Category Archives: Business

economy and business news

Trump Administration Bars Oil Drilling Off Florida

Interior Secretary Ryan Zinke has caved in to pressure from the governor and is banning oil and gas drilling off the Florida coast.

“I support the governor’s position that Florida is unique and its coasts are heavily reliant on tourism as an economic driver,” Zinke said in a statement late Tuesday.

He outright admitted that Florida’s Republican Governor Rick Scott pressured him to put the state’s waters off limits.

Last week, the Trump administration proposed opening nearly all U.S. offshore waters to oil and gas drilling, reversing former Obama administration policies.

The White House has said it wants to make the U.S. more energy independent.

But environmental groups and Republican and Democratic governors from coastal states loudly object. They say oil and gas drilling puts marine life, beaches, and lucrative tourism at risk.

The Pentagon has also expressed misgivings about drilling in the eastern Gulf of Mexico, where naval exercises are held.

The 2010 BP Deepwater Horizon oil spill in the Gulf was the largest such disaster in U.S. history, causing billions of dollars in damage to the Gulf Coast, from Louisiana to Florida, killing more than 100,000 different marine mammals, birds, and reptiles.

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Poverty for Syrian Refugees in Lebanon Could Push Children to Marry and Work

Nearly seven years into Syria’s civil war, Syrian refugees in neighboring Lebanon are becoming poorer, leaving children at risk of child labor and early marriage, aid organizations said on Tuesday.

A recent survey by the United Nations children’s agency UNICEF, U.N.’s World Food Program, and refugee agency, UNHCR showed that Syrian refugees in Lebanon are more vulnerable now than they have been since the beginning of the crisis.

Struggling to survive, more than three quarters of the refugees in Lebanon now live on less than $4 per day, according to the survey which was based on data collected last year.

“The situation for Syrian refugees in Lebanon is actually getting worse – they are getting poorer. They are barely staying afloat,” Scott Craig, UNHCR spokesman in Lebanon, told the Thomson Reuters Foundation.

Around 1.5 million refugees who fled Syria’s violence account for a quarter of Lebanon’s population.

The Lebanese government has long avoided setting up official refugee camps. So, many Syrians live in tented settlements, languishing in poverty and facing restrictions on legal residence or work.

“Child labor and early marriage are direct consequences of poverty,” Tanya Chapuisat, UNICEF spokeswoman in Lebanon said in a statement to the Thomson Reuters Foundation.

“We fear this (poverty) will lead to more children being married away or becoming breadwinners instead of attending school,” she said.

According to UNICEF, 5 percent of Syrian refugee children between 5-17 are working, and one in five Syrian girls and women aged between 15 and 25 is married.

Mike Bruce, a spokesman for the Norwegian Refugee Council, said without sufficient humanitarian aid and proper work Syrian families would increasingly fall into debt and more could turn to “negative coping mechanisms” like child labor and marriage.

Cold winter temperatures in Lebanon would also hurt refugees, he said.

“Refugees are less and less able to deal with each shock that they face and severe weather could be one of those shocks,” said Bruce.

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Venezuela’s Congress Declares ‘Petro’ Cryptocurrency Illegal

Venezuela’s opposition-run parliament on Tuesday outlawed a “petro” cryptocurrency promoted by socialist President Nicolas Maduro, calling it an effort to illegally mortgage the cash-strapped country’s oil reserves.

Maduro on Friday said his government would issue nearly $6 billion of petros as a way to raise hard currency and to evade financial sanctions imposed by Washington.

Cryptocurrency experts say Venezuela’s mismanagement of its own economy, combined with the ruling Socialist Party’s historic lack of respect for private property rights, will likely leave investors uninterested in acquiring petros.

“This is not a cryptocurrency, this is a forward sale of Venezuelan oil,” said legislator Jorge Millan. “It is tailor-made for corruption.”

Legislators warned investors that the petro would be seen as null and void once Maduro, who is up for re-election this year, is no longer in office. They added that the petro issue violates constitutional requirements that the legislature approve borrowing.

The Information Ministry did not immediately respond to a request for comment.

Maduro has routinely ignored the legislature since his party lost control of it in 2016, and the pro-government Supreme Court has shot down nearly every measure passed since then.

In July, the country elected an all-powerful legislative body called the Constituent Assembly, a vote that was boycotted by the opposition.

The government of U.S. President Donald Trump described the new Constituent Assembly as the consolidation of a dictatorship, and issued sanctions barring U.S. financial institutions from acquiring any debt issued by Venezuela after mid-2017.

That has effectively blocked Maduro’s government from refinancing its hefty debt burden, and would likely add to investor concern about the petro, although it was not specifically mentioned in the sanctions measure.

Maduro hopes it will serve as a payment mechanism for foreign suppliers and avoid the payments delays that have grown more acute since the sanctions went into place.

The government plans in the coming weeks to issue 100 million petros, backed by 100 million barrels of oil reserves.

The petro’s price is initially to be pegged to the value of Venezuela’s basket of oil and fuel exports, which last week closed at $59.07.

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Amazon’s Jeff Bezos Now World’s Richest Man

Amazon.com CEO Jeff Bezos is now the richest person of all time, with a fortune of $105.1 billion, according to financial news outlet Bloomberg.

With the stock market soaring to new heights in the first few days of 2018, Bezos’ fortune rocketed upward, growing $6.1 billion in just five trading days.

That happened because most of Bezos’ wealth is contained in shares of Amazon.com, the online retail giant. Shares of Amazon rose 56 percent in 2017 and more than 6 percent since the start of this year.

Financial news trackers differ on whether Bezos is the richest man in history, or if his nearest rival, Microsoft founder Bill Gates, holds that record.

Bezos surpassed Gates briefly last year before taking the lead for good in October and crossing the $100-billion mark by November, buoyed by the holiday shopping season.

Gates is worth more than $90 billion, but financial experts say he would be worth far more if he had not given away so much in cash and shares of Microsoft to charity. Bloomberg reports that if Gates had not given away some $36 billion of stock to charity, his fortune would be worth more than $150 billion.

In addition to Amazon, Bezos’ holdings include The Washington Post and the space exploration company, Blue Origin.

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Oil Prices Rise to Three-Year High

Oil prices surged to a three-year high Tuesday on rising expectations that OPEC member countries will comply with oil production cuts to the end of 2018.

Brent Crude prices are headed toward $70 a barrel, West Texas Crude settled at $62.96 bbl, the highest since December 2014. But other factors could derail OPEC member agreement on production quotas, including continued expansion of U.S. shale production and the likelihood of stronger global demand. 

Analysts say rapid changes in supply and demand could trigger an early exit or prompt member countries to cheat on production quotas, especially when prices start to rise.

Meanwhile, the United States is increasingly less dependent on foreign oil, thanks in part to the shale boom and the influx of cheap natural gas. U.S. Energy Information Administration forecasts U.S. crude oil production will climb to more than 10 million barrels per day by the first quarter of 2018, exceeding 11 million bpd in 2019.  

The American Petroleum Institute, the U.S. trade group that represents the oil and natural gas industry, boasted Tuesday about helping to create “U.S. energy abundance” but said the industry was focused on minimizing the harmful effects of greenhouse gases associated with fossil fuels.

In his 2018 State of American Energy address, API president and CEO Jack Girard said it was time to move beyond the debate over climate change.

“I think we’re at the point where we need to get over the conversation of who believes and who doesn’t, and move to a conversation about solutions,” he said.

The U.S. is now the world’s biggest natural gas producer. Despite a 30 percent increase in domestic natural gas production since 2008, Girard says CO2 emissions in the U.S. are near 25-year lows, and key air pollutants have declined 73 percent since 1970.

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Ecuador to Probe Legality of Debt Under Ex-president Correa

Ecuador’s comptroller’s office on Monday announced it will open an audit of debt contracted in the last five years of the government of former President Rafael Correa to determine the legality of the operations and the use of the funds.

The move follows a report by the comptroller’s office revealing that some documentation relating to debt operations had been declared secret and that official reports on public debt had excluded some of the operations.

President Lenin Moreno, a former Correa protege, since his election last year been has criticized the ex-president’s handling of the economy and is seeking to unwind some Correa-era reforms. Correa says such efforts constitute a “coup” by Moreno.

A team of economists, lawyers and businessmen will analyze debt operations carried out between January 2012 and May 2017 and will present recommendations in April.

Comptroller Pablo Celi said Correa and former Finance Ministry officials had been notified about investigation.

Shortly after taking office last May, Moreno said that total public debt was $42 billion dollars, plus additional liabilities including some associated with payments to oil services companies.

I have just learned of a supposed preliminary report on the audit of the debt and a commission that includes several haters of the (Citizen’s Revolution),” Correa said via Twitter, referring to his political movement.

During a later speech in the city of Guayaquil he described the probe as “persecution.”

The former president is leading a campaign for the “No” vote in a Feb. 4 referendum on constitutional reforms include a measure to prohibit indefinite re-election, a measure Correa created that allowed him to run for a second term.

Correa himself in 2008 commissioned a team of experts to study the country’s prior debt operations. The experts concluded that several debt operations were “illegitimate,” leading his government to declare a default.

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Tunisian Protester Killed in Clashes with Police Over Price Hikes, Unemployment

One person was killed Monday during clashes between security forces and protesters in a Tunisian town, a security official and residents said, as demonstrations over rising prices and tax increases spread in the North African country.

A man was killed during a demonstration against government austerity measures in Tebourba, 40 km (25 miles) west of Tunis, the security official said, without giving details.

The protest had turned violent when security forces tried stopping some youths from burning down a government building, witnesses said. Five people were wounded and taken to a hospital, state news agency TAP said.

Tunisia, widely seen in the West as the only democratic success among nations where Arab Spring revolts took place in 2011, is suffering increasing economic hardship.

Anger has been building up since the government said that from Jan. 1, it would increase the price of gasoil, some goods and taxes on cars, phone calls, the internet, hotel accommodations and other items, part of austerity measures agreed with its foreign lenders.

The 2018 budget also raises customs taxes on some products imported from abroad, such as cosmetics, and some agricultural products.

The economy has been in crisis since a 2011 uprising unseated the government and two major militant attacks in 2015 damaged tourism, which comprises 8 percent of GDP. Tunisia is under pressure from the International Monetary Fund to speed up policy changes and help the economy recover from the attacks.

Violent protests spread in the evening to at least 10 towns with police and crowds clashing in Fernaneh, Bouhajla, Ouslatia, Moulouche, Sabitla, Gtar and Kef.

There was also a protest turning violent in Ettadamen district in the capital, residents said. Security forces had already dispersed small protests in Tunis late Sunday.

On Monday, about 300 people also took to the streets in the central Tunisian town of Sidi Bouzid, cradle of the country’s Arab Spring revolution, carrying banners aloft with slogans denouncing high prices.

A lack of tourists and new foreign investors pushed the trade deficit up by 23.5 percent year-on-year in the first 11 months of 2017 to a record high $5.8 billion, official data showed at the end of December.

Weakened dinar

Concerns about the rising deficit have hurt the dinar, sending it to 3.011 versus the euro Monday, breaking the psychologically important 3 dinar mark for the first time, traders said.

The currency is likely to weaken further, said Tunisian financial risk expert Mourad Hattab.

“The sharp decline of the dinar threatens to deepen the trade deficit and make debt service payments tighter, which will increase Tunisia’s financial difficulties,” he said.

Hattab said the dinar may fall to 3.3 versus the euro in the coming months because of high demand for foreign currency and little expectation of intervention from the authorities.

Last year, former Finance Minister Lamia Zribi said the central bank would reduce its interventions so that the dinar steadily declined in value, but it would prevent any dramatic slide.

The central bank has denied any plans to liberalize the currency, but Hattab said Monday’s decline showed there was an “undeclared float” of the dinar.

A weaker currency could further drive up the cost of imported food after the annual inflation rate rose to 6.4 percent in December, its highest rate since July 2014, from 6.3 percent in November, data showed Monday.

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As Growing Economies Jostle for Power, What Post-Brexit Role for Britain?

As Britain’s 2019 exit from the European Union edges closer, it is looking to carve out a new role for itself on the world stage. Many analysts say it could struggle to retain its influence as other world powers demand greater representation in global bodies like the United Nations. But the British government insists it is looking to build global alliances beyond Europe.

“Britain punches above its weight” – a boxing analogy once used by a former foreign secretary to describe his country’s role on the world stage, and often repeated since. But the punch could be losing power, says Luke McDonagh of City University London.

“Leaving the EU means that the UK could now be seen as a medium-sized economy in an increasingly polarized world where there are massive economic blocs,” he said. ” You have the United States, you have China, you have the EU. In the coming century, you will also have India, the rise of South America and Africa to compete, as well. What will the UK’s place be?”

McDonagh says a measure of Britain’s fading clout was its November loss of a judge at the International Court of Justice. After a long battle at the United Nations, London withdrew its candidate, allowing an Indian judge to take the place occupied by Britain since the ICJ’s inception in 1946.

“The way the powers game works now is decidedly different from that of 1945. And we have to question whether the U.N. Security Council will continue in this form for much longer,” he said.

But it is unlikely Britain will lose its permanent seat on the U.N. Security Council any time soon, says U.N. expert Richard Gowan of the European Council on Foreign Relations.

“Most of the big powers in the Security Council, including the United States and China, do not want to see any serious reforms to the institution in the foreseeable future,” noted Gowan.

Britain insists it is not turning inward. The government’s post-Brexit ambition is to create what it terms a “Global Britain.”

“On the one hand, the British foreign service will be able to invest more resources in U.N. affairs now that they are going to be less focused on the EU. ,” Gowan said. “But on the other hand, without the support of 27 other (EU) countries, the British are going to find it much harder to influence debates over humanitarian affairs, development or security through the U.N.”

A foretaste came in June, when many EU countries failed to vote with Britain on its claim to the Chagos Islands in the Indian Ocean.

Britain needs to keep Europe onside, argues Gowan.

“If the British are seen to be simply cozying up to the Americans, they are going to lose a lot of goodwill from their European partners pretty quickly,” he said.

In seeking a new role on the world stage, analysts say Britain will need to forge new alliances, while keeping old friends close, and try to weather turmoil back home.

 

 

 

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Eritrea Closes Hundreds of Businesses for Bypassing Banks 

Eritrea has temporarily shut down nearly 450 private businesses, the latest in a series of moves that has sent shockwaves through the economy of the Red Sea nation.

The closures were a response to companies hoarding cash and “failing to do business through checks and other banking systems,” according to a Dec. 29 editorial published by Eritrea’s Ministry of Information on the state-run website Shabait.com.

Most of the affected businesses operate in the hospitality sector, according to the announcement, and they will remain closed for up to eight months, depending on the severity of the violations.

About 58,000 private businesses operate across the country, according to the government; less than 1 percent was affected by the recent closures.

Replacing the currency

The government has taken other steps in recent years to reassert control over the economy.

In 2015, Eritrea mandated that citizens exchange all notes of the currency, the nakfa, for new notes. The government also imposed financial restrictions, including limits on the amount of cash that could be withdrawn from bank accounts or kept in private hands, according to multiple reports.

Business owners complained about the restrictions, and reports from inside the country indicate the rules have altered Eritrea’s black market exchange rate, which affects the price of many goods.

State control

Tesfa Mehari, a professor of economics in England, said the Eritrean government wants a state-owned economy. That’s a trap many other countries have fallen into that generally leads to economic failure, Mehari said.

“The government cannot develop the economy. Only the people can do that,” Mehari told VOA’s Tigrigna service. “The government can only be a facilitator. There hasn’t been a country in the world that developed because of government control.”

He also said that the closures harm people’s trust in the government and in banking institutions. 

“At the end of the day, if the people of Eritrea want to develop the economy of the country, they can only work based on trust, especially with banks. What you have with banks is a matter of oath,” Mehari said.

Compounding this mistrust, he added, is that the government’s actions aren’t backed by a specific law or decree that is publicly available for all to read.

In a statement, the government also acknowledged shortcomings in modernizing its banking sector with up-to-date technology and relevant expertise, another potential impediment to confidence in the system.

In contrast, Ibrahim Ibrahim, an Eritrean-born accountant who supports the government, said the actions are needed to fight inflation and stabilize the currency.

“I don’t think the Eritrean government is trying to control the economy, and I don’t think that’s the current environment,” said Ibrahim, who is based in Washington, D.C. “However, there might be a situation where the government is taking measures to adjust things that are not normal and turn it into normalcy as per usual.”

He said any government has the right to regulate its currency and the businesses operating within its borders.

“When these businesses are given permission to work, that means they’re entering a contract,” he said. “At the core of entering into such agreements is that the businesses work within the legalities and the laws in place. If these businesses are not working according to the law, the government is going to take appropriate measures.”

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