Iraq: Don’t ‘Politicize’ Electricity, Iraq Minister Urges as Summer Nears

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

 

Don’t ‘Politicize’ Electricity, Iraq Minister Urges as Summer Nears

Wednesday, 15 May, 2019 – 10:30
Iraq’s Minister of Electricity Luay al-Khatteeb. (Getty Images)
Asharq Al-Awsat
With temperatures rising on both the weather and security fronts across the region, Iraq’s freshman electricity minister is warning that politicizing his country’s power sector could have ripple effects around the world.

“Electricity is a national security issue,” Luay al-Khateeb told AFP in a wide-ranging interview at the ministry’s headquarters in Baghdad.

“In the end, any political, economic or security crisis in Iraq will affect the whole region — and the global economy will be open to threat.”

“We’re urging for this file not to be politicized.”

Khateeb, a 51-year-old energy expert, was appointed minister in October with a mandate to revamp Iraq’s grid, which was already ailing before it was further crippled by the ISIS group.

But he faces a pair of formidable political challenges to a typically dry, technical portfolio: the threat of renewed protests and escalating US pressure on energy-supplier Iran.

Demonstrations erupted in 2018 across Iraq against poor services, including the measly few hours of state-provided electricity per day.

This summer will be a de facto referendum on the government´s progress.

Khateeb, optimistic, said his ministry had revived out-of-service stations, fixed transmission lines, and brought temporary generators to battered areas including Mosul that ISIS held in the north.

“On October 25, the week I took office, electricity generation sat at between 9.5 to 10 GW. It is now at 15 GW,” Khateeb said.

Most Iraqi provinces, he added, “will receive no less than 20 hours of electricity per day. This, to be honest, is a level of production the country hasn’t seen in years.”

In the medium term, the ministry is developing solar power, gas-capturing capabilities, and energy deals with neighbors.

It signed contracts worth 700 million euro ($785 million) with Germany’s Siemens last month, amid expectations of similar deals with American rival General Electric.

Around a third of Iraq’s electricity relies on Iran, through 28 million cubic meters (990 cubic feet) of gas piped in to feed stations or the direct import of up to 1,300 megawatts of Iranian-produced electricity.

When Washington reimposed sanctions on Iran last year, it granted Iraq temporary exemptions until late June.

Khateeb declined to say what would happen if the waiver was not again extended.

“I’m not in the business of making predictions, but what I ask for from world powers is a little reasonableness so we can live in peace on this planet,” he told AFP.

Tensions have ramped up between Washington and Tehran, with Baghdad often caught in the middle.

Iraqi government sources say the US is pressuring Baghdad to partner with American companies including General Electric, ExxonMobil and Honeywell as it weans off Iranian energy.

Khateeb acknowledged foreign embassies were pushing for their interests in Iraq’s power sector, but said Baghdad would try to steer clear of the politics.

“The truth is we don’t want to be a scapegoat in conflicts that will negatively affect regional security, and in turn the global economy,” he said.

Besides the ticking clocks of the Iraqi street and geopolitical tensions, Khateeb admitted pressure from within the government itself.

He said he had “inherited a bureaucracy” and was often asked for favors or employment opportunities.

Asked whether he, like Prime Minister Adel Abdul Mahdi, kept his resignation letter close at hand, Khateeb sounded determined.

“One needs to have a thick skin,” he said.

“Either I focus on the politicians, or I focus on the work.”

California Now Has a Bigger Economy Than the United Kingdom

(THIS ARTICLE IS COURTESY OF TIME NEWS)

 

By JONATHAN J. COOPER / AP

May 5, 2018

(SACRAMENTO) — California’s economy has surpassed that of the United Kingdom to become the world’s fifth largest, according to new federal data made public Friday.

California’s gross domestic product rose by $127 billion from 2016 to 2017, surpassing $2.7 trillion, the data said. Meanwhile, the UK’s economic output slightly shrunk over that time when measured in U.S. dollars, due in part to exchange rate fluctuations.

The data demonstrate the sheer immensity of California’s economy, home to nearly 40 million people, a thriving technology sector in Silicon Valley, the world’s entertainment capital in Hollywood and the nation’s salad bowl in the Central Valley agricultural heartland. It also reflects a substantial turnaround since the Great Recession.

“We have the entrepreneurial spirit in the state, and that attracts a lot of talent and money,” said Sung Won Sohn, an economics professor at California State University Channel Islands. “And that’s why, despite high taxes and cumbersome government regulations, more people are coming into the state to join the parade.”

All economic sectors except agriculture contributed to California’s higher GDP, said Irena Asmundson, chief economist at the California Department of Finance. Financial services and real estate led the pack at $26 billion in growth, followed by the information sector, which includes many technology companies, at $20 billion. Manufacturing was up $10 billion.

California last had the world’s fifth largest economy in 2002 but fell as low as 10th in 2012 following the Great Recession. Since then, the largest U.S. state has added 2 million jobs and grown its GDP by $700 billion.

California’s economic output is now surpassed only by the total GDP of the United States, China, Japan and Germany. The state has 12 percent of the U.S. population but contributed 16 percent of the country’s job growth between 2012 and 2017. Its share of the national economy also grew from 12.8 percent to 14.2 percent over that five-year period, according to state economists.

California’s strong economic performance relative to other industrialized economies is driven by worker productivity, said Lee Ohanian, an economics professor at University of California, Los Angeles and director of UCLA’s Ettinger Family Program in Macroeconomic Research. The United Kingdom has 25 million more people than California but now has a smaller GDP, he said.

California’s economic juggernaut is concentrated in coastal metropolises around San Francisco, San Jose, Los Angeles and San Diego.

“The non-coastal areas of CA have not generated nearly as much economic growth as the coastal areas,” Ohanian said in an email.

The state calculates California’s economic ranking as if it were a country by comparing state-level GDP from the Bureau of Economic Analysis at the U.S. Department of Commerce with global data from the International Monetary Fund.

 

China: President Jinping Says Stability Is Needed To Help Global Markets As China Beats Their War Drums

 

 

(THIS ARTICLE IS COURTESY OF THE SHANGHAI DAILY NEWS)

Stability needed next year for stronger global economy

FOR China and the world to witness stronger economic growth next year, one thing is needed: stability.

For an international market trapped in fluctuations during a year of surprising events, a new direction in 2017 is a must, something discussed at a recently ended annual economic policy meeting in Beijing.

“Seeking progress while maintaining stability” was the main theme of this year’s Central Economic Work Conference, according to a statement released by the conference on Friday. Economic priorities for 2017 were also be hammered out.

With a gross domestic product (GDP) accounting for over 15 percent of the global total, China’s growth at 6.7 percent in the third quarter, or between 6.5 percent and 7 percent annually, represents a natural and significant contribution to global economic stability.

That is true more than ever since the International Monetary Fund in October revised down global growth to 3.1 percent for 2016 and 3.4 percent for 2017.

Moreover, the spillover of China’s new economic policies will be strongly felt in the ongoing joint construction of the China-proposed Belt and Road Initiative, which will see development of countries along its route.

STABILITY WITH CONTINUED SUPPLY-SIDE STRUCTURAL REFORM

In combination with the growth trend in the second half of 2016, the important messages Chinese policymakers convey at the key annual economic conference will highlight a clear reform course for the world’s second largest economy.

Stability is a prerequisite for reforms, commented Margit Molnar, head of the China Desk of the Economics Department of the Organization for Economic Cooperation and Development.

Having dealt with such flashpoints like the asset bubble and local government debt, China will help prevent systematic risks, creating conditions for continuing the supply-side structural reform, he told Xinhua.

The economic work conference has maintained supply-side structural reform as necessary for stable growth, with a continued focus on upgrading the country’s economic structure.

Reforms which focus on expanding effective supply in a dynamic supply-demand equilibrium, will promote stability, said Zhao Yao, professor with the business school of Rutgers University in the United States.

LONG-TERM MOVES TO COOL DOWN REAL ESTATE

Homes are for living in rather than speculation, the conference stressed, proposing to use financial, land, taxation, investment and other instruments to establish a fundamental and long-term system to curb real estate bubbles and market volatilities.

Guo Shengxiang, dean of the Australian think tank Academy of APEC Creative Finance, described the idea as “forward-looking”.

“It will be a good news, to stabilize the market, improve people’s well-being and facilitate the development of the real economy,” he said.

The Hong Kong and Shanghai Banking Corp. (HKSB) believes measures to cool down real estate will not thwart China’s economic recovery.

Without a complete tightening of monetary policy, the impact of government regulations could be neutralized by infrastructure investment with financial support, it said.

PRUDENT AND NEUTRAL MONETARY POLICY AGAINST RISKS

The conference defines China’s monetary policies for 2017 as “prudent and neutral”, promising better adjustments to ensure stable liquidity.

Monetary policymaking should adapt to changes in the use of money supply tools, and further efforts are needed for smoother policy transmission, it said.

China will keep the yuan basically stable, while improving the flexibility of exchange rates.

“The stance shows the government is trying to find a subtle balance between stabilizing growth and controlling asset bubbles,” noted Hong Hao, chief China strategist at BOCOM International.

Earlier, a Standard Chartered Bank report predicted financial and monetary policy instruments available to the Chinese government would suffice to support China’s growth in the coming years.