Business

Suspiciously cheap diamonds, jeans for $1 and a pair of skis for next to nothing. It’s not a dream, these are actual bargains at a store in a small town in Alabama. What it sells are the contents of lost airline baggage. Every year airline companies lose about 20 million suitcases, and while most of them find their way back to their owners, thousands of bags are never picked up. As Daria Dieguts found out, some of these lost items end up here at the lost baggage store in Alabama.
…

Suspiciously cheap diamonds, jeans for $1 and a pair of skis for next to nothing. It’s not a dream, these are actual bargains at a store in a small town in Alabama. What it sells are the contents of lost airline baggage. Every year airline companies lose about 20 million suitcases, and while most of them find their way back to their owners, thousands of bags are never picked up. As Daria Dieguts found out, some of these lost items end up here at the lost baggage store in Alabama.
…

Suspiciously cheap diamonds, jeans for $1 and a pair of skis for next to nothing. It’s not a dream, these are actual bargains at a store in a small town in Alabama. What it sells are the contents of lost airline baggage. Every year airline companies lose about 20 million suitcases, and while most of them find their way back to their owners, thousands of bags are never picked up. As Daria Dieguts found out, some of these lost items end up here at the lost baggage store in Alabama.
…

The United States has formally lifted a crippling ban on exports to the Chinese telecommunications giant ZTE. 

The Commerce Department said Friday that it had removed the ban after ZTE deposited $400 million in a U.S. bank escrow account as part of a settlement reached last month.

ZTE has already paid a $1 billion fine that is also part of its settlement with the U.S. government. 

“While we lifted the ban on ZTE, the department will remain vigilant as we closely monitor ZTE’s actions to ensure compliance with all U.S. laws and regulations,” Commerce Secretary Wilbur Ross said in a statement. He described the terms of the deal as the strictest ever imposed in such a case.

The Chinese company is accused of selling sensitive technologies to Iran and North Korea, despite a U.S. trade embargo. 

In April, the Commerce Department barred ZTE from importing American components for its telecommunications products for the next seven years, practically putting the company out of business. However, Trump later announced a deal with ZTE in which the Chinese company would pay a $1 billion fine for its trade violations, as well as replace its entire management and board by the middle of July.

Lawmakers from both parties have criticized Trump’s efforts and have taken steps to block the White House’s efforts to revive ZTE. The Senate passed legislation last month included in a military spending bill that would block ZTE from buying component parts from the United States. That legislation now moves to a joint committee of House and Senate members who will decide the fate of the ZTE measure in a compromise defense bill. 

Most of the world first heard of the dispute over ZTE in May after one of Trump’s tweets. “President Xi of China and I are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump said.
…

The White House released a report Thursday contending that the United States’ war on poverty — a drive that started over 50 years ago to improve the social safety net for the poorest citizens of the world’s largest economy — is “largely over and a success,” contrasting with other reports on the nation’s poor.

The report, authored by President Donald Trump’s Council of Economic Advisers, called for federal aid recipients to be pushed toward work requirements.

The report says poverty, when measured by consumption, has fallen by 90 percent since 1961. It also says that only 3 percent of Americans currently live under the poverty line.

“The timing is ideal for expanding work requirements among non-disabled working-age adults in social welfare programs,” according to the report. “Ultimately, expanded work requirements can improve the lives of current welfare recipients and at the same time respect the importance and dignity of work.”

U.N. report

The council’s report contrasts with a U.N. report on poverty in the U.S. that was released last month. That report said about 12 percent of the U.S. population lives in poverty, and that the U.S. “leads the developed world in income and wealth inequality.”

Phillip Alston, a U.N. adviser on extreme poverty and the author of the report, wrote in December 2017 that he believed Trump and his administration, along with U.S. House Speaker Paul Ryan, a Wisconsin Republican, “will essentially shred crucial dimensions of a safety net that is already full of holes.”

In April, Trump signed an executive order outlining work mandates for low-income citizens on federal aid programs. These programs included Medicaid, which provides federal health insurance for low-income individuals, and the Supplemental Nutrition Assistance Program, which provides these low-income individuals with assistance in food purchasing.

Both programs were among those introduced in the 1960s, during the administration of then-President Lyndon Johnson, a Democrat who coined the term “war on poverty” during his first State of the Union address.

Four state mandates

The Trump administration has already permitted four states — Kentucky, Indiana, Arkansas, and New Hampshire — to implement work requirement programs for Medicaid recipients, the first such restrictions enforced on the program. In June, however, a federal judge struck down Kentucky’s mandate, writing that the administration’s waiver “never adequately considered whether [the program] would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.”

Anne Marie Regan, a senior staff attorney for the Kentucky Equal Justice Center, one of the organizations that successfully challenged the Kentucky waiver, told VOA that while she didn’t know the specifics of other states’ Medicare waivers, she thought similar challenges could be successful because of the administration’s insistence on work requirements.

Regan said her state’s proposal would have removed 95,000 people from health care coverage.

“The war on poverty is certainly not over,” Regan said. “There’s certainly still a great need for a safety net.”

In June, the U.S. House of Representatives narrowly passed a farm bill that includes work requirements for some adults who receive food assistance benefits. Every Democrat, along with 20 Republicans, voted against the bill, which is not expected to pass the Senate.
…

Failing to let girls finish their education could cost the world as much as $30 trillion in lost earnings and productivity, yet more than 130 million girls are out of school globally, the World Bank said Wednesday.

Women who have completed secondary education are more likely to work and earn on average nearly twice as much as those with no schooling, according to a report by the World Bank.

About 132 million girls worldwide aged 6 to 17 do not attend school, while fewer than two-thirds of those in low-income nations finish primary school, and only a third finish lower secondary school, the World Bank said.

If every girl in the world finished 12 years of quality education, lifetime earnings for women could increase by $15 trillion to $30 trillion, according to the report.

“Overall, the message is clear: Educating girls is not only the right thing to do,” the World Bank said in the report, “it also makes economic and strategic sense for countries to fulfill their development potential.”

Other positive impacts of completing secondary school education for girls include a reduction in child marriage, lower fertility rates in countries with high population growth, and reduced child mortality and malnutrition, the World Bank said.

“We cannot keep letting gender inequality get in the way of global progress,” Kristalina Georgieva, World Bank chief executive, said in a statement.

The benefits of educating girls are considerably higher at secondary school level in comparison to primary education, said Quentin Wodon, World Bank lead economist and main report author.

“While we do need to ensure that, of course, all girls complete primary school, that is not enough,” Wodon told Reuters.

Women who have completed secondary education are at lesser risk of suffering violence at the hands of their partners, and have children who are less likely to be malnourished and themselves are more likely to go to school, the report said.

“When 130 million girls are unable to become engineers or journalists or CEOs because education is out of their reach, our world misses out on trillions of dollars,” Malala Yousafzai, 2014 Nobel Peace Prize laureate, said in a statement.

“This report is more proof that we cannot afford to delay investing in girls,” said Yousafzai, an education activist who was shot in the head at the age of 15 by a Taliban gunman in 2012.

The report was published ahead of U.N. Malala Day on Thursday, which marks the birthday of the Pakistani activist.
…

Uber’s business in Kenya said on Friday it will keep its fares unchanged for now, after associations representing taxi drivers in the country signed a deal giving guidelines for better fares and working conditions.

“As of today, we will not be adjusting our fares as we are busy completing a deeper study of driver economics in light of the concerns and feedback that we have received from drivers to ensure that fares are correctly priced,” a spokesperson for Uber Technologies said in an email to Reuters.

The Digital Taxi Association of Kenya, representing more than 2,000 ride-hailing taxi drivers, signed a deal on Wednesday meant to give drivers higher pay and better conditions.

The drivers told Reuters they thought the deal would cushion them in the event of falling fares arising from discounts companies offers to passengers. They had staged a nine-day strike seeking higher fares and better working conditions.

As in other markets, these ride-hailing services in Kenya initially faced opposition and sometimes hostility from other taxi drivers.

Kenya is Uber’s second-largest market in sub-Saharan Africa, after South Africa. It competes mostly against its local rival Taxify, which has gained popularity in Nairobi in the past year and a half, but does not disclose numbers of active riders and users.
…

As farmer Brian Duncan gently brushes his hands over the rolling amber waves of grain in the fields behind his rural Illinois home, this picturesque and idyllic American scene belies the dramatic hardship he currently faces.

“We’re in trouble,” he told VOA.

Wheat is just one product that grows on Duncan’s diverse farm, also home to about 70,000 hogs annually, which Duncan said “were projected to be profitable this year.”

Were, but not anymore.

Pork is now subject to a 62 percent Chinese tariff, and demand is drying up in one of the world’s largest pork markets.

“Once that tariff went on, the pork stopped going into China. Not going to Taiwan, either. Not finding other routes. That market just disappeared,” said Duncan, who expected to see a $4 to $5 profit on each pig, then watched it become a $7 to $8 loss per head.

“The difference between making and losing money in the hog industry is exports,” said Duncan, acknowledging that for most hog farmers, exports are key to profits. A lack of competitive access to international markets could spell long-term financial hardship, particularly for independent pork producers like Duncan.

“The reality is 95 percent of the world population is outside these borders. We need them … as markets and trading partners,” Duncan said.

Tariffs begin to bite

U.S. farmers like Duncan are beginning to feel the effects of such tariffs imposed by China in retaliation for U.S. tariffs on Chinese steel and aluminum.

As the trade dispute continues, Duncan, who also serves as vice president of the Illinois Farm Bureau, is losing money on virtually everything growing on his farm because of imposed or impending tariffs.

“Soybeans were a buck and a half higher than they are now,” he told VOA. “Corn was 50 to 70 cents higher than it is now. So, certainly the attitude has changed here in the last two to three weeks.”

So has Duncan’s mood.

“Frustrated. This was preventable. This was predictable — the outcome. There was a better way to go about this,” he said.

​Long-term loss of market

“Tariffs are kind of a last resort for a really specific instance or really serious breach of a contract and not something that you would lob out there to try to make progress in a trade agreement, and I think that’s what surprised farmers a bit,” said Tamara Nelsen, senior director of commodities with the Illinois Farm Bureau.

Nelsen said history shows the long-term impact of tariffs and trade embargoes is a loss of market access and competitiveness for U.S. products.

“In every event, we lost market share, or we encouraged production somewhere else of that same product. And it took U.S. agriculture 20, 30 years to get some of those markets back. And in some cases, we haven’t gotten those markets back.”

For Duncan, the long-term impact on the reputation of U.S. agricultural products is his biggest concern.

“How are we going to be seen? Is a country going to look at us and say, ‘Why would I sign an agreement with them, anyhow? If they don’t like something we do, are they just going to put a bunch of tariffs up and blow things up?’ How are we seen going forward in the next five, 10, 15, 20 years? For me, that is the biggest issue more than the here and now.”

Farm income at risk

But in the here and now is the difficult reality that farmers are also experiencing their fifth year of declining income.

“We’ve seen farm income cut in half in the last four years for various reasons. We could easily see it cut in half again if we lost all our export markets,” which Duncan said could increase dependence on government aid at a time when lawmakers in Washington debate new Farm Bill legislation that the agriculture industry needs to provide security.

All of the uncertainty has him evaluating his options the next time he heads to the ballot box.

“It’s the economy, stupid. My vote will depend an awful lot on the farm economy,” he said. That’s just the world I live in.”

A world that is now more connected — and dependent on international trade — than ever before.
…

President Donald Trump’s criticism of Germany’s involvement in a natural gas pipeline deal with Russia launched a tense two days of NATO meetings in Brussels — but it also may have set the tone for the U.S. leader’s highly anticipated summit with his Russian counterpart Monday in Helsinki.

In a taut exchange with NATO Secretary-General Jens Stoltenberg on Wednesday, Trump said Nord Stream 2 — an offshore pipeline that would deliver gas to Germany directly from Russia via the Baltic Sea — leaves the Western military alliance’s largest and wealthiest European member “totally controlled” by and “captive to” Russia.

“We’re supposed to protect you against Russia but [Germany is] paying billions of dollars to Russia, and I think that’s very inappropriate,” Trump told Stoltenberg.

According to the U.S. leader, Germany “got rid of their coal plants, got rid of their nuclear, they’re getting so much of the oil and gas from Russia. I think it’s something NATO has to look at.”

As Europe’s biggest natural gas consumer, Germany relies on Russia for roughly half of its gas imports, which account for 20 percent of its current energy mix, according to London-based Marex Spectron group. The International Energy Association projects German natural gas demand to increase by 1 percent in the next five years, as Berlin continues phasing out its nuclear power plants by 2022.

Expanding upon the existing Nord Stream 1 pipeline, which has been transporting gas from Russia to Germany along the same Baltic Sea route since 2011, Nord Stream 2, currently slated for completion by 2019, would roughly double Russia’s export volume.

Trump says the $11 billion, 800-mile pipeline expansion linking Russia and Germany would give Moscow greater geopolitical leverage over Europe at a time of heightened international tensions, an opinion in keeping with that of his his immediate predecessor, former President Barack Obama, and former President George W. Bush, who opposed Nord Stream 1.

The administrations have long pushed for Germany, Europe’s largest energy consumer, to buy American liquefied natural gas (LNG) in an attempt to overtake a sector of the market long dominated by Russian distribution routes that run through Ukraine.

Poland and Lithuania, who are among Nord Stream 2’s most vociferous European critics, have built LNG terminals that would stand to profit from an American takeover of the market. But other former Soviet satellite nations — such as Ukraine, Latvia and Estonia — have long warned that a growing reliance on Russian energy not only compromises European security, but rewards Russia’s 2014 annexation of Crimea and other campaigns to destabilize the European Union.

There have been numerous price disputes between Moscow and Kyiv over natural gas deliveries to Ukraine, whose pipelines serve other European nations. In 2009, a disagreement between the two nations cut natural gas supplies to Western Europe in the middle of winter, leaving many without heat.

Nord Stream 2, they argue, will not only deprive land-transit countries such as Poland and Ukraine of billions in annual transit fees, it will also give Russia a way to penalize Eastern European foes without sacrificing lucrative deals further to the west.

According to Atlantic Council energy expert Agnia Grigas, Nord Stream 2 contradicts the EU’s official energy security strategy, which calls on EU nations to diversify energy sources, distributors and routes.

“If Nord Stream 2 is built, Germany would be the EU country most exposed to dubious Russian influence,” Grigas recently reported. “Moscow already has a track record of relying on German businesses and lawmakers to advance its own strategic goals. For instance, following Russia’s invasion of Crimea in 2014, large German companies with considerable business ties with Russia were among the harshest critics of Western sanctions against Moscow.”

As a private project backed by energy giants such as Shell — a British-Dutch multinational — Germany’s Wintershall and Uniper, along with Russia’s state-owned Gazprom, Nord Stream 2 is also being financed by private firms from Austria, France and Britain, but not by German tax funds.

In responding to Trump’s Wednesday tirade against Berlin, German Chancellor Angela Merkel said she knew all too well from her childhood in the East what it is like to live under Soviet control. But she said energy deals with Russia do not make 21st-century Berlin beholden to Moscow.

“I am very happy that today we are united in freedom as the Federal Republic of Germany. Because of that, we can say that we can make our independent policies and make independent decisions,” she said.

Merkel’s predecessor, Gerhard Schroeder, a longtime friend of Putin, has championed the Nord Stream enterprise since just before being voted out of office in 2005. He soon went on to lead the shareholder committee of Nord Stream AG, a consortium for construction and operation of the submarine pipeline, eventually going on to become chairman of the Kremlin-controlled Rosneft, Russia’s largest oil company.

In March, European politicians increased calls for sanctions against the ex-chancellor for representing Russian interests, though his name has yet to appear on any lists of individuals targeted for sanctions.

Despite repeated U.S. warnings that companies involved in the deal also risk being slapped with sanctions, Nord Stream 2 is scheduled for completion next year.

This story originated in VOA’s Russian service. 
…

President Donald Trump’s criticism of Germany’s involvement in a natural gas pipeline deal with Russia launched a tense two days of NATO meetings in Brussels — but it also may have set the tone for the U.S. leader’s highly anticipated summit with his Russian counterpart Monday in Helsinki.

In a taut exchange with NATO Secretary-General Jens Stoltenberg on Wednesday, Trump said Nord Stream 2 — an offshore pipeline that would deliver gas to Germany directly from Russia via the Baltic Sea — leaves the Western military alliance’s largest and wealthiest European member “totally controlled” by and “captive to” Russia.

“We’re supposed to protect you against Russia but [Germany is] paying billions of dollars to Russia, and I think that’s very inappropriate,” Trump told Stoltenberg.

According to the U.S. leader, Germany “got rid of their coal plants, got rid of their nuclear, they’re getting so much of the oil and gas from Russia. I think it’s something NATO has to look at.”

As Europe’s biggest natural gas consumer, Germany relies on Russia for roughly half of its gas imports, which account for 20 percent of its current energy mix, according to London-based Marex Spectron group. The International Energy Association projects German natural gas demand to increase by 1 percent in the next five years, as Berlin continues phasing out its nuclear power plants by 2022.

Expanding upon the existing Nord Stream 1 pipeline, which has been transporting gas from Russia to Germany along the same Baltic Sea route since 2011, Nord Stream 2, currently slated for completion by 2019, would roughly double Russia’s export volume.

Trump says the $11 billion, 800-mile pipeline expansion linking Russia and Germany would give Moscow greater geopolitical leverage over Europe at a time of heightened international tensions, an opinion in keeping with that of his his immediate predecessor, former President Barack Obama, and former President George W. Bush, who opposed Nord Stream 1.

The administrations have long pushed for Germany, Europe’s largest energy consumer, to buy American liquefied natural gas (LNG) in an attempt to overtake a sector of the market long dominated by Russian distribution routes that run through Ukraine.

Poland and Lithuania, who are among Nord Stream 2’s most vociferous European critics, have built LNG terminals that would stand to profit from an American takeover of the market. But other former Soviet satellite nations — such as Ukraine, Latvia and Estonia — have long warned that a growing reliance on Russian energy not only compromises European security, but rewards Russia’s 2014 annexation of Crimea and other campaigns to destabilize the European Union.

There have been numerous price disputes between Moscow and Kyiv over natural gas deliveries to Ukraine, whose pipelines serve other European nations. In 2009, a disagreement between the two nations cut natural gas supplies to Western Europe in the middle of winter, leaving many without heat.

Nord Stream 2, they argue, will not only deprive land-transit countries such as Poland and Ukraine of billions in annual transit fees, it will also give Russia a way to penalize Eastern European foes without sacrificing lucrative deals further to the west.

According to Atlantic Council energy expert Agnia Grigas, Nord Stream 2 contradicts the EU’s official energy security strategy, which calls on EU nations to diversify energy sources, distributors and routes.

“If Nord Stream 2 is built, Germany would be the EU country most exposed to dubious Russian influence,” Grigas recently reported. “Moscow already has a track record of relying on German businesses and lawmakers to advance its own strategic goals. For instance, following Russia’s invasion of Crimea in 2014, large German companies with considerable business ties with Russia were among the harshest critics of Western sanctions against Moscow.”

As a private project backed by energy giants such as Shell — a British-Dutch multinational — Germany’s Wintershall and Uniper, along with Russia’s state-owned Gazprom, Nord Stream 2 is also being financed by private firms from Austria, France and Britain, but not by German tax funds.

In responding to Trump’s Wednesday tirade against Berlin, German Chancellor Angela Merkel said she knew all too well from her childhood in the East what it is like to live under Soviet control. But she said energy deals with Russia do not make 21st-century Berlin beholden to Moscow.

“I am very happy that today we are united in freedom as the Federal Republic of Germany. Because of that, we can say that we can make our independent policies and make independent decisions,” she said.

Merkel’s predecessor, Gerhard Schroeder, a longtime friend of Putin, has championed the Nord Stream enterprise since just before being voted out of office in 2005. He soon went on to lead the shareholder committee of Nord Stream AG, a consortium for construction and operation of the submarine pipeline, eventually going on to become chairman of the Kremlin-controlled Rosneft, Russia’s largest oil company.

In March, European politicians increased calls for sanctions against the ex-chancellor for representing Russian interests, though his name has yet to appear on any lists of individuals targeted for sanctions.

Despite repeated U.S. warnings that companies involved in the deal also risk being slapped with sanctions, Nord Stream 2 is scheduled for completion next year.

This story originated in VOA’s Russian service. 
…

The U.S. Justice Department said Thursday that it would appeal a federal judge’s approval of AT&T Inc.’s $85.4 billion acquisition of Time Warner.

The Justice Department opted in June not to seek an immediate stay of the court’s approval of the merger, allowing the merger to close on June 14. The department still had 60 days to appeal the decision.

The government’s court filing did not disclose on what ground it intended to challenge the approval.

AT&T and the Justice Department did not immediately comment.

AT&T shares fell 1 percent after the bell.

The merger, announced in October 2016, was opposed by President Donald Trump. AT&T was sued by the Justice Department but won approval from a judge to move forward with the deal in June following a six-week trial.

Judge Richard Leon of U.S. District Court for the District of Columbia ruled that the tie-up between AT&T’s wireless and satellite businesses and Time Warner’s movies and television shows was legal under antitrust law.

The Justice Department had argued the deal would harm consumers.
…

The U.S. Justice Department said Thursday that it would appeal a federal judge’s approval of AT&T Inc.’s $85.4 billion acquisition of Time Warner.

The Justice Department opted in June not to seek an immediate stay of the court’s approval of the merger, allowing the merger to close on June 14. The department still had 60 days to appeal the decision.

The government’s court filing did not disclose on what ground it intended to challenge the approval.

AT&T and the Justice Department did not immediately comment.

AT&T shares fell 1 percent after the bell.

The merger, announced in October 2016, was opposed by President Donald Trump. AT&T was sued by the Justice Department but won approval from a judge to move forward with the deal in June following a six-week trial.

Judge Richard Leon of U.S. District Court for the District of Columbia ruled that the tie-up between AT&T’s wireless and satellite businesses and Time Warner’s movies and television shows was legal under antitrust law.

The Justice Department had argued the deal would harm consumers.
…

Saudi Arabian billionaire Prince Alwaleed bin Talal, who was detained for three months in an anti-corruption campaign under Crown Prince Mohammed bin Salman, pledged support on Thursday for the young leader’s program of sweeping reforms.

“I was honored to meet with my brother HRH the Crown Prince and to discuss economic matters and the private sector’s future &; role in #Vision2030 success,” he tweeted with a photograph of the royal cousins embracing in front of a desk.

It is the first publicly disclosed meeting between the two men since the anti-corruption crackdown was launched in November.

“I shall be one of the biggest supporters of the Vision through @Kingdom_KHC &; all its affiliates,” Prince Alwaleed added, referring to his international investment company.

Vision 2030 is Prince Mohammed’s scheme to wean the world’s top crude exporter off oil revenues and open up Saudis’ cloistered lifestyles. The corruption sweep alarmed the Saudi business community as well as international investors the kingdom is courting to support the reforms.

Prince Alwaleed, the kingdom’s most recognised business figure, was freed in January after being held at Riyadh’s Ritz-Carlton Hotel along with scores of royals, senior officials and businessmen, most of whom reached financial settlements with the authorities.

He said in March he had cut a deal but declined to disclose the details. He said he was in discussions with the Public Fund, the sovereign wealth fund chaired by the crown prince, about making joint investments inside the kingdom. He previously told Reuters that he was innocent and expected to keep full control of his firm.

In the absence of more information, speculation has run rampant about whether Prince Alwaleed secured his freedom by forfeiting part of his fortune — once estimated by Forbes magazine at $17 billion — or stood up to authorities and won.
…

Saudi Arabian billionaire Prince Alwaleed bin Talal, who was detained for three months in an anti-corruption campaign under Crown Prince Mohammed bin Salman, pledged support on Thursday for the young leader’s program of sweeping reforms.

“I was honored to meet with my brother HRH the Crown Prince and to discuss economic matters and the private sector’s future &; role in #Vision2030 success,” he tweeted with a photograph of the royal cousins embracing in front of a desk.

It is the first publicly disclosed meeting between the two men since the anti-corruption crackdown was launched in November.

“I shall be one of the biggest supporters of the Vision through @Kingdom_KHC &; all its affiliates,” Prince Alwaleed added, referring to his international investment company.

Vision 2030 is Prince Mohammed’s scheme to wean the world’s top crude exporter off oil revenues and open up Saudis’ cloistered lifestyles. The corruption sweep alarmed the Saudi business community as well as international investors the kingdom is courting to support the reforms.

Prince Alwaleed, the kingdom’s most recognised business figure, was freed in January after being held at Riyadh’s Ritz-Carlton Hotel along with scores of royals, senior officials and businessmen, most of whom reached financial settlements with the authorities.

He said in March he had cut a deal but declined to disclose the details. He said he was in discussions with the Public Fund, the sovereign wealth fund chaired by the crown prince, about making joint investments inside the kingdom. He previously told Reuters that he was innocent and expected to keep full control of his firm.

In the absence of more information, speculation has run rampant about whether Prince Alwaleed secured his freedom by forfeiting part of his fortune — once estimated by Forbes magazine at $17 billion — or stood up to authorities and won.
…

The U.S. is on pace to leapfrog both Saudi Arabia and Russia to become the world’s biggest oil producer.

The latest data released by the Energy Information Administration shows U.S. output growing again next year to 11.8 million barrels a day.

 

Linda Capuano, who heads the agency, says that would make the U.S. the world’s No. 1 producer.

 

The director of the International Energy Agency, a group of oil-consuming countries, made a similar prediction in February.

 

Russia and Saudi Arabia pumped more crude than the U.S. last year.

 

Production is booming in U.S. shale fields because of newer techniques such as fracking and horizontal drilling.
…

The U.S. is on pace to leapfrog both Saudi Arabia and Russia to become the world’s biggest oil producer.

The latest data released by the Energy Information Administration shows U.S. output growing again next year to 11.8 million barrels a day.

 

Linda Capuano, who heads the agency, says that would make the U.S. the world’s No. 1 producer.

 

The director of the International Energy Agency, a group of oil-consuming countries, made a similar prediction in February.

 

Russia and Saudi Arabia pumped more crude than the U.S. last year.

 

Production is booming in U.S. shale fields because of newer techniques such as fracking and horizontal drilling.
…

Nigeria’s President Muhammadu Buhari said on Wednesday the country will soon sign up to a $3 trillion African free trade zone.

Nigeria is one of Africa’s two largest economies, the other being South Africa. Buhari’s government had refused to join a continental free-trade zone established in March, on the grounds that it wishes to defend its own businesses and industry.

The administration later said it wanted more time to consult business leaders.

“In trying to guarantee employment, goods and services in our country, we have to be careful with agreements that will compete, maybe successfully, against our upcoming industries,” Buhari told a news conference during a visit by South African President Cyril Ramaphosa.

“I am a slow reader, maybe because I was an ex-soldier. I didn’t read it fast enough before my officials saw that it was all right for signature. I kept it on my table. I will soon sign it.”

The continental free-trade zone, which encompasses 1.2 billion people, was initially joined by 44 countries in March. South Africa signed up earlier this month.

Economists point to the continent’s low level of intra-regional trade as one of the reasons for Africa’s enduring poverty and lack of a strong manufacturing base.
…

Nigeria’s President Muhammadu Buhari said on Wednesday the country will soon sign up to a $3 trillion African free trade zone.

Nigeria is one of Africa’s two largest economies, the other being South Africa. Buhari’s government had refused to join a continental free-trade zone established in March, on the grounds that it wishes to defend its own businesses and industry.

The administration later said it wanted more time to consult business leaders.

“In trying to guarantee employment, goods and services in our country, we have to be careful with agreements that will compete, maybe successfully, against our upcoming industries,” Buhari told a news conference during a visit by South African President Cyril Ramaphosa.

“I am a slow reader, maybe because I was an ex-soldier. I didn’t read it fast enough before my officials saw that it was all right for signature. I kept it on my table. I will soon sign it.”

The continental free-trade zone, which encompasses 1.2 billion people, was initially joined by 44 countries in March. South Africa signed up earlier this month.

Economists point to the continent’s low level of intra-regional trade as one of the reasons for Africa’s enduring poverty and lack of a strong manufacturing base.
…

In a ceremony last week attended by heads of state from across East Africa, Djibouti inaugurated what it says will become the largest free-trade zone on the continent.

The project will take 10 years to complete and will occupy more than 48 square kilometers when finished. In the pilot phase, it will increase the size of Djibouti’s economy by 11 percent, Prime Minister Abdoulkader Kamil Mohamed told VOA’s French-to-Africa service.

But the $3.5 billion project will also add to what some experts consider to be an extreme reliance on Chinese financing and could raise the small desert nation’s debt to alarming levels.

Debt distress

Scott Morris is a senior fellow at the Center for Global Development and the director of the U.S. Development Policy Initiative. He co-wrote a report in March that highlights the debt implications of the Belt and Road Initiative.

Morris and his colleagues considered the debt vulnerability of 68 countries involved in the BRI, including China. They concluded that most countries have a low risk, but for eight countries, the risk is high.

Djibouti is the only high-risk African country. It stands out because its debt represents a large portion of its gross domestic product, which economists consider to be a good indicator of a country’s overall economic strength and size. By the end of 2016, Djibouti’s debt had reached more than 86 percent of its GDP, and it owed nearly all of that money to China.

Combined, these factors make Djibouti susceptible to debt distress, a condition that can hurt economic growth or even cause an economic crisis.

The new free-trade zone will add significantly to Djibouti’s Chinese debt, possibly elevating Djibouti’s risk to “an alarming state,” Morris said.

‘We are well-situated’

Djibouti is optimistic its investments will pay off.

“We don’t have natural resources, but God has placed us in a strategic zone where about 30 percent of the maritime commerce in the world passes through,” Mohamed said. “So, we are well-situated, and we plan to take advantage of this placement to have the maximum profit for our country and our people.”

Morris agrees that Djibouti’s infrastructure deals could generate significant economic activity and growth, and that helps keep the risks of debt in check.

The catch, according to Morris, is big infrastructure projects pay dividends over the long haul, but debt obligations kick in much sooner. “With deals like this continuing to stack up, it does seem to me that Djibouti is facing a real debt problem,” Morris said.

If Djibouti were to default on its loans, it might find itself handing full control of projects such as the free-trade zone or Chinese-built ports over to China. That precedent was set late last year, when Sri Lanka, burdened with $8 billion in loans to Chinese firms, transferred the Port of Hambantota to China on a 99-year lease. 

If China were to take control over a Djibouti-based infrastructure project, the geopolitical implications could extend far beyond finances. But a handover wouldn’t be necessary for China to sway politics in the region and beyond.

“There’s no doubt that the Chinese government as a creditor also makes its political will known on issues that matter to it,” Morris said.

Those stipulations aren’t unique to China, Morris added, citing the United States as one example of a country that ties economics to politics. President Donald Trump’s administration, Morris said, has made clear that countries would be eligible for financial assistance depending on their votes in the United Nations.

The additional challenge with Chinese loans, according to Morris, is a lack of transparency. “It’s really hard to judge the degree to which they are extracting political concessions.”

Risks and rewards

An opaque approach to financing makes Chinese loans more risky overall, Morris said.

“There’s not a consistent reporting principle on the part of China as a creditor,” he added. And because China hasn’t agreed to be governed by globally accepted financing rules, the risk for countries that accept Chinese loans goes up.

African countries need to vet Chinese-financed projects carefully, Morris said, being sure the terms adhere to accepted financing standards. But that doesn’t mean all BRI projects should be taken off the table.

“If there is a viable infrastructure project that an entity like the China Development Bank wants to finance, and the terms look reasonable, there’s no reason not to proceed with that,” Morris said. “But one has to evaluate each project on its own merits.”

In Djibouti, the government is confident its strategy is paying off. “Chinese interests are Djiboutian interests also,” Mohamed said. “We are happy to profit from our position so we can develop our country.”

Idrissa Fall and Anasthasie Tudieshe contributed to this report.
…

Outside Baltimore, Maryland, sheets of tinplated steel transform into colorful cans and containers for Zippo lighter fluid, Starbucks cookies, Nestle chocolates, and premium brands of peanuts and popcorn. Machines stamp, cut, print, shape and assemble multiple product lines under the watchful eyes of skilled work crews at Independent Can Company, which is fighting the Trump administration’s 25 percent tariff on imported steel.

“We are the largest manufacturer of specialty tins in the United States,” ICC president and CEO Rick Huether said. “The tinplated steel that we buy is close to 50 percent of [the cost of] what we produce. It is the driver when there’s a change in our prices to the marketplace.”

The new steel tariff has been welcomed by U.S. producers of the material, but slammed by American manufacturers like ICC that rely on a global steel supply chain to stay afloat. The company says its clients will turn to foreign can makers if its prices rise too high.

“Our primary competitor would be China,”Huether said. “If we’re more than five-10 percent higher [in price] than China, our customers will shop overseas.”

The Trump administration continues to defend tariffs as stiff but appropriate medicine to save vital American industries battered by decades of predatory foreign competition.

“Steel and aluminum imports threaten to impair our national security,” Commerce Secretary Wilbur Ross said at a recent Senate hearing. “The tariff actions taken by the president are necessary to revive America’s essential steel and aluminum industries.”

Huether said ICC has bought U.S.-made steel, but that imports bridge a gap in supply for high-grade tinplated steel needed for blemish-free lithographic printing his customers demand, adding that the mere threat of tariff-induced price hikes already cost the company a $2 million order.

“We’d like to be fighting to grow our can business, but we’re fighting our supply side to just get materials to satisfy the demands we have now. So it’s a very frustrating situation,” the CEO said.

ICC is warning of possible job cuts. The company employs more than 400 workers, paying well above minimum wage with a benefits package that includes health care.

“There are craftsmen in here that have been doing this for 20, 30, 40 years,” ICC lithographer Bryon Borrell said, adding that he is thankful to hold a middle class manufacturing job. “I have been very successful, raised a family. That is all I can ask for.”

ICC has asked the Commerce Department for steel tariff exemptions. U.S. Steel Corporation filed objections, arguing it has been harmed by “unfairly traded imports” and that “the domestic industry has ample production capacity to supply ICC’s needs.”

Huether countered that he has no guarantee when domestic production will be ramped up, the price ICC will be charged for tinplated steel, or whether quality standards will be met.

“U.S. Steel says they can produce our specification in sufficient quantities. Yes they can, in a year, when they invest the money they’ve already committed to upgrading the mill,” Huether said. “We would like to buy domestic. The lead times are shorter [than buying imported steel], but right now they can’t give us the material when they promised.”

The Commerce Department has not acted on ICC’s requests, but signaled that tariff exemptions will be rare.

“Relatively few of those [exemptions] will be granted because many of them have no substance,” Secretary Ross said.

“I think we’re fighting people that are not listening to our problem, our industry’s problem,” Huether said. “This is my family’s business—my sister, my dad, my cousin, my son are in this every day, on the floor, trying to develop. We’ve brought back $4-5 million dollars worth of cans to manufacture in the United States in the last three or four years. Not many companies can say that.”

ICC just installed a state-of-the-art assembly line that will expand production, if the company has enough steel to run it, and if it is able to keep prices competitive on its containers.

Huether credited President Donald Trump for tax reform enacted last year, saying it’s a boost to companies like his, but added that tariffs are counterproductive.

“Yeah, he [Trump] is encouraging us to invest. But on the other hand he’s raising our costs to produce those goods. Who are we going to have to sell it to if we don’t hit a right price [on steel]?” he said.
…