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You may have noticed: Much of the recent anti-immigration rhetoric in Washington most loudly comes from factions on the political right: H1B, H2B, it’s all about protecting American jobs.

But every step of the way, progressive groups — while pro-immigrant — are just as critical of foreign worker visas. Federal regulations on the books, they argue, are inherently insufficient to protect visa holders from abuse, whether through unwarranted recruitment fees, misrepresentation of job requirements, fraud or intimidation.

The issue plagues potential recruits, but also well-meaning businesses that can’t find enough Americans willing to take seasonal jobs. In Cape Cod, Massachusetts and other areas of the country whose economic models are centered on five-to-six-month tourist seasons, the work of H2B visa-holders becomes essential to business owners.

Employers worry, too

Tyler Hayes, vice president of Cape Cod Restaurants, says he is fortunate that his seasonal foreign workforce, mainly from Jamaica, has created a “family atmosphere” during his 20-year tenure with the company.

“Now, their children are coming in, working for us,” Hayes said.

But while Hayes can only point to the well-being of his own workforce, he acknowledges that at least in recent years, abuse of workers has not been inconceivable.

“There used to be these companies that would send out these big petitions,” Hayes recalled. “They bring in 100 or 200 people, get them in the country and then farm them out.”

In response, the U.S. Department of Labor (DOL) and Department of Homeland Security (DHS) cracked down on abuse within the H2B system in 2015, both in order to prevent the exploitation of workers and to ensure U.S. workers’ awareness of available jobs.

Are regulations enough?

Elizabeth Mauldin, policy director at Centro de los Derechos del Migrante, Inc. (CDM) — the Center for Migrant Rights — calls those protections basic, including the right to receive a contract before entering the U.S. and protection from being charged a recruitment fee.

But many aspects of those existing regulations, she argues, are difficult to ensure, absent greater transparency in the recruitment process.

“It’s impossible to enforce a ban on charging workers fees,” Mauldin told VOA. “When workers are charged fees upfront, they are vulnerable to the same type of economic coercion across the board.” As a result, she notes, foreign workers become susceptible to wage theft and other abuses, regardless of their visa category.

Afraid to report

A 2013 report issued by CDM, whose findings were based on a survey and in-depth interviews with hundreds of H2B workers, found that 58 percent of respondents reported paying illegal recruitment fees, while 10 percent reported recruitment fraud — having paid a fee for a nonexistent job.

While there are mechanisms in place for foreign workers to report abuse, Mauldin argues that the disincentives are often too great.

“[Abusive employers] will say, at the end of the season, ‘If you pay those fees, then we will be more likely to recruit you in the future,’ or ‘If you don’t report these violations, then our recruiter will choose you again next year,’” Mauldin said.

Jane Nichols Bishop, founder and president of Peak Season Workforce, a family-run company that helps Cape Cod-area businesses secure H2B visas, says the mechanisms in place to prevent exploitation, including audits by the Department of Labor, have largely worked. But in cases where they do not, she says it’s in everyone’s interest that the infractions are reported.

“If there are abuses, we would like to see them caught,” Nichols said. “They give everyone who does this and who works at this very successfully a very bad name.”

Workers empower themselves

Despite ongoing reports of abuse nationwide, there is some hope for affected foreigners outside of federal regulations, thanks to the internet. A bilingual workers’ rights initiative, which Mauldin calls the Yelp for migrant workers, allows workers to review recruiters and share their experiences, and create a self-empowering community in the process.

 
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Steeped in centuries of seemingly impenetrable tea tradition, Afghanistan’s capital is getting a little coffee buzz.

Nargis Aziz Shahi says business has been increasing day by day since she opened iCafe a couple of weeks ago. Looking a little like a brick-walled Starbucks with a distinctively homey Afghan feel, it’s attracting a mostly youthful clientele drawn by free internet service and books to peruse over a cup or two.

“There were three key objectives that led me open the cafe: 1) to introduce coffee to Afghans who mostly don’t know coffee and its taste and benefits; 2) to provide a place for our youth to carry out social activities; and 3) to provide job opportunities for young people,” Shahi told VOA’s Afghan service.

Tea came to Afghanistan early

Afghanistan was introduced to tea early because of its location on ancient trade routes. The Chinese traded silk and tea for other commodities. Tea became part of the country’s hospitality for guests. Just about every family has its own recipe.

Today, Afghanistan is the world’s largest tea consumer, with each person consuming an average of almost 4.5 kilograms — more than 1,500 cups — per year in 2012. By comparison, the U.S. ranked 72nd at 0.4 kilograms per person.

Only the Russian Federation and Britain, with much larger populations, import more tea.

Coffee culture gets a start

Dr. Nabi Misdaq, adviser to President Ashraf Ghani, has visited iCafe. He regards coffee drinking as a new, enlightening culture in Afghanistan.

“It is a good beginning,” Misdaq said. “It is a profitable business, because many young people come here to read books and exchange ideas. I am sure that this will also lead to the opening of new shops.”

The cafe also serves as a place for young Afghans to carry out social and cultural activities. They come to iCafe to attend literary programs and poetry contests.

The female customers say there are few other places where they can get together and entertain themselves, but they maintain that they come to the shop to relax and enjoy.

“I am very happy that we have a coffee shop in Kabul,” said customer Samira Seerat. “It is a very good place for women to visit. There are in fact no appropriate places for women in Kabul, and Afghanistan as a whole, to visit, because our people believe that women cannot go to restaurants.”
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Steeped in centuries of traditional tea drinking, Afghanistan is getting a little coffee buzz for a change. Hikmat Sorosh has more on this popular new trend from the Afghan capital, Kabul, in this story narrated by Michael Lipin, with additional reporting by Khalil Noorzaie in Herat.
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The impact of automation on U.S. jobs is open to debate. Robots have displaced millions of manufacturing workers, and automation is getting cheaper and more common, raising concerns it will eventually supplant far more workers in the services sector of the economy, which includes everything from truck driving to banking. 

University of Virginia Darden School of Business Professor Ed Hess says we are just starting to see automation’s impact. “It is going to be broad and it is going to be deep,” he said, adding that “tens of millions” of jobs could be at risk.

Data from the Bureau of Labor Statistics show 5 million U.S. manufacturing jobs have disappeared already.

While some politicians blame trade for the job losses, most economists say automation is mainly to blame as robots do routine factory tasks previously done by humans. 

Hess calls self-driving cars and trucks a threat to millions of human jobs, and says fast-food workers are also vulnerable, as companies install electronic kiosks to take restaurant orders. McDonalds says displaced workers will be reassigned to other tasks.

The professor says research shows nearly half of U.S. jobs could be automated, including retail store clerks, doctors who scan X-rays for disease, administrative workers, legal staffers, and middle managers.

Future of jobs

Starting more than a century ago, advancing technology changed the United States from an agrarian to a manufacturing economy. Displaced farm hands eventually found factory work, but the transition took years. This new transition may also take a time because, Hess says, “We’re not going to anywhere produce the number of jobs that we automate.”

But 50 years of experience in banking shows that while automation may change the industry, it does not necessarily end jobs for humans. 

The first Automatic Teller Machines, or ATMs, were installed 50 years ago, and there are now 420,000 in the United States. International Monetary Fund analysis shows the number of human tellers did not drop, but rose slightly.

“Humans were doing mostly service and routine types of tasks that could be converted into more automated tasks,” Tremont Capital Group’s Sam Ditzion said. But “the humans then became far more valuable in customer service and in sales in these branches.”

In a Skype interview, Ditzion said that while automation can be “scary,” the oversight of ATMs created new kinds of work for “tens of thousands of people.”

Automation grows

A report by Redwood Software and the Center for Economics and Business Research (CEBR) says surging investment and falling prices will help robotics grow.

Redwood’s software handles business processes that are repetitive, rule-bound and tedious.

CEBR Economist David Whitaker says as growing fleets of robots take over mundane tasks, higher productivity could bring higher wages for some human workers. He says people who want to stay employed must hone skills that robots can’t handle, such as unpredictable work or the need for an emotional human connection.

One example, according to Alex Bentley of Blue Prism software, is a program that helps law firms examine visa applications. The robot enters data but gets help from a human partner with problems such as missing information. Bentley says some human jobs have been lost, but in other cases displaced workers move within the firm to new work, particularly jobs that are “customer-centric.”

U.S. Senator Chris Coons says Germany and other nations use training programs to help their citizens get and keep jobs in a changing economy. The Democrat says America’s competitors invest six times what the U.S. does in skills development and workforce training, while Washington has slashed funding for such programs. Coons and a Republican colleague, Senator Thom Tillis, are seeking more help for schools, companies, workers and government agencies operating programs to upgrade the workforce.

New opportunities

While workers need to make some changes, philosopher and professor Ed Freeman of UVA’s Darden School of Business says companies also need to rethink their basic purpose. He says businesses must do more than just maximize value for shareholders.

“I need red blood cells to live,” he said. “It doesn’t follow that the purpose of my life is to make red blood cells. Companies need profits to live, it doesn’t follow that the purpose of a company is to make profits. We have to think through this idea about what purpose is in business.”

Freeman says he is “optimistic” because many jobs, such as creating applications for smartphones that would have been unimaginable a few years ago, are creating thousands of opportunities. He is also encouraged by his many students who, he says, bring new ideas, passion and energy to the task of starting businesses that will create new kinds of jobs.

Freeman is convinced that the problem isn’t the tsunami of lost jobs, it is the lack of “really good ideas” for creating a safety net for people who will lose jobs to automation.

Many experts worry about growing levels of automation — particularly advanced forms known as artificial intelligence — hurting employment for U.S. workers.

But U.S. Treasury Secretary Steven Mnuchin says it will be “50 or 100 years” before artificial intelligence takes American jobs. In an interview with Mike Allen of AXIOS, Mnuchin said, “I think we are so far away from that, [it is] not even on my radar screen.”
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Robots have displaced millions of manufacturing workers, and automation is getting cheaper, more capable, and far more common in the much-larger services sector. This area includes everything from truck driving to banking and has far more jobs than factories had. VOA’S Jim Randle reports that one expert says “tens of millions” of jobs could be at risk, but others say the picture is more complex, and less grim.
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U.S. President Donald Trump’s administration declined to name any major trading partner as a currency manipulator in a highly anticipated report on Friday, backing away from a key Trump campaign promise to slap such a label on China.

The semi-annual U.S. Treasury currency report did, however, keep China on a currency “monitoring list” despite a lower global current account surplus, citing China’s unusually large, bilateral trade surplus with the United States.

Five other trading partners who were on last October’s monitoring list – Japan, South Korea, Taiwan, Germany and Switzerland – also remain on the list, ensuring that the Treasury would apply extra scrutiny to their foreign exchange and economic policies.

The Treasury report recognized what many analysts have said over the past year, namely that China has recently intervened in foreign exchange markets to prop up the value of its yuan currency, not push it lower to make Chinese exports cheaper.

Foreign exchange experts told Reuters last week that a manipulator label was unlikely for Beijing.

Trump, who on the campaign trail blamed China for “stealing” U.S. jobs and prosperity by cheapening its currency, repeatedly promised to label the country as a currency manipulator on “day one” of a Trump administration – a move that would require special negotiations and could lead to punitive duties and other action.

The report did call out China’s past efforts to hold down the yuan’s value, saying this created a long-term “distortion” in the global trading system that “imposed significant and long-lasting hardship on American workers and companies.”

The Treasury also warned that it will scrutinize China’s trade and currency practices very closely and called for faster opening of China’s economy to U.S. goods and services and a shift away from exports to more domestic consumption.

“China will need to demonstrate that its lack of intervention to resist appreciation over the last three years represents a durable policy shift by letting the RMB (yuan) rise with market forces once appreciation pressures resume,” the report said.

The report shows the Trump administration is taking an approach to foreign exchange based on data rather than politics, said Nathan Sheets, a former U.S. Treasury under secretary for international affairs during the Obama administration.

“This isn’t the report that Donald Trump had in mind on Nov. 8,” said Sheets, who is now with the Peterson Institute for International Economics in Washington. “But it lays out legitimate complaints. It’s a clear statement to the Chinese that they need progress.”

The Treasury did not alter its three major thresholds for identifying currency manipulation put in place last year by the Obama administration: a bilateral trade surplus with the United States of $20 billion or more; a global current account surplus of more than 3 percent of gross domestic product, and persistent foreign exchange purchases equal to 2 percent of GDP over 12 months.

No countries were determined to have met all three of these criteria, but Japan, South Korea, Taiwan, Germany and Switzerland all met two of them.

The Treasury warned Japan against resuming currency interventions, saying that these “should be reserved only to very exceptional circumstances with appropriate prior consultations, consistent with Japan’s G-7 and G-20 commitments.”
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More than a decade after it was proposed, India’s most ambitious tax reform measure is set to roll out in six weeks following the passage of a law that will replace a plethora of confusing levies with a single, nationwide tax.  

The new goods and services tax (GST) will unite the world’s fastest growing economy into a common market of 1.3 billion people.

The measure is seen as a major achievement for Prime Minister Narendra Modi, who struggled for two years to build a political consensus.

 The government says the GST will be implemented from July 1 after state legislatures ratify it.   

 The new tax is expected to make it vastly easier to do business as it dismantles tax checkpoints at every state border. Businesses have often complained that India’s complicated tax system leaves them grappling with a mesh of separate duties levied by each of the country’s 29 states, and goods are often stranded for hours or even days at state borders as payments are worked out.

 By making distribution more efficient and less expensive, Ankur Bisen at New Delhi based consultancy, Technopak, sees big benefits for consumer-oriented businesses, which have to move goods across state lines in the vast country. 

Another huge benefit will be increased transparency. “It will have implications on corruption because taxation regime will not be vague anymore, it will be very clearly defined,” says Bisen.

For the government, the GST is expected to improve tax compliance and draw more people into the tax net in a country where tax evasion is common. It will also make India more attractive for foreign investors by simplifying rules for a huge and increasingly attractive market.

The government estimates the new tax will boost economic growth by about half a percentage point in its first year of implementation and in the long run by as much as 2 percent.

However several economists say that the political compromises that had to be struck win approval of the new tax mean the sweeping benefits India had hoped to see may not accrue in the short run.  

Taxes will be levied at four levels – five, 12, 18 and 28 percent. Many say the 18 percent and 28 percent tax rates are too high.  

 “It could potentially have been a transformative measure if the structure of GST would have been characterized by a large base and low and single rate,” says D.K. Srivastava at consultancy Ernst and Young. But, he says, “it is going as a multiple-rate system and some of the rates are very high and the tax base is still narrow. Therefore it is a kind of a fragmented GST. ”

Despite the shortfalls, Srivastava says that “given the complications of the size of the Indian economy, it might be useful to start off with a functioning model and then go on reforming it as matters progress.”

Many also warn against a hasty implementation, saying that rushing ahead with a July 1 deadline could make it difficult to handle the transition in a country which has always struggled with bureaucratic ineptitude.

Many businesses, which had long clamored for such a tax, are asking the government for more time to prepare for the switch, saying six weeks is too little. They worry that the tax rates for various products have still be to be decided.

Others point out that the GST will be serviced by state-of-the-art technology and an electronic portal where taxpayers can register, eliminating the conventional and discretionary role of tax authorities.
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Along northeastern Cape Cod off the coast of Massachusetts, April doesn’t usually equate with sunshine and sandcastles. The month is mostly a time of waiting for the fog and chill to lift off the Atlantic Ocean and the tourists to arrive.

But this year is a problem for seasonal businesses, whose model is built around five-to-six-month, low-skilled jobs in areas like hospitality. Few Americans are willing to fill them and now, thousands of foreign seasonal workers may not be allowed into the U.S. to take them.

Changes to the U.S. temporary work visa program, called H2B, are keeping out the workers that businesses count on.

For affected businesses, the financial loss could be plenty.

“It could be 20 percent,” said Allen Sylvester, president of American Tent & Table, Inc., a family-owned tent rental and party accessory business in Cape Cod, Massachusetts.

Sylvester, who has been with the company since 1996, says it earns roughly 85 to 90 percent of its profits in five months — the region’s outdoor wedding season. Fully staffed, the company employs seven to eight Americans and 13 H2B visa workers.

Normally it’s the former group Sylvester has a hard time hiring. But last September, Congress failed to renew a provision that effectively quadrupled the number of H2B visas available in 2016 by not counting returnees against the annual cap. This year, instead of potentially 264,000 visas, there are 66,000 — half allocated in the spring, the other half in the fall.

Businesses in colder areas like Cape Cod, which typically have later start dates, find themselves at a loss. By the time many could complete their visa applications, the cap had been reached.

“Instead of bringing 3,000 workers here, we right now are bringing 300 workers,” said Jane Nichols Bishop, president of Peak Season Workforce, a family-owned business that helps local companies secure annual H2B visas.

Bishop, who calls herself “Mama Visa,” says the 90-day application process that businesses must follow to gain seasonal employment is stringent, including evidence of advertising to recruit American workers.

Of the 171 applications she personally filed for clients, Bishop says 24 made their way through the Department of Homeland Security before all the visas were gone.

Why not hire more Americans?

At 3.4 percent, the February unemployment rate in Massachusetts is lower than the current national average, 4.5 percent, according to data from the Bureau of Labor Statistics.

But as Falmouth, Massachusetts, resident Paul Skudder said, the numbers don’t paint the whole picture on Cape Cod, a community with a growing number of retirees and decreasing number of youth.

“There is a limited number of job opportunities on the Cape for college-educated professional or near professional people, which overall leads to a little bit of an exodus of bright, educated young people,” Skudder said.

Eligible job seekers who are willing to accept low-skilled employment, generally need a permanent source of income. And students can offer just three months of labor during their summer breaks, not five or six.

The well-being of the younger population is also a factor. In 2015, Cape Cod suffered the highest per capita death rate by opioid overdose in Massachusetts and remains one of the most affected areas in the country.

“A lot of the kids I used to know have now passed away,” said Prince Wright, who attended high school in Falmouth. “That’s the big problem right now … most of our locals are not coming in no more. Either they’re locked up or they moved away because of the changes on the Cape.”

More effort needed?

But along Main Street in the Cape’s largest town, not all are convinced that businesses are trying their best to hire local.

“It’s good for the [foreigners] that are coming over here on work visas, but it also takes away from the people that are living on the streets that can work,” said Mary Richard. “I just think it’s hard on the people here too.”

Politicians are divided on the H2B visa program, seeing it as either economically exploitative or a job-killer for Americans.

Republicans, who control both chambers of Congress, send mixed messages. Attorney General Jeff Sessions, the country’s top law enforcement official, has called the H2B program “detrimental to wages and job opportunities of American workers.” But Donald Trump, before he was president, employed H2B workers during peak resort season at his Florida golf club, Mar-a-Lago.

H2B-reliant businesses worry that the visa is unfairly lumped into Trump’s hard-line stance on immigration. And in Bishop’s mind, some legislators simply don’t understand seasonal economies.

“When people come to Cape Cod and the islands, they come to see and visit us. It’s full employment, we are busy, there’s traffic, so they don’t even realize there is a labor shortage,” Bishop said. “But when you come here in January, you may be the only car on the road for quite a while.”

Hiring strategy

Jim Underdah, general manager at the Coonamessett Inn, considers himself one of the lucky few to secure his share of foreign seasonal workers from Jamaica. Still, a backlog in the system has delayed their arrival and forced him to repurpose the limited workforce he retains year-round.

In anticipation of this, Underdah says many businesses like his choose to employ workers full-time even during the offseason, when he doesn’t need them.

“I have people in the kitchen that we work 40 hours for the winter, so they’re not going to leave me,” Underdah said. “They’re gonna say, ‘Hey, they’re treating us good.’ They’re going to be here this spring. They’re going to get me through till hopefully the workers get in.”

Paul Dean, who runs a seafood retail and catering business, was not as lucky. Lacking the workforce he needs to keep his multiple operations running, he says he may be forced to close one of his locations a couple days a week.

Like Sylvester, Dean predicts this would amount to a loss of 20 percent of annual income.

“That means I’m buying 20 percent less product from local vendors,” Dean said. “We’re obviously collecting 20 percent less in meals tax toward the state. We’re not paying payroll taxes … there’s a huge trickle-down effect.”

Dean and Sylvester are crossing their fingers for a last-ditch effort by lawmakers to reinstate an H2B returning worker exemption before April 28, as part of its fiscal year 2017 federal spending bill. But in case that doesn’t happen, Sylvester offers last-resort advice for summer tourists.

“If you’re going to stay over, bring your sheets and some towels,” he joked, “because there’s going to be no one to clean your room.”

WATCH: One Business Owner Talks about the Challenges
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At first glance, U.S. President Donald Trump and Federal Reserve chair Janet Yellen may have little in common.

Yellen is an academic economist and veteran of Democratic administrations who is committed to an open global economy, while Trump is a real estate mogul with an electoral base suspicious of the economic order Yellen helped to create.

Yet the two may have interests in common now that Trump is president and both want to get as many Americans working as possible.

Since her appointment as Fed chair in February 2014, Yellen has kept interest rates low and she currently pledges to raise them only slowly even though unemployment, at 4.5 percent, is at its lowest in nearly 10 years.

Meanwhile, Trump’s election campaign promises to cut taxes, spend money on infrastructure and deregulate banking, have helped propel a surge in the U.S. Conference Board’s consumer confidence index to its highest level since the internet stocks crash 16 years ago.

Former Fed staff and colleagues who know Yellen said Trump’s surprising remarks this week in a Wall Street Journal interview, in which he did not rule out Yellen’s reappointment to a new four-year term next year, are not as outlandish as they may appear now that the president has a vested interest in keeping markets and the economy on an even keel.

And the same staff and colleagues say Yellen may well accept reappointment, despite Trump’s criticism of her during last year’s election campaign.

Many in Trump’s Republican party have called for tighter monetary policy and a less activist Fed, but “the president would not really find that useful,” said former Fed vice chair Donald Kohn.

If Trump fills three existing Federal Reserve board vacancies with people Yellen thinks she could work with, “it would be really difficult to turn down” a reappointment when her term as chair expires in February 2018.

“If she continues to do well, he’d be nuts to ditch her for an unknown quantity,” said University of California, Berkeley, economics professor Andrew Rose, a long-time colleague and co-author with Yellen of an oft-cited study of labor markets.

Yellen took over from Ben Bernanke as Fed chair in February 2014 with the U.S. economic recovery from the 2008 financial crisis still on shaky ground, and she has made no secret she puts a priority on growth in jobs and wages and a broad recovery in U.S. household wealth.

In a slow return to more normal monetary policy, Yellen has stopped the purchase of additional financial securities by the Fed and in December 2015 began raising short term interest rates for the first time in 10 years.

So far those policy shifts have been engineered with little apparent impact on job growth, and so mesh with Trump’s core election campaign promises to restore employment and earnings.

The slow rise in interest rates in the past year has also happened while U.S. stock prices have risen to record highs, though Trump has claimed the credit for himself.

Precedent for Fed Chair to Stay On

There is precedent for Trump to stick with a former president’s Fed chair appointment. Paul Volcker, Alan Greenspan and Ben Bernanke, the three previous Fed chairs, served at least two four-year terms and were nominated by both Democratic and Republican presidents.

However it may be a more difficult step for Trump.

During last year’s election campaign, Trump accused Yellen of accepting orders from then President Obama to keep interest rates low for political reasons, and he said he would replace her as Fed chair because she is not a Republican party member.

In a particularly biting moment last year, in a campaign video advertisement, he labeled her as among the “global special interests” who had ruined life for middle America.

The Fed on Thursday said it had no response to Trump’s comments published on Wednesday on Yellen and or on whether Yellen would consider a second term.

Much Could Still Go Wrong

Some of Trump’s advisers and some Republican lawmakers want a more conservative Fed in which the chair has less power and would see a Yellen reappointment as yet another step away from his promise to “drain the swamp” of the Washington establishment.

There are also three current vacancies on the Fed’s seven member Board of Governors, and unorthodox new members could make it difficult for Yellen to manage policy or accept another four-year term.

But if the choice is her consensus style or someone unproven in their ability to manage public and market expectations, “he’d be wise to reappoint her,” said Joseph Gagnon, a former Fed staffer and Berkeley colleague of Yellen’s currently at the Peterson Institute for International Economics.

“I don’t see what is in his interests to appoint someone who is going to jack up interest rates.”
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Tesla CEO Elon Musk says the company plans to unveil an electric semi-truck in September.

Musk tweeted the announcement Thursday. He offered no other details about the semi, such as whether it will be equipped with Tesla’s partially self-driving Autopilot mode.

Musk also said the company plans to unveil a pickup truck in 18 to 24 months.

Tesla currently sells two electric vehicles, the Model S sedan and Model X SUV. Its lower-cost Model 3 electric car is due out by the end of this year.

But Musk revealed last summer that the Palo Alto, California-based company is working on several more vehicles, including the semi and a minibus.

Tesla shares rose nearly 3 percent in late trading Thursday in response to Musk’s tweet.
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Chilean President Michelle Bachelet announced on Wednesday evening that she was sending to Congress a bill that would dramatically increase the size of

public pensions in the face of growing opposition to the nation’s current system.

The bill would include an increase in the amount of savings held collectively, a new 5 percent payroll tax, and a corresponding boost in retirement savings. Current pensioners would see savings rise by around 20 percent, while workers currently paying into the system would see increases of up to 50

percent.

“We must advance toward a truly mixed social security system, where all play their part, where solidarity comes from personal effort, where the state and employers play their corresponding role,” Bachelet said in a speech.

Chile’s privatized pension plan was started in the 1980s during the dictatorship of Augusto Pinochet, and the so-called ‘Chilean model’ has been copied and adopted worldwide.

But opposition to it is rising in Chile, with regular street protests demanding changes. Opponents say the payouts are meager, and they complain the pensions are managed by for-profit funds.

It is unclear if Bachelet’s bill can become law. Her governing coalition is severely divided, and parliamentary elections are set to take place in November, while debate on complex bills can take years in Chile.

Earlier in April, Chile’s finance minister said divisions in the government might make any pension reform impossible, and earlier this week, a major education bill pushed by Bachelet failed in committee.

Under the system proposed by Bachelet, the new 5 percent tax would be divided into two parts and have a six-year implementation period. Three percent would go into the personal savings of each worker, while 2 percent would go into a collective account, managed by the state.

The bill would also give pensioners more say in the investment decisions of the pension investment funds, known as AFPs.
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President Donald Trump plans to revive the hobbled Export-Import Bank of the United States, his office said, a victory for American manufacturers like Boeing and General Electric which have overseas customers that use the agency’s government-backed loans to purchase their products.

Trump first told the Wall Street Journal on Wednesday he would fill two vacancies on the agency’s five-member board that have prevented the bank from having a quorum and being able to act on loans over $10 million. Trump’s picks must gain approval from the Senate, which blocked nominees by former President Barack Obama.

Trump told the Journal that the bank benefits small businesses and creates jobs, a reversal of his earlier criticism of the bank being “featherbedding” for wealthy corporations.

Bank offers loans to foreign entities

The Export-Import Bank, an independent government agency, provides loans to foreign entities that enables them to purchase American-made goods. For example, it has been used by foreign airlines to purchase planes from Boeing and farmers in developing nations to acquire equipment.

The bank’s acting chairman, Charles “CJ” Hall, was not immediately available for comment.

The bank has become a popular target for conservatives, who have worked in Congress to kill the bank, arguing that it perpetuates cronyism and does little to create American jobs.

Trump’s about-face on the export bank comes after meeting on Tuesday with former Boeing Chief Executive Officer Jim McNerney, who left the company last year but oversaw the corporation’s aggressive lobbying effort in support of the bank in 2015.

Trump also met at the White House on Feb. 23 with GE CEO Jeff Immelt and Caterpillar Inc CEO Mark Sutton, both vocal supporters of the bank.

It is not known if they discussed the bank at those meetings.

Bank helps level playing field

Large American corporations that do significant amounts of exports say other countries have similar agencies and the export bank levels the playing field.

“This is an encouraging development on a key competitive issue for U.S manufacturers and their extensive supply chains,” Boeing spokeswoman Kate Bernard said in statement to Reuters.

The U.S. Chamber of Commerce and the National Association of Manufacturers, which includes companies like Ingersoll-Rand, United States Steel and Pfizer, cheered the move.

“Manufacturers are encouraged by President Trump’s vocal support for the bank,” said NAM Vice President of International Economic Affairs Linda Dempsey in a statement.

A 2015 fight to shutter the bank led by conservatives in Congress allowed the bank’s charter to expire for five months.

After overwhelming bipartisan support emerged to renew the bank’s charter, which is needed for it to operate, conservatives blocked nominees to the board, preventing it from financing large exports like aircraft and power turbines.

Groups work to shut down bank

Freedom Partners and Americans for Prosperity, two groups funded by the Republican donor Koch brothers, worked aggressively for years to kill the bank. Brothers Charles and David Koch have opposed the bank for what they call damaging interference into the free market by government.

Nathan Nascimento, Freedom Partners vice president of policy, called the bank on Wednesday “the epitome of what’s wrong with Washington.”

“Reopening the flood gates to Ex-Im’s corporate welfare is a bad deal for hardworking taxpayers and a bad deal for American businesses,” he said.

The Club for Growth, which spends heavily in electing conservative candidates and was one of the few groups to campaign against Trump during the Republican primary in 2016, also lamented the change in position.

“Ex-Im has a long history of cronyism and corruption that is well-known to many in the Trump Administration, and while we hoped it would be done away with, the administration now has taken on the almost impossible challenge of reforming a federal agency whose mission has been to pick winners and losers with taxpayer dollars,” spokesman Doug Sachtleben said in a statement to Reuters.

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

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

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

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

New economic reality

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

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

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

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

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

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

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

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

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

Foreign currencies

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

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

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

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

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

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

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

A day-one promise

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

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

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

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

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

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

Yellen’s future

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

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

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

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

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

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

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

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

Fed overhaul

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

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

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

The president is also “very close” to naming a vice chair for banking regulation and filling another open seat that governs community banking on the Federal Reserve Board, U.S. Treasury Secretary Steven Mnuchin said during the interview.
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