Oxfam Faces New Investigation Over Haiti Prostitutes Scandal

Britain’s Charity Commission must conduct a “full and urgent investigation” into Oxfam following an alleged cover-up of its staff hiring prostitutes in Haiti during a 2011 relief effort on the earthquake-hit island, the prime minister’s office said Saturday.

“The reports of what is unacceptable behavior by senior aid workers in Haiti are truly shocking,” a spokeswoman for Theresa May said. “We want to see Oxfam provide all the evidence they hold of the events to the Charity Commission for a full and urgent investigation of these very serious allegations.”

The call came as the British charities regulator released its own statement detailing Oxfam’s previous disclosure of the events, including that it characterized the misconduct as “inappropriate sexual behavior.”

“Our approach to this matter would have been different had the full details that have been reported been disclosed to us at the time,” the commission said.

It confirmed that it had asked Oxfam to urgently provide fresh information.

Late on Friday, the Department for International Development (DFID) also said it was reviewing its relationship with the U.K.-based charity, to which it gave nearly $44 million last year.

It said Oxfam’s leaders had “showed a lack of judgment” in their handling of the matter and their level of openness with the government and Charity Commission.

‘Appalling abuse’

“The international development secretary is reviewing our current work with Oxfam and has requested a meeting with the senior team at the earliest opportunity,” a DFID spokeswoman said. “The way this appalling abuse of vulnerable people was dealt with raises serious questions that Oxfam must answer.”

Oxfam Chief Executive Mark Goldring said Saturday that the charity receives less than 10 percent of its funding from DFID and hoped to continue working with the department while rebuilding trust with the public. 

He admitted Oxfam did not give full details of the scandal to the commission in 2011 but insisted it “did anything but cover it up.”

“With hindsight, I would much prefer that we had talked about [the] sexual misconduct,” Goldring told BBC radio. “But I don’t think it was in anyone’s best interest to be describing the details of the behavior in a way that was actually going to draw extreme attention to it.”

The charity is under growing pressure after an investigation by The Times found young sex workers had been hired by senior staff in Haiti after the 2010 earthquake. Groups of young prostitutes were invited to homes and guesthouses paid for by the charity for sex parties, according to one source who claimed to have seen footage of an orgy with sex workers wearing Oxfam T-shirts.

In further revelations Friday, the paper said Oxfam failed to warn other aid agencies about the staff involved, which allowed them to get jobs among vulnerable people in other disaster areas.

Roland van Hauwermeiren, 68, whom Oxfam said was forced to resign as Haiti country director in 2011 after allegedly admitting hiring prostitutes, went on to become head of mission for Action Against Hunger in Bangladesh from 2012 to 2014.

Good references received

The French charity told AFP it made pre-employment checks with Oxfam but that the U.K.-based organization “did not share with us the reasons for his resignation as head of mission in Haiti or the results of its internal inquiry.”

“Moreover we received positive references from former Oxfam staff — in their individual capacities — who worked with him,” including from a human resources staffer, a spokesman said.

In a statement, Oxfam denied providing positive references for those implicated.

It said the vast number of aid operations working around the globe made it impossible “to ensure that those found guilty of sexual misconduct were not re-employed in the sector.”

“Unfortunately, there is nothing we can do to stop individuals falsifying references, getting others that were dismissed to act as referees and claiming it was a reference from Oxfam,” a spokeswoman added.

And there was also nothing to stop them from getting former or current staff to provide a reference “in a personal capacity,” she said.

The charity said it launched an immediate investigation in 2011 that found a “culture of impunity” among some staff, but it denied trying to cover up the scandal.

During the probe, Oxfam dismissed four staff members and another three resigned, including van Hauwermeiren.

The charity also said it had yet to find evidence proving allegations that underage girls were involved.

Merkel Declines to Comment on Poland’s New Holocaust Law

German Chancellor Angela Merkel declined to comment Saturday on a Polish law that imposes jail terms for suggesting the country was complicit in the Holocaust, saying she did not want to wade into Poland’s internal affairs.

The law would impose prison sentences of up to three years for using the phrase “Polish death camps” and for suggesting “publicly and against the facts” that the Polish nation or state was complicit in Nazi Germany’s crimes.

“Without directly interfering in the legislation in Poland, I would like to say the following very clearly as German chancellor: We as Germans are responsible for what happened during the Holocaust, the Shoah, under National Socialism [Nazism],” Merkel said in her weekly video podcast.

She was responding to a question from a student who had asked whether the new Polish law curbs freedom of expression. Israel and the United States criticized President Andrzej Duda for signing the bill into law this week.

Israel says the law will curb free speech, criminalize basic historical facts and stop any discussion of the role some Poles played in Nazi crimes.

A Polish government spokeswoman welcomed Merkel’s remarks, the PAP news agency reported. Prime Minister Mateusz Morawiecki will hold talks with Merkel in Berlin next week.

Poland’s ruling Law and Justice party has clashed with the European Union and human rights groups on a range of issues since taking power in late 2015. It says the law is needed to ensure that Poles are recognized as victims, not perpetrators, of Nazi aggression in World War II.

More than 3 million of the 3.2 million Jews who lived in pre-war Poland were killed by the Nazis, accounting for about half of all Jews killed in the Holocaust.

Jews from across the continent were sent to be killed at death camps built and operated by Germans in occupied Poland — home to Europe’s biggest Jewish community at the time.

Winter Olympics Debut A 10th-Anniversary Gift For Kosovo

Skier Albin Tahiri will miss Kosovo’s 10th-anniversary celebrations next week — but as the country’s first winter Olympian, he thinks his 1.8 million compatriots will forgive him while he competes in the Pyeongchang Games that began Friday.

While it has long had snow-capped mountains offering steep slopes and deep powder, Kosovo didn’t exist as a country until it broke free from Serbia in 2008, nearly a decade after a NATO-led bombing campaign pushed out Serbian forces to end a brutal crackdown on ethnic Albanians during a two-year battle for independence.

Now the 28-year-old Tahiri will compete in all five alpine-ski events in South Korea, one of 115 countries that recognize Kosovo as a country.

“When I started skiing, Kosovo was not an independent country,” says the Slovenian-born Tahiri, who carried Kosovo’s flag into the Olympic Stadium during the opening ceremonies.

“My father always cheered for Kosovar athletes and I did it as well, so when Kosovo proclaimed independence I wanted to help by representing the country as an athlete,” he adds. 

Kosovo’s inclusion in the Olympics was not always a given.

Serbia lobbied hard to block Kosovo from being recognized as a separate Olympic country and it wasn’t until the International Olympic Committee granted such a status to Kosovo in late 2014 that it made its debut at the Summer Olympics two years later in Brazil, which still does not formally recognize Kosovo as an independent country.

Tahiri, who began skiing in Slovenia at the age of 7, collected enough World Cup points while studying dentistry.

Now given the chance to represent Kosovo, the birthplace of his father, Tahiri will have to compete against the world’s best skiers without access to a full-time equipment manager or his coach — who can’t travel with him to South Korea because of the cost.

‘Once-In-A-Lifetime Pressure’

With the lighting of the flame in Pyeongchang, Kosovo will be one of six countries competing in the Winter Olympics for the first time.

The young country officially marks its independence on Feb. 17, midway through the Olympics, which finish eight days later.

“For me as president of the country, for the state and Kosovar society, as well as for the whole world, the participation of Kosovo for the first time in the Olympic Winter Games in [South] Korea is [big] news,” Hashim Thaci, president of Kosovo, said on Feb. 5, during a ceremony presenting the official Kosovar flag to Tahiri.

“I hope that not only the participation [of Tahiri] will make news, but that we will also have the strong news of winning a medal,” Thaci added.

Thaci and the rest of the country still have the Rio Olympics fresh in their minds. That debut by Kosovo put the country on the sporting map as Majlinda Kelmendi made history by winning a gold medal in judo.

Kelmendi says she is proud that Kosovo will finally be represented in the Winter Olympics, and knows the pressure Tahiri faces as the hopes of a nation weigh on him as he glides down the slopes.

“I wish him all the best,” Kelmendi said in a Thursday Facebook video post. “I know you have responsibility, you will also be waving the flag, but enjoy this experience to the maximum. Believe me, it’s something that happens once in a lifetime, so all the best and feel proud for the country you represent,” she added.

RFE/RL’s Balkan Service contributed to this report.

Pictures Are Worth 10,000 Words

A new vocabulary program claims to dramatically accelerate a child’s understanding of language. As Faith Lapidus reports, the Mrs Wordsmith teaching system relies on cartoon drawings and short word exercises to boost academic achievement.

Experts: More Stock Volatility Ahead, but No Reason to Panic

It’s been a tough week on Wall Street. The Dow Jones Industrial average closed more than 300 points higher Friday, after plunging more than 1,000 points the day before, the second steepest decline in history. The biggest dive happened Monday when the blue chip index fell more than 1,100 points. It’s enough to make even the most experienced investors swoon. But does this mean the end of the nine-year bull market? Is it time to worry? Mil Arcega spoke with economic analysts to get some answers.

Ride-Sharing Uber and Self-Driving Car Firm Waymo Settle Legal Battle

Ride-sharing giant Uber and the self-driving car company Waymo have agreed to settle their legal battle over allegedly stolen trade secrets.

The surprise agreement Friday came as lawyers for the companies prepared to wrap up the first week of the case’s jury trial in San Francisco, California.

As part of the agreement, Uber will pay $245 million worth of its own shares to Waymo.

Waymo sued Uber last year, saying that one of its former engineers who later became the head of Uber’s self-driving car project took with him thousands of confidential documents.

After the lawsuit was filed, Uber fired the employee and fell behind on its plans to roll out self-driving cars in its ride-sharing service.

Waymo, a company hatched from Google, says the settlement also includes an agreement that Uber cannot use Waymo confidential information in its technology.

“We have reached an agreement with Uber that we believe will protect Waymo’s intellectual property now and into the future. We are committed to working with Uber to make sure that each company develops its own technology,” Waymo said in a statement.

Uber’s new CEO, Dara Khosrowshahi, expressed regret for the company’s actions in a statement Friday.

“While we do not believe that any trade secrets made their way from Waymo to Uber, nor do we believe that Uber has used any of Waymo’s proprietary information in its self-driving technology, we are taking steps with Waymo to ensure our Lidar and software represents just our good work,” Khosrowshahi said in a statement.

Lidar is a laser-based system that helps self-driving cars to navigate their surroundings.

The trial so far included testimony from former Uber chief executive Travis Kalanick, who denied any attempt to steal trade secrets from Waymo.

Uber has faced a series of recent struggles, including public accusations of sexual harassment at the company and accusations it used software to thwart government regulators.

Freed Captives, Families of Murdered Western Hostages Demand Justice 

The detention in northern Syria by U.S.-backed Kurdish fighters of two notorious British jihadists, the remaining members of a militant quartet that tortured and beheaded Western hostages, including American journalists James Foley and Steven Sotloff, is being greeted with pleas by former Western captives of the terror group that they face trial.

Nicolas Henin, a French reporter held for 10 months by the British gang, has told British and U.S. broadcasters that he wants the militants to face justice for their crimes somewhere he and other former hostages and the relatives of murdered victims will be able to attend and testify. 

El Shafee Elsheikh and Alexanda Amon Kotey, the last two members of the British quartet that Western hostages dubbed “The Beatles,” were captured last month by the U.S.-backed Syrian Democratic Forces (SDF) in eastern Syria. News of their detention was reported Thursday by The New York Times. U.S. officials have confirmed their capture and say they were identified from their fingerprints and biometric data.

“This is the beginning of a process that will bring them eventually, hopefully, to a trial. Justice is just what I want,” Henin said. “What I want is a trial and a trial potentially that I can attend, so rather, a trial in London rather than one in Kobani in northern Syria.”

He rejected the idea of them facing a U.S. military commission in Guantanamo, saying that would risk a “denial of justice.”

“Guantanamo was opened 16 years ago. There hasn’t been a single trial there,” he said. 

Rights campaigners are urging the U.S. government not to transfer the men to Guantanamo. “They should prosecute them in U.S. federal court, not send them to Guantanamo,” said Laura Pitter of the Human Rights Watch.

“These men are accused of committing serious crimes, including torture, murder and other offenses. If they end up in [formal] U.S. custody, the U.S. should not jeopardize their prosecutions by sending them to the dysfunctional military commissions at Guantanamo where important cases involving serious crimes have languished for years.”

According to European captives who were freed by the Islamic State terror group in return for ransoms, the group of four British militants put their Western captives, especially the British and Americans, through rounds of excruciating suffering, routinely beating and waterboarding them and staging mock executions.

Thanks to IS propaganda videos, the gang quickly acquired a singular place in this century’s annals of terrorism. James Foley, the first of the Western hostages to be beheaded, was earmarked for the worst treatment of all, possibly because he had a brother who had served with U.S. forces in Afghanistan. 

“You could see the scars on his [Foley’s] ankles,” Jejoen Bontinck, a 19-year-old Belgian and convert to Islam, said in interviews later. Bontinck, a jihadist recruit who fell afoul of IS, shared a prison cell with Foley in 2013. “He told me how they had chained his feet to a bar and then hung the bar so that he was upside down from the ceiling. Then they left him there.”

Foley’s mother, Diane, told the BBC on Friday that the crimes of the British jihadists “are beyond imagination.” She says they need to face life in prison. “It doesn’t bring James back, but hopefully it protects others from this kind of crime.”

An international manhunt was launched by Western governments for the fighters in 2014 when IS released a video of Foley’s execution at the hands of an masked English-accented militant, who called himself “John” and was the leader of the gang. He was nicknamed by the British media “Jihadi John” and was later identified as Mohamed Emwazi, who was born in Kuwait, but was raised like the rest of the gang in west London.

He was killed in a drone strike in November 2015.

Another member of the gang, Aine Davis, was sentenced last year in Turkey to a seven-and-a-half-year prison term. He was charged with membership in a terrorist organization, but a weightier charge of preparing acts of terrorism, which carried the possibility of a longer sentence, was dropped by Turkish prosecutors for lack of sufficient evidence. 

U.S. officials say El Shafee Elsheikh, who fled from Sudan in the 1990s but grew up in London, and Alexanda Amon Kotey, whose ethnic background is Greek Cypriot, are providing information on the remaining IS structure and leaders. But it is unclear who has been interrogating them and whether British intelligence officers also have had access to the pair alongside U.S. counterterror officials. 

Family and friends of British photojournalist John Cantlie, a friend of Foley, who remains missing, say they hope the captured jihadists provide information about his whereabouts. Cantlie was used by IS to front propaganda videos.

The British IS gang also was responsible for the murder of U.S. aid worker Peter Kassig, according to freed captives, as well as David Haines, a British aid worker, and Alan Henning, a British taxi driver from Salford outside Manchester, who had volunteered to deliver humanitarian aid to Syria.  

Elsheikh traveled to Syria in 2012 and joined al-Qaida in Syria before switching to IS. U.S. officials say he took pleasure in staging crucifixions and waterboarding while an IS jailer. The two captured jihadists knew Emwazi in the British capital, where all three attended Al-Manaar mosque in west London. 

Officials on both sides of the Atlantic say the fate remains unclear of the captured jihadists, who may be considered non-state combatants. They could be handed over to the U.S. Justice Department to stand trial in the U.S. or be transferred to the U.S. military authorities to face a tribunal at Guantanamo Bay detention center. U.S. President Donald Trump recently signed an order to keep the detention center. 

Another option is for their fate to be left to the Kurdish authorities in northern Syria, but that option is being opposed by freed captives. French officials have raised the possibility of the pair standing trial at the International Criminal Court in The Hague, which has jurisdiction to prosecute individuals for crimes of genocide, crimes against humanity, and war crimes. However, the U.S. is not a signatory to the court. 

The French position was echoed Friday by a British defense minister, Tobias Elwood, who said the two jihadists shouldn’t be tried before a U.S. military tribunal or sent back to Britain, but should face justice at The Hague in order to uphold the rule of law.

Relatives of other alleged victims have echoed Henin’s call for a trial.

Bethany Haines, the daughter of David Haines, posted on Facebook: “It’s brilliant that these evil people have been caught. The families will now have people to hold account for their loved ones death.”

She added, “No punishment is enough for these barbarians and in my opinion they should be sentenced to a slow painful death.”

Tillerson to Press Turkey to Free Detained Americans, Show Restraint in Afrin

U.S. Secretary of State Rex Tillerson will press Turkey to release Americans detained by Ankara, and urge the NATO ally to show restraint in military operations in northern Syria, according to senior U.S. officials.

“At times like this, engagement is all the more important,” said a State Department official on Friday, while acknowledging, “It’s going to be a difficult conversation.”

Turkey is the second stop of Tillerson’s five-nation visit to the Middle East next week, following a visit to Jordan. He will also meet with senior officials from Lebanon, Egypt and Kuwait.

The top U.S. diplomat’s visit to Ankara comes amid escalated tensions between the two NATO allies over a series of disagreements, including human rights cases and the Syria crisis. 

“Look, it’s difficult. The rhetoric is hot, the Turks are angry and this is a difficult time to do business, but it’s our belief that there are still some very fundamental underlying shared interests,” the senior official said Friday.

U.S. citizen Serkan Golge, a NASA scientist who was arrested in July 2016, was convicted without credible evidence on Feb. 8 by Turkish authorities for being a member of a terror organization. On Feb. 1, Amnesty International’s Turkey chairman, Taner Kilic, was re-arrested and placed back in pretrial detention. Kilic is facing terrorism charges.

The State Department said it is deeply troubled by those cases and urged the Turkish government to “end the protracted state of emergency, to release those detained arbitrarily under emergency authorities, and to safeguard the rule of law consistent with Turkey’s own domestic and international obligations and commitments.”

In the year after a failed coup in July 2016, Turkey arrested more than 40,000 people and fired 125,000, including many from the police, army and judiciary. 

Turkish President Recep Tayyip Erdogan accused Fethullah Gulen, an exiled cleric based in the U.S., of orchestrating the attempted coup. Gulen has denied any role in the plot. Ankara has also asked Washington to extradite Gulen.   

The lack of trust between Washington and Ankara grew after Turkey started an air and ground offensive in Afrin, Syria against a Kurdish group known as the People’s Protection Units, or YPG. Turkey considers the YPG to be a terrorist organization, alleging it is an extension of a Kurdish group fighting for autonomy in Turkey for decades. 

The U.S. denies those connections and sees the YPG as a key ally in the battle against Islamic State militants.

“We are urging them [Turkish authorities] to show restraint in their operations in Afrin, and to show restraint further along the line across the border in northern Syria,” said a senior State Department official. 

“We can work with them to address their legitimate security concerns while, at the same time, minimizing civilian casualties and above all else, keeping everything focused on the defeat ISIS fight, which is not over,” he added, using the acronym of the Islamic State militants.

In Amman, Tillerson will meet with the Jordanian leadership on the conclusion of a new memorandum of understanding on bilateral assistance, and discuss key regional issues, such as the ongoing crisis in Syria and Jordan’s support for Middle East peace.

In Beirut, he will meet with Lebanese President Michel Aoun, Prime Minister Saad Hariri, and Speaker of Parliament Nabih Berri to emphasize U.S. support for the Lebanese people and the Lebanese armed forces.

Building on Vice President Mike Pence’s recent visit to Cairo, Tillerson will meet with Egyptian President Abdel Fattah el-Sissi and Foreign Minister Sameh Shoukry to discuss regional security issues such as Libya and Syria, as well as Israeli-Palestinian issues.

The chief U.S. diplomat will also lead a delegation to the ministerial meeting in Kuwait of the 74-member Global Coalition to Defeat ISIS. He will also participate in the Iraq Reconstruction Conference, which is the first since Islamic State was defeated in Raqqa, Syria and Iraq declared some of its own territory liberated.

The three-day Iraq Reconstruction Conference will showcase private sector investment opportunities and international support for Iraq.

As Brexit ‘Cliff-Edge’ Fears Grow, France Courts Japanese Firms In Britain

There are growing fears that Britain could be headed for a so-called “cliff-edge” exit from the European Union, as big differences remain between Brussels and London over the shape of any future deal. 

The European Union’s chief negotiator, Michel Barnier, voiced frustration Friday that London has yet to detail what type of relationship it wants with the EU after Brexit.

“We had agreed with the British team on an agenda this week covering Ireland, the governance of the withdrawal agreement, and of course the transition,” Barnier told reporters in Brussels. “We had also planned an update by the United Kingdom on the future relationship. That update could not take place as planned this morning due to a scheduling issue on the British side.”

He also warned that both sides must agree on precise legal terms on the future border arrangements between Northern Ireland and the Republic of Ireland.

“Once again, ladies and gentlemen, it is important to tell the truth. A U.K. decision to leave the single market and to leave the customs union would make border checks unavoidable,” Barnier said.

That would mean the return of a physical border along the frontier, which many fear could reignite sectarian violence. Analyst Jonathan Portes of the U.K. in a Changing Europe program at Kings College London said the Ireland issue could determine the success of any overall Brexit deal.

“We have to work out how to translate the political fudge on the Northern Irish border that was agreed at the end of December into hard legal language,” he said. “And at the moment, no one really has any idea how to do that.” 

Britain says it wants frictionless trade with the EU after Brexit, but also the freedom to strike trade deals with other countries. But analyst Portes said the government is deeply divided over the shape of Britain’s future relationship with Europe, making negotiations difficult. A leaked government analysis suggests that economic growth in Britain will be reduced by up to 8 percent after it leaves the bloc.

Warning from Japan

Meanwhile, Tokyo’s ambassador to Britain warned that Japanese businesses might pull out of Britain if they faced higher costs after Brexit.

“If there is no profitability of continuing operations in the U.K., not Japanese only, no private company can continue operation. So, it’s as simple as that, and this is all high stakes that I think all of us need to keep in mind,” Ambassador Koji Tsuruoka told reporters Thursday, ahead of a meeting between British Prime Minister Theresa May and bosses of Japanese firms.

Japan has invested billions of dollars in Britain, lured by the promise of a tariff-free gateway to Europe. Carmakers Nissan, Honda and Toyota produce almost half of Britain’s cars, while pharmaceutical firms, tech companies and banks employ thousands of people.

Britain’s competitors, notably France, are eyeing that investment keenly. French Foreign Minister Jean-Yves Le Drian visited Tokyo last week and said any hopes that Britain might reverse course and stay in the EU were unfounded.

“It’s our choice, and our move, to tell the Japanese companies that, yes, the U.K. as part of the EU is over, but here is what we can offer you,” Le Drian told reporters.

‘Difficult pill’

Britain and Europe both want a transition period to ease the changeover for businesses. 

“Which is likely going to mean that the U.K. accepts that the EU makes all the rules, and we continue to pay, but we get no say. That’s going to be quite a difficult pill to swallow,” said Portes.

As the one-year Brexit countdown approaches, pressure is growing from Britain’s global and European partners for clarity over what future it wants after the European Union.

Britain Targets Global Corruption With Law to Seize Unexplained Wealth

Politicians and public figures suspected of buying property with corrupt money will be forced to explain their wealth, or face the seizure of their assets under new legislation that has come into force in Britain this month. As Henry Ridgwell reports from London, the so-called Unexplained Wealth Orders have been welcomed by activists, who say the British capital is at the center of a global web of corrupt and embezzled money.

Eye Contact Between Adults, Babies Synchronizes Brainwaves

When two people see things the same way, it is often said that they are “operating on the same wavelength.” That concept recently got a scientific stamp of approval when researchers at the University of Cambridge found that adults’ and infants’ brainwaves synchronize when they look at each other’s eyes while singing a nursery rhyme. VOA’s George Putic has more.

Stocks Move Steadily Lower on Wall Street, Extending Losses

Stocks lurched lower again in midday trading on Wall Street Thursday, extending a streak of losses and putting the market on track for its second big weekly decline in a row.

The market got off to a mixed start but fell steadily as the morning wore on. Technology companies, the leading sector over the past year, and banks fell the most.

 

The Standard & Poor’s 500 index, the benchmark for many index funds in 401(k) accounts, is now down 7.7 percent from the latest record high of 26,616 it set January 26. It’s still up 15.5 percent over the past year.  

 

Stock trading turned volatile over the last several days, breaking an unusually long period of calm, and the market is on track for its fifth loss in the last six days. European markets were also lower after the Bank of England said it could raise interest rates in the coming months.

 

After huge gains in the first weeks of this year, stocks tumbled Friday after the Labor Department said workers’ wages grew at a fast rate in January. That’s good for the economy, but investors worried it will hurt corporate profits and that rising wages are a sign of faster inflation. It could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy.

 

The S&P 500 shed 30 points, or 1.1 percent, to 2,651 as of noon Eastern time.

 

The Dow Jones industrial average lost 342 points, or 1.4 percent, to 24,550. Boeing and Caterpillar took some of the worst losses. The Nasdaq composite fell 89 points, or 1.3 percent, to 6,962.

 

The losses were broad. Three stocks fell for every one that rose on the New York Stock Exchange, and nine out of the 11 industry sectors in the S&P 500 index were down.

 

Bond prices recovered most of an early loss, sending yields slightly higher. The yield on the 10-year Treasury note rose to 2.85 percent from 2.84 percent.

 

Mixed bag for companies

High-dividend stocks including phone companies fell. Those stocks are often seen as substitutes for bonds because they tend not to fluctuate that much in price and provide steady income. Those stocks fall out of favor when bond yields rise, as they have been for the past few months, and many expect the trend to continue. The yield on the 10-year note was as low as 2.04 percent as recently as September.

The market didn’t get much help Thursday from company earnings reports, several of which disappointed investors. While U.S. companies mostly did well at the end of 2018, a number of them had a weak finish to the year.

 

Hanesbrands, which makes underwear, T-shirts and socks, reported a smaller profit than investors expected, and its forecast for the current year didn’t live up to analysts’ estimates either. The company also said it will pay $400 million to buy Australian retailer Bras N Things. The stock dropped $2.02, or 9.2 percent, to $19.94.

 

IRobot, which makes Roomba vacuums, plummeted 30 percent after projected a smaller annual profit than Wall Street was expecting. The stock dropped $26.64 to $61.40.

 

Twitter had a banner day, soaring 16 percent after turning in a profit for the first time. Its fourth-quarter revenue was also better than expected. The stock rose $4.55, or 15.9 percent, to $31.46.

 

Online delivery company GrubHub soared after it announced a partnership with Yum Brands, the parent of Taco Bell and KFC. GrubHub will provide the delivery people and technology to let people order food from those restaurants. GrubHub jumped $19.46, or 27.8 percent, to $89.37, while Yum Brands dipped 77 cents, or 1 percent, to $79.36.

 

After a sharp loss Wednesday, benchmark U.S. crude lost 97 cents, or 1.6 percent, to $60.82 a barrel in New York. Brent crude, the international standard for oil prices, gave up 85 cents, or 1.3 percent, to $64.66 per barrel in London.

Stocks in Europe declined and bond yields increased after the Bank of England said could raise interest rates in coming months because of the strong global economy. That also sent the pound higher. Britain’s FTSE 100 fell 1.6 percent and the French CAC 40 lost 2.4 percent. Germany’s DAX declined 2.6 percent.

 

In Tokyo the Nikkei 225 index rose 1.1 percent. South Korea’s Kospi gained 0.5 percent and the Hang Seng of Hong Kong rose 0.4 percent.

 

Turkish, Russian Leaders Speak as Syria Strains Grow

Turkey and Russia’s presidents have reportedly agreed to meet with their Iranian counterpart in Istanbul in the near future.

Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan spoke Thursday amid growing tensions between the countries over Syria.The two also agreed to increase coordination between their forces in Syria.

The telephone conversation follows a tumultuous few days in Syria.

Saturday, a Russian made missile was blamed by Ankara for the destruction of a Turkish tank and the killing of eight Turkish soldiers in the Syrian Kurdish enclave of Afrin.

The deaths were the worst loss for Turkey since it launched an offensive against the YPG Kurdish militia in Syria nearly three weeks ago.

Also Saturday, a Russian jet was downed by Syrian rebels in Idlib.The rebel group blamed by Russia has close ties to Turkey, and Russian media alluded to Turkish involvement, a charge denied by Ankara.

Erdogan reportedly offered his condolences to Putin for the loss of the Russian pilot. Turkey used its connections with the Syrian rebels to help repatriate the pilot’s body.

The incident likely serves as a painful reminder to Putin of the 2015 shooting down by a Turkish jet of a Russian bomber operating from a Syrian airbase. Then, Putin all but severed relations with Ankara and imposed painful sanctions. Now, Moscow appears publicly ready to accept Ankara’s denials of responsibility.

Russia ‘unhappy’

But since Monday, Russia has prevented Turkish warplanes supporting ground forces fighting in Afrin from entering Syria airspace.

“Russia is unhappy and concerned,” noted International Relations Professor Huseyin Bagci of Ankara’s Middle East Technical University, “Russia and Turkey have developed certain relations, but Turkey is much more dependent on Russia. Turkey can’t operate in Syrian airspace without Russia.”

The scale of the Turkish operation and Ankara’s objectives in Syria are also reportedly adding to Moscow’s concern.

Addressing supporters Thursday, Erdogan further stoked concerns over the Afrin operation.

“Those who thought we’ve forgotten all about these lands [Syria] after withdrawing in tears a century ago better realize now they are wrong about Turkey,” he said.

Erdogan also lashed out at foreign powers, including Moscow, for attempting to keep Turkey out of Syria.

Observers suggest Moscow is also uneasy about Turkish reliance on elements of the Free Syrian Army (FSA) in the Afrin operation.

Political columnist Semih Idiz, of Al Monitor website argued that Moscow’s concern “is more about the FSA” and some of its elements that are fighting with Turkey.

“They are made up of groups that Russia is bombing,” he added. “That is a potential weak spot in the [Russian-Turkish] relationship. Sooner or later this will surface.”

Ankara and Moscow remain at loggerheads about which Syrian groups can be considered terrorists.

Moscow has tempered its criticism of Ankara. “Both Moscow and Ankara try to maintain the cooperation and are not interested in any kind of frictions which can provoke a break,” noted Zaur Gasimov, an Istanbul-based specialist on Russian-Turkish relations at the Max Weber Foundation.

In its attempts with Tehran to negotiate a solution to the Syrian civil war, Moscow considers Ankara’s strong ties with some Syrian rebel groups important. But experts note key Syrian opposition groups, many with links to Ankara, boycotted the Russian-hosted Sochi meeting in January, likely adding to Moscow’s unease.

Severing alliances

Russia’s deepening relationship with Turkey in the past year potentially offers a bigger prize: the strategic goal of drawing Ankara away from the United States and NATO.

“Turkey and Russia have finally found each other after 300 years separation due to Western-incited wars,” Erdogan’s chief aide, Yigit Bulut, declared on a TV show this week.”Turkey no longer needs the West when Russia and China are taking Turkey’s side.”

A Western diplomat speaking on condition of anonymity said there are deep concerns Erdogan wants to re-orientate Turkey towards Moscow.

Putin is well aware Turkish-US relations are at crisis point over Washington’s support of the YPG in its fight against Islamic State. Erdogan has repeatedly threatened to extend the Syrian offensive to the town of Manbij, where U.S. forces are deployed with the YPG.

Gasimov said Moscow “is about to elaborate a new strategy for Syria.” But for now, he said it is intensively observing the dynamics in the region and in Syria, particularly American-Turkish relations “with regard to the movements of the Turkish troops in Afrin and the plans related to Manbij.”

Russia Says IS Turning Afghanistan Into ‘Resting Base’ for Regional Terrorism

Russia has warned Islamic State is turning northern Afghanistan into a “resting base” of international terrorism and a “bridgehead” for establishing its “destructive” caliphate in the region.

The “international wing of Daesh” is spearheading the effort of terrorists spilling over the borders of Syria and Iraq and moving worldwide, asserted Russian ambassador to Pakistan, Alexey Dedov.

Daesh is the Arabic acronym for IS.

“With clear connivance, and sometimes even with direct support of certain local and outside sponsors, thousands of militants of various nationalities are consolidating under the banners of Daesh there (in northern Afghanistan), including jihadis from Syria and Iraq,” Dedov told a seminar in Islamabad.

He did not elaborate but Russia and Iran accuse the United States of supporting Islamic State’s rise in Afghanistan.

Iran’s top military commander earlier this week also alleged that the U.S. is transferring IS militants to Afghanistan to fuel regional instability and justify its presence in the region.

Washington vehemently rejects the charges as “rumors” and says its sustained operations in partnership with Afghan forces against IS bases in the country have significantly degraded and reduced the terrorists.

The U.S. military maintains its recent airstrikes in northern Afghan regions are targeting Taliban training camps and those of the East Turkestan Islamic Movement, a terrorist organization operating near the border with China and Tajikistan.

 

“The U.S. strikes support Afghanistan in reassuring its neighbors that it is not a safe sanctuary for terrorists who want to carry out cross border operations,” the military said Thursday.

Russia has lately also increased contacts with Taliban insurgents in a bid to contain spread of IS, particularly to Afghan provinces, which border Central Asian states.

Kabul and Washington denounce Moscow for its overt ties with the Taliban, saying they are detrimental to U.S.-led international efforts to fight terrorism and extremism in Afghanistan.

Russia defends its ties with insurgents, saying they are meant only to promote a peaceful resolution of the conflict, and rejects allegations of arming the Taliban.

Ambassador Dedov said his country seeks increased security cooperation with Afghan and Pakistani authorities to suppress the “proliferation” of IS-led terrorism before it threatens the security of Moscow-allied Central Asian states.

He noted the recent sale of Mi-35M combat helicopters to Pakistan and other military deals are part of Russia’s efforts to boost regional efforts against terrorism. The two countries, added the Russian diplomat, conducted joint anti-terrorism military and naval drills in 2016 and 2017, and the process will continue this year.

“This (cooperation) is being developed dynamically and we are very satisfied with these dynamics,” Dedov said.

Pakistan

Islamabad has come under increased U.S. pressure over alleged Taliban sanctuaries in Pakistan that Washington says have enabled insurgents to prolong and expand the Afghan conflict.

President Donald Trump has recently suspended military aid to Pakistan until it takes “decisive action” against the militants. The move has dealt a major blow to Islamabad’s already fragile relationship with Washington and tensions continue to escalate with the rise in Taliban attacks in Afghanistan.

Pakistani officials deny they harbor or support insurgents, insisting the country is being scapegoated for U.S. military “failures” in the neighboring country.

Speaking at the seminar, Pakistan’s Joint Chiefs of Staff Committee Chairman, General Zubair Mahmood Hayat, took a swipe at Trump’s punitive actions against his country and boasted at the same time expanding military and economic ties with Russia and China.

These two relationships, however, “are not at the expense of, or in opposition to a third party,” the general explained without naming the U.S. Pakistan is a major non-NATO ally of the U.S, though calls are growing in American political circles for degrading the status.

“While some powers weaken diplomatic and military support to Islamabad, Beijing and Moscow continue to support Pakistan in the diplomatic sphere…Pakistan appreciates Russian and Chinese diplomatic efforts to defend Pakistan’s legitimate security and sovereignty concerns,” Hayat said.

The top Pakistani general praised as “a significant development” Russia’s “stabilizing” role in Afghanistan and its push for warring sides to find a negotiated settlement.

“We welcome Russia’s influence in Afghanistan to weaken Daesh foothold. Pakistan also supports Russian outreach to various segments of the afghan society for wider benefits of peace and stability,” Hayat said.

The general went on to criticize increased U.S. military actions in Afghanistan in a bid to break the stalemate with the Taliban. He emphasized the need for starting an intra-Afghan reconciliation process, involving the Taliban, to end the violence.

“Unfortunately, preference for the kinetic approach over political settlement has further compounded the already existing complexity in Afghanistan,” warned Hayat.

The general was apparently referring to President Donald Trump’s recent remarks in which he ruled out peace talks with the Taliban and instead vowed to escalate military pressure on the insurgents to “finish” them.

China, Pakistan’s biggest regional ally, has recently initiated a trilateral ministerial level dialogue involving Islamabad and Kabul to ease tensions in their bilateral ties and promote Afghan peace.

“China’s increasing active role to bring peace in Afghanistan has our full support. The trilateral mechanism between China, Afghanistan and Pakistan has positive prospects for success,” said General Hayat.

Beijing is investing billions of dollars in Pakistan to help build a massive economic corridor linking the two countries as part of China’s global Belt and Road Initiative.

China’s January Exports, Imports Surge; US Trade Deficit Grows

China’s export growth accelerated in January amid mounting trade tension with Washington while imports surged as factories stocked up ahead of the Lunar New Year holiday.

Exports rose 11.1 percent compared with a year earlier to $200.5 billion, up from December’s 10.9 percent growth, trade data showed Thursday. Imports surged 36.9 percent to $180.1 billion, up from the previous month’s 4.5 percent.

China’s politically sensitive trade surplus with the United States widened by 2.3 percent from a year ago to $21.9 billion, while its global trade gap narrowed by 60 percent to $20.3 billion.

“Export growth remained robust in January, indicating steady global demand momentum,” said Louis Kuijs of Oxford Economics in a report.

“While we expect the favorable external setting to continue to support China’s exports, rising U.S.-China trade friction remains a key risk,” Kuijs said. “We expect the U.S. administration to scale up on measures impeding imports from China.”

US import duties

Beijing’s steady accumulation of multibillion-dollar trade surpluses with the United States has prompted demands for import controls.

President Donald Trump’s administration has increased duties on Chinese-made washing machines, solar modules and other goods it says are being sold at improperly low prices. It is set to announce results of a probe into whether Beijing improperly pressures foreign companies to hand over technology, which could lead to further penalties.

Exports to the United States rose 12.1 percent in January from the same time last year to $37.6 billion while imports of U.S. goods rose 26.5 percent to $15.7 billion, according to the General Administration of Customs of China.

Exports to the European Union, China’s biggest trading partner, rose 11.6 percent to $33.7 billion while purchases of European goods rose 44.4 percent to $23.8 billion. China reported a $9.9 billion trade surplus with the EU but that was down 29.8 percent from a year earlier.

Trade war accusations

Chinese authorities have accused Trump of threatening the global trade regulation system by taking action under U.S. law instead of through the World Trade Organization. Beijing has filed a challenge in the WTO against Washington’s latest trade measures.

Beijing announced an anti-dumping investigation last weekend of U.S. sorghum exports. In response to suggestions the move was retaliation for Trump’s increase tariffs, Chinese government spokespeople say it is a normal regulatory step.

January’s import growth was driven in part by demand from factories that are restocking before shutting down for the two-week holiday. Each year, the holiday falls at different times in January or February, distorting trade data.

Forecasters expect Chinese demand to weaken this year as Beijing tightens controls on lending to slow a rise in debt. That is a blow to its Asian neighbors, for which China is the biggest export market, and for suppliers of iron ore and other commodities such as Brazil and Australia.

Dutch Bank to Pay $369 Million in Drug Cartel Money-Laundering

Dutch lender Rabobank’s California unit agreed Wednesday to pay $369 million to settle allegations that it lied to regulators investigating allegations of laundering money from Mexican drug sales and organized crime through branches in small towns on the Mexico border.

The subsidiary, Rabobank National Association, said it doesn’t dispute that it accepted at least $369 million in illegal proceeds from drug trafficking and other activity from 2009 to 2012. It pleaded guilty to one count of conspiracy to defraud the United States for participating in a cover-up when regulators began asking questions in 2013.

The penalty is one of the largest U.S. settlements involving the laundering of Mexican drug money, though it’s still only a fraction of the $1.9 billion that Britain’s HSBC agreed to pay in 2012. It surpasses the $160 million that Wachovia Bank agreed to pay in 2010.

Three execs behind cover-up

Under the agreement, the company will cooperate with investigators. The federal government agreed not to seek additional criminal charges against the company or recommend special oversight.

The settlement describes how three unnamed executives ignored a whistleblower’s warnings and orchestrated the cover-up. Two of the executives were fired in 2015 and one retired that year.

“Settling these matters is important for the bank’s mission here in California,” said Mark Borrecco, the subsidiary’s chief executive.

In 2010, Mexico proposed new limits on cash deposits at the country’s banks, resulting in more tainted deposits at Rabobank branches in Calexico and Tecate, according to the plea agreement. Accounts in the two border towns soared more than 20 percent after Mexico’s crackdown, and bank officials knew the money was likely tied to drug trafficking and organized crime.

Risky customers escaped scrutiny, including one in Calexico who funneled more than $100 million in suspicious transactions. Customers in Tecate withdrew more than $1 million in cash a year from 2009 to 2012, often in amounts just under federal reporting requirements.

“The cartels probably thought these were sleepy towns, no one’s going to notice,” said Dave Shaw, head of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in San Diego. “When you bring in $400 million, someone is going to notice. The bank should have known and they just chose not to report any suspicious activity.”

Punishment for cover-up, not crime

Heather Lowe, legal counsel and government affairs director at research and advocacy group Global Financial Integrity, said the illegal activity bore similarities to what happened with HSBC and Wachovia.

But those banks were charged with laundering Mexican drug proceeds, while Rabobank only acknowledged covering it up.

“It seems in this case we have the bank taking the hit for lying but not for the violations themselves,” said Lowe, who expects the three unnamed executives will be prosecuted.

A whistleblower alerted two of the three executives to suspicious activity in 2012 and shared her concerns with the bank’s “executive management group,” according to the plea agreement. She also spoke with regulators amid concerns in the company that the government scrutiny could endanger a pending merger. She was fired in July 2013.

The government has a cooperating witness in former compliance officer George M. Martin, who agreed in December to cooperate with authorities in a deal that delayed prosecution for two years.

Martin, a vice president and anti-money laundering investigations manager, acknowledged he oversaw policies and practices that blocked or stymied probes into suspicious transactions and said he acted at the direction of supervisors, or at least with their knowledge.

Martin told investigators that he and others allowed millions of dollars to pass through the bank.

Rabobank, based in Utrecht, Netherlands, said last month that it set aside about 310 million euros ($384 million) to settled allegations against its subsidiary. Sentencing is scheduled May 18.

Brussels Trial Opens for Paris Attacks Suspect Abdeslam 

The top surviving suspect of the November 2015 terrorist attacks in Paris, stayed mostly silent during a much awaited trial appearance Monday in Brussels. The trial is for a case involving a shootout with Belgian police.

Salah Abdeslam quickly shattered any hopes he might finally talk about his role in the 2015 Paris attacks, the deadliest in recent French history. Bearded, long-haired and clad in a white polo, Abdeslam arrived under tight security at the main courthouse in Brussels. 

He first refused to stand or answer questions but then claimed Muslims were unfairly judged and said he would only respond to Allah.

If found guilty, Abdeslam and fellow defendant, Tunisian Soufiane Ayari, face up to 40 years in prison for attempted murder in a shootout with Belgian police. The incident took place in March 2016, four months after the Paris attacks that killed 130 people, and just before Abdeslam was arrested in the Brussels Molenbeek district where he grew up.

Days later came the attacks in the Belgian capital and airport that killed more than 30 people. 

Belgian criminologist Michael Dantinne described Abdeslam as a potential mine of information about the Paris and Brussels attacks. 

Speaking to French radio, Dantinne described Abdeslam’s short remarks as propaganda aimed to provoke and to shore up other radicals.

The head of a Paris attacks survivors’ group, Philippe Duperron, said he was not surprised by Abdeslam’s silence. 

Duperron, who lost his son Thomas in the 2015 attacks, described a strong emotional charge when Abdeslam walked into the room. He said seeing him for the first time was very difficult. 

Security was heavy for the trial’s opening, and both Abdeslam and Ayari declined to be photographed or captured on video. For the rest of this week’s hearings, Abdeslam will be commuting from a high-security prison in northern France, and face the same 24-hour video surveillance as in his maximum security cell at the Fleury Merogis prison near Paris.

Aid Group Launches Job Training Program for Refugees in Germany

The International Rescue Committee on Wednesday announced the creation of Project Core, a $1 million job training program for refugees in Germany.

The IRC said it would collaborate with computer giant Intel to equip at least 1,000 migrants with “critical skills in information and communications technology and other in-demand sectors of the German economy.”

“It is exciting and encouraging to see that opportunities are being extended to refugees living in the country,” IRC President David Miliband said. 

He thanked Intel for its cooperation and commitment. “The work we will do together epitomizes the power of partnerships to develop the right solutions and create meaningful impact,” he said.

The IRC said more than 1.5 million refugees had arrived in Germany since 2015, seeking asylum from war, terrorism and poverty, and having little hope their lives would have improved if they stayed home.

The IRC said it has worked with the German government and civil organizations, sharing its expertise in educating refugee children and others in ways they can contribute to their new communities.

Russian Presidential Hopeful: If Putin Could Safely Retire, He Would

Russian presidential hopeful Ksenia Sobchak, a Russian TV celebrity and socialite, has told VOA that the rumors are true: If her father’s old political mentor, President Vladimir Putin, were guaranteed a personally safe exit from public life, he would willingly retire from politics.

“Yes, I think [he really would retire],” she said. “It’s just hard to convince him that there’s an exit and that he can trust those people who guarantee that, and that nothing like what happened to [former Chilean dictator Augusto] Pinochet or [former Libyan dictator Moammar] Gadhafi would happen to him. He’s really afraid of that.”

Sobchak, 36, whose candidacy has been questioned by opposition activists and political observers who suspect her campaign is a Kremlin ploy to boost turnout and help Putin’s bid for another six-year term, was not the first to make this claim. Alexei Navalny, who has built a national following by railing against endemic corruption, made a similar observation several months ago.

After being barred from seeking office because of what supporters have long called politically motivated criminal charges, Navalny made the claim independent of any direct ties to Putin’s inner circle. Sobchak, however, is the first person to base the observation on personal insights into Putin’s private life.

Strategic transition

Asked whether his safety could be guaranteed without his wealthy and powerful allies remaining in power, she said his departure would require a politically strategic transition.

“The question here is about a change of the entire system, so that those people would not stay in power either,” Sobchak said. “We’re talking about politics and [a long-term] strategy, so in six years [Putin] wouldn’t think about new changes to the constitution and again take part in elections.

The objective would be “to slowly change the situation and minimize the aggression level, have new people, new talent and have a new compromise political figure that would be satisfying for the opposition, but also acceptable for Putin,” she said.

Attending several high-profile events in Washington this week, Sobchak countered skeptics, saying that her political ambitions were genuine and that they would continue well beyond the March 18 polls.

Speaking at the Center for Strategic and International Studies on Tuesday, Sobchak indicated that, among other things, she planned to meet with administration officials about U.S. economic sanctions imposed on Russia in recent years.

Washington first hit Moscow with asset freezes and travel bans in 2014, following Russia’s annexation of Ukraine’s Crimean Peninsula and the outbreak of fighting between government forces and Russia-backed separatists in eastern Ukraine. Later measures were imposed in response to U.S. intelligence findings that Russia engaged in a campaign of hacking and propaganda to try to influence the 2016 U.S. presidential election.

Those sanctions have continued into Donald Trump’s presidency, despite his calls for better relations with Moscow.

Division on sanctions

A law passed by Congress last summer called for new punitive measures against Russia, but last week, the State and Treasury departments declined to impose new sanctions.

Putin is widely expected to win a new six-year term in next month’s election.

Sobchak, who is one of the other candidates who will appear on the ballot, is best known for her celebrity persona and TV appearances. Her father was Anatoly Sobchak, the late mayor of St. Petersburg who brought Putin, then an unknown KGB officer, to work in the city government.

This story originated in VOA’s Russian Service.

Merkel Clinches German Coalition Deal But Hurdle Remains

Chancellor Angela Merkel finally reached a deal Wednesday to form a new German coalition government, handing the powerful finance ministry to the country’s main center-left party in an agreement aimed at ending months of political gridlock.

The center-left Social Democrats’ leaders now have one last major hurdle to overcome – winning their skeptical members’ approval of the deal.

Merkel’s conservative Christian Democratic Union, its Bavaria-only sister, the Christian Social Union, and the center-left Social Democrats agreed after a grueling final 24 hours of negotiations on a 177-page deal that promises “a new awakening for Europe.”

“I know that millions of citizens have been watching us closely on this long road over recent weeks,” Merkel said. “They had two justified demands of us: First, finally form a government – a stable government – and second, think … of people’s real needs and interests.”

The coalition deal could be “the foundation of a good and stable government, which our country needs and many in the world expect of us,” she added.

Germany has already broken its post-World War II record for the longest time between its last election on Sept. 24 to the swearing-in of a new government. That is still at least several weeks away.

Merkel currently leads a caretaker government, which isn’t in a position to launch major initiatives or play any significant role in the debate on the European Union’s future, led so far by French President Emmanuel Macron.

A key role in the EU is particularly dear to Social Democrat leader Martin Schulz, a former European Parliament president.

On Wednesday he declared that, with the coalition deal, Germany “will return to an active and leading role in the European Union.” The agreement states, among other things, that Germany is prepared to pay more into the EU budget.

To help that process, Schulz announced later he would hand over his party’s leadership to Andrea Nahles, the head of its parliamentary group, and take on the role of Germany’s foreign minister. Nahles will still have to be confirmed by the party.

Yet before addressing Europe’s future, Schulz faces hard work at home.

The coalition accord will be put to a ballot of the Social Democrats’ more than 460,000 members, a process that will take a few weeks. Germany’s highest court said Wednesday it had dismissed a series of complaints against the ballot.

Many Social Democrats are skeptical after the party’s disastrous election result, which followed four years of serving as the junior partner to Merkel’s conservatives in a so-called “grand coalition.” The party’s youth wing vehemently opposes a repeat of that alliance.

If Social Democrat members say no, the new coalition government can’t be formed. That would leave only an unprecedented minority government under Merkel or a new election as options.

Schulz had previously ruled out taking a Cabinet position under Merkel, and his decision to become foreign minister may complicate his efforts to sell the coalition deal to party members.

“We are optimistic that we can convince a wide majority of our members to enter this coalition,” he said, speaking with Nahles at his side.

Schulz’s zigzag course has undermined his authority. He vowed to take the party into opposition on election night, but reversed course in November after Merkel’s efforts to build a coalition with two smaller parties collapsed.

On the conservative side, Merkel needs only the approval of a party congress of her CDU, a far lower hurdle.

“I am counting on convincing our members that we have negotiated a very good coalition agreement,” Schulz said.

His party reached compromises on two key demands: curbing the use of temporary work contracts in larger companies and at least considering narrowing differences between Germany’s public and private health insurance systems.

In addition to the Foreign Ministry, the Social Democrats are set to get the Labor and Finance Ministries – the latter a major prize, held by Merkel’s CDU for the past eight years and an influential position given Germany’s status as the eurozone’s biggest economy. Unconfirmed reports in the German media say the new finance minister and vice chancellor would be Olaf Scholz, Hamburg’s center-left mayor.

The Interior Ministry, also held by the CDU, would go to Bavaria’s CSU, which has pushed hard to curb the number of migrants entering Germany.

Merkel’s party would keep the Defense Ministry and get the Economy and Energy Ministry, held by the Social Democrats in the outgoing government. One CDU lawmaker, Olav Gutting, wrote on Twitter: “Phew! At least we still have the chancellery!”

Merkel defended the carve-up of ministries.

“Of course, after many years in which Wolfgang Schaeuble led the finance ministry and really was an institution, many find it difficult that we can no longer hold this ministry, and the same goes for the interior ministry,” she said. “But we have important jobs. We have the economy ministry for the first time in decades.”

She dismissed suggestions that Social Democrat-led ministries would force her to open Germany’s purse wider for Macron’s European reform proposals than she would like.

“Regardless of whether a ministry is led by the Social Democrats or the (Christian Democratic) Union, you can only spend the money you have,” Merkel said.

If the coalition comes together, the nationalist Alternative for Germany will be the biggest opposition party. Co-leader Alexander Gauland criticized the deal, particularly the possibility of deeper European financial integration.

“You ask yourself why Mr. Macron doesn’t just move into the chancellery,” he said.

Soaring Agave Prices Give Mexican Tequila Makers a Headache

In the heartland of the tequila industry, in Mexico’s western state of Jalisco, a worsening shortage of agave caused by mounting demand for the liquor from New York to Tokyo has many producers worried.

The price of Agave tequilana, the blue-tinged, spiky-leaved succulent used to make the alcoholic drink, has risen six-fold in the past two years, squeezing smaller distillers’ margins and leading to concerns that shortages could hit even the larger players.

In front of a huge metal oven that cooks agave for tequila, one farmer near the town of Amatitan said he had been forced to use young plants to compensate for the shortage of fully grown agave, which take seven to eight years to reach maturity.

He asked not to be identified because he did not want his clients to know he was using immature plants.

The younger plants produce less tequila, meaning more plants have to be pulled up early from a limited supply – creating a downward spiral.

“They are using four-year-old plants because there aren’t any others. I can guarantee it because I have sold them,” said Marco Polo Magdaleno, a worried grower in Guanajuato, one of the states allowed to produce tequila according to strict denomination of origin rules.

More than a dozen tequila industry experts interviewed by Reuters said that the early harvesting will mean the shortage is even worse in 2018.

Already, the 17.7 million blue agaves planted in 2011 in Mexico for use this year fall far short of the 42 million the industry needs to supply 140 registered companies, according to figures from the Tequila Regulatory Council (CRT) and the National Tequila Industry Chamber (CNIT).

The shortages are likely to continue until 2021, as improved planting strategies take years to bear fruit, according to producers.

The result is agave prices at 22 pesos ($1.18) per kilo – up from 3.85 pesos in 2016.

Those higher prices mean that low-cost tequila producers, which make a cheaper, less pure drink that once dominated the market, find it harder to compete with premium players.

“It doesn’t make sense for tequila to be a cheap drink because agave requires a big investment,” said Luis Velasco, CNIT’s president.

Small-scale distillers of quality tequilas are also feeling the pinch and some warn that drinkers are seeking alternative tipples.

“At more than 20 pesos per kilo, it’s impossible to compete with other spirits like vodka and whisky,” said Salvador Rosales, manager of smaller producer Tequila Cascahuin, in El Arenal, a rural town in Jalisco.

“If we continue like this a lot of companies will disappear,” he said.

Exports to the United States of pure tequila jumped by 198 percent over the past decade, while cheaper blended tequila exports rose by just 11 percent, CNIT data shows.

Over the same time, Mexican production declined 4 percent, with blended tequila leading the fall.

Global Demand

As it sheds its image as a fiery booze drunk by desperados and fratboys, while moving into the ranks of top-shelf liquors, the tequila industry has seen a flurry of deals in recent years.

In January, Bacardi Ltd. said it would buy fine tequila maker Patron Spirits International for $5.1 billion.

In 2017, after years of speculation, Mexico’s Beckmann family launched an initial public offering of Jose Cuervo, raising more than $900 million.

And Britain’s Diageo Plc swapped its Bushmills Irish whiskey label for full ownership of the high-end Don Julio tequila in 2014.

The question posed by many distillers is how to keep pace with tequila’s success.

“The growth has overtaken us. It’s a crisis of success of the industry,” said Francisco Soltero, director of strategic planning at Patron, which buys agave under various contracts.

“We thought that we were going to grow a certain amount, and we’re growing double,” he said.

Large sellers such as Patron and Tequila Sauza say they have not experienced problems paying for agave, and forecast that their inventories will keep growing.

“If you sell value, the costs don’t worry you,” Soltero said.

Tequila Sauza, which mostly grows its own agave, does not foresee supply problems, chief executive Servando Calderon said.

But some think it is simply a matter of time before the higher production costs and scarcity pressures bigger players.

“We are sure this will have a strong impact on the big firms such as Cuervo or Sauza,” said Raul Garcia, President of the National Committee for Agave Production in Tequila, a group that includes most agave producers in the country.

“We don’t see that the problem will be resolved soon, and that’s what worries us.”

Demand is also being driven by other, fashionable agave-derived products, including agave syrup and health supplement inulin, which use the equivalent of 20 percent of the plants needed in 2018, the CRT said.

And rising prices are leading to growing theft, driving out smaller producers, said Jose de Jesus, a producer of blue agave in Tepatitlan. Criminals come to the area with large trucks in the middle of the night to steal agave, he said.

According to the CRT last year 15,000 plants were reported stolen, more than triple the number in 2016.

($1 = 18.7096 Mexican pesos)

Peru Defends China as Good Trade Partner After US Warnings

Peru’s trade minister defended China as a good trade partner on Tuesday, after U.S. Secretary of State Rex Tillerson warned Latin American countries against excessive reliance on economic ties with the Asian powerhouse.

Eduardo Ferreyros said Peru’s 2010 trade liberalization deal with China had allowed the Andean nation of about 30 million people to post a $2.74 billion trade surplus with Beijing last year.

“China is a good trade partner,” Ferreyros told foreign media, as Tillerson met with President Pedro Pablo Kuczynski in Lima, a stop on Tillerson’s five-nation Latin American tour.

“We’re happy with the results of the trade agreement.”

The remarks were the Peruvian government’s first signal since Tillerson’s warning that it does not share Washington’s concerns about growing Chinese influence in the region.

Before kicking off his trip to Latin America on Friday, Tillerson suggested that China could become a new imperial power in the region, and accused it of deploying unfair trade practices.

“I appreciate advice, no matter where it comes from. But we’re careful with all of our trade relations,” Ferreyros said, when asked about Tillerson’s remarks.

Ferreyros also praised Peru’s trade relationship with Washington, despite a trade deficit with the United States. “I’m not afraid of trade deficits,” Ferreyros said.

Since China first overtook the United States as Peru’s biggest trade partner in 2011, thanks mostly to its appetite for Peru’s metals exports, bilateral trade has surged and diplomatic ties have tightened.

Kuczynski, a former Wall Street banker, made a point of visiting China before any other nation on his first official trip abroad as president in 2016.

Under former president Barack Obama, the United States had hoped to counter China’s rise in the fast-growing Asia-Pacific region, which includes large parts of Latin America, with the sweeping Trans-Pacific trade deal known as the TPP.

While President Donald Trump withdrew the United States from the TPP upon taking office, the 11 remaining signatories, including Peru and Japan, have struck a similar deal that they plan to sign without the United States in March.

Tillerson, who left Peru for Colombia on Tuesday, said on Monday that Trump was open to evaluating the benefits of the United States joining the so-called TPP-11 pact in the future, which Ferreyros called “a good sign.”

All countries in the Asia-Pacific region, including China, were welcome to join TPP-11, Ferreyros said. “But the deal has closed and countries that want to join obviously can’t renegotiate the whole agreement,” he added.

US Deplores Turkey’s Re-arrest of Amnesty International Official

The United States said on Tuesday it was “deeply troubled” by Turkey’s re-arrest of the chairman of the local arm of Amnesty International, and called on its NATO ally to end its state of emergency and safeguard the rule of law.

U.S.-Turkish relations have been strained recently by a series of disagreements, especially over the Syria crisis.

Taner Kilic was one of 11 human rights activists arrested last year on what Amnesty International has said were “bogus terrorism charges.” He is the only one of the 11 still jailed after eight months in detention, the rights group said.

Kilic was conditionally released last week, but the prosecution successfully appealed the decision and he was re-arrested before he had even arrived home, Amnesty said in a statement.

U.S. State Department spokeswoman Heather Nauert told a briefing the United States was “deeply troubled” by Kilic’s re-arrest on Feb. 1.

She said Washington was closely following Kilic’s case, as well as those against other human rights defenders, journalists, civil society leaders and opposition politicians detained in the state of emergency that followed a failed coup against President Tayyip Erdogan on July 15, 2016.

“We call on the Turkish government to end the protracted state of emergency, to release those detained arbitrarily under the emergency authorities and to safeguard the rule of law,” Nauert said, noting that the emergency had “chilled freedom of expression” and raised concerns about judicial independence.

In the year after the coup, Turkey arrested more than 40,000 people and fired 125,000, including many from the police, army, and judiciary. Erdogan blames the attempted coup on Fethullah Gulen, an exiled cleric and former ally based in the United States. Gulen has denied any role in the plot.

 

Are Europe’s Woes Bound to Worsen?

The 28-member European Union faces an aggregate of pressures, including slow economic growth, persistently high unemployment, escalating populism, a migrant wave, the threat of terrorism, and a resurgent Russia. Amid these difficulties, the future shape and character of the EU is being questioned. VOA’s Jela de Franceschi probes the topic with three veteran observers of all things Europe.

Bail Refused in French Rape Case Against Muslim Theologian

A Paris judge on Tuesday denied bail to a controversial Swiss Muslim scholar facing rape accusations, as fresh allegations promise to further complicate one of France’s most prominent sexual assault cases to date.

Oxford University professor Tariq Ramadan, 55, was charged with rape late last week, following two French women’s accusations of brutal sexual experiences in hotel rooms years before. Ramadan was questioned for two days before being taken into custody Friday.

Swiss media have reported allegations that Ramadan had sexual relations with teenage girls at a Geneva school where he taught in the 1980s. In addition, French media have reported that police have testimonies from other women, who have not leveled charges.

The allegations first surfaced last fall, as the Harvey Weinstein scandal triggered a broader #MeToo outcry against sexual assault and harassment.

Ramadan, a married father of four, adamantly denies the charges, claiming they amount to slander from enemies intent on demolishing him. The case has stunned the Muslim world and further fueled the many critics of Ramadan, who has long been a polarizing figure in Europe.

The accusations

Both of the women pressing charges describe similar episodes — of hotel room meetings, ostensibly for religious discussions, that quickly turned into violent sexual encounters. One woman — a handicapped, 45-year-old convert to Islam using the pseudonym “Christelle” — described in interviews a particularly brutal and humiliating encounter with the scholar in the French city of Lyon in 2009.

During recent questioning, “Christelle” allegedly identified a scar on Ramadan’s groin, which he reportedly confirmed existed. She turned over a USB flash drive to investigators allegedly containing compromising text messages from Ramadan, according to Le Parisien newspaper.

But the newspaper also reported a plane reservation that, if confirmed, would show Ramadan flying from London to Lyon at about the same time the woman said the assault took place.

The second woman, Henda Ayari, a former Salifist-turned-feminist activist, went public with her accusations in October. She was the first to openly accuse Ramadan of sexual assault, earning insults and threats in the weeks that followed. Like “Christelle,” Ayari said the experience took place in a hotel in 2012.

But Ayari’s account, too, has been compromised in recent days, with reports of a man claiming she threatened to press rape charges against him in 2013 — a year after her alleged encounter with Ramadan —after he rebuffed her advances.

Beginning of the end?

Regardless of the outcome, the charges amount to a significant blow to Ramadan, once seen as an inspiration to a generation of young European Muslims. In conferences and television interviews, he preached that Islam and Europe were compatible. Still, critics claimed Ramadan, the grandson of Egyptian Muslim Brotherhood founder Hassan al-Banna, wielded a double discourse, hiding political Islam behind unifying rhetoric.

Following last fall’s allegations, Ramadan took a leave of absence from his teaching post at Oxford University. More recently, French media report that Qatar — which financed his Islamic Studies chair at Oxford — has also distanced itself from him.

“He has a real hold on his [sexual] prey, as on his faithful,” feminist writer Caroline Fourest, a longtime Ramadan foe, told Le Journal du Dimanche.

“I don’t think people realize his impact on Europe as a preacher,” she added. “He has radicalized brilliant students — young Muslims —and transformed them into vindictive paranoids. He has divided European citizens with the kind of harm that few extremists can match.”

A number of prominent Muslims have chosen to remain silent, saying they will wait for French justice to weigh in. Analysts claim Ramadan’s star was fading long before the allegations surfaced — and especially after the Arab uprisings starting in 2011.

“It’s a whole myth that is collapsing. Tariq Ramadan will have a hard time continuing his preaching career based on his personality and a discourse of religious puritanism,” Islam specialist Omero Marongui-Perria told Le Parisien.

For their part, Ramadan’s backers have launched a petition and written an open letter of support in which they denounce an alleged campaign against him carried out by French media and politicians.

In Puerto Rico, Housing Crisis US Storm Aid Won’t Solve

Among the countless Puerto Rico neighborhoods battered by Hurricane Maria is one named after another storm: Villa Hugo. The illegal shantytown emerged on a public wetland after 1989’s Hurricane Hugo left thousands homeless.

About 6,000 squatters landed here, near the El Yunque National Forest, and built makeshift homes on 40 acres that span a low-lying valley and its adjacent mountainside. Wood and concrete dwellings, their facades scrawled with invented addresses, sit on cinder blocks. After Maria, many are missing roofs; some have collapsed altogether.

Amid the rubble, 59-year-old Joe Quirindongo sat in the sun one recent day on a wooden platform — the only remaining piece of his home. Soft-spoken with weathered skin and a buzzcut, Quirindongo pondered his limited options.

“I know this isn’t a good place for a house,” said Quirindongo, who survives on U.S. government assistance. “Sometimes I would like to go to another place, but I can’t afford anything.”

Villa Hugo reflects a much larger crisis in this impoverished U.S. territory, where so-called “informal” homes are estimated to house about half the population of 3.4 million.

Some residents built on land they never owned. Others illegally subdivided properties, often so family members could build on their lots.

Most have no title to their homes, which are constructed without permits and usually not up to building codes. The houses range in quality and size, from one-room shacks to sizable family homes. Many have plumbing and power, though not always through official means.

The concentration of illegal housing presents a vexing dilemma for local and federal authorities already overwhelmed by the task of rebuilding an economically depressed island after its worst natural disaster in nine decades.

Puerto Rico Governor Ricardo Rosselló has stressed the need to “build back better,” a sentiment echoed by U.S. disaster relief and housing officials. But rebuilding to modern standards or relocating squatters to new homes would take an investment far beyond reimbursing residents for lost property value. 

It’s an outlay Puerto Rico’s government says it can’t afford, and which U.S. officials say is beyond the scope of their funding and mission. Yet the alternative — as Villa Hugo shows — is to encourage rebuilding of the kind of substandard housing that made the island so vulnerable to Maria in the first place.

“It’s definitely a housing crisis,” said Fernando Gil, Puerto Rico’s housing secretary. “It was already out there before, and the hurricane exacerbates it.”

In Puerto Rico, housing is by far the largest category of storm destruction, estimated by the island government at about $37 billion, with only a small portion covered by insurance.

That’s more than twice the government’s estimate for catastrophic electric grid damage, which was made far worse by the shoddy state of utility infrastructure before the storm.

Puerto Rico officials did not respond to questions about how the territory estimated the damage to illegally built homes.

Maria destroyed or significantly damaged more than a third of about 1.2 million occupied homes on the island, the government estimates. Most of those victims had no hazard insurance — which is only required for mortgage-holders in Puerto Rico — and no flood insurance. Just 344,000 homes on the island have mortgages, according U.S. Census Bureau data.

Officials at the U.S. Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA) acknowledged the unique challenges of delivering critical housing aid to Puerto Rico. Among them: calculating the damage to illegal, often substandard homes; persuading storm victims to follow through on application processes that have frustrated many into giving up; and allocating billions in disaster aid that still won’t be nearly enough solve the island’s housing crisis.

By far the most money for Puerto Rico housing aid is expected to come from the U.S. Department of Housing and Urban Development (HUD).

HUD spokeswoman Caitlin Thompson declined to comment on how the agency would spend billions of dollars in disaster relief funds to rebuild housing, or how it planned to help owners of informally built homes. Two HUD officials overseeing the agency’s Puerto Rico relief efforts, Todd Richardson and Stan Gimont, also declined to comment.

But the disaster aid package currently under consideration by the U.S. Congress would provide far less housing aid than Puerto Rico officials say they need. Governor Rosselló is seeking $46 billion in aid from HUD, an amount that dwarfs previous allocations for even the most destructive U.S. storms.

That’s nearly half the island’s total relief request of $94 billion.

The U.S. House of Representatives instead passed a package of $81 billion, with $26 billion for HUD, that still needs Senate and White House approval. The money would be divided between regions struck by several 2017 hurricanes — including Maria, Harvey in Texas and Irma in Florida — as well as the recent California wildfires. Congress could also decide to approve additional aid later.

‘My mother is scared’

A generation ago, Maria Vega Lastra, now 61, was among the estimated 28,000 people displaced by Hurricane Hugo. Neighbors helped her build a new home in what would become Villa Hugo, in the town of Canóvanas.

Her daughter, 34-year-old Amadaliz Diaz, still recalls her older brother grinning as he sawed wood for the frame of their self-built, one-floor house, with a porch and three bedrooms.

Now, Vega Lastra’s roof has holes in it, and her waterlogged wooden floorboards buckle with each step.

Vega Lastra has been staying with her daughter, who lives in Tampa, as the family waits on applications for FEMA aid. The agency initially denied her application in December, saying it could not contact her by phone, Diaz said.

Vega Lastra is returning to her home this week, uncertain if its condition has gotten worse. Her daughter bought her an air mattress to take with her.

“My mother is scared,” Diaz said. “I hope the government helps her. I work, but I have three kids to take care of.” The island’s housing crisis long predated the storm.

According to Federal Housing Finance Agency data, Puerto Rico’s index of new home prices fell 25 percent over the last decade, amid a severe recession that culminated last May in the largest government bankruptcy filing in U.S. history.

Legal home construction, meanwhile, plummeted from nearly 16,000 new units in 2004 to less than 2,500 last year, according to consultancy Estudios Tecnicos, an economic data firm.

A 2007 study by environmental consultant Interviron Services Inc., commissioned by the Puerto Rico Builders Association, found that 55 percent of residential and commercial construction was informal. That would work out to nearly 700,000 homes.

That figure might be high, said David Carrasquillo, president of the Puerto Rico Planning Society, a trade group representing community planners. But even a “every conservative” estimate would yield at least 260,000 illegally built houses, he said.

Generations of Puerto Rican governments never made serious efforts to enforce building codes to stop new illegal housing, current and former island officials said in interviews. Past administrations had little political or economic incentive to force people out of neighborhoods like Villa Hugo.

Former Governor Rafael Hernandez Colon, in office during Hurricane Hugo, said he tried to help informal homeowners without policing them. 

“Our policy was not to relocate, but rather improve those places,” Hernandez Colon said in an interview.

Subsequent administrations advocated similar policies; none made meaningful headway, partly because of Puerto Rico’s constant political turnover.

Today, informal communities provide a stark contrast to San Juan’s glittering resorts and bustling business districts. San Juan Mayor Carmen Yulin Cruz pointed to poor barrios like those near the city’s Martín Peña Channel, hidden behind the skyscrapers of the financial hub known as the Golden Mile.

“It’s not something I’m proud of, but we hide our poverty here,” Cruz said in an interview.

Recovery dilemma 

The task of rebuilding Puerto Rico’s housing stock ultimately falls to the territory government, which has no ability to pay for it after racking up $120 billion in bond and pension debt in the years before the storm. 

That leaves the island dependent on U.S. relief from FEMA, the SBA and HUD.

The SBA offers low-interest home repair loans of up to $200,000. FEMA provides homeowners with emergency grants, relocation assistance and other help. HUD is focused on long-term rebuilding efforts, working directly with local agencies to subsidize reconstruction through grants. 

FEMA’s cap for disaster aid to individuals is $33,300, and actual awards are often much lower. Normally, FEMA eligibility for housing aid requires proving property ownership, but the agency says it will help owners of informal homes if they can prove residency.

How exactly to help gets complicated. For example, someone who builds their own home with no permits on land they own is more likely to be treated as a homeowner, said Justo Hernandez, FEMA’s deputy federal coordinating officer. Squatters who built on land they didn’t own, however, would likely only be given money to cover lost items and relocate to a rental, he said.

Several Villa Hugo residents said they received money from FEMA, but many didn’t know what it was for and complained it wasn’t enough.

Lourdes Rios Romero, 59, plans to appeal the $6,000 grant she got for repairs to her flooded home, citing a much higher contractor’s quote. Neighbor Miguel Rosario Lopez, a 62-year-old retiree, showed a statement from FEMA saying he was eligible for $916.22, “to perform essential repairs that will allow you to live in your home.”

Without money for major changes, most homeowners said they planned to combine the aid they might get from FEMA with what little money they could raise to rebuild in the same spot.

FEMA does not police illegal building. Code enforcement is left to the same local authorities who have allowed illegal construction to persist for years.

Quirindongo is planning to buy materials to rebuild his Villa Hugo home himself with about $4,000 from FEMA. It will be the third time he has done so, having lost one home to a 2011 flood, another to a fire.

“I just want to have something that I can say, ‘This is mine,’” Quirindongo said.

Giving up

Many others appear to have given up on FEMA aid because the agency’s application process is entangled with a separate process for awarding SBA loans to rebuild homes.

FEMA is legally bound to assess whether applicants might qualify for SBA loans before awarding them FEMA grants. If an applicant passes FEMA’s cursory eligibility assessment, they are automatically referred to SBA for a more thorough screening.

Applicants are not required to follow through on the SBA process — but they cannot qualify for FEMA aid unless they do.

FEMA only provides a grant when the SBA denies the applicant a loan.

FEMA said it has referred about 520,000 people out of 1.1 million total applicants so far to the SBA. But as of Monday, only 59,000 followed through with SBA applications. Of those, some 12,000 later withdrew, SBA data shows.

“As soon as people see SBA they say, ‘I give up, I don’t want a loan — I can’t afford a loan,’” FEMA’s Hernandez said.

SBA spokeswoman Carol Chastang said the agency is working with FEMA to educate flood victims on available benefits and the application process, including sending staffers to applicants’ homes.

330,000 vacant homes

Before the storm hit, Puerto Rico already had about 330,000 vacant homes, according to Census Bureau 2016 estimates, resulting from years of population decline as citizens migrated to the mainland United States and elsewhere. Puerto Ricans are American citizens and can move to the mainland at will.

Puerto Rico and federal officials have considered rehabilitating the vacant housing for short- and long-term use, along with building new homes and buying out homeowners in illegally built  neighborhoods, according to Gil and federal officials.

Rosselló, the Puerto Rican governor, has said the rebuilding plan must include a fleet of properly built new homes. Gil, the housing secretary, said the administration would like to build as many as 70,000 properties.

HUD officials declined to comment on whether the agency would finance new housing. Its Community Development Block Grant program allows for local governments to design their own solutions and seek HUD approval for funding.

The cost of constructing enough new, code-compliant properties to house people displaced by Maria could far exceed the available federal aid. Making them affordable also presents a problem.

Puerto Rico’s subsidized “social interest housing,” geared toward low-income buyers, typically provides units that sell in the mid-$100,000 range, with prices capped by the government.

That’s beyond the means of many displaced storm victims.

Gil offered little detail on a solution beyond saying it will include a mix of new development, buyout programs for owners of illegally built homes and other options.

The answer will come down to how much Washington is willing to pay, he said. He invoked the island’s territorial status and colonial history as a root cause of its poor infrastructure and housing stock before the storm.

“It is precisely because we have been neglected by the federal government that the island’s infrastructure is so weak,” he said.

Many Puerto Rico officials continue to advocate for bringing relief and legitimacy to squatter communities like Villa Hugo, rather than trying to relocate their residents.

Canóvanas Mayor Lornna Soto has been negotiating with island officials to provide property titles to Villa Hugo’s population.

The vast majority still don’t have them.

“It’s long overdue to recognize that they are not going anywhere and their communities need to be rebuilt with proper services,” Soto said.

Diaz said she supports her mother’s decision to return to Villa Hugo, regardless of what aid the government ultimately provides.

“I grew up there,” Diaz said. “Everyone knows us there.”

Misery on US Stock Market Spreads to Asia Tuesday

Asia’s benchmark stock indexes collapsed Tuesday, as Monday’s massive selloffs on Wall Street rolled across the globe. 

Japan’s Nikkei 225 index lost as much seven percent of its value at one point during the trading session, before closing at 21,610 points, a loss of nearly five percent. Hong Kong’s Hang Seng index followed suit, dropping just over five percent in its worst trading day since August 2015. 

The benchmark indexes Australia and South Korea also suffered serious losses.

In early Europe trading London’s FTSE 100 was down 3.5 percent at 7,081 points.

Asian markets were caught in the ripple effect of Monday’s 1,175-point loss on the Dow Jones Industrial Average, marking the biggest point decline in history. The S&P (Standard and Poor’s) 500 also had a bad day, losing just over four percent to finish at 2,648 points. 

The stock market has now lost about a trillion dollars in value since Friday, when the Dow lost 666 points. That drop followed a solid jobs report that showed the U.S. economy adding 200 thousand jobs and wages rising at the fastest pace in a decade. The tighter labor market and rising wages prompted investor fears of higher inflation and the possibility that the U.S. Federal Reserve would raise interest rates faster and higher than they have in recent years. 

Analysts who spoke with VOA had been expecting a stock market “correction” (a decline of about 10% from recent highs) as a result of the record run up in stock prices this year.

As US Stocks Plummet, Trump Goes Silent on Role in Markets

As U.S. stocks plunged on Monday, President Donald Trump was speaking at an event in Ohio but noticeably not taking credit for the market despite doing so repeatedly when stocks were rising.

The stark contrast was a sign that Trump may be absorbing a tough message, underscored by former White House advisers, that American presidents traditionally have avoided commenting directly on Wall Street’s fickle trends.

Gene Sperling, a top economic adviser to Democratic former presidents Bill Clinton and Barack Obama, said Trump erred in recent months by focusing so heavily on the stock market.

“Even though the stock market tripled under Bill Clinton, his view was that you should always focus your policies and your public messages on bread-and-butter kitchen table issues … and that focusing on the stock market would take your eye off the real economy,” Sperling said.

White House spokesman Raj Shah, in an adjustment to the administration’s message on stocks, told reporters aboard Air Force One en route to Trump’s speaking event in Ohio, “Look, markets do fluctuate in the short term. We all know that … But the fundamentals of this economy are very strong and they’re headed in the right direction.”

Throughout a speech at a factory in Blue Ash, Ohio, Trump made no mention of stock markets. That departed sharply from past practice.

In his State of the Union address last week, Trump said, “The stock market has smashed one record after another, gaining $8 trillion and more in value in just this short period of time.”

‘Tremendous Benefits’

On Jan. 7, he wrote on Twitter, “The Stock Market has been creating tremendous benefits for our country in the form of not only Record Setting Stock Prices, but present and future Jobs, Jobs, Jobs. Seven TRILLION dollars of value created since our big election win!”

Three days before that, he tweeted, “Dow just crashes through 25,000. Congrats! Big cuts in unnecessary regulations continuing.” He had sent similar tweets for months.

 

The Republican president told Reuters in a Jan. 17 interview he has been getting kudos from people grateful for increased 401(k) retirement plan values and he believed the rise would not have happened if his Democratic opponent Hillary Clinton had won the 2016 presidential election.

“If the Democrats won the election, the stock market would have gone down 50 percent from where it was, and now look at the percentage increase. It’s a record increase,” Trump said.

Once the markets closed, the White House issued a statement saying Trump’s focus is “on our long-term economic fundamentals, which remain exceptionally strong, with strengthening U.S. economic growth, historically low unemployment, and increasing wages for American workers.”

“The president’s tax cuts and regulatory reforms will further enhance the U.S. economy and continue to increase prosperity for the American people,” White House spokeswoman Sarah Sanders said.

The benchmark Dow Jones industrial average soared 42 percent between Election Day 2016, when Trump won the presidency, and its historic peak a week ago above 26,400.

On Monday, the Dow fell to below 24,000 but regained some of its midday losses to close at 24,345. In the past five trading days, the index has erased all its gains since late November.

The benchmark S&P 500 has pulled back more than 6 percent from a Jan. 26 record high.

The “Trump rally,” as some traders have dubbed it, has coincided with a sweeping tax code overhaul approved in December, which slashed corporate taxes, and a deregulation push.

The S&P 500 rose 34 percent from Trump’s election to its recent high.

But stocks have been climbing since March 2009, when Obama inherited a serious financial crisis and the worst economic recession since the Great Depression of the 1930s. At that time, the Dow was trading at around 6,500.

Trump has also criticized his predecessor Obama’s effect on markets. In November 2012, Trump tweeted, “The stock market and U.S. dollar are both plunging today. Welcome to @BarackObama’s second term.”

The S&P 500 rose 126 percent from Obama’s 2008 election to his final day in office in 2017.

Former Obama press secretary Jay Carney on Monday tweeted, “Good time to recall that in the previous administration, we NEVER boasted about the stock market — even though the Dow more than doubled on Obama’s watch — because we knew two things: 1) the stock market is not the economy; and 2) if you claim the rise, you own the fall.”

Doug Holtz-Eakin, president of the American Action Forum and a former economic adviser to 2008 Republican presidential nominee John McCain, said, “The president shouldn’t comment about the stock market. Indeed if anyone is going to make major pronouncements about economic data, it should be the Treasury secretary or the agency releasing the data, so if they get it wrong you can get rid of them. You don’t want the president owning those things.”

German Spy Chief: N. Korea Has Gotten Nuclear Equipment Through Its Berlin Embassy

North Korea has been getting equipment and technology for its nuclear weapons program through its embassy in Berlin, Germany’s intelligence chief says.

“When we detect something of this sort, we prevent it,” BfV head Han-Georg Maassen told German public television NDR Monday. “But we can’t guarantee that we will be able to detect and thwart all cases.”

Maassen says German authorities suspect underground markets and shadow buyers got their hands on the parts and the North Koreans procured them in Germany. 

He did not say exactly what equipment the North Koreans bought, but said it is likely duel-use technology, meaning it has civilian and military purposes.

The German TV report says the North carried out its activities in Germany in 2016 and 2017, but that a North Korean diplomat tried to buy a monitor used in chemical weapons production as early as 2014.

A North Korean embassy spokesman denies the report, telling CNN it is “simply not true.”

The United Nations has imposed a series of increasingly stronger sanctions on North Korea because of its refusal to stop developing nuclear weapons and testing ballistic missiles that could carry such bombs.

But a recent U.N. report says the North earned nearly $200 million last year ignoring sanctions and exporting such goods as coal, iron, and steel.

Nome, Alaska, Gets Fresh Review as Possible US Arctic Port

Federal officials will take another look at the historic Alaska community of Nome as a possible port serving ships heading for the Arctic.

 

The U.S. Army Corps of Engineers announced it has signed an agreement with the city of Nome to examine whether benefits justify costs of navigation improvements, said Bruce Sexauer, chief of civil works for the Corps’ Alaska District.

 

“The study will look at economic and social reasons to see if expanding the port is in the federal interest,” he said.

 

The study process generally takes three years and could culminate in a Corps’ recommendation to Congress to authorize port improvements, Sexauer said.

 

Alaska lacks deep-water ports along most of its west and northwest coast. The nearest permanent U.S. Coast Guard station is Kodiak more than 800 miles (1,287 kilometers) away.

 

Arctic marine traffic continues to grow and Nome, though south of the Arctic Circle, is well situated south of the Pacific chokepoint to the Arctic, the Bering Strait, Sexauer said.

 

A joint federal-state study started in 2008 looked at alternatives for Arctic ports in the Bering and Chukchi seas. Nome became the top choice because of infrastructure already in place, including an airport that handles jets, a hospital and fuel supply facilities.

 

“It just needed to be bigger and deeper,” Sexauer said

 

However, economic justification for the port diminished in late 2015 when Royal Dutch Shell PLC drilled a dry hole in the Chukchi Sea and suspended its U.S. Arctic offshore drilling program.

 

“The benefits for a project at Nome went away, at least the oil and gas benefits,” Sexauer said. The Corps paused its study with the state and officially terminated it last month, Sexauer said.

 

The study with the city will again look at how a Nome port would aid marine traffic for petroleum development, mining and regional delivery of fuel and other products.

 

Federal law changed in 2016 to allow the Corps to also consider social benefits, such as support of search and rescue operations, national security and aid to communities to help them be sustainable.

 

The Port of Nome remains too shallow to handle large ships. Fuel tankers stay anchored in deep water and fuel is lightered to Nome.

 

Nome’s inner harbor in 2014 was just 10 feet (3 meters) deep and its outer harbor was less than 23 feet (7 meters) deep. The Corps that year looked at constructing docks up to 1,000 feet (305 meters) long and dredging to 35 feet (10.7 meters).

 

The Corps in late April has scheduled a planning meeting in Nome to detail the scope of the new study.