Careem, a Middle Eastern rival to Uber, has become the first ride-hailing firm to operate in the Israeli-occupied West Bank.

Dubai-based Careem, whose name is a play on the Arabic word for generous or noble, launched in Ramallah in June, aiming to bring digital simplicity to the Palestinian territory.

There is certainly a market for easier ride-hailing among the nearly 3 million Palestinians living in the West Bank, but the fact the mobile network is still 2G, that electronic payments are not the norm and that Israeli checkpoints are common, make using the service somewhat cumbersome.

Yet Careem is optimistic about the potential.

“We are planning to invest hundreds of thousands of dollars within the coming year in the (Palestinian) sector,” Kareem Zinaty, operations manager for the Levant region said. “After the investment, it is also an opportunity to create jobs.”

Careem, which launched in 2012 and now operates in 12 countries and more than 80 cities across the Middle East, Africa, and South Asia, has said it aims to provide work for one million people across the region by 2018.

Careem’s captains

While a version of Uber and Israeli app Gett already operate in Israel, they do not venture into Palestinian territory. Drivers are excited to work with Careem, which they hope will help boost their incomes, especially with unemployment in the West Bank running at nearly 20 percent.

“It’s a very wonderful opportunity,” said one of the more than 100 new drivers, known as “captains” by Careem. “Most of the people who use it are young and happy with the price.”

Palestinians have limited self rule in parts of the West Bank, which they want for a future state alongside East Jerusalem and the Gaza Strip. Israel captured those areas in the 1967 Middle East war. It withdrew from Gaza in 2005, but still occupies the West Bank and East Jerusalem.

Under interim peace accords, Israel still controls 60 percent of the West Bank, where most of its settlements are located. Careem’s drivers have Palestinian license plates, meaning they usually cannot enter Israeli-controlled areas.

In 2015, Israel and the Palestinian Authority agreed to expand 3G mobile access to the West Bank by 2016, but have yet to implement the agreement. In the meantime, the Ramallah municipality has set up public Wi-Fi in parts of the city center, allowing Apps like Careem to be used more easily.

Despite 2G’s slower service, Zinaty said their model was an opportunity for telecommunication companies to look into expanding services and technologies to better serve Palestinian start ups and businesses.
…

The government of Peru’s President Pedro Pablo Kuczynski is no longer considering cutting the value-added tax (VAT) rate due to slumping government revenues as the economy slows, the country’s prime minister said Tuesday.

Trimming the VAT rate gradually to 15 percent from 18 percent had been part of Kuczynski’s economic platform as he took office a year ago, before severe flooding and a graft scandal thwarted investments and knocked Peru’s growth outlook.

Dropping the plan will likely be welcomed by the right-wing opposition that had feared a VAT reduction would widen the fiscal deficit. But it could be seen as a broken campaign promise by Kuczynski allies who expected a lower rate to stimulate the economy and encourage more people to pay the tax.

“Reducing the VAT has been ruled out,” Prime Minister Fernando Zavala told foreign media in a press conference. “Tax revenues haven’t grown in recent months and we think we have to improve that in coming years by making VAT collection more

efficient.”

Kuczynski named Zavala finance minister while keeping him in his post as prime minister last month after the opposition-controlled Congress ousted the former finance minister over a scandal involving an airport contract.

Peru, the world’s second biggest copper, zinc and silver producer, has enjoyed some of the strongest growth readings and slowest inflation rates in the region this century.

But the economy will likely slow to 2.8 percent this year from 3.9 percent in 2016, even with the government’s planned fiscal stimulus, Zavala said. Next year the economy should expand by between 3.8 percent to 4 percent, he added.

The government previously forecast growth at 3 percent in 2017 and 4.5 percent in 2018.

Zavala reiterated that the government planned to expand the fiscal deficit to 3 percent of gross domestic product this year and to 3.5 percent next year to pay to rebuild parts of Peru devastated by floods this year.

“It’s a deficit increase but only for resources for the reconstruction and only for a period of 3 to 4 years,” Zavala said. “We’re taking all the measures necessary for the economy to accelerate.”

Peru will likely sell sovereign bonds again next year to finance government spending or to extend the life of the country’s debt, Zavala said.

On Monday, Peru sold some $3 billion in sol-denominated bonds that can be settled through post-trade services provider Euroclear, part of the country’s efforts to reduce debt in foreign currencies.
…

With corruption charges delaying his unpopular proposal for the overhaul of Brazil’s costly pension system, President Michel Temer is trying to quickly push through a mini tax reform, a presidential aide told Reuters on Tuesday.

The simplification of the PIS/Cofins federal social security contributions levied on gross receipts would face easier passage in Congress and allow Temer to show his wavering allies that his administration is still advancing on its promised reform agenda.

“There won’t be the political environment to approve pension reform until the issue of the charges is out of the way,” said the aide, who requested anonymity because he was not authorized to speak publicly on the matter.

Federal prosecutors charged Temer last month with taking bribes.  Though his government is confident it has the backing in Congress to stop a trial by the Supreme Court, that support could melt away if his administration is seen to be paralyzed.

In a video statement released on social media on Monday, Temer said tax reform was a priority and a bill would be sent to Congress in “very little time.”  He has held talks this week on the tax reform with his economic team and a series of lawmakers.

Temer pointed to approval last week of a measure modernizing Brazil’s labor laws as a sign his government is still working.

“We know it is difficult to pass pension reform. It is clear there is no climate for that now,” said Lucio Vieira Lima, the deputy leader of the ruling PMDB party in the lower chamber of Congress.

The tax measure will be sent to Congress after the two-week recess that began on Tuesday, the aide said.

It will not tackle the more complicated levies in Brazil’s burdensome tax system, the ICMS tax on circulation of goods and the ISS tax on services. These are vital sources of revenue for cash-strapped local governments and any attempt to change them could be political dynamite for Temer at this moment.
…

House Republicans on Tuesday unveiled a 10-year budget blueprint that would dramatically increase military spending while putting the GOP on record favoring Medicare cuts opposed by President Donald Trump.

The GOP plan, authored by Budget Chairman Diane Black, R-Tenn., would also pave the way for overhauling the U.S. tax code this fall, and would pair that effort with cuts to benefit programs such as food stamps. The plan also lays out a plan to balance the budget inside a decade through deep cuts to a wide swath of domestic programs — though GOP leaders have no intention of actually carrying out the cuts.

Black announced a committee vote for Wednesday, but action by the entire House could be delayed by an ongoing quarrel between the GOP’s tea party and moderate factions over spending cuts.

Medicare is the second largest mandatory program after Social Security, and the House GOP plan again proposes to turn Medicare into a voucher-like program in which future retirees would receive a fixed benefit to purchase health insurance on the open market. Republicans have proposed the idea each year since taking back the House in 2011, but they’ve never tried to implement it — and that’s not going to change now, even with a Republican as president.

The plan, in theory at least, promises to balance the budget through unprecedented and unworkable cuts across the budget. It calls for turning this year’s projected $700 billion or so deficit into a tiny $9 billion surplus by 2027. It would do so by slashing $5.4 trillion over the coming decade, including almost $500 billion from Medicare, $1.5 trillion from Medicaid and the Obama health law, along with enormous cuts to benefits such as federal employee pensions, food stamps, and tax credits for the working poor.

“The status quo is unsustainable. A mounting national debt and lackluster economic growth will limit opportunity for people all across the country,” Black said in a statement. “But we don’t have to accept this reality. We can move forward with an optimistic vision for the future and this budget is the first step in that process. This is the moment to get real results for the American people. The time for talking is over, now is the time for action.”

But in the immediate future the GOP measure is a budget buster. It would add almost $30 billion to Trump’s $668 billion request for national defense, which already exceeds an existing “cap” on spending by $54 billion. But while Trump proposed taking that $54 billion from domestic agencies and foreign aid, the GOP budget plan would restore most of the cuts, trimming non-defense agencies by just $5 billion.

All told, the GOP plan would spend about $67 billion more in the upcoming annual appropriations bills than would be allowed under harsh spending limits set by a failed 2011 budget and debt agreement and pads war accounts by $10 billion. And, like Trump’s budget, the House GOP plan assumes rosy economic projections that would erase another $1.5 trillion from the deficit over 10 years.

The measure, called a budget resolution, is nonbinding. It would allow Republicans controlling Congress to pass follow-up legislation through the Senate without the threat of a filibuster by Democrats. GOP leaders and the White House plan to use that measure to rewrite the tax code.

As proposed by House leaders, tax reform would essentially be deficit neutral, which means cuts to tax rates would be mostly “paid for” by closing various tax breaks such as the deduction for state and local taxes. However, the GOP plan would devote $300 billion claimed from economic growth to the tax reform effort.

But conservatives are insisting on adding cuts to so-called mandatory programs, which make up more than two-thirds of the federal budget and basically run on autopilot. After extended negotiations, Black would instruct 11 House panels to draw up $203 billion worth of mandatory cuts. But neither tea party lawmakers nor moderates are pleased with the idea. Conservatives want larger cuts, while moderates are blanching at voting to cut popular programs such as food stamps.
…

The Trump Administration has launched “Made In America Week” to highlight the importance of U.S. manufacturing and tout its policies to bring more such jobs back home from overseas. But as VOA White House Bureau Chief Steve Herman reports, many Trump family products are made in foreign factories, leading to criticism of the president’s trade campaign.
…

President Donald Trump inspected products brought to the White House on Monday from all 50 U.S. states to launch his “Made In America Week.”

On display from the easternmost state of Maine was a yacht. From the distant shores of Hawaii, more than 7,500 kilometers from the nation’s capital, there was a bottle of rum.

Even Marine One, the presidential helicopter, was turned into an expensive prop to tout Connecticut manufacturing.

The president hopped into a Wisconsin firetruck.

“Where’s the fire? I’ll put it out,” he asked as Vice President Mike Pence looked on and press secretary Sean Spicer snapped photos.

Highlighting US manufacturing prowess

Minutes later, Trump signed a proclamation declaring July 17 as Made in America Day, saying the “hard part now is done,” because his administration has removed regulatory barriers.  

“For decades Washington has allowed other nations to wipe out millions of American jobs through unfair trade practices,” said the president to representatives of the featured businesses from 50 states. “Wait ‘till you see what is up for you. You are going to be so happy.”  

The latest weekly-themed campaign of the six-month-old Trump administration (and there are more to come in the next few weeks) is meant to highlight the importance of U.S. manufacturing and tout its policies to bring more such jobs back from overseas.

Amid the continuing pursuit of health care legislation and the growing investigations into links between the Trump campaign and Russia, another themed week should have come as a welcome and positive distraction.

Monday’s launch, however, was somewhat overshadowed by the fact that many, if not most, of the Trump family business products are made in foreign factories.

Steel and aluminum to build some of the most recent Trump hotels in the U.S. came from China. Much of the merchandise sold in those hotels, as well as the president’s private golf courses, are of foreign origin.  

What about Trump products?

The Democratic National Committee calls the domestic promotion campaign “the epitome of hypocrisy,” saying the president, instead of lecturing, should try setting an example.

“If you’re going to preach something, start at home, start at home,” said Chuck Schumer, the Democratic Party’s leader in the Senate. “Trump shirts and ties: where are they made? China. Trump furniture: where is it made? Turkey.” 

The clothing line carrying daughter Ivanka Trump’s name is also made overseas. That point was repeatedly raised by reporters at Monday’s off-camera White House press briefing.

“Some products may not have the scalability or the demand here in this country,” acknowledged Spicer. “But like so many other things, if that demand – if there is enough of demand then hopefully somebody builds a factory and does it.”  

Globalization makes ‘Made in…’ obsolete

Trade analysts say it is not that simple, because we are now in an interconnected global economy.

“The factory floor has broken through its walls and now spans borders and oceans,” said Daniel Ikenson, who directs trade policy studies at a libertarian think tank, the Cato Institute. “So things, a final good on an American retail store shelf, tends to have components, value-added, in five, six, 10 countries.”

While internationalists acknowledge there is a problem with Americans displaced from their jobs by technological changes or trade treaties, “The way to address that is not to compel people to buy American. The way to address that is to get rid of the frictions in the labor market that will make it easier for people to adjust to the new conditions,” Ikenson told VOA.

White House policymakers are undeterred by such arguments, pursuing their protectionist agenda. It seeks to reverse decades of work by administrations of both parties – supported by major U.S. business groups — to promote international commerce and trade agreements. 
…

EU foreign ministers approved on Monday measures to allow Ukraine to export more industrial and agricultural products free of tariffs to the bloc in recognition of reforms undertaken by Kyiv and the country’s fragile economy.

By the end of September, Ukraine will be able to export greater tonnage of farm products, including grains, honey and processed tomatoes for three years.

The EU will also remove for the same period import duties on fertilizers, dyes, footwear, copper, aluminum, televisions and sound recording equipment.

The measures add to a free-trade agreement provisionally in place since January 2016 that has opened both markets for goods and services.

“It is our duty to support Ukraine and strengthen our economic and political ties, also in the face of the ongoing conflict on its soil,” said Estonia Foreign Minister Sven Mikser, whose country holds the six-month rotating presidency of the European Union.

Trade has been at the heart of a dispute between Russia and the European Union over relations with Ukraine, with Moscow and Brussels both competing to bring Kyiv closer to their side through offers of greater economic integration.

While Kyiv has moved westward, Russia has sought to destabilize Ukraine, EU governments and NATO say, by annexing Crimea and providing separatists with weapons and troops in Ukraine’s industrial east.
…

On a sweltering summer morning in the southern Indian city of Chennai, a dozen garment workers crowd into a small courtroom for the latest hearing in a protracted battle over low wages in factories supplying global fashion brands.

The women are among tens of thousands of workers in Tamil Nadu state – the largest hub in India’s $40 billion-a-year textile and garment industry – who are seeking millions of dollars in compensation following a landmark court ruling last year that declared they had long been grossly underpaid.

The Madras High Court ordered that the garment workers should receive a pay rise of up to 30 percent – the first minimum wage hike for 12 years – and that they could claim arrears going back to 2014.

But 12 months on, many factory bosses have failed to pay up.

Squeezed into a corner at the back of the stuffy Chennai courtroom, a middle-aged woman leans against the blue walls, clutching polythene bags full of documents to prove her claim.

Normally she spends her days hunched over a sewing machine, stitching skirts, shirts and dresses destined for high streets around the world.

But for months she has been taking days off work to attend court.

“I forgo a day’s salary to come for these hearings. It may not seem like a big amount, but for us it is hard earned money,” said the 48-year-old seamstress, who did not wish to be identified fearing it would impact her case. “I am only asking for what is rightfully mine. And they won’t even tell me how they are calculating my dues.”

More than 150 claims have been filed against tailoring and export garment manufacturing units in the Chennai region alone, according to data requested by the Thomson Reuters Foundation under the Right to Information Act.

The claims, which would benefit at least 80,000 workers at factories around the port city, add up to more than 490 million Indian rupees ($7.6 million).

But workers’ unions say these claims are probably the tip of the iceberg as they only represent cases filed by government labor inspectors.

Salary cuts

Under the 2016 Madras court ruling, Tamil Nadu’s garment and textile workers should see their pay rise from a monthly average of 4,500 to 6,500 rupees – which campaigners say is comparable to wages for textile jobs in most other states.

But workers say managers have defaulted or delayed on payments since the ruling, with some even introducing pay cuts.

Despite the state’s minimum wage laws, salaries continue to be “grossly low” for thousands of workers who are still not given pay slips or are often hired only as apprentices, campaigners say.

“Instead of paying workers their correct salaries, companies are finding ways to surreptitiously squash their rights,” said Selvi Palani, a lawyer helping workers’ unions fight their cases. “There is a court order but the money is not on the table.

Workers continue to be underpaid.”

Sujata Mody of Penn Thozhilalargal Sangam, a women workers’ union, said some companies that had raised wages were now docking pay for sick days, and for factory meals and shuttle buses which were previously free, meaning many workers had seen little or no change in pay.

Some factories were also firing more expensive workers on trivial grounds, she added.

“The workers are struggling to be heard and the managements are coming up with new forms to deduct their income,” Mody said.

Repeated delays

Under the 1948 Minimum Wages Act, state governments are required to increase the basic minimum wage every five years to protect workers against exploitation, but textile manufacturers have repeatedly challenged pay rises in Tamil Nadu.

The state’s labor commissioner, Ka Balachandran, said inspectors were verifying every company’s records to check that wages were now in line with last year’s ruling.

“We are doing everything to ensure workers get fair wages, and get it quickly,” he added.

But manufacturers in Tamil Nadu say the hike is too high, putting them at a disadvantage to competitors in other states. Some say they are already paying workers more than the minimum wage.

“The new norms are not distinguishing clearly between skilled and non-skilled workers,” said S Shaktivel of the Tirupur Exporters’ Association.

He said some companies had launched an appeal against the order at the Madras High Court.

In the Chennai labor court, case numbers are called out in quick succession.

The seamstress, who is expecting arrears of up to 5,000 rupees, strains to listen over the slow whirring of the ceiling fan.

“My financial situation is not very good,” she whispers. “My husband had surgery a few months back, we have a loan to pay back and a house to run. The company owes me arrears for almost one year. I need that income desperately.”

Her case is called. The lawyer representing the company asks for more time. Another date is set, with the judge warning against further delays.

“I hope I get a good settlement,” the seamstress said as she left court. “After all these years, I would like to stop working, but that looks unlikely. At least if they paid me properly, I would feel a little better.”
…

A severed marine cable has left Somalia without internet for weeks, triggering losses for businesses, residents said, and adding a layer of chaos in a country where Islamist insurgents are carrying out a campaign of bombings and killings.

Abdi Anshuur, Somalia’s minister for posts and telecommunications, told state radio that internet to the Horn of Africa state went down a month ago after a ship cut an undersea cable connecting it to global data networks.

Businesses have had to close or improvise to remain open and university students told Reuters their educational courses had been disrupted.

Anshuur said the outage was costing Somalia the equivalent of about $10 million in economic output.

“The night internet went off marked the end of my daily bread,” Mohamed Nur, 22, told Reuters in the capital Mogadishu.

Nur said he now begged “tea and cigarettes from friends” after the internet cutoff also severed his monthly income of $500 that he took in from ads he developed and placed on the video website, YouTube.

Somalia’s economy is still picking up slowly after a combined force of the army and an African Union peacekeeping force helped drive the Islamist group, al Shabaab, out of Mogadishu and other strongholds.

Al Shabaab wants to topple the western backed government and rule according to its strict interpretation of Islamic sharia law.

The group remains formidable and lethal, with its campaign of frequent bombings and killings a key source of significant security risk for most businesses and regular life.

Now the internet outage potentially compounds the hardships for most firms. Most young people who say they are unable to work because of the outage spend hours idling in front of tea shops.

Mohamed Ahmed Hared, commercial manager of Somali Optical Networks(SOON), a large internet service provider in the country, told Reuters his business was losing over a million dollars a day. Hared’s clients, he said, had reported a range of crippled services including passport and e-tickets printing and money remittances.

Some students and staff at the University of Somalia in Mogadishu told Reuters their learning had been disrupted because Google, which they heavily rely on for research, was now inaccessible.

The absence of especially popular internet sites like Facebook and YouTube and Google was, however, cause for celebration for some in the conservative, Muslim nation.

“My wife used to be (on) YouTube or Facebook every minute,” Mohamud Osman, 45, said, adding the online activity would sometimes distract her from feeding her baby and that the habit had once forced him to try to get a divorce.

“Now I am happy … internet is without doubt a necessary tool of evil.”

 
…

Gibraltar will not be a victim of Brexit and has had guarantees from the British government it will not do a trade deal with the European Union which doesn’t include the territory, its chief minister said on Sunday.

The future of Gibraltar, a rocky enclave on the southern tip of Spain captured by Britain in 1704, and its 30,000 inhabitants is set to be a major point of contention in Brexit negotiations. The EU annoyed Britain and Gibraltar in April by offering Spain a right of veto over the territory’s post-Brexit relationship with the bloc.

Gibraltar, which Spain wants back, voted strongly in favor of remaining in the EU at last year’s referendum but is committed to staying part of Britain.

Gibraltar’s Chief Minister Fabian Picardo told Sky News he had had “cast iron assurances” from Britain’s Brexit minister David Davis that the government would not do a trade deal with the EU if it did not include Gibraltar.

“I’m the backbone of this negotiation for Gibraltar and the backbone is made of limestone rock, it’s not going to be easy to buckle on that. We can have the War of the Summer, the War of the Autumn or the War of the Winter, if you like, on that, Gibraltar is not going to change its position,” he said.

“It’s our obligation now to energetically and enthusiastically pursue the result of the referendum and deliver a successful Brexit. We’re not going to get in the way of Brexit but we’re not going to be the victims of Brexit.”

During a state visit to Britain this week, Spain’s King Felipe said he was confident an acceptable arrangement could be worked out with Britain over the future of Gibraltar, but Prime Minister Theresa May’s spokeswoman said the topic had not come up during their bilateral meeting.

“There is not going to be any new arrangements in relation to the sovereignty of Gibraltar, that is going to remain 100 percent British,” Picardo said.
…

Bilateral talks aimed at reducing the U.S. trade deficit with China have yielded some initial deals, but U.S. firms say much more needs to be done as a deadline for a 100-day action plan expires Sunday.

The negotiations, which began in April, have reopened China’s market to U.S. beef after 14 years and prompted Chinese pledges to buy U.S. liquefied natural gas. American firms have also been given access to some parts of China’s financial services sector.

More details on the 100-day plan are expected to be announced in the coming week as senior U.S. and Chinese officials gather in Washington for annual bilateral economic talks, rebranded this year as the “U.S.-China Comprehensive Economic Dialogue.”

A U.S. Commerce Department spokesman declined to discuss potential areas for new agreements since a May 11 announcement on beef, chicken, financial services and LNG.

​Trade deficit grows

Earlier in April, when Chinese President Xi Jinping met U.S. President Donald Trump for the first time at his Florida resort, Xi agreed to a 100-day plan for trade talks aimed at boosting U.S. exports and trimming the U.S. trade deficit with China.

The U.S. goods trade deficit with China reached $347 billion last year. The gap in the first five months of 2017 widened about 5.3 percent from a year earlier, according to U.S. Census Bureau data.

“It is an excellent momentum builder, but much more needs to be done for U.S.-China commercial negotiations to be considered a success,” said Jacob Parker, vice president of China operations at the U.S.-China Business Council (USCBC) in Beijing.

Biggest irritants

There has been little sign of progress in soothing the biggest trade irritants, such as U.S. demands that China cut excess capacity in steel and aluminum production, lack of access for U.S. firms to China’s services market, and U.S. national security curbs on high-tech exports to China.

The Trump administration is considering broad tariffs or quotas on steel and aluminum on national security grounds, partly in response to what it views as a glut of Chinese production that is flooding international markets and driving down prices.

Deals struck

American beef is now available in Chinese shops for the first time since a 2003 U.S. case of “mad cow” disease, giving U.S. ranchers access to a rapidly growing market worth around $2.6 billion last year.

More beef deals were signed during an overseas buying mission by the Chinese last week.

“There are hopes there will be even more concrete results,” Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing in Beijing on Friday. He did not elaborate.

Critics of the 100-day process said China had agreed to lift its ban on U.S. beef last September, with officials just needing to finalize details on quarantine requirements.

China, meanwhile, has delivered its first batch of cooked chicken to U.S. ports after years of negotiating for access to the market. 

But unlike the rush by Chinese consumers for a first taste of American beef, Chinese poultry processors have not had a flurry of orders for cooked chicken.

Biotech crops, financial services

Other sectors in China under U.S. pressure to open up have moved more slowly.

Beijing had only approved two of the eight biotech crops waiting for import approval, despite gathering experts to review the crops on two occasions in a six-week period.

U.S. industry officials had signaled they were expecting more approvals. U.S. executives say the review process still lacks transparency.

Financial services is another area where little progress has been made, U.S. officials say.

USCBC’s Parker said it is unclear how long it will take for foreign credit rating agencies to be approved, or whether U.S.-owned suppliers of electronic payment services will be able to secure licenses.

The bilateral talks have also not addressed restrictions on foreign investment in life insurance and securities trading, or “the many challenges foreign companies face in China’s cybersecurity enforcement environment,” Parker said.

In an annual report released Thursday, the American Chamber of Commerce in Shanghai said China remained a “difficult market.”
…

Take care of your soil, and your soil will take care of you. That’s the message agriculture experts have for farmers worldwide. They say farmers can halt the degradation of their land and save money by using techniques known as conservation agriculture. But as VOA’s Steve Baragona reports, adopting those techniques takes a change of attitude.
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Ride-hailing apps such as Uber and Lyft have been so disruptive to New York City’s taxi industry, they are causing lenders to fail.

Three New York-based credit unions that specialized in loaning money against taxi cab medallions, the hard-to-get licenses that allow the city’s traditional cab fleet to operate, have been placed into conservatorship as the value of those medallions has plummeted.

Just three years ago, cab owners and investors were paying as much as $1.3 million for a medallion. Now they are worth less than half that, and some medallion owners owe more on their loans than the medallions are worth.

Like subprime loans

“You’ve got borrowers who are under water. This is just like the subprime loan crisis,” said Keith Leggett, a credit union analyst and former senior economist at the American Bankers Association.

LOMTO Federal Credit Union, which was founded by taxi drivers in 1936 for mutual assistance, was placed into conservatorship by the National Credit Union Administration on June 26 “because of unsafe and unsound practices.”

New York City has the nation’s largest taxi industry, with more than 13,000 medallions.

Value went up, then down

Marcelino Hervias bought his medallion in 1990 for about $120,000 and thought its value would hit $2 million by the time he was ready to retire.

Instead, the 58-year-old said he owes $541,000 and is driving 12 to 16 hours a day to make ends meet.

While some medallions are held by large owners with fleets, owning a single medallion was long seen as a ticket to the middle class for immigrants like Hervias, who is from Peru.

Many of them now owe more on their medallion loans than they originally paid for the medallions because they used their equity in the medallion for a home, a child’s education or other expenses.

Other medallion owners tell similar stories.

Constant Granvil bought his medallion for $102,000 in 1987 and said he now owes more than $300,000 to his lender. He could have sold the medallion for two or three times that a few years ago, “but I said no, I’m not going to sell it,” said Granvil, who is 76. “And then I got caught.”

The value of Granvil’s medallion is hard to pinpoint because 2017 sale prices have varied from the $200,000s to the $500,000s depending on whether lenders are willing to finance the purchase. 

Meanwhile, Granvil, who no longer drives because of poor health and uses a broker to hire a driver, said he is facing threats from the lender, Melrose Credit Union, to foreclose on not just his medallion, but also his house.

Level playing field

Supporters of the yellow cab industry have sued and pushed for city legislation to try to level the playing field between taxis and ride-hailing apps, which they say enjoy advantages like not paying a public transportation improvement surcharge that’s levied on yellow cabs and not having to outfit a percentage of cars with disabled-access features.

City Council member Ydanis Rodriguez, who chairs the council’s transportation committee, called this week for a panel to investigate the fall in medallion values. 

According to a Morgan Stanley report, there were 11.1 million yellow cab trips in the city in April 2016, compared with 4.7 million Uber trips and 750,000 Lyft trips. The 11.1 million taxi rides were 9 percent fewer than the April 2015 number.

Some observers believe that the yellow cab’s market share will continue to shrink and that the value of a medallion won’t recover.

“This is a commodity that has been fundamentally disrupted,” said Leggett, who has written about medallion loans in his online newsletter Credit Union Watch. “I don’t see the value of the medallions getting close to what they were.”
…

The White House said Friday that worsening tax revenues would cause the budget deficit to jump to $702 billion this year. That’s a $99 billion spike from what was predicted less than two months ago.

The report from the Office of Management and Budget came on the heels of a rival Congressional Budget Office analysis that scuttled White House claims that its May budget, if implemented to the letter, would balance the federal ledger within 10 years. The OMB report doesn’t repeat that claim and instead provides just two years of updated projections.

The White House budget office also said the deficit for the 2018 budget year that starts on October 1 would increase by $149 billion, to $589 billion. But lawmakers are already working on spending bills that promise to boost that number even higher by adding to President Donald Trump’s Pentagon proposal and ignoring many of his cuts to domestic programs.

Last year’s deficit registered $585 billion.

The White House kept the report to a bare-bones minimum and cast blame on “the failed policies of the previous administration.”

“The rising near-term deficits underscore the critical need to restore fiscal discipline to the nation’s finances,” said White House budget director Mick Mulvaney. “Our nation must make substantial changes to the policies and spending priorities of the previous administration if our citizens are to be safe and prosperous in the future.”

In late May, Trump released a budget plan proposing jarring cuts to domestic programs and promising to balance the budget within a decade. But the CBO said Trump relied on rosy predictions of economic growth to promise a slight surplus in 2027.

Trump’s budget left Social Security retirement benefits and Medicare alone, though House Republicans are poised next week to again propose cutting Medicare as they unveil their nonbinding budget outline.

Trump’s budget predicted that the U.S. economy would soon ramp up to annual growth in gross domestic product of 3 percent; CBO’s long-term projections predict annual GDP growth averaging 1.9 percent.
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The top Democrat on the U.S. House of Representatives’ antitrust subcommittee has voiced concerns about Amazon.com Inc.’s $13.7 billion plan to buy Whole Foods Market Inc and is pushing for a hearing to look into the deal’s potential impact on consumers.

The deal announced in June marks the biggest acquisition for the world’s largest online retailer. Amazon has not said what it will do with Whole Foods’ stores and other assets, but analysts and investors worry the move could upend the landscape for grocers, food delivery services and meal-kit companies.

U.S. Representative David Cicilline requested the hearing on Thursday in a letter to the chair of the House Judiciary Committee and the subcommittee chairman. Shares of Amazon were up 0.3 percent in mid-morning trading on Friday.

“Amazon’s proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America,” Cicilline said in a statement. “Congress has a responsibility to fully scrutinize this merger before it goes ahead.”

The deal must be approved by U.S. antitrust enforcers, in this case most likely the Federal Trade Commission. Congress plays no formal role in that process but hearings are often used to highlight the possible impact of deals on consumers. The hearing is unlikely to happen without Republican support.

Amazon and Whole Foods declined to comment.

Also this week, hedge fund manager Douglas Kass from Seabreeze Partners Management Inc. said he was shorting shares of the retailer because of concern about Amazon in Washington.

Kass said he had heard rumblings on Capitol Hill regarding concern about Amazon’s size and clout but did not specify what the concerns were.

“I am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington, D.C.,” he wrote in a note to investors late on Wednesday. “If I am correct, word of this could lower Amazon’s shares by 10 percent overnight.”

Kass said in emailed comments to Reuters on Friday that he has what he called a “core” short position in Amazon, meaning a sizeable bet based on a long-term outlook.

“This has the potential of being the biggest business news story of [the] year,” he said. Kass declined to comment when asked for more details about pressure from Capitol Hill.

Kass is followed for his bets on declines in companies’ share prices. He shorted Marvel Entertainment in 1992 when its shares were in the high $60s, and the company went bankrupt 1-1/2 years later.

He also bet against big U.S. banks leading into the 2007-2009 financial crisis, shorting Bank of America, MGIC, Citigroup and several other financials that ultimately averaged a 98 percent price decline by the time they bottomed in 2009.

While antitrust experts have said they expect Amazon’s bid to win regulatory approval, some critics argue the deal should be blocked because it gives the retailer a big head start towards domination of online grocery delivery.

They argue the Whole Foods acquisition will give Amazon an unfair advantage over traditional grocers and new players that might emerge in the market, potentially grounds for the deal to be blocked for antitrust reasons.
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The German Transport Ministry says the country’s motor transport authority will examine cars made by Daimler amid an investigation into suspected manipulation of diesel emissions controls.

Daimler said in May that prosecutors would search several offices in Germany and it was cooperating with the probe.

Company representatives met with a Transport Ministry commission Thursday following a report by the Sueddeutsche Zeitung newspaper, citing a search warrant, that over a million vehicles may have had engines whose software manipulated emissions levels. Neither the company nor prosecutors commented on that detail.

Ministry spokesman Ingo Strater said Friday the company “set out its position that Daimler is behaving in accordance with the law.”

Strater said the Federal Motor Transport Authority is examining Daimler cars, as it has in the past other manufacturers’ vehicles.
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Radio Flyer is rolling its largest “little” red wagon into its hometown of Chicago in celebration of the company’s 100-year anniversary.

Radio Flyer’s gargantuan wagon was the centerpiece for the company’s anniversary event Thursday in the city’s downtown area, the Chicago Tribune  reported. The wagon was created 20 years ago for the brand’s 80th anniversary.

Attendees of the event had the opportunity to take a photo with the large wagon and participate in free giveaways. Radio Flyer also will donate 2,000 wagons to children’s hospitals across the country in partnership with Starlight Children’s Foundation.

According to Guinness World Records, the wagon, which is 27 feet (8.23 meters) long and weighs over 15,000 pounds (6803.96 kilograms), is the world’s largest toy wagon. It was inspired by a 1930s statue featured in the World’s Fair in Chicago.

Radio Flyer has locations around the world, but Robert Pasin, chief wagon officer of Radio Flyer, said Chicago is still the company’s home.

“Chicago has so much to do with our heritage and story,” Pasin said. “It’s truly a part of the brand’s DNA.”

The company has evolved since its establishment in 1917 and now offers customizable wagons made of various materials and other products, including tricycles, bicycles and scooters.
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The electricity supply to Gaza’s 2 million residents has dropped to unprecedented lows, with blackouts lasting for more than 24 hours, the territory’s power distribution company said Thursday, prompting fears of a humanitarian and environmental crisis.

The Palestinian enclave needs at least 400 megawatts of power a day, but only 70 megawatts were available as of late Wednesday, when Gaza’s power plant shut down after fuel shipments from Egypt were interrupted following a militant attack last week.

The Gaza-based Palestinian Center for Human Rights said the power cuts have caused a rapid deterioration in basic services, “especially health and environmental services, including water and sewage draining.”

The coastal strip had been experiencing the worst electricity shortage in years, limiting Gazans to about four hours of electricity per day.

​Abbas asks Israel to cut shipments

Palestinian President Mahmoud Abbas recently asked Israel, the main provider of power to Gaza, to cut shipments as a way of pressuring the Islamic militant group Hamas, which seized power in Gaza a decade ago.

Several neighborhoods were without electricity for more than 24 hours Thursday.

Late Thursday, Hamas said 27 Egyptian trucks with 1.5 million liters of diesel entered Gaza for the power plant. It was unclear when operations would resume.

Diesel fuel from neighboring Egypt had kept the station running at half capacity since June 21, but deliveries were interrupted after a deadly attack on Egyptian soldiers last week near the border. Gaza’s power station has low storage capacity, and requires new fuel shipments on an almost daily basis.

Abbas pressures Hamas

Abbas has tried to squeeze Hamas financially in recent months, hoping to force it to cede power. He slashed salaries of his employees there, stopped payments for ex-prisoners and reinstated heavy taxes on the power plant’s fuel.

Palestinians have been split since 2007, with Hamas ruling Gaza and Abbas governing parts of the West Bank. Repeated reconciliation attempts have failed.

The Egyptian diesel shipments were facilitated by Mohammed Dahlan, a former leading figure in Abbas’ Fatah movement who fell out with the Palestinian president in 2010, went into exile and has since forged strong ties with the United Arab Emirates and Egypt.
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Venezuela’s crude and fuel deliveries to Cuba have slid almost 13 percent in the first half this year, according to documents from state-run oil company PDVSA viewed by Reuters, threatening to worsen gasoline and power shortages in the communist-run island.

Cuba’s government since 2016 has reduced fuel allocations 28 percent to most state-run companies, and has cut electricity consumption. Public lighting was cut 50 percent, while residential electric use was spared.

Beginning in March, Cubans also have reported minor gasoline and diesel shortages at service stations.

Cuba’s economy depends heavily on Venezuelan crude shipments under a series of bilateral agreements started in 2000 by the South American country’s late President Hugo Chavez. In return, the island nation has provided Venezuela with Cuban doctors and other services.

Venezuela’s shipments of crude for Cuba’s refineries dropped 21 percent to 42,310 barrels per day (bpd), the documents showed. Last year, Venezuela made up for a shortfall in crude shipments by sending Cuba more fuels, but this year’s data showed refined products sent to Cuba remained almost unchanged at around 30,040 bpd.

In total, PDVSA sent Cuba an average of 72,350 bpd of crude and refined products in the first half of 2017, down almost 13 percent from the same period of last year, according to the data from internal PDVSA trade reports.

“Cuba needs at least 70,000 bpd from Venezuela to cover its energy deficit and avoid deeper rationing. A larger or total loss of the Venezuelan supply would have a high political and financial cost for Cuba,” which has been gearing up to welcome more tourists, said Jorge Pinon, a Cuban energy expert at the University of Texas in Austin.

Cuba suffered severe energy rationing in the 1990s after the collapse of the Soviet Union, an ally that had provided cheap fuel. In 2016, Cuba’s economy went into recession for the first time since those days, declining almost 1 percent as shrinking export earnings left it short of funds to import oil on the open market and replace declining Venezuelan supplies.

With Venezuela’s crude production sliding in 2017 for the sixth year in a row, the OPEC nation has had less oil to send Cuba and other customers in regions from Asia to North America and the Caribbean.

Cuba, which produces extremely heavy crude used by industry and power plants, received 103,226 bpd of oil from Venezuela in the first half of 2015, according to the same data.

PDVSA, whose full name is Petroleos de Venezuela SA, did not reply to a request for comment.

Venezuela’s oil shipments to Cuba have been falling since 2008, when they peaked at 115,000 bpd mainly due to a decline in crude exports. The poor shape of Venezuelan refineries cut into fuel exports this year, and Venezuela has also had to boost fuel imports to meet domestic demand.

Cuba, in addition to rationing fuel, is seeking oil cargoes from other producers including Russia, something it had not done for more than a decade.

In one of several recent shipments, the Ocean Quest tanker loaded with fuel oil at Russia’s Tuapse terminal, arrived in Havana on July 9 and is waiting to discharge, according to Reuters vessel tracking data. The Tuapse terminal is operated by state-run Rosneft.

Cuba’s three aged refineries have been operating at reduced rates since last year due to a shortage of light crude, which also affects Venezuela’s 1.3-million-bpd refining network.
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United Nations human rights experts on Thursday called on Peru to suspend negotiations on a new contract for a large oilfield in the Amazon until past pollution was cleaned up and the rights of indigenous groups respected.

Canada’s Frontera Energy Corporation now operates Block 192 in the Peruvian Amazon and is in talks with Peru about renewing its contract once the current one expires in September.

U.N. Special Rapporteurs Baskut Tuncak and Victoria Tauli-Corpuz, independent experts tasked with investigating human rights issues, said Peru had failed to clean up pollution from oil spills in the region and was not doing enough to ensure indigenous groups had a voice in talks.

“The Peruvian Government must suspend the direct negotiations with companies until the right to free, prior and informed consent is guaranteed, and all environmental damage has been remedied,” Tuncak and Tauli-Corpuz said in a statement from the U.N. Human Rights Council.

The remarks will likely be welcomed by indigenous rights activists in Peru who say a law requiring the government to include native groups in talks on projects affecting them has not been fully enforced.

Peru’s environment ministry and energy and mines ministry did not immediately respond to requests for comment. In previous years, the government has declared several environmental emergencies in the region due to oil pollution.

Frontera did not immediately respond to requests for comment.

Peru’s government has been trying to jump start investments in the country’s oil industry that have dropped sharply since global oil prices fell and a series of ruptures largely shuttered the main pipeline serving the sector.

The aging pipeline, operated by state-owned oil company Petroperu, suffered a new rupture this week, Petroperu said Wednesday. The company has blamed most of the dozen spills from the pipeline last year on attacks from unknown parties.

In June, Frontera reached a deal with indigenous people who had occupied Block 192 in a land-use dispute. The company agreed to pay them for use of land and finance community projects.

Block 192 has produced an average of 2,565 barrels of oil per day this year, a sharp drop from previous years when it churned out some 10,000 bpd, according to data from state regulator Perupetro.

U.S. oil company Occidental Petroleum produced oil from Block 192 for decades before Argentine energy company Pluspetrol took over operations in 2001. Frontera was awarded a two-year contract in 2015.
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Federal Reserve Chair Janet Yellen on Thursday said she believed the risks concerning inflation are “two-sided,” stressing that price gains could both accelerate or slow down.

Testifying for the second day before Congress, Yellen sought to expand on remarks she had made Wednesday before the House Financial Services Committee in an apparent effort to adjust views in financial markets.

In her House comments, Yellen discussed the possibility that a recent slowdown in inflation could persist longer than the Fed expects. The comments helped trigger a big market rally, with the Dow Jones industrial average hitting a record high. Investors saw the remarks as a signal that the Fed, which has raised interest rates three times since December, might slow the pace of future interest rate increases.

But on Thursday, Yellen said that she believed it would be “premature” to conclude that a recent slowdown in price gains meant that the Fed would not be able to achieve its goal of 2 percent annual inflation.

After keeping its key policy rate at a record low near zero for seven years, the central bank began raising rates gradually with one quarter-point hike in December 2015, another one last December and two more in March and June of this year. It is now in a range of 1 percent to 1.25 percent. Many economists believe the Fed will raise rates one more time this year, in either September or December.

Some senators asked Yellen whether she believed the Trump administration’s goal of lifting economic growth to 3 percent is realistic. President Donald Trump has pledged to boost growth through a combination of tax cuts, regulatory relief and tougher enforcement of trade laws.

Yellen said hitting 3 percent growth in the next five years “would be wonderful. … I would love to see it. But I think it would be challenging.”

On a regulatory matter, Yellen said that the Fed had the power to remove directors of banks, but she did not give a specific commitment to do so when pressed by Sen. Elizabeth Warren.

Warren, D-Massachusetts, wants to see those directors of San Francisco-based Wells Fargo replaced if they were responsible for the bank’s creation of fake accounts.

“Time after time, big banks cheat their customers, and no actual human beings are held into account,” Warren told Yellen.

Yellen described the actions at Wells Fargo as “unacceptable.” She said the Fed needs to conduct a full investigation to understand the root causes of the problems at the bank. Yellen said the central bank is prepared to take appropriate enforcement actions but did not say whether that action would include removal of any bank directors.
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McDonald’s is hoping to make a difference in its future seven seconds at a time.

The company that helped define fast food is making supersized efforts to reverse its fading popularity and catch up to a landscape that has evolved around it. That includes expanding delivery, digital ordering kiosks in restaurants, and rolling out an app that saves precious seconds.

Much of the work is on display in an unmarked warehouse near the company’s headquarters in suburban Chicago, where a blowup of a mobile phone screen shows the app launching nationally later this year. McDonald’s estimates it would take 10 seconds for a customer to tell an employee their order number from the app, down from the 17-second average of ordering at the drive-thru, a difference that could help ease pileups. Elsewhere at the Innovation Center, the digital ordering kiosk shows how customers can skip lines at the register.

“Five, 10 years ago, we were the dominant player in convenience, as convenience was defined in those days,” CEO Steve Easterbrook said last month. “But convenience continually gets redefined, and we haven’t modernized.” 

The push come as McDonald’s Corp.’s stock has hit all-time highs as investors cheer a turnaround plan that has included slashed costs and expansion overseas. Yet the asterisk on the headlines is the chain’s declining stature in its flagship U.S. market, where it is fighting intensifying competition, fickle tastes and a persistent junk food image.

In an increasingly crowded field of places to eat, the number of McDonald’s locations in the U.S. is set to shrink for the third year in a row. At established locations, the frequency of customer visits has declined for four straight years, even after the launch of a popular “All-Day Breakfast” menu. 

The chain that popularized innovations like drive-thrus in the 1970s acknowledges it has been slow to adapt, and is scrambling to better fit into American lifestyles. 

Running to keep up

Lots of once-dominant restaurant chains are feeling the pressure of people having more eating options.

An estimated 613,000 places were selling either food or drink in the U.S. last year, up 17 percent from a decade earlier, according to government figures. Supermarkets and convenience stores are offering more prepared foods, and meal-kit delivery companies have been expanding. 

“Better burger” places like Shake Shack and Habit Burger Grill don’t come close to McDonald’s roughly 14,000 U.S. locations, but they’re growing. And even if Starbucks and Dunkin Donuts don’t serve burgers and fries, they are among those promoting food more aggressively.

“They’re still taking customers from the same market pool,” said Nick Karavites, a McDonald’s franchisee with 22 locations in the Chicago area and chairman of a regional leadership committee.

Richard Adams, a former McDonald’s franchisee who is now a consultant to those businesses, has questioned whether the chain can return to the height of its popularity in such a fragmented marketplace. He also noted that many of the new offerings the company is pursuing, such as delivery, are already available at other places.

Still, McDonald’s needs to make changes to keep customer visits from falling further. 

‘Turning a very large ship’

One main focus is the drive-thru, where McDonald’s gets roughly 70 percent of its business. 

Customers who place orders on the mobile app, for instance, could also pull into a designated parking spot where an employee would bring out their order. That would theoretically ease backups at the drive-thru, which in turn might prevent potential customers from driving past without stopping during peak hours.

Then there’s the partnership with UberEats to offer delivery. McDonald’s gives an undisclosed percentage of the sale to UberEats, in addition to a fee of about $5 that customers pay. So a risk is that delivery could draw from in-store sales, eating into profitability.

So far, however, McDonald’s says delivery is bringing in new business during slower times at the roughly 3,500 locations where it has rolled out since the start of the year. 

Either way, such changes aren’t likely to transform operations overnight, since most of McDonald’s customers might prefer to order the way they always have. 

“That’s like turning a very large ship,” said Karavites, noting the range of company efforts intended to build sales over time. At his remodeled restaurant in Chicago where delivery was recently launched, he said sales are climbing. 

To bring more people in over the short-term, the company is promoting $1 sodas and $2 McCafe drinks. Glass cases displaying baked goods are also popping up in stores. And at about 700 locations, the company is testing “dessert stations” behind the counter where employees can make sundaes topped with cake or brownie chunks. 

Those stations could eventually handle an expanded menu of sweets.

Junk food image

At the same time, McDonald’s is trying to shake its image for serving junk food, especially since its appeal to families with children has long helped keep it ahead of rivals like Burger King and Wendy’s.

It’s made changes to its Happy Meal, and made a high-profile pledge to offer healthier options. It plans to start using fresh beef instead of frozen patties in Quarter Pounders. But as other chains emphasizing quality or health keep emerging, it may get harder for McDonald’s to hold onto families or change perceptions. 

Larry Light, a former chief marketing officer at McDonald’s, says the company strayed in recent years by chasing customers who may have been going to places like Chipotle, but that it is refocusing on burgers and fries. He thinks that will help get people visiting more often.

“You cannot build an enduring, profitable business on a shrinking customer base,” Light said.

And Bernstein analyst Sara Senatore cited the changes the company is pursuing in raising her rating on McDonald’s to “buy” in April.

“I wouldn’t underestimate the power of scale,” Senatore said.
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Working 50 meters (164 feet) under ground with minimal air supply, Uuganbaatar is one of thousands of Mongolians trying to make a living digging for coal.

Although the mining season does not begin until autumn, when the ground freezes and work is safer, the 31-year-old and his colleagues are seeking to gain a head start by digging a shaft in Nalaikh, one of the nine districts of Mongolia’s capital Ulaanbaatar, in late June.

But their mine could soon be shut by the government, which has launched an unprecedented crackdown on sites that don’t meet safety standards.

That would mean even fewer opportunities for Mongolia’s individual prospectors, who have already been hit hard by the privatization of mines previously open to all.

Miners such as Uuganbaatar dig for coal under loose arrangements with local unions and private companies.

“Things seem really tough for private miners now,” said Uuganbaatar, who, like many Mongolians, goes by one name. “All the licenses have been bought up by influential big shots. Whenever you start to dig somewhere, someone shows up and chases us away. It’s impossible to find a place or mine to dig in.”

A weak economy and particularly harsh winters drove herdsman from across Mongolia to Nalaikh’s private mines in the late 1990s and early 2000s.

The district, with a population of nearly 30,000, was home to Mongolia’s first state mining company, which collapsed in the 1990s in the midst of a post-communist economic crisis. The firm’s dilapidated buildings dot the landscape.

With the economy slowing again after a commodities boom earlier in the decade, authorities fear more people could be tempted down the mines.

“More mines will probably be shut down,” said Byambadorj, a woman who ran two private mine shafts with her husband for 13 years until the government closed them in June.

“In Nalaikh, life revolves around mining, and mining is the main means to support our lives,” she says, insisting that her mines were operating according to the safety standards.

The government had tried to get companies to improve safety by issuing licenses. An official said nine companies had been granted licenses, but not all had met the standards.

“People were working in shafts with no air supply,” said S. Battulga, an official whose department is responsible for reviewing mining licenses across the country.

“Therefore, it was requested that the private mining licenses in Nalaikh be cancelled” on health and safety grounds, he added.

Nalaikh authorities would like people to switch from mining to work in brick factories, but no one seems keen to switch despite the danger.

In the past 25 years, the government has recorded 234 fatalities in Nalaikh’s coal mines, although residents say the real number is hundreds higher.
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Spanish companies will commit millions of pounds of investment to Britain on Thursday, the British government said, as it seeks to limit the economic impact of leaving the European Union.

The investment plans, which include building trains and trams in Britain, coincide with a three-day state visit to Britain by Spain’s King Felipe and Queen Letizia.

King Felipe and British trade minister Liam Fox are due to address a U.K.-Spain business forum in London on Thursday, before the Spanish monarch holds bilateral talks with Prime Minister Theresa May at her Downing Street residence.

Britain said the investments would include Spanish manufacturer CAF committing 30 million pounds ($39 million) to build trains and trams at a new factory in Wales, creating 300 jobs, and Spanish infrastructure company Sacyr unveiling plans for a new office in London.

Bilateral trade strong

Bilateral trade between the two countries was worth 40 billion pounds in 2015, and more than 400 Spanish companies are registered in Britain, the government said.

“The sheer scale of Spanish investment in Britain demonstrates Spain’s continued confidence in the strength of the UK economy, and shows that we can and will maintain the closest possible relationship,” May said in a statement.

The government also highlighted more than 100 million pounds which is being invested in the expansion of Luton Airport, majority owned Spanish airport operator AENA, and the construction of a 26 million pound factory in the West Midlands by Spanish steel producer Gonvarri Steel Services.

Gibraltar remains issue

Away from the financial deals, the Spanish royal visit comes amid tensions over the post-Brexit future of the British territory of Gibraltar, which Spain wants back.

The future of Gibraltar, a rock on the southern tip of Spain captured by Britain in 1704, and its 30,000 inhabitants, is set to be a major point of contention in the Brexit talks.

During an address to members of both houses of parliament in London on Wednesday, Felipe said he was confident that Spain and Britain could work towards an acceptable arrangement over Gibraltar.

May to meet with King Felipe

The EU and Britain have also yet to agree on guarantees for EU citizens living in the UK and British expats living in other EU countries. More than 300,000 Britons live in Spain, while more than 130,000 Spaniards live in Britain.

On Wednesday, Felipe said these citizens had “a legitimate expectation of decent and stable living conditions” and urged the British and Spanish governments to work to ensure the Brexit agreement provided sufficient assurance and certainty.

May’s office said that during her talks with Felipe she would welcome the contribution that Spanish citizens make to Britain’s economy and society.

 
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Iraq says it will offer new oil and gas exploration rights as it looks to boost energy revenues to fund its war against the Islamic State group and shore up its finances amid low oil prices.

Oil Minister Jabar Ali al-Luaibi said late Tuesday that his ministry plans to put nine border exploration blocks up for bidding by international energy companies. Five are shared with Iran, three with Kuwait and one is in the Persian Gulf.

He did not provide a timetable.

Iraq has the world’s fourth largest oil reserves. This year, it added 10 billion barrels, bringing its total reserves up to 153.1 billion. Low oil prices have taken a heavy toll, as some 95 percent of the country’s revenues come from the energy sector.

 
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When Janet Yellen delivers her testimony on the Federal Reserve’s semiannual report to Congress on Wednesday, investors may listen as much for clues to her own future – and the Fed’s – as they will to what she says about interest rate policy.

The Fed chair is likely to repeat a message she has been sending about rates: That further gradual increases will follow the three rate hikes the Fed has made since December. She is expected to say that even though inflation has slowed further below the Fed’s target level, the job market appears healthy enough to justify slightly higher borrowing costs.

But lawmakers may prod Yellen about her own plans and about the potential reshaping of the Fed itself resulting from a forthcoming influx of new board members selected by President Donald Trump. During last year’s presidential campaign, Trump was critical of the central bank for its low-rate policies, which he said were helping Democrats, and for its efforts to enact tougher regulations on banks in response to the 2008 financial crisis.

On Monday, the administration announced that it had chosen Randal Quarles, a Treasury Department official under two Republican presidents, to serve as vice chairman for supervision, the Fed’s top bank regulatory post.

Including the post Quarles would fill, the Fed has three vacancies on the seven-member board. Trump has yet to announce his other choices, though at least one person –  Marvin Goodfriend, an economist, a former staffer at the Federal Reserve Bank of Richmond and now a professor at Carnegie Mellon University – is considered a leading candidate for one of the spots.  All of Trump’s nominations will require Senate approval.

Yellen so far has deflected questions about whether she would accept a second four-term term as chairman if Trump asked her to remain after her term ends in February. But lawmakers may try to glean some insight into her own wishes and about how the Fed could potentially change under the influence of Trump’s nominees.

On Wednesday, Yellen will address the House Financial Services Committee and on Thursday the Senate Banking Committee. She will be testifying on the Fed’s Monetary Policy Report, with one wrinkle this time: For the first time, the Fed released the report five days before Yellen’s testimony. In the past, the two had occurred the same day.

The central bank explained the change by saying Fed officials wanted to give lawmakers more time to review the semiannual monetary report before Yellen addressed questions about it.

The report said the Fed “expects that the ongoing strength of the economy will warrant gradual increases in the federal funds rate,” referring to its benchmark short-term rate.

The Fed had slashed that rate to a record low near zero in December 2008 to combat the worst economic downturn since the 1930s – and kept it there for seven years until nudging it up modestly in December 2015. It then left the rate unchanged for another year until raising it again in December of last year, followed by increases in March and June this year. Even so, the rate remains in a still-low range between 1 percent and 1.25 percent.

The Fed’s report noted that officials had affirmed at their June meeting that they foresee a total of three rate increases in 2017, if the economy performs as they expect. If so, that would mean one additional increase before year’s end. The Fed also expects to raise rates three times in 2018 if economic conditions evolve as they expect.

This week, Yellen will surely face questions about sticking to that pace, given that while job growth has been solid, inflation has slowed this year rather than edging closer to the Fed’s 2 percent target.

In a speech Tuesday, Lael Brainard, a Fed board member who has often argued for a go-slow approach to rate hikes, said she wanted to “monitor inflation developments carefully and to move cautiously on further increases” in the Fed’s key rate.

Brainard suggested that she would support a move soon to begin paring the Fed’s $4.5 trillion balance sheet, which swelled to five times its previous size after the Fed bought Treasury and mortgage bonds to hold down long-term borrowing rates in the aftermath of the 2008 financial crisis.

At its June meeting, the Fed signaled that it could begin shrinking its balance sheet later this year, a step that could put gradual upward pressure on longer-term rates for such items as home mortgages.
…

Japanese car parts company Takata on Tuesday recalled another 2.7 million air bags that it previously thought were safe.

The recall affects certain Ford, Mazda and Nissan cars from the 2005 through 2012 model years.

Takata’s air bags are inflated by a chemical — ammonium nitrate — in emergency situations, but it can deteriorate in conditions of high humidity and heat. The company added a desiccant to stop the chemical inflators from degrading and thought they had then been made safe.

However, tests by the U.S. National Transportation Safety Board showed that Takata air bags were still subject to inflating without warning, expanding with great force and sending metal parts flying. Previous problems with Takata air bags have killed at least 17 people and injured more than 180.

Takata, which has filed for bankruptcy protection, has already recalled 42 million cars to replace the defective inflators, the largest automobile-related recall in U.S. history. But the latest recall raised doubts about the safety of other Takata inflators. The company has agreed to recall all original equipment inflators without a drying agent in phases by the end of 2018. The National Highway Traffic Safety Administration gave Takata until the end of 2019 to prove that inflators with the drying agents are safe, or they must be recalled as well.

U.S. Senator Bill Nelson, a Florida Democrat, said federal regulators have to act faster to determine whether all Takata air bag inflators are safe.

“We certainly can’t afford to wait until the December 2019 deadline. … If even more are found to be defective, it will take us from being the biggest recall ever to something that could become mind-boggling,” Nelson said.
…

How do you explain the European Central Bank’s capital key in 140 characters? Or the U.S. Federal Reserve’s dot plot?

Difficult. But International Monetary Fund chief Christine Lagarde wants the world’s policymakers to try.

At a conference in Croatia on Tuesday, Lagarde said convoluted fiscal and monetary policy proposals use terminology “hardly anybody understands” and often lose the public’s attention.

“We are in an era where some political leaders communicate almost exclusively using 140 characters,” Lagarde said, referring to the Twitter limit. “We too in the financial community… need to have in the back of our mind those 140 characters.”

Financial policymakers, and central bankers in particular, can be famously opaque, steering sophisticated investors by the mere dropping of a word. But this is a world far removed from ordinary people.

“Smart communication, funny communication, alternative, not fake communication, around what you are about to do is, in my view, critically important,” she said.

“Because that battle is going to be lost or won depending on how early you prepare and how efficiently you communicate in simple, easy to understand terms, with funny to ready, funny to listen to, media supported tools.”

She argued the lack of clarity risked getting the policy message hijacked, creating a self-defeating cycle.

So how about: Central banks want to stop pouring #money into improving world economy, but low inflation, hungry markets mean they can’t SAD As for the ECB’S capital key, the bank responded on Twitter:

“Ok: each EU national central bank owns part of ECB. How much?=capital key. Based on population and economy @Reuters”
…

Thailand’s Cabinet on Tuesday approved construction of the first phase of a $5.5-billion railway project to link the industrial eastern seaboard with southern China through landlocked Laos, as part of a regional infrastructure drive by Beijing.

Prime Minister Prayuth Chan-ocha, who heads the Thai ruling junta, made use of an executive order last month to pave the way for the project, which has been beset by delays, including negotiations on loan terms.

The first phase encompasses six railway stations on a 250-km (155-mile) high-speed line linking the Thai capital of Bangkok and the northeastern province of Nakorn Ratchasima.

“This project is part of the development of a regional transport network, in particular China’s ‘One Belt One Road’ initiative that will link Europe, Asia and Southeast Asia together,” Korbsak Pootrakool, vice-minister at the Prime Minister’s Office, told reporters.

The link forms part of Beijing’s regional infrastructure drive to connect Chinese cities with Southeast Asia, including Thailand’s industrial zones and its eastern deep sea port.

Some analysts see the project as a centerpiece of China-Thailand relations which appear to have deepened following a 2014 coup by the Thai army.

Thailand’s government has said Thai firms will be responsible for construction while China will be responsible for the railway technology, signal systems and technical training.

“The project will use Thai materials but Chinese technology will be used in the construction,” Prayuth said.

“We will send people to learn this so that we can operate the rail system ourselves in the future.”
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On the day they were freed from slavery, the fishermen hugged, high-fived and sprinted through a stinging rain to line up so they wouldn’t be left behind. But even as they learned they were going home, some wept at the thought of returning empty-handed and becoming one more mouth to feed.

Two years have passed since an Associated Press investigation spurred that dramatic rescue, leading to the release of more than 2,000 men trapped on remote Indonesian islands. The euphoria they first felt during reunions with relatives has long faded. Occasional stories of happiness and opportunity have surfaced, but the men’s fight to start over has largely been narrated by shame and struggle.

Some of them are lucky to find odd jobs paying pennies an hour in cramped slums and rural villages in Myanmar, Cambodia, Thailand and Laos. Others must travel far from home for back-breaking labor.

Some suffer night terrors and trauma from the years or even decades of physical and mental abuse they endured on boats run by Thai captains. Others have fought their demons with drugs and alcohol.

At least one Cambodian tried to hang himself. Another Thai fisherman went back to work on a different boat at home, only to have his arm ripped off by a net. He says he was offered about $3 and a few packets of instant noodles as compensation.

The men left their impoverished homes years ago full of hope and headed to neighboring Thailand, promising to send money back from good-paying jobs. Instead, they were tricked, sold or even kidnapped and put onto boats that became floating prisons.

They then were trafficked thousands of miles away to the isolated Indonesian island village of Benjina, where the AP first found hundreds of captive fishermen, including some locked in a cage simply because they asked to go home. They were beaten and routinely forced to work up to 22 hours a day. The unluckiest ones ended up in the sea or buried in a company graveyard under fake names – their bodies will likely never be recovered.

The AP story prompted the Indonesian government to initiate a rescue. It also traced fish tainted by forced labor back to the supply chains of many major U.S. companies and pet food brands, including Wal-Mart, Sysco, Kroger, Fancy Feast and Iams.

“What happened in Benjina has opened everybody’s eyes,” says Indonesian fishing minister Susi Pudjiastuti, who oversaw the rescue and is pushing for improved human rights at sea globally.

Despite all the suffering following their homecomings, there are stories of inspiration.

Some of the men borrowed money, enrolled in trade school or found decent work, saving what little they could. Others are opening small businesses, or have married and started families.

A few have gone to court to challenge their former captains, receiving a small portion of the pay they were owed. In rare instances, some even helped send their traffickers to jail.

Many say time has helped soften the pain, but most remain angry about the money and years lost to Benjina. Still, they are thankful to be home, living as free men.

They are slaves no more.

Sick and unemployed

MON STATE, Myanmar – Myint Naing sits outside the flimsy thatch shack he shares with five other family members. He stares silently at a computer alongside his mother and sister, watching flickering images of their extraordinary reunion two years ago.

The memories are still raw of Myint collapsing into his wailing mother’s arms on the same dusty road just feet away from where they sit now in southern Myanmar. That day was tinged with both joy and sorrow for all the time lost – ending 22 years of separation after Myint was taken to Indonesia and nearly beaten to death by a captain who refused to let him go home.

His mother blots her eyes and briefly looks away from the screen. Myint’s younger sister sees herself embracing her brother and screaming, “We don’t need money! We just need family!”

She never realized just how much those words would be tested every day in the harsh reality of poverty.

Myint, now 42, desperately wants to work, but he’s simply not able. He tried doing construction and other manual labor, but the muscles on the right side of his body were weakened by a stroke-like attack in Indonesia. He can’t even steady a smartphone with one hand long enough to take a selfie.

He dreams of opening a little snack shop to contribute to the family’s income, but there is no money to start it.

“Half of my body is suffering, and it’s very challenging for me to get a job anywhere,” he says, as his nieces dance around him on a rickety porch. “I don’t really know how to keep going like this.”

He’s also stressed. He and his sister moved out of their mother’s house soon after he returned, partially because Myint didn’t get along with his new stepfather, who is about his age.

His sister, Mawli Than, and her husband together earn less than $5.50 a day to feed three children and three adults. But she has kept her promise to love and care for him no matter what.

She wishes she could afford to get Myint the long-term medical care he needs. Her voice cracks when she talks about not being able to give him a proper ceremony before he left to study as a Buddhist novice, a custom that every devout Burmese male tries to fulfill.

“I feel really sad and guilty that I wasn’t able to do that,” she says, sobbing, as he listens quietly in the doorway. “My brother is like a father to me.”

Myint’s freshly shaved head reveals two large scars he received during his years in Indonesia. One is from a motorbike helmet, the other from an iron rod – both blows from angry fishing captains.

He eventually escaped his captors and lived in the jungle for years, farming vegetables with help from sympathetic local families.

He insists life is better now that he is home. But his mind often drifts to the past. If his former Thai captains would just pay him what he’s owed for all the time he worked on the boats, he could buy his own house and help his sister instead of making her life harder.

“I’m very angry at them. I can’t even find words,” he says. “If I ever saw them again, I might kill them.”

Happy on land

PREK TATIENG, Cambodia – A gas-powered pump growls on Sriev Kry’s back as he walks barefoot, spraying a stream of pesticide on pink lotus blossoms that will soon be ready for harvest.

The work is hard and unforgiving. He doesn’t wear a mask or other protective gear, and there aren’t any trees in the surrounding rice paddy to shield him from the blistering sun. But this is Cambodian soil, and it belongs to him. It’s a freedom he says he never really understood until being trafficked and enslaved in Benjina.

The wiry rice farmer never wanted to be a fisherman because the ocean’s roiling waves had always sent him running to the side of the boat to vomit. So when a cousin asked if he was interested in leaving his rural Cambodian village to find higher-paying work in Thailand, he refused until he was promised a factory job or something else on land.

Unlike most migrant workers who cross the border illegally, Sriev Kry and two of his cousins waited to receive passports before leaving in 2014.

They were immediately taken to a boat and ordered to get on board after receiving $880 advances. They were told they wouldn’t be at sea long. But it was all a lie.

Just as their trawler reached the Malaysian border, Sriev Kry says he woke up to learn a Burmese fisherman was missing. They didn’t stop to search for him, and no calls were made for help. Instead, Sriev Kry says the Thai owner told the workers that “life on the boat doesn’t matter. No one cares about missing people.”

He says the men then watched as the crew member’s passport was tossed into the sea, destroying the only record of his existence.

“The other workers just saw that life is very cheap,” Sriev Kry recalls. “It is cheaper than the bodies of dogs.”

He tried not to cause problems and worked nonstop on the boat, sorting mountains of fish. He saw other crew beaten or scalded by water tossed on them when they were too sick to work.

“It’s like a slave’s life. It’s even worse than a slave. Slaves can sometimes complain or challenge the owner,” he says. “If we refused, if we complained, the Thai owner always asked: ‘You want to live? You want to have a life? Or do you want to die?'”

Sriev Kry was only able to contact his wife a few times from Benjina. He told her he wasn’t sure he’d ever make it back home to the emerald green rice paddies and lotus fields they tended together.

Two of their four children were studying in the capital, Phnom Penh, with one already in university. The baby was just a year old, and the family was struggling to survive because Sriev Kry never sent the money he was promised. But his wife, Khan Srin, encouraged him to hold on. To focus on staying alive.

When he was finally rescued, Sriev Kry was done being silent: He volunteered to testify against his captain. He saw it as his duty to speak out to prevent others from facing the same fate. He is still waiting for his day in court.

Today, at 44, he earns about $10 a day farming the field that rings a one-room shack perched on stilts overlooking the few acres of land he owns. He sleeps here sometimes, away from his nearby village, to stand watch over his crops. He also sells mangoes from his beat-up motorbike just across the border in Vietnam and harvests catfish from a lake – the only fishing he says he will ever do again.

It’s not much, but it’s enough to pay his debts and feed his family. His captain in Benjina swore more earnings would be sent, but Sriev Kry says nothing ever came.

He remains angry and is still haunted by the image of the dead crewman’s passport being thrown into the sea. But he’s happy to be home and vows he’ll never leave his family again.

“I was just rescued from hell,” he says, shaking his head. “Why would I go back to hell again?”

Still a fisherman

YANGON, Myanmar – Phyo Kyaw’s father wept when he heard his son was returning to Thailand to board another fishing boat. But there was nothing he could do.

After the 31-year-old was rescued from Benjina, he worked a few months on the gritty outskirts of Yangon driving a bus and a motorbike taxi, but the money wasn’t good and his bike soon was stolen.

Several of Phyo’s friends from Benjina already had gone back to Thailand to find better-paying work, and they encouraged him to get a passport and join them on another fishing boat. They had heard good stories about the company, and they all had legal working documents this time. They were convinced their papers would protect them from exploitation.

Phyo left Myanmar without telling his father. He went to the same port town where he was initially trafficked and got on a trawler with 13 other Burmese men.

After being beaten and spending more than two years on Benjina with no pay, he was scared of being trafficked again but decided to take a chance. As he prepared to leave, he met other fishermen who had just docked – they had been at sea for three years without touching land.

“I don’t think it’s fair, but it’s my choice to go,” Phyo says. “My father is the only financial provider here for the moment so at least if I go to Thailand, I can bring some money back.”

Phyo didn’t know where his boat was going or how long he would be gone. He also had no idea if he was fishing legally or poaching, a common but dangerous practice that can land an entire crew in a foreign jail.

The days were still long but, this time, he got a few more hours of sleep – four or five a night – and he wasn’t beaten.

After six months at sea, the trawler returned to Thailand. Phyo should have made nearly $1,600 for the trip, but was left with just $350 after deductions for fees, food and supplies.

He could have earned nearly double that amount driving the motorbike taxi back home. Still, he’s thinking about going out to sea again with another group of Benjina guys.

His father, an electrical engineer, can only shake his head with disappointment.

“As parents, you are always worried about your children,” Aye Kyaw, 67, says inside the family’s small, sweltering apartment.

But Phyo just shrugs. Fishing is what he knows.

“If I can get a better job here, I won’t go,” he says. “But if I don’t have anything, I will go on a fishing boat.”

Forgiveness as a monk

SAMUT SAKHON, Thailand – Wrapped in flowing saffron robes with a shaved head, Prasert Jakkawaro speaks calmly and softly as he looks back on his lost life.

He spent eight years fishing the Arafura Sea’s rich waters off Benjina. If he was lucky, his boat docked twice a year. He worked around the clock, but says he was never paid what was promised.

The memories still cut like razor blades, but he does not show it. His voice remains steady, his fingers laced loosely across his lap. The rage that once sent him searching for solace at the bottom of a bottle has died. He now finds comfort praying in a monastery as a Buddhist monk and helping others who have lost their way.

“I feel that I have to give forgiveness and kindness back,” he says, his robe concealing tattoos from his former life. “I have another chance. There’s no point in dwelling on the past. The anger will only follow me in this life and into the next.”

Finding peace wasn’t easy: He was first forced to confront all of the evil he saw.

Even though the captains were Thai like him, he says he was treated just as badly as his fellow fishermen from Myanmar and Cambodia. They rarely had vegetables or meat to eat – just fish and rice for every meal, and even that wasn’t guaranteed. Those who got sick were forced to work anyway, and he saw one crew member die due to a lack of medical attention. Sleep was a luxury.

“If you don’t get up, the metal rod will be used to bang on your door and beat on your legs,” says Prasert, 53. “The rule is that if you can eat, then you have to work.”

When he asked to go home after just one year on his trawler, he was told he first had to find a replacement, an impossible request on a remote island with hundreds of other enslaved men just as desperate to leave.

Once, after coming ashore, Prasert asked his captain for more money. As punishment, he says he was tossed into a tiny, muggy cell with about 20 other men.

The security guards then used the imprisoned fishermen for a twisted form of entertainment – forcing them to beat each other up.

“You would get hit so hard that you could see the handprints on your face,” Prasert says.

Over the years, he lost hope and rage festered inside him. He talked about attacking the captain, but the other fishermen always managed to calm him down.

After he was finally rescued and returned home to Thailand, he received a settlement of about $2,250 from the boat owner. It was far short of the nearly $9,000 he says he was owed, but he knows most of the other men received nothing.

The anger continued to swell, and he wallowed in alcohol and slept anywhere he could find, including on a bathroom floor. Staff at the local nonprofit Labor Rights Protection Network, which has long assisted trafficked fishermen, pushed him to seek help.

With encouragement from his sister, Prasert spent three months studying at a Buddhist temple.

Slowly, the hatred began to melt.

“When I attend ceremonies, people really look at me as if I can shine a light on their life, and it makes me feel that I am useful again,” he says. “I feel like I can have real happiness at last.”

* Information for this story came from interviews with nearly 15 former fishermen in Cambodia, Myanmar and Thailand along with nonprofits in Cambodia and Thailand.

 
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