain and Brazil $800 million in 2017 to resolve allegations of bribing officials in at least a dozen countries over more than two decades

The report rated the performance of 44 major exporting countries, including 40 nations that have signed the Organization of Economic Cooperation and Development’s (OECD) Anti-Bribery Convention. The 1997 compact requires signatories to make it a crime for companies and individuals in their countries to bribe foreign officials. 

Transparency International’s last report on the topic, released in 2015, listed just four countries with active anti-foreign bribery law enforcement: Germany, Switzerland, Britain and the U.S.

But the elevation of Israel, Italy and Norway to the ranks of countries with vigorous anti-foreign bribery enforcement was offset by declining levels of enforcement in four other countries: Austria, Canada, Finland and South Korea. 

“Disappointingly, there has been little change in the overall enforcement level (taking the share of world exports into account) since the last report,” the report said. 

‘Limited’ enforcement

Of the 44 countries examined by Transparency International, four — Australia, Brazil, Portugal and Sweden  had “moderate” anti-foreign bribery law enforcement; 11 had “limited” enforcement, while 22, including Russia and China, had “little to no” enforcement. Argentina, Brazil and Chile were among countries that improved their enforcement. 

For the first time, Transparency rated the performance of China, Hong Kong, India and Singapore — all non-OECD members that have not signed the organization’s anti-graft convention — and put them all in its lowest rung of enforcement. 

Concern about Chinese corporate bribery of foreign officials has heightened since Beijing rolled out its ambitious Belt and Road Initiative in 2013. But Transparency said there were no known foreign bribery cases or investigations brought by the Chinese government between 2014 and 2017. 

The watchdog said that China has recently “signaled” that it may focus more on foreign bribery enforcement, noting that Beijing and the World Bank held a symposium last year that focused, in part, on corruption risks associated with Belt and Road projects. 

‘Naive’ suggestion

To close the enforcement gap, Transparency recommended that all four sign the OECD convention.

Stuart Gilman, a former head of the United Nations global program against corruption, called the recommendation “naive.”

For China and Russia, “corruption and whatever way they can influence other governments is, in effect, part of their foreign policy,” Gilman said. “I think in my discussions with Chinese officials — not officially but reading between the lines — they see it as one among many tools to extend the influence of China around the world, from the Silk Road to Africa to other areas of the world.”
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Labor unions and social groups blocked streets in downtown Buenos Aires on Wednesday, with more marches planned over the days ahead over   austerity measures proposed by the government and backed by the International Monetary Fund.

Protesters are angry about the belt-tightening policies, which are cutting services to low-income Argentines already walloped by inflation of 31 percent and climbing.

But Argentine leader Mauricio Macri says he needs to carry out such measures to regain investors’ confidence by reducing the country’s fiscal deficit.

The outlook for Latin America’s third biggest economy is grim, according to orthodox and left-leaning economists alike.

Planned cuts to public utility subsidies, forcing Argentines to pay more for transportation and electricity, are expected to keep upward pressure on consumer prices for the rest of 2018.

“The day to day uncertainty is getting worse,” said protester Gabriela Gil, a 49-year-old mother of five.

The year will close with inflation at more than 40 percent, according to economists’ forecasts. Hardest hit are low-income families that spend a high proportion of their income on food.

“The poorest people in the country are on the verge of hunger,” said Daniel Menendez, a spokesman for Barrios de Pie, one of the groups that helped organized the march.

Fiscal medicine

Measures aimed at taming inflation, like the central bank’s 60 percent monetary policy rate, have helped push the economy into recession by choking off credit. Stimulus spending that might pep up the economy would dash Macri’s promise of bringing the primary fiscal deficit to zero next year. The previous 2019 deficit target was 1.3 percent of gross domestic product.

Economy Minister Nicolas Dujovne said earlier this month that it was weakness on the country’s “fiscal flank” that prompted a run on the peso in August. The currency fell 26 percent last month alone and has lost more than half its value so far in 2018.

On Tuesday, the peso wobbled 1.4 percent lower to close at 38.5 per dollar.

Having signed a $50 billion standby financing deal with the IMF in June, the slide in the peso prompted Macri’s administration to pledge deeper spending cuts to secure an early release of funds.

The revamped fiscal targets are being hammered out in Washington and will be part of the 2019 budget bill that Macri is expected to send to Congress over the days ahead.

“What we are seeing in asset prices in Argentina is that people are not giving them the benefit of the doubt,” Daniel Osorio, president of New York-based consultancy Andean Capital Advisors, said in a telephone interview.

With investors demanding that the government stand by its budget-cutting program, some economists say the bitter fiscal medicine called for by the IMF might prove worse than the recession and high inflation that are already ailing Argentina.

“The financial markets have closed for the country. Argentina’s government is responding by attempting a much more drastic fiscal adjustment,” said Martin Guzman, an economist at Columbia University Business School. “My view is that such a measure will lead to another recession in 2019.”
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The median U.S. household income reached $61,372 last year — its highest level ever, the U.S. Census reported Wednesday.

The new median figure, meaning that half of U.S. families earned more money and half less, was a reflection of the robust U.S. economy, the world’s largest, that expanded 4.1 percent in the April-to-June period even as the unemployment rate held steady in August at 3.9 percent. The 2017 household income was 1.8 percent higher than the $60,309 figure in 2016.

Middle-class income in the U.S. has been expanding in recent years as the country continues its recovery from the steep recession of a decade ago — a time when millions of people lost their jobs, and many lost their homes through foreclosure when they no longer had enough money to make monthly home loan payments.

Now, one Census official said, many Americans are moving from part-time to full-time work, adding to their financial well-being.

With the income improvement, the Census said that 12.3 percent of the 328 million Americans are living in poverty, a slight improvement from the 12.7 percent figure in 2016. It said 8.8 percent of Americans are without health insurance coverage, the same figure as the year before.
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