New Credit Rating Speaks of Vietnam’s Complicated Makeover

A decent rating from Fitch this month has Vietnam riding high on the small victory, despite some of the less favorable economic trends connected to this first-of-its-kind rating.

The state monopoly Vietnam Electricity, or EVN, clinched a “BB” score June 6 from Fitch Ratings, which until then had never officially assessed the credit of a non-financial company owned by the Hanoi government. That prompted a cross-section of officials in the southeast Asian country to gush about the promise in store for one of the world’s fastest-growing economies.

“This positive rating enables EVN to issue international bonds, diversify our financing sources, and reassure domestic and foreign institutional investors,” said Dinh Quang Tri, the acting CEO of EVN. “We are now on a stronger footing to deliver more reliable electricity to Vietnam.”

The ebullience, however, is tempered by two questions: Will this be enough for investors to trust EVN? And how much should government become involved in business?

Renewable energy

EVN underscores the mixed sentiments that analysts express about Vietnam, a communist country transitioning to capitalism. The fact that the government runs EVN contributed to Fitch’s confidence in its report card.

“We believe the company can secure adequate funding in light of its position as an entity closely linked to the sovereign,” it said in a media release.

Yet businesses want even more promises from the government. Vietnam has spent years courting investment in renewable power, for example, but with limited success. That is in part because businesses that generate wind, solar, and other alternative energy sources can sell it only to EVN, and they are afraid of losing money if the company does not buy their electricity.

For renewables, “there is no provision for any form of government guarantee, assurance, or support to enhance the creditworthiness of EVN as the sole off-taker/purchaser,” corporate law firm Baker McKenzie said in a September report.

State vs. free market

Some would like to see more government involvement in general, especially to bail out companies in trouble. Others would like to see less involvement, as evidenced in the push for Vietnam to privatize further by selling stakes in its many state-owned enterprises. The country has not settled on a balance between the free market and the government.

Hanoi used to give iron-clad pledges that it would pay up in case of default at one of its state firms or public works projects. The government is doing that less often now because it is moving away from a centrally-planned economy, as well as reducing its sovereign debt.

Public anxiety mounted in recent years as Vietnam approached its debt ceiling of 65 percent of gross domestic product, though the country has made progress in reining in the debt.

That means EVN must tread lightly. Now that the power company has a Fitch Rating, it is eyeing international bonds to borrow money from investors around the world.

Going through this financing process is “helping EVN benefit from the discipline that comes with access to capital markets,” said Jordan Schwartz, who is the director of the World Bank group overseeing infrastructure, guarantees, and public-private partnerships.

The World Bank gave EVN funds and technical assistance to prepare for the Fitch assessment. Its credit rating shows how tightly EVN’s fate correlates with that of the government. Electricity prices, for example, will have to increase for the utility to make profits and improve its rating. Big increases, however, require approval from Hanoi, which also wants to keep power affordable for citizens.

The correlation is even blunter in Fitch’s analysis. The overall credit rating for Vietnam’s government itself also is BB. If that improves, so could the score for EVN, Fitch said, “provided EVN’s linkages with the state do not deteriorate significantly.”

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Poll: Voters Give Trump Mixed Grades on Foreign, Domestic Issues

More than half of American voters say U.S. President Donald Trump’s recent meeting with North Korean leader Kim Jong Un reduced the likelihood of nuclear war, according to a poll released Wednesday.

The poll, administered by Quinnipiac University, found that 54 percent of voters thought the summit, which took place June 12 in Singapore, reduced the risk of war. Thirty-seven percent of respondents said they felt it did not reduce the chance.

“American voters say President Donald Trump deserves a pat on the back for his summit with North Korean leader Kim Jong Un ,” said Tim Malloy, assistant director of the poll.

Fifty percent of voters, however, said they did not think the summit would lead to peace between the two nations, and seven out of 10 disagreed with Trump’s June 13 claim that North Korea was “no longer a nuclear threat,” the poll found.

During the summit, Trump and Kim signed a document pledging both countries would “work to complete denuclearization of the Korean Peninsula,” and attempt to establish “new U.S.-DPRK relations.”

North Korea, however, has made several pledges to denuclearize in the past to no avail. In 2016, during the Obama administration, the North “signal[ed] a willingness to resume negotiations on denuclearization,” according to arms control advocacy group the Arms Control Association.

No to Nobel Prize

According to the poll, 66 percent of voters disagreed with the notion that Trump deserves the Nobel Peace Prize. In May, 18 Republican members of the U.S. House of Representatives wrote to the Norwegian Nobel Committee to formally nominate him. The committee is in charge of awarding the prize.

“Since taking office, President Trump has worked tirelessly to apply maximum pressure on North Korea to end its illicit weapons program and bring peace to the region,” the letter read.

Overall, 52 percent of voters said they disapproved with Trump’s performance as president, whereas 43 percent said they approved. The last Quinnipiac poll, released June 6, also found more voters disapproved than approved of the president’s performance by a margin of 51 percent to 40 percent.

Trust in media

Fifty-three percent of those polled said they trusted the news media more than Trump, while 65 percent believed that the media is an important part of democracy.

The First Amendment to the U.S. Constitution guarantees freedom of speech and the press. Trump, however, has often attacked leading news outlets such as CNN and The New York Times, often claiming that they are biased against him. In February 2017, Trump called the media “the enemy of the American People” in a tweet.

November elections

Ahead of this November’s midterm elections, in which all 435 seats of the U.S. House of Representatives and 35 of the 100 U.S. Senate seats are up for election, the poll found American voters wanted Democrats to take control of both Republican-held chambers of Congress. Voters favored Democrats over Republicans 49-43 in the House, and 49-44 in the Senate. Democrats need to gain two seats to take control of the Senate, and 24 to take control of the House.

J. Miles Coleman, an electoral analyst for American election calling group Decision Desk HQ, told VOA while Trump’s approval numbers appear to be stable, Democratic incumbents are doing better than he would expect at this time.

On Wednesday, former New York City Mayor Michael Bloomberg, a billionaire who was first elected to office as a Republican before becoming an Independent in 2007, announced he would be pledging $80 million toward helping Democratic candidates in the elections.

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McCaskill’s Husband Invested $1 Million in Offshore Hedge Fund

Four years after Democratic Senator Claire McCaskill co-sponsored legislation targeting tax havens such as the Cayman Islands, her husband began investing in a hedge fund registered in the Caribbean nation — an investment that has paid off handsomely.

The Kansas City Star reported Wednesday that Joseph Shepard has invested $1 million in Matrix Capital Management and that it has earned him between $230,000 and $2.1 million in income. The Star cited McCaskill’s financial disclosure forms, which only show a range of income.

Shepard declined the newspaper’s request for comment. He and McCaskill file their taxes separately.

McCaskill is running for re-election this year. Campaign spokeswoman Meira Bernstein told the Star that the senator has no involvement in her husband’s investments, and doesn’t consider his business interests when doing her job in the Senate.

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European Business Lobby Presses China to Stop Dragging Feet on Reform

As the United States and China teeter on the brink of an all out trade war and tit-for-tat tariffs loom, a European businesses lobby is urging Beijing to stop dragging its feet on reforms and using unfair trade policies to pamper Chinese companies.

 

Each year, foreign trade groups in China roll out a laundry list of concerns about market access, regulatory hurdles and other policies that tilt the playing field in the world’s second largest economy.

 

This year, for the first time ever, the European Chamber of Commerce’s annual survey of the business climate found that 61 percent of its 532 company members saw their Chinese counterparts as equally or more innovative.

Increased spending on research and development, targeted acquisitions of foreign high-tech firms and growing demand for innovative products from consumers were helping driving that shift, the chamber said.

 

The high response is significant. Policies linked to innovation and competition are a key part of the intensifying US — China trade debate and concerns of foreign companies operating here.

 

European Chamber President Mats Harborn said that as Chinese companies become stronger and more competitive, it is time for Beijing to “remove the training wheels.”

 

“It’s time for China to lift or reduce the pampering of its own enterprises and expose them to even more open and fair competition for them to develop into the champions that China wants them to be,” Harborn said.

 

Currently, Chinese companies account for 115 of the Fortune 500 list of global enterprises. The Chinese government claims that of the world’s 260 “unicorns” — start up companies valued at more than a billion dollars — more than 160 are from China.

Since Chinese President Xi Jinping delivered an address at the World Economic Forum in Davos early last year, China has repeatedly pledged to further open up the country’s economy.

 

According to the group’s survey of its members 52 % said that the government’s promises of opening up had yet to be realized. And looking forward, 46 percent said they thought the number of regulatory obstacles would increase over the next five years.

 

Harborn said that time is running out for China and 2018 has to be the year that it delivers on its promises.

 

“Dragging the feet on delivering on promises that have been made in China will cause reactions around the world,” Harborn said.

 

The United States response to that has led to reactions such as the $50 billion, and more recently $200 billion, in possible tariffs that Washington could levy on Chinese goods.

 

“We don’t agree with that action but it is the result of what we have warned about earlier,” he said.

Washington and European companies alike have long voiced concern about trade policies in China that protect domestic companies and State Owned Enterprises through subsidies, regulatory barriers and unequal treatment.

 

The Trump administration has alleged that Beijing is stealing American intellectual property and forcing technology transfers. Beijing denies that is the case.

 

Still, the European chamber’s survey found that about one in five of its companies “felt compelled to hand over technology in exchange for market access,” despite Chinese government assurances to the contrary.

 

According to the survey, 19 percent said they felt compelled to transfer technology.

Harborn said that while the percentage may seem small, the value it represents is much larger. Numbers were even higher among companies in the aerospace and aviation sector (36 percent), civil engineering and construction (33 percent) and automakers (27 percent).

 

“And no foreign company going to Europe has to even consider the issue of giving up technology for market access,” Harborn said.

 

Reciprocal treatment is a key concern from companies in China, regardless of whether they are from Europe and America. It is also a key aim of Washington’s trade dispute with Beijing and effort to make trade fairer.

 

But as the rhetoric in the U.S.-China trade dispute has heated up, some analysts argue that the focus has shifted too heavily to reciprocal and damaging tariffs. Actions that risk hurting not only the United States and China, but the global economy as well.

 

Harborn said confrontation through tariffs is not the most efficient way to get reforms and opening up that companies have been asking China to deliver.

 

“We are afraid that when you are exerting pressure this way [through threats of tariffs] that China keeps its aces up its sleeve and is presenting what is needed to defuse the tension at the time and is not addressing the fundamental and broader issues,” Harborn said.

 

Besides, he add, reforms are not only important for foreign companies but China’s own economic development as well.

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Amazon, Buffett, JPMorgan Pick Gawande to Lead Health Firm

Amazon, JPMorgan Chase and Berkshire Hathaway have picked well-known author and Harvard professor Dr. Atul Gawande to transform the health care they give their employees.

The three corporate titans said Wednesday that Gawande will lead an independent company focused on a mission they announced earlier this year: figure out ways to improve a broken and often inefficient system for delivering care.

Health care researchers have said any possible solutions produced by this new venture will be felt well beyond the estimated 1 million workers the three companies employ in the United States. Other businesses that provide employee health coverage are eager to find solutions for health care costs that often rise faster than inflation and squeeze their budgets in the process.

Berkshire Chairman and CEO Warren Buffett has described health costs as a “hungry tapeworm on the American economy.”

Leaders of the three companies have said little about how their Boston-based venture plans to tackle this problem, but they have noted that it will take time to figure out solutions, a point they emphasized again on Wednesday.

“We said at the outset that the degree of difficulty is high and success is going to require an expert’s knowledge, a beginner’s mind, and a long-term orientation,” Amazon CEO Jeff Bezos said in a prepared statement. “[Gawande] embodies all three, and we’re starting strong as we move forward in this challenging and worthwhile endeavor.”

Employer-sponsored insurance covers about 157 million people, according to the Kaiser Family Foundation. That’s nearly half the total U.S. population and the biggest slice of the country’s patchwork health insurance market.

Neither companies nor many of their employees are happy with how the system currently works. Employers have reacted in part to rising expenses by raising deductibles and other costs, asking their workers to pay more of the bill and to shop around for better deals. Many patients, especially the sickest, struggle with that.

Gawande is surgeon and professor at both Harvard’s Medical School and its T.H. Chan School of Public Health. He said in a statement Wednesday that he has devoted his career in public health to building solutions for better care delivery, and that while the current system is broken, “better is possible.”

The consortium’s leaders have said they aren’t looking for a quick fix. JPMorgan Chase Chairman and CEO Jamie Dimon said during an appearance on CNBC earlier this month that fraud in the system, high administrative costs and the overuse and underuse of some drugs are among the many complications that must be improved.

The three companies said in late January that their new venture will focus on technology that provides simplified, high-quality and transparent care.

Amazon’s participation and customer-first focus will be crucial, according to Brian Marcotte, CEO of the National Business Group on Health, a nonprofit that represents large employers.

He noted that employers already offer ways to help patients shop for care or see a doctor remotely through telemedicine. But people don’t use this technology unless they need it, so they haven’t grown comfortable with it.

That could change if they go through a well-known platform like Amazon, which could then reach into its vast trove of customer data to personalize the shopping, Marcotte said. If, for instance, you are a runner considering knee surgery, Amazon could lay out the best or common practices for your condition and maybe show that surgery isn’t your only option.

“It’s not only reaching people in the moment, it’s the possibility to reach people with relevant personalized messaging that will engage them,” Marcotte said.

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Silicon Valley-Style Coding Boot Camp Seeks to Reset Japan Inc.

Barely six months after inaugurating a tiny software-coding boot camp in a basement in Tokyo, Silicon Valley transplant Kani Munidasa stood before some of Japan’s top business leaders in February with a warning: software was threatening their future.

A Sri Lankan native with a Japanese mother and wife, Munidasa was speaking at the invitation of Nobuyuki Idei, a former chief executive of Sony.

Idei had offered to become an adviser to the boot camp, called Code Chrysalis, whose mission of bringing Japan’s software engineering up to global standards and helping its companies transform aligned with his own.

“Idei-san told me, ‘Tell it as it is; don’t sugar-coat anything. They need to hear that change has to happen,'” Munidasa said, recalling how he showed up at the executives’ meeting in a T-shirt and hoodie.

Long known as a “monozukuri” – or manufacturing – powerhouse, Japan is in danger of getting left behind as artificial intelligence, robotics, and machine learning sweep through industries from cars to banking, Idei and others say.

Japanese companies have traditionally treated software as a means to cut costs rather than add value, and code-writers as second-class citizens. Entry-level software engineers in Japan make about $40,000 on average – less than half their U.S. counterparts.

Programs like Code Chrysalis are trying to change that by injecting Silicon Valley training methods into Japan’s slow-to-change corporate culture.

Coding, “soft skills” like public speaking and even physical fitness are all on the agenda. Since Code Chrysalis opened last July, a dozen students have graduated from its 12-week course, with six more in the pipeline. The camp currently accepts up to eight applicants per session.

For the students, the benefits are clear: their salaries increased by an average of nearly 80 percent after graduation, according to Code Chrysalis.

Japanese companies are desperate for skilled developers, with top IT recruiter Computer Futures seeing 2.3 job openings for every applicant so far this year, and most positions being filled by foreigners.

Educators and industry leaders hope programs such as Code Chrysalis will be transformative for Japan.

“Even if the numbers are small, I think (Code Chrysalis) can have a big impact,” Idei told Reuters, noting that Japan had focused too much on “physical goods” in the post-Internet age.

“The United States has Google, Apple, Facebook, Amazon,” said Idei, now CEO of his consultancy, Quantum Leaps. “China’s got Baidu, Alibaba and Tencent. Japan doesn’t have a single platform company. That’s the No. 1 difference.”

A textbook problem

Japan’s English-language education, notoriously focused on standardised testing, has hindered the development of good programmers, industry insiders say.

Without a good grasp of the language, programmers are always a step behind, waiting for translations to access cutting-edge tools and methods.

Toyota is making English the common language for the 1,000 software engineers it plans to employ at a new automated-driving unit launching in Tokyo next month.

James Kuffner, CEO of the unit, Toyota Research Institute-Advanced Development (TRI-AD), said Japan’s computer science education was also overly based on textbook learning.

Recalling the “horrible and boring” lectures he sat through at the prestigious University of Tokyo as a post-doctoral research fellow in 1999, Kuffner said the classes did little to prepare students for the real world. Coding boot camps are a step in the right direction, he said.

“I want to figure out a way to fix the education system because it’s also important for our company,” said Kuffner, who still serves as an adjunct associate professor at Carnegie Mellon’s Robotics Institute. “I would love to make a university where (everything) you did was project-based.”

Rebooting the system

Munidasa and his co-founder, Yan Fan, tailored their course around project-based learning, teaching exclusively in English.

Just one other English-language coding boot camp exists in Japan, run by French chain Le Wagon since late 2016, with 75 graduates so far. That program, which costs 790,000 yen ($7,200) for a nine-week course, targets beginners looking for a job in software development, who want to freelance, or who are launching their own start-ups.

“The positioning is very different because we work with beginners to bring them to a junior-developer level,” said Paul Gaumer, co-founder of Le Wagon Japan.

Munidasa and Fan’s program, which is aimed at higher-level training, has so far rejected nearly 80 percent of applicants, some of whom couldn’t meet the English requirement. To help, they added a four-week English-communication course.

During Code Chrysalis’ 1.03 million yen ($9,390), full-time course, students learn to become “full-stack” engineers, covering servers, user interfaces, and everything in between.

Beyond coding, they get unconventional instruction: voice training from an opera singer, squats challenges, and assignments requiring intense teamwork.

Baby steps

Code Chrysalis has already caught the attention of some big Japanese firms, including information technology giant NTT Data.

Its applied software engineering centre is using Code Chrysalis for part of its training and has placed an engineer in the current cohort.

“Our customers are increasingly looking for faster and cheaper software development, and we need to be able to meet those demands,” said human resources manager Kotaro Kimura.

Masataka Shintoku, an engineer in NTT Data’s sales and planning group who found Code Chrysalis on his own and graduated in March, says he’s already putting his new skills to work.

“I’m now able to create an app on my own and show prospective clients what we can do,” he said.

Kuffner said he hopes to emulate the storied Toyota Production System to create the software world’s “best process for writing bug-free software” as automated cars incorporate millions of lines of code.

“Japanese people are hard-working, very dedicated,” he said. “I have no question in my mind that with the right training they could be some of the best software engineers in the world.”

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Recycling Rubbish into Revenue, Plan Brings Hope to Women in Jordan

Sameera Al Salam folds a discarded piece of newspaper into a long strip then loops it round her finger to form a tight circle, the first stage of making the upcycled handbags, trays and bowls the Syrian refugee hopes will help her earn a living.

Al Salam, 55, was a hairdresser with a passion for “art and making things” before she fled her war-torn homeland for Irbid in northern Jordan with her family in 2012.

Now she has two teenagers and a husband left paralyzed by a stroke to support in a country where she has no automatic legal right to work, and they are three months behind on their rent.

“We were living a really happy life. I had a garden where I grew everything,” Al Salam told the Thomson Reuters Foundation. “We had to leave because of the airstrikes. We were always trying to put things in front of the door to protect the children. Whenever I remember, it breaks my heart.”

Like most of the more than 655,000 Syrian refugees living in Jordan — and many Jordanians — poverty, debt and unemployment dominate the family’s existence.

Al Salam hopes her involvement in a new rubbish collection and recycling plan that aims to alleviate the poverty of both refugees and locals and bring the two communities closer will help turn things around.

The project, managed by charity Action Against Hunger, employs 1,200 people to collect and sort waste from the streets and provides temporary work permits to refugees who take part.

Nearly half the participants are female in a country where women can face cultural and family obstacles to employment, including a culture of shame around going out to work.

One in three Syrian refugee households in Jordan is headed by women and more and more are now seeking jobs in an already crowded market.

More than 80 percent of the Syrian refugees in Jordan live below the poverty line, according to Care International.

Awsaf Qaddah, a 39-year-old Syrian widow, said working as a rubbish collector initially felt like “a kind of shame,” but she now feels only pride.

“The job took me out of this atmosphere I was living in at home. Women can and should go out and work, especially with the circumstances we’re facing,” she said. “I have no husband or father or brother to help — I’m proud to do it.”

Fellow worker Berwen Misterihi, who is Jordanian, was forced to earn after her husband left her and their four children.

“Women and men would make comments about me picking up waste,” she said.

“I said to one man, ‘I’d rather work than come to you for the money’ and he apologized.”

‘Like Siblings’

The project workers were given 50-day contracts paying 12 Jordanian Dinar ($16.90) a day, plus training and social security provisions. Some of the waste was sold to scrap dealers for extra cash.

Al Salam was among a group of women who started an upcycling project, turning the waste paper and plastic they collected into objects to sell.

Action Against Hunger, which has managed the waste project since 2017 with German government funding, is now setting up a second phase focusing on equipping cooperatives and workers to continue waste processing and upcycling unaided.

“First there was a focus on breaking the culture of shame for women. Then we wanted ideas of how they could benefit from waste,” said Sajeda Saqallah, programme manager with Action Against Hunger. “Upcycling is a new concept here, so we took them to Amman to learn about it.”

Al Salam said her husband did not object to her taking part in the project. She now hopes she will get training on marketing and trademarking and win one of a number of new contracts Action Against Hunger is providing to carry on upcycling for wages.

The women in her upcycling group meet regularly and share ideas and news in a WhatsApp group.

At a workshop filled with their creations – from handbags to light shades to side tables, all made from recycled newspaper and cardboard – Sahira Zoubi, a Syrian refugee and mother of five excitedly points to the gold handbag she made.

Zoubi, who has not seen her husband since the Syrian army captured him in 2012, has made close friends through the project from both Syria and Jordan who she says are “like siblings.”

“Doing this project is so joyful because you come here and forget about your problems,” she said.

Al Salam breaks down as she tells how the project has allowed her to overcome her fears of being a refugee in a strange country.

“I never really mixed with people before this. I was afraid to go outside, I wasn’t involved in the community,” she said. “I was from a different country. I didn’t know what people were going to do to me or what they would say. Now I like to mingle.”

($1 = 0.7100 Jordanian dinars)

Travel for this story was covered by Action Against Hunger.

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Motorists in Crime-ridden Caracas Seek Safety Through ‘Buddy’ App

Two men on motorbikes approached a broken-down vehicle in Caracas one day earlier this month in what could have been a nightmare scenario in one of the world’s most dangerous cities where roadside robberies and murders are an everyday occurrence.

The men took up positions either side of the green four-wheel-drive vehicle, with a 33-year-old female schoolteacher behind the wheel, and guarded it until a tow truck arrived two hours later to cart it off to a garage.

The two guards are employees of a new mobile application called “Pana” – “Buddy” in Venezuelan slang – which dispatches security crews to stranded drivers who request help.

It’s a reflection of how Venezuelans are turning to technology to overcome the dangers and nuisances of living in the crisis-hit country. Mobile payment apps, for example, attract customers who do not have enough paper money, which is in short supply due to hyperinflation.

Domingo Coronil who started Pana with his brother Juan Cristobal last September said they have carried out more than 5,000 successful driver rescues on the streets of the capital.

“People’s reactions have been amazing. Some start crying, while others take selfies,” the 46-year-old security consultant said in an interview.

Violence in Venezuela has shot up during the oil-wealthy country’s spiral into a five-year economic crisis and political meltdown. Many Caracas residents refuse to go out at night due to security fears, and wealthier Venezuelans often travel in bullet-proof cars with bodyguards.

There were almost 27,000 violent deaths in the country last year, with Venezuela having the second highest murder rate in the world after El Salvador, according to the Venezuelan Observatory of Violence, a local crime monitoring group.

National homicide rates rose each year from 67 murders per 100,000 people in 2011 to 92 in 2016, before dipping to 89 last year, according to the group.

The homicide rate in Caracas alone was 104 per 100,000 people in 2017, the group said. New York, in contrast, had a homicide rate of 3 per 100,000 last year and most European cities had less than 1.

A recent Gallup study placed Venezuela at the bottom of its 2018 Law and Order index, with 42 percent of surveyed Venezuelans reporting they had been robbed the previous year and one-quarter saying they had been assaulted.

“The fear people have isn’t you’ll be robbed in your car, but that you’ll be killed or kidnapped,” said Roberto Briceno Leon, the observatory’s director.

Venezuelan authorities say nongovernmental groups inflate crime figures to create paranoia and tarnish President Nicolas Maduro’s socialist government. But even the most recent official national murder rate – 58 per 100,000 inhabitants for 2015 – was still among the world’s highest.

About 700 people have joined Pana because of the high crime rate, Coronil said, each paying an annual fee of 4,800,000 bolivars, or about $2 to $4 on the black market, to request help as many times as they want at any hour day or night.

The company receives a customer’s geo-locations at its headquarters and dispatches two of its 28 security guards to the breakdown. Coronil hopes to expand coverage to roads outside Caracas and offer corporate plans.

Vanessa Mikuski, the schoolteacher in the van, tapped the button in Pana’s smartphone app when her car broke down without warning that June morning in the east of Caracas. A friend had recommended she download it last year.

The two Pana security guards, who were not armed and wear jackets with the app’s logo, kept pedestrians and drivers away while Mikuski waited and arranged for her children to be picked up from school.

“You feel much more secure … And at that price, it’s great,” she said.

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Youngest Migrants Held in ‘Tender Age’ US Shelters

Trump administration officials have been sending babies and other young children forcibly separated from their parents at the U.S.-Mexico border to at least three “tender age” shelters in South Texas, The Associated Press has learned. 

Lawyers and medical providers who have visited the Rio Grande Valley shelters described play rooms of crying preschool-age children in crisis. The government also plans to open a fourth shelter to house hundreds of young migrant children in Houston, where city leaders denounced the move Tuesday.

Since the White House announced its zero tolerance policy in early May, more than 2,300 children have been taken from their parents at the U.S.-Mexico border, resulting in a new influx of young children requiring government care. The government has faced withering critiques over images of some of the children in cages inside U.S. Border Patrol processing stations.

Decades after the nation’s child welfare system ended the use of orphanages over concerns about the lasting trauma to children, the administration is standing up new institutions to hold Central American toddlers that the government separated from their parents.

“The thought that they are going to be putting such little kids in an institutional setting? I mean it is hard for me to even wrap my mind around it,” said Kay Bellor, vice president for programs at Lutheran Immigration and Refugee Service, which provides foster care and other child welfare services to migrant children. “Toddlers are being detained.” 

Bellor said shelters follow strict procedures surrounding who can gain access to the children in order to protect their safety, but that means information about their welfare can be limited.

By law, child migrants traveling alone must be sent to facilities run by the U.S. Department of Health and Human Services within three days of being detained. The agency then is responsible for placing the children in shelters or foster homes until they are united with a relative or sponsor in the community as they await immigration court hearings. 

But U.S. Attorney General Jeff Sessions’ announcement last month that the government would criminally prosecute everyone who crosses the U.S.-Mexico border illegally has led to the breakup of hundreds of migrant families and sent a new group of hundreds of young children into the government’s care. 

The United Nations, some Democratic and Republican lawmakers and religious groups have sharply criticized the policy, calling it inhumane. 

Not so, said Steven Wagner, an official with the Department of Health and Human Services. 

“We have specialized facilities that are devoted to providing care to children with special needs and tender age children as we define as under 13 would fall into that category,” he said. “They’re not government facilities per se, and they have very well-trained clinicians, and those facilities meet state licensing standards for child welfare agencies, and they’re staffed by people who know how to deal with the needs – particularly of the younger children.” 

Until now, however, it’s been unknown where they are.

“In general we do not identify the locations of permanent unaccompanied alien children program facilities,” said agency spokesman Kenneth Wolfe.

Drawing the line

The three centers – in Combes, Raymondville and Brownsville – have been rapidly repurposed to serve needs of children including some under 5. A fourth, planned for Houston, would house up to 240 children in a warehouse previously used for people displaced by Hurricane Harvey, Mayor Sylvester Turner said.

Turner said he met with officials from Austin-based Southwest Key Programs, the contractor that operates some of the child shelters, to ask them to reconsider their plans. A spokeswoman for Southwest Key didn’t immediately reply to an email seeking comment. 

“And so there comes a point in time we draw a line and for me, the line is with these children,” said Turner during a news conference Tuesday.

On a practical level, the zero tolerance policy has overwhelmed the federal agency charged with caring for the new influx of children who tend to be much younger than teens who typically have been traveling to the U.S. alone. Indeed some recent detainees are infants, taken from their mothers. 

Doctors and lawyers who have visited the shelters said the facilities were fine, clean and safe, but the kids – who have no idea where their parents are – were hysterical, crying and acting out. 

“The shelters aren’t the problem, it’s taking kids from their parents that’s the problem,” said South Texas pediatrician Marsha Griffin who has visited many. 

Alicia Lieberman, who runs the Early Trauma Treatment Network at University of California, San Francisco, said decades of study show early separations can cause permanent emotional damage. 

“Children are biologically programmed to grow best in the care of a parent figure. When that bond is broken through long and unexpected separations with no set timeline for reunion, children respond at the deepest physiological and emotional levels,” she said. “Their fear triggers a flood of stress hormones that disrupt neural circuits in the brain, create high levels of anxiety, make them more susceptible to physical and emotional illness, and damage their capacity to manage their emotions, trust people, and focus their attention on age-appropriate activities.” 

A call for shelter

Days after Sessions announced the zero-tolerance policy, the government issued a call for proposals from shelter and foster care providers to provide services for the new influx of children taken from their families after journeying from Honduras, El Salvador, Guatemala and Mexico.

As children are separated from their families, law enforcement agents reclassify them from members of family units to “unaccompanied alien children.” Federal officials said Tuesday that since May, they have separated 2,342 children from their families, rendering them unaccompanied minors in the government’s care. 

While Mexico is still the most common country of origin for families arrested at the border, in the last eight months Honduras has become the fastest-growing category as compared to fiscal year 2017. 

During a press briefing Tuesday, reporters repeatedly asked for an age breakdown of the children who have been taken. Officials from both law enforcement and Health and Human Services said they didn’t how many children were under 5, under 2, or even so little they’re non-verbal. 

“The facilities that they have for the most part are not licensed for tender age children,” said Michelle Brane, director of migrant rights at the Women’s Refugee Commission, who met with a 4-year-old girl in diapers in a McAllen warehouse where Border Patrol temporarily holds migrant families. “There is no model for how you house tons of little children in cots institutionally in our country. We don’t do orphanages, our child welfare has recognized that is an inappropriate setting for little children.” 

So now, the government has to try to hire more caregivers. 

The recent call for proposals by the federal government’s Office of Refugee Resettlement said it was seeking applicants who can provide services for a diverse population “of all ages and genders, as well as pregnant and parenting teens.” 

Even the policy surrounding what age to take away a baby is inconsistent. Customs and Border Protection field chiefs over all nine southwest border districts can use their discretion over how young is too young, officials said. 

For 30 years, Los Fresnos, Texas-based International Education Services ran emergency shelters and foster care programs for younger children and pregnant teens who arrived in the U.S. as unaccompanied minors. At least one resident sued for the right to have an abortion in a high-profile case last March.

For reasons the agency did not explain, three months ago the government’s refugee resettlement office said it was ending their funding to the program and transferred all children to other facilities. This came weeks before the administration began its “zero tolerance” policy, prompting a surge in “tender age” migrant children needing shelter. 

In recent days, members of Congress have been visiting the shelters and processing centers, or watching news report about them, bearing witness to the growing chaos. In a letter sent to Attorney General Jeff Sessions on Tuesday, a dozen Republican senators said separating families isn’t consistent with American values and ordinary human decency.

On Tuesday, a Guatemalan mother who hasn’t seen her 7-year-old son since he was taken from her a month ago sued the Trump administration. She was released from custody while her asylum case is pending and thinks her son, Darwin, might be in a shelter in Arizona. She has been able to speak with him on the telephone.

“I only got to talk to him once and he sounded so sad. My son never used to sound like that, he was such a dynamic boy,” Mejia-Mejia said as she wept. “I call and call and no one will tell me where he is.” 

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US Governors Pull National Guard Over Immigration Policy

The governors of multiple East Coast states have announced that they will not deploy National Guard resources near the U.S.-Mexico border, a largely symbolic but politically significant rejection of the Trump administration’s “zero-tolerance” immigration policy that has resulted in children being separated from their families.

Maryland Governor Larry Hogan, a Republican, announced Tuesday morning on his Twitter account that he has ordered four crew members and a helicopter to immediately return from where they were stationed in New Mexico.

“Until this policy of separating children from their families has been rescinded, Maryland will not deploy any National Guard resources to the border,” Hogan tweeted.

Massachusetts Governor Charlie Baker, who like Hogan is a Republican governor in a blue state, on Monday reversed a decision to send a National Guard helicopter to the border, citing the Trump administration’s “cruel and inhuman” policy.

On the Democratic side, governors in Connecticut, Delaware, New Jersey, Pennsylvania, Rhode Island, New York and Virginia have all indicated their refusal to send Guard resources to assist with immigration-related issues.

The resources in question from each state are relatively small, so the governors’ actions aren’t likely to have a huge practical impact. But they are a strong symbolic political gesture, said Mileah Kromer, the director of the Sarah T. Hughes field Politics Center at Goucher College in Towson, Maryland.

“I think at a time when you have a large percentage of the country questioning the leadership of the Trump administration, it certainly is a moment for the governors across the country to show leadership, particularly at a time when this is so divisive,” Kromer said.

The forced separation of migrant children from their parents has fueled criticism across the political spectrum and sparked nationwide protests of President Donald Trump’s immigration policies.

“Ever since our founding — and even before — our nation has been a beacon for families seeking freedom and yearning for a better life,” Democratic New Jersey Governor Phil Murphy said Tuesday as he signed an executive order prohibiting the use of state resources. “President Trump has turned this promise on its head by doubling down on his inhumane and cruel policy of separating families.”

In New York, Governor Andrew Cuomo on Monday reiterated a decision he first made earlier this year to not send Guard resources to the border to assist with immigration-related duties. He’s also asked for a federal investigation of the policy relating to the separation of the children from their families.

Delaware Governor John Carney, a Democrat, said he turned down a request he received Tuesday to send National Guard troops to the southwest border, while the Democratic governors of Virginia and North Carolina said they would recall Guard members and equipment they already had sent to the border.

“If President Trump revokes the current inhumane policy of separating children from their parents, Delaware will be first in line to assist our sister states in securing the border,” Carney said in a statement.

Governors are not the only ones taking action: Mayors from across the U.S. announced plans to travel to the Texas border on Thursday to protest the “zero-tolerance” policy. The mayors will gather at a point of entry near where migrant minors began arriving at a tent-like shelter last week.

The U.S. Conference of Mayors last week unanimously passed a resolution registering its opposition to separating children from their families at the border.

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