Warren Buffett, the chairman of Berkshire Hathaway Inc., Saturday faulted Wells Fargo & Co for failing to stop employees from signing up customers for bogus accounts even after learning it was happening.

Wells Fargo, whose largest shareholder is Berkshire, with a 10 percent stake worth roughly $27 billion, gave employees too much autonomy to engage in “cross-selling” multiple products to meet sales goals, Buffett said.

This “incentivized the wrong type of behavior,” and former Chief Executive John Stumpf, who lost his job over the scandal, was too slow to fix the problem, Buffett said.

Wells Fargo was among many topics discussed at Berkshire’s annual meeting in Omaha, where Buffett, 86, and Vice Chairman Charlie Munger, 93, fielded dozens of questions from shareholders, journalists and analysts.

“If there’s a major problem, the CEO will get wind of it. At that moment, that’s the key to everything. The CEO has to act,” Buffett said. “The main problem was they didn’t act when they learned about it.”

Still, Buffett’s support of current management and board was key to ensuring the re-election of the entire board last month.

Wells Fargo spokesman Mark Folk said “we agree” with Buffett’s comments, and have taken “decisive actions” to fix the problems and “make things right for customers.”

Asked whether Berkshire’s decentralized structure could lead to a similar scandal, Buffett said “as we sit here, somebody is doing something wrong at Berkshire,” whose units employ 367,000 people. But he said Berkshire has an internal hotline to flag possible misbehavior, which gets 4,000 calls a year.

Succession and dividends

The meeting also included discussions about Berkshire’s succession plans, its controversial partnership with Brazilian firm 3G Capital, and whether it will start paying dividends or make an acquisition.

Buffett has said Berkshire could have a new chief executive within 24 hours if he died or could not continue, and that nothing had changed just because he praised fewer managers than usual in his February shareholder letter.

He said it may have been harder to single people out because “we have never had more good managers.”

But he also said it would be a “terrible mistake” if capital allocation were not the “main talent” of his successor.

Buffett did lavish much praise on top insurance executive Ajit Jain, who some investors believe could be that successor, saying “nobody could possibly replace Ajit. You can’t come close.”

On 3G, with which Berkshire controls Kraft Heinz Co and tried to merge it with Unilever NV, Buffett acknowledged a dislike for the cost-cutting for which the Brazilian firm is known.

But, he said, “it is absolutely essential to America that we become more productive,” and 3G was “very good at making a business productive with fewer people.”

Buffett also raised the possibility Berkshire could pay its first dividend since 1967, if “reasonably soon, even while I’m around,” the company had too much cash it could not reasonably deploy.

“It could be repurchases, it could be dividends,” he said.

Berkshire ended March with more than $96 billion of cash and cashlike instruments, and Munger said it could do a “$150 billion” acquisition now if it wanted.

Airlines and IBM

Buffett defended Berkshire’s foray into airlines, where it is a top investor in American Airlines Group Inc., Delta Air Lines Inc., Southwest Airlines Co. and United Continental Holdings Inc.

He had long disdained the industry, which had gone through many bankruptcies, but said he is confident it will not resort to “suicidally competitive” pricing strategies that could spell doom.

Munger added: “You’ve got to remember railroads were a terrible business for decades and decades and decades, and then they got good.” Berkshire bought the BNSF railroad in 2010.

Buffett also admitted he was wrong to think International Business Machines Corp. “would do better” when he started amassing 81 million shares six years ago.

Berkshire recently sold about one-third of those shares even as it built a huge stake in Apple Inc., which Buffett said is more as a “consumer” company that a technology company.

He also addressed criticism that Berkshire discloses too little about businesses such as aircraft parts maker Precision Castparts Corp, which it bought last year for $32.1 billion.

“We want you to understand what you own,” he said, and “there are just a million things that are of minor importance” at Berkshire, whose market value is about $411 billion.

Buffett also noted that Berkshire reported far fewer investment gains in the first quarter, which dragged on results, but said the company now has a slight preference for taking tax losses, which could lose value if Washington lawmakers reduce the 35 percent corporate tax rate.

The annual meeting, expected to draw more than last year’s estimated 37,000 shareholders, is the main event of a weekend of events that Buffett calls “Woodstock for Capitalists.”

Buffett and Munger took questions after the traditional shareholder movie, and after Buffett had roamed a nearby exhibit hall featuring products from Berkshire companies.

He was joined at the traditional newspaper tossing contest by friends including Microsoft Corp co-founder and Berkshire director Bill Gates, and Miami Dolphins defensive tackle Ndamukong Suh.

Hundreds of shareholders lined up early outside downtown Omaha’s CenturyLink Center for the meeting. Several said they got there nearly five hours before doors opened around 6:45 a.m.

“Every year it seems I have to come earlier,” said Chris Tesari, a retired businessman from Pacific Palisades, California who said he arrived at 3:20 a.m. for his 21st meeting. “It’s a pilgrimage.”
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Berkshire Hathaway Inc Chairman Warren Buffett fumed Saturday that health care costs are eating away at the U.S. economy like “tapeworm” and said the Republican approach to overhaul Obamacare is a tax cut for the rich.

The U.S. House of Representatives on Thursday narrowly approved a bill to repeal and replace Obamacare, a victory for Republican President Donald Trump who has called the 2010 law a “disaster.”

Speaking at Berkshire’s annual shareholders’ meeting in Omaha, Buffett said his federal income taxes last year would have gone down 17 percent had the new law been in effect.

“So it is a huge tax cut for guys like me,” he said. “And when there’s a tax cut, either the deficit goes up or they get the taxes from somebody else.”

The Republican bill would repeal most of the taxes that paid for the law formally known as the Affordable Care Act. The party’s leadership has promised that the new American Health Care Act, which faces a likely overhaul and uncertain passage in the Senate, would address growing health care costs.

Buffett said rising health care costs are crippling the competitiveness of U.S. companies abroad.

Unlike in many other countries where much of health care spending is publicly financed, employers provide health insurance coverage for nearly half of Americans and often face skyrocketing rates.

Buffett said health care costs have risen much faster in the United States than in the rest of the world and “will go up a lot more.”

“Medical costs are the tapeworm of American economic competitiveness,” he said. “That is a problem this society is having trouble with and is going to have more trouble with.”

Buffett is a Democrat who vocally supported Hillary Clinton’s unsuccessful bid for the presidency against Trump. The fourth richest man in the world with a net worth totaling $74.3 billion, according to Forbes magazine, Buffett has vowed to donate nearly his entire fortune to charity.

Berkshire Vice Chairman Charlie Munger added that he thinks neither political party “can think rationally” about health care because they “hate each other so much.”
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The venture fund 500 Startups has been making a splash in Southeast Asia, most recently with Khmerload, a Cambodian entertainment news website modeled after the American media giant Buzzfeed. Binh Tran, a venture partner with the firm, sat down with Sophat Soeung of VOA’s Khmer service to talk about how entrepreneurs in developing countries could attract such investors. Here’s some of his advice for them:

Remember, Silicon Valley investors are a click away

I think first is to understand the whole startup ecosystem. All this information is at your fingertips. The world’s shrunk, and for resourceful entrepreneurs, they have this incredible amount of knowledge that they can tap into, to get themselves familiarized with how to build a company, how to launch it, how to monetize, and also understand investment. All that is available.

Not everyone can be a tech entrepreneur. It’s incredibly hard, but for the ones that are resourceful … the tools are there. And we want to be the ones to provide that dry powder to help you grow. So once you have achieved some progress and some [traction], then come talk to us.

Don’t overthink — there is no ‘right’ sector

I’m pretty sector-agnostic. … If you’re building something that is obscure to me … the fact that you can make a business out of it, you’re making some money out of it, that’s great. And if it’s technology-enabled, it’s done through software, or done through some algorithm that you created, that’s where I think I can help. That’s where I think the opportunities are.

Look for a growing user base

All ecosystems around the world are somewhat new. Even China is a decade or two [old] for venture capital. … If these companies are making money and they’re growing, that’s great. You see companies who have been more focused on revenue early on. So I think Southeast Asia has a lot of opportunity, because you do have that 4 million-new-internet-users-a-month type of growth, but the business models are not quite as risky [as those seen in Silicon Valley].

Pay more attention to operational rather than business risk

I think there’s going to be a small percentage of my portfolio that’s always reserved for the crazy, one-in-a-million-chance ideas. But for the most part, these startups should be solving basic problems. Across many sectors in Southeast Asian countries like Vietnam, businesses have barely adopted Web 1.0 technologies. There’s opportunities for entrepreneurs to solve basic problems such as helping business attract, serve and support customers more efficiently.

So instead of investing in a new, risky, innovative business model as you would in Silicon Valley, the innovation these companies we’re investing into is the way they’re hiring and training employees and how they’ve mastered how to operate within highly regulated environments. These companies also deeply understand their customers’ problems and have demonstrated their ability to market to and sell to locals.

So the innovation we’re seeing is less about business model or technology innovation, but I do hope that changes.

Build your reputation, and be patient

You’ve got to do what you say you’re going to do. This is one of those things where your reputation is so important. … [Also,] realize that it’s going to take a while. It’s not easy. Don’t be caught up in the buzz or the hype — just focus on the fact that this is going to be a long, hard journey. And hopefully that sets up the right expectations.

This report originated on the VOA Khmer service.
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Oystermen, pirates and police clashed violently more than a century ago over who could collect the Chesapeake Bay’s tasty and lucrative oysters. As the shellfish makes a comeback, a modern-day oyster war is brewing, this time between wealthy waterfront property owners and working-class fishermen.

Over the past five years, oyster production has doubled on the East Coast, driven by new farming methods, cleaner water and Americans’ growing taste for orders on the half shell. The resurgence has led to unprecedented resistance from coastal Virginians who want to maintain picturesque views from their waterfront homes and has fueled a debate over access to public waterways.

“These people can’t have it all,” said Chris Ludford, an oysterman in Virginia Beach who sells to nearby farm-to-table restaurants.  

Ludford said he faces fierce pushback along a Chesapeake Bay tributary from people with “a $2,000 painting in their house of some old bearded oysterman tonging oysters.

“But they don’t want to look out their window and see the real thing,” he said.

Views spoiled, privacy lost

 Homeowners say the growing number of oystermen — dressed in waders and often tending cages of shellfish — spoil their views and invade their privacy. Residents also worry about less access to the water and the safety of boaters and swimmers.

Low tides often expose oyster cages, usually accompanied by markers or warning signs that protrude from the surface. In some places, cages float.

“All of sudden you have people working in your backyard like it was some industrial area,” said John Korte, a retired NASA aerospace engineer in Virginia Beach who’s among residents concerned about oyster farming’s proliferation. “They may be a hundred feet away from someone’s yard.”

Ben Stagg, chief engineer at the Virginia Marine Resources Commission, said the state is poised to break its record of leased acreage for oyster growing. But nearly 30 percent of more than 400 new lease applications face opposition, an unprecedented number that’s led to a backlog of leases awaiting approval.

 “Occasionally I can resolve those by having the parties get together and adjust the area further offshore,” Stagg said. “But oftentimes, I can’t.”

Oysters make a comeback

There hasn’t been this much interest in oysters in Virginia since the early 1960s. Since then, disease and overfishing took hold and growers started to disappear.

Over the last few decades, breeding programs have produced more disease-resistant and faster-growing oysters. The water’s cleaner. American palettes have evolved, increasing demand.  

Farming techniques also changed. Traditionally, oysters are grown on the bottom of a calm and salty river or bay, then harvested with tongs or dredges that pull them onto boats.  

Now, fishermen are increasingly using cages to grow oysters over a two-to-three year period. The equipment keeps predators away and produces oysters with a more uniform shape and size, which restaurants prefer.

 But the cages are often placed in shallower water closer to shore — and people’s homes.  

Virginia Beach is perhaps ground zero for today’s oyster war. The state’s largest city sits at the mouth of the Chesapeake Bay. And oysters thrive in the city’s Lynnhaven River, a network of bays and creeks flowing past expensive homes. Lynnhaven oysters are well-known for their salty taste and size.

Solution is not easy to find

A state task force was formed to find compromise. It recommended giving residents more power to block nearby oyster leases. But the idea was rejected by the Virginia Marine Resources Commission, with the majority of commissioners saying state lawmakers should step in.  

Proposals in the Statehouse have included raising the cost of an oyster farming lease from $1.50 an acre annually to $5,000. But legislators haven’t found a solution.  

Conflicts also have flared up along Maryland’s Patuxent River, the coastal lagoons of Rhode Island and on Martha’s Vineyard in Massachusetts.  

In Delaware, a group of people who mostly own vacation homes successfully blocked potential oyster farming along their part of an inland bay.

“Oftentimes, affluent and new members of the community have the point of view that they own the water in front of them, which is really not true,” said Bob Rheault, executive director of the East Coast Shellfish Growers Association. “We need to win back our social license to farm.”

Rheault said he’s seen these battles “up and down the East Coast” — even before the crop began to double five years ago.

 “The industry was there before the waterfront mansions were built,” Rheault added. “But it hasn’t been there for this generation.”

Ludford, who also works as a Virginia Beach firefighter, is relatively new to the business. He and other relatives started growing oysters in 2010 after leaving the crab industry.

Is zoning the answer?

On a recent morning, Ludford sorted through cages as he stood in the Lynnhaven River, hundreds of yards from the nearest home.  

He dragged cages into view as grass shrimp wriggled on the shells. He and two helpers retrieved more than 500 oysters, which he sold at 75 cents apiece to three restaurants — totaling about $375.

“Really, people haven’t seen an oysterman behind their houses in 50 to 60 years,” Ludford said.

Steven Corneliussen, who owns a waterfront home in Poquoson, Virginia, said he’s among a group that successfully protested new leases along his corner of the Chesapeake. He said waterways should be subject to zoning, like land.     

“That water out in front of me doesn’t belong to me,” he said. “But it doesn’t belong to them, either.” 
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Kenyan President Uhuru Kenyatta spoke at the annual May Day celebrations Monday in Nairobi, a day when many countries celebrate workers. But in sub-Saharan Africa, about three-fourths of those laborers work in the informal sector, without contracts or job protections, according to the International Labor Organization.

Kenyatta pledged to tackle high unemployment during his May Day speech.

One hundred meters away, 31-year-old Christine Ndunge continued her work selling sodas and snacks. She has been a street vendor at a public park in central Nairobi for several years. 

“These days getting a job is hard,” she said. “I have decided to employ myself so that I can survive. Like now, it’s a rainy season — there are not enough customers to buy drinks. I motivate myself to continue selling because there is nowhere else I can work.”

In his address Monday, Kenyatta announced that Kenya will be raising its minimum wage by 18 percent.

The crowd cheered, but analysts say policies like raising the minimum wage won’t help a majority of the workforce. 

According to the Kenyan government’s 2017 economic survey, 833,000 jobs were created last year. However, less than 20 percent of those jobs were in the formal sector.  

“There is that disconnect,” said Kwame Owino, CEO of the Institute of Economic Affairs in Kenya. “So on one side, we have unions, which are talking for people who are in the formal sector, raising wages. And when that happens in standard economics, one of the first things that happens is employment shrinks. So when that employment shrinks in the formal sector, most of these people fall back to the informal sector. We are solving the wrong problem.”

He said Kenya and other African countries need to improve conditions for entrepreneurs.

Entrepreneurs in Africa often struggle to raise capital. Owino said what governments can do is create new regulations making it easier for small businesses to get loans. He said policymakers can also streamline the process of registering and running a legal business and make it cheaper.

Josphat Mwendo, a trained mechanic, spent years unsuccessfully looking for a job. Finally, the 32-year-old started fixing cars for money himself. Now, he has three people he pays to help him.

“I don’t feel good because they did not speak about people like us,” he said. “I think it’s good to think about those who have employed themselves too, so that they can know their worth and also feel they are Kenyans like the rest.”

The problem is particularly acute among young people.

A recent study by the Brookings Institution found that Africans between the ages of 15 and 24 are just a third of the continent’s total working-age population, but account for nearly two-thirds of the continent’s unemployed.
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With the U.S. economy on solid footing and unemployment at a near-decade low, the Federal Reserve remains in the midst of a campaign to gradually raise interest rates from ultra-lows. But this week, it’s all but sure to take a pause.

The Fed is widely expected to keep its key short-term rate unchanged after having raised it in March for the second time in three months. Most analysts foresee the Fed raising its key rate again at least twice more before year’s end, a testament to the durability of the U.S. economic recovery and a more stable global picture.

One reason for the Fed to stand pat this week is that even though the job market has shown steady strength, the economy itself is still growing in fits and starts. On Friday, the government estimated that the economy, as gauged by the gross domestic product, grew at a tepid 0.7 percent annual rate in the January-March quarter. It was the poorest quarterly performance in three years.

Though some temporary factors probably held back growth last quarter and may have overstated the weakness, the poor showing underscored that key pockets of the economy — consumer spending and manufacturing, for example — remain sluggish. On Monday, the government said U.S. consumer spending stalled in March for a second straight month. And the Institute for Supply Management reported a drop in factory activity.

“Given all the uncertainties they still face and especially with growth coming in so weak, the less the Fed says at this meeting, the better,” said Diane Swonk, chief economist at DS Economics.

Most economists have expressed optimism that the economy is strengthening in the current April-June quarter, fueled by job growth, higher consumer confidence and stock-market records. Many think that annualized growth could accelerate to around 3 percent and that the Fed will feel more confident to resume raising rates at its June meeting.

“The Fed will probably say in their statement that they expect the economy to rebound in the second quarter,” said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University.

It isn’t just the Fed’s short-term rate — a benchmark for other borrowing costs throughout the economy — that will likely occupy attention at this week’s meeting. Officials will also likely discuss how and when to start paring their extraordinary large $4.5 trillion portfolio of Treasurys and mortgage bonds. The Fed amassed its portfolio — commonly called its balance sheet — in the years after the financial crisis erupted in 2008, when it bought long-term bonds to help keep mortgage and other borrowing rates low and support a frail economy. At the time, the Fed had already cut its short-term rate to a record low.

The balance sheet is now about five times its size before the financial crisis hit. The Fed stopped buying new bonds in 2014 but has kept its balance sheet high by reinvesting the proceeds of maturing bonds. The Fed’s thinking has been that reducing the balance sheet could send long-term rates up and work against its goals of fortifying the economy.

Now, as the Fed becomes more watchful about inflation pressures, the time is nearing when it will need to shrink its balance sheet, a process that could have the effect of raising some borrowing rates, at least modestly. The Fed jolted investors when it released the minutes of its March meeting, which showed that most officials thought that process “would likely be appropriate later this year.” This was sooner than many investors expected.

Could the Fed clarify its timetable for paring its balance sheet in the statement it will issue when its policy meeting ends Wednesday? It may decide against doing so, given that this meeting won’t be accompanied by a news conference with Chair Janet Yellen to explain any shifts in the Fed’s policy or thinking.

Mark Zandi, chief economist at Moody’s Analytics, said the more likely signal the Fed could send is to reinforce the markets’ view that it intends to raise its short-term rate again next month.

“I expect two more rate hikes — one in June and then one in September,” Zandi said. “Then I expect the Fed to begin allowing its balance sheet to run off.”

Some Fed officials have suggested that they would prefer not to be raising the short-term rate at the same time that they are beginning to reduce their balance sheet. Giving investors too much to digest at once risks unsettling financial markets. In 2013, the Fed triggered a brief storm in bond markets when then-Chairman Ben Bernanke raised the possibility that the Fed would start tapering its bond purchases later that year, catching investors by surprise.

“They learned their lesson with the taper tantrum of 2013 that they need to give the markets plenty of warning of changes in their bond policies,” Sohn said.

Some analysts say they think the Fed will reveal nothing this week about its timetable for reducing its balance sheet, in part because the policy committee has yet to reach a consensus on when or how to do so.

“I have a feeling we are going to get much less information than we want,” Swonk said. “The Fed wants to move slowly, but they don’t have a consensus yet on how to proceed.”

 
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Monday is May Day, known worldwide as the day when workers and activists march in the streets and gather in city centers to honor laborers across the globe. 

The holiday is also known as International Workers Day and as Labor Day. 

Workers and union members in the Philippines celebrated May Day by marching in the streets of Manila, the capital. Workers’ rights groups and unions have also scheduled rallies across Manila. 

Indonesian workers took to the streets of Jakarta Monday. Thousands more workers are expected to join the rally later in the day. 

France’s presidential rivals — centrist front-runner Emanuel Macron and far-right challenger Marine Le Pen — will hold their own dueling rallies Monday. There will also be demonstrations against both candidates. 

In the U.S., May Day’s rallying point has shifted from workers to immigrants.Tens ofthousands of people are expected to mark the day from New York to Los Angeles to protest against President Donald Trump’s focus on boosting deportations.Organizations have called for immigrant strikes in some cities to show Americans what a day without immigrants would look like.

Cuba is facing its first May Day celebration without longtime President Fidel Castro, who died in November.Monday’s observance will also be the last May Day overseen by President Raul Castro, who has promised to step down from office in February. 

Hundreds of thousands of people traditionally celebrate May Day in Havana’s Revolution Square with Cuban flags and portraits of Fidel Castro.
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Once they acclimate to their new environment, overcoming language, social and cultural barriers, refugees in the U.S. often thrive. Some translate their experiences into assets that are valuable to their new community, as did Parvin and Yadollah Jamalreza. VOA’s June Soh visited their popular tailoring shop in Charlottesville, Virginia.
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Growth in China’s manufacturing sector slowed in April, official data showed Sunday, pointing to an unsteady recovery in the world’s second-largest economy. 

The monthly purchasing managers’ index by the Chinese Federation of Logistics and Purchasing fell to 51.2 in April, lower than the 51.8 recorded in March. 

The index is based on a 100-point scale on which numbers above 50 indicate expansion.

National Bureau of Statistics statistician Zhao Qinghe said in the release that April’s figure was affected by sluggish growth in market demand and supply, and slower expansion in imports and exports.

April’s index still represented a ninth consecutive month of expansion. 

China saw its slowest growth in nearly three decades in 2016. China’s huge manufacturing sector is seen as an important indicator for the wider Chinese economy. It has cooled gradually over the past six years as Beijing tries to pivot it away from heavy reliance on export-based manufacturing and investment toward consumer spending.

The official full-year economic growth target for 2017 is 6.5 percent. 
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