All posts by MBusiness

UN Forecasting Global Economy Will Expand by Over 3 Percent

The United Nations is forecasting that the global economy will expand by more than 3 percent this year and next year — but it warns that increasing risks could trigger “a shock to investment and trade” and a sharp drop to 1.8 percent growth in 2019.

 

The U.N.’s mid-year report on the World Economic Situation and Prospects launched Thursday says growth in the world economy is surpassing expectations, reflecting further economic expansion in developed countries and broadly favorable investment conditions.

 

However, the report said, “downside risks” have increased including “a rise in the probability of trade conflicts between major economies.”

 

Dawn Holland, chief of the U.N.’s Global Economic Monitoring Branch, cited the Trump administration’s imposition of tariffs in January and proposed new tariffs against China as well as the renegotiation of the U.S. trade agreement with Mexico and Canada, which has left “a void of uncertainty.”

 

There are also negotiations between the European Union and the United States partly linked to tariffs on steel, she said, and an increasing number of disputes have been raised with the World Trade Organization over the last six months.

 

The report said other factors also pose risks including uncertainty over monetary policy, increasing debt levels, and greater geopolitical tensions including in the Korean peninsula, Middle East, South China Sea and Ukraine.

 

But the U.N.’s assessment was generally upbeat citing continued economic improvements over the last several months including accelerating wage growth, improved investment prospects, and the short-term impact of the U.S. fiscal stimulus package.

 

“Many commodity-exporting countries will also benefit from the higher level of energy and metal prices,” the report said.

 

According to the U.N., world growth is now forecast to reach 3.2 percent in both 2018 and 2019, up from its forecast in December of 3 percent growth this year and 3.1 percent next year.

 

While many countries will experience growth, the report said output is expected to decline in central Africa and southern Africa, the report said. And the forecast for economies in transition including Russia and the world’s poorest countries have been revised “marginally downward” for 2018.

 

Assistant Secretary-General for Economic Development Elliott Harris cautioned, however, that “there is a strong need not to become complacent in response to upward trending headline figures.”

 

The report not only highlights the risks to economic growth but “the need to urgently address a number of policy challenges, including threats to the multilateral trading system, high inequality and the renewed rise in carbon emissions,” he told a press conference launching the report.

 

And it warned that if trade tensions and barriers were to “spiral over the course of 2018, through widespread retaliations and extensive disruption to global value chains, this could trigger a sharp drop in global investment and trade.”

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Iran Signs Oil Deal With UK Group as France’s Total Exits

Iranian state TV is reporting that the country has signed an agreement with a British consortium to develop an oil field, just as another major company, France’s Total, says it will withdraw from Iran because of the renewed U.S. sanctions.

The new agreement is the first between Iran and a company from a key Western ally of the United States since Washington last week announced it will pull out of the landmark 2015 nuclear deal between Iran and Western powers. The U.S. said it was reinstalling sanctions against Iran.

Managing Director of Pergas International Consortium Colin Rowley, and Bijan Alipour, managing director of National Iranian South Oil Co., signed a preliminary deed on the partnership in the presence of British Ambassador Rob Macaire in Tehran on Wednesday night.

The project, if the agreement turns into a contract, will require more than $1 billion to produce 200,000 barrels of crude oil per day during the next decade in the 55-year old Karanj oil field. The oil field is located in the country’s oil-rich province and currently produces 120,000 barrels of crude per day.

The U.S. sanctions aim to limit companies from any country from dealing with Iran by prohibiting them from using American banks in their operations. Pergas seems to do little business in the U.S., potentially giving it more freedom to operate in Iran.

Its move contrasts with the decision by French oil and gas producer Total to not continue a multi-billion dollar project in Iran unless it is granted a waiver by U.S. authorities.

The group said in a statement Wednesday that it “cannot afford to be exposed to any secondary sanction” including the loss of financing by American banks.

Total wants U.S. and French authorities to examine the possibility of a specific project waiver.

The 2017 contract for new development at the vast South Pars gas field was the first major gas deal signed with Iran following the 2015 nuclear deal.

Major European powers and Tehran committed this week to keep working together to save the Iran nuclear deal.

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Iran Signs Oil Deal With UK Group as France’s Total Exits

Iranian state TV is reporting that the country has signed an agreement with a British consortium to develop an oil field, just as another major company, France’s Total, says it will withdraw from Iran because of the renewed U.S. sanctions.

The new agreement is the first between Iran and a company from a key Western ally of the United States since Washington last week announced it will pull out of the landmark 2015 nuclear deal between Iran and Western powers. The U.S. said it was reinstalling sanctions against Iran.

Managing Director of Pergas International Consortium Colin Rowley, and Bijan Alipour, managing director of National Iranian South Oil Co., signed a preliminary deed on the partnership in the presence of British Ambassador Rob Macaire in Tehran on Wednesday night.

The project, if the agreement turns into a contract, will require more than $1 billion to produce 200,000 barrels of crude oil per day during the next decade in the 55-year old Karanj oil field. The oil field is located in the country’s oil-rich province and currently produces 120,000 barrels of crude per day.

The U.S. sanctions aim to limit companies from any country from dealing with Iran by prohibiting them from using American banks in their operations. Pergas seems to do little business in the U.S., potentially giving it more freedom to operate in Iran.

Its move contrasts with the decision by French oil and gas producer Total to not continue a multi-billion dollar project in Iran unless it is granted a waiver by U.S. authorities.

The group said in a statement Wednesday that it “cannot afford to be exposed to any secondary sanction” including the loss of financing by American banks.

Total wants U.S. and French authorities to examine the possibility of a specific project waiver.

The 2017 contract for new development at the vast South Pars gas field was the first major gas deal signed with Iran following the 2015 nuclear deal.

Major European powers and Tehran committed this week to keep working together to save the Iran nuclear deal.

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EU to Trump: Stop Threatening Us with Tariffs

The European Union has called on U.S. President Donald Trump’s administration to stop threatening it with tariffs on steel and aluminum, saying Thursday it is prepared to discuss trade — but not at gun-point.

 

In March, Trump slapped tariffs of 25 percent on steel imports and 10 percent on imported aluminum, but granted the 28 EU countries a temporary exemption until June 1. He also temporarily exempted big steel producers Canada and Mexico, provided they agree to renegotiate a North American trade deal to his satisfaction.

 

“It’s Europe’s economic sovereignty, and what we are demanding is that we are exempted without conditions or time limits,” French President Emmanuel Macron said in Bulgaria, where EU leaders have gathered for a summit with Balkans countries.

 

Convinced that the U.S. move breaks global trade rules, the EU has drawn up a list of “rebalancing” duties worth some 2.8 billion euros ($3.4 billion) to impose on U.S. products if it is not permanently exempt. It has vowed not to negotiate under threat.

 

“I don’t think we have to consider this or that, when it contravenes the laws of international trade,” Macron said.

 

But he added: “We can improve things, in a peaceful setting.”

 

German Chancellor Angela Merkel echoed his remarks.

 

“We have a common position: we want an unlimited exemption, but are then prepared to talk about how we can reciprocally reduce barriers for trade,” she told reporters in the Bulgarian capital Sofia.

 

Should the exemptions be dropped, the EU stands ready to deepen trans-Atlantic energy cooperation, notably on liquefied natural gas, improve reciprocal market access for industrial products and work together to reform the rules of the World Trade Organization.

 

The EU rejects Trump’s assertion that the tariffs are needed for U.S. national security and sees them as protectionist measures meant to boost local businesses. Most EU countries are U.S. allies in the world’s biggest security organization, NATO.

 

 

 

 

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EU to Trump: Stop Threatening Us with Tariffs

The European Union has called on U.S. President Donald Trump’s administration to stop threatening it with tariffs on steel and aluminum, saying Thursday it is prepared to discuss trade — but not at gun-point.

 

In March, Trump slapped tariffs of 25 percent on steel imports and 10 percent on imported aluminum, but granted the 28 EU countries a temporary exemption until June 1. He also temporarily exempted big steel producers Canada and Mexico, provided they agree to renegotiate a North American trade deal to his satisfaction.

 

“It’s Europe’s economic sovereignty, and what we are demanding is that we are exempted without conditions or time limits,” French President Emmanuel Macron said in Bulgaria, where EU leaders have gathered for a summit with Balkans countries.

 

Convinced that the U.S. move breaks global trade rules, the EU has drawn up a list of “rebalancing” duties worth some 2.8 billion euros ($3.4 billion) to impose on U.S. products if it is not permanently exempt. It has vowed not to negotiate under threat.

 

“I don’t think we have to consider this or that, when it contravenes the laws of international trade,” Macron said.

 

But he added: “We can improve things, in a peaceful setting.”

 

German Chancellor Angela Merkel echoed his remarks.

 

“We have a common position: we want an unlimited exemption, but are then prepared to talk about how we can reciprocally reduce barriers for trade,” she told reporters in the Bulgarian capital Sofia.

 

Should the exemptions be dropped, the EU stands ready to deepen trans-Atlantic energy cooperation, notably on liquefied natural gas, improve reciprocal market access for industrial products and work together to reform the rules of the World Trade Organization.

 

The EU rejects Trump’s assertion that the tariffs are needed for U.S. national security and sees them as protectionist measures meant to boost local businesses. Most EU countries are U.S. allies in the world’s biggest security organization, NATO.

 

 

 

 

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Trump: US Has Not ‘Folded’ in Trade Dealing with China

President Donald Trump says the United States has not “folded” in trade negotiations with China as both countries get set for another round of meetings.

“We have not seen China’s demands yet,” Trump tweeted Wednesday. “The U.S. has very little to give because it has given so much over the years. China has much to give.”

U.S. Treasury Secretary Steve Mnuchin opens two days of talks in Washington with Chinese officials Thursday.

“These meetings are a continuation of the talks held in Beijing two weeks ago and will focus on rebalancing the United States-China bilateral economic relationship,” the White House says.

They are also aimed at avoiding a full-blown trade war after the U.S. and China exchanged tariffs in March.

Trump told the country Wednesday that the U.S. has been losing hundreds of billions of dollars a year and countless U.S. manufacturing jobs because of its trade deficit with China.

But despite his tough talks on China, Trump wants to rescue China’s giant technology company ZTE, puzzling many lawmakers.

ZTE was forced to close one of its plants and cease major operations after the U.S. Commerce Department barred it from buying American-made components for its consumer products. ZTE had been using those components in goods sold to Iran and North Korea, a violation of U.S. trade embargoes.

The president said earlier this week that “too many jobs” were being lost in China because of ZTE’s problems, and he ordered the Commerce Department to help it “get back into business, fast.”

Republican Senator Marco Rubio told VOA that the Commerce Department’s sanctions on ZTE are “a law enforcement function that really shouldn’t have anything to do with trade. … Chinese telecom companies are agents of the Chinese government. They don’t just steal national security secrets, they steal commercial secrets.”

House Democratic Leader Nancy Pelosi also talked to VOA, saying Trump does not know how to fight when it comes to balancing trade issues.

“The president talked big about wanting to have a fair trade relationship with China and folded immediately on the ZTE issue.”

Pelosi said Trump’s motives over ZTE are hard to understand, but said he will face serious opposition in Congress if he tries to use ZTE as a bargaining chip.

Michael Bowman and VOA Mandarin contributed to this report.

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Trump: US Has Not ‘Folded’ in Trade Dealing with China

President Donald Trump says the United States has not “folded” in trade negotiations with China as both countries get set for another round of meetings.

“We have not seen China’s demands yet,” Trump tweeted Wednesday. “The U.S. has very little to give because it has given so much over the years. China has much to give.”

U.S. Treasury Secretary Steve Mnuchin opens two days of talks in Washington with Chinese officials Thursday.

“These meetings are a continuation of the talks held in Beijing two weeks ago and will focus on rebalancing the United States-China bilateral economic relationship,” the White House says.

They are also aimed at avoiding a full-blown trade war after the U.S. and China exchanged tariffs in March.

Trump told the country Wednesday that the U.S. has been losing hundreds of billions of dollars a year and countless U.S. manufacturing jobs because of its trade deficit with China.

But despite his tough talks on China, Trump wants to rescue China’s giant technology company ZTE, puzzling many lawmakers.

ZTE was forced to close one of its plants and cease major operations after the U.S. Commerce Department barred it from buying American-made components for its consumer products. ZTE had been using those components in goods sold to Iran and North Korea, a violation of U.S. trade embargoes.

The president said earlier this week that “too many jobs” were being lost in China because of ZTE’s problems, and he ordered the Commerce Department to help it “get back into business, fast.”

Republican Senator Marco Rubio told VOA that the Commerce Department’s sanctions on ZTE are “a law enforcement function that really shouldn’t have anything to do with trade. … Chinese telecom companies are agents of the Chinese government. They don’t just steal national security secrets, they steal commercial secrets.”

House Democratic Leader Nancy Pelosi also talked to VOA, saying Trump does not know how to fight when it comes to balancing trade issues.

“The president talked big about wanting to have a fair trade relationship with China and folded immediately on the ZTE issue.”

Pelosi said Trump’s motives over ZTE are hard to understand, but said he will face serious opposition in Congress if he tries to use ZTE as a bargaining chip.

Michael Bowman and VOA Mandarin contributed to this report.

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New Farmers Squeezed Out as Development Alters US Landscape

Four years ago, Maeve Taylor and her husband decided to quit their jobs and move their family across the United States to start an organic dairy farm in New York.

The couple used a federal loan to buy 35 cows and started to learn their new trade on a patch of rented farmland.

But when they began looking for land of their own they hit their first major hurdle. Even in an area with a long agricultural tradition and lots of farmland, there was nothing to buy — at least at a price they could afford.

“You’d think you could buy something, but hardly any of it is for sale,” Taylor told the Thomson Reuters Foundation. “Wealthy landowners … live here as retirement homes or have purchased property as a vacation home.”

More than 31 million acres (12.5 million hectares) of U.S. farmland were lost between 1992 and 2012, according to a major assessment released this week by the American Farmland Trust — double previous estimates.

The advocacy group found nearly two-thirds of all U.S. development during that period was on farmland, taken over primarily by the expansion of urban areas and by low-density housing.

Experts say new farmers are being priced out by developers and the rural landscape risks being radically transformed as farms are split or sold as real estate, unless the government is prepared to safeguard agricultural property.

“We’re at a time in history where farmland isn’t being bought by farmers,” said Holly Rippon-Butler at the National Young Farmers Coalition, an advocacy group. “Our limited agricultural resources could be lost to agriculture forever. That’s the urgency.”

Nearly 100 million acres — 10 percent of agricultural land in the United States — is expected to change hands by the end of the decade as elderly farmers retire, according to a 2014 government estimate, the first of its kind.

The average age of U.S. farmers — and agricultural landholders — has been steadily rising, to the point where today many are looking to secure a comfortable retirement.

Almost two-thirds of U.S. farmland is now managed by someone over 55, and farmers older than 65 now outnumber those under 35 by a sixfold margin, according to the Young Farmers Coalition, citing federal statistics.

“Significant challenge”

The looming changeover in landholdings could be an opportunity for new farmers wanting to buy. But most agricultural lands are kept within families or sold to acquaintances, not on the open market.

Less than a quarter of the nearly 100 million acres of agricultural land that will change hands is expected to be sold to a non-relative, according to the 2014 federal findings.

Another 58 million acres is expected to be passed down through farming families.

Taylor said she and her husband were repeatedly turned away by sellers who pointedly told them that they wouldn’t be able to afford the asking price.

Eventually, driven by falling prices for organic dairy products, they decided to sell their cows in order to pay off their loan — a story that appears to be increasingly common.

Last year, the Young Farmers Coalition surveyed U.S. farmers aged under 40 to gauge how they were fairing. The findings were stark. Almost 40 percent of respondents cited land access as a “significant challenge” — the survey’s most-cited concern.

Real estate values for farms more than doubled from 2000 to 2015, U.S. Department of Agriculture research found in February.

Meanwhile, farm incomes stayed relatively flat, particularly after commodity prices fell in recent years. A study released in September found that the value of farm production compared with farm real estate is at its lowest point ever recorded.

Opportunities

Campaigners are now looking to lawmakers debating updates to what is commonly known as the farm bill, which expires in September.

The new five-year bill, a draft of which was released in mid-April, could offer strategies to address the issue.

While local-level zoning regulations already seek to protect farmland in the United States, experts say it is not difficult for developers to change the designation — and almost unheard of for it to be changed back again.

“In general, once you transfer land out of farming, it’s very difficult if not impossible to bring it back into farming,” said Juli Obudzinski, deputy policy director with the National Sustainable Agriculture Coalition.

Even if land continues to be farmed, Obudzinski said spiking real estate values meant it was more likely to be bought up by existing farmers than new ones looking to get into the sector, and called for a national strategy on the looming transition.

“Otherwise, our concern is that these lands will just go to the biggest farms and the highest bidders, increasing consolidation and decreasing the viability of rural communities,” Obudzinski said.

Still, the aging of U.S. agricultural landholders does offer potential opportunities.

Maeve Taylor’s family is now in the process of purchasing land in nearby Vermont, close enough that they won’t have to move.

The transaction is being facilitated by the Vermont Land Trust, which matched the Taylors with a farming family who wanted to sell.

It structured the sale in such a way that the land would be affordable to the Taylors, using a mechanism under debate in the farm bill discussions.

The owners had been raising organic wheat for nearly four decades, Taylor said, supplying it to nearby bakers. Now, they wanted to retire and ensure that their business continued.

The land sale is expected to take place this month, and Taylor expects to be farming organic wheat by summer.

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New Farmers Squeezed Out as Development Alters US Landscape

Four years ago, Maeve Taylor and her husband decided to quit their jobs and move their family across the United States to start an organic dairy farm in New York.

The couple used a federal loan to buy 35 cows and started to learn their new trade on a patch of rented farmland.

But when they began looking for land of their own they hit their first major hurdle. Even in an area with a long agricultural tradition and lots of farmland, there was nothing to buy — at least at a price they could afford.

“You’d think you could buy something, but hardly any of it is for sale,” Taylor told the Thomson Reuters Foundation. “Wealthy landowners … live here as retirement homes or have purchased property as a vacation home.”

More than 31 million acres (12.5 million hectares) of U.S. farmland were lost between 1992 and 2012, according to a major assessment released this week by the American Farmland Trust — double previous estimates.

The advocacy group found nearly two-thirds of all U.S. development during that period was on farmland, taken over primarily by the expansion of urban areas and by low-density housing.

Experts say new farmers are being priced out by developers and the rural landscape risks being radically transformed as farms are split or sold as real estate, unless the government is prepared to safeguard agricultural property.

“We’re at a time in history where farmland isn’t being bought by farmers,” said Holly Rippon-Butler at the National Young Farmers Coalition, an advocacy group. “Our limited agricultural resources could be lost to agriculture forever. That’s the urgency.”

Nearly 100 million acres — 10 percent of agricultural land in the United States — is expected to change hands by the end of the decade as elderly farmers retire, according to a 2014 government estimate, the first of its kind.

The average age of U.S. farmers — and agricultural landholders — has been steadily rising, to the point where today many are looking to secure a comfortable retirement.

Almost two-thirds of U.S. farmland is now managed by someone over 55, and farmers older than 65 now outnumber those under 35 by a sixfold margin, according to the Young Farmers Coalition, citing federal statistics.

“Significant challenge”

The looming changeover in landholdings could be an opportunity for new farmers wanting to buy. But most agricultural lands are kept within families or sold to acquaintances, not on the open market.

Less than a quarter of the nearly 100 million acres of agricultural land that will change hands is expected to be sold to a non-relative, according to the 2014 federal findings.

Another 58 million acres is expected to be passed down through farming families.

Taylor said she and her husband were repeatedly turned away by sellers who pointedly told them that they wouldn’t be able to afford the asking price.

Eventually, driven by falling prices for organic dairy products, they decided to sell their cows in order to pay off their loan — a story that appears to be increasingly common.

Last year, the Young Farmers Coalition surveyed U.S. farmers aged under 40 to gauge how they were fairing. The findings were stark. Almost 40 percent of respondents cited land access as a “significant challenge” — the survey’s most-cited concern.

Real estate values for farms more than doubled from 2000 to 2015, U.S. Department of Agriculture research found in February.

Meanwhile, farm incomes stayed relatively flat, particularly after commodity prices fell in recent years. A study released in September found that the value of farm production compared with farm real estate is at its lowest point ever recorded.

Opportunities

Campaigners are now looking to lawmakers debating updates to what is commonly known as the farm bill, which expires in September.

The new five-year bill, a draft of which was released in mid-April, could offer strategies to address the issue.

While local-level zoning regulations already seek to protect farmland in the United States, experts say it is not difficult for developers to change the designation — and almost unheard of for it to be changed back again.

“In general, once you transfer land out of farming, it’s very difficult if not impossible to bring it back into farming,” said Juli Obudzinski, deputy policy director with the National Sustainable Agriculture Coalition.

Even if land continues to be farmed, Obudzinski said spiking real estate values meant it was more likely to be bought up by existing farmers than new ones looking to get into the sector, and called for a national strategy on the looming transition.

“Otherwise, our concern is that these lands will just go to the biggest farms and the highest bidders, increasing consolidation and decreasing the viability of rural communities,” Obudzinski said.

Still, the aging of U.S. agricultural landholders does offer potential opportunities.

Maeve Taylor’s family is now in the process of purchasing land in nearby Vermont, close enough that they won’t have to move.

The transaction is being facilitated by the Vermont Land Trust, which matched the Taylors with a farming family who wanted to sell.

It structured the sale in such a way that the land would be affordable to the Taylors, using a mechanism under debate in the farm bill discussions.

The owners had been raising organic wheat for nearly four decades, Taylor said, supplying it to nearby bakers. Now, they wanted to retire and ensure that their business continued.

The land sale is expected to take place this month, and Taylor expects to be farming organic wheat by summer.

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Malaysia’s New Leaders Lay Out Economic Reforms, Rattle Nerves

Malaysia’s new government to scrutinize past economic policies under the now ousted Najib Razak administration is prompting analysts to warn of a slide in investment and growth in one of Southeast Asia’s top economies.

The new leadership has appointed a group of prominent citizens, an eminent persons group, to come up with a new policy agenda within the next 100 days that will, among other things, review mega investment projects that have been key drivers of economic growth.

The new government has also established a special task force as corruption allegations over the abuse of funds in a sovereign wealth fund set up by Najib, and ordered a review of political representation on Malaysia’s largest government investment firms, including the main sovereign and pension funds.

Leading the eminent persons group is a former finance minister, Daim Zainuddin, and it includes a former central bank governor, Zeti Akhtar Aziz, a former president the Malaysian energy giant, Petronas, an economist and a leading businessman.

 

Gareth Leather, senior Asia economist for Capital Economics, an economic research group in London, says a key issue is whether Malaysia’s new government will remain united in the face of moves toward economic reforms.

“[The coalition] when it was formed was very much a coalition against Najib rather than anything pro-reform. So the first real test they have got is to see if there is enough cohesion within that coalition to push through [economic] reforms,” Leather told VOA.

A key campaign promise by new Prime Minister Mahathir Mohamad’s Pakatan Harapan — or Alliance of Hope — was to abolish a value added, goods and services tax.

While the tax, known as GST, was unpopular among voters, analysts say the revenue enabled the government to diversify its tax base from an over-reliance on corporate tax and the oil industry.

Immediately after the vote, financial markets reacted nervously to the scrapping of the tax and questions of the impact the measure would have on the government’s budget. Contributions from the GST have reached $10.6 billion.

Malaysian Finance Ministry officials have not said when the tax would be abolished, and analysts predicted a tough road ahead for the plan.

“To raise as much money as the GST while getting rid of the GST is going to be quite difficult. I don’t think that they can really go ahead and form a U-turn a d decide to keep it — so it’s going to be quite tricky managing it for them,” Leather said.

Analysts say financial markets are also closely watching steps in the new investigations centered on former leader Najib, accused of siphoning off billions of dollars from the 1MDB wealth fund. He firmly denies the charges. The U.S. Department of Justice alleges some $4.5 billion was misappropriated from the 1MDB, originally set up by Najib.

At least six countries, including the U.S., Singapore and Switzerland, are investigating the allegations of corruption. The new government has vowed to undertake fresh investigations into the case. Last weekend Malaysian immigration authorities refused Najib and his family the right to leave the country pending the investigations.

 

Unlike abolishing the sales tax, Leather predicts the corruption investigations will have a positive effect on the economy.

“Hopefully what it will do is it will bring to light a lot of the problems, institutional problems that have been holding Malaysia’s economy back over the past few years. It would have been shocking had Najib been able to steal this election,” he said.

But observers say a review of the multi-billion dollar mega projects, especially those undertaken by China, may have a major impact. The Chinese have invested more than $3.38 billion in Malaysia — and China is the leading foreign investor ahead of the U.S., Japan and Singapore. Chinese investments include manufacturing, real estate and sovereign wealth fund bonds.

China has also supported rail infrastructure in Malaysia that is linked to the One Belt One Road, a Beijing initiative that envisions building a network extending throughout Asia.

Analysts say there is a risk that investment — a key driver of growth — may fall sharply over the next two years.

Economic growth, with quarterly figures due this week, has been expanding at between 5.5 percent and 6 percent over the past year, aided by exports and foreign investment.

During the election campaign, Mahathir rallied against Chinese investment and promised a detailed review of projects involving foreign countries.

Pavida Pananond, a professor of international business at Bangkok’s Thammasat University, also predicts that Malaysia faces key economic challenges, especially after more than 60 years of government led by the monolithic United Malay National Organization coalition.

Pavida, in emailed comments to VOA, said it “remains to be seen how much political power can be remained from [the] economic sphere” after such a length of time.

“While the intention to scrutinize major projects and to investigate corruption should be well received, major changes will not come easily as the Malaysian economy and business have long been dominated by government linked or government supported corporations and entities,” she said.

On a positive note, she added, “the euphoric excitement toward changes, equality and transparency, should be welcome, as they bode well for what is needed in the new era of efficiency — and innovation-driven economy that Malaysia aspired to achieve.”

 

 

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