Alibaba Chairman Jack Ma said Wednesday that the Chinese e-commerce giant had canceled plans to create 1 million jobs in the U.S., blaming the ongoing trade war for the decision, according to Chinese news agency Xinhua.

“This commitment is based on friendly China-U.S. cooperation and the rational and objective premise of bilateral trade,” Ma told Xinhua. “The current situation has already destroyed the original premise. There is no way to deliver the promise.”

Ma originally pledged to spur job growth by letting American small businesses and farmers sell their goods on Alibaba, which is one of the world’s largest online retailers, when he visited then-President-elect Donald Trump early 2017.

Trump imposed 10 percent tariffs on $200 billion worth of Chinese imports on Monday, threatening to place taxes on an additional $267 billion worth of Chinese imports if China attempts to retaliate.

China placed tariffs on about $60 billion worth of U.S. products the next day as previously planned, though it reduced the size of the tariffs.

At an Alibaba investor conference Tuesday, Ma described the state of economic relations between the two countries as a “mess” with consequences that could last for decades.

Some experts said Ma’s plan to bring 1 million jobs to the U.S. might have been overly ambitious in the first place.
…

Alibaba Chairman Jack Ma said Wednesday that the Chinese e-commerce giant had canceled plans to create 1 million jobs in the U.S., blaming the ongoing trade war for the decision, according to Chinese news agency Xinhua.

“This commitment is based on friendly China-U.S. cooperation and the rational and objective premise of bilateral trade,” Ma told Xinhua. “The current situation has already destroyed the original premise. There is no way to deliver the promise.”

Ma originally pledged to spur job growth by letting American small businesses and farmers sell their goods on Alibaba, which is one of the world’s largest online retailers, when he visited then-President-elect Donald Trump early 2017.

Trump imposed 10 percent tariffs on $200 billion worth of Chinese imports on Monday, threatening to place taxes on an additional $267 billion worth of Chinese imports if China attempts to retaliate.

China placed tariffs on about $60 billion worth of U.S. products the next day as previously planned, though it reduced the size of the tariffs.

At an Alibaba investor conference Tuesday, Ma described the state of economic relations between the two countries as a “mess” with consequences that could last for decades.

Some experts said Ma’s plan to bring 1 million jobs to the U.S. might have been overly ambitious in the first place.
…

Canada said on Wednesday that it would need to see movement from the United States if the two sides are to reach a deal on renewing NAFTA, which Washington insists must be finished by the end of the month.

Although the administration of U.S. President Donald Trump and its allies are increasing pressure on Canada to make the concessions they say are needed for the North American Free Trade Agreement, Canadian Prime Minister Justin Trudeau made clear he also wanted to see flexibility.

“We’re interested in what could be a good deal for Canada but we’re going to need to see a certain amount of movement in order to get there and that’s certainly what we’re hoping for,” he told reporters in Ottawa.

Shortly afterwards, Canadian Foreign Minister Chrystia Freeland met U.S. Trade Representative Robert Lighthizer for their fourth set of talks in four weeks with the two sides still disagreeing on major issues.

Trump has already wrapped up a side deal with Mexico and is threatening to exclude Canada if necessary. Canadian officials say they do not believe the U.S. Congress would agree to turn NAFTA into a bilateral treaty.

U.S. Chamber of Commerce President Thomas Donohue said it would be extremely complicated, if not impossible, for the administration to pull off a Mexico-only agreement.

“If Canada doesn’t come into the deal there is no deal,” Donohue told a media breakfast in Washington.

Donohue said he believed that if the administration wanted to end the current NAFTA, such a move would be subject to a vote in Congress, which would be difficult to get.

The Chamber, the most influential U.S. business lobby, wants NAFTA to be renegotiated as a tri-lateral agreement, citing how highly integrated the three member nations’ economies have become since the pact came into force in 1994.

Negotiators are arguing over cultural protections, dispute resolution, and a U.S. demand for more access to Canada’s protected dairy market. Sources say Ottawa has made clear it is prepared to make concessions, which would anger the influential dairy lobby.

“For American farmers the Canadian market is a drop in the bucket. For us it’s our livelihood,” Dairy Farmers of Canada vice president David Wiens told reporters in Ottawa. Concessions in past trade deals had already hurt Canadian farmers, he said.

“The dairy sector cannot be negatively impacted again by a new trade agreement,” he said. “Enough is enough.”
…

Canada said on Wednesday that it would need to see movement from the United States if the two sides are to reach a deal on renewing NAFTA, which Washington insists must be finished by the end of the month.

Although the administration of U.S. President Donald Trump and its allies are increasing pressure on Canada to make the concessions they say are needed for the North American Free Trade Agreement, Canadian Prime Minister Justin Trudeau made clear he also wanted to see flexibility.

“We’re interested in what could be a good deal for Canada but we’re going to need to see a certain amount of movement in order to get there and that’s certainly what we’re hoping for,” he told reporters in Ottawa.

Shortly afterwards, Canadian Foreign Minister Chrystia Freeland met U.S. Trade Representative Robert Lighthizer for their fourth set of talks in four weeks with the two sides still disagreeing on major issues.

Trump has already wrapped up a side deal with Mexico and is threatening to exclude Canada if necessary. Canadian officials say they do not believe the U.S. Congress would agree to turn NAFTA into a bilateral treaty.

U.S. Chamber of Commerce President Thomas Donohue said it would be extremely complicated, if not impossible, for the administration to pull off a Mexico-only agreement.

“If Canada doesn’t come into the deal there is no deal,” Donohue told a media breakfast in Washington.

Donohue said he believed that if the administration wanted to end the current NAFTA, such a move would be subject to a vote in Congress, which would be difficult to get.

The Chamber, the most influential U.S. business lobby, wants NAFTA to be renegotiated as a tri-lateral agreement, citing how highly integrated the three member nations’ economies have become since the pact came into force in 1994.

Negotiators are arguing over cultural protections, dispute resolution, and a U.S. demand for more access to Canada’s protected dairy market. Sources say Ottawa has made clear it is prepared to make concessions, which would anger the influential dairy lobby.

“For American farmers the Canadian market is a drop in the bucket. For us it’s our livelihood,” Dairy Farmers of Canada vice president David Wiens told reporters in Ottawa. Concessions in past trade deals had already hurt Canadian farmers, he said.

“The dairy sector cannot be negatively impacted again by a new trade agreement,” he said. “Enough is enough.”
…

Kenya’s Finance Minister Henry Rotich has cut the government’s spending budget by 55.1 billion shillings ($546.90 million), or 1.8 percent, for the fiscal year from July this year, a Treasury document showed on Wednesday.

The government is facing a tough balancing act after a public outcry over a new 16 percent value added tax on all petroleum products forced President Uhuru Kenyatta to suggest to parliament to keep the VAT and cut if by half.

In the document detailing the new spending estimates, Rotich said the budget had to be adjusted because of the amendments to tax measures brought by lawmakers when they first debated it and passed it last month.

The proposed halving of the VAT rate on fuel has left the government with a funding shortfall, hence the cuts in spending.

Parliament will vote on a raft of proposals, including the 1.8 percent cut on spending, in a special sitting on Thursday.

Kenya’s economy is expected to grow by 6 percent this year, recovering from a drought, slowdown in lending and election-related worries that cut growth in 2017, but investors and the IMF have expressed concerns over growing public debt.

While the next election is still four years away, the government’s economic policies are chafing with citizens angered by increasing costs of living. Fuel dealers protested when the VAT on fuel kicked in this month and citizen groups have gone to court to try to block new or higher taxes.

Separate documents sent by Kenyatta to parliament ahead of Thursday’s sitting underscored the debate in government over how to boost revenues without hurting the poor.

His government has to reduce a gaping fiscal deficit while boosting spending on priority areas such as healthcare and affordable housing.

In order to balance the government’s books after the reduction of the fuel tax, he is trying to reinstate several tax measures struck out by parliament, including a 2 percentage hike on excise duty for mobile phone money transfers to 12 percent.

Kenya’s biggest mobile phone operator Safaricom said in June it was opposed to any tax rise on mobile phone-based transfers, arguing that it would mainly hurt the poor, most of whom do not have bank accounts and rely on services such as its M-Pesa platform.

The president also asked parliament to double the excise duty on the fees charged by banks, money transfer services, and other financial institutions to 20 percent.

Parliament in August threw out an earlier version of proposed fees on bank transfers, a so-called “Robin Hood” tax of 0.05 percent on transfers of more than 500,000 shillings.

The president has not yet signed the budget due to the dispute over the planned tax hikes. Kenyatta’s Jubilee party and its allies have a comfortable majority in parliament.

The Kenya National Chamber of Commerce and Industry this month said the government should widen the tax base. It also urged the state to cut expenditure, reduce wastage of public funds and deal with corruption, which some studies have found lose the government about a third of its annual budget.

 
…

Kenya’s Finance Minister Henry Rotich has cut the government’s spending budget by 55.1 billion shillings ($546.90 million), or 1.8 percent, for the fiscal year from July this year, a Treasury document showed on Wednesday.

The government is facing a tough balancing act after a public outcry over a new 16 percent value added tax on all petroleum products forced President Uhuru Kenyatta to suggest to parliament to keep the VAT and cut if by half.

In the document detailing the new spending estimates, Rotich said the budget had to be adjusted because of the amendments to tax measures brought by lawmakers when they first debated it and passed it last month.

The proposed halving of the VAT rate on fuel has left the government with a funding shortfall, hence the cuts in spending.

Parliament will vote on a raft of proposals, including the 1.8 percent cut on spending, in a special sitting on Thursday.

Kenya’s economy is expected to grow by 6 percent this year, recovering from a drought, slowdown in lending and election-related worries that cut growth in 2017, but investors and the IMF have expressed concerns over growing public debt.

While the next election is still four years away, the government’s economic policies are chafing with citizens angered by increasing costs of living. Fuel dealers protested when the VAT on fuel kicked in this month and citizen groups have gone to court to try to block new or higher taxes.

Separate documents sent by Kenyatta to parliament ahead of Thursday’s sitting underscored the debate in government over how to boost revenues without hurting the poor.

His government has to reduce a gaping fiscal deficit while boosting spending on priority areas such as healthcare and affordable housing.

In order to balance the government’s books after the reduction of the fuel tax, he is trying to reinstate several tax measures struck out by parliament, including a 2 percentage hike on excise duty for mobile phone money transfers to 12 percent.

Kenya’s biggest mobile phone operator Safaricom said in June it was opposed to any tax rise on mobile phone-based transfers, arguing that it would mainly hurt the poor, most of whom do not have bank accounts and rely on services such as its M-Pesa platform.

The president also asked parliament to double the excise duty on the fees charged by banks, money transfer services, and other financial institutions to 20 percent.

Parliament in August threw out an earlier version of proposed fees on bank transfers, a so-called “Robin Hood” tax of 0.05 percent on transfers of more than 500,000 shillings.

The president has not yet signed the budget due to the dispute over the planned tax hikes. Kenyatta’s Jubilee party and its allies have a comfortable majority in parliament.

The Kenya National Chamber of Commerce and Industry this month said the government should widen the tax base. It also urged the state to cut expenditure, reduce wastage of public funds and deal with corruption, which some studies have found lose the government about a third of its annual budget.

 
…

Several cryptocurrency exchanges are plagued by poor market surveillance, pervasive conflicts of interest and lack sufficient customer protections, the New York Attorney General’s office said in a report published on Tuesday.

The study found that online platforms where virtual currencies such as bitcoin can be bought and sold by individuals operate with lower safeguards than traditional financial markets, are vulnerable to market manipulation and put customer funds at risk.

“As our report details, many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges,” Attorney General Barbara Underwood said in a statement.

As a result of the findings, the attorney general asked New York’s Department of Financial Services (NYDFS) to review whether three exchanges might be operating unlawfully in the state.

The attorney general’s office launched its Virtual Markets Integrity Initiative in April 2018, asking 13 platforms to voluntarily share information about their practices.

Four platforms did not participate, claiming they did not allow trades from within New York State. The Attorney General’s office investigated whether the platforms did operate in the state, and has referred three – Binance, Kraken and Gate.io – to NYDFS. The three platforms could not immediately be reached for comment.

U.S. and international regulators have begun clamping down on malpractices in the cryptocurrency market over the past year as trading in the nascent asset class boomed.

Two Wall Street regulators last week announced a series of actions, including levying fines, against companies involved with cryptocurrencies, while a New York federal judge ruled a case could proceed in which U.S. securities law was being used to prosecute fraud cases involving cryptocurrency offerings.

The attorney general’s report detailed how some of these platforms conduct overlapping lines of business that present “serious conflicts of interest,” including trading for their own account on their own venues. Some platforms also issue their own virtual currencies or charge companies to list their tokens.

The study also found that “trading platforms lack a consistent and transparent approach to independently auditing the virtual currency purportedly in their possession”, making it “difficult or impossible” to confirm that the exchanges are responsibly holding customer accounts.

Although some platforms police their markets for trading abuses, others do not, the report found.

“Platforms lack robust real-time and historical market surveillance capabilities, like those found in traditional trading venues, to identify and stop suspicious trading patterns,” the report said.
…

Several cryptocurrency exchanges are plagued by poor market surveillance, pervasive conflicts of interest and lack sufficient customer protections, the New York Attorney General’s office said in a report published on Tuesday.

The study found that online platforms where virtual currencies such as bitcoin can be bought and sold by individuals operate with lower safeguards than traditional financial markets, are vulnerable to market manipulation and put customer funds at risk.

“As our report details, many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges,” Attorney General Barbara Underwood said in a statement.

As a result of the findings, the attorney general asked New York’s Department of Financial Services (NYDFS) to review whether three exchanges might be operating unlawfully in the state.

The attorney general’s office launched its Virtual Markets Integrity Initiative in April 2018, asking 13 platforms to voluntarily share information about their practices.

Four platforms did not participate, claiming they did not allow trades from within New York State. The Attorney General’s office investigated whether the platforms did operate in the state, and has referred three – Binance, Kraken and Gate.io – to NYDFS. The three platforms could not immediately be reached for comment.

U.S. and international regulators have begun clamping down on malpractices in the cryptocurrency market over the past year as trading in the nascent asset class boomed.

Two Wall Street regulators last week announced a series of actions, including levying fines, against companies involved with cryptocurrencies, while a New York federal judge ruled a case could proceed in which U.S. securities law was being used to prosecute fraud cases involving cryptocurrency offerings.

The attorney general’s report detailed how some of these platforms conduct overlapping lines of business that present “serious conflicts of interest,” including trading for their own account on their own venues. Some platforms also issue their own virtual currencies or charge companies to list their tokens.

The study also found that “trading platforms lack a consistent and transparent approach to independently auditing the virtual currency purportedly in their possession”, making it “difficult or impossible” to confirm that the exchanges are responsibly holding customer accounts.

Although some platforms police their markets for trading abuses, others do not, the report found.

“Platforms lack robust real-time and historical market surveillance capabilities, like those found in traditional trading venues, to identify and stop suspicious trading patterns,” the report said.
…

Argentina’s ex-President Cristina Fernandez said on Tuesday that she never received corrupt payments and challenged investigators to scour her home region of Patagonia if they believed she had hidden cash, a day after she was indicted on graft charges.

Using her immunity as a senator to refuse to answer any questions, Fernandez handed a written statement to the federal judge investigating a sprawling bribery scandal that has ensnared dozens of former officials and construction company executives. The statement was published on her party’s website.

“They can dig up all of Patagonia, but they will never find anything because I never received any illicit money,” the statement said, citing official allegations that cash was kept in underground vaults at Fernandez’s private residence or hidden in containers in the southern Argentina countryside.

Federal Judge Claudio Bonadio said in the indictment that officials had found empty vaults under the house, but no money.

Fernandez, president from 2007 through 2015, is accused of heading a network in which officials in her administration accepted bribes from construction companies in exchange for public works contracts.

Known as the “notebooks” scandal, the allegations arose in August after a local newspaper published diaries kept by a former government chauffeur, who said his notes documented hundreds of millions of dollars delivered to the offices of Fernandez and her late husband and presidential predecessor Nestor Kirchner.

“There is no evidence that links me to this alleged network,” Fernandez’s statement said.

Fernandez was previously indicted on corruption charges in 2016 after her former public works secretary was caught trying to hide bags of cash in a convent.

Fernandez’s current position as a senator grants her immunity from arrest, but not from investigation.

The probe has implications for next year’s presidential election. President Mauricio Macri is expected to run for a second term in October 2019, and his arch political rival Fernandez is among his possible challengers from the country’s Peronist movement. But the scandal is expected to limit her chances.

Some 85 percent of Argentines expect corruption to “decrease substantially within the next five years,” a recent survey by the International Federation of Accountants said.

“The optics do not look good for Fernandez’s re-election prospects,” said Jose Arnoletto, President of the Argentine Federation of Professional Economic Scientists.
…

Venezuelan President Nicolas Maduro said Tuesday that new investments from China will help his country dramatically boost its oil production, doubling down on financing from the Asian nation to turn around its crashing economy.

Already a major economic partner, China has agreed to invest $5 billion more in Venezuela, Maduro said following a recent trip to Beijing, adding that the money would help it nearly double its oil production.

“We are taking the first steps into a new economic era,” he said. “We are on track to have a new economy, and the agreements with China will strengthen it.”

A once-wealthy oil nation, Venezuela is gripped by a historic crisis deeper than the Great Depression in the United States. Venezuelans struggle to afford scarce food and medicine, many going abroad in search of a better life.

Venezuela’s inflation this year could top 1 million percent, economists predict.

After two decades of socialist rule and mismanagement, Venezuela’s oil production of 1.2 million barrels a day is a third of what it was two decades ago before the late President Hugo Chavez launched the socialist revolution.

Maduro says under the deal, Venezuela will increase production and the export of oil to China by 1 million barrels a day.

However, China is taking a strong role in its new agreements. Over the last decade China has given Venezuela $65 billion in loans, cash and investment. Venezuela owes more than $20 billion.

The head of the National Petroleum Corporation of China will soon travel to Venezuela to finalize plans on increasing oil exports.

Russ Dallen, a Miami-based partner at brokerage Caracas Capital Markets, said the influx of money appears to be investments China will control.

“The Chinese are reluctant to throw good money after bad,” Dallen said. “They do want to get paid back. The only way they can get paid back is to get Venezuela’s production back up.”

Venezuela also agreed to sell 9.9 percent of shares of the joint venture Sinovensa, giving a Chinese oil company a 49 percent stake. The sale will expand exploitation of gas in Venezuela, the president said.

Maduro also recently launched sweeping economic reforms aimed at rescuing the economy that include a creating new currency, boosting the minimum wage more than 3,000 percent and raising taxes.

Economist Asdrubal Oliveros of Caracas-based firm Econalitica said he doubts that Venezuela can reach the aggressive goal to boost oil exports to China by one million barrels a day given problems faced by the state corporation PDVSA.

“Increased production I see as quite limited,” Oliveros said. “The Chinese companies alone have neither the muscle nor the size to prop up production.”
…

Venezuelan President Nicolas Maduro said Tuesday that new investments from China will help his country dramatically boost its oil production, doubling down on financing from the Asian nation to turn around its crashing economy.

Already a major economic partner, China has agreed to invest $5 billion more in Venezuela, Maduro said following a recent trip to Beijing, adding that the money would help it nearly double its oil production.

“We are taking the first steps into a new economic era,” he said. “We are on track to have a new economy, and the agreements with China will strengthen it.”

A once-wealthy oil nation, Venezuela is gripped by a historic crisis deeper than the Great Depression in the United States. Venezuelans struggle to afford scarce food and medicine, many going abroad in search of a better life.

Venezuela’s inflation this year could top 1 million percent, economists predict.

After two decades of socialist rule and mismanagement, Venezuela’s oil production of 1.2 million barrels a day is a third of what it was two decades ago before the late President Hugo Chavez launched the socialist revolution.

Maduro says under the deal, Venezuela will increase production and the export of oil to China by 1 million barrels a day.

However, China is taking a strong role in its new agreements. Over the last decade China has given Venezuela $65 billion in loans, cash and investment. Venezuela owes more than $20 billion.

The head of the National Petroleum Corporation of China will soon travel to Venezuela to finalize plans on increasing oil exports.

Russ Dallen, a Miami-based partner at brokerage Caracas Capital Markets, said the influx of money appears to be investments China will control.

“The Chinese are reluctant to throw good money after bad,” Dallen said. “They do want to get paid back. The only way they can get paid back is to get Venezuela’s production back up.”

Venezuela also agreed to sell 9.9 percent of shares of the joint venture Sinovensa, giving a Chinese oil company a 49 percent stake. The sale will expand exploitation of gas in Venezuela, the president said.

Maduro also recently launched sweeping economic reforms aimed at rescuing the economy that include a creating new currency, boosting the minimum wage more than 3,000 percent and raising taxes.

Economist Asdrubal Oliveros of Caracas-based firm Econalitica said he doubts that Venezuela can reach the aggressive goal to boost oil exports to China by one million barrels a day given problems faced by the state corporation PDVSA.

“Increased production I see as quite limited,” Oliveros said. “The Chinese companies alone have neither the muscle nor the size to prop up production.”
…

Dozens of European countries are backing a plan to increase the use of hydrogen as an alternative to fossil fuels to cut the continent’s carbon emissions.

Energy officials from 25 countries pledged Tuesday to increase research into hydrogen technology and accelerate its everyday use to power factories, drive cars and heat homes.

The proposal, which was included in a non-binding agreement signed in Linz, Austria, includes the idea of using existing gas grids to distribute hydrogen produced with renewable energy.

The idea of a “hydrogen economy,” where fuels that release greenhouse gases are replaced with hydrogen, has been around for decades. Yet uptake on the concept has been slow so far, compared with some other technologies.

Advocates of hydrogen say it can solve the problem caused by fluctuating supplies of wind, solar, hydro and other renewable energies. By converting electricity generated from those sources into hydrogen, the energy can be stored in large tanks and released again when needed.

Electric vehicles can also use hydrogen to generate power on board, allowing manufacturers to overcome the range restrictions of existing batteries. Hydrogen vehicles can be refueled in a fraction of the time it takes to recharge a battery-powered vehicle.

On Monday the world’s first commuter train service using a prototype hydrogen-powered train began in northern Germany.

The European Union’s top climate and energy official said hydrogen could help the bloc meet its obligations to cut carbon emissions under the 2015 Paris accord. Miguel Arias Canete told reporters it could also contribute to the continent’s energy security by reducing imports of natural gas, much of which currently comes from Russia and countries outside of Europe.

Kirsten Westphal, an energy expert at the German Institute for International and Security Affairs, said encouraging the use of hydrogen as a means of storing and transporting energy makes sense, but added the overall goal for should be reducing fossil fuels rather than pushing a particular energy alternative.
…

Dozens of European countries are backing a plan to increase the use of hydrogen as an alternative to fossil fuels to cut the continent’s carbon emissions.

Energy officials from 25 countries pledged Tuesday to increase research into hydrogen technology and accelerate its everyday use to power factories, drive cars and heat homes.

The proposal, which was included in a non-binding agreement signed in Linz, Austria, includes the idea of using existing gas grids to distribute hydrogen produced with renewable energy.

The idea of a “hydrogen economy,” where fuels that release greenhouse gases are replaced with hydrogen, has been around for decades. Yet uptake on the concept has been slow so far, compared with some other technologies.

Advocates of hydrogen say it can solve the problem caused by fluctuating supplies of wind, solar, hydro and other renewable energies. By converting electricity generated from those sources into hydrogen, the energy can be stored in large tanks and released again when needed.

Electric vehicles can also use hydrogen to generate power on board, allowing manufacturers to overcome the range restrictions of existing batteries. Hydrogen vehicles can be refueled in a fraction of the time it takes to recharge a battery-powered vehicle.

On Monday the world’s first commuter train service using a prototype hydrogen-powered train began in northern Germany.

The European Union’s top climate and energy official said hydrogen could help the bloc meet its obligations to cut carbon emissions under the 2015 Paris accord. Miguel Arias Canete told reporters it could also contribute to the continent’s energy security by reducing imports of natural gas, much of which currently comes from Russia and countries outside of Europe.

Kirsten Westphal, an energy expert at the German Institute for International and Security Affairs, said encouraging the use of hydrogen as a means of storing and transporting energy makes sense, but added the overall goal for should be reducing fossil fuels rather than pushing a particular energy alternative.
…

Africa has the globe’s fastest-growing youth population as well as 10 of the poorest countries, a volatile combination that warrants making it “the world’s most important priority for the foreseeable future.”

The Bill & Melinda Gates Foundation lays out that argument in its second annual report on progress toward sustainable development goals set by the United Nations for 2030. This Goalkeepers Data Report, released Tuesday, urges targeting Africa with the same kind of investment intensity that lifted once-poor China and India into the ranks of middle-income nations.

Sixty percent of Africans are younger than 24, numbers that Melinda Gates emphasized in a phone interview earlier this month with VOA’s English to Africa Service.

“If the world makes the right investments in health and nutrition and education,” she said, it could unleash the potential of “an amazing generation that has unbelievable ingenuity.”    

The report notes that while the youth population is booming in Africa, it’s shrinking elsewhere in the world. For example, the median age is 19 in Africa – and 35 in North America. Populations are expected to soar by 2050 in the 10 poorest countries: Benin, Burundi, Central African Republic, Democratic Republic of Congo, Madagascar, Malawi, Nigeria, Somalia, South Sudan and Zambia. 

Melinda Gates described the foundation as a “catalytic wedge,” whose investments can fuel beneficial projects and programs.

“We start getting things going” with many partners on the ground “working in culturally, contextually sensitive ways,” she said. “We take some risks, but ultimately it’s the governments who scale them up, and that work is done in deep partnership with many people around the globe.”

The Gates Foundation is the biggest of U.S. funders aiding Africa, such as the Ford, Rockefeller, Conrad N. Hilton, Carnegie and Open Society foundations, the website Inside Philanthropy reported in 2016. 

Earlier this year, it observed that charitable giving by Africans is growing, too.    

To date, the Gates Foundation has invested more than $15 billion “in projects relevant to Africa,” the report says, while promising to spend more. It has targeted three areas for investment: health, education and agriculture.

Health: The foundation subsidizes a range of health programs, from childhood vaccination and good nutrition, but it gives special attention to family planning and HIV interventions.

Among countries that have risen economically, “every one of them allowed voluntary access to contraceptives to women,” Gates told VOA. “We know if men and women can space the births of their children … there are more opportunities then for those children and their families. Girls can stay in school” and, when educated, are better able to provide for their families.

“Those people create amazing opportunities and new jobs in the economy,” Gates added.

The U.S. government is the biggest donor in global family planning and reproductive health, according to the Kaiser Family Foundation (KFF), a nonprofit focused on health issues. U.S. spending on that front was at $608 million in fiscal year 2018, though the Trump administration has proposed reductions for 2019. Funding levels can reflect domestic and international political debates, especially over abortion, KFF’s website notes. It adds that, since 1973, the government has banned “direct use of U.S. funding overseas for abortion as a method of family planning. …”

The report praised Rwanda for building “an effective health system” that has brought about “the steepest drop in child mortality ever recorded.” In 2005, the country recorded 103 deaths per 1,000 lives births; a decade later, the death rate dropped to 50.

As for HIV infections, the report acknowledged progress in Zimbabwe, where a fourth of all adults were infected in 1997, the peak year of the epidemic.

“Since 2010, new infections are down by 49 percent, and AIDS-related deaths are down by 45 percent,” it noted. But it warned that the youth boom could bring a reversal without continued support for treatment and prevention methods.

Education: While school enrollment and literacy rates have improved, as the United Nations reports, that’s not enough.

“We need to get the quality of education to come up, much like Vietnam has done,” Melinda Gates told VOA.

Students in that country, labeled as low income until 2010, ranked among the best in the world in science in the Paris-based Organization for Economic Cooperation and Development’s most recent assessment of 15-year-olds.

Agriculture: “… We need to make sure that we help countries move from subsistence farming to making real investments” supporting larger-scale operations so people can feed themselves, Gates said. 

Ghana provides a good example, she and the report noted.

With its current agricultural productivity and innovations such as new hybrid varieties of maize, the country’s “poverty rate is projected to fall from 20 percent in 2016 to 6 percent in 2030.”

But, the report observed, “There is ample room for Ghana’s agrifood system to keep developing.” For example, “cocoa, the country’s main export crop, is sold raw and processed outside the country. Meanwhile, almost half of all processed foods consumed in Ghana are imported.” Buying food processed in Ghana would keep more money in the country and generate jobs, it said.   

Since 2000, more than a billion people have risen from extreme poverty, a level that the World Bank sets at $1.90 a day. Melinda Gates attributed that rise to “investments the world made systematically in human capital: in health, in education, in agriculture. …

“A lot of the gains that we’ve seen can drop back, particularly with a growing population,” she said. “So our message to the world is keep your foot on the gas. Keep the accelerator going.”
…

The Asian Development Bank said on Tuesday it is expanding its presence in the Pacific islands, at a time of competition for influence there, opening seven new country offices and expecting its loans and grants in the region to top $4 billion by 2020.

The pledge from the Japan-led bank comes amidst a vigorous new campaign by the United States and its allies to check China’s rising sway in the region, where it has sought deeper diplomatic ties and emerged as the second-largest donor.

The battle for influence in the sparsely populated Pacific matters because each of the tiny island states has a vote at international forums like the United Nations, and they also control vast swathes of resource-rich ocean.

The ADB said it will open offices in the Cook Islands, Micronesia, Kiribati, the Marshall Islands, Nauru, Palau, and Tuvalu, as well as expand missions in Samoa, the Solomon Islands, Tonga and Vanuatu.

“The new country offices will allow ADB to have more regular contact and substantive communication with government and development partners,” the bank said in a statement.

Its overall assistance to the Pacific, which stands at $2.9 billion, is expected to surpass $4 billion by 2020, it added, with the money destined for economic and social development projects and disaster resilience.

China has likewise pledged to keep lending to a region where it says its aid is supporting sustainable development.

However, it has spent $1.3 billion on concessionary loans and gifts since 2011, stoking concern in the West that several tiny nations could end up overburdened and in debt to Beijing.

Australia in particular, which has long viewed the Pacific as its backyard, has been critical of some Chinese aid projects, and a former foreign minister has warned that the lending could undermine the long-term sovereignty of recipients.
…

Francisco Javier Jaramillo and Victor Chavez should be picking sweet potatoes at a North Carolina farm and sending much-needed money to their families in Mexico.

Instead, Hurricane Florence has forced the migrant workers to evacuate their farm and seek refuge at a school-turned-shelter near the tiny hamlet of Spivey’s Corner, where they sleep in school hallways, wait and worry.

“If the sweet potato fields are flooded, we cannot work. If we cannot work, we will be sent home. We will have nothing,” said Chavez, 39.

When Florence tore through the Carolinas last week, bringing wave after wave of wind and rain, the storm not only disrupted a harvest but also jeopardized its harvesters.

Known for its fields upon fields of sweet potatoes, tobacco and peanuts, North Carolina’s agricultural engine is powered by more than 83,000 migrant workers.

Many come from Mexico and other Latin American countries to toil on restrictive contracts working fields that double as floodplains when the weather sours.

The contracts guarantee a certain number of working hours but that can be nullified if a farmer declares an act of god if, for example, fields are so flooded or hurricane-battered their crop cannot be salvaged. That would mean these workers get sent home without the hours, or money, promised.

A spokeswoman for North Carolina’s agriculture department said there are no estimates yet of the extent of crop damage.

At peak harvest in 2016 there were more than 83,000 migrant workers on North Carolina farms, according to the Employment Security Commission.

Workers on an H2A visa for temporary agricultural workers are among the most vulnerable people hit by a hurricane, according to advocates, lawyers and outreach workers who talked with Reuters. They have the least means to cushion the blow and the most to lose.

“H2A workers are very isolated, very vulnerable,” said Lariza Garzon, with the Episcopal Farmworkers Ministry. “They may not know their rights.”

Lee Wicker, deputy director of the 700-farmer North Carolina Growers Association, said maybe decades ago that might have been true but now resources are in place to ensure workers have the supports they need.

About 20,000 of the workers come to North Carolina every year on H2A visas, which tether them to an employer on whom they rely for housing, transportation and, in many cases, information about the outside world, said Caitlin Ryland, a supervising attorney with Legal Aid of North Carolina’s farmworker unit.

They are frequently housed in areas close to farmland that can be prone to flooding, Ryland said.

Wicker said that sometimes happens, but said storms like Florence have outsize effects.

For workers like Jaramillo and Chavez, in a precarious labor position and with limited access to outside information, leaving camps for a few days to wait out a storm can be daunting.

Misinformation is rampant: many believe fleeing a storm can get them deported and barred from returning.

If their employer reports them as having abandoned their job, under the terms of the H2A visa it can start the clock ticking on having to leave the United States, Ryland said.

Fleeing for their lives in the face of a storm does not count as abandoning a job, she said, but many workers may not know that.

A spokeswoman for North Carolina’s Department of Labor wrote in an email that “the Agricultural Safety and Health Bureau has not received any complaints from migrant workers concerning unsafe housing conditions due to the storm.”

Five migrant workers Reuters spoke with at a supermarket outside Clinton, in Sampson County about 35 miles (56 km) east of Fayetteville, had elected to stay in their work camps despite the threats presented by the weather.

Explaining why he stayed, Miguel Hernandez motioned to the cement blocks used to build his barracks in an area under a flash-flood warning – surely they could withstand a storm, he said.

But Luis Alberto, a 25-year-old migrant worker from the Mexican state of Nayarit, was scared for his life when he and four friends decided to go to a shelter several miles away.

Luis Alberto, who asked not to use his last name, regularly sends money home to support his family. What worries him now is what happens next — if the crop is destroyed, if they cannot get the contracted hours of work they need.

“We want to know what is going to happen to us,” he said. “Can we keep working? Will we be sent back to Mexico?”
…

Francisco Javier Jaramillo and Victor Chavez should be picking sweet potatoes at a North Carolina farm and sending much-needed money to their families in Mexico.

Instead, Hurricane Florence has forced the migrant workers to evacuate their farm and seek refuge at a school-turned-shelter near the tiny hamlet of Spivey’s Corner, where they sleep in school hallways, wait and worry.

“If the sweet potato fields are flooded, we cannot work. If we cannot work, we will be sent home. We will have nothing,” said Chavez, 39.

When Florence tore through the Carolinas last week, bringing wave after wave of wind and rain, the storm not only disrupted a harvest but also jeopardized its harvesters.

Known for its fields upon fields of sweet potatoes, tobacco and peanuts, North Carolina’s agricultural engine is powered by more than 83,000 migrant workers.

Many come from Mexico and other Latin American countries to toil on restrictive contracts working fields that double as floodplains when the weather sours.

The contracts guarantee a certain number of working hours but that can be nullified if a farmer declares an act of god if, for example, fields are so flooded or hurricane-battered their crop cannot be salvaged. That would mean these workers get sent home without the hours, or money, promised.

A spokeswoman for North Carolina’s agriculture department said there are no estimates yet of the extent of crop damage.

At peak harvest in 2016 there were more than 83,000 migrant workers on North Carolina farms, according to the Employment Security Commission.

Workers on an H2A visa for temporary agricultural workers are among the most vulnerable people hit by a hurricane, according to advocates, lawyers and outreach workers who talked with Reuters. They have the least means to cushion the blow and the most to lose.

“H2A workers are very isolated, very vulnerable,” said Lariza Garzon, with the Episcopal Farmworkers Ministry. “They may not know their rights.”

Lee Wicker, deputy director of the 700-farmer North Carolina Growers Association, said maybe decades ago that might have been true but now resources are in place to ensure workers have the supports they need.

About 20,000 of the workers come to North Carolina every year on H2A visas, which tether them to an employer on whom they rely for housing, transportation and, in many cases, information about the outside world, said Caitlin Ryland, a supervising attorney with Legal Aid of North Carolina’s farmworker unit.

They are frequently housed in areas close to farmland that can be prone to flooding, Ryland said.

Wicker said that sometimes happens, but said storms like Florence have outsize effects.

For workers like Jaramillo and Chavez, in a precarious labor position and with limited access to outside information, leaving camps for a few days to wait out a storm can be daunting.

Misinformation is rampant: many believe fleeing a storm can get them deported and barred from returning.

If their employer reports them as having abandoned their job, under the terms of the H2A visa it can start the clock ticking on having to leave the United States, Ryland said.

Fleeing for their lives in the face of a storm does not count as abandoning a job, she said, but many workers may not know that.

A spokeswoman for North Carolina’s Department of Labor wrote in an email that “the Agricultural Safety and Health Bureau has not received any complaints from migrant workers concerning unsafe housing conditions due to the storm.”

Five migrant workers Reuters spoke with at a supermarket outside Clinton, in Sampson County about 35 miles (56 km) east of Fayetteville, had elected to stay in their work camps despite the threats presented by the weather.

Explaining why he stayed, Miguel Hernandez motioned to the cement blocks used to build his barracks in an area under a flash-flood warning – surely they could withstand a storm, he said.

But Luis Alberto, a 25-year-old migrant worker from the Mexican state of Nayarit, was scared for his life when he and four friends decided to go to a shelter several miles away.

Luis Alberto, who asked not to use his last name, regularly sends money home to support his family. What worries him now is what happens next — if the crop is destroyed, if they cannot get the contracted hours of work they need.

“We want to know what is going to happen to us,” he said. “Can we keep working? Will we be sent back to Mexico?”
…

Aid money urgently needs to be redirected to the poorest countries in order to reach the United Nations’ goal of ending extreme poverty by 2030, according to a report.

The London-based Overseas Development Institute (ODI) says middle-income countries receive more aid than the 30 poorest nations. It also warns that at least 400 million people will still be living on less than $1.90 a day, despite government pledges to eliminate all extreme poverty.

In northern Ethiopia, teams of workers dig irrigation channels through orchards and grain fields. Such projects have turned arid plains into fertile farmland, which has quadrupled agricultural production.

The report from the ODI credits Ethiopia’s “Productive Safety Net Program,” launched in 2005, with lifting 1.4 million people out of extreme poverty. It also enabled Ethiopia to avoid another famine during severe droughts in 2010 and 2015.

In contrast, neighboring Uganda has seen extreme poverty levels rise recently, after a rapid reduction in previous years.

“One of the reasons is because climate change is starting to have an impact in that country,” said Marcus Manuel, author of the ODI report. “Now in Ethiopia, they’ve managed, with a lot of support partly from the U.S., to have programs that support farmers when a sudden climate or weather event happens. In Uganda, they didn’t. So when they had a drought, that led to a real increase in poverty. So it’s a matter of having the right systems in place.”

Ethiopia’s program, the largest of any low-income country, pays beneficiaries to work on public works projects such as irrigation, roads, schools and health clinics, which helps to create long-term poverty relief.

Such programs are vital in ending extreme poverty, according to the ODI report. The report says there is an annual funding shortfall of $125 billion in the three core sectors of education, health and what it terms social protection transfers, or welfare.

“You need to do economic growth to do part of things, and you also need investment in the social sectors,” Manuel said. “You need to have both sides of the coin to make this work. Donors are investing both in growth and in social sectors, but they’re not investing it in the right countries to nearly the extent that’s needed. And, in particular, in this report we’ve identified 29 countries which can’t afford the investment needed in the social sectors and donors are not giving enough money to that group of countries.”

The statistics show middle-income countries receive more aid than poorer countries, whose share of global aid has fallen over the past six years from 30 percent to 24 percent.

In addition to better aid allocation, the report says more donor nations need to reach the U.N. goal of allocating at least 0.7 percent of gross domestic product to aid budgets. Without urgent action, the authors warn the goal of eliminating extreme poverty by 2030 will remain out of reach.
…

Aid money urgently needs to be redirected to the poorest countries in order to reach the United Nations’ goal of ending extreme poverty by 2030, according to a report.

The London-based Overseas Development Institute (ODI) says middle-income countries receive more aid than the 30 poorest nations. It also warns that at least 400 million people will still be living on less than $1.90 a day, despite government pledges to eliminate all extreme poverty.

In northern Ethiopia, teams of workers dig irrigation channels through orchards and grain fields. Such projects have turned arid plains into fertile farmland, which has quadrupled agricultural production.

The report from the ODI credits Ethiopia’s “Productive Safety Net Program,” launched in 2005, with lifting 1.4 million people out of extreme poverty. It also enabled Ethiopia to avoid another famine during severe droughts in 2010 and 2015.

In contrast, neighboring Uganda has seen extreme poverty levels rise recently, after a rapid reduction in previous years.

“One of the reasons is because climate change is starting to have an impact in that country,” said Marcus Manuel, author of the ODI report. “Now in Ethiopia, they’ve managed, with a lot of support partly from the U.S., to have programs that support farmers when a sudden climate or weather event happens. In Uganda, they didn’t. So when they had a drought, that led to a real increase in poverty. So it’s a matter of having the right systems in place.”

Ethiopia’s program, the largest of any low-income country, pays beneficiaries to work on public works projects such as irrigation, roads, schools and health clinics, which helps to create long-term poverty relief.

Such programs are vital in ending extreme poverty, according to the ODI report. The report says there is an annual funding shortfall of $125 billion in the three core sectors of education, health and what it terms social protection transfers, or welfare.

“You need to do economic growth to do part of things, and you also need investment in the social sectors,” Manuel said. “You need to have both sides of the coin to make this work. Donors are investing both in growth and in social sectors, but they’re not investing it in the right countries to nearly the extent that’s needed. And, in particular, in this report we’ve identified 29 countries which can’t afford the investment needed in the social sectors and donors are not giving enough money to that group of countries.”

The statistics show middle-income countries receive more aid than poorer countries, whose share of global aid has fallen over the past six years from 30 percent to 24 percent.

In addition to better aid allocation, the report says more donor nations need to reach the U.N. goal of allocating at least 0.7 percent of gross domestic product to aid budgets. Without urgent action, the authors warn the goal of eliminating extreme poverty by 2030 will remain out of reach.
…

U.S. media reports said Friday that President Donald Trump has instructed aides to proceed with tariffs on $200 billion more in Chinese products.

Citing sources familiar with the matter, Bloomberg and Reuters said the president wanted to move forward with the additional duties even though Treasury Secretary Steven Mnuchin is trying to restart trade talks with Beijing.

The reports sent stocks falling Friday and led to a drop in the Chinese yuan.

The White House did not immediately comment on the reports.

Bloomberg reported that Trump met Thursday with his top trade advisers to discuss the tariffs, including Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. The meeting was not on Trump’s public schedule.

Before Thursday’s meeting, Trump said on Twitter that he felt “no pressure” to make a deal with Beijing, saying “they are under pressure to make a deal with us.” He also raised questions about whether new talks between the United States and China would happen, saying the U.S. “will soon be taking in Billions in Tariffs & making products at home. If we meet, we meet?”

A public comment period for the proposed new tariffs ended last week. The U.S. trade representative’s office received nearly 6,000 comments on the proposal.

Even more tariffs

Last week, Trump threatened even more tariffs on Chinese items — duties on another $267 worth of goods, which when combined with the others would cover virtually all the products that China sends to the United States.

“That changes the equation,” he told reporters.

The Untied States has already imposed tariffs on $50 billion worth of Chinese goods, leading China to retaliate on an equal amount of U.S. goods. 

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

It has demanded that China better protect American intellectual property, including ending cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

China has threatened to retaliate against any potential new tariffs. However, China’s imports from the United States are worth $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.
…

U.S. media reports said Friday that President Donald Trump has instructed aides to proceed with tariffs on $200 billion more in Chinese products.

Citing sources familiar with the matter, Bloomberg and Reuters said the president wanted to move forward with the additional duties even though Treasury Secretary Steven Mnuchin is trying to restart trade talks with Beijing.

The reports sent stocks falling Friday and led to a drop in the Chinese yuan.

The White House did not immediately comment on the reports.

Bloomberg reported that Trump met Thursday with his top trade advisers to discuss the tariffs, including Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. The meeting was not on Trump’s public schedule.

Before Thursday’s meeting, Trump said on Twitter that he felt “no pressure” to make a deal with Beijing, saying “they are under pressure to make a deal with us.” He also raised questions about whether new talks between the United States and China would happen, saying the U.S. “will soon be taking in Billions in Tariffs & making products at home. If we meet, we meet?”

A public comment period for the proposed new tariffs ended last week. The U.S. trade representative’s office received nearly 6,000 comments on the proposal.

Even more tariffs

Last week, Trump threatened even more tariffs on Chinese items — duties on another $267 worth of goods, which when combined with the others would cover virtually all the products that China sends to the United States.

“That changes the equation,” he told reporters.

The Untied States has already imposed tariffs on $50 billion worth of Chinese goods, leading China to retaliate on an equal amount of U.S. goods. 

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

It has demanded that China better protect American intellectual property, including ending cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

China has threatened to retaliate against any potential new tariffs. However, China’s imports from the United States are worth $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.
…

The Turkish central bank caught international markets by surprise Thursday as it aggressively hiked interest rates in an effort to strengthen consumer confidence, stem inflation and rein in the currency crisis. 

Interest rates were increased to 24 percent from 17.75 percent, which is more than double the median of investor predictions of a 3 percent hike. The Turkish lira surged above 5 percent in response, although the gains subsequently were pared back.

International investors broadly welcomed the move. “TCMB [Turkish Republic Central Bank] did show resolve in hiking the one-week repo rate substantially and going back to orthodoxy,” chief economist Inan Demir of Nomura International said.

The central bank had drawn sharp criticism for failing to substantially raise interest rates to rein in double-digit inflation and an ailing currency. The lira had fallen by more than 40 percent this year.

The rate hike is an apparent rebuke to Turkish President Recep Tayyip Erdogan, who has been opposed to such a move.

Only hours before the central bank decision, Erdogan again voiced his opposition to increasing interest rates. The Turkish president reiterated his stance of challenging orthodox economic thinking, arguing that inflation is caused by high rates, although that runs contrary to conventional economic theory. Erdogan also issued a presidential decree banning all businesses and leasing and rental agreements from using foreign currency denominations.

The central bank indicated further rate hikes could be in the offing. “Tight stance monetary policy will be maintained decisively until inflation outlook displays a significant improvement,” the central bank statement reads.

The strong commitment to challenge inflation was welcomed by investors. “Most importantly, the CBT seemed to be vocal about price stability risks,” wrote chief economist Muhammet Mercan of Ing bank.

‘Crazy’ spending

Fueled by August’s sharp fall in the lira, which drove up import costs, inflation is on a rapid upward trajectory. Some predictions warn inflation could approach 30 percent in the coming months.

While international markets are broadly welcoming the central bank’s interest rate hike, economist Demir warns more action is needed.

“This rate hike does not undo the damage inflicted on corporate balance sheet, and market concerns about geopolitics will remain in place. So this is not the hike to end all problems,” said Demir.

The World Bank and IMF repeatedly have called on Ankara to rein in spending, which they say is fueling inflation. Perhaps in response, Erdogan has announced a freeze on new state construction projects.

In the past few years, he has embarked on an unprecedented construction boom, including building one of the world’s largest airports and a multibillion-dollar canal project in Istanbul, which the president himself described as “crazy.”

Trade tariffs

Investors also remain concerned about ongoing diplomatic tensions between Ankara and Washington. The two NATO allies remain at loggerheads over the detention on terrorism charges of American pastor Andrew Brunson.

Brunson’s detention saw U.S. President Donald Trump impose trade tariffs on Turkey, which triggered August’s collapse in the lira. Trump has warned of further sanctions.

“If we somehow sort out our problems with the United States and adopt an orthodox austerity program, we may find a way out of this mess,” said political analyst Atilla Yesilada of Global Source Partners.  “Turkey is a country that has a net foreign debt of over $400 billion, and where 40 percent of [Turkish] deposits are in foreign currency, so the game could be over in a day.”

Turkey has a long tradition of carrying out business in foreign currencies to mitigate the threat of inflation and a falling lira. The growing danger of the so-called “dollarization” of the economy and the public abandonment of the lira are significant risks to the currency.

Turkish companies are paying the cost for the depreciation of the lira. Analysts estimate about $100 billion in foreign currency loans have to be repaid by the private sector in the coming year. Companies and individuals borrowing in local currency, however, will be facing higher repayments. And most analysts predict the Turkish economy is heading into a recession.

Economist Demir says, though, that the situation could have been far worse.

“In the absence of an [interest rate] hike, the rollover pressures on banks would get even worse, damage on corporate balance sheets would intensify, and local deposit holders’ confidence would have weakened further. So this hike, although it doesn’t eliminate other risks, eliminates some of the worst outcomes for the Turkish economy,” he said.

Thursday’s rate hike appears to have bought time for the Turkish economy and the nation’s besieged currency. Analysts say investors are watching to see if Turkey’s decision-makers use that time wisely.
…

The Turkish central bank caught international markets by surprise Thursday as it aggressively hiked interest rates in an effort to strengthen consumer confidence, stem inflation and rein in the currency crisis. 

Interest rates were increased to 24 percent from 17.75 percent, which is more than double the median of investor predictions of a 3 percent hike. The Turkish lira surged above 5 percent in response, although the gains subsequently were pared back.

International investors broadly welcomed the move. “TCMB [Turkish Republic Central Bank] did show resolve in hiking the one-week repo rate substantially and going back to orthodoxy,” chief economist Inan Demir of Nomura International said.

The central bank had drawn sharp criticism for failing to substantially raise interest rates to rein in double-digit inflation and an ailing currency. The lira had fallen by more than 40 percent this year.

The rate hike is an apparent rebuke to Turkish President Recep Tayyip Erdogan, who has been opposed to such a move.

Only hours before the central bank decision, Erdogan again voiced his opposition to increasing interest rates. The Turkish president reiterated his stance of challenging orthodox economic thinking, arguing that inflation is caused by high rates, although that runs contrary to conventional economic theory. Erdogan also issued a presidential decree banning all businesses and leasing and rental agreements from using foreign currency denominations.

The central bank indicated further rate hikes could be in the offing. “Tight stance monetary policy will be maintained decisively until inflation outlook displays a significant improvement,” the central bank statement reads.

The strong commitment to challenge inflation was welcomed by investors. “Most importantly, the CBT seemed to be vocal about price stability risks,” wrote chief economist Muhammet Mercan of Ing bank.

‘Crazy’ spending

Fueled by August’s sharp fall in the lira, which drove up import costs, inflation is on a rapid upward trajectory. Some predictions warn inflation could approach 30 percent in the coming months.

While international markets are broadly welcoming the central bank’s interest rate hike, economist Demir warns more action is needed.

“This rate hike does not undo the damage inflicted on corporate balance sheet, and market concerns about geopolitics will remain in place. So this is not the hike to end all problems,” said Demir.

The World Bank and IMF repeatedly have called on Ankara to rein in spending, which they say is fueling inflation. Perhaps in response, Erdogan has announced a freeze on new state construction projects.

In the past few years, he has embarked on an unprecedented construction boom, including building one of the world’s largest airports and a multibillion-dollar canal project in Istanbul, which the president himself described as “crazy.”

Trade tariffs

Investors also remain concerned about ongoing diplomatic tensions between Ankara and Washington. The two NATO allies remain at loggerheads over the detention on terrorism charges of American pastor Andrew Brunson.

Brunson’s detention saw U.S. President Donald Trump impose trade tariffs on Turkey, which triggered August’s collapse in the lira. Trump has warned of further sanctions.

“If we somehow sort out our problems with the United States and adopt an orthodox austerity program, we may find a way out of this mess,” said political analyst Atilla Yesilada of Global Source Partners.  “Turkey is a country that has a net foreign debt of over $400 billion, and where 40 percent of [Turkish] deposits are in foreign currency, so the game could be over in a day.”

Turkey has a long tradition of carrying out business in foreign currencies to mitigate the threat of inflation and a falling lira. The growing danger of the so-called “dollarization” of the economy and the public abandonment of the lira are significant risks to the currency.

Turkish companies are paying the cost for the depreciation of the lira. Analysts estimate about $100 billion in foreign currency loans have to be repaid by the private sector in the coming year. Companies and individuals borrowing in local currency, however, will be facing higher repayments. And most analysts predict the Turkish economy is heading into a recession.

Economist Demir says, though, that the situation could have been far worse.

“In the absence of an [interest rate] hike, the rollover pressures on banks would get even worse, damage on corporate balance sheets would intensify, and local deposit holders’ confidence would have weakened further. So this hike, although it doesn’t eliminate other risks, eliminates some of the worst outcomes for the Turkish economy,” he said.

Thursday’s rate hike appears to have bought time for the Turkish economy and the nation’s besieged currency. Analysts say investors are watching to see if Turkey’s decision-makers use that time wisely.
…

Cuba’s street vendors are bringing back the pregon, the art of singing humorous, rhyming ditties with double entendres about the goods they are selling, with some modernizing the tradition by setting their tunes to reggaeton.

The pregon is a centuries-old tradition that has inspired famous songs like “El Manisero” (the peanut vendor), composed in the late 1920s by Cuban musician Moises Simons on son music, the backbone of salsa.

It faded out in Cuba after Fidel Castro’s 1959 revolution did away with most free enterprise. With the tentative liberalization of the centralized economy over the last few decades, however, it has made a comeback.

Cubans can now get a permit to make and sell their own goods on the street, from coconut ice cream to juices. Vendors often opting for that option, rather than opening a shop, which remains an onerous venture given ongoing restrictions on private business.

Others just illegally sell wares from stores at a mark-up, hoping to avoid authorities and a fine.

Not all street vendors bother with the pregon. Some just shout out what they are selling and their prices in a blunt manner on a loop, often using loudspeakers that they strap to rickety carts or bicycles, adding to the urban cacophony.

Cuba’s pregoneros however, like Lyssett Perez, who hawks paper cones of roasted peanuts to tourists in Old Havana, believe their ditties help them stand out.

“Firstly, it’s so people listen to me. Secondly, so they love me,” said Perez. “For me the pregon means joy.”

Perez has opted for more traditional pregons. She dresses up in colonial-style dresses with voluminous skirts and white aprons in order to catch the eye of potential clients.

“If you want to have fun by the mouth, buy yourself a peanut cornet,” she sings in a deep, melodious voice as she meanders up and down Old Havana’s pebbled and picturesque streets.

Other pregoneros are updating the genre. Gilberto Gonzalez raps about his wares to the beat of reggeaton that blends reggae, Latin and electronic rhythms.

“Toilet paper, so the chorus goes, buy me my people, to clean your bottom, hands in the air!” he raps in a video captured by a passer-by that subsequently drew tens of thousands of views on YouTube.

The video appeared just months after shortages of toilet paper in Havana, adding to its humorous appeal. Cubans are notorious for dealing with constant shortages of basic goods by making fun of them.

Such was its success that one of Cuba’s top DJs, DJ Unic, did a remix that further spread Gonzalez’s peculiar renown. Sporting a cap that reads “Money on my Mind,” Gonzalez said he was just trying to “make ends meet.”
…