Month: June 2017

China’s three big Internet-driven companies, Alibaba, Tencent, and Baidu, are set to influence a vast section of the country’s business because they control data concerning the consumer and social behavior of millions of people. The awesome power comes from the government’s drive to develop a “big data” industry, which is thriving in China.

Several other players, including utilities like phone companies and retail chains, are also trying to dip into the newly discovered pot of money from buyers who need information to understand buying preferences of potential customers, and design their products and strategies in line with the data flows.

“It [big data] is an improvement to do [a] better job, but unfortunately your [consumer’s] lifeline is more and more dependent on these big three guys,” said Chiang Jeongwen, a professor of marketing at the China Europe International Business School.

Recent studies have shown that nearly 90 percent of China’s 731 million online users have made at least one online purchase, often involving the use of Baidu’s search facilities, e-commerce sites and third-party transactions using mobile phone apps.

Predicting trends

“People are buying things and using their third party payment systems. [That] information [is] also being captured by Tencent and Alibaba. That is huge because now they know both offline and online information of consumers,” said Chiang.

These companies own a wide range of businesses that makes it possible for them to gather both online and offline data that is generated when a customer uses a phone app to make payments at a physical shop.

Alibaba owns Alipay while Tencent runs the highly popular WeChat service which offers mobile payment options. Baidu is China’s biggest internet search engine and holds the kind of influence that Google does in other countries.

“They have diversified the services [that] they offer. Alibaba, they are big in e-commerce. The kind of data they generate comes from anything ranging from what you buy online to your bill payments, travel bookings you do with, for example, the Alipay app,” said Shazeda Ahmed, visiting academic in the technology and economics division of Mercator Institute of Chinese Studies.

“People use the same platforms to make purchases, so there is a sense of extreme power in this situation because you can do all of these on one platform,” she explained.

These companies have a very strong predictive power that comes from a vast store of historical data and real-time data that they are collecting from users of different services. “They kind of able to anticipate the next thing a user might want before the user himself is aware of it,” she said.

Trading in data

The expansion of big data has given rise to serious concerns about the privacy of millions of people, who reveal both their transaction information and facets of social behavior through social media.

China has seen the rise of a black market for data. Data sellers offer a wide range of data on a targeted person, business or community by cracking into official databases and privately run sites.

But Chinese officials insist the government has put in place strong safeguards.

“There is a very strong firewall built before the big data center was established,” Zhang Bin, a senior official of the main big data center established by the Chinese government in Guiyang city. “We also made strict policy to control the data leaks from the government, so these are the two ways to protect information not to be leaked to the private companies for illegal use.”

The government has established a big data exchange center in Guiyang to encourage private and state-run companies to trade in data in a transparent manner, and help the industry find out the real price of the information. The center has come in for some praise by foreign companies who visited it but some questions remain unanswered.

“Having a legitimate place to trade data is an idea, but how does an exchange ensure that the data controllers has to requisite rights to sell data and it’s not breach of privacy?” Gagan Sabharwal, director of the National Association of Software and Service Companies in India, said after a recent visit.
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Panama’s business community on Tuesday cheered the Central American country’s decision to establish full diplomatic ties with China and ditch Taiwan, hoping to deepen links with a key customer of the nation’s shipping canal.

Although there was regret at the cost to Taiwan, an ally of various Central American nations, there was broad support for President Juan Carlos Varela’s decision to throw his lot in with China, whose growing global ambitions contrast with U.S. President Donald Trump’s isolationist rhetoric.

“I’m sure it wasn’t an easy decision, given the long-term links we’ve had with Taiwan, but nonetheless, [China] is a global superpower, the world’s No. 2 economy, the second biggest user of the canal – and so we think this is a positive development that will result in more business and investment in Panama,” said Inocencio Galindo, president of Panama’s Trade, Industry and Agriculture chamber.

The diplomatic U-turn comes as China attempts to position itself as a defender of free trade in the face of the “America First” policy of Trump, who was elected in November 2016.

Chinese officials also celebrated the news.

Wang Weihua, the permanent representative in the Office of China-Panama Trade Development and Beijing’s top representative in the country, said various attempts had been made over the years without success to establish formal ties.

Late last year, more advanced talks began with Varela’s team that concluded only this week, said Wang, who added he was involved in the discussions.

China is interested in Panama for its strategic location, and as a trade and logistics hub, he added.

“China has made a big bet on Latin America, where it has strategic investments, and Panama, which didn’t have diplomatic relations, was losing out on those advantages,” he said in an interview. “Now Panama will be able to enjoy what our country can offer it in various sectors.”

Almost a fifth of the cargo crossing the isthmus last year went to or from China, which has been taking an increasing interest in the Panama Canal.

In March, the canal’s administrator, Jorge Quijano, said Chinese state firms were considering developing land around the waterway, which was recently expanded.

A spokesman for the canal said Quijano would address the implications of the diplomatic change for commerce on Thursday.

Bright Future

Taiwanese economic aid has helped support Central America, a region in the United States’ backyard that relies heavily on agriculture and struggles with law and order.

Its remaining allies were guarded about what the future held for their ties with Taiwan, which China considers a renegade province.

Panama’s foreign minister, Isabel de Saint Malo, said Varela had expressed an interest a decade ago in establishing ties with China. She hoped the move would lead to trade, investment and tourism opportunities, especially for “exporting more goods from Panama to China.”

According to Panamanian statistics, total trade between Panama and China was worth $1.1 billion in 2016 – roughly 12 times the value of the nation’s commerce with Taiwan. Chinese exports accounted for the vast majority of it.

Alvin Weeden, a former comptroller of Panama, said the decision to break ties with Taipei in favor of Beijing would boost business and should have been taken years ago, given Panama’s reliance on global trade and Chinese shipping.

“Every day, Taiwan is more isolated,” he said, adding he did not expect the move to hurt Panama’s ties with the United States, the top canal customer. “This is a reality that’s happening, a geopolitical reality.”

Octavio Vallarino, a partner of Desarrollos Bahia, a local real estate firm, said he hoped direct flights would soon be established between the two countries, and that the commercial real estate market would be bolstered by arriving Chinese firms.

Sara Pardo, president of Panama’s hotel association, said the accord could help make travel between the two countries easier.

“This is definitely going to strengthen the economy,” she said.
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Mexico’s ancient civilizations cultivated crops such as maize, tomatoes and chilies for thousands of years before the Spanish conquerors arrived — and now those native plants could hold the key to sustainable food production as climate change bites, said a leading ecologist.

José Sarukhán Kermez, who helped set up Mexico’s pioneering National Commission for the Knowledge and Use of Biodiversity (CONABIO), said that analyzing the genetic variability of traditional crops, and supporting the family farmers who grow most of the world’s food offered an alternative to industrial agriculture.

“We don’t need to manipulate hugely the genetic characteristics of these [crops] … because that biodiversity is there — you have to just select and use it with the knowledge of the people who have been doing that for thousands of years,” said Sarukhán, CONABIO’s national coordinator, in a telephone interview.

The emeritus professor and former rector of the National University of Mexico (UNAM) recently won the Tyler Prize for Environmental Achievement, often referred to as a “Nobel for the Environment.”

Making use of the knowledge held by indigenous groups is “absolutely essential,” Sarukhán told the Thomson Reuters Foundation.

That requires working with a wide range of people, from local cooks to small-scale farmers, especially in states like Oaxaca and Chiapas in the south of Mexico where indigenous farmers have a strong traditional culture, he said.

“They haven’t gone to university, and they don’t have a degree — but they damn well know how to do these things,” he said.

For example, they discover and incorporate new knowledge as they exchange seeds with peers from different areas.

Key is funding

CONABIO is hoping to win some $5 million in funding from the Global Environment Facility for a five-year project worth more than $30 million to speed up research into indigenous crops.

The aim is to enrich the commission’s vast online database of biodiversity, with a view to influencing national agricultural policy, said Sarukhán.

CONABIO’s information on the genetic adaptability of native plants will enable scientists to develop new lines that can tolerate wetter or more arid conditions as the climate changes, he said.

Highlighting the potential of climate-adapted native crops, Sarukhán said around 60 types of maize are grown across Mexico, from the coast to 3,000 meters (9,843 feet) above sea-level, while only a handful of species are sold commercially.

Forest protection

With Mexico’s hugely varied ecosystems and biodiversity under threat, the ecologist urged a greater focus on schemes to boost local incomes rather than giving grants to encourage people to maintain vast swaths of the country’s forest.

Projects like growing organic coffee in Oaxaca’s forests or ecotourism in Chiapas are helping provide communities with a decent income and an incentive to protect the environment, he said.

Rural and indigenous communities own 60 to 70 percent of all Mexico’s forests and natural ecosystems, he noted.

“That is the patrimony they have — they don’t have anything else to live on,” Sarukhán explained. “There are ways in which you can combine the sustainable management of the forest with more attractive incomes for the owners of the forest.”
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With a record-breaking 26.5 million people going hungry in the Horn of Africa, development banks are increasing their humanitarian funding to fill a gap left by traditional donors, a high-level mission said on Tuesday.

Food rations for 7.8 million Ethiopians are due to run out in July due to funding shortages, while neighboring Somalia is on the verge of its second famine in six years.

In an unprecedented move, the World Bank is giving $50 million to the International Committee of the Red Cross (ICRC) and the U.N. Food and Agriculture Organization to distribute emergency food, water and cash in Somalia.

“We are demonstrating not just that we appreciate the kind of pressure that Somalia is facing but the importance of the humanitarian and development actors working together,” said Mahmoud Mohieldin, a senior World Bank official.

Consecutive failed rains have led to widespread crop failures, hurting farmers and livestock herders across the region, many of whom are hungry and on the move in search of grazing, water and work.

The African Development Bank (ADB) has also announced $1.1 billion to combat drought in six countries, mostly in the Horn of Africa.

Officials from the U.N., World Bank, ADB and African Union held a news conference in Nairobi after meeting displaced people in Ethiopia’s Somali region and Somalia’s Gedo region.

The greatest needs are in Ethiopia, where numbers are predicted to rise due to poor spring rains, and South Sudan, where 5.5 million people are short of food, with some areas already in famine, the U.N. says.

“We have both the biggest food insecurity crisis and the biggest displacement crisis this region has ever faced,” said Dirk-Jan Omtzigt, an analyst with the U.N. Office for the Coordination of Humanitarian Affairs in Nairobi.

The number of refugees and asylum seekers in East Africa has almost tripled to 4.3 million since 2011, he said, driven by conflict, climate change and economic shocks like falling livestock prices during drought.

In a “Grand Bargain,” struck at last year’s World Humanitarian Summit, donors promised to make their funding more flexible to respond to growing humanitarian crises globally.

The World Bank has started funding humanitarians to deliver aid in countries like Somalia and Yemen, where a rapid response is needed but conflict has weakened governments’ ability to reach needy populations, Mohieldin said.
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Sheltering under planks on his boat moored at a waterside slum in Lagos, fisherman Thomson Pascal is trying to protect his six children from the rain flooding into what is now their new home.

He is one of 30,000 residents who have been living in boats, shacks or in the open since bulldozers escorted by policemen destroyed their slum dwellings as competition for building land heats up in Nigeria’s booming commercial capital.

The site of their former settlement is now guarded by police and young men. A developer has unveiled plans to build a luxury residential and commercial complex there.

As with most things in Lagos, home to 23 million, the housing problem is magnified by the sheer size and energy of Nigeria’s megacity. Space is scarce as a result of new building projects, a high birth rate and the arrival of thousands of people every day from all over the country looking for work.

The Lagos State government said it had evicted the fishing community from the Lekki peninsula because their slum was a hideout for kidnappers and posed a risk to public health.

Authorities ignored a court injunction banning any demolition.

Residents and rights groups say this was an excuse to help a local businessman get rid of a settlement that had existed for decades so he could build more skyscrapers, hotels and malls.

“We don’t have anywhere else to go to. I sleep in this boat with my family,” said Pascal, cradling one of his young children in a makeshift cabin built from wooden planks saved from his former home.

“The government sent police to chase us out of our land with guns,” he said, an account confirmed by other residents and rights groups such as Lagos-based JEI and Amnesty International.

At least two people were killed, residents say.

They ended up in another slum, mooring their boats or moving into already crowded shacks. Locals already struggling to survive refuse to allow the newcomers to catch fish.

“We are too many now, for instance 12 to 15 people sleeping in a small flat,” said Agbojete Johnson, head of Pascal’s new community. “If government is not ready to relocate them … we shall have no other choice than to chase them away.”

Living in a leaky three-room wooden house, Johnson said he struggled to feed his 20 children. “This man has even 32 kids,” he said, pointing to another community leader sitting next to him.

The Lagos state commissioner for information, Steve Ayorinde, did not to respond to phone calls.

Demolition

“The demolition of #OtodoGbame was carried out as a security measure in the overall interest of all Lagosians,” a Lagos State body tweeted in April.

Officials also had warned of an “environmental disaster” after a fire destroyed much of the Otodo Gbame settlement due to a conflict between residents in November.

But residents said youths from another community claiming the land had set their wooden houses on fire while police had prevented them from extinguishing the blaze and later sent in a bulldozer to flatten the wreckage.

That was a month after the Lagos government had set a one-week deadline for the slum dwellers to move out.

A Lagos construction firm has announced plans to build an “eco-friendly” business city for 44 billion naira ($145 million) in the area. It denied, via local media, any involvement in the demolition but confirmed it had approval for the project.

The firm could not be reached for comment.

Police denied any involvement but residents and rights groups say they have seen policemen, including senior officers, during the demolitions.

Population

Nigeria’s population is set to nearly double to 400 million by 2050, making it the third most populous country after China and India, according to U.N. estimates.

Massive building projects, fueled by oil money, are in the works in Lagos. Aliko Dangote, Africa’s richest man, is building an oil refinery and petrochemicals plant, while more luxury flats are planned in Lekki, one of the city’s most desirable areas.

Such projects attract thousands of job seekers every day from across the country. Most Nigerians live in poverty as the oil wealth benefits only a small elite.

Officials say the influx has grown in the past two years due to the failure of several cash-strapped federal states to pay civil servants’ salaries and the Boko Haram Islamist insurgency in the north.

That makes it hard to plan roads, schools or transport in Lagos. By the time a project is finished it must cater to a much larger number of residents than expected.

Liborous Oshoma, a lawyer, said the Lagos government made the problem worse by removing slums to build luxury towers that are too expensive even for people on regular incomes.

“If you see the way Lagos State Government is going about grabbing, you know, waterfronts for the rich, it’s almost as if the Lagos State Government is trying to push out … the poor,” he said. “Many new buildings … are empty.”

The slum clearances have not only uprooted the fishermen.

“I haven’t been back to my school since April as it’s far away and I cannot afford the transport fee of 1,200 naira [$4],” said Edukpo Tina, a 21-year-old university student who has been living in a shack since being evicted from Otodo Gbame. “My daddy is a fishermen while my mum sells fish and none of them is doing their job anymore,” she said.
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The World Bank on Tuesday approved financing worth more than $500 million for Afghanistan to support a string of projects to boost the economy, help improve service delivery in five cities and support Afghan refugees sent back from Pakistan.

The bank said the six grants, including donor money, worth some $520 million would help the Afghan government “at a time of uncertainty when risks to the economy are significant.”

The international troop withdrawal, which began in 2011, and political uncertainties have impacted Afghanistan’s economy, while a worsening security situation has added to budget pressures, the World Bank said.

“The package will help Afghanistan with refugees, expand private-sector opportunities for the poor, boost the development of five cities, expand electrification, improve food security and build rural roads,” the World Bank said in a statement.

In May, a World Bank report said economic growth in the country was likely to pick up this year but not enough to provide jobs needed by its growing population.

The largest chunk of the package, some $205.4 million, will go toward supporting communities affected by refugees returning from Pakistan, the World Bank said. Some 800,000 Afghans have been sent back from Pakistan and Iran, many of them left to rely on subsistence income in rural areas or low-paid work in towns.

In addition, $100 million will support reforms and business development for the poor; $20 million will go to improving services in five provincial capital cities; $29.4 million will help establish wheat reserves and improve grain storage; and $60 million will boost electricity in the western Herat province.
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The World Bank on Tuesday approved a $500 million loan to support Tunisia’s budget, a government official for the North African country said on Tuesday.

The funding followed the release by the International Monetary Fund of a delayed $320-million tranche of Tunisia’s IMF loan, after the government agreed to speed up economic reforms.

Praised as a model of democratic transition following its 2011 uprising to oust autocrat leader Zine El-Abidine Ben Ali, Tunisia has so far mostly failed to deliver on planned economic reforms to help create jobs and cut public deficits.

In a statement, the World Bank said the funding would support economic reforms to improve the business environment and boost investor confidence, as well as help expand access to finance.

“Along with supporting the implementation of the new competition and investment laws, this development policy loan will help the government’s efforts to improve the efficiency of public investments and promote greater participation of the private sector through public-private partnerships,” said Abdoulaye Sy, the bank’s senior economist for Tunisia.
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The United States is weighing imposing sanctions on countries that do business with North Korea and looking for ways to revive strained relations with Russia, U.S. Secretary of State Rex Tillerson said on Tuesday.

At a committee hearing, he also defended President Donald Trump’s plans for steep reductions in U.S. spending on diplomacy and foreign aid. Senators from both major parties charged that such cuts would ultimately hurt America.

At the start Tillerson told lawmakers that North Korea had released Otto Warmbier, a U.S. university student held captive for 17 months, and the United States was seeking the release of three other detained Americans.

Washington has sought to increase economic and political pressure on Pyongyang because of its nuclear and ballistic missile programs. The North has conducted five nuclear tests and is believed to be making progress toward an intercontinental ballistic missile that could hit the United States.

Tillerson said Washington is discussing North Korea with all of its allies, and seeing some response from China, its biggest trading partner. He said North Korea would top the agenda at next week’s high-level talks between U.S. and Chinese officials.

Tillerson said the United States would have to work with other countries to deny North Korea access to basics such as oil and will have to consider whether to impose sanctions on those doing business with North Korea.

“We are in a stage where we are moving into this next effort of, ‘Are we going to have to, in effect, start taking secondary sanctions because countries we have provided information to have not, or are unwilling, or don’t have the ability to do that?'” Tillerson told the Senate Foreign Relations Committee.

Because the United States has no trade with the North, its strongest way to impose economic pressure is through “secondary sanctions” that threaten companies from third countries with losing access to the U.S. market if they deal with Pyongyang.

Ties With Russia at a Low

Asked whether the United States wanted to see an Iran-style global embargo to deny exports of petroleum and other products to North Korea, Tillerson said that this would only work if Russia and China, the North’s main suppliers, cooperated.

Tillerson repeated his view that U.S. relations with Russia were at an all time-low and still deteriorating. Ties have been strained by differences over Syria, Ukraine and allegations, denied by Moscow, of Russian efforts to influence the 2016 U.S. presidential election.

He said the administration was trying to find a way to re-establish a working relationship, notably on Syria.

It took years of diplomacy with Russia and China to achieve consensus among major powers to impose the sanctions on Iran and a similar result with the North seems unlikely given Beijing’s reluctance to destabilize its neighbors.

Asked if China had lived up to its pledges to crack down on the North, Tillerson said its actions had been “uneven,” but added: “They have taken steps, visible steps that we can confirm. We are in discussions with them about entities inside of China.”

The purpose of Tillerson’s appearance, his first of four congressional hearings this week, was to discuss the budget. In all, the Trump proposal cuts about 32 percent from U.S. diplomacy and aid budgets, or nearly $19 billion.

Committee members, including some of Trump’s fellow Republicans, spoke sharply against the plan. Republicans control both houses of Congress, which sets the federal government budget.

Separately, 16 retired senior generals and other ex-military officers said they would submit joint testimony to the Senate on Wednesday about the importance of foreign aid to national security.
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