Dutch Ousted 2 Russians Over Alleged Swiss Lab Hack Attempt

Swiss authorities said Friday that the Netherlands arrested and expelled two suspected Russian spies who allegedly tried to hack a Swiss laboratory that conducts tests for the U.N.-backed chemical weapons watchdog.

Switzerland’s Foreign Ministry summoned the Russian ambassador to protest the attempted attack.

The Federal Intelligence Service says it worked “actively” with British and Dutch partners on the case involving Switzerland’s Spiez Laboratory. Russia’s foreign minister said earlier this year that the lab analyzed samples linked to the poisoning of former Russian spy Sergei Skripal and his daughter in England.

The confirmation came after Dutch newspaper NRC Handelsblad and Swiss newspaper Tages-Anzeiger reported that two Russians suspected of being agents of military intelligence service GRU were kicked out of the Netherlands earlier this year as a result of a Europe-wide investigation.

“The Swiss authorities are aware of the case of Russian spies discovered in The Hague and expelled from the same place,” said FIS spokeswoman Isabelle Graber in an email. “The Swiss Federal Intelligence Service participated actively in this operation together with its Dutch and British partners.”

“The FIS has thus contributed to the prevention of illegal actions against a critical Swiss infrastructure,” she added, while declining to comment further.

The Swiss attorney general’s office confirmed it had identified “two individuals” as part of a broader investigation opened last year.

Switzerland’s Foreign Ministry said it summoned Russia’s ambassador on Friday to “protest against this attempted attack” and demanded that Russia “immediately” end its spying activities on Swiss soil.

Andreas Bucher, a spokesman for the laboratory, declined to comment on the expulsions, but added: “We have had indications that we have been in the crosshairs of hackers in the last few months.” He said the lab had taken precautions, and no data was lost.

The Russian state news agency Tass quoted Stanislav Smirnov, a spokesman for the Russian embassy in Switzerland, as calling the Dutch news report “absurd.”

“We believe that this is a new anti-Russian bogus story made up by the Western media,” he was quoted as saying, alluding to the events that took place six months ago. “We have seen this article and it gives rise to a lot of questions … It is absurd, just new groundless allegations.”

 

Anti-Kremlin Activist Seriously Ill in Hospital, Colleagues Say

Prominent anti-Kremlin activist Pyotr Verzilov is seriously ill and in hospital, members of the Pussy Riot protest band with whom he collaborated said late on Wednesday, suggesting he may have been poisoned.

Verzilov, 30, staged a brief pitch invasion during the soccer World Cup final in Moscow in July along with three women affiliated to the anti-Kremlin punk band and is the publisher of Mediazona, a Russian online news outlet which focuses on human rights violations inside Russia’s penal system.

“Our friend, brother, comrade Petr Verzilov is in reanimation. His life is in danger. We think that he was poisoned,” Pussy Riot said on its official Twitter feed.

Sergei Smirnov, editor-in-chief of Mediazona, struck a more cautious note however, confirming on social media that Verzilov was in hospital but saying nobody knew his diagnosis, making it difficult to understand what was going on.

Online news portal Meduza cited Veronika Nikulshina, who it said was Verzilov’s girlfriend, describing how he had been rushed to hospital on Tuesday night after he started to lose his eyesight and ability to talk and walk.

Verzilov is also a citizen of Canada. Prime Minister Justin Trudeau said he was worried by what happened, adding that Canadian consular officials had reached out to the hospital.

“It is of concern, obviously, particularly given actions of recent months by the Russians in the United Kingdom … but it is too early to draw any conclusions about what has happened,” he told reporters in the western city of Saskatoon.

Earlier this month Canada said it backed Britain’s assessment that Russian officers were behind an attack in March on a former Russian spy and his daughter in the English city of Salisbury.

Verzilov and the others served a 15-day sentence for running onto the pitch in front of President Vladimir Putin and other high-ranking officials wearing police uniforms during the final of the World Cup on July 15, a stunt they said was meant to promote free speech.

Pussy Riot came to prominence in 2012 when its members were jailed for staging a protest against Putin in a Russian Orthodox cathedral in Moscow. The group has since become a symbol of anti-Kremlin protest action.

Volkswagen to Stop Production of Iconic Beetle in 2019

Volkswagen said on Thursday it would stop producing its Beetle compact car globally in 2019, ending a model that looked backward to the 1960s counter-culture as the automaker prepares for a leap toward a future of mass-market electric cars.

The VW Beetle and the VW minibus became symbols of the small-is-beautiful esthetic of many in the post-war Baby Boom and the crescent shaped car was revived with the “New Beetle” of the late 1990s, which offered a built-in flower vase.

The New Beetle was a hit during its early years, with sales of more than 80,000 cars in the United States in 1999. More recently the car’s U.S. sales have suffered along with most other small cars.

Volkswagen sold 11,151 total Beetles through the first eight months of 2018, down 2.2 percent from the same period a year earlier. U.S. consumers looking for a small Volkswagen vehicle overwhelmingly prefer the Jetta sedan, or a Tiguan compact sport utility vehicle.

The company said two special models will join the final lineup — Final Edition SE and Final Edition SEL — in the United  States and would offer driver-assistance technology.

Turkey’s Central Bank Defies Erdogan, Hikes Rates

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.

In Cuba, Street Vendors Sing to Sell, From Salsa to Reggaeton

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.”

Survey: US Tariffs Hurting American Businesses in China

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

 

 

Renoir Stolen by Nazis Returned to Jewish Family

A Renoir masterpiece stolen by the Nazis in World War II is back in the hands of the Jewish family who owned it.

Sylvie Sulitzer, granddaughter of the original owner, received the painting, “Two Women in a Garden,” at a ceremony Wednesday at the Museum of Jewish Heritage in New York.

“I’m very thankful to be able to show my beloved family, wherever they are, that after all they’ve been thorough, there is a justice,” Sulitzer said.

“Two Women in a Garden” was among the last works Renoir painted before he died in 1919.

Sulitzer’s grandfather, famed art collector Alfred Weinberger, stashed the painting with the rest of his collection in a Paris bank vault before fleeing the Nazis, who occupied Paris in 1940.

Weinberger tried but failed to recover his collection after the war.

The Renoir painting was bought and sold several times over the next 70 years, traveling to South Africa, Switzerland and London before finally being put up for auction in New York in 2013.

Christie’s Auction House suspected the work may have been stolen by the Nazis and contacted the FBI, who contacted Sulitzer in France.

She has told the French News Agency that five other works from her grandfather’s collection still need to be recovered. They include four other Renoirs.

“We’ll never forget. We can’t forget. But it’s very important that we, me as a human being, as a Jewish person, to consider that you have people who work for justice,” she said.

Anti-Corruption Watchdog: Most Countries Ignore Anti-Foreign Bribery Laws  

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.”

US Seeks to Impose Cost for Election Meddling

The United States is threatening automatic sanctions to deter Russia and any other current or future adversary from interfering in the country’s elections.

President Donald Trump declared a national emergency Wednesday, signing an executive order that mandates a range of economic sanctions and other penalties against any person, group or country assessed to have meddled with the upcoming midterm elections November 6.

The order comes eight weeks before voters go to the polls and covers attacks on America’s election infrastructure, such as voting machines and voter databases, cyber attacks against candidates or political organizations, and disinformation campaigns.

It also comes as the White House is trying to take a tougher line against Moscow after Trump publicly accepted Russian President Vladimir Putin’s denials of his country’s involvement in any interference in the 2016 U.S. presidential elections, contrary to the findings of the U.S. intelligence community.

“It’s a further effort, among several that the administration has made, to protect the United States against foreign interference in our elections and really our political process more broadly,” National Security Adviser John Bolton said Wednesday while briefing reporters.

“We felt it was important to demonstrate the president has taken command of this issue, that it’s something he cares deeply about,” Bolton added.

Russian meddling attempts

There have been ongoing concerns about attacks or disinformation campaigns, fueled in part by Trump’s own attacks against the ongoing special counsel investigation into Russia’s activities and into possible collusion with Trump’s own campaign staff.

Trump has repeatedly dismissed the investigation as a “witch hunt.”

But in a statement late Wednesday, the president said his executive order makes clear the United States “will not tolerate any form of foreign meddling in our elections.”

“When it comes to foreign policy, my administration has delivered decisively and taken action where previous administrations have not,” Trump said. “By signing this Executive Order, I am adding to my record of implementing the strongest measures to date of any United States president to protect our electoral system.”

​​Automatic sanctions

The new executive order gives U.S. intelligence agencies 45 days after an election to report any efforts to meddle with the outcome.

The U.S. attorney general and the Department of Homeland Security will then have 45 days to review those findings. If they agree with the assessment, it would trigger automatic sanctions.

Those sanctions could include blocking access to property and interests, restricting access to the U.S. financial system, prohibiting investment in companies found to be involved, and even prohibiting individuals from entering the United States.

Additionally, the order authorizes the State Department and the Treasury Department to add on additional sanctions, if deemed necessary.

A key State Department official praised the executive order as a good start.

“I applaud the attempt to make it harder to evade, to let something fall away and not be countered,” Michele Markoff, the State Department’s Deputy Coordinator for Cyber, said during a panel discussion in Washington Wednesday.

“We’re setting up a process or a mechanism where if we see something, we’re going to say something,” she said. “The way we have been doing it [until now] is fingernail-pulling.”

Some former officials also praised the order as a “step in the right direction.”

Growing skepticism

“I think it’s going to be good,” said Sean Kanuck, a former intelligence officer for cyber issues, now with the International Institute for Strategic Studies.

Still, Kanuck said the executive order alone is likely not enough.

“I don’t know that it will be a complete solution,” he said. “I doubt it will completely change the incentive-cost-benefit analysis of the other side.”

Other cyber analysts are even less optimistic.

“The July Helsinki meeting between Trump and Putin has a visual effect that is searing and long lasting,” said Laura Galante, a senior fellow at the Atlantic Council who has previously worked with the U.S. government.

“Words, and those words in Helsinki, probably speak louder than executive action,” she said.

Additional measures possible

Key lawmakers are likewise cautious.

“An executive order that inevitably leaves the president broad discretion to decide whether to impose tough sanctions against those who attack our democracy is insufficient,” Mark Warner, the ranking Democratic member of the Senate Intelligence Committee, said in a statement.

“If we are going to actually deter Russia and others from interfering in our elections in the future, we need to spell out strong, clear consequences, without ambiguity,” Warner added.

“Today’s announcement by the administration recognizes the threat, but does not go far enough to address it,” Republican Senator Marco Rubio and Democratic Senator Chris Van Hollen said in a joint statement Wednesday.

But Senate Intelligence Committee Chairman Republican Richard Burr expressed hope the new executive order will “send a clear message” to Russia, Iran and others.

Not just Russia

Trump administration officials said Wednesday they have not ruled out working with lawmakers on additional measures, but said they did not want to have to wait for legislation to be approved before having a chance to act.

And while some of the proposed legislation focuses on Russia, the officials said it was important to take a broader view.

“We have seen signs of not just Russia, but from China, of capabilities, potentially from Iran, and even North Korea,” U.S. Director of National Intelligence Dan Coats told reporters Wednesday.

“In terms of what the influence is and will be, we continue to analyze all that,” Coats added. “This is an ongoing effort here, and it has been for a significant amount of time, and will continue on a, literally, 24-hour-a-day basis until the election.”

Putin Proposes Peace Treaty With Japan Before Year’s End

Russian President Vladimir Putin said Wednesday that he wanted to sign a formal peace treaty with Japan ending hostilities from World War II by the end of the year without conditions.

Seventy-three years after the war concluded, the two countries remain technically at war because of a territorial dispute over four Pacific islands.

“Let us sign the peace treaty … and later we will continue to talk about all of our disagreements as friends on the basis of a peace treaty,” Putin said at an economic conference in Vladivostok.

Japanese Prime Minister Shinzo Abe appeared open to a treaty, saying it was “not normal” that one still hasn’t been signed after seven decades.

“Japan and Russia — both President Putin and myself — share the same position and determination to solve our territorial disputes,” he said.

But a Japanese government spokesman said Japan’s position had not changed and that the issue of sovereignty over the islands needed to be resolved before signing any treaties with Russia.

The Soviet Union seized the four islands north of Hokkaido and east of Sakhalin in the closing days of World War II.

Russia calls the islands the Kurils, while Japan calls them the Northern Territories. Russia has sovereignty over the islands. Japan wants them back.

The islands are rich in minerals and rare metals, and its waters are excellent fishing grounds. 

Putin and Abe have met more than 20 times to discuss the dispute.

Abe has proposed making the islands a joint economic zone, which could lead to a settlement.

Argentine Austerity Protests Mount Over Macri-Backed IMF Measures

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.”

US Median Household Income Reaches Record High

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.

‘Nobody Likes The Truth,’ says Veteran Serbian Human Rights Activist

Nataša Kandić, the formidable Serbian human rights campaigner and Nobel Peace prize nominee, shrugs. “Nobody likes the truth,” she says.

For almost three decades Kandić has been a thorn in the side of those who butchered, raped and tortured during the Balkans wars of the 1990s. She documented abuses and massacres. She protested what was unfolding, cajoling and informing a shocked world, insisting it pay attention to the return of genocide to Europe, and to do something about it.

The evidence she gathered was used in the preparation of many indictments issued by the U.N. International Criminal Tribunal for the former Yugoslavia in The Hague, including a video of Bosnian-Serb paramilitaries executing a number of captives, which helped prove Serbia’s role in the Srebrenica massacre of 7,500 Bosnian Muslim men and boys.

She has drawn the praise of human rights activists across the world, but in her home country she has seen by many as a traitor and drawn the hatred of the Serbs’ wartime leaders and their followers, including a new generation of ethnic nationalists who glorify ethnic cleansing and the Balkans conflict, which marked the first large-scale slaughter of civilians in Europe since the Nazi era.

During an interview in downtown Belgrade at the Humanitarian Law Center, an NGO she founded in 1992, she said, “The majority of public opinion is without respect for human rights. Truth is not so nice for people and politicians because Serbia bears responsibility for many war victims, wrongdoing, bad relations with neighbors, especially Kosovo. And we don’t have politicians who are willing to take responsibility for the wrong decisions of Serbia. All of them participated in making decisions in 1991 at the beginning of the war.”

Hours after she spoke with VOA, Serbian President Aleksandar Vučić lauded Serbia’s wartime leader Slobodan Milošević, describing him in a speech as “a great Serbian leader” whose “aims were certainly the best.” Vučić criticized former Serbian officials, who he dubbed pro-Western, for handing over Slobodan Milošević and his generals to the U.N. war crimes tribunal in The Hague.

His remarks prompted outrage in neighboring Balkan states where Milosevic’s ultranationalist policies during the breakup of Yugoslavia prompted bloodshed and destruction, and the deaths of at least 120,000 people in Bosnia, Croatia, and Kosovo.

For Kandić, Vučić’s remarks are not a surprise. Like many human rights activists and war victims in the Balkans she is frustrated with the halting progress made with transitional justice since the end of the Balkans conflict. She believes punishments and prosecutions, acknowledgement, and the apportioning of guilt are necessary to advance reconciliation.

She laments the ending of the mandate of the International Criminal Tribunal for the Former Yugoslavia, which wrapped up its work last year. She says the court changed the landscape of international humanitarian law and its legacy is important, but she worries “there is no other body to build on that legacy.”

Kandić says Western countries have neglected human rights in the Balkans and is urging them to back her calls for the establishment of a regional commission “to register all of the victims, to oblige states to name the victims and with a mandate to collect information to establish the identities of 130,000 victims; to establish the facts about how they lost their lives and organize public recognition.”

She asks, “How can you establish the rule of law without punishing the people who committed the crimes in the past?”

Kandić clearly is fearful of backsliding amid rising nationalist sentiment across the Balkans. “For example, in Kosovo, all the leaders were very active in the war, they were on the top level, they were war leaders. In Serbia, all current opposition leaders were very close to Milosevic.”

She is not alone nursing worries. In the Serbian-controlled Republika Srpska, one of the two legal entities of Bosnia and Herzegovina, Aleksandra Letić of the Helsinki Committee for Human Rights, bewails an increase in nationalist rhetoric, fanned by the politicians, especially before Bosnia-wide elections next month.

“Everybody, in particular the international community, is pretending that the pink elephant [a euphemism for hallucination] is not running through the streets of Bosnia Herzegovina,” she says.

A new generation of youngsters are thrilling to the idea of Serbian ultra-nationalism and there is little effort to pull them the other way, she says. “In Bosnia Herzegovina monuments are raised to the perpetrators, but the victims are neglected. We have only one official monument for the victims in Republika Srpska and that was built because of international pressure.”

“What is concerning is that those who are actually supporting war criminals, supporting the ideology of those who actually committed war crimes are young people born after the war,” says Letić. She adds the young generation should be the driving force for progress towards an open and democratic society, but is “deeply involved in nationalistic and chauvinistic behavior.”

The schools, she laments, do not teach what the war criminals did to get convicted. “Some of the history text books end before the peak of the Balkans conflict,” she complains.

 

 

EU Lawmakers Vote to Sanction Hungary for Eroding Democracy

European Union legislators took the unprecedented step Wednesday to begin process of imposing sanctions on Hungary for presenting a “systematic threat” to the bloc’s Democratic values.

The European Parliament voted 448-197 to launch an Article Seven process, which could result in the suspension of Hungary’s EU voting rights.

The vote dealt a serious blow to Prime Minister Viktor Orban, further isolating him from powerful allies in the midst of his ambitious effort to push Europe toward Hungary’s version of an “illiberal democracy.”

Orban managed during his eight years in office to deflect his critics, who contend Hungary’s electoral system is irregular, media freedom and judicial independence are waning and refugees and asylum-seekers are abused.

Hungarian Foreign Minister Peter Szijjarto condemned the vote as “nothing less than the petty revenge of pro-immigration politicians.” He also said Hungary was considering legal actions because the vote was tainted by “massive fraud” since abstentions were not included in the final count.

There were 48 abstentions, so the 448 votes in favor of the sanctions exceeded the two-thirds needed only because it was based on 645 votes.  If the abstentions were counted, there would have been a total of 693 votes.

Judith Sargentini, a Dutch politician who presented the European Parliament’s report recommending the sanctions process, welcomed the results of the vote.

“Viktor Orban’s government has been leading the charge against European values by silencing independent media, replacing critical judges, and putting academia on a leash,” she said. “The Hungarian people deserve better.  They deserve freedom of speech, non-discrimination, tolerance, justice and equality, all of which are enshrined in the European treaties.”

With European Parliament elections in May, the dispute over Hungary and Poland, which faces a similar sanctions process that was initiated by the European Commission last year, highlights tensions between nationalists and federalist camps on the continent.

 

Juncker: EU Must Grasp World Role as US Retreats

The European Union must flex its muscles as a world power, EU chief executive Jean-Claude Juncker said on Wednesday, as he spoke critically of U.S. President Donald Trump’s retreat from international engagement.

In his annual State of the Union address to the European Parliament in Strasbourg, Juncker, who is entering his final year as president of the European Commission, urged EU states to bridge angry divisions over budgets, immigration and other issues in order to capitalize on a chance to shape the world.

“Whenever Europe speaks as one, we can impose our position on others,” Juncker said, arguing that a deal he struck in July with Trump to stall a transatlantic tariff war and which won plaudits for the Commission should have come as no surprise.

“The geopolitical situation makes this Europe’s hour: the time for European sovereignty has come,” he said.

Juncker made no direct comment on Trump or U.S. policy but aides said the geopolitical situation he spoke of was a U.S. retreat into what Juncker described elsewhere in the speech as “selfish unilateralism”. He also saw new opportunities to work with China, Japan and others to develop “multilateral” rules.

Some proposals to strengthen the EU’s effectiveness face an uphill battle against member state opposition, notably scrapping national vetoes in some foreign policy areas, such as where economic pressure from the likes of Russia or China on certain EU countries has blocked EU sanctions to defend human rights.

In repeating his support for deeper economic integration, he also pushed the idea that the euro should challenge the dollar as the world’s leading currency, calling it “absurd” that the EU pays for most of its energy in the U.S. currency despite buying it mainly from the likes of Russia and the Gulf states. He said

airlines should also buy planes priced in euros not dollars.

Juncker renewed calls for states to push ahead in developing an EU defense capability independent of the U.S.-led NATO alliance and to embrace Africa through investment and a sweeping new free trade area — part of a strategy to curb the flow of poor African migrants which has set EU governments at each other’s throats and fueled a sharp rise in anti-EU nationalism.

EU divisions

Without naming Hungarian Prime Minister Viktor Orban, Juncker blasted EU leaders who sought to undermine democracy and the rule of law and rejected complaints from lawmakers that the Commission has been lenient toward Hungary, Poland and other eastern states.

Later on Wednesday, the European Parliament voted to sanction Hungary for flouting EU rules on democracy, civil rights and corruption in an unprecedented step that could lead to a suspension of Budapest’s EU voting rights.

At the same time, the Commission put forward a plan to get even tougher on illegal economic migrants whose arrival has so angered Orban and others.

However, the idea of a fully federal European Border and Coast Guard, with its own 10,000-strong uniformed force run from Brussels may hit national resistance.

With an eye on elections next May to the European Parliament, Juncker proposed new vigilance, and penalties, for attempts to manipulate voters. As the centenary nears of the end of World War One, he recalled how Europeans were taken totally by surprise by its outbreak and urged more respect for the EU as a force for peace against nationalistic “poison and deceit.”

He spoke of regret at Britain’s impending withdrawal from the bloc which will mark his five-year mandate and warned Prime Minister Theresa May that the EU would not compromise its single market to let London pick and choose which rules to obey.

But as negotiators struggle to overcome problems about the future of the land border on the island of Ireland, Juncker also pledged that Britain would remain a very close partner.

In the parliamentary debate which followed his hour-long address, Nigel Farage, of the UK Independence Party, accused him of failing to acknowledge the arrival of euroskeptics in government in Italy and a “populist revolt” across Europe that he said would resist Juncker’s aim to centralize more power.

S. Korea Jobless Rate Hits Highest Since Global Financial Crisis

South Korea’s unemployment rate hit an eight-year high in August as mandatory minimum wages rose, adding to economic policy frustrations and political challenges for President Moon Jae-in whose approval rating is now at its lowest since inauguration.

The unemployment rate rose to 4.2 percent in August from 3.8 percent in July in seasonally adjusted terms as the number of unemployed rose by 134,000 people from a year earlier.

This was the labor market’s worst performance since January 2010, when the economy was still reeling from the global financial crisis, when 10,000 jobs were lost.

Finance Minister Kim Dong-yeon said on Wednesday the government will need to adjust its wage policies, signaling some future soft-pedaling in the drive to raise minimum wages.

“(The government) will discuss slowing the speed of minimum wage hikes with the ruling party and the presidential office,” Kim Dong-yeon told a policy meeting in Seoul, adding he did not expect a short-term recovery in the job market.

Experts say the uproar over jobs could also cost Moon considerable political capital as he pursues closer ties with Pyongyang, as any good news from an inter-Korean summit may not be enough to offset public discontent over the lack of jobs and soaring housing prices.

More than 60 percent of respondents in a Gallup Korea survey criticized Moon’s handling of the economy, including his ‘inability to improve the livelihoods of ordinary citizens’ and ‘minimum wage increases.’

The jobs report showed the labor-intensive retail and accommodation sector, which lost 202,000 jobs in August from a year earlier, was the hardest hit.

A total 105,000 jobs were lost from manufacturing industries, the report said.

However, the agriculture, construction and transport sectors saw a rise in the number of employed, partly offsetting the rise in the number of workers laid off.

The overall number of employed people rose by just 3,000 – also the worst since January 2010.

Each month’s worsening jobs report has sparked a strong public backlash, with President Moon Jae-in’s approval rating falling below 50 percent for the first time on Sept. 7.

A weekly Gallup Korea survey released on Friday showed Moon’s support fell 4 percentage points to 49 percent, the lowest since he took office in May 2017.

“At this rate, we may not see any gains in the number of employed in September or the month after that,” said Oh Suk-tae, an economist at Societe Generale.

Oh said economists at the Korea Development Institute, a state-run think tank, believed this year’s 16 percent increase in the minimum wage – the biggest jump in nearly two decades – was discouraging employers from hiring.

“The president should be held responsible for this, nothing could change the trend unless the boss changes his mind about minimum wage hikes,” Oh said.

The workforce participation rate declined slightly to 63.4 percent from 63.6 percent in July, as more jobs were lost than created, Statistics Korea data showed.

 

Water Shortages to Cut Iraq’s Irrigated Wheat Area by Half

In Iraq, a major Middle East grain buyer, will cut the irrigated area it plants with wheat by half in the 2018-2019 growing season as water shortages grip the country, a government official told Reuters.

Drought and dwindling river flows have already forced Iraq to ban farmers from planting rice and other water-intensive summer crops. Water scarcity was one of the issues galvanizing street protests in the country this year.

An investigation by Reuters in July revealed how Nineveh, Iraq’s former breadbasket, was becoming a dust bowl after drought and years of war.

This latest move is likely to significantly raise wheat imports.

Deputy Agriculture Minister Mahdi al-Qaisi said irrigated land grown with winter grains, namely wheat and barley, would be halved.

“The shortage of water resources, climate change and drought are the main reasons behind this decision, our expectation is the area will shrink to half,” Qaisi said in an interview.

Iraq’s agricultural plan included 1.6 million hectares of wheat last 2017-2018 season. Of those, around one million hectares were irrigated and the rest relied on rainfall.

“We expect that the irrigated wheat area falls to half of what it was last year,” Qaisi said, implying plantings of 500,000 hectares.

The cut is expected to lower the country’s wheat production by at least 20 percent, implying a significantly higher import bill Fadel al-Zubi, the U.N. Food and Agriculture Organization Iraq Representative said.

Iraq already has an import gap of more than one million tonnes per year, with annual demand at around 4.5 million to 5 million tons.

“Imports will go up as a result of cutting down on production and also as a result of population increase,” Zubi said but he declined to give an exact estimate for size of imports next year.

Haidar al-Abbadi, the head of Iraq’s General Union of Farmers, confirmed the cut saying water shortage was the main reason behind it.

“Irrigated wheat will reach 2 million donhums (500,000 hectares) down from around 4 million last season,” he said.

Qaisi said it was too early to tell the area of land that could be grown with wheat relying on rainfall this season but he hoped it would make up for some of the shortfall.

“We will follow a few programs to increase the crop, like raising yields and bringing Nineveh province back to more production … that can partly make up for shortfall,” he said.

But the rains failed Iraq’s Nineveh last season with the government procuring a little over 100,000 tonnes of wheat this year from a region that used to produce close to one million tons annually before Islamic State took over in 2014.

Iraq imports wheat to supply a rationing program created in 1991 to combat U.N. economic sanctions, including flour, cooking oil, rice, sugar and baby milk formula.

The trade ministry is responsible for procuring strategic commodities, including wheat, for the program.

Trade ministry officials were not immediately available for comment on a potential rise in imports.

In Posh Bangkok Neighborhood, Residents Trade Energy with Blockchain

Residents in a Bangkok neighborhood are trying out a renewable energy trading platform that allows them to buy and sell electricity between themselves, signaling the growing popularity of such systems as solar panels get cheaper.

The pilot project in the center of Thailand’s capital is among the world’s largest peer-to-peer renewable energy trading platforms using blockchain, according to the firms involved.

The system has a total generating capacity of 635 KW that can be traded via Bangkok city’s electricity grid between a mall, a school, a dental hospital and an apartment complex.

Commercial operations will begin next month, said David Martin, managing director of Power Ledger, an Australian firm that develops technology for the energy industry and is a partner in the project.

“By enabling trade in renewable energy, the community meets its own energy demands, leading to lower bills for buyers, better prices for sellers, and a smaller carbon footprint for all,” he said.

“It will encourage more consumers to make the switch to renewable energy, as the cost can be offset by selling excess energy to neighbors,” he told the Thomson Reuters Foundation.

Neighborhoods from New York to Melbourne are upending the way power is produced and sold, with solar panels, mini grids and smart meters that can measure when energy is consumed rather than overall consumption.

The World Energy Council predicts that such decentralized energy will grow to about a fourth of the market in 2025 from 5 percent today.

Helping it along is blockchain, the distributed ledger technology that underpins bitcoin currency, which offers a transparent way to handle complex transactions between users, producers, and even traders and utilities.

Blockchain also saves individuals the drudgery of switching between sending power and receiving it, said Martin.

For the pilot in Bangkok’s upmarket Sukhumvit neighborhood, electricity generated by each of the four locations will be initially used within that building. Excess energy can be sold to the others through the trading system.

If there is a surplus from all four, it will be sold to the local energy storage system, and to the grid in the future, said Gloyta Nathalang, a spokeswoman for Thai renewable energy firm BCPG, which installed the meters and solar panels.

Thailand is Southeast Asia’s leading developer of renewable energy, and aims to have it account for 30 percent of final energy consumption by 2036.

The energy ministry has encouraged community renewable energy projects to reduce fossil fuel usage, and the regulator is drafting new rules to permit the trade of energy.

The Bangkok Metropolitan Electricity Authority forecasts “peer-to-peer energy trading to become mainstream for power generation in the long run,” a spokesman told reporters.

BCPG, in partnership with the Thai real estate developer Sansiri, plans to roll out similar energy trading systems with solar panels and blockchain for a total capacity of 2 MW by 2021, said Gloyta.

“There are opportunities everywhere – not just in cities, but also in islands and remote areas where electricity supply is a challenge,” she said.

EU Failing on Pollution Limits, Auditor Warns

European Union governments are failing to comply with air quality limits that are already weaker than the World Health Organization’s recommendations, the bloc’s auditors said Tuesday.

The findings by the EU watchdog come as Brussels is taking half a dozen member states to court over their failure to enforce the bloc’s air quality laws.

Respiratory illness caused by pollution result in 400,000 premature deaths a year, costing governments heavily in health care expenses, the European Court of Auditors found.

“There are still considerable impacts on public health,” said Janusz Wojciechowski, one of the report’s authors.

As many as 23 out of the bloc’s 28 nations are failing to comply with the existing limits on harmful pollutants such as nitrogen oxide and particulate matter, according to EU data.

Responding to the report, the EU executive said it was stepping up action to reduce pollution and defended its policy record, pointing to improvements in some areas.

“The commission is fully aware that there is still an urgent need to further improve air quality in Europe,” a European Commission spokesman said.

The commission said in May that it would sue Britain, France, Germany, Hungary, Italy and Romania at the bloc’s highest court for breaching rules on air pollutants.

Catalonia Crisis Could Flare Again, With Political, Economic Fallout

At the height of the crisis over Catalonia’s secession drive last year, thousands of companies moved their legal headquarters out of the region, the Madrid stock market and government bonds took a hit, and the Spanish

state came under strong pressure.

Nearly a year later, the organizers of an illegal referendum on independence for Catalonia are in jail or in self-imposed exile, Spain has a new prime minister, and the economy has stabilized. But the situation remains tense and could flare up any time.

Danger for economy

Despite the crisis, Catalonia remains one of Spain’s main economic powerhouses and still accounts for around a fifth of national gross domestic product. 

However, a Catalan trade group says hotels in Barcelona have seen revenue fall 14 percent this summer after the city developed a negative reputation internationally, partly as a result of political instability.

Data also showed fewer new businesses were created in Catalonia and international investment had dropped, putting the region on track to fall behind Madrid in terms of economic output for the first time.

More than 3,000 firms have shifted their headquarters outside the region, many to Madrid. The risk is that the uncertainty over investments in Catalonia will translate into a slow economic decline.

Impact on politics

Spanish Prime Minister Pedro Sanchez, who ousted the conservative Mariano Rajoy in June, remains opposed to independence for Catalonia, something the Spanish constitution does not allow.

Sanchez has, however, adopted a softer tone and offered to hold a wide-ranging dialogue that could lead to drafting a new statute of autonomy that Catalans would have the opportunity to adopt or reject by referendum.

Catalonia’s new leader, Quim Torra, last week dismissed the idea that this could be a way forward and instead called on Sanchez to accept a legally binding referendum on independence.

Because Sanchez needs Torra’s party votes in the national parliament to pass the annual budget bill, a failure to find common ground in Catalonia would most likely spill over to national politics in Madrid — and possibly trigger a snap national election in early 2019.

Will issue go away?

According to a survey released in July, 46.7 percent of Catalans want their region to become an independent state, while 44.9 percent oppose this solution.

The proportions of those who favor and those who oppose independence has remained roughly stable over the last four years, meaning the issue is unlikely to go away any time soon.

Catalonia also elected a new regional parliament this year in which separatist forces retained a majority of seats. The trials of jailed separatist leaders should keep the Catalan question at the top of the political agenda for the time being.

Italy, Austria Sharpen Criticism of UN over Migrants

Italy and Austria issued sharp retorts to the new U.N. human rights chief Tuesday over her plans to send in teams to investigate the treatment of migrants, with Italy saying the move is “inappropriate, unfounded and unjust.”

A foreign ministry statement recalled all the praise Italy has received over the years for rescuing migrants, providing assistance projects in migrants’ home countries and cracking down on Libyan-based smuggling networks that have greatly reduced the number of arrivals.

The ministry said it hoped the data “will help the newly installed high commissioner” understand Italy’s commitment and its track record.

Former Chilean President Michelle Bachelet, who took over as U.N. High Commissioner for Human Rights last week, announced plans to send teams to Italy and Austria to examine the treatment of migrants after her first major address Monday.

In Vienna on Tuesday, Chancellor Sebastian Kurz demanded “clarification” from the U.N. of “what human rights violations” are suspected in Austria, the Austria Press Agency reported.

“It is particularly important to clear up how and why the decision came about that Austria in particular should be examined,” he added. Kurz said he would defend Austria against any unjustified suspicion.

Amid such protests, Ravina Shamdasani, a spokeswoman for the U.N. human rights office, said it was “not unusual at all” for it to deploy teams to countries, saying they often conduct “working-level visits to various countries where we see that there are human rights concerns for them to look at.”

She told reporters in Geneva that rights office teams were dispatched to Bulgaria, France, Greece and Macedonia as well as Italy in 2016.

Shamdasani said she did not have precise dates for the visits to Austria and Italy, but “I’m told it’s a matter of weeks.”

Indonesia Battles Currency Woes

Policymakers in Indonesia are grappling to deal with a weakened currency, the rupiah, which was valued at just 14,930 per U.S. dollar last week — its lowest point since the 1998 Asian financial crisis. But unlike 20 years ago, when economic turmoil led to major political upheaval in Indonesia, most observers say that Southeast Asia’s largest economy is now far better positioned to endure a poorly performing currency.

The United States Federal Reserve’s planned interest rate hikes have impacted emerging markets worldwide as investors sell assets in countries such as Indonesia in favor of American ones. The Argentine peso and Turkish lira both crashed in late August, crises that sent major shockwaves across developing economies. President Donald Trump’s trade war with Beijing has also seen a devaluation of the Chinese yuan.

These external factors have badly hit the Indonesian rupiah, already one of the weakest currencies in Asia. According to Bloomberg, the rupiah has lost around 9 percent of its value against the greenback during 2018. Like Turkey and Argentina, Indonesia also has a so-called “twin” deficit, meaning it is running both fiscal and current account deficits.

“Indonesia obviously is one of the frontline currencies alongside the Indian rupee and the Philippine peso, these are the three currencies most battered among the regional pack… in the latest turmoil,” said Prakash Sakpal, an economist from ING in Singapore.

Stronger 20 years on

In the late 1990s, the collapse of the rupiah exacerbated a severe economic crisis, which led to the fall of Indonesia’s longtime dictator Suharto.

“We know what we face with the rupiah is a really, really important problem,” the head of Research at the Jakarta-based brokerage and investment management firm Ekuator, David Setyanto, told VOA. “But if you compare with Turkey or Argentina, we are not the same with them because our fundamental economics are much stronger than these two countries.”

Dr. Tommy Soesmanto, an economics lecturer at Griffith University, told VOA that “Indonesians should not be overly concerned with the current situation,” as the economy is in a far stronger position than in 1998. During the Asian Financial Crisis, the rupiah fell from 3000 against the US dollar to 15,000 — a depreciation of some 500 percent from which it never recovered, hovering at around 10,000 per dollar in subsequent years.

Indonesia’s credit rating is now Triple B as opposed to 1998 when it was “considered junk”, Soesmanto said, while the country now has net capital inflow compared with “severe” capital outflow in 1998. Bank Indonesia holds foreign reserves worth some $118 billion compared with just $24 billion back then, allowing it greater leverage to finance debts and imports.

Charu Chanana, Deputy Head of Asia Research at Continuum Economics in Singapore, agreed. “We believe Indonesia is much stronger today fundamentally when compared to 1998,” she wrote in an email. “However, as external headwinds persist, we believe Indonesia’s currency will remain in the firing line due to a weak external position and high foreign exposure in the stock and bond markets.”

“I think it’s a little bit overblown,” said Sakpal of ING when asked about the severity of the currency crisis, noting that “economic fundamentals for most of the regional economies are still solid.”

“In Indonesia, growth has accelerated in the second quarter to 5.3 percent, which was the fastest in many quarters… all the recent turmoil is driven by external factors,” he said.

Unite for the rupiah

Bank Indonesia, the central bank, has responded aggressively to the latest currency problems by raising interest rates four times since May. For months it has also sold foreign currency and bought sovereign bonds in a bid to stabilize the currency.

The government, meanwhile, has now imposed higher import taxes of up to 10 percent on some 1000 consumer goods, including cosmetics and luxury cars.

“This is a good chance for local producers to penetrate our own domestic market that is usually filled with imported goods,” Indonesia’s Finance Minister Sri Mulyani Indrawati said last week.

The weak rupiah is likely to hit Indonesia’s manufacturing sector hardest, and accordingly, the government has imposed lower tax hikes of 2.5 percent on imported raw materials. The energy and resources ministry also announced it would delay $25 billion worth of power projects, aimed at producing an additional 35 gigawatts of electricity, which is expected to save $8 to $10 billion in import costs.

“We can come together for the success of the #AsianGames2018,” read a Facebook post from the Finance Ministry last week, accompanied by infographics urging Indonesians to buy local products, reduce their consumption of imports, change U.S. dollars for rupiah, travel within Indonesia and invest locally. “We can also #BersatuUntukRupiah [unite for the rupiah].”

 

 

13-Year-Old Kurdish-American Boy Becomes Entrepreneur

United States is a land of opportunity. We have all heard this saying, but what does it mean and how does it happen? A Kurdish-American family in the state of Virginia is seeing how their 13-year-old son has made the most of a unique opportunity. VOA’s Yahya Barzinji recently visited this family and filed this report narrated by Bezhan Hamdard.

Analysts: Russia’s Vostok ’18 Troop Numbers, ‘China Alliance’ Claims Questionable

Russian President Vladimir Putin is hosting his Chinese counterpart at an economic forum in the far eastern port city of Vladivostok today as armed forces from both countries descend on eastern Siberia to launch Moscow’s largest-ever military drills.

Russia’s week-long deployment alongside Chinese and Mongolian troops, known as “Vostok-2018” (East-2018), comes at a time of heightened tensions between Moscow and the West over accusations of Russian interference in Western affairs and ongoing conflicts in Ukraine and Syria.

Comparing this week’s show of force to the Soviet Union’s 1981 war games during which between 100,000 and 150,000 Warsaw Pact soldiers took part in “Zapad-81” (West-81)—the largest military exercises of the Soviet era—Russian Defense Minister Sergei Shoigu said these exercises will be even larger, with 300,000 soldiers, 36,000 military vehicles, 1,000 planes and 80 warships taking part in the drills.

China’s participation in the quadrennial war games, while comparatively modest with only 3,200 men and 900 weapons units, is also unprecedented, leading some to view it as an unequivocal warning to the United States and Europe.

“It sends a signal to Washington that if the U.S. continues on its current course by pressuring Russia and imposing more sanctions, Russia will fall even more into the firm embrace of China, America’s only strategic competitor in the 21st century,” Alexander Gabuev of the Carnegie Institute in Moscow recently told The Associated Press, adding that Beijing’s participation indicates that Russia and China no longer view each other as military threats.

Other experts, however, disagree, questioning both the transparency of Vostok-2018 troop estimates and the political significance of China’s inaugural participation.

“Numbers and figures for these kinds of exercises are typically what we might call to be true lies, in that they’re statistical lies whereby the Russian army’s General Staff tallies every single unit-formation that either sends somebody to the exercise or has some tangential command component in it,” said Michael Kofman, Russia and Eurasia security and defense analyst at the Washington-based Kennan Institute.

“This basically means that if a brigade sends one battalion, then they count the whole brigade,” he told VOA. “So these numbers are not entirely fictional, but you have to divide them by a substantial amount to get any sense of how big the exercise actually is.”

“And they typically revise the numbers after the fact,” Kofman added. “For example, originally after Vostok 2014, they said that they had 100,000 participants, and then I guess they decided it wasn’t impressive enough, because they later posted an official figure of 155,000.”

Different methodologies for calculating troop numbers further complicate efforts to assess troop counts.

“It’s very hard to tell beforehand just how big these exercises are going to be,” said Jeffrey Edmonds of Arlington-based CNA Analysts. A former Russia director for the National Security Council and CIA military analyst, Edmonds told VOA that while some observers may tally only uniformed troops, others might include deployment of military-civilian reserves.

“It could also be, you know, ‘Is perhaps this other unit that’s operating along the Western front actually part of the operation in the East?’ Maybe it is, maybe it isn’t. So, different people can come up with different figures.”

The purpose of the nearly week-long drills, however, is unambiguous. Like top NATO officials who have denounced Vostok-2018 as an “exercise in large-scale conflict,” multiple experts described the event as a first-of-its-kind rehearsal for a post-Cold War global confrontation.

“The point of the exercise is really to test Russia’s ability to conduct a large-scale conflict, and one that may involve a nuclear component,” Kofman told VOA. “It’s also designed to stress-test the entire Russian political-military network in terms of mobilization, dealing with reserves and assessing how civilian-military authorities would react and respond in the event of a large-scale conventional war.”

Despite the seemingly more imminent risk of conflict across eastern Europe—Baltic nations have been on high alert since Russia’s 2014 annexation of Crimea, and some 2,200 Ukrainian, American and NATO soldiers recently conducted drills in western Ukraine—the Russian military’s Achilles Heel, geographically speaking, lies to the far east.

“The far east is unique compared to the other [Russian] military districts because it is so distant from Russian infrastructure and population centers,” said Kofman, who described the sparsely populated military jurisdiction as “designed and intended to fight as its own, almost separate military, which is why it has so many ground-force formations.”

“That’s another part of this exercise: to test how well that district can hold a potential fight and be reinforced from the central military district in the event of a large-scale conflict or horizontal escalation against Russia,” he said. “That even though much of the security conversation on Russia is focused in Europe, the majority of U.S. power projection and most of America’s strongest allies are in the Asia-Pacific region.”

And although Russia and China have increased military-to-military contact in recent years, annually engaging in smaller snap military drills, few analysts equate Chinese participation in Vostok-2018 with the emergence of a formal military alliance between the two countries.

“Russia has no chance of a formal military alliance with China, and not because Russia doesn’t want it,” said Moscow-based military analyst Aleksander Goltz. “This China very clearly and resolutely refuses any military alliances and commitments. And while Beijing may be ready to develop some military cooperation with Russia, as well as with other members of the Shanghai Cooperation Organization”—an economic and security pact between China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan—”it is only in very limited ways defined by Beijing parameters.”

Edmonds described Vostok-2018 as part of Russia’s ongoing efforts to modernize its forces.

“Maybe the announcements of how big it’s going to be is a reaction to hostilities with the West, but the actual exercise itself is a pretty standard Russian military activity.”

Kofman, too, suggested China’s involvement has less to do with emerging geopolitical dynamics than with regional necessities.

“If you’re going to do large-scale military exercises like this today in the far east, especially when considering Russia’s set strategy of trying to form a balancing entente with China on the basis of mutual antagonism toward and shared security concerns about the United States, the only logical course of action is to invite the Chinese to participate in this exercise,” Kofman told VOA. “Otherwise, [China would] will inherently view this exercise as having to do with them, or at least they would be suspicious.”

“Another part of it, of course, is that both sides are signaling to the United States that their military cooperation is not only growing but that their individual bilateral problems in their respective relationships with the United States are driving them toward greater cooperation, which is definitely not in America’s interest,” he added. “So, the joint military exercises are not necessarily signs that some sort of formal alliance is forming, but these are incremental steps, so it’s important to view them in aggregate.”

Which is to say, he suggested, the longer term trend-line of Russian-Chinese cooperation may reveal more than the drills themselves.

“Over time, an entente between these two countries could be more likely to become a reality than not.”

Wire news outlets have reported that Vostok-2018 will see Russian forces field Su-34 and Su-35 fighter planes, T-80 and T-90 tanks, and nuclear-capable Iskander missiles. At sea, the Russian fleet is expected to deploy several frigates equipped with Kalibr missiles that have been used in Syria.

Last week, Russia held military exercises in the Mediterranean, where more than 25 warships and some 30 planes took part in the drills, as Russia increased its military presence in Syria where it intervened to help the Bashar al-Assad regime in 2015.

Upon publication, NATO officials were still considering Moscow’s invitation to send observers to the drills, which will wind down September 15.

The Russian president is scheduled to observe the drills after the Vladivostok forum, where Putin, President Xi Jinping and other regional leaders are expected to discuss trade and North Korea.

This story originated in VOA’s Russian Service. Yulia Savchenko contributed original reporting. Some information is from AP and Reuters.

Japan’s Bid to End Whaling Ban is Top Issue at Conference

Japan will once again try to get the international ban on whale hunting overturned at the global conference of the International Whaling Commission (IWC), which opened in Brazil on Monday.

The proposal presented by Japan says, “Science is clear: there are certain species of whales whose population is healthy enough to be harvested sustainably.”

While the Japanese proposal is supported by other traditional whaling countries, such as Iceland and Norway, it faces fierce opposition from countries such as Australia and Brazil, and the European Union, as well as from numerous environmental groups.

Japan, which has pushed for an amendment to the ban for years, accuses the IWC of siding with anti-whaling nations rather than trying to reach a compromise between conservationists and whalers.

Whale meat has been a a traditional part of the Japanese diet for centuries.

After the IWC adopted a ban on commercial whaling in 1982, Japan, Norway and Iceland continued to hunt whales. Tokyo justified the practice as a part of scientific research, which was allowed by the moratorium.

But in 2014, the International Court of Justice ruled that Japan’s whaling practice had no scientific basis, but instead it was a way to keep the industry alive.

This year, Japan wants to establish a Sustainable Whaling Committee to oversee the hunting of healthy whale populations for commercial purposes.

But environmentalists say allowing even limited hunting of the mammoth mammals will only again push the species to the brink of extinction. Brazil introduced  proposal Monday that says hunting whales is “no longer a necessary economic activity.”

Australia has vowed to lead the charge against reinstatement of commercial whaling and it has the strong backing of New Zealand, the European Union and the United States.

Japan’s proposal will likely be put to a vote sometime before the conference ends on Sept. 14.

UN: Afghans Need Asylum, All Should Not Bear Blame for Few Crimes in Europe

European countries must not rush to repatriate Afghan refugees to their increasingly insecure homeland or blame their community for isolated crimes such as recent deadly attacks in Germany and in France, the top U.N. refugee official said on Monday.

Two Afghans have been detained in Germany on suspicion of killing a 22-year-old German man, the public prosecutor’s office said on Sunday.

French police detained a man who wounded several people in a knife attack in central Paris on Sunday, police and judicial sources said on Monday. The attacker, who a police source said was from Afghanistan, stabbed tourists and passersby.

Filippo Grandi, United Nations High Commissioner for Refugees, said that sending Afghan refugees home was a “complex issue in Europe” — despite a spate of suicide bombs and attacks across Afghanistan, including by the Taliban and Islamic State.

“There is a lot of pressure for Afghans to return. Our advice is to carry out this process with great caution because conditions from the security point of view are deteriorating,” he told a news conference on return from Afghanistan.

Grandi, asked whether he feared any backlash against Afghan nationals in Europe, said: “If anybody who is either an asylum seeker or a refugee commits crimes, this person has to be excluded from the (asylum) process or from refugee status.”

UNHCR spokeswoman Melissa Fleming later clarified that such exclusion applies only when a serious crime has been committed before the asylum seeker enters a country, and is then taken into account during the asylum process, before the person is determined to be a refugee. Refugee status is retained when a refugee commits a crime in the asylum country, but that person is subject to prosecution.

Grandi said suspects must bear the full force of law, but voiced concern that an entire community could be blamed for the crimes of an individual, or the issue manipulated for political purposes.

“This is very dangerous, because asylum seekers and refugees in their overwhelming majority do not commit crimes, and are particularly vulnerable to discrimination.”

Pakistan and Iran together host some 2.5 million Afghan refugees, but only 12,000 returned home so far this year against 40,000-50,000 at this time in 2017, according to his agency.

Some 40,000 people were killed or maimed in the past 4 years of conflict in Afghanistan and 170,000 people newly-displaced this year alone, U.N. emergency humanitarian coordinator Mark Lowcock said.

He welcomed talks between the government of President Ashraf Ghani and Taliban insurgents, saying they needed to be supported.

“That probably is also the single biggest thing that will contribute to better economic prospects and people feeling more confident about the prospects and then that is what will be biggest driver in Afghans feeling they can go home,” he added.

Canada’s Freeland to Hold NAFTA Talks Tuesday as Time Runs Short

Canadian Foreign Minister Chrystia Freeland will meet U.S. Trade Representative Robert Lighthizer in Washington on Tuesday for another round of talks to renew the NAFTA trade pact, an official said on Monday, as time runs short to seal a deal.

Freeland spokesman Adam Austen did not give details. After more than a year of negotiations, Canada and the United States are still trying to resolve differences over the North American Free Trade Agreement, which also includes Mexico.

U.S. officials say time is running out to agree on a text on which the current Congress can vote. Canadian officials say they are working on the assumption they have until the end of September.

Freeland spent three days in Washington last week and said on Friday as she prepared to leave that she and Lighthizer were making very good progress in some areas, although a deal remained out of reach.

U.S. President Donald Trump, who says he is prepared to tear up NAFTA, has struck a trade deal with Mexico and threatened to push ahead without Canada.

Uncertainly over the future of NAFTA, which underpins $1.2 trillion in trade, is weighing on markets as well as the Canadian and Mexican currencies.

Officials say the main sticking points are Canada’s dairy quota regime, Ottawa’s desire to keep a dispute-resolution mechanism, and Canadian media laws that favor domestically produced content.

U.S. Agriculture Secretary Sonny Perdue, speaking in an interview broadcast on Sunday, said Canada had to scrap a low-price milk proteins policy to reach a deal on NAFTA. U.S. farmers complain Canada is flooding export markets.

Austen, asked whether Freeland might return to Washington later in the week, said no decisions had been taken. She is due to attend a two-day meeting of legislators from the ruling Liberal Party in western Canada on Wednesday and Thursday.

Prime Minister Justin Trudeau said last Wednesday he did not see the need to attend the talks for the time being.

Catalan Separatists Plan Mass Rally for Independence From Spain

Hundreds of thousands of Catalans are expected to fill the streets of Barcelona on Tuesday for the Spanish region’s first commemorative day since its leader declared independence last year and pitched the country into constitutional crisis.

Supporters of splitting the wealthy northeastern region from the rest of Spain have in recent years used the September 11 “Diada,” the anniversary of the fall of their coastal capital to Spanish forces in 1714, to promote the cause.

This year, Catalonia’s leader Quim Torra, who took over from his exiled predecessor after Madrid ended an unprecedented period of direct rule, has called for a mass rally in support of his bid for a binding referendum on independence.

“Our government has committed to making the republic a reality,” Torra said in a televised address to mark the occasion. “I wish you all a very good Diada. Long live free Catalonia.”

He wore a yellow ribbon signifying support for nine politicians whose jailing for their role in the independence bid is one of the Catalan government’s biggest grievances.

Socialist Prime Minister Pedro Sanchez, who took power in June, has taken a softer approach to one of the thorniest issues in national politics than that of his conservative predecessor Mariano Rajoy, but he has stood firm against allowing a vote on secession, or any unilateral attempt by Catalonia to secede.

Last year’s Diada, in which marchers often climb on each other’s shoulders in shows of the traditional sport of forming human towers, fell as the regional government was preparing to hold a referendum in defiance of Madrid, which ultimately sent riot police to try to stop the vote.

Torra’s predecessor and ally Carles Puigdemont then declared independence, prompting Madrid to impose direct rule on the grounds that Barcelona had violated the 1978 constitution which states that the country is indivisible.

Extra police will be deployed during the anniversaries of events in the independence bid. The government’s regional delegate, asked last week about 600 agents being sent as reinforcements, said this was the normal approach to scheduled rallies.

Divisions over the question of secession are stark in Catalonia, which makes up around one fifth of Spain’s economic output and already has a high level of autonomy in areas including education and health, and its own police force.

A poll by the Centro d’Estudis d’Opinio in July showed 46.7 percent of Catalans surveyed saying they wanted an independent state, just ahead of 44.9 percent who did not.

Last year’s banned referendum delivered a majority vote for independence, but turnout was low.

A pro-secession coalition regained control of the regional parliament at a regional election in December that Rajoy had hoped would put paid to the independence bid, but a staunchly pro-union party emerged as the single biggest winner.

Creditors Warn Greece on Debt Relief as Inspectors Return

Greece’s lead creditor warned the country on Monday not to stray from reforms agreed upon before the end of its international bailout, as European monitors arrived to check the nation’s finances.

The five-day inspection is expected to focus on government promises over the weekend to offer tax relief as well as plans to scrap promised pension cuts that are due to take effect in 2019.

Klaus Regling, managing director of the European Stability Mechanism, the eurozone’s rescue fund, told Austria’s Die Presse newspaper that Greece needed to stick to its commitments.

`We are a very patient creditor. But we can stop debt relief measures that have been decided for Greece if the adjustment programs are not continued as agreed,” he said. “The debt level appears to be frighteningly elevated. But Greece can live with that as the loan maturities are very long and the interest rates on the loans are much lower than in most other countries.”

Left-wing Prime Minister Alexis Tsipras is trailing opposition conservatives in opinion polls and must call a general election within the next 12 months. Amid large protest rallies led by labor unions over the weekend, the prime minister said that relief measures promised to taxpayers would not jeopardize fiscal performance targets and would be introduced gradually.

Greece has promised to deliver high primary surpluses — the budget balance before calculating the cost of servicing debt — for years to come, along with a series of reforms in exchange for better debt repayment terms.

The end of the bailout means Greece will have to return to international capital markets to finance itself. However, the country faces a troubled return after the financial turmoil in Turkey and Italy halted a decline in Greek borrowing rates. The yield on Greece’s 10-year-bond remains above 4 percent.

The bailout program ended August 20 but the country’s debt level remains near 180 percent of gross domestic product.

Zimbabwe Finance Minister: Reviving Economy is ‘Herculean’ Task

Zimbabwe’s new finance minister has described his task of reviving the country’s moribund economy as extraordinarily difficult, but he is hopeful of success.

“It’s enormous, it is Herculean. I am very energetic and I am very up to the task. I am starting now, but in the process what I will do is listen,” said Finance Minister Mthuli Ncube, a former chief economist and vice president of the African Development Bank.

He spoke to VOA at the State House after being sworn into office Monday by President Emmerson Mnangagwa.

Nearby, 21-year-old Isaac Madyira is jobless. He dropped out of school seven years ago after his also parents, also unemployed, failed to pay the fees. He now sells cash, which has been in acute short supply for the past two years in Zimbabwe. He says he expects change from the new Cabinet Mnangagwa put into office Monday.

“What we want is corruption to be get rid of. We want development as quickly as possible. I think [on] the issue of money, we need our own currency which is valued as compared to other currencies, then bond notes must go [the last two words in Shona],” he said.

Zimbabwe started printing bond notes about two years ago to ease cash shortages. They were supposed to trade at par with the U.S. dollar, but on the black market the notes are worth about half as much as a dollar and cash shortages have not ended.

Almost as if Ncube had talked to Madyira, the new finance minister said he has to address the currency issue for Zimbabwe’s economy to get back on track.

“Restoring confidence in the economy, I make sure that international investors are interested in the Zimbabwean economy again,” said Ncube. “I will be rolling [out] a plan on the arrears clearance and the whole debt restructuring process, coupled with that is building credit lines globally. Internally I make that on the expenditure side we live within or means or move towards that. We need to strengthen our tax collection systems. Ultimately we need to have the Zimbabwe dollar that is stable, that people have confidence in. To have a domestic currency, you need to build reserves.”

Zimbabwe abandoned its worthless dollar in 2009 and has been using the U.S. dollar, South African rand and British sterling pound for trading.

An economist for the Labor and Economic Development Research Institute of Zimbabwe, Prosper Chitambara, says the Ncube is a good choice for the job.

“It is a good start. He is someone who is credible, a professional. But what has to be done is to begin real work,” he said. “To roll up his sleeves and begin to implement key fiscal policies that will bring back confidence into the economy. Reining down on recurrent expenditure. In general, what we need are fiscal consolidation reforms that curtail drastically recurrent government expenditure.”

Chitambara says Zimbabwe’s government spends much of its revenue on salaries, leaving social services sectors like education and health in dire need unless Western aid agencies, like USAID, assist. Chitambara says Ncube has to change that if the country is to recover.