NATO foreign ministers are gathering in Washington, D.C. this week to celebrate the 70th anniversary of the North Atlantic Treaty Organization. President Donald Trump has been critical of the alliance, blasting other members for under-investing on defense and relying too heavily on the United States. Observers will be watching closely to see how the alliance is weathering internal storms on this anniversary.

Trump, who hosts NATO Secretary General Jens Stoltenberg for talks at the White House on Tuesday, made his views on NATO clear during the 2016 presidential campaign, shocking many on both sides of the Atlantic by calling the alliance “obsolete.”

He cited what he said was a missing focus on terrorism, while repeatedly claiming the United States was shouldering too much of the cost.

Most U.S. foreign policy experts say NATO is one of the most successful military alliances in history and is far from obsolete.

“It has showcased an ability to adapt to change in the past, from dealing with a resurgent Russia, to managing crisis in south of NATO’s flank, to as well dealing with issues like cyber, so NATO is adapting and allies are spending more on defense,” Mark Simakovsky of the Atlantic Council told VOA.

Military spending has been a core issue for Trump, who has frequently pressured European allies to increase their defense expenditures.

“Everyone’s agreed to substantially up their commitment, they are going to up it at levels they have never thought of before,” Trump told reporters during a NATO summit last year.

NATO guidelines say member states should spend at least two percent of their gross domestic product on the military each year. But only seven of the 29 member states reached that level in 2018. Some experts think the two percent rule is very important.

“You’re not giving the money to somebody else, you’re not putting it into a NATO budget somewhere, you’re spending it on yourselves,” said McCain Institute Director Kurt Volker, who formerly served as U.S. ambassador to NATO. “But it is a demonstration of your commitment to your own security, which then gives NATO the confidence that this is a country that we can help defend as well, because they are committed to defense of their own territory.”

Others agree that defense spending is important, but say the alliance is fundamentally about the members’ ability to trust each other, and Trump has damaged that trust.

“When an American president questions the value of the alliance, our enemies in Moscow and Beijing are now questioning whether or not NATO would come to the defense of some smaller NATO nations that the president has criticized as maybe not worthy of NATO’s defense,” said Simakovsky. “But I don’t think at this summit the administration is going to be announcing any departure of the United States.”

Simakovsky said the partners agreed to downgrade the Washington meeting to a foreign minister’s meeting to avert the risk of verbal attacks from Trump.
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NATO foreign ministers are gathering in Washington, D.C. this week to celebrate the 70th anniversary of the North Atlantic Treaty Organization. U.S. President Donald Trump has been critical of other alliance members for under-investing on defense and relying too heavily on the United States. 

We take a look at the alliance. 

What is NATO?

The North Atlantic Treaty Organization is an alliance of 29 countries bordering the North Atlantic Ocean. It was created in 1949 as a bulwark against the Soviet Union. Its purpose is to “guarantee the freedom and security of its members through political and military means,” according to its website. 

Who are the members? 

The initial alliance was entered into by 12 nations, including the United States, Britain, Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway and Portugal. Seventeen others have joined the group since. Montenegro is the latest member, joining in 2017. According to Article 10 of the Washington Treaty, membership is open to any “European State in a position to further the principles of this Treaty and to contribute to the security of the North Atlantic area.”

What is its aim? 

NATO’s main aim is security and defense of its member nations. Article 5 of the treaty states that “an armed attack against one or more” member state “shall be considered an attack against them all.”

The collective defense principal at the heart of the treaty was invoked for the first time after the 9/11 attacks on the United States. NATO responded to a U.S. request for help in the war on al-Qaida in Afghanistan. It took the lead from August 2003 to December 2014. At its peak, it deployed 130,000 troops.

Who funds NATO? 

Each member country pays a certain amount into the NATO budget based on an agreed upon formula. But, the United States has been bearing nearly two-thirds of the alliance’s defense bill. The NATO charter requires member states to spend 2 percent of the nation’s wealth on defense. According to NATO’s most recent estimate, released in June 2017, six countries hit the 2 percent target: the United States, Greece, the United Kingdom, Estonia, Romania and Poland.

NATO vs. Trump

President Donald Trump has long been critical of U.S. involvement overseas. He has specifically railed against NATO members for not contributing more money to their own defense. In July, he went so far as to claim that the alliance owed the United States money.

“Many countries owe us a tremendous amount of money from many years back, where they’re delinquent, as far as I’m concerned, because the United States has had to pay for them,” he said. “So if you go back 10 or 20 years, you’ll just add it all up, it’s massive amounts of money is owed.”

But that is not how the alliance’s budget works. While not all member states are meeting their commitments, as explained above, more are expected to increase their contributions this year.

Trump has also threatened to pull out of the treaty, which experts say would be a monumental mistake.

The celebration of NATO’s 70th anniversary was downgraded to a meeting of member foreign ministers, because diplomats feared Trump would use the occasion to mount renewed attacks on the alliance. Trump is not expected to address the meeting in Washington this week. 
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Australia’s treasurer said he will unveil the government’s first balanced annual budget plan in a decade days before general elections are called.

The budget to be announced late Tuesday will be the conservatives coalition’s final major act before going to voters in May with the argument that they are better economic managers than the center-left Labor Party opposition.

Treasurer Josh Frydenberg said the budget for the fiscal year starting July 1 would achieve a surplus without increasing taxes.

“Tonight’s budget sets Australia up for the next decade,” Frydenberg told reporters on arrival at Parliament House.

“It builds a stronger economy and secures a better Australia for every Australian and we do that without increasing taxes,” he added.

Frydenberg also foreshadowed “congestion-busting infrastructure” to reduce commuting times in Australia’s largest and most congested cities.

The government also plans to provide tax breaks for low and middle-income earners.

Up to 4 million low-income Australians in a population of 25 million will receive one-off payments by July to help with rising energy bills.

A conservative government delivered balanced budgets for a decade before the global financial crisis hit in 2008. A newly elected Labor government then ran up a record deficit with economic stimulus spending.

Australia’s revenue has improved with rising prices for its biggest exports, coal and iron ore.

Opinion polls suggest that Labor will win the next election. Scott Morrison would become the sixth Australian prime minister since 2007 to fail to last an entire three-year term.

Parliament will sit for three days this week before it rises for the last time before elections are held on May 11 or May 18.
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The boom times for the U.S. lobster industry are imperiled this year because of a shortage of a little fish that has been luring the crustaceans into traps for hundreds of years.

Members of the lobster business fear a looming bait crisis could disrupt the industry during a time when lobsters are as plentiful, valuable and in demand as ever. America’s lobster catch has climbed this decade, especially in Maine, but the fishery is dependent on herring — a schooling fish other fishermen seek in the Atlantic Ocean.

Federal regulators are imposing a steep cut in the herring fishery this year, and some areas of the East Coast are already restricted to fishing, months before the lobster season gets rolling. East Coast herring fishermen brought more than 200 million pounds of the fish to docks as recently as 2014, but this year’s catch will be limited to less than a fifth of that total.

The cut is leaving lobstermen, who have baited traps with herring for generations in Maine, scrambling for new bait sources and concerned about their ability to get lobster to customers who have come to expect easy availability in recent years.

“If you don’t have bait, you’re not going to fish. If the price of bait goes up, you’re not going to fish,” said Patrice McCarron, executive director of the Maine Lobstermen’s Association. “We have to take the big picture, and make sure our communities continue to have viable fisheries.”

The cut in the herring quota stems from a scientific assessment of the fish’s population last year by the National Oceanic and Atmospheric Administration’s Northeast Fisheries Science Center. The assessment found a below-average number of young herring are surviving in the ocean.

The loss of herring has sounded alarms among scientists and conservationists, because the fish also serve a critical role in the ocean food chain and they’re valuable as food for humans.

It’s unclear exactly what factors are causing young herring to fail to survive to maturity, said Jonathan Deroba, lead assessment scientist for herring with the Northeast Fisheries Science Center. He said it’s “premature to predict the sky is falling,” though he added the herring population could be suffering from multiple stresses at once.

“We’d be foolish not to look at climate change. The abundance of haddock, which are egg predators. And fishing activity on Georges Bank disrupting herring,” Deroba said. Georges Bank is a key fishing area off New England.

Fishermen bring herring to shore mostly in Maine and Massachusetts, which are also the biggest lobster fishing states. Lobstermen also load traps with other kinds of bait, such as menhaden, and some herring is available in freezers, but fishermen said they’re concerned there won’t be enough to go around.

The New England Fishery Management Council is also considering herring catch quota for 2020 and 2021 later this year, and fishermen said they’re concerned the cuts could be maintained for those years. The loss of herring is also a heavy blow to the fishermen who harvest the species, said Jeff Kaelin, who works in government relations for Lund’s Fisheries, a herring harvester based in Cape May, New Jersey.

“It’s going to be tough on everyone,” Kaelin said, not just the people who catch the herring, but also “the lobstermen who depend on it for historic bait supply.”

The U.S. lobster fishery set an all-time record for value at docks in 2016, when the catch was worth more than $670 million. That was also the year the herring catch fell to its lowest point since 2002, though it was still more than 138 million pounds.

Lobsterman Jeffrey Peterson, who fishes out of the island town of Vinalhaven, Maine, said he’s sure he’ll be able to load his traps with bait this summer. He’s just concerned about how expensive it’ll be to do so.

“It’ll be around,” he said. “It’s just how much they gouge you for it.”
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The Eiffel Tower was plunged into darkness late on Saturday as the city of Paris switched off the lights on its best-known tourist attraction to mark this 

year’s Earth Hour. 

The 13th annual edition of the global event, organized by environmental group World Wildlife Fund to push for action on climate change and other man-made threats to the planet, called for nearly 200 major landmarks around the world to be unplugged at 8:30 p.m. local time.

They included New York’s Empire State Building, the Christ the Redeemer statue in Brazil and the Sydney Opera House.

Ahead of the Eiffel Tower shutdown, Paris Mayor Anne Hidalgo and Junior Environment Minister Brune Poirson appeared at the foot of the 130-year-old edifice for a public discussion on global warming and declining biodiversity. 

Earth Hour has grown steadily since the first event in 2007 and is now marked in more than 180 countries and territories, according to its organizers.
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The Eiffel Tower, the Empire State Building, the Sydney Opera House, the Brandenburg Gate, the Acropolis and many more iconic landmarks went dark at 8:30 p.m. local time, Saturday night, for Earth Hour, an annual call for local action on climate change.

Earth Hour is the brain child of the World Wildlife Fund.

“By going dark for Earth Hour, we can show steadfast commitment to protecting our families, our communities and our planet from the dangerous effects of a warming world,” said Lou Leonard, WWF senior vice president, climate and energy. “The rising demand for energy, food and water means this problem is only going to worsen, unless we act now.”

Individuals and companies around the world participated in the hour-long demonstration to show their support for the fight against climate change and the conservation of the natural world.

WWF said Earth’s “rich biodiversity, the vast web of life that connects the health of oceans, rivers and forests to the prosperity of communities and nations, is threatened.”

The fund also reports that wildlife populations monitored by WWF “have experienced an average decline of 60 percent in less than a single person’s lifetime, and many unique and precious species are at risk of vanishing forever.”

“We have to ask ourselves what we’re willing to do after the lights come back on,” Leonard said. “If we embrace bold solutions, we still have time to stabilize the climate and safeguard our communities and the diverse wildlife, ecosystems and natural resources that sustain us all.”

“We are the first generation to know we are destroying the world,” WWF said. “And we could be the last that can do anything about it.”
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Lyft Inc shares on Friday opened up 21.2 percent at $87.24 in its market debut on the Nasdaq after the company was valued at $24.3 billion in the first initial public offering (IPO) of a ride-hailing startup.

On Thursday, Lyft said it priced 32.5 million shares, slightly more that it was offering originally, at $72, the top of its already elevated $70-$72 per share target range for the IPO.

After a few minutes of trading, shares were up 18.6 percent at $85.42.

Instead of celebrating the first day of trading at the Nasdaq in New York, Lyft opted to mark the occasion at a defunct auto dealership in downtown Los Angeles.

A couple hundred people – Lyft staff, family and friends, stakeholders and Los Angeles Mayor Eric Garcetti – gathered before dawn for the kick-off event.

Lyft has recently bought the facility to turn it into a driver services center, the first of several it plans to open across the U.S. in the coming months, where drivers can get discounted services like help with taxes or charging electric vehicles.
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Influential figures in Washington are calling for the establishment of a bilateral free-trade agreement with Taiwan, even as U.S. and Chinese officials move toward a resolution of their long-running trade dispute. 

“We have a lot of issues with Beijing, and a lot of opportunities with Taiwan,” said Edwin J. Feulner in an interview with VOA. Feulner is the founder and former president of the Heritage Foundation, an influential think tank in Washington known for its conservative views and ties with the Republican Party. 

Feulner thinks trade negotiations between Washington and Beijing will most likely conclude within 60 days, at which point a full-force push for a bilateral trade agreement with Taiwan could begin. Those talks would be “more or less independent of what’s going on with bilateral negotiations with Beijing,” he said. 

WATCH: Feulner: Taiwan Not Seen by Administration as ‘Bargaining Chip’

Feulner predicted “huge bipartisan support on Capitol Hill” for such an agreement. “Both Republican and Democrat, both House and Senate members, are overwhelmingly positive that a free China can exist, and can be there in the world community today,” he said.  

WATCH: Feulner: ‘We Intend to Strengthen Our Friends’ 

However, any such deal could be expected to anger authorities in Beijing, who see Taiwan as a renegade Chinese province and adamantly oppose any initiatives that treat the island as an independent country or entity.   

The international community has seen how Beijing tries to make Taiwan pay for any inroads it makes toward international recognition, said Scott W. Harold, a senior political scientist at the RAND Corporation, a global policy research group. But Beijing’s problem, he said, “is that they’ve dialed the pain up so high, so often, that it’s hard to see what more they can do.”  

On Wednesday, Feulner invited Taiwan’s President Tsai Ing-wen to participate by Skype in a conference at the Heritage Foundation in Washington. Tsai, on a stopover in Hawaii after visiting three Indo-Pacific nations that still maintain diplomatic relations with Taiwan, told the audience her government was enthusiastic about the prospect of bilateral trade talks with the U.S. 

“If we can have a breakthrough in trade with the U.S., this will be very helpful in terms of encouraging many other trading partners to do the same,” she said, adding that a trade deal with the United States would reduce Taipei’s reliance on China “as they increase their political influence in Taiwan, primarily using economic actors.” 

Tsai expressed hope that talks with Washington will include discussion about Taiwan’s role in the global high-tech supply chain “amid concerns of technology theft and control over 5G networks” by Beijing. 

Two prominent members of the U.S. Congress joined Feulner in welcoming Tsai to the U.S. and expressed their support for a bilateral free-trade agreement. Sen. Cory Gardner of Colorado, a Republican and a member of the Foreign Relations Committee, called the pursuit of a bilateral free-trade agreement with Taiwan “imperative.” 

Common values

Rep. Ted Yoho of Florida, a member of the House Foreign Affairs Committee and the most senior Republican on its subcommittee on East Asia, the Pacific and Nonproliferation, told Tsai and the audience that “trade is important between our nations, but more important than that is our common belief in the values we hold, the democracies that we have together. That in itself is the thing that really binds us together.” 

Steve Yates, former U.S. government official and longtime observer of U.S.-Taiwan relations, told VOA that President Donald Trump has “unhesitatingly signed” a series of resolutions and bills in support of closer ties between Washington and Taipei. To him, this signals it might be time “for the administration and Congress to be able to cross that bridge and get some results.” 
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Britons desperately wanting some clarity in the country’s interminable Brexit saga were disappointed Wednesday when lawmakers plunged the country’s proposed exit from the European Union, after half-a-century of membership, into further disarray, failing to find a majority for any way forward after a series of so-called indicative votes.

The hope had been a majority might emerge from the eight different options they voted on, which included staying in the EU, leaving with no withdrawal agreement, remaining in the bloc’s customs union and/or single market or holding a second Brexit referendum.

“Parliament Finally Has Its Say: No. No. No. No. No. No. No. No.” Britain’s Guardian newspaper announced on its front-page Thursday.

“In summary: the Commons has now overwhelmingly rejected every single type of Brexit, and no Brexit,” tweeted Michel Deacon, the Daily Telegraph’s parliamentary sketch-writer. The option of leaving without a deal was defeated by a huge margin. So, too, was a motion that would see Brexit cancelled altogether.

It wasn’t what the organizers of the indicative votes in the House of Commons had hoped would be the upshot. Backed by the opposition parties and pro-EU Conservative rebels they seized control of the parliamentary agenda from the government, the first time in 140 years that Downing Street hasn’t called the shots on what can be debated and when on the floor of the House of Commons.

“This is going well. Putting the Commons in charge was clearly a brilliant idea,” tweeted Andrew Neil, the arch-Brexiter presenter of a BBC politics show. The EU’s chief executive Jean-Claude Juncker said Britain’s intentions had become more mysterious than those of the mythological sphinxes guarding ancient tombs.

More confusion

To add to the confusion in London, just before the indicative voting, an  exhausted Prime Minister Theresa May told her Conservative lawmakers she would relinquish the party leadership and resign as prime minister, but only if her contentious Brexit withdrawal agreement, which parliament has twice rejected, is passed.

May’s announcement was a last-ditch bid to persuade Conservative Brexiters to back her withdrawal agreement, a deal they disapprove of because it would keep Britain closely aligned with the European Union and obedient to its rules while a longer-term trade relationship is negotiated.

A hardcore of Conservative Eurosceptics and ten lawmakers from Northern Ireland’s Democratic Unionist Party, who May has to rely on because her government is a minority one, have adamantly refused to back her deal. They say the plan poses a risk to the integrity of the union of the United Kingdom. The DUP believes if it took effect, it would cause trade differences between Northern Ireland and Great Britain, and create in effect a “border down the Irish Sea.”

There were no signs Thursday that May will be able to persuade enough holdouts to vote for her deal, if it is put before the Commons for a third time, leaving Britain on course to crash out of the EU without a deal on April 12, unless the British government requests, for the second time, a Brexit postponement.

EU negotiators have indicated they might be open to another delay, but only if it is a lengthy one of a year or more.

It remains unclear how the political deadlock in London can be broken. The idea of leaving without a transition deal has strong opposition in the Commons and would likely be blocked by a majority of lawmakers.

Frustration on EU side

EU negotiators, out of exasperation, could decide to raise the stakes and decline another Brexit postponement, hoping to force the Commons to stop Brexit altogether, say some analysts. But it is unlikely they would risk such a high stakes gamble, fearing that might push Britain into crashing out by accident as much as by design.

European Council President, Donald Tusk, said last week in Brussels that the European Union will work with Britain for as long as it takes and on Wednesday he urged European lawmakers to be open to a long delay in Britain’s departure.

That leaves Britain trapped — paralyzed by a deadlocked House of Commons, itself a reflection of a country split down the middle over staying a member of the EU or quitting. With all avenues seemingly leading to dead-ends, there is more talk now in the British parliament of the need to hold an general election, hoping that returns a parliament that is not so undecided.

Behind-the-scenes Cabinet ministers and Conservative party officials are war-gaming calling an election three years ahead of schedule. David Davies, a pro-Brexit Conservative MP who quit as Brexit minister, says “a general election is a lot more likely now.” He added: “I don’t say it’s going to happen, but clearly if a government can’t get through on the one issue which we were really elected to deal with at the last election it puts us all in a very difficult situation.”

The problem in calling a snap election is the British public doesn’t want another one so soon after the Conservatives called another early poll two years ago, according to opinion surveys, with just 12 percent backing the idea.

The other problem for the Conservatives is that they would be fighting an election with a leader who has announced she intends to step down soon and heading a party that’s even more deeply and rancorously divided than the main opposition Labour party.

In the division lobbies on Wednesday some Conservative lawmakers on different sides of the Brexit question were spotted cursing each other and one clash prompted the intervention of colleagues, who feared a brawl might break out.

Commons in charge

Organizers of Wednesday’s indicative voting are placing some hopes that the Commons can still break the deadlock. They say clarity could be reached on Monday when lawmakers are due for another session of indicative voting, this time on the options that attracted the most support.

Labour’s Stephen Doughty said they never expected the votes on Wednesday to reveal a majority for one option. The whole idea was to narrow down the alternatives that have the most support and for parliament then to reconsider.

The two closest votes Wednesday were for staying in the EU’s customs union and another for a second referendum confirming any Brexit departure. Both attracted more votes than May’s deal has got the two occasions it was voted on in parliament. Campaigners for a second referendum appear buoyed.

They believe Britons have shifted their attitudes on Brexit since the 2016 referendum, pointing to a new polling study by veteran pollster John Curtice, which indicates voters are becoming increasingly doubtful about Brexit. The study suggests two and half years after the plebiscite, leaving the European Union may not now reflect majority thinking.

 
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Iceland’s budget carrier WOW Air said it had ceased operations and cancelled all flights on Thursday, potentially stranding thousands of passengers.

The collapse of the troubled airline, which transports more than a third of those traveling to Iceland, comes after buyout talks with rival Icelandair collapsed earlier this week.

“All WOW Air flights have been cancelled. Passengers are advised to check available flights with other airlines,” the carrier said in a statement.

“Some airlines may offer flights at a reduced rate, so-called rescue fares, in light of the circumstances. Information on those airlines will be published, when it becomes available.”

WOW Air, founded in 2011, exploited Iceland’s location in the middle of the North Atlantic to offer a low-cost service between Europe and North America as well as tapping into a tourist boom to the volcanic island.

However it had flown into financial trouble in recent years due to heightened competition and rising fuel prices, and had been searching for an investor for months.

On Monday WOW Air said it was in talks to restructure its debt with its creditors after Icelandair ended brief negotiations over buying a stake in the no-frills airline.

WOW Air was left needing $42 million to save the company, according to the Frettabladid newspaper.

The privately-owned airline has undergone major restructuring after posting a pre-tax loss of almost $42 million for the first nine months of 2018.

It has reduced its fleet from 20 to 11 aircraft, eliminating several destinations, including those to the US, and cutting 111 full-time jobs.

A report by a governmental work group has warned that a WOW Air bankruptcy would lead to a drop in Iceland’s gross domestic product, a drop in the value of the krona and rising inflation.

 
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Nearly one in three people living in West and Central Africa fear losing their homes and land in the next five years, according to a survey of 33 countries, making it the region where people feel most insecure about their property.

More than two in five respondents from Burkina Faso and Liberia worry their home could be taken away from them, revealed Prindex, a global property rights index which gauges citizens’ views.

In West Africa, “a history of governments and investors seizing land for large projects has made people more insecure,” said Malcolm Childress, executive director of the Global Land Alliance, a Washington-based think tank that compiles the index.

Insecurity can lead to people struggling to plan for their futures, holding back entire economies, Childress said.

“In countries like Rwanda, however, which are mapping and registering customary land, that uncertainty is much lower,” he told the Thomson Reuters Foundation, adding that only 8 percent of the country’s respondents feared losing their homes.

In Southeast Asia and Latin America, which Childress said had strong institutions documenting land, only 21 percent and 19 percent of people, respectively, reported feeling insecure about their property.

The survey, conducted by U.S. polling firm Gallup and launched in Washington, D.C., at a World Bank conference on Tuesday, is the largest ever effort documenting how secure people feel about their homes and land at a global level.

A lack of formal documentation and poor implementation of land laws threaten tenure in many countries, experts say, with more than 5 billion people lacking proof of ownership, according to the Lima-based Institute for Liberty and Democracy.

Survey respondents cited being asked by their landlord to leave the property as well as family disagreements as the main reasons for feeling insecure.

The index also found that 12 percent more women than men felt they might lose their property in the event of divorce or death of a spouse.

That gap shows “there is a long way to go in meeting the aspiration of equal economic rights for women worldwide,” said Anna Locke from the Overseas Development Institute, a British think tank that is involved in the index.

The survey for the first time sampled respondents in Britain, where 11 percent of people feared losing their home, mainly due to a lack of money or other resources.

More than 50,000 people were questioned about ownership or tenure in 33 countries most of them from Africa, Latin America and Asia. Over the next year, the poll will be extended to 140 countries.

Prindex is an initiative of the Omidyar Network — with which the Thomson Reuters Foundation has a partnership on land rights coverage — and the U.K.’s Department for International Development.
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Than Ei lived in the Thilawa area near Yangon for years, growing vegetables in her backyard and sending her two children to school with money from her husband’s construction job.

Then came the government order to move. Than Ei’s family was among 68 households relocated in 2013 to make way for the Thilawa Special Economic Zone (SEZ), the first such industrial area in Myanmar, about 23km (15 miles) southeast of Yangon.

Authorities said each family would get a home a few miles away, or a plot of land and money to build a house, as well as jobs in the new factories, with good wages.

But six years on, Than Ei and others who moved say their incomes are lower than before, and they have only limited access to services. Many families sold their homes and left the area after they ran out of money, Than Ei said.

“There is no land to grow vegetables or to keep chickens, and we are not close to transport or the market anymore,” Than Ei said outside her one-room home in Myaing Thar Yar village.

“My husband only got a job as a security guard two years after (the move). We had to take out a loan until then, which we are still paying off.”

For developing nations like Myanmar – which emerged from decades of economic isolation in 2011 when the military stepped back from direct control – SEZs are seen as a way to attract much-needed foreign investment and create jobs.

Authorities say Thilawa SEZ is being built according to international environmental and social safeguards, which includes getting the consent of residents and offering adequate compensation.

But for those whose lives have been uprooted by the country’s economic ambitions, the reality is different, said Mike Griffiths, a researcher at the Myanmar Social Policy and Poverty Research Group, a think tank based in Yangon.

“They not only have lower levels of income, but are more likely to have higher expenditure, higher rates of debt and lower employment rates,” he wrote in a report last year on the relocated households. “The picture is of extreme vulnerability.”

Risky Model

The model for economic growth that Myanmar and other countries in the region hope to emulate is that of China, which in the 1980s set up about half a dozen major SEZs to boost its market reforms.

Experts say SEZs have contributed significantly to China’s economic growth, with the World Bank estimating in 2015 that they accounted for nearly a quarter of the country’s GDP.

Spurred by China’s example, governments from sub-Saharan Africa to southeast Asia have adopted SEZs, but analysts say they have a mixed record of success.

“The model has passed its use-by-date, and officials have been slow to catch on,” said Charlie Thame, a professor of political science at Bangkok’s Thammasat University.

“Even from an economic point of view they are fraught with risk, mostly borne by host states.”

In poorer nations, SEZs “overwhelmingly fail to provide decent jobs or generate beneficial effects to local economies,” he said, and domestic legislation and international investment frameworks largely fail to protect those affected.

No Consultation

When completed, the Thilawa SEZ will cover some 2,400 hectares (9 sq. miles) of land. Dozens of manufacturers, largely making goods for export, are already operating there.

Thilawa is the only operational SEZ in the country, with the Dawei SEZ in the southern region of Tanintharyi on hold after some initial construction. A third SEZ is planned, with Chinese investment, in Kyauk Pyu in Rakhine state.

The site in Thilawa had been earmarked for industrial use under the junta government in 1996, but the original plans fell through.

When authorities announced the start of development for the SEZ six years ago, they said since the land already belonged to the government, villagers living on it were only eligible to be compensated for their crops.

None of the residents made to move were consulted on the economic or social impacts of the development, said Mya Hlaing, a member of the Thilawa Social Development Group, which was set up to represent the villagers.

“We were also promised training and jobs, but very few have got jobs – and even then, only as cleaners and security guards,” he told the Thomson Reuters Foundation.

A spokesman for Myanmar Japan Thilawa Development, which operates Zone 1 of the SEZ, said the land acquisition was carried out by government authorities, and that those affected had been offered several job opportunities.

Myanmar authorities did not respond to calls and e-mails seeking comment.

Backlash

About 600km away in southern Myanmar, development of the Dawei SEZ has been suspended since 2013, after it sparked community protests and hit funding difficulties.

The project is a joint venture of the Thai and Myanmar governments, and includes a 140-km road to the Thai border, a port, a power plant, a reservoir and an industrial estate.

Most residents affected by the initial phase of construction refused to move into the nearly 500 homes that had been built a couple of miles away.

“We were not told what types of factories would be built or what their impact would be,” said Mar Lar, who sold some of her land in the southern Htein Gyi village but still lives in her own home.

Residents in Dawei fear construction on the stalled project will resume soon, even as a backlash against SEZs is growing.

Protests broke out in Vietnam last year over planned new SEZs.

In India, the Supreme Court has asked why land acquired for SEZs is not being used, and the Myanmar government has scaled back its Kyauk Pyu project with China over fears of a debt trap.

But back in Thilawa, the second phase of construction is about to kick off and will see the relocation of more than 800 families, said Aye Khaing Win, a community leader.

“The government says the SEZ has done many good things, but we have lost our land. We have not benefited,” he said.
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U.S. labor officials on Tuesday pressed lawmakers to strengthen enforcement of the provisions of the United States-Mexico-Canada Agreement (USMCA) intended to protect workers, the latest sign that the trade deal could face hurdles to passage in the Democrat-led House of Representatives.

Renegotiation of the North American Free Trade Agreement (NAFTA) was one of President Donald Trump’s campaign promises and part of his broader push for better terms of trade for the United States. He has said that bad deals have cost millions of jobs.

Representatives from some of the largest and most influential unions in the United States told lawmakers on Tuesday that the reworked pact does not go far enough to ensure improvement of wages and working conditions, especially for Mexican workers.

“All the NAFTA renegotiation efforts in the world will not create U.S. jobs, raise U.S. wages or reduce the U.S. trade deficit if the new rules do not include clear, strong and effective labor rules that require Mexico to abandon its low wage policy,” Celeste Drake of the American Federation of Labor and Congress of Industrial Organizations said at a House Ways and Means subcommittee hearing.

In late 2018, the leaders of the United States, Mexico and Canada signed the deal to replace NAFTA, but it has yet to be reviewed and ratified by Congress. Trade among the three countries totals more than $1 trillion.

Democrats, who took control of the House of Representatives in January, have traditionally been skeptical of free trade agreements and sympathetic to labor groups. Their support is essential to USMCA’s passage.

USMCA requires its three signatories to maintain labor laws in line with international standards, and to enforce them. But critics have called the agreement’s enforcement mechanism insufficient, saying it will still allow weak unions and resulting low wages in Mexico, while failing to stanch the flight of U.S. factories to lower-cost Mexico.

NAFTA, launched in 1994, put labor provisions in an unenforceable addendum to the agreement, allowing Mexican wages to stagnate despite a flood of factory investment from U.S. companies.

“The (USMCA) labor chapter is an improvement. The problem is the enforceability mechanism,” said Shane Larson, a director with the Communications Workers of America, advocating for reopening the agreement.

Autoworkers, too, are concerned about the new agreement, despite provisions aimed at requiring more vehicle value content produced in North America and in high-wage areas in the United States and Canada.

USMCA “takes some positive steps but doesn’t measure up to being able to make more good-paying jobs now and going forward,” said Josh Nassar, legislative director of the United Auto Workers union.

The imposition of NAFTA led to decades of lost jobs for autoworkers, who watched U.S. factories close as manufacturers moved production to Mexico.

House Democrats have greeted USMCA coolly, telling U.S. Trade Representative Robert Lighthizer earlier this month about their concerns about labor enforcement and provisions that could lock in higher drug prices.

“This agreement is a continuation of the assault on the American middle class,” Brian Higgins, a Democratic representative from New York, said on Tuesday at the hearing.

The Trump administration is lobbying to persuade Congress to ratify USMCA this year. Trump visited Capitol Hill on Tuesday to meet with Senate Republicans, and discussed the trade pact with House Republicans later in the afternoon.
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The White House and business groups are stepping up efforts to win congressional approval for the U.S.-Mexico-Canada trade accord. But prospects are uncertain given that Republicans are at odds with some aspects of the plan and Democrats are in no hurry to secure a political victory for the president.

President Donald Trump will meet with GOP lawmakers Tuesday to try to kick-start the process for rounding up votes on Capitol Hill. Supporters in Congress and business groups say they have a narrow window to push it through, given that lawmakers tend to avoid tough trade votes during election season.

Rep. Earl Blumenauer, D-Ore., the chairman of the House subcommittee that has jurisdiction over trade, said the pact needs adjustments to be “worthy of support.”

Some Republican lawmakers also have concerns. Sen. Chuck Grassley of Iowa, the Republican chairman of the Senate Finance Committee, maintains that the president should lift steel and aluminum tariffs on products brought in from Canada and Mexico as a first step to getting the trade agreement through Congress.

Trump’s top trade negotiator, Robert Lighthizer, told lawmakers during a recent congressional hearing that if they don’t pass the trade agreement, the United States will have “no credibility at all” with future trading partners, including China.

“There is no trade program in the United States if we don’t pass USMCA. There just isn’t one,” Lighthizer said.

The White House’s legislative affairs team has talked to more than 290 members of Congress and staff over the past two months to push the deal. But the administration knows that making changes in the agreement to win over lawmakers could jeopardize support for the pact from Canada and Mexico.

Sen. Joni Ernst, R-Iowa, told reporters recently that many in her state’s agricultural community are “still with the president, but if we don’t get the trade deals done, they could turn quickly.”

She said, “We need to start wrapping this baby up.”

​The trade deal is designed to supplant the North American Free Trade Agreement, which took effect in 1994 and gradually eliminated tariffs on goods produced and traded within North America.

U.S. trade with its NAFTA partners has more than tripled since the agreement took effect, and more rapidly than trade with the rest of the world.

But Trump has called NAFTA a disaster for the United States. The new pact his administration negotiated is meant to increase manufacturing in the United States. Trump is warning that if lawmakers don’t approve the pact, the U.S. may revert to what he has described as “pre-NAFTA.”

Blumenauer is looking to make changes to the agreement in four areas: enhancing environmental and labor protections, ensuring enforcement of the agreement, and taking on protections for pharmaceutical companies that he believes drive up drug costs for consumers.

“I don’t think anyone wants to blow it up, but there is interest in strengthening it,” Blumenauer said.

Rep. Vern Buchanan of Florida, the ranking Republican on the trade subcommittee, said he believes the vast majority of Republicans will end up voting for the agreement. He’s tried to assure Democratic colleagues that Republicans were “open-minded to try and get some things done” to address their concerns.

“You put a lot of jobs at risk if this blows up,” Buchanan said.

Vanessa Sciarra, a vice president at the National Foreign Trade Council, said it’s too soon to tell how the vote will shake out.

Sciarra said one thing lawmakers don’t want to see is Trump make good on a threat to withdraw from NAFTA if he can’t get Congress to ratify the pact.

“Never has NAFTA been so popular,” Sciarra said.

Canadian officials have been lobbying the U.S. to end Trump’s steel and aluminum tariffs and have suggested that approval by Canada’s Parliament could be conditioned upon them being lifted. David MacNaughton, Ottawa’s ambassador to Washington, has said it will be a tough sell to pass if the tariffs are still in place.

Dan Ujczo, a trade lawyer and Canada-U.S. specialist in Columbus, Ohio, said the trade deal could pass “relatively quickly” once the tariffs are removed.

In Mexico, the administration of then-President Enrique Pena Nieto spearheaded Mexico’s negotiations, but representatives of current President Andres Manuel Lopez Obrador were deeply involved in the talks to ensure an agreement that both the outgoing and incoming administrations could live with.

Allies of Lopez Obrador, who took office Dec. 1, enjoy a large majority in the Mexican Senate, so passage of the agreement would seemingly go smoothly.

Kenneth Smith Ramos, who was chief negotiator for Pena Nieto’s government and now works as an international trade consultant at Mexico City-based AGON, said Mexican enthusiasm for the deal could dim though if there are significant new demands on labor, pharmaceuticals, the environment or other issues.

“We made some important concessions,” he said, adding that if “the U.S. still wants more, then that starts to unbalance the agreement and there may be a growing opposition in Mexico.”
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Hong Kong’s former home affairs secretary Patrick Ho Chi Ping was jailed for three years Monday for a scheme to bribe African officials to boost a top Chinese energy company that was part of Beijing’s global Belt and Road initiative.

Ho, 69, who worked for the controversial energy conglomerate CEFC China Energy, was sentenced by a New York judge after being convicted in December on seven charges of violating the Foreign Corrupt Practices Act and money laundering for bribes.

He was accused of paying off top officials in Uganda and Chad to support the Shanghai conglomerate’s projects in their countries.

Some of the deals were arranged in the halls of the United Nations, leading to the U.S. arrest in November 2017 of Ho and a co-conspirator, former Senegalese top diplomat Cheikh Gadio.

The two men allegedly offered a $2 million bribe to Idriss Deby, the president of Chad, “to obtain valuable oil rights,” and a $500,000 bribe to an account designated by Sam Kutesa, the minister of foreign affairs of Uganda, who had recently completed his term as the President of the U.N. General Assembly, according to the charges.

“Patrick Ho schemed to bribe the leaders of Chad and Uganda in order to secure unfair business advantages for the Chinese energy company he served,” said U.S. Attorney Geoffrey Berman. “Foreign corruption undermines the fairness of international markets, erodes the public’s faith in its leaders, and is deeply unfair to the people and businesses that play by the rules.”

CEFC was an upstart company that quickly grew to be worth tens of billions of dollars despite a murky track record.

It was considered to be a vital player in Chinese President Xi Jinping’s ambitious One Belt One Road plan to build commercial networks around the world.

CEFC was led by Ye Jianying, an ostensibly well-connected businessman who built a network of global contacts, and notably was able to meet with members of then-vice president Joe Biden’s family and a former CIA director.

But after Ho was arrested by U.S. authorities in 2017, CEFC’s business began to crumble.

Last year, Ye disappeared and is now believed to be held by Chinese authorities for unspecified charges.
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Airbus signed a deal worth tens of billions of dollars on Monday to sell 300 aircraft to China as part of a trade package coinciding with a visit to Europe by Chinese President Xi Jinping and matching a China record held by rival Boeing.

The deal between Airbus and China’s state buying agency, China Aviation Supplies Holding Company, which regularly coordinates headline-grabbing deals during diplomatic visits, will include 290 A320-family jets and 10 A350 wide-body jets.

French officials said the deal was worth some 30 billion euros at catalogue prices. Planemakers usually grant significant discounts.

The larger-than-expected order, which matches an order for 300 Boeing planes when U.S. Donald Trump visited Beijing in 2017, follows a year-long vacuum of purchases in which China failed to place significant orders amid global trade tensions.

It also comes as the grounding of the Boeing 737 MAX has left uncertainty over Boeing’s immediate hopes for a major jet order as the result of any warming of U.S.-China trade ties.

There was no evidence of any direct connection between the Airbus deal and Sino-U.S. tensions or Boeing fleet problems, but China watchers say Beijing has a history of sending diplomatic signals or playing off suppliers through state aircraft deals.

“The conclusion of a big (aviation) contract … is an important step forward and an excellent signal in the current context,” French President Emmanuel Macron said in a joint address with his Chinese counterpart Xi Jinping.

The United States and China are edging towards a possible deal to ease a months-long tariff row and a deal involving as many as 200-300 Boeing jets had until recently been expected as part of the possible rapprochement.

Long-term relationship

China was also the first to ground the newest version of Boeing’s workhorse 737 model earlier this month following a deadly Ethiopian Airlines crash, touching off a series of regulatory actions worldwide.

Asked if negotiations had accelerated as a result of the Boeing grounding or other issues, Airbus planemaking chief and designated chief executive Guillaume Faury told reporters, “This is a long-term relationship with our Chinese partners that evolves over time; it is a strong sign of confidence.”

China has become a key hunting ground for Airbus and its leading rival Boeing, thanks to surging travel demand.

But whether Airbus or Boeing is involved, analysts say diplomatic deals frequently contain a mixture of new demand, repeats of older orders and credits against future deals, meaning the immediate impact is not always clear.

The outlook has also been complicated by Beijing’s desire to grow its own industrial champions and, more recently for Boeing, the U.S.-China trade war.

French President Macron unexpectedly failed to clinch an Airbus order for 184 planes during a trip to China in early 2018 and the two sides have been working to salvage it.

Industry sources have said the year’s delay in Airbus negotiations, as well as a buying freeze during the U.S. tariff row, created latent demand for jets to feed China’s growth.
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The chairman of India’s private Jet Airways has quit amid mounting financial woes which have forced it to suspend 14 international routes and ground more than 80 planes.

A statement by the airline says its board on Monday accepted the resignations of Chairman Naresh Goyal, his wife and a nominee of Gulf carrier Etihad Airways from the board. It said Goyal will also cease to be chairman.

Goyal has been trying to obtain new funding from Etihad Airways, which holds a 24 percent stake in the airline, which was founded 27 years ago.

The statement said the airline will receive 15 billion rupees ($217 million) in immediate funding under a recovery plan formulated by its creditors.

 
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U.S. sportswear maker Nike was hit with a 12.5 million euro ($14.14 million) fine on Monday for blocking cross-border sales of soccer merchandise of some of Europe’s best-known clubs, the latest EU sanction against such restrictions.

The European Commission said Nike’s illegal practices occurred between 2004 to 2017 and related to licensed merchandise for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation.

The European Union case focused on Nike’s role as a licensor for making and distributing licensed merchandise featuring a soccer club’s brands and not its own trademarks.

The sanction came after a two-year investigation triggered by a sector inquiry into e-commerce in the 28-country bloc. The EU wants to boost online trade and economic growth.

European Competition Commissioner Margrethe Vestager said Nike’s actions deprived soccer fans in other countries of the opportunity to buy their clubs’ merchandise such as mugs, bags, bed sheets, stationery and toys.

“Nike prevented many of its licensees from selling these branded products in a different country leading to less choice and higher prices for consumers,” she said in a statement.

Nike’s practices included clauses in contracts prohibiting out-of-territory sales by licensees and threats to end agreements if licensees ignored the clauses. Its fine was cut by 40 percent after it cooperated with the EU enforcer.

($1 = 0.8839 euros)
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Vietnam’s cheap workers might not be the country’s stars for much longer: low wages helped to propel the communist nation to some of the fastest growth rates in the world, but analysts say it needs a new economic model now.

After a slow recovery from the Vietnam War, the Southeast Asian country saw gross domestic product rise year after year from the 1990s on. That was built on the back of low-cost labor and factory-driven exports, as well as companies’ increasing tie-ins to foreign investment.

Vietnam is currently at a turning point, looking back at simple exports like rice and Reeboks that helped it develop, and looking forward to a more advanced economy along the lines of Taiwan or South Korea. Locals do not want “Made in Vietnam” to signal low quality. They also want to integrate into global trade, without the backlash against globalization seen among populist voters from Europe to the United States.

“What has been working in the past 30 years may not necessarily work in the future,” said Ousmane Dione, the World Bank director in Vietnam. “The impacts of initial institutional and structural reforms seem to have reached their limit.”

He was referring to the Doi Moi reforms that began three decades ago, when Vietnam started to introduce more and more traits of a market economy into its system, like private ownership of firms and houses. Hanoi is conducting a review of how well Doi Moi turned out, and how to chart an economic path for the next three decades.

Advisers have put forward ideas of how the new economy could look in Vietnam, among which are three common themes: the internet and other high-tech sectors will dominate; businesses will move into services and other value-added industries rather than physical goods; and employees will constantly update their skills through life-long learning.

For example, Vietnamese factory hands are accustomed to assembling phones and cars, but could they one day move up the value chain, such as by providing tech support to people who buy these products?

On the technology side, Vietnam could do more to collaborate with the rest of Southeast Asia, according to Pham Hong Hai, CEO of HSBC Vietnam. That may range from ensuring electronic payments go off without a hitch across borders, to cooperating on a response to cyber threats, he said.

“Businesses are crying out for tangible developments that will smoothen intra-regional trade,” Hai said. Vietnam “should continue the momentum to further integrate into the region and gain most benefits from globalization.”

Left Behind?

The other vital theme has to do with the workforce, making sure its productivity and skill levels improve. Millions of Vietnamese now rely on entry-level jobs to make a living, whether it’s gluing together wallets at a factory, or picking coffee cherries on a farm.

That was the work that used to attract foreign investors to the country in droves, but not all of those jobs will last. So groups from government agencies to charities are enacting education and training programs to equip locals with skills for the future.

This is meant not just to increase job security, but also to prevent Vietnamese from feeling left behind or bitter if jobs get off-shored to cheaper countries. Vietnam hopes to avoid the populist resentment of other parts of the world, as well as the trade protectionism that has created.

To that end Vietnam is turning to partners like Australia, which has supported projects that allow the fruits of economic success to be spread more widely.

Vietnam set out on a new “chapter that embraces innovation, promotes bold reform, and helps Vietnam achieve its ambitious development goals,” said Craig Chittick, the Australian ambassador in the country of 100 million people.

His government has backed programs in Vietnam like the KOTO center, which teaches hospitality skills to street children, as well as a contest to invent technologies useful to rural women and a forum to promote impact investing. The idea is that not all groups have benefited from past economic growth, but there is still a chance to change that in the new Vietnam.
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The United States is an economic powerhouse.

As the largest economy in the world, the U.S. produced $20.5 trillion worth of goods and services — known as its Gross Domestic Product (GDP) — in 2018. That’s impressive when you consider that the total GDP for the entire world was about $80 trillion in 2017.

In fact, every U.S. state has a GDP that makes it as powerful, economically, as a foreign nation.

California is the state with the highest GDP in the country. Its $2.97 trillion economy is on par with Britain, which has a GDP of $2.81 trillion. The UK needed 14.5 million workers — 75 percent more than California used — to produce the same economic output. On its own, California is the fifth-largest economy in the world.

The GDP of Texas ($1.78 trillion) is equivalent to the economy of Canada ($1.73 trillion), while New York’s GDP ($1.70 trillion) matches up to South Korea ($1.66 trillion).

Even the smaller U.S. states can hold their own. Wyoming, the smallest U.S. state population-wise, with fewer than 600,000 residents, has a GDP of $41 billion, which is about the same as Jordan’s, a country of 9 million people.

Mark J. Perry, an economics and finance professor at the University of Michigan, and a scholar at the American Enterprise Institute, used data from the U.S. Department of Commerce and the International Monetary Fund for his analysis comparing the GDP’s of U.S. states to entire countries.

He says those numbers are a testament to the “world-class productivity of the American workforce,” and a reminder of “how much wealth, output and prosperity is being created every day in the largest economic engine there has ever been in human history.”
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The U.S. federal government posted a $234 billion budget deficit in February, according to data released Friday by the Treasury Department.

Analysts polled by Reuters had expected a $227 billion deficit for the month.

The Treasury said federal spending in February was $401 billion, up 8 percent from the same month in 2018, while receipts were $167 billion, up 7 percent compared to February 2018.

The deficit for the fiscal year to date was $544 billion, compared with $391 billion in the comparable period the year earlier.

When adjusted for calendar effects, the deficit was $547 billion for the fiscal year to date versus $439 billion in the comparable prior period.
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Less than a week after a series of critical tweets from the president over an Ohio plant closure, General Motors is announcing plans to add 400 jobs and build a new electric vehicle at a factory north of Detroit.

The company says it will spend $300 million at its plant in Orion Township, Michigan, to manufacture a Chevrolet vehicle based on the battery-powered Bolt.

GM wouldn’t say when the new workers will start or when the new vehicle will go on sale, nor would it say if the workers will be new hires or come from a pool of laid-off workers from the planned closings of four U.S. factories by January.

The company also announced plans Friday to spend about another $1.4 billion at U.S. factories with 300 more jobs but did not release a time frame or details.

The moves come after last weekend’s string of venomous tweets by President Donald Trump condemning GM for shutting its small-car factory in Lordstown, Ohio, east of Cleveland. During the weekend, Trump demanded that GM reopen the plant or sell it, criticized the local union leader and expressed frustration with CEO Mary Barra.

GM spokesman Dan Flores would not answer questions about Trump but said the investment has been in the works for weeks. Indeed, GM has said it planned to build more vehicles off the underpinnings of the Bolt, which can go an estimated 238 miles on a single electric charge. The company has promised to introduce 20 new all-electric vehicles globally by 2023.

In November, GM announced plans to shut the four U.S. factories and one in Canada. About 3,300 workers in the U.S. would lose their jobs, as well as 2,600 in Canada. Another 8,000 white-collar workers were targeted for layoff. The company said the moves are necessary to stay financially healthy as GM faces large capital expenditures to shift to electric and autonomous vehicles.

Plants slated for closure include Lordstown; Detroit-Hamtramck, Michigan; Warren, Michigan; White Marsh, Maryland, near Baltimore and Oshawa, Ontario near Toronto. The factories largely make cars or components for them, and cars aren’t selling well these days with a dramatic consumer shift to trucks and SUVs. With the closures, GM is canceling multiple car models due to slumping sales, including the Chevrolet Volt plug-in gas-electric hybrid.

GM has said it can place about 2,700 of the laid-off U.S. workers at other factories, but it’s unclear how many will uproot and take those positions. More than 1,100 have already transferred, and others are retiring.

The United Auto Workers has sued GM over the closings, which still must be negotiated with the union.

Trump’s latest GM tweet on Monday said GM should: “Close a plant in China or Mexico, where you invested so heavily pre-Trump,” and “Bring jobs home!”

Ohio and the area around the Lordstown plant are important to Trump’s 2020 re-election bid. The state helped push him to victory in 2016, and Trump has focused on Lordstown, seldom mentioning the other U.S. factories that GM is slated to close.

Barra has said that she sees no further layoffs or plant closures through the end of 2020.
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Malaysian Prime Minister Mahathir Mohamad arrived Thursday in Pakistan on an official three-day visit, where his high-powered delegation is expected to finalize investment deals worth nearly $900 million, officials said. 

The Malaysian leader will also be the chief guest at the Pakistan Day military parade Saturday, the Foreign Ministry announced. 

Pakistani Prime Minister Imran Khan’s adviser on commerce told reporters that business leaders accompanying Mahathir would sign three memorandums of understanding on Friday covering up to $900 million worth of investments in information technology and telecom sectors.  

The adviser, Razak Dawood, said the deals with Malaysia would also provide Pakistan a new opening toward membership in the Association of South East Asian Nations. He said Malaysian businessmen had also indicated they would like to invest in other sectors, including energy and textiles, to help Pakistan improve its exports. 

Officials said that Malaysia’s Proton carmaker signed an agreement late last year with a Pakistani partner to set up an assembly plant in the southern city of Karachi that would be its first facility in South Asia. Khan and his Malaysian counterpart are expected to officiate at a symbolic groundbreaking of the Proton plant Friday.

Looking for investors

Since taking office last August, Khan has approached nations that have warm relations with Pakistan, including China, Saudi Arabia, the United Arab Emirates, Qatar and Malaysia, to bring investment and financial deposits to help reduce a widening current account deficit and shore up foreign reserves.  

Riyadh and Abu Dhabi have deposited or are in the process of depositing $6 billion in loans in recent months. The two countries have also agreed to allow Islamabad to import oil on deferred payments. China is expected to deposit more than $2 billion in the next few days. 

Beijing has invested more than $19 billion over the past six years in energy and infrastructure projects under what is known as the China-Pakistan Economic Corridor, as part of its global Belt and Road Initiative. 

Last month, Saudi Crown Prince Mohammad bin Salman visited Islamabad and signed investment agreements worth $20 billion, including a $10 billion refinery and petrochemicals complex in the southwestern port city of Gwadar. 

Pakistani officials say they are also close to securing a deal with the International Monetary Fund for a bailout package reportedly of up to $12 billion.
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The number of Americans filing applications for unemployment benefits fell more than expected last week, pointing to still strong labor market conditions, though the pace of job growth has slowed after last year’s robust gains.

Other data on Thursday showed a measure of factory activity in the mid-Atlantic region rebounding sharply this month after falling into negative territory in February for the first time in more than 2-1/2 years. But manufacturers’ perceptions about the outlook were the least favorable in three years and their expectations for capital spending were also less upbeat.

These findings support the view that the manufacturing sector is slowing in line with softening economic growth.

The Federal Reserve held interest rates steady on Wednesday and its policymakers abandoned projections for further rate increases this year, noting that “growth of economic activity has slowed from its solid rate in the fourth quarter.”

“The U.S. economy has clearly slowed and will cause job growth to moderate, which isn’t alarming as long as it is orderly,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 221,000 for the week ended March 16, the Labor Department said on Thursday. Economists polled by Reuters had forecast claims falling to 225,000 in the latest week. Claims have been drifting in the middle of their 200,000-253,000 range this year.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 1,000 to 225,000 last week.

The claims data covered the survey week for the nonfarm payrolls portion of March’s employment. The four-week average of claims fell 11,000 between the February and March survey periods, suggesting a pickup in job growth after hiring almost stalled last month.

Nonfarm payrolls increased by only 20,000 jobs in February, the fewest since September 2017. The slowdown followed big gains in December and January. Average job growth has moderated to about 165,500 per month from 223,250 per month in 2018.

Despite the slowdown in employment growth, the labor market remains solid. The unemployment rate is at 3.8 percent and annual wage growth in February was the strongest since 2009.

The step-down in hiring reflects a shortage of workers and softening economic growth as the stimulus from a $1.5 trillion tax cut package fades. A trade war between the United States and China, slowing global growth and uncertainty over Britain’s exit from the European Union are also hurting domestic activity.

Ebbing momentum

The slow growth theme was also underscored by another report on Thursday from the Conference Board showing its leading economic index, which measures future U.S. economic activity, rose in February for the first time in five months.

February’s 0.2 percent increase in the leading indicator followed an unchanged reading in January.

The leading indicator’s growth rate has slowed in the past six months, which the Conference Board said suggested “that while the economy will continue to expand in the near-term, its pace of growth could decelerate by year end.”

Gross domestic product estimates for the first quarter are as low as a 0.4 percent annualized rate. The economy grew at a 2.6 percent pace in the fourth quarter.

The dollar firmed against a basket of currencies while stocks on Wall Street rose. U.S. Treasury prices were generally higher.

In a third report on Thursday, the Philadelphia Fed said its business conditions index jumped to 13.7 in March from -4.1 in February, which was the first negative reading since May 2016.

But the survey’s measure of new orders received by factories in the region, which covers eastern Pennsylvania, southern New Jersey and Delaware, rebounded moderately from negative territory in February and unsold goods piled up.

In addition, the survey’s six-month business conditions index dropped to a reading of 21.8 this month, the lowest since February 2016, from 31.3 in February. Its six-month capital expenditures index fell to a reading of 19.5 in March from 31.7 in the prior month. The index dropped below 20 for the first time since 2016.

“The details within the report were much more of a mixed bag, and more downbeat than one might think given the solid improvement in the headline reading,” said Daniel Silver, an economist at JPMorgan in New York.

These readings are in line with other surveys showing signs of slowing national factory activity. A report from the New York Fed last week showed a gauge of factory activity in New York state dropped to a two-year low in March.

The Philadelphia Fed survey also showed more factories experiencing difficulty finding workers, which could weigh on production in the future. Nearly 74 percent of the firms reported labor shortages, up from 63.8 percent last year.

Just over half of the companies also reported they had positions that have remained vacant for more than 90 days. That compared to 47.8 percent in 2018.
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