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.

 
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Videos of Venezuelan President Nicolas Maduro feasting on steaks at an upscale restaurant have sparked worldwide outrage on behalf of the poverty-stricken people of his country.

One video show celebrity chef Nusret Gokce, also known as “Salt Bae,” carving meat for the president and his wife, Cilia Flores, at the Nusr-Et restaurant in Istanbul, where each cut of meat can cost hundreds of dollars.

Florida Senator Marco Rubio slammed the chef who was filmed with the “dictator,” who was shown eating “a five-star gourmet meal, smoking fine cigars while the people of Venezuela are literally starving.”

“It’s an outrage, disgusting … this is a man starving human beings and [Salt Bae] is celebrating him as some sort of hero – I got pissed,” Rubio told the Miami Herald on Tuesday.

“I don’t know who this weirdo #Saltbae is, but the guy he is so proud to host is not the President of #Venezuela. He is actually the overweight dictator of a nation where 30% of the people eat only once a day & infants are suffering from malnutrition,” Rubio tweeted Tuesday.

The senator also tweeted the address and phone number of the chef’s restaurant in Miami, which is home to scores of Venzeulan-Americans and Cuban-Americans who despise the socialist leader.

Opposition leader Julio Borges, who lives in exile in Colombia, tweeted: “While Venezuelans suffer and die of hunger, Nicolas Maduro and Cilia Flores have a good time in one of the most expensive restaurants in the world, all with money stolen from the Venezuelan people.”

The once-wealthy oil-producing nation has been in an economic crisis for the past five years. The turmoil has left many Venezuelans struggling to find food and medicine and driven masses to flee to other South American countries.

According to the United Nations, more than 2 million Venezuelans have fled since 2014.

A  Meganalisis poll published in the Miami Herald last month found more then 30 percent of Venezuelans say they only ate one meal a day, nearly the same number report eating “nothing or close to nothing” at least one day a week and a staggering 78 percent said they had trouble finding enough food.
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Mexico’s incoming financial intelligence chief said it was “shameful” how little had been done about bribes that Brazilian construction firm Odebrecht executives said were paid to secure Mexican public works contracts, and vowed to reexamine the case once in office.

Santiago Nieto will head the finance ministry’s Financial Intelligence Unit, which analyzes suspicious financial records, once the new leftist government takes office on Dec. 1. He said in an interview last week that the unit had been misused for political ends, without elaborating.

“It’s shameful that Mexico and Venezuela are the only countries in Latin America that haven’t sanctioned anyone,” he said of the Odebrecht case, which is at the heart of Brazil’s Lava Jato, or Car Wash, corruption investigation that has reverberated across the region in recent years.

“In the case of Odebrecht, and in any other case, the first thing we would have to do is review what there is in the Financial Intelligence Unit related to the case,” he said. Nieto does not yet have access to files and records kept by the unit.

In Brazil, Odebrecht executives admitted to paying bribes within Mexico. Prosecutors in Mexico have said they are probing business between the Brazilian conglomerate and state oil company Pemex.

Pemex has declined to comment on issues related to Odebrecht, citing the ongoing investigation. The office of Mexico’s attorney general, the finance ministry and the Financial Intelligence Unit all declined to comment for this story. Odebrecht acknowledged receipt of an emailed request for comment, but did not respond further.

Anger at widespread corruption scandals, including the alleged bribes from Odebrecht, a lucrative house deal involving the family of President Enrique Pena Nieto, and hundreds of millions of dollars siphoned from government coffers through fake contracts, helped leftist Andres Manuel Lopez Obrador win a landslide presidential victory in July.

Lopez Obrador pledged in his manifesto to clamp down on financial crime, and tighten money laundering, banking and tax regulations. He has given few details of how he will achieve this, but promises to set an example of probity from the presidency.

Tasked with helping to prevent and fight money laundering and terrorism financing, the financial intelligence unit receives and analyzes information that it should then pass on to prosecutors to investigate and construct a case.

A former lead prosecutor for electoral crimes, Nieto was dismissed in 2017 on the grounds that he broke a code of conduct when he gave an interview about his investigation into Odebrecht bribery during the 2012 presidential campaign.

Nieto has admitted his mistake, but denies breaking rules or revealing sensitive information. He said his firing was illegal.

Last month, two incoming administration officials told Reuters that Odebrecht may be blocked from participating in public works projects under the new government.

Odebrecht responded that wrongdoing at the company should not be used to impose sanctions against it in Mexico.

Corrupt System?

Nieto said he would press for more information sharing between federal departments that investigate tax, electoral and organized crime, and investigate possible corruption within the system.

“I have the impression that there is a factor of internal corruption,” he said, without providing specifics.

The Financial Action Task Force, an international organization that sets global standards for fighting illicit finance, said earlier this year that in Mexico “financial intelligence does not often lead to investigations of money laundering, underlying crimes, and terrorist financing.”

Following the report, Mexico’s finance ministry and the attorney general’s office issued a joint statement recognizing shortcomings and promising to improve efforts.

However, the Mexican government seized just 871 million pesos ($46.3 million) and $14.7 million between September 2017 and June 2018, and began just one criminal proceeding, according to official statistics.

Nieto, who called the outcomes “terrible,” pointed to the financial intelligence unit and attorney general’s office as the two “bottlenecks” holding back cases.

“It is a matter of impunity, a complicit government, and a lack of political will to fight corruption,” Nieto said.
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When Pearl Jam led 50,000 people in a chant of “Save the Showbox” in a Seattle stadium last month, the rockers confronted a question facing many cities: When do the cultural costs of a property boom become too high?

The Showbox is an 1,100-person venue across the street from Pike Place Market, Seattle’s top tourist attraction. It opened in 1939 and has hosted acts from Duke Ellington to Prince, as well as the hometown grunge pioneers Pearl Jam.

The venue now risks becoming the latest casualty of the Pacific Northwest city’s real estate rush – and many in the community are saying enough is enough.

“Today one of our great cathedrals is at risk of being leveled,” said Ben Gibbard, lead singer of indie rock band Death Cab for Cutie, at a Seattle City Council hearing in August. “It’s not just a music venue, but a cornerstone of our cultural heritage. We cannot allow this vital piece of our rapidly changing city to be snuffed out.”

Historic venues are being crushed by real estate development in cities across Britain and the United States.

London has lost 35 percent of its independent music venues since 2007, according to the mayor’s office.

In 2014, The New York Observer documented eight significant music venues the city lost over the previous decade, beginning with punk icon venue CBGB and ending with the Roseland Ballroom, another pre-World War II concert hall.

Experts say that the trend affects more than just music fans, bands, and others in the industry.

“Music venues are an early canary in the coal mine,” said Shain Shapiro, head of Sound Diplomacy, a Britain-based consultancy firm on music in cities.

“It’s not just about developing our music industry and providing a great night out,” he told the Thomson Reuters Foundation by phone from London. “It improves the quality of life in increasingly denser and denser cities.”

Music or Housing

Interventions by city governments to save historic venues are rare, but the past few years have seen a few – usually in response to public pressure.

Fans of the Showbox were outraged in July when the Onni Group, a real estate developer headquartered in neighboring Vancouver, Canada, filed plans to build a 44-story building where the venue now sits.

A “Save the Showbox” online petition has garnered about 100,000 signatures. They include members of R.E.M., Jamie xx, The English Beat, and other musicians who have performed there.

Supporters packed the city hall hearing in August waving “Save the Showbox” signs.

Last month, the municipal government approved an extension of the Pike Place Market Historic District’s boundaries to incorporate the Showbox, which will be valid for 10 months.

The legislative move means additional scrutiny will apply to any proposed real estate development on the site, even though it is zoned to accommodate a 44-story building.

In response, the owners of the building housing the Showbox filed a $40 million lawsuit against the city of Seattle earlier this month.

The lawsuit noted that halting the project would mean losing $5 million in fees from the developer, which would go towards funding affordable housing.

Showbox supporters argue that the amount of money raised by the project would be paltry and could come from elsewhere.

“What we would be losing culturally is far more valuable than the amount of money that would go toward affordable housing,” Gibbard said in an interview.

City council member Lorena Gonzalez said she intends to submit a plan this month to permanently protect the building housing The Showbox.

Onni Group, the developer, did not reply to a request for comment.

Legal Protection

Authorities in Britain have acted to preserve some well-loved venues, as well as spurring the growth of new ones.

Under British law, developers must sign “Section 106 agreements” before gaining permission to proceed with projects.

Shapiro of Sound Diplomacy said that local governments have leveraged the law to push developers into incorporating live music spaces into their plans.

He pointed to Vicarage Field, a new shopping center in the London district of Barking that will host a music venue.

In Cardiff, Shapiro said, a public outcry last year saved a haven for Welsh-language music called Clwb Ifor Bach.

Developers planned plan to build flats in the live music district, but the City of Cardiff Council eventually purchased the land parcel and leased it to the venue.

“Clwb Ifor Bach is one of the best examples of a direct action that a council has taken,” Shapiro said.
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China says it has no choice but to retaliate to U.S. President Donald Trump’s 10 percent tariffs on $200 billion in Chinese goods, risking a further escalation of trade tensions between the world’s two biggest economies.

 

In a brief statement posted online Tuesday, China’s Commerce Ministry said, “To protect its legitimate rights and interests and order in international free trade, China is left with no choice but to retaliate simultaneously.”

 

The statement did not say how China might respond. China has previously said it would respond with a list of tariffs that includes products from liquified natural gas to aircraft.  On Monday, the Communist Party backed Global Times newspaper warned that if Trump went ahead with the tariffs, China would not just play defense.

 

At about the same time the Commerce Ministry statement was released, a research director for North America and the Pacific at the Commerce Ministry also delivered a commentary on China’s state-run CCTV news network.

 

The official said the latest round of tariffs have brought uncertainty to ongoing efforts for representatives from both countries to meet again and hold trade talks.

 

“Under the party’s strong central leadership, China has the resolve and confidence to press ahead and use deeper reforms and deeper opening up as well as the development of our domestic market to counter United States unilateralism,” Li Wei said.

 

Foreign Ministry spokesman Geng Shuang told a daily briefing Tuesday in Beijing that talks are the only correct way to resolve the issue and accused the United States of being insincere.  Last week, the United States extended an invitation to China’s top negotiator, Liu He, to resume talks later this month in Washington.

 

“As for what measures China may take in response, that will be announced at an appropriate time,” Geng said.

 

The $200 billion in U.S. tariffs go into effect in less than a week, on September 24, leaving the two sides little time to sit down.

 

On Monday, President Trump warned, in a statement announcing his move, if China retaliates against U.S. farmers or other industries, Washington “will immediately pursue phase three, which is tariffs on approximately $267 billion in additional imports.”

The additional $267 billion in tariffs is expected to cover all Chinese imports to the United States.

American and European businesses operating in China say that if Washington presses ahead with more and more tariffs, it is likely to only add to the challenges businesses are already facing.

 

According to surveys conducted by the American Chamber of Commerce in China and the European Chamber of Commerce, trade tensions are already hitting and hurting supply chains of foreign businesses.  Some companies have begun to move manufacturing away from China and the United States to avoid the impact of growing trade tensions, the European Chamber said.

 

European Chamber President Mats Harborn said engagement on the part of Washington and Beijing is the answer.

 

He said that what the United States is doing now is “economic madness” that risks creating a vicious cycle for business that could have an impact in China and elsewhere.  But the root of the trade dispute is that China’s reform is lagging behind its development, creating a “reform deficit.”

 

“Closing the reform gap will create better private companies in China, foreign companies,” Harborn said.  “And reducing the reform deficit should also help reduce tensions in the ongoing trade war.”

 

In its annual position paper on European business in China, the chamber lists 828 recommendations for Chinese authorities to address that deficit.

 

One of the key hurdles both private Chinese enterprises and foreign companies face is the dominant position state owned enterprises (SOEs) enjoy.  State owned enterprises account for around 30 percent of the economy and yet enjoy nearly 70 percent of all financing, the report said.

 

Unfair trade practices and the way SOEs contribute to an unbalanced playing field in China are key elements of the investigation the Trump administration carried out prior to launching its first round of tariffs.

 

But how far China is willing to go to change is uncertain.  Later this month, a meeting on SOEs will be held that many are expecting will be an indicator of the future course China’s Communist Party leaders plan to chart.

 

“We hear that there is a move to make the SOEs stronger, bigger and better,” Harborn said.  “Such ambitions are hindering the further opening and development of the vibrant private Chinese sector.”

 

If reform of SOEs is not on the agenda at the meeting, that would be seen as a clear provocation, given the current climate, he said. 

 

 

 

 
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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,  Inside Philanthropy reported in 2016. Earlier this year, the news website 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 Gatekeepers 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.”
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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.
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