Month: June 2017

President Donald Trump on Thursday will lay out his plan for reducing regulations to boost already-abundant U.S. production of oil, natural gas and coal and export it around the world, creating American jobs and helping allies.

Trump will deliver an address on his administration’s new mantra of “energy dominance” at the Energy Department, officials told reporters. They declined to give details on how he would tweak existing regulations that have not stopped a surge in exports.

“We’ve gone from the age of scarcity now to the age of abundance when it comes to American energy,” Mike Catanzaro, a White House energy policy aide, told reporters.

“We want to use those abundant resources for good here at home and for good abroad as well,” Catanzaro said.

Trump’s speech comes a week before he meets in Warsaw with leaders of a dozen central and eastern European nations who are eager to see more U.S. liquefied natural gas (LNG) in their markets as an alternative to Russian gas.

Trump is stopping at the summit on his way to the G20 in Hamburg, Germany, where he is expected to meet face-to-face for the first time in his presidency with Russian President Vladimir Putin.

Shipments of LNG will play a big part in the “energy dominance” strategy, Energy Secretary Rick Perry told reporters, but so will exports of coal and U.S. technology that helps reduce emissions from coal-fired plants, he said.

Perry said he discussed the potential for U.S. coal exports to Ukraine with President Petro Poroshenko during his visit to Washington last week.

The Trump administration believes in an “all-of-the-above” approach to energy, Perry said – borrowing the energy catch-phrase of the Obama administration.

U.S. domestic energy prices have plunged in recent years because of the natural gas boom, crowding out competing sources of power, including coal and nuclear. Dozens of nuclear power reactors are in danger of shutting down over the next several years as a result.

The Trump administration wants to make sure the United States remains “technologically and economically engaged” in the nuclear industry, Perry said. “If we do not, then China and Russia will fill that void,” he said.

But he said the administration would not be “wildly supportive” of subsidizing any sectors of the energy industry.

Perry said energy supports in the tax code would be examined as the administration and Congress look at tax reform later this year.

“I think we’ll have a good healthy conversation about the energy sector and tax incentives, subsidies – all of that needs to be on the table and we need to have a conversation about it,” Perry said.
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New York City real estate companies’ attempts to rename a Harlem neighborhood “SoHa” have enraged longtime residents of the historically black enclave, who say the move erases the community’s rich cultural history.

The neighborhood served as home and inspiration to generations of leading African-Americans, including activists W.E.B. Du Bois and Malcolm X, who dubbed it “Seventh Heaven.” Artists such as poet Langston Hughes and singers Harry Belafonte and Ella Fitzgerald also lived there.

The “SoHa” name, echoing the high-priced, largely white Manhattan neighborhood of SoHo in lower Manhattan, has begun appearing in real estate listings for apartments located between 110th Street and 125th Street, and Realtor Keller Williams boasts a “SoHa Team” of agents on its website.

Keller Williams did not respond to a request for comment.

Harlem’s U.S. Congressman Adriano Espaillat vowed to introduce a House resolution to protect Harlem from being renamed.

“#WeRHarlem! And we refuse to be called by any other name! #NY13 #HarlemStrong,” @RepEspaillat wrote on Twitter on Monday.

The tweet accompanied a photograph of the famed Apollo Theater, where Fitzgerald made her singing debut at age 17 on Amateur Night in 1934.

Espaillat said the congressional resolution he plans to introduce this week “supports imposing limitations on the ability to change the name of a neighborhood based on economic gain.”

“I along with leaders and constituents of this community stand united to vigorously oppose the renaming Harlem in yet another sanctioned gentrification,” he said in an email. “This is an incredibly insulting attempt to disown Harlem’s longtime residents, legacy, and culture.”

Jamie McShane, a spokesman for the Real Estate Board of New York, an industry association, said the group supports existing state regulations, which prohibit real estate brokers from using “a name to describe an area that would be misleading to the public.”

Harlem is not the only historically black U.S. neighborhood to have its image challenged by eager real estate agents.

Further north, parts of the South Bronx have been christened the “Piano District,” a reference to its former instrument manufacturing base.

In Washington, D.C., real estate firms have recast the Shaw neighborhood around historically black Howard University as North End of Shaw.

Both sparked outrage among longtime residents, particularly after developers who pushed the Piano District name change threw a “Bronx is Burning” themed Halloween party in 2015 that focused on the neighborhood’s 1970’s decay, complete with a bullet-riddled car sculpture.
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Making agriculture profitable and “cool” for young people in Africa is key to lifting millions out of poverty and stemming migration to Europe, said the president of the African Development Bank (AfDB).

Akinwumi Adesina was named the winner of this year’s World Food Prize on Monday for his decades-long work to boost food production in his native Nigeria, increase access to credit for small farmers across Africa and transform the continent’s agriculture.

Kenneth Quinn, president of the Des Moines, Iowa-based World Food Prize Foundation, said the $250,000 award reflected Adesina’s “breakthrough achievements” as Nigeria’s minister of agriculture and his critical role in the development of the nonprofit Alliance for a Green Revolution in Africa.

Adesina, 57, told Reuters he was humbled by the award but felt his work to ensure Africa could feed itself was “uncompleted business.”

Almost 30 percent of the 795 million people in the world who do not have enough to eat are in Africa, according to the U.N. Food and Agriculture Organization.

“When I look at Africa today, I see that many rural areas unfortunately have become zones of economic misery,” Adesina said in a phone interview ahead of the award’s announcement.

No sector has greater potential to revive those areas than agriculture, but investments are needed to make it attractive for young people, many of whom risk their lives migrating in search of better opportunities in Europe, Adesina said.

“We must make agriculture cool for young people,” he said. “The key is to make agriculture a business. Agriculture is not a way of life, is not a development activity, it’s a business.”

Africa has 65 percent of the world’s uncultivated arable land but imports food for $35 billion every year, a bill that is expected to swell to $110 billion by 2025, he said.

“It makes no sense. That is food Africa should be producing, processing, selling and exporting,” he said. “Africa in the future should not only feed itself, but it must contribute to feeding the world.”

Toward this end, agriculture must become more industrialized, with farmers gaining better access to seeds, fertilizer, credit, power and infrastructure, he said.

Farmers should be supported to transform from producers of raw materials, such as cocoa and cotton, to manufacturers of finished goods such as chocolate and garments, which have less volatile prices, Adesina said.

To accelerate growth, the AfDB aimed to invest $12 billion in the energy sector, hoping to leverage another $50 billion from the private sector, he said.

Last year, AfDB had invested $800 million to support young agro-entrepreneurs in eight countries and planned to extend the scheme to 30 nations, he added.

Adesina called on governments and institutional investors, such as pension and insurance funds, to “see the gold” in African agriculture and invest in it to unlock its potential. He said he was convinced the future billionaires of Africa would come from agriculture.

“I don’t believe that the future of African youth lies at the bottom of the Mediterranean Sea,” he said. “The future of African young people lies in a more prosperous and inclusive Africa, and there is no other sector that has greater power to create growth than the agricultural sector.”

Adesina was named winner of the World Food Prize, regarded as the equivalent of a Nobel Prize for agriculture, in a ceremony on Monday at the U.S. Department of Agriculture in Washington.
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Jury selection began Monday in the trial of a Chinese billionaire accused of bribing United Nations diplomats to gain their approval of a U.N. conference center he wanted to build.

Ng Lap Seng has pleaded not guilty. He has posted $50 million bail, but is restricted to a luxury New York City apartment that he owns, where he is under guard around the clock. He is allowed to leave his apartment only to visit his doctors or his lawyers.

Ng, who is 69, is accused of paying hundreds of thousands of dollars in bribes for the center he planned to build in Macau.

Prosecutors say some of the money reached former General Assembly president John Ashe and a former diplomat from the Dominican Republic, Francis Lorenzo.

Ashe died last year in a freak accident while lifting weights at his home.

Lorenzo pleaded guilty and agreed to cooperate with U.S. prosecutors in the case against Ng.

Ng’s lawyers contend the charges are politically motivated, aimed at trying to curb China’s influence over developing countries that might have used the Macau conference center.

If prosecutors and defense lawyers can agree on selection of a jury without delay, the judge in the case estimated the trial would last a month or perhaps longer.
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Fishing fleets dump about 10 percent of the fish they catch back into the ocean in an “enormous waste” of low-value fish despite some progress in limiting discards in recent years, scientists said on Monday.

A decade-long study, the first global review since 2005 and based on work by 300 experts, said the rate of discards was still high despite a decline from a peak in the late 1980s.

Discarded fish are usually dead or dying.

Almost 10 million tons of about 100 million tons of fish caught annually in the past decade were thrown back into the sea, according to the “Sea Around Us” review by the University of British Columbia and the University of Western Australia.

Industrial fleets often throw back fish that are damaged, diseased, too small or of an unwanted species. A trawler with a quota only to catch North Atlantic cod, for instance, may throw back hake caught in the same net.

Discards are an “enormous waste … especially at a time when wild capture fisheries are under global strain amidst growing demands for food security and human nutritional health,” they wrote in the journal Fish & Fisheries.

The report welcomed the decline in discards from a peak of about 19 million tonnes in 1989, roughly 15 percent of a total catch of 130 million tons.

The fall may be linked to restrictions in some nations on discards and improved fishing gear. Also, a rise in the price of fishmeal for aquaculture made it profitable to keep formerly low-value species, it said.

But it might just reflect a lack of fish.

“We suspect that [the decline] is because overfishing … has already depleted the species being discarded,” lead author Dirk Zeller of the University of Western Australia told Reuters.

Few fish survive getting thrown back although some species such as sharks, rays or crustaceans are more resilient.

The U.N.’s Food and Agriculture Organization last estimated, in 2005, that eight percent of fish were discarded from 1992-2001. Those numbers, using different methods, are not directly comparable with the Sea Around Us data.

The scientists said discards were now highest in the Pacific, a shift from the Atlantic.

Russian fleets, for instance, discarded large amounts of Alaska pollock in the North West Pacific because they only wanted the roe. Fleets from South Korea, Taiwan and China were also among those dumping Pacific fish.
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The promotion of Saudi Arabia’s top economic reformer to crown prince has cheered business leaders who believe it will open up new opportunities. But they worry about officials’ ability to implement reforms and about geopolitical tensions in the region.

The Saudi stock market jumped 7 percent in the two days after Mohammed bin Salman, previously deputy crown prince, was appointed last week to be first in line for the throne.

Part of the market’s rise was due to a decision by index compiler MSCI to consider upgrading Riyadh to emerging market status. But much of the euphoria was political; shares in companies closely linked to Prince Mohammed’s reforms were the top performers.

National Commercial Bank, the biggest lender, which is expected to play a big role handling financial transactions related to the reforms, surged 15 percent.

Miner Ma’aden soared 20 percent; Prince Mohammed has labelled mining a key sector in his drive to cut Saudi Arabia’s reliance on oil exports. Emaar the Economic City, builder of an industrial zone which the prince hopes

to develop as an export industry base, gained 16 percent.

Solid political move

Business leaders said the promotion of Prince Mohammed, 31, removed political uncertainty by confirming a smooth shift of power from an older generation of Saudi leaders to a young generation represented by the prince.

“The political transition was very smooth — we expect the reforms to continue,” Muhammad Alagil, chairman of Jarir Marketing, a top retailing chain, told Reuters.

He said Jarir, which has 47 stores, some 39 of which are in Saudi, would open at least six this year and a similar number next year, mostly inside Saudi Arabia.

Fresh opportunity

To some in business, Prince Mohammed represents fresh opportunity in the form of a $200 billion privatization program and state investment to help kick start new industries such as shipbuilding, auto parts making and tourism.

Some executives predicted the progress of these plans, which are still largely on the drawing board a year after Prince Mohammed announced them, would accelerate after his promotion.

“I didn’t see a risk of the reforms stalling or being reversed before, given the political backing behind them. But now the reforms can go ahead with more strength,” said Hesham Abo Jamee, chief executive at Alistithmar Capital.

He added that social initiatives in the reforms would help the economy by stimulating consumer spending.

For example, developing an entertainment sector, in a conservative society which has so far shunned many forms of public entertainment, would create jobs. The government plans an entertainment zone south of Riyadh with sports, cultural and recreational facilities.

Increasing the role of women in the workforce would boost family incomes and could accelerate creation of small businesses such as restaurants, Abo Jamee said.

Repatriation

Prince Mohammed is also architect of a tough austerity policy, including spending cuts and tax rises, that aims to abolish by 2020 a budget gap which totaled $79 billion in 2016.

The austerity has slowed private sector growth almost to zero.

But many in business see austerity as inevitable in an era of low oil prices and are pleased by the prince’s willingness to moderate it to avoid a worse slowdown. To mark his promotion, Riyadh retroactively restored civil servants’ allowances at a cost it estimated at around $1.5 billion.

Privately, many executives expect Prince Mohammed to persuade or pressure wealthy Saudis to repatriate some of the billions of dollars which they are believed to have transferred overseas for safe-keeping.

Other issues

It is not clear what tools he would use — moral suasion, legal action or financial incentives — but his promotion may have given him the political capital for such a sensitive step. Businesses remain worried by two other issues, however.

One is the competence of the bureaucracy to carry out the complex reforms. The government talks of partnerships between the public and private sectors to finance projects, for example, but has not released legal frameworks for such deals.

“Many of the reforms are in name only — nothing has happened. They’re struggling with the details,” said a foreign economist who advises the Saudi government.

Military intervention

The other big worry is rising tensions around Saudi Arabia — tensions in which Prince Mohammed has been closely involved in his role as defense minister for two years.

In addition to its military intervention in Yemen, Saudi Arabia is locked in a diplomatic confrontation with Iran, its allies are struggling in Syria’s civil war, and early this month it cut diplomatic and transport ties with Qatar.

For some in business, these tensions are at best a distraction for the government at a time when it needs to focus on the economy, and at worst risk a more serious regional crisis that could deter foreign investment and endanger the reforms.

 
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The Federal Reserve’s little-known role housing the assets of other central banks comes with a unique benefit to the United States: It serves as a source of foreign intelligence for Washington.

Senior officials from the U.S. Treasury and other government departments have turned to these otherwise confidential accounts several times a year to analyze the asset holdings of the central banks of Russia, China, Iraq, Turkey, Yemen, Libya and others, according to more than a dozen current and former senior Fed and Treasury officials.

The U.S. central bank keeps a tight lid on information contained in these accounts. But according to the officials interviewed by Reuters, U.S. authorities regularly use a “need to know” confidentiality exception in the Fed’s service contracts with foreign central banks.

The exception has allowed Treasury, State and Fed officials without regular access to glean information about the movement of funds in and out of the accounts, those people said. Such information has helped Washington monitor economic sanctions, fight terror financing and money laundering, or get a fuller picture of market hot spots around the world.

Some 250 foreign central banks and governments keep $3.3 trillion of their assets at the Federal Reserve Bank of New York, about half of the world’s official dollar reserves, using a service advertised in a 2015 slide presentation as “safe and confidential.”

The Bank for International Settlements, other major central banks and some commercial banks offer similar services, and clients usually have more than just one account. But only the Fed offers direct access to U.S. debt markets and to the world’s reserve currency, the dollar, making the U.S. central bank the top provider of this so-called custodial banking business.

In all, the people interviewed by Reuters identified seven instances in the last 15 years in which the accounts gave U.S. authorities insights into the actions of foreign counterparts or market movements, at times leading to a specific U.S. response.

In one relatively recent case, data from these foreign accounts offered U.S. authorities a sense of the mood in Moscow in March 2014, after Russia’s invasion of Crimea prompted the United States to respond with economic sanctions.

When foreign holdings at the New York Fed plunged about $115 billion, U.S. officials confirmed what others could only suspect, according to two former Fed officials: Russia’s central bank had pulled its funds.

While the Kremlin’s public response was defiant, Fed and Treasury officials concluded Moscow feared the United States would freeze Russia’s assets even though the account was not included in the narrow scope of the sanctions, according to one former official.

After about two weeks, Russia’s central bank returned most of the money to its Fed account, but the incident made officials monitor the account more closely for signs the sanctions had forced Moscow to draw down its reserves, the same source said.

It was unclear what effect the sanctions had.

The Bank of Russia said it would not comment on “details of its operations and interaction with partners.” The Russian Embassy in Washington did not respond to an emailed query.

No promise

The Fed acknowledged the practice of disclosing account intelligence, but declined to comment on individual clients.

“While our account agreement does provide for the sharing of information with the U.S. government in limited circumstances, we require a clearly demonstrated need for the information and a commitment that the information will be treated confidentially,” said a New York Fed spokeswoman. “This exception has been used on rare occasions and on a limited basis for such issues as compliance with sanctions requirements and anti-money laundering principles.”

The insights into the Fed operation come at a time when U.S. President Donald Trump threatens new economic sanctions on countries that could again be monitored through the foreign accounts. It also comes as U.S. intelligence-gathering has come under intense public scrutiny, with agencies investigating Russian meddling in last year’s election and possible collusion with Trump’s campaign. The Senate this month backed new sanctions on Russia in part to punish it for the meddling, while the Treasury added individuals and entities to those sanctioned over Moscow’s actions in Ukraine.

According to a draft account agreement the New York Fed published online last year, the Treasury or any other U.S. government agency or Fed bank must have “a need to know such information” to access it.

Seven people with direct knowledge of instances in which this exception was used told Reuters there was no working definition of the “need to know,” and that New York Fed lawyers would usually decide case by case.

The level of scrutiny by U.S. authorities and lack of clarity over what would constitute a “need to know” surprised some former foreign central bankers who spoke to Reuters.

The Bank of France, which also maintains foreign accounts, guarantees “full confidentiality” for its clients unless information is needed in a criminal investigation, said Christian Noyer, who was governor from 2003 to 2015. “It’s only in that case,” he said in an interview. “It’s not just to look at them and to know that.”

Less surprising was the fact that the United States leveraged the Fed’s position at the center of global finance, they said.

“The kinds of powerful central banks that can offer these services … will want to use that power in ways that benefit their public remit,” Patrick Honohan, governor of the Central Bank of Ireland from 2009 to 2015, told Reuters.

Edwin Truman, who headed the Fed Board of Governors’ international finance division for more than two decades before joining the Treasury in 1998, said the Fed’s clients should not expect absolute secrecy.

“There is no promise to clients that the information in their accounts will not be shared with U.S. official circles,” Truman, now a fellow at the Peterson Institute for International Economics, said in an interview.

A Treasury spokesman said the department monitors transactions and collects data from all financial firms “both routinely and in the course of investigations [and] has the ability to request information from banks beyond the ‘need to know’ provision.” He declined to comment on interactions with the New York Fed.

Treasury calling

The U.S. officials interviewed by Reuters included executives and division heads, and people directly involved in discussions in which the confidentiality exception was used to analyze accounts that otherwise only a select group of Fed officials monitors.

Most spoke on the condition of anonymity. Day to day, a team of about a dozen New York Fed analysts oversees the accounts. This low-profile unit, called Central Bank and International Account Services (CBIAS), came under the spotlight last year when it transferred $81 million from the Bangladesh central bank’s account into the hands of hackers in one of the largest cyber heists ever.

The unit manages mostly Treasury and agency debt. It also oversees more than 500,000 gold bars that have accumulated in underground vaults since the New York Fed first opened accounts for Britain and France a century ago.

The requests for information became more frequent after the passage of the 2001 U.S. Patriot Act, mostly from the Office of Foreign Assets Control, a Treasury division enforcing sanctions and targeting terrorist financing, money laundering, and weapons and drugs trafficking. The Department can also subpoena confidential information.

Among the requests since then have been inquiries about the accounts belonging to Turkey, Iraq, Russia and others, often to help determine whether official funds were being used to finance sanctioned groups or individuals, according to three of the sources. A few countries of keen interest to the U.S. government have little or no funds at the New York Fed — such as Iran, which is sanctioned, and Saudi Arabia, which is not.

An official at Turkey’s central bank said “operations are routinely carried out according to a correspondent banking agreement with the New York Fed, which is the standard operational procedure in correspondent banking.”

Iraq’s central bank stands out among those subject to U.S. scrutiny because of the extent of cooperation between Baghdad and New York. Earlier this month, based on information and instructions from the Fed’s foreign accounts team, the Central

Bank of Iraq blacklisted a money exchange firm suspected of ties with Islamic State and al-Qaida. The Al-Kawthar money exchange firm, from the town of Qaim near the Syrian border, had its assets frozen in the action.

Fed officials rely on meetings and conference calls to advise the Iraqi central bank on how to track and freeze out local firms suspected of terrorist connections or of helping Iran bypass sanctions, an Iraq central bank official told Reuters.

“We have direct contact with the foreign assets monitoring office in the Fed,” the official said. In freezing the assets of Al-Kawthar, Iraq’s central bank followed Fed “verification procedures,” added the official, who declined to be named.

The U.S. Treasury announced the sanctions against Al-Kawthar on June 15, citing $2.5 million in money transfers it allegedly made to a firm linked to Islamic State facilitators. The owner of the money exchange firm was not available to comment.

Sometimes, a peek into the Fed accounts has provided the Treasury insight into market upheaval. At the height of the global financial crisis in 2008, Treasury officials asked the New York Fed whether one of its clients was behind plummeting demand for short-term debt of mortgage giants Fannie Mae and Freddie Mac, according to a former CBIAS official.

An analysis of the accounts showed that China’s central bank had curbed purchases, and that intelligence factored into the U.S. government’s decision to seize the agencies in September 2008, the person said.

The People’s Bank of China declined to comment.

In some cases, the Fed team handling the foreign accounts would activate the “need to know” clause if it spotted something unusual, two former Fed officials said.

Since the 2010 Arab Spring uprisings, for example, the New York Fed has made several inquiries with the State Department about Yemeni and Libyan assets, according to one of these officials.

The Fed team, which ranks accounts by levels of risk, sought clarity on whether the governments or insurgents were in control of those countries’ central banks, the official said.

A State Department official said it “maintains contact with counterparts in the Federal Reserve system to share information on political and security developments” so they can “better evaluate and understand foreign governmental structures, leadership, and financial risk.”

Representatives of Libya’s and Yemen’s central banks, as well as Yemen’s embassy in Washington, did not respond to requests for comment.

 
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A study by aviation experts says the number of non-military drones will grow very quickly over the next 10 years, as investment soars and capability improves. Drones are unmanned aircraft, remotely controlled by a person on the ground, rather than a pilot on board the vehicle.

The Teal Group says around $2.8 billion will be spent on non-military drones globally this year, growing to $11.8 billion by 2026. The report says easing airspace regulations, major investment, and work by major technology companies means the civil drone market is ready “to take off.” While many drones are used by hobbyists, commercial drones are the fastest growing part of this market.

Commercial drones are used for aerial photography in real estate, university research, and for shooting Hollywood movies. Farmers use drones to get a perspective on which parts of their fields are short of water or fertilizer, and use other unmanned aircraft to spray chemicals. Construction and utility companies use unmanned aircraft for inspections, and some companies are working on solar-powered high-altitude drones that can park in the sky and serve as platforms for internet services in undeserved areas.

Drones cost less to operate than manned aircraft, and that is why some traditional aviation tasks as well as some new kinds of work are opening up to these vehicles. Drones are cheaper because they are usually smaller than traditional planes and cost far less to buy, maintain and fuel.

It takes less time and money to train people to operate drones. Flight instructors say it takes many months and tens of thousands of dollars to earn a license to operate manned aircraft for pay.

Alan Perlman, founder of Drone Pilot Ground School, said a commercial drone operator can earn a credential for a few hundred dollars in a few days. Perlman’s company trains new operators, and he told VOA that there are probably more than 40,000 licensed commercial drone pilots in the United States. Based on enrollment in his school, he thinks the number is growing rapidly.

In the United States, traditional manned aircraft are flown by more than 250,000 professional pilots, including both commercial and airline pilots, according to the Federal Aviation Administration. The government’s Bureau of Labor Statistics projects that jobs flying manned aircraft will grow about 5 percent annually over the next decade. The FAA says it does not have studies under way to examine the impact of drones on employment.

Press reports say airline traffic is growing and increasing the demand for the highly trained and experienced pilots who fly airline passenger planes. Some stories describe a global shortage of these experienced pilots as demand grows for air travel, particularly in Asia.

It may be a different story for commercial pilots who fly manned aircraft for aerial photography or to spray chemicals on farmers’ fields. Drones have already been used for some of those activities, and as these devices become more capable, they may expand their reach. Government experts at the BLS are working to update the outlook for these and other kinds of jobs, but those studies will not be published until October.
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