Day: July 12, 2017

The speaker of Brazil’s lower house vowed Wednesday to fight any changes President Michel Temer makes to a labor reform bill passed by the Senate, highlighting new tension between longtime political allies.

The speaker, Rodrigo Maia, would replace Temer if Congress allows the Supreme Court to move ahead with a corruption charge against the president, a vote that Maia has said he wants to have this week.

The bill, a business-friendly measure modernizing labor laws dating from the 1940s, passed by a wide margin in the Senate on Tuesday following approval in the lower house and will be sent to Temer to be signed into law.

Given that any changes in the Senate would have sent the bill back to the lower house for fresh debate, Temer assured senators Tuesday that he would use a decree to tweak the legislation as they suggested after he signed it into law.

Maia rejected any such arrangement.

“The lower house will not accept any change to the law. Any [presidential decree] will not be recognized by the House,” the speaker said in a Twitter post.

Graft scheme

Prosecutors charged Temer last month in a graft scheme involving JBS SA, the world’s biggest meatpacker. Executives said the president took bribes from the company in exchange for resolving tax matters and facilitating loans from state-run banks.

Temer has repeatedly denied any wrongdoing.

The presidential press office said in a statement that Maia has remained loyal to Temer since becoming speaker last year.

“The presidential palace rebuffs the attempts to create a false crisis between the executive and legislative power without connection to facts and reality,” the statement said.

Under Brazilian law, two-thirds of the lower house of Congress must vote to allow a criminal charge against a sitting president to move to the Supreme Court. The vote could happen Friday or possibly be delayed until early August, after a congressional recess.
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Iraq says it will offer new oil and gas exploration rights as it looks to boost energy revenues to fund its war against the Islamic State group and shore up its finances amid low oil prices.

Oil Minister Jabar Ali al-Luaibi said late Tuesday that his ministry plans to put nine border exploration blocks up for bidding by international energy companies. Five are shared with Iran, three with Kuwait and one is in the Persian Gulf.

He did not provide a timetable.

Iraq has the world’s fourth largest oil reserves. This year, it added 10 billion barrels, bringing its total reserves up to 153.1 billion. Low oil prices have taken a heavy toll, as some 95 percent of the country’s revenues come from the energy sector.

 
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When Janet Yellen delivers her testimony on the Federal Reserve’s semiannual report to Congress on Wednesday, investors may listen as much for clues to her own future – and the Fed’s – as they will to what she says about interest rate policy.

The Fed chair is likely to repeat a message she has been sending about rates: That further gradual increases will follow the three rate hikes the Fed has made since December. She is expected to say that even though inflation has slowed further below the Fed’s target level, the job market appears healthy enough to justify slightly higher borrowing costs.

But lawmakers may prod Yellen about her own plans and about the potential reshaping of the Fed itself resulting from a forthcoming influx of new board members selected by President Donald Trump. During last year’s presidential campaign, Trump was critical of the central bank for its low-rate policies, which he said were helping Democrats, and for its efforts to enact tougher regulations on banks in response to the 2008 financial crisis.

On Monday, the administration announced that it had chosen Randal Quarles, a Treasury Department official under two Republican presidents, to serve as vice chairman for supervision, the Fed’s top bank regulatory post.

Including the post Quarles would fill, the Fed has three vacancies on the seven-member board. Trump has yet to announce his other choices, though at least one person –  Marvin Goodfriend, an economist, a former staffer at the Federal Reserve Bank of Richmond and now a professor at Carnegie Mellon University – is considered a leading candidate for one of the spots.  All of Trump’s nominations will require Senate approval.

Yellen so far has deflected questions about whether she would accept a second four-term term as chairman if Trump asked her to remain after her term ends in February. But lawmakers may try to glean some insight into her own wishes and about how the Fed could potentially change under the influence of Trump’s nominees.

On Wednesday, Yellen will address the House Financial Services Committee and on Thursday the Senate Banking Committee. She will be testifying on the Fed’s Monetary Policy Report, with one wrinkle this time: For the first time, the Fed released the report five days before Yellen’s testimony. In the past, the two had occurred the same day.

The central bank explained the change by saying Fed officials wanted to give lawmakers more time to review the semiannual monetary report before Yellen addressed questions about it.

The report said the Fed “expects that the ongoing strength of the economy will warrant gradual increases in the federal funds rate,” referring to its benchmark short-term rate.

The Fed had slashed that rate to a record low near zero in December 2008 to combat the worst economic downturn since the 1930s – and kept it there for seven years until nudging it up modestly in December 2015. It then left the rate unchanged for another year until raising it again in December of last year, followed by increases in March and June this year. Even so, the rate remains in a still-low range between 1 percent and 1.25 percent.

The Fed’s report noted that officials had affirmed at their June meeting that they foresee a total of three rate increases in 2017, if the economy performs as they expect. If so, that would mean one additional increase before year’s end. The Fed also expects to raise rates three times in 2018 if economic conditions evolve as they expect.

This week, Yellen will surely face questions about sticking to that pace, given that while job growth has been solid, inflation has slowed this year rather than edging closer to the Fed’s 2 percent target.

In a speech Tuesday, Lael Brainard, a Fed board member who has often argued for a go-slow approach to rate hikes, said she wanted to “monitor inflation developments carefully and to move cautiously on further increases” in the Fed’s key rate.

Brainard suggested that she would support a move soon to begin paring the Fed’s $4.5 trillion balance sheet, which swelled to five times its previous size after the Fed bought Treasury and mortgage bonds to hold down long-term borrowing rates in the aftermath of the 2008 financial crisis.

At its June meeting, the Fed signaled that it could begin shrinking its balance sheet later this year, a step that could put gradual upward pressure on longer-term rates for such items as home mortgages.
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Japanese car parts company Takata on Tuesday recalled another 2.7 million air bags that it previously thought were safe.

The recall affects certain Ford, Mazda and Nissan cars from the 2005 through 2012 model years.

Takata’s air bags are inflated by a chemical — ammonium nitrate — in emergency situations, but it can deteriorate in conditions of high humidity and heat. The company added a desiccant to stop the chemical inflators from degrading and thought they had then been made safe.

However, tests by the U.S. National Transportation Safety Board showed that Takata air bags were still subject to inflating without warning, expanding with great force and sending metal parts flying. Previous problems with Takata air bags have killed at least 17 people and injured more than 180.

Takata, which has filed for bankruptcy protection, has already recalled 42 million cars to replace the defective inflators, the largest automobile-related recall in U.S. history. But the latest recall raised doubts about the safety of other Takata inflators. The company has agreed to recall all original equipment inflators without a drying agent in phases by the end of 2018. The National Highway Traffic Safety Administration gave Takata until the end of 2019 to prove that inflators with the drying agents are safe, or they must be recalled as well.

U.S. Senator Bill Nelson, a Florida Democrat, said federal regulators have to act faster to determine whether all Takata air bag inflators are safe.

“We certainly can’t afford to wait until the December 2019 deadline. … If even more are found to be defective, it will take us from being the biggest recall ever to something that could become mind-boggling,” Nelson said.
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Three years ago, at the peak of the Boko Haram insurgency, Nigerian soldiers stopped all fishing activities in the country’s section of Lake Chad. Militants had infiltrated the ranks of the fishermen, the army said, and were using the guise to fund arms purchases and launch surprise attacks on innocent people.

The local fishermen’s union said it understood the army’s actions but pushed for an easing of the ban, because its members had no other way to earn a living in the largely dry and remote area.

Relief came to the local fishermen over the weekend, when the Nigerian Army commander in charge of the area, Major General Ibrahimn Attahiru, addressed the fishermen and said they could return to work based on some guidelines the army had reached with their leaders.

Fishermen support changes

The president of the Lake Chad Fishermen Association, Alhaji Abubakar Gamande, confirmed the development in an interview Monday with VOA’s Hausa Service and pledged that fishermen will follow the new rules.

“Based on what happened in the past, we will not continue to operate as we used to, where everyone did as he deemed fit,” he said. “We and the army will watch the activities of the fishermen and anyone whose work requires entering the lake. We will not let him operate as he wishes. We will screen all our members. We have to know where they are coming from and where they are going.”

In normal times, the fishermen can still make a decent living off Lake Chad despite the lake’s radical shrinkage over the past 50 years, which scientists believe is a result of overuse and shifting rainfall patterns brought on by climate change.

Local authorities back in control

But Boko Haram’s takeover of northeastern Nigeria severely disrupted a fishing industry that draws traders from Nigeria’s Lake Chad neighbors  Chad, Cameroon and Niger  and enables many locals to support themselves. By early 2015, the well-armed militants had seized effective control of the areas along the lake, and there was little the fishermen could do to stop Boko Haram activity.

Local authorities are now back in control, following a 30-month regional offensive by the army and a multi-national task force that includes soldiers from Cameroon, Chad, Niger and Benin.

Gamande was full of praise for the army, which he said has worked tirelessly to restore peace to the area.

Quiet on new rules

Asked how the new rules will prevent Boko Haram activity, the union leader said he cannot reveal all the details for security reasons.

“On our own part as a union we have laid down guidelines that enable us to know who comes for fishing, those who buy, and those who come to sell,” Gamande said.

“We will do all we can to ensure that what happened in the past will never happen again. Enough is enough.”
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Opposition to a planned $3 billion coal-fired power plant in eastern Myanmar is highlighting the challenges facing Aung San Suu Kyi’s government in crafting a coherent energy policy in one of Asia’s poorest and most electricity-starved countries.

With only a third of the country’s 60 million people connected to the grid and major cities experiencing blackouts, finding investors is tough for Myanmar and it is now looking at options, from coal to deep-sea gas, to boost its power supply.

Myanmar has reserves of natural gas, but most existing offshore production is exported under agreements struck during the junta era, while new blocks will not come on stream for some years.

Coal would be one of the quickest ways to ramp up power generation but, as protests against the proposed 1,280 megawatts (MW) project in the eastern Kayin state show, the option is unpopular in Myanmar.

More than 100 activist groups across the country have signed a joint statement calling for the project to be cancelled and urging the government to look at renewable energy instead.

“They are worried about their land and water, which would be affected by the coal-fired plant,” said Kayin-based activist Nan Myint Aung, referring to residents in the area who mostly depend on agriculture.

Attracting investment is crucial for Suu Kyi, who has made job creation one of her top priorities. Foreign direct investment has fallen 30 percent from the previous year to $6.6 billion in 2016/17 due to sluggish progress on retooling the economy after decades of military rule.

Myanmar aims a more than fourfold increase in its electricity generation of over 23,500 MW by 2030 to meet rising demand, a target experts said will be difficult to achieve – particularly, they say, if policy remains confused.

Uncertainty over energy mix

The Kayin state project, which is still awaiting approval from the authorities, is among the 11 planned coal-fired plants in Myanmar and, by itself, would increase the country’s current electricity production by 25 percent, official data shows.

But it is uncertain how many of those projects will go ahead. The former quasi-civilian government led by President Thein Sein had to stall more than 10 coal projects across the country due to opposition on environmental grounds.

Some western experts advising the government also oppose the solution, arguing that importing coal – which is not abundant in Myanmar – would mean an outflow of dollars from a country with tiny reserves of hard currency.

Officials have previously said they were looking to increase the share of hydro power in the country’s energy mix.

Most of its 49 planned hydropower projects have stalled, however, amid a lengthy dispute with China over the building of the Myitsone mega dam.

An electricity master plan has been under review since last year, but the government has yet to reveal details. Several energy officials said the share of coal and gas could be increased at the expense of hydro.

“International investors would like to see more clarity on energy policy. It is presently very difficult to say exactly what Myanmar’s energy plans are,” said Jeremy Mullins, researcher at Yangon-based consulting firm Frontier Myanmar.

‘Dilemma of coal’

Kayin’s energy minister, Soe Hlaing, told Reuters that the government would go ahead with the project if there was “enough public support.” He did not elaborate.

Residents and environmentalists say the risks the plant in Kayin could pose to the environment and the livelihoods of local people are not being properly investigated.

A feasibility study on the environmental and social impact will be ready later this year before the final decision from the energy ministry, local authorities said.

Thailand-based TTCL Public Company Ltd., developer of the project, said it would build a high-efficiency low-emissions station with advanced “clean coal” technology to mitigate environmental impact.

Coal currently generates just 1 percent of Myanmar’s electricity.

Win Htein, one of the top leaders from Suu Kyi’s National League for Democracy, said alternatives such as hydropower would take time and coal was ideal for the country’s urgent energy demand.

“If we have to choose between the dilemma of coal and the development of the country, we prioritize the development,” he said.
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