Malaysia To Scrap $22 Billion Worth Of China-Backed Projects

(THIS ARTICLE IS COURTESY OF NORTH KOREAN NEWS AGENCY NDTV)

 

Malaysia To Scrap $22 Billion Worth Of China-Backed Projects

Mahathir Mohamad’s government has suspended China-backed projects worth more than $22 billion including a major rail link.

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Malaysia To Scrap $22 Billion Worth Of China-Backed Projects

Mahathir is expected to meet President Xi Jinping Monday afternoon. (Reuters)

KUALA LUMPUR/BEIJING: Malaysian Prime Minister Mahathir Mohamad called on China’s top leadership Monday to help solve his country’s fiscal problems, as he tries to revise major Beijing-backed projects signed under his scandal-plagued predecessor.

The 93-year-old leader, who returned for a second stint as premier following a shock election win in May, has railed against a series of deals struck with Chinese state-owned companies by the administration of toppled leader Najib Razak.

His government has suspended China-backed projects worth more than $22 billion, including a major rail link, and Mahathir had pledged to raise the issue of what he views as unfair terms related to some of the deals on his five-day trip.

During a press conference with Premier Li Keqiang at Beijing’s Great Hall of the People, Mahathir thanked China for agreeing to increase imports of speciality agricultural products, such as durian.

But even as he welcomed the agreements, Mahathir also said he expected more from the world’s second-largest economy.

“I believe that China will look sympathetically towards the problems that we have to resolve and perhaps help us in resolving some of our internal fiscal problems,” he said.

Mahathir, who is expected to meet President Xi Jinping Monday afternoon, also warned that wealthy countries should not use their riches to take advantage of less developed nations.

“There is a new version of colonialism happening because poor countries are unable to compete with rich countries just in terms of open free trade. It must also be fair trade,” he said.

Li said that he hoped the two countries would be able to achieve “balance” in their trade relations.

 Financial woes

During his nine-year rule, Najib was accused of cutting quick deals with Beijing in return for help paying off debts linked to a massive financial scandal that ultimately helped bring down his long-ruling coalition.

Last week, Mahathir had said he would try to cancel or modify the previous administration’s agreements with China, stressing that “the most important thing is for us to save money”.

As well as the rail link, which would have run from the Thai border to Kuala Lumpur, the government has suspended a China-backed project to build pipelines after alleging that almost all the money for the work was paid out but only a fraction of the project had been completed.

Mahathir is trying to reduce Malaysia’s national debt, which has ballooned to some $250 billion.

Despite the threat to revise China-linked contracts, Mahathir is seeking to strengthen business ties with Beijing during the trip.

He met the founder of e-commerce giant Alibaba, Jack Ma, in the eastern city of Hangzhou on Saturday. Mahathir also oversaw the signing of a cooperation agreement between Chinese auto firm Geely and troubled Malaysian carmaker Proton.

Geely in May took a 49.9 percent stake in Proton.

China is the top trading partner of Malaysia, which is home to a substantial ethnic Chinese minority.

Relations were warm under the previous government, and Chinese investment in the country surged as Beijing signed deals for major infrastructure and construction projects.

But critics said there was often a lack of transparency and the terms, such as interest rates on loans, were unfavourable to Malaysia, fuelling suspicions about Najib’s real motives.

Najib and his cronies are accused of plundering billions of dollars from a sovereign wealth fund, 1MDB, in an audacious fraud.

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Since losing power, Najib has been charged over the scandal and will stand trial. He denies any wrongdoing.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Venezuelan: shopkeepers alarmed by Maduro’s latest economic moves

(THIS ARTICLE IS COURTESY OF CNBC NEWS)

 

Venezuelan shopkeepers alarmed by Maduro’s latest economic moves

  • The socialist Maduro on Friday ordered a 96 percent currency devaluation, pegged the bolivar currency to the government’s petro crypto currency and boosted taxes as part of a plan aimed at pulling the OPEC member out of its economic tailspin.
  • Venezuela’s main business chamber, Fedecamaras, said it did not have any estimates on the effects of the measure yet, although local economists predicted a heavy toll.

Venezuela's President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela October 17, 2017.

Carlos Garcia Rawlins | Reuters
Venezuela’s President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela October 17, 2017.

After Venezuelan President Nicolas Maduro’s 60-fold increase to the minimum wage, storeowners on Saturday wrestled with an anguishing decision: Close up shop or hit customers with steep price hikes at the risk of sinking the business.

In a set of sweeping announcements that shocked many Venezuelans, the socialist Maduro on Friday ordered a 96 percent currency devaluation, pegged the bolivar currency to the government’s petro cryptocurrency and boosted taxes as part of a plan aimed at pulling the OPEC member out of its economic tailspin.

The measures especially spooked shopkeepers already struggling to stay afloat due to hyperinflation, government-set prices for goods ranging from flour to diapers, and strict currency controls that crimp imports. Many stores were closed on Saturday as owners hunkered down to consider the implications.

Economists warned that some companies would go under, unable to shoulder the massive increase in monthly minimum wage from 3 million bolivars to 180 million bolivars, or roughly $0.5 to $30. That will likely increase unemployment and further fuel mass emigration that has overwhelmed neighboring South American countries.

Jhonny Herrera, 41, owner of a hardware store on the windswept Paraguana Peninsula in northern Venezuela, said he would have to fire two employees because he cannot afford to pay them, leaving him with just one worker. When Venezuela was enjoying a decade-long oil bonanza, he had 10 employees.

“I have thought about closing for good and leaving, all the more so now with these increases. I have held back due to my 14 year-old-son, who I would leave here because I need to emigrate first,” said Herrera, surrounded by stores that have been shuttered after their owners fled the country.

To soften the blow, Maduro vowed that the government would cover three months of the wage increase for small and medium-sized companies. But he did not provide details and it remains unclear how his cash-starved government would afford such a hefty payout or whether the chaotic administration has the logistical capacity to pay wages on time.

The Information Ministry did not respond to a request for an explanation of the plan. Venezuela’s opposition called for protests and a national strike on Tuesday, although recent attempts by the fractured coalition to rally Venezuelans have had little impact.

Maduro no longer can count on armed forces' support

Venezuela’s Maduro can no longer count on armed forces’ support  

Venezuela’s main business chamber, Fedecamaras, said it did not have any estimates on the effects of the measure yet, although local economists predicted a heavy toll.

“A minimum wage of 180 million bolivars in this current situation implies the closure of thousands of companies and the unemployment of many people,” said economist Luis Oliveros.

Bakery owner Luis Carballo, a 59-year-old who has worked in the bread sector for 45 years, said he would try to stay afloat but was full of dread.

“I have to increase prices … And if I don’t sell, production drops, and I have to suspend some of my employees. I feel really badly,” said Carballo, as he handed loaves to customers in the Andean city of San Cristobal.

Outside another bakery in San Cristobal, security guard Victor Martinez fretted with a friend about the measures. “This is worsening the situation. I’m scared of losing my job,” said Martinez.

Yuan’s international usage remains stable: report

(THIS ARTICLE IS COURTESY OF THE SHANGHAI CHINA NEWS AGENCY ‘SHINE’)

 

Yuan’s international usage remains stable: report

Xinhua

International usage of Chinese currency renminbi, or the yuan, remains stable despite a sharp fall in the offshore exchange rate, according to a new report by Bank of China.

In June, the yuan remained in 5th place in the currency rankings for global payments with a share of 1.81 percent, BOC said in its Offshore RMB Express report citing data from SWIFT, a global financial institution network.

Currently, Hong Kong is the key offshore market for yuan payments, accounting for 75.98 percent of renminbi trading volume.

Total turnover via the Real Time Gross Settlements clearing system reached 21.46 trillion yuan (US$3.11 trillion), up 10 percent month on month and 38.7 percent year on year, the report showed.

China’s domestic capital market’s opening continues at a steady pace, BOC said.

As of July 31, the quota in the RMB Qualified Foreign Institutional Investors program came in at 622.1 billion yuan, data from the State Administration of Foreign Exchange showed.

So far, 19 countries and regions have obtained RQFII quotas, totaling 1.94 trillion yuan, according to the report.

When The Poor Serve No Need= Extermination

When The Poor Serve No Need= Extermination 

 

Earlier I posted an article that came from the Government of China, the article was in several of their news outlets, the article stated that by the year 2027 in China’s Financial district alone that AI will cause the loss of 2.3 million jobs. Remember that their current President for life Mr. Xi Jinping is a devout follower of Chairman Mao. When Chairman Mao was in charge in China their country’s population was about one billion people and his policies were to let about half of the Nation starve to death. One of the main reason he gave was the Central Government’s inability to not only be able to control them but also their inability to feed them. The population of the United States and of Russia combined today is about 470 million people, Mao was speaking of letting 500 million of his own people starve to death. There are many reasons that China went to their ‘one child’ policies for several decades, these were two of their top reasons.

 

There are those in China and elsewhere in the world who will argue that these things could not happen today because we are now much more civilized and to this I have to say, O really. The United States is without a doubt a ‘surveillance State’ today, if you think otherwise you are being quite naive. There are good things about living in constant surveillance though, I have no doubt that the FBI, CIA, and the NSA have stopped quite a few attacks upon the American people because of their secretive work. Yet how much freedom do the people give up for the sake of being safer? The more a government knows, the more easily they can then totally control the lives of the people. When it comes to governing a Nation the main building block of their power is their ability to control the people. Lose control on the streets, they lose their grip on their power.

 

Now let’s get back to financials within a government. Unless you are oblivious to reality you should know that the tail that wags the dog, is money. Back in the mid 1970’s I worked in a Chrysler Assembly Plant in norther Illinois for just a couple of weeks (I couldn’t stand the thought of working on an assembly line putting cushions in-car seats for at least 37 years) so I quit. What I did notice was how many people worked on the different ‘lines’. As the cars went down the assembly line you had many people doing manual labor like spot welding and putting windshields into the car frames. Go there now, see how many jobs are still there and how many are being done by automation, the job loss is staggering. Even think of stores like Wal-Mart who are getting rid of their cashiers in favor of automation and self-checkouts. Now think about self driving cars, trucks and even trains. Even companies like Uber are killing the Taxi industry. What do all of these things have in common folks? Companies are trying to get rid of human employees and the reason is simple, more profits for the top end persons in these companies.

 

If you are old enough (I am 62) do you remember when we used to hear how technologies were going to allow worker to only have to work 4 days a week because with technologies we could get 5 days work done in 4 days? Some people were foolish enough to think that their employer was going to pay you for 5 days work even though you only worked 4 days. Reality was that the employees still worked 5 days a week but the companies demanded 6 or 7 days of finished product in the 5 days, for no more pay. Then of course the companies could ‘let go’ some of their workforce because they didn’t need them anymore. The employment issue has just grown from there as more and more computers and machines have taken over jobs that humans used to do.

 

I have spoken of the world Stock Markets before, how I believe that they are nothing but a Ponzi scheme and a curse to the working class, the working poor who labor in these corporations who are on these ‘Markets.’ Some will argue that throughout the years that they have been buying and selling stocks and bonds that they have been able to amass a ‘nice little retirement fund’, yet in reality all of a persons profits that they have amassed over the past thirty years can easily be wiped out in one or two hours on this same ‘Market scheme.’ Little people like us working class folks at best get the crumbs that fall off of the ‘Boss Mans’ plate. We are no more than dogs licking their floor and their shoes. What takes you or I 30 years to amass the ‘connected’ make in one 5 minute transaction.

 

When there are lets say 4 billion working age poor people (ages 10-75) but there are only 2 billion actual jobs that need a humans hands to do, what will happen to the other 2 billion people, and all of their families, all of the children? The Republicans in the U.S Congress often refer to things like Social Security, Medicare, Medicaid, Food Stamps, Aid For Dependent Children, unemployment checks, VA Disability checks and even the VA itself as “entitlements” as “Welfare”, things that must be “defunded”, “stopped.” Why is this? The answer is simple, it takes away from the money that flows to the top end of the financial class. The Republicans say that they are the “Christian right” yet their actions are as anti-Christian as you can get in American politics. Do not get me wrong, I am no fan of the Democratic Party either with their platform of murdering babies (pro-abortion). Both ‘Parties’ are pure evil, they will both do everything that they can to make sure that the American people never get to have a viable 3rd or 4th political party and the reason is simple, that would take away from their power and they aren’t about to let that happen.

 

When there is not enough jobs for the poor people to do, not even slave labor jobs, who is going to house and feed these people if they can’t get an income? Is the top 1% going to just ‘give’ these people money from their bank accounts? When there is 7 billion people on the planet but only enough food or clean drinking water for 6 billion, who is going to get that food and clean water, the poorest of the poor people? Really? If you really think so, how naive you are my friend! In this new world that is on our doorstep, indeed kicking down our doors right now, you are either the lead dog, or you are daily looking up the lead dogs ass, drinking their piss for water and licking up their shit for food. In this regard, for the poor, this new world that we are all hurtling into, thousands, then millions, then billions of people will be fighting for a position behind these lead dogs just so they can stay alive. Those who refuse will not be fed and housed, we will be exterminated!

 

China to continue opening up: Chinese Ambassador to US

(THIS ARTICLE IS COURTESY OF THE SHANGHAI CHINA NEWS SERVICE ‘SHINE’)

 

China to continue opening up: Chinese ambassador to US

Xinhua

Chinese Ambassador to the United States Cui Tiankai has said here that China will continue to open its doors to the global community.

“We cannot develop ourselves behind closed doors… We have to open our door even wider and seek cooperation with others, particularly with countries like the United States,” Cui said at the welcome banquet held by Kentucky Governor Matt Bevin on Monday.

Cui said China-US relations are not zero sum game, but rather will continue to be mutually beneficial. He said Beijing and Washington should deal with trade issues in an effective way.

Addressing Kentucky officials and businesses, Cui said he has full confidence in bilateral cooperation at the provincial, municipal and county levels, adding that the Chinese people came to know the state after the first Kentucky Fried Chicken restaurant opened in Beijing over three decades ago.

Over the past decades, the Chinese people have learned that the state has much more to offer, including Bourbon, race horses, farm products and manufactured goods, prompting the Chinese public and business leaders to develop strong relations with Kentucky, Cui said.

For his part, Bevin said his administration is working to cut red tape for businesses who wish to invest here, highlighting the elaborate transportation web his state boasts.

Bevin admitted that certain trade policies Washington has pursued created uncertainties for bilateral business ties, but pledged to work at a state level to assure foreign investors.

Greek Spat Exposes Putin’s Waning Clout in European Backyard

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT AND BLOOMBERG NEWS)

 

Greek Spat Exposes Putin’s Waning Clout in European Backyard

Monday, 13 August, 2018 – 08:30
When Greece, traditionally among Russia’s closest friends in Europe, expelled two Russian diplomats last month for trying to wreck a deal with the neighboring Republic of Macedonia, it exposed Moscow’s deepening frustration at President Vladimir Putin’s loss of influence in a key strategic region.

Russia’s being squeezed out of the Balkans by the expansion of the European Union and the North Atlantic Treaty Organization, leaving the Kremlin with diminishing clout in southeastern Europe. There’s little chance of reversing that trend, according to four people in Moscow familiar with its Balkans policy.

“NATO membership of course is bad for us,” said Leonid Reshetnikov, a former head of Russian foreign intelligence who also served as an agent in Greece and the Balkans. “What can we do? They are clearing this territory” of rival influences, he said.

Russia’s deep historical and cultural ties to the Balkans made the region a preserve of pro-Moscow sentiment that ensured warmer relations than with much of the rest of Europe. Now Balkan states are becoming bound in with the West as they gravitate toward the EU and NATO.

Even amid divisions within the EU and questions raised by President Donald Trump about the US commitment to its NATO allies, the blocs still exert a strong pull in the region with their promises of rising trade and living standards, strengthened rule of law and security guarantees. Russia’s shrinking geopolitical reach is a historic setback for Putin, even as the Kremlin leader’s global power appears to be on the march, from Syria to meddling in US politics.

“Russia is acting pretty passively,’’ said Alexander Dugin, a nationalist thinker and one-time Kremlin adviser who promotes a vision of Russian dominance across Europe and Eurasia. “It needs a plan of action.”

Greek Expulsions

Greece expelled the Russian envoys after accusing them of bribing officials in an attempt to block the accord that settles a dispute over the Republic of Macedonia’s name and allows it to start talks on NATO membership. Russia’s foreign ministry accused Athens of joining in “dirty provocations,” prompting a Greek demand that “the constant disrespect for Greece must stop.”

Russia on Monday summoned the Greek ambassador to inform him that the foreign ministry was retaliating with reciprocal diplomatic measures in response to the expulsions.

Under the deal with Athens, the Republic of Macedonia will become the Republic of North Macedonia after Greece objected that the former Yugoslav republic’s title implied a territorial claim on its province with the same name.

‘Derail It’

Greece is “fully determined” to ratify the agreement, said Costas Douzinas, a member of the ruling Syriza party and head of the parliamentary committee on defense and foreign relations. “If the Russians continue to attempt to derail it, the reaction will be strong.”

Even the pro-Russian Independent Greeks party, the junior coalition partner in Prime Minister Alexis Tsipras’s government, accuses Moscow of meddling, even as it opposes the accord. There’s “first-hand information that there was Russian interference in Greek matters,” the party’s vice president, Panos Sgouridis, said by phone. “It’s crucial that Greece’s national sovereignty is protected.”

The Republic of Macedonia plans to hold a referendum on Sept. 30. The deal is opposed by President Gjorge Ivanov, while Prime Minister Zoran Zaev has accused unnamed Greek businessmen sympathetic to Russia of inciting protests against it.

Last month, the Organized Crime and Corruption Reporting Project, a consortium of investigative reporters, cited the Republic of Macedonia’s Interior Ministry documents as saying that Greek-Russian billionaire Ivan Savvidis paid 300,000 euros to opponents of the accord. A representative for Savvidis denied the claim.
‘Enemies of Russia’

The former Yugoslav republic “will be in NATO,” said Frants Klintsevich, a member of the defense and security committee in Russia’s upper house of parliament. Moscow views the expansion of the alliance as reinforcing “the circle of enemies around Russia,” he said.

The tensions follow accusations by Montenegro that Russia was behind a failed coup attempt during 2016 parliamentary elections in a bid to derail its entry into the U.S.-led military alliance last year. Two Russian intelligence officers are among 14 people charged with the plot by Montenegrin prosecutors. Russia denies any involvement.

Konstantin Malofeev, a wealthy Russian businessman and Putin ally, who’s been sanctioned by the EU for backing insurgents in eastern Ukraine and has cultivated links to far-right parties in Europe, warned ominously of a backlash in Greece. A June opinion poll in Greece showed almost 70 percent of Greeks opposed the agreement with the Republic of Macedonia.
Serbia Shift

Russia’s sometimes heavy-handed efforts to stem the West’s growing influence have provoked alarm, particularly after the 2014 annexation of Crimea and support for rebels fighting in eastern Ukraine. Moscow’s fear is that it may be left without partners in the region.

Albania and Croatia are NATO members, while Bosnia and Herzegovina says it wants to join, though Bosnian Serbs with ties to Russia threaten to block any attempt. Even Russia’s closest regional ally, Serbia, has joined NATO’s Partnership for Peace cooperation program. Meanwhile, the EU has dangled the prospect of membership as early as 2025 for Serbia and five other Balkans states.

Ranged against Russia are the US and its European allies.

US Vice President Mike Pence spoke by phone to Tsipras and Zaev on July 5. He later tweeted that “successful implementation’’ of the agreement “will open the door to European integration’’ for the Republic of Macedonia. German Foreign Minister Heiko Maas said July 30 that it’s in the EU’s “strategic interest” to expand into the western Balkans.

“It will be a very big blow” for Russia if Serbia, which NATO forces bombed in 1999 during the Kosovo crisis, eventually joins the alliance, said Nikita Bondarev, a Balkans expert from the Russian Institute for Strategic Studies, which advises the Kremlin. “We will become almost friendless in southeastern Europe.”

(Bloomberg)

Rebuilding the employment security system for the Rust Belt that created it

(THIS ARTICLE IS COURTESY OF THE BROOKINGS INSTITUTE)

 

Rebuilding the employment security system for the Rust Belt that created it

John C. Austin and Richard Kazis

Industrial transformation, brought on by global trade, new digital technologies, and changes in the structure of work, have hit Rust Belt communities hard. Some places, such as Pittsburgh and Kalamazoo, have gone through painful transitions and come out the other side. However, the majority of the Rust Belt’s older industrial cities continue to struggle with job loss and weak economic growth.

Authors

The collapse of the region’s labor-intensive manufacturing-based economy took its toll on the employment-based safety net protections that Midwestern employers and unions forged after World War II. Today, employer-based systems of health insurance, pensions, and unemployment insurance serve fewer and fewer Midwestern workers.

For Rust Belt workers and communities today and in the future, economic security policies must become more flexible and suited to a fast-changing economy. This will require balancing support for technological innovation with concerted efforts to reduce the costs of dislocation for people and places bearing the brunt of change.

THE MIDWEST BUILT AMERICA’S EMPLOYMENT-BASED SECURITY SYSTEM

In the years following World War II, the manufacturing industries of the industrial Midwest, together with their unions, hammered out a set of economic rules and policies that became the foundation for America’s subsequent economic prosperity and security.

Wage controls imposed during World War II set the stage for this system. Unable to increase worker pay, employers began to offer pensions and health insurance to attract and retain workers. The federal government assisted by exempting health insurance benefits from taxation for companies and individuals.

The transformation accelerated in the wake of the 1950 General Motors-United Auto Workers contract. Dubbed the “Treaty of Detroit,” it traded labor peace for wage gains based on productivity and cost-of-living increases. Large employers shared prosperity with their workers by providing them with health insurance, pensions, and other benefits. State and federal unemployment insurance policies that took shape during the Great Depression worked well for an economy in which periodic layoffs were temporary and skills were fairly transferable from one labor-intensive manufacturing sector to another.

The resulting system spread across the nation, in both union and non-union settings. The percentage of Americans covered by private pensions jumped from 3.7 million in 1940 to 19 million in 1960—nearly 30 percent of the labor force. By 1975, 40 million Americans were covered by private pension plans. The pattern of employer-provided health insurance coverage forged in Midwest industries became almost universal, rising from 10 percent in 1940 to just under 30 percent in 1946, reaching 80 percent of all workers by 1964.

Public sector employment systems, too, began to copy the agreements negotiated in the region’s private industries. In 1951, Wisconsin created the nation’s first stable statewide pension system for public employees and became the first state to allow public workers to participate in Social Security. Other states soon followed suit.

THE MIDWEST’S ECONOMIC DECLINE ERODED EMPLOYMENT-BASED ECONOMIC SECURITY

By the 1970s, global competition facilitated by technology-based innovations in communications and transportation began to challenge U.S. manufacturing dominance—and the employment-based safety net that had matured with it. In successive waves of industrial restructuring, employers shuttered inefficient factories, moved production to cheaper locales, automated where possible, and pushed costs and risks onto employees and suppliers.

Across the Rust Belt, between 2000 and 2010, this trend turned into a tsunami. Across six Great Lakes states, manufacturing employment dropped by 35 percent in 10 years—a more dramatic decline than during the Great Depression—eliminating 1.6 million jobs.

By 2015, only 5 percent of Fortune 500 firms offered defined benefit pension plans, down from 50 percent in 1998.

The wider impact on employer-provided benefits and the safety net protecting workers was devastating. The number of working-age Americans without health insurance jumped from 24 million to 37 million between 2001 and 2010, before the Affordable Care Act. Employer-provided defined benefit pension plans largely disappeared in the private sector, replaced by defined contribution 401(k) plans that shifted the burden for funding retirement onto workers. By 2015, only 5 percent of Fortune 500 firms offered defined benefit pension plans, down from 50 percent in 1998. Public employee agreements were harder to dismantle, but the underfunding of these state and local plans hit $1.4 trillion in 2016. Access to unemployment insurance (UI) diminished: In 2016, only 27 percent of all unemployed workers qualified for and received UI benefits, the lowest proportion in 40 years.

THE DISRUPTION WILL CONTINUE

As employers adapted to survive, their strategies to cut costs, enhance productivity, and shift risk heightened the instability of many Americans’ employment arrangements. They also set the stage for more disruption in the years ahead—change that will continue to hit Midwestern workers and communities particularly hard.

First, improvements in process automation, robotics, and machine learning are destabilizing employment. The McKinsey Global Institute projectsthat as many as one-third of U.S. workers may need to change occupations and acquire new skills by 2030, as robotics and artificial intelligence eliminate routine and repetitive jobs and create new jobs that require more and different skills.

The Midwest is at the epicenter of these shifts. Auto manufacturing uses half of all industrial robots in this country. Robots on the shop floor are concentrated in about 10 Midwestern and Southern states, led by Michigan, Ohio, and Indiana.

Where the robots are

Second, low educational attainment among the region’s industrial workforce could exacerbate employment dislocation due to automation and digitalization. A comparatively high proportion of Rust Belt working-age adults have only a high school diploma. Such workers may face greater difficulty making the transition to new kinds of occupations that demand higher-order cognitive skills.

A third destabilizing shift is the movement away from long-term, stable, full-time jobs toward contingent, alternative work arrangements. According to one study, nearly all net employment growth between 2005 and 2015 came from contingent work. In 2015, the Government Accountability Office estimated that contingent workers, including independent contractors and freelancers, part-time workers, on-call workers, temp firm employees, and self-employed workers, accounted for 40 percent of the U.S. workforce, up from 30 percent 10 years earlier.

The growth of more flexible work arrangements is a welcome development for many, particularly those working at the higher end of the labor market who have more skills and greater control over their work. But for Midwest workers with relatively low levels of formal postsecondary education and training, part-time work, being subcontracted out and paid as a “1099 worker,” or working in the “gig economy” have increased insecurity and reduced access to benefits and protections.

TOWARD A MODERNIZED ECONOMIC SECURITY SYSTEM

As our colleagues Mark Muro and Robert Maxim have outlined, America needs a new economic security system that is de-coupled from the once-dominant model of full-time, long-term employment with a single employer. This is particularly the case for Rust Belt workers. Policymakers seeking to rebuild economic security in the Midwest and across the nation should follow these principles:

  • Design for an era of economic instability and disruption—of frequent job and career switches—by increasing benefit portability.
  • Promote innovation, technological change, and risk-taking, but also prioritize effective supports for those who bear the brunt of the resulting changes.
  • Extend benefits to serve part-time workers, contractors, and those employed in multiple jobs.
  • Provide support not only during temporary dislocations, but also help individuals adapt and advance in the new economy, with both a safety net and a trampoline that accelerates return to the workforce and expands access to higher-skill, higher-paid jobs.

Policymakers and advocates are advancing a number of proposals that could be scaled to build a modern economic security regime:

Portability: Health care and pension benefits should be portable, universal, tied to individual employees, and delinked from full-time work and single employers. Benefits should be pro-rated for part-time employees based on hours worked. To finance this, some have suggested a Social Security-like mechanism of payroll deductions. Others have proposed more modest multi-employer or sectoral plans like those in the construction industry. Senator Mark Warner (D-VA) has proposed legislation to fund a set of pilots testing different approaches with different mechanisms.

Pro-ration of benefits: Too many benefits are tied to full or almost full-time work with a single employer. Work-related benefits that can reduce family stress and keep people in the workforce—including paid sick leave, family leave, and vacation days—should be extended to part-time employees on a pro-rated basis based on hours worked for a given employer.

Unemployment insurance reform: Eligibility requirements should be made more flexible so that more individuals can access unemployment insurance, including intermittent workers, those with low and variable wages, part-time workers not working enough hours, and entrepreneurs starting their own businesses. Experiments should combine benefit receipt with training, work preparation, and support for pursuing postsecondary credentials.

More aggressive adjustment assistance: Current Trade Adjustment Assistance is too modest, short-term, and tied to specific industries affected by trade. It is not nearly as strategic and proactive as labor market adjustment policies in other advanced industrial countries. More generous relocation assistance can support worker mobility and help people go where the jobs are. Retraining opportunities and support for programs with proven labor market value can help those needing to make significant mid-career changes.

The growth of more flexible work arrangements is a welcome development for many, particularly those working at the higher end of the labor market.

Rust Belt communities, industries, and workers created and benefited greatly from the old system in its prime—and they have arguably suffered the most from its collapse. In turn, they have the most to gain from a needed remaking of employment security and safety net policies that recognize and respond to today’s economic realities. To the degree that these new policies put solid ground beneath more people in Rust Belt communities, they can help shift the political conversation in these places from one based on nostalgia, anxiety, and resentment to one lifted up by greater hope and optimism.

U.S.-Turkey Relations Will Never Be the Same

(THIS ARTICLE IS COURTESY OF BLOOMBERG NEWS)

 

U.S.-Turkey Relations Will Never Be the Same

Escalating tensions might simmer down, but we’re past the point of pretending these two governments’ values are compatible.

Hope you sold all your lira before this week.

Photographer: Chris McGrath/Getty Images

There are only two ways that the diplomatic rift between the U.S. and Turkey can end: a compromise that salvages the relationship as best possible, or a complete rupture with devastating consequences both for Turkey’s economy and America’s regional strategic interests. Either way, there is no going back to the way things were.

The arrest in Turkey of American pastor Andrew Brunson nearly two years ago has led to a diplomatic spat that threatens a full-blown economic meltdown in Turkey. Brunson, along with many foreign nationals that were detained in the wake of the failed 2016 coup attempt, has been accused of “supporting terrorism.” A deal for Brunson’s release seemed likely as Turkish officials traveled to Washington this week, but fell apart apparently over last-minute Turkish demands.

Meanwhile, tensions have ratcheted up. The Trump administration has imposed sanctions on Turkey’s interior and justice ministers. Erdogan threatened retaliation and got the support of most of the Turkish opposition. On Wednesday, Stars and Stripes reported that a group of pro-government lawyers in Turkey have filed charges against several U.S. officers at the Incirlik Air Base, accusing them too of ties to terrorist groups. They are demanding all flights leaving the base be temporarily suspended and a search warrant be executed.

The standoff is partly the accumulation of years of resentment, despite the pretenses of a faithful partnership. Turkey’s once-unassailable support among U.S. foreign policy leaders, and in Congress, has been weakened by years of authoritarian creep, a worsening human rights record and cooperation with Russia and Iran in Syria. Turkey’s plans for a $2 billion purchase of Russian-made S-400 surface-to-air missiles, which NATO has said are incompatible with allied systems and restrictions on American use of the Incirlik Air Base, haven’t gone down well.

The feeling is mutual. Erdogan has never quite recovered from his anger at the way his allies seemed to sit on the fence in the hours after an attempted coup was announced in July 2016.

The Turkish leader is also furious at American support for the Kurdish militia fighting Islamic State in northern Syria. Earlier this year, he threatened American troops with an “Ottoman slap” if the U.S. tried to block Turkey’s military incursion into northwest Syria.

One major source of contention has been the U.S. refusal to turn over the Pennsylvania-based cleric Fethullah Gulen, a one-time Erdogan ally and now an enemy, whom Erdogan alleges was behind the coup and other attempts to undermine him. Trump’s abandonment of the Iran nuclear deal is another sore point; nearly half of Turkey’s oil imports come from Iran, and the re-imposition of sanctions against Iran hurts Turkey’s economy.

The Brunson case made all of that impossible to ignore, as U.S. evangelicals took up the cause.

But “impossible to ignore” is not to say that the Trump administration has become a principled defender of human rights in Turkey. Far from it. Trump, whose name adorns luxury properties in Turkey, expressed only praise for Erdogan when they met in 2017. When Erdogan’s supporters and guards attacked protesters in Washington, the affair was handled quietly.

The administration has been silent on other arrests of U.S. and foreign nationals in Turkey. But it was ready to strike a deal for Brunson’s release. The U.S. had already asked Israel to release Ebru Ozkan, a Turkish national who was arrested there on suspicion of aiding Hamas (Israel deported herthe day after Trump called Israeli President Benjamin Netanyahu). The Trump administration was also reportedly ready to allow Hakan Atilla, a former top executive of state-owned Halkbank, convicted for violating Iran sanctions, to serve out the rest of his prison sentence in Turkey. The deal was scuppered, reportedly, when Turkey wanted relief on a multibillion-dollar fine against Halkbank and an assurance that any investigations be dropped.

The U.S. can afford to play a longer game. The June 24 election may have strengthened Erdogan’s power further, but he didn’t win by a Putin-sized margin. (Erdogan cleared just over 52 percent, and that’s if we all agree to ignore the voting irregularities that presumably bolstered his numbers.) Turkey is divided politically, and the longer Erdogan rules by coercion, the more vulnerable he may become, especially if Turkey’s economy continues to suffer. As the main barometer of confidence in the country, the lira’s decline speaks volumes.

Even so, a diplomatic solution is clearly preferable to continued escalation. Erdogan is sacrificing the Turkish economy in order to keep Brunson as a bargaining chit. A fractured relationship with the U.S. will also put a strain on Turkey’s EU relationships and will give investors, already spooked, even more pause.

American support for Turkey doesn’t crumble in a day. The relationship is baked into ties on multiple levels, both inside and outside government, and for good reason. As Asli Aydintasbas and Kemal Kirisci argue in an April 2017 Brookings paper, however bad it looks, Turkey is crucial:

Without Turkey, it is difficult to see how a rule-based U.S.-led world order could be sustained in this region, and how a successful policy on containing chaos in the Middle East could be envisioned. Similarly, there are arguably no Muslim-majority nations apart from Turkey that can serve as a bridge with the Western world or achieve the democratic standards, to which Turks have grown accustomed and, inadvertently or not, still expect.

And yet, it has definitely changed, thanks not so much to national interests, but to failings in leadership. The U.S. will have to settle for something less loyal, less an alliance and more a transactional relationship. But then that seems to define these times pretty aptly.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Therese Raphael at [email protected]

To contact the editor responsible for this story:
Philip Gray at [email protected]

China Robust July foreign trade shows little impact from row with US

(THIS ARTICLE IS COURTESY OF THE SHANGHAI NEWS AGENCY ‘SHINE’)

 

Robust July foreign trade shows little impact from row with US

China’s foreign trade accelerated in July despite escalating trade tensions with the United States, with data pointing to a more balanced trade picture.

Growth in imports and exports, denominated in US dollars, rebounded in July, with imports rocketing by 27.3 percent — nearly double the growth pace in June — and exports rising 12.2 percent from a year earlier, data released yesterday by the General Administration of Customs showed.

July’s trade data was under the spotlight as it was the first reading since fresh US tariffs on a wide range of Chinese goods went into effect. The US slapped an extra 25 percent tariff on US$34 billion worth of Chinese imports beginning July 6, to which China responded with an equivalent retaliatory measure.

China’s surplus with the US shrank slightly to US$28.09 billion in July from a record high of US$28.97 billion in June.

“China-US trade tariffs seem to have had more impact on China’s exports than its imports from the US,” said Betty Wang, senior China economist at the Australia and New Zealand Banking Group.

China’s exports to the US rose 11.2 percent year on year in July, compared with an increase of 12.5 percent in June, while China’s imports from the US grew by a faster 11.1 percent in July, up from June’s 9.6 percent.

At the same time, China’s imports from the Association of Southeast Asian Nations, the European Union and Australia jumped 30.2 percent, 20 percent and 33.7 percent, respectively, “which may suggest that China is trying to seek other import sources in the midst of the trade war,” according to the ANZ Group.

“Currency devaluation, which may have helped exports to some extent, has been largely market-driven in our view and is not a preferred policy tool by Chinese policy-makers as part of retaliatory measures,” Wang said.

Wang added that the much higher-than-expected import growth was mainly driven by surging commodity, mechanical and electrical products.

The better-than-expected growth might be partly because China tends to strengthen economic and trade ties with other major economies amid trade tensions with the US, Huatai Securities said in a research note.

Yesterday’s data also revealed a more balanced trade picture, thanks to the surge in imports.

China’s global trade surplus narrowed by 40 percent from a year earlier to US$28 billion last month. The trade gap with the 28-nation EU contracted by 8 percent to US$11.2 billion.

China has been seeking a more balanced trade pattern, with a series of pro-import policies introduced.

Last month, the State Council released guidelines on expanding imports, promising tariff cuts, clean-ups of unreasonable price markups, and better intellectual property rights protection.

The policy incentives have had positive impacts on imports, Huatai Securities noted. It added that a decision of intensifying efforts to improve infrastructure, made at a meeting of the Political Bureau of the Communist Party of China Central Committee in late July, will further drive imports of industrial raw materials such as iron ore.

Looking forward, China tends to maintain strong imports, while exports are also likely to hold steady despite uncertainties rising from trade tensions with the US, said Bai Ming with the Ministry of Commerce research department.

“The tariffs have so far had a limited impact on overall trade,” China Merchants Securities said. While short-term effects might be mild, the impact of US tariffs on China’s trade may be gradually revealed as time passes and more tariffs on Chinese goods threatened by the US take effect, it noted.

China to slap additional tariffs on US

(THIS ARTICLE IS COURTESY OF THE SHANGHAI ‘SHINE’ NEWS AGENCY)

 

China to slap additional tariffs on US

Xinhua

China has decided to impose additional tariffs on imported products from the United States worth about US$16 billion, according to an official statement released yesterday.

Approved by the State Council, its Customs Tariff Commission has decided to impose additional duties of 25 percent on the US$16 billion of US products after making proper adjustments to the second part of a list of the products subject to the tariffs. The additional duties will take effect on August 23.

Commenting on the decision, a spokesman for the Ministry of Commerce said it is totally unreasonable for the US to put domestic laws above international laws time and time again. To defend its legitimate rights and interests and the multilateral trade system, China was forced to take necessary countermeasures, said the spokesman.

The customs tariff commission said the list has been appropriately adjusted after taking into account the advice of related government departments, industry associations and enterprises to best protect the interest of domestic consumers and companies.

The commission also published a final version of the second part of the list on the website of the Ministry of Finance.

In June, the customs authority unveiled a list of products from the US worth US$50 billion that will be subject to additional tariffs in response to US announcement to impose additional duties on Chinese imports.

Additional duties on the US products in the first part of the list, worth US$34 billion, came into force on July 6.