Month: May 2017

In August, 2014, planners in the northeastern Chinese city of Hunchun argued in state media that it should be included in the “One Belt, One Road” project, Beijing’s vision laid out the previous year of a new Silk Road across Asia to Europe. In 2015, the official Xinhua news agency ran stories about how Hunchun was accelerating its “OBOR” plans, and early in 2016, China’s cabinet released a list of Chinese cities included in “OBOR:” Hunchun was on the map. The fact that the list came about slowly, and that some cities felt moved to lobby to be included, underlines how the pet project of Chinese President Xi Jinping is as amorphous as it is ambitious. The challenge of defining exactly what OBOR means will come to the fore later this month, when heads of state and senior officials from around the world gather in Beijing for the first major summit dedicated to the project. “Frankly, I don’t really know what the belt and the road are. The reason being that I think Beijing doesn’t know either,” said Tom Miller of Gavekal Dragonomics, who recently wrote a book on the New Silk Road. Reality is complicated In theory, incentives for cities, companies and countries to be involved are strong: hundreds of billions of dollars are expected to be spent on roads, railways, pipelines, ports and industrial zones stretching from Sri Lanka to Djibouti. But as Hunchun shows, the reality of OBOR can be complicated and requires buy-in from other countries. …

Mexico is embarking on a strategy to combat illegal pipeline thefts that includes going after those who purchase and deal in stolen fuel as well as the thieves, the country’s treasury secretary said Tuesday.   Jose Antonio Meade said it’s a problem that costs Mexico somewhere between 15 billion and 20 billion pesos a year, or $780 million to $1 billion, and one that requires a holistic approach to solve.   Mexico’s government wants to reduce the siphoning of gasoline and diesel from illegal pipeline taps by attacking “not only the supply but also the demand,” Meade said, according to a transcript of remarks during a Q&A session released by the Treasury Department.   Besides quick-response actions against thieves, authorities must work to make the illicit business less profitable and make those who buy it face consequences, he said. Armed gangs add to problem The topic is front-and-center in Mexico these days after gun battles between the army and suspected thieves killed four soldiers and six gunmen last week in the central state of Puebla. Armed gangs have gotten involved in the business of fuel thefts, and gunmen were said to have used civilians as human shields in one of the clashes.   Fuel thieves are also suspected of being behind a shocking crime in Puebla on May 2, when eight assailants raped a woman and her 14-year-old daughter, killed her toddler son, beat her husband, stole the family’s pickup truck and left on them on a highway at night. …

Four U.S. states filed a lawsuit Tuesday over President Donald Trump’s decision to restart the sale of coal leases on federal lands, saying the Obama-era block of the leasing program was reversed without studying what’s best for the environment and for taxpayers. The attorneys general of California, New Mexico, New York and Washington, all Democrats, said bringing back the federal coal lease program without an environmental review risks worsening the effects of climate change on those states while shortchanging them for the coal taken from public lands. “Climate change has to be considered when we are talking about compensating states and New Mexico citizens for their resources,” said Cholla Khoury, New Mexico Attorney General Hector Balderas’ director of consumer and environmental protection. The U.S. Interior Department’s Bureau of Land Management administers 306 coal leases in 10 states, producing more than 4 billion tons of coal over the past decade. Most of that coal — 85 percent — comes from the Powder River Basin in Wyoming and Montana. Production and combustion of coal from federal lands accounted for about 11 percent of U.S. greenhouse gas emissions in 2014. The Obama administration blocked the sale of new leases in 2016 to conduct an environmental study and a review of the royalties that mining companies pay the U.S. government for coal that’s extracted. Federal officials and members of Congress said the current royalty rates were shortchanging taxpayers. In January, Interior officials said they were considering raising those royalty rates to offset the effects …

The U.S. economy won’t achieve the Trump administration’s 3 percent growth goal this year and not until all of its tax, regulatory, trade and energy policies are fully in place, Commerce Secretary Wilbur Ross said on Tuesday. Ross also said trade enforcement actions would be a major tool to cut U.S. trade deficits, adding that he has problems with World Trade Organization rules which allow widely divergent tariffs and are slow to punish violators. The 3 percent growth target “is certainly not achievable this year,” Ross told Reuters in an interview. “The Congress has been slow-walking everything. We don’t even have half the people in place.” But Ross said the growth target ultimately could be achieved in the year after all of President Donald Trump’s business-friendly policies are implemented. He noted that delays were possible if the push for tax cuts was slowed down in Congress. “I think between the change in regulatory attitudes which will make it easier to make big projects, and the new taxes, which will make the rates of return much better, the reduced regulatory environment, I think over time you will see increases in capex – and that in turn has a big multiplier effect through the economy,” Ross said. …

Now onto his third job since finishing high school a decade ago, Festus Chege is hoping his latest venture as a water vendor in Githurai, a growing suburb to the south of Kenya’s capital Nairobi, will pay off. Like many young people from poor families, the 30-year-old passed his high-school exams but lacked the funds to pursue his studies, confining him to work in the city’s fast-expanding informal sector. Kenya’s current drought, which is affecting some 3 million people across the East African country, has led to a drop in water volumes in reservoirs serving Nairobi residents. The city authorities have been forced to ration water services, giving priority to critical facilities like hospitals, as well as manufacturers. Taps in poor households are now empty of piped water most of the time, and they have little choice but to buy their water from vendors like Chege. “The water business is good,” said Chege, who has been selling water for the past four months. “People call me to supply them with water as early as 4 a.m.” Chege, who uses a rickshaw to transport the water, sells 20-liter drums of water for 50 shillings ($0.49) each. In a day, he can supply as many as 40 drums, earning him 2,000 shillings — more than double a government clerk’s wage. It’s five times more than what he was making last year hawking secondhand clothes. “There were days when I would find myself idle because of a lack of customers,” said Chege. That’s …

The U.S. Treasury on Tuesday launched an upgrade of a website to allow for the first time the tracking of all federal government spending categories, which totaled $3.85 trillion last year. The new Beta.USAspending.gov website culminates a three-year initiative to improve the existing USAspending.gov to provide a broader view of government spending than the grant and procurement data previously available on the site. The project brings together some 400 different data sets from more than 100 federal agencies, extracting spending information from thousands of divergent computer systems across the government. It also is designed to be machine readable, with open source code allowing private companies to analyze and develop commercial applications for the data, said a senior Treasury official working on the project. The beta site is launching with year-to-date data for fiscal 2017, with historical data to be added later. The data will be updated quarterly, the official said. The spending site upgrade was mandated by the Data Accountancy and Transparency Act of 2014, a bipartisan law aimed at shedding new light on federal spending by making data readily available. “The new site provides taxpayers with the ability to track nearly $4 trillion in government spending from Washington, D.C., directly into their communities and cities,” Treasury Secretary Steven Mnuchin said in a statement. “Greater access to data will drive better decision-making and strengthen accountability and transparency — qualities central to the Administration’s focus on a more innovative and effective government,” Mnuchin said. The new version of the site makes …

Indian airline IndiGo said it plans to start flying smaller planes to second-tier towns and cities later this year, in a shift in strategy for the carrier that has prided itself on the simplicity of running only one type of jet. IndiGo, which has a fleet of 131 Airbus A320 aircraft, said on Tuesday it has placed a provisional order for 50 ATR 72-600 aircraft from European turboprop maker ATR, worth over $1.3 billion at list price. IndiGo joins national carrier Air India and SpiceJet which have finalized plans under Prime Minister Narendra Modi’s scheme to make it cheaper for people to fly within India. The scheme subsidizes part of the cost for airlines to fly to smaller towns. “We should see increased business activity in small towns and cities which will increase demand for air travel in these regions,” IndiGo’s President Aditya Ghosh said after the company reported a 25 percent fall in quarterly net profit.   InterGlobe Aviation Ltd, owner of IndiGo, said net profit fell to 4.4 billion rupees ($68 million) in the quarter ended March 31, from 5.84 billion rupees a year ago, as fuel costs jumped 71 percent over the same period. The company said it expects available seat kilometer, a key measure of an airline’s capacity, to increase by 22 percent in the April-June quarter. IndiGo, which has maintained its efficiency by operating only one type of aircraft, said it plans to set up a separate unit to manage the ATR fleet to reduce …

Gibraltar is preparing for a post-Brexit setup in which its firms will have no longer access to the European Union market but will maintain a preferential relationship with Britain, a top Gibraltar financial official said on Tuesday. The tiny British enclave on Spain’s southern tip, with a population of 30,000, is home to around 15,000 companies and is a major provider of insurance and gambling services. “We are currently planning for a hard Brexit,” James Tipping, director at Gibraltar’s government body for financial promotion, told EU lawmakers in a hearing in Brussels. He said Gibraltar did not expect to obtain a “special status” and was resigned to lose its access to the EU market after Britain leaves the EU at the end of a process triggered in March by British Prime Minister Theresa May. This would mark a shift in Gibraltar’s stated policy of seeking extraordinary arrangements with the EU after Brexit. Many companies have so far been attracted to Gibraltar by the prospect of being able to operate in all 28 EU countries from a territory with low tax rates and business-friendly regulations. The loss of the access to the EU market, granted to EU member states by so-called passporting rules, may reduce firms’ appetite to establish their headquarters in the British enclave. But this may not discourage Gibraltar-based firms that operate in the United Kingdom. “Our financial model will not have to change,” Tipping told lawmakers, noting Britain has committed to guarantee full access to its market for …

Cambodia’s rapidly normalizing economy will receive an additional boost when it hosts the regional World Economic Forum (WEF) for the first time this week with business leaders looking for opportunities to diversify the country’s fledgling industries. American lawyer and chairman of the American Chamber of Commerce in Cambodia, Brett Sciaroni, said Cambodia’s economy remained the fastest growing in Southeast Asia with annual GDP growth exceeding seven percent year-on-year. Garments, tourism, construction and agriculture are key planks in the local economy, but he said he would prefer to see the number of industries substantially broadened. “Well, we’re very hopeful that we’ll be getting more light manufacturing in the future because we do need to diversify the economy. Right now we have a strong agricultural sector and we have a strong garment sector but we want to graduate that light manufacturing from garments to other things,” he said.  Sprucing-up Cambodia’s image Across the capital, buildings are getting a lick of paint, parks are being cleaned-up and gardens manicured ahead of the arrival of 700 delegates from 40 countries for the May 10-12 forum with its focus on technology, growth and youth. Sciaroni said the WEF, which Cambodia will host on behalf of the 10-member Association of South East Asian Nations (ASEAN), would help improve Cambodia’s image and an international reputation that is often maligned by corruption and issues like human rights. “Old views of Cambodia are frequently hard to change. So, I think there’s still an impression out there of Cambodia as …

The International Monetary Fund called on Asian economies to learn from Japan’s experience and act early to cope with rapidly aging populations, warning that parts of the region risk “getting old before becoming rich.” Asia has enjoyed substantial demographic dividends in the past decades, but the growing number of elderly is set to create a demographic “tax” on growth, the IMF said in its economic outlook report for the Asia-Pacific region on Tuesday. “Adapting to aging could be especially challenging for Asia, as populations living at relatively low per capita income levels in many parts of the region are rapidly becoming old,” the report said. “Some countries in Asia are getting old before becoming rich.” The population growth rate is projected to fall to zero for Asia by 2050 and the share of working-age people – now at its peak – will decline over the coming decades, the report said. The share of the population aged 65 and older will increase rapidly and reach close to two-and-a-half times the current level by 2050, it said. That means demographics could subtract 0.1 percentage point from annual global growth over the next three decades, it said. The challenges are particularly huge for Japan, which faces both an ageing and shrinking population. Its labor force shrank by more than 7 percent in the past two decades, the IMF said. The high percentage of its citizens living on pensions may be behind Japan’s excess savings and low investment, which are weighing on growth and …

Mexican Economy Minister Ildefonso Guajardo will travel to Washington next week for talks about sugar exports, he told reporters on Monday, in an attempt to break an impasse that threatens to trigger tit-for-tat duties on sweeteners. U.S.-Mexican trade relations are already under strain as U.S. President Donald Trump seeks to renegotiate the North American Free Trade Agreement pact with Mexico and Canada and build a wall on the U.S.-Mexican border and have Mexico pay for it. The U.S. sugar industry pressed the Commerce Department late last year to withdraw from a 2014 trade agreement that sets prices and quota for U.S. imports of Mexican sugar unless the deal could be renegotiated. Mexico and the United States last week extended a deadline to June 5 to reach an agreement on how much Mexican refined and crude sugar can enter the United States. Speaking at an event in Mexico City, Agriculture Minister Jose Calzada said Mexico was willing to react in-kind to any U.S. duties imposed on its sugar. “If we were to have to pay … tariffs on Mexican sugar imports, the federal government would energetically consider similar measures on some U.S. product,” Calzada said. Mexico is the top foreign supplier of sugar to the United States, a coveted market of 12 million tons where the U.S. government gives export quotas to about 40 sugar-producing countries each year through trade programs. …