Day: September 24, 2017

Iraqi Government Asks Foreign Countries to Stop Oil Trade With Kurdistan

Iraq on Sunday urged foreign countries to stop importing crude directly from its autonomous Kurdistan region and to restrict oil trading to the central government.

The call, published in statement from Prime Minister Haider al-Abadi’s office, came in retaliation for the Kurdistan Regional Government’s plan to hold a referendum on independence on Monday.

The central government’s statement seems to be directed primarily at Turkey, the transit country for all the crude produced in Kurdistan. The crude is taken by pipeline to the Turkish Mediterranean coast for export.

Baghdad “asks the neighboring countries and the countries of the world to deal exclusively with the federal government of Iraq in regards to entry posts and oil,” the statement said.

The Iraqi government has always opposed independent sales of crude by the KRG, and tried on many occasions to block Kurdish oil shipments.

Long-standing disputes over land and oil resources are among the main reasons cited by the KRG to ask for independence.

Iraqi Kurdistan produces around 650,000 barrels per day of crude from its fields, including around 150,000 from the disputed areas of Kirkuk.

The region’s production volumes represent 15 percent of total Iraqi output and around 0.7 percent of global oil production. The KRG aspires to raise production to over 1 million barrels per day by the end of this decade.

Kurdish oil production has been dominated by mid-sized oil companies such as Genel, DNO, Gulf Keystone and Dana Gas. Major oil companies such as Chevron, Exxon Mobil and Rosneft also have projects in Kurdistan but they are mostly at an exploration stage.

However, Rosneft, Russia’s state oil major, has lent over $1 billion to the KRG guaranteed by oil sales and committed a total of $4 billion to various projects in Kurdistan.

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Swiss Voters Reject Raising Women’s Retirement Age

Swiss voters rejected raising women’s retirement age to 65 in a referendum on Sunday on shoring up the wealthy nation’s pension system as a wave of Baby Boomers stops working.

Authorities pushing the first serious reform of the pension system in two decades had warned that old-age benefits were increasingly at risk as life expectancy rises and interest rates remain exceptionally low, cutting investment yields.

But it fell by a margin of 53-47 percent, sending the government back to the drawing board on the thorny social issue.

The package turned down under the Swiss system of direct democracy included making retirement between the ages of 62 and 70 more flexible and raising the standard value-added tax (VAT) rate from 2021 to help finance the stretched pension system.

It sought to secure the level of pensions through 2030 by cutting costs and raising additional revenue.

Minimum pay-out rates would have gradually fallen and workers’ contributions would rise, while public pensions for all new recipients would go up by 70 Swiss francs ($72.25) a month.

The retirement age for women would have gradually risen by a year to 65, the same as for men.

“That is no life,” complained one 49-year-old kiosk cashier, who identified herself only as Angie. “You go straight from work to the graveyard.”

Some critics had complained that the higher retirement age for women and higher VAT rates were unfair, while others opposed expanding public benefits and said the reforms only postponed for a decade rather than solved the system’s financial woes.

Opinion polls had shown the reforms just squeaking by, but support had been waning.

The standard VAT rate would have gone up by 0.3 point from 2021 to 8.3 percent — helping generate 2.1 billion francs a year for pensions by 2030 — but the rejection means the standard VAT rate will now fall to 7.7 percent next year as a levy earmarked for disability insurance ends.

A 2014 OECD survey found Switzerland, where a worker earns over $91,000 on average, spends a relatively low 6.6 percent of economic output on public pensions. Life expectancy at birth was 82.5 years. More than 18 percent of the population was older than 65.

($1 = 0.9690 Swiss francs)

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After German Vote, Europe Can Turn to Patching Euro’s Flaws

Sunday’s national election in Germany will sound the starting gun for a renewed debate on fixing flaws in Europe’s shared currency to prevent future crises.

 

France’s new president Emmanuel Macron has made it clear he is willing to push for change to strengthen the euro and is expected to make proposals in a major speech Tuesday. He is pushing for, among other things, a finance minister for the eurozone to oversee a central fiscal pot of money that could even out recessions in individual members.

 

Even pro-euro policymakers concede their 19-nation currency union contains weaknesses that fed its debt crisis — and leave it exposed to new trouble. But action on fixes has slowed.

 

Macron’s ideas are not new but several of them have faced resistance from Germany, always allergic to the idea of being handed the bill for other members’ troubles. For example, German Chancellor Angela Merkel and her finance minister, Wolfgang Schaeuble, have pushed back against the idea of EU-wide insurance on bank deposits meant to keep bank troubles from hitting government finances.

 

Now there are signs that after its own elections are out of the way, Germany might be more open to change or at a minimum speeding up steps — like the deposit insurance idea — that have stalled. Polls suggest Merkel will win a fourth term. What’s not clear is which party her center right Christian Democratic Union will form a coalition.

 

“In several ways, the coming 12-18 months represent an exceptional opportunity for European reform,” says Nicolas Veron, senior fellow at the Bruegel think tank in Brussels and at the Peterson Institute for International Economics in Washington. Reasons for that, he said, include:

The two biggest EU countries, France and Germany, will now have new governments with fresh mandates from voters.
Europe’s banks are in better shape and the economy is growing, meaning leaders are not preoccupied with fighting a crisis.
 Anti-euro populists have been turned back at the polls this year in France and the Netherlands, giving pro-EU forces a fresh shot of confidence.
 Memories of the debt crisis that threatened to break up the eurozone at its peak in 2011-2012 may still be vivid enough to overcome complacency. 

Merkel has expressed cautious openness to tweaking the setup of the euro.

“I have made clear that I don’t have anything against the title of a European finance minister per se — we would just have to clear up, and we are not yet that far along in talks with France — what this finance minister could do,” she said in August.

 

“I could imagine an economy and finance minister … so that we achieve a higher degree of harmonization of competitiveness.”

 

The euro, currently worth about $1.20, was created in 1999, and 19 of the 28 EU members use it.

 

European officials concede that the debt crisis, which exploded when Greece revealed in October 2009 that it was bankrupt, exposed serious flaws. Once financial trouble hit, member countries such as Greece, Ireland and Portugal lacked typical crisis safety valves such as letting their national currency devalue, which can help a country’s exports and attract investment. Without their own currencies, this was no longer possible. The countries wound up needing bailouts from the other member countries led by Germany and from the International Monetary Fund.

 

Additionally, the cost of rescuing failing banks threatened to bankrupt entire eurozone governments. And the euro lacks a central fiscal budget that could even out recessions in member countries by investing more in economies in need.

 

German resistance will likely remain strong to the bolder ideas, such as a well-stocked central fiscal pot worth several percentage points of EU gross domestic product. Currently, the EU’s budget is 1 percent of GDP, spent on things like support for farmers and infrastructure to help development in the poorest members.

 

More modest, politically realistic steps could include:

Pushing ahead with EU-wide deposit insurance, to be implemented over a period of years.
Regulations limiting the widespread practice of European banks buying their own governments’ bonds. That would increase pressure on governments to shape up their economies and finances.
 A modest additional pot of money that could be used as targeted stimulus for eurozone countries that fall into serious recessions, with the condition that they implement economic reforms.

EU governments led by Germany, the bloc’s most influential member, have already taken some significant steps since the crisis days. They created a fund that can give bailout loans to states in need. They tightened banking oversight by moving it to the EU level at the European Central Bank, and they took steps to stick bank creditors — not taxpayers — with any losses in case of a rescue.

 

The new system proved its mettle in June, when the ECB pulled the plug on Spain’s troubled Banco Popular, the country’s sixth-largest bank, and then orchestrated a sale to Banco Santander for one euro. Shareholders and junior bondholders took the losses, while taxpayers and depositors were spared. It’s a step away from crisis times when the financial burden of rescuing banks drove Ireland and Spain to seek bailout help.

 

Carsten Brzeski, chief economist at ING Germany, says that reforms like a small central fund and deposit insurance are feasible.

 

“The opportunity in 2018 would be more a natural evolution of the process that has been ongoing now for the past couple of years, rather than being a revolution,” he said.

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US Launches Spy Satellite From California

A spy satellite for the U.S. National Reconnaissance Office has been launched from Vandenberg Air Force Base in California.

A United Launch Alliance Atlas 5 rocket carrying the classified NROL-42 satellite lifted off at 10:49 p.m. PDT Saturday. All systems were going well when the launch webcast concluded about three minutes into the flight.

National Reconnaissance Office satellites gather intelligence information for U.S. national security and an array of other purposes including assessing impacts of natural disasters.

U.S. officials have not revealed what the spacecraft will be doing or what its orbit will be.

United Launch Alliance is a joint venture of Lockheed Martin and Boeing.

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Uber Signals It’s Willing to Make Concessions to London

U.S. ride-hailing firm Uber is prepared to make concessions as it seeks to reverse a decision by London authorities not to renew its license in the city, which represents a potentially big blow for the fast-growing company, a newspaper reported.

The Sunday Times also quoted sources close to London’s transport body as saying the move was encouraging and suggested the possibility of talks.

“While we haven’t been asked to make any changes, we’d like to know what we can do,” Tom Elvidge, Uber’s general manager in London, told the newspaper. “But that requires a dialogue we sadly haven’t been able to have recently.”

A spokesman for Transport for London (TfL) declined to comment.

The Sunday Times said Uber’s concessions were likely to involve passenger safety and benefits for its drivers, possible limits on working hours to improve road safety and holiday pay.

TfL stunned the powerful U.S. start-up Friday when it deemed Uber unfit to run a taxi service for safety reasons and stripped it of its license from Sept. 30, although the company can continue to operate while it appeals.

The regulator cited failures to report serious criminal offenses, conduct sufficient background checks on drivers and other safety issues.

Uber responded by urging users in London to sign a petition that said the city authorities had “caved in to a small number of people who want to restrict consumer choice.” The move echoed Uber’s strategy in disputes with other cities.

By 2200 GMT Saturday, more than 600,000 people had signed although it was not clear how many of them were in London.

A spokesman for Uber said around 20,000 Uber drivers had emailed the city’s mayor directly to object to the decision.

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‘Screaming Eagle of Soul,’ Charles Bradley Dies at 68

Charles Bradley, known as the “Screaming Eagle of Soul” for a powerful, raspy style that evoked one of his musical heroes, James Brown, died Saturday at age 68.

Bradley, who achieved success later in life with his 2011 debut album “No Time for Dreaming,” was diagnosed with stomach cancer in the fall of 2016 and underwent treatment, according to a statement from his publicist, Shazila Mohammed. He went out on tour earlier this year after receiving a clean bill of health, but the cancer returned recently, spreading to his liver, the statement said.

Recording on the Daptone label, Bradley was a fiery live performer. He followed up his first album with “Victim of Love” in 2013. His third album, “Changes,” was released last year.

Among his TV appearances was a stop last year on “CBS This Morning: Saturday,” which earned him an Emmy nomination.

Born in Gainesville, Florida, Bradley found himself living in New York at age 8. He left home as a teenager and lived as an itinerant until he settled in Brooklyn 20 years ago.

Bradley idolized Brown, working as a Brown impersonator known as Black Velvet before he was discovered by Gabriel Roth, a Daptone co-founder. He later became known for closing shows under his own name with hugs for his audiences.

“The world lost a ton of heart today,” Roth said in the statement. “Charles was somehow one of the meekest and strongest people I’ve ever known. His pain was a cry for universal love and humanity. His soulful moans and screams will echo forever on records and in the ears and hearts of those who were fortunate enough to share time with him.”

Roth said he told Bradley recently there’s solace to be found for fans knowing Bradley “will continue to inspire love and music in this world for generations to come.”

Bradley’s response? “I tried.”

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EPA Recovers Material From Houston-area Superfund Sites

The Environmental Protection Agency says it has recovered 517 containers of “unidentified, potentially hazardous material” from highly contaminated toxic waste sites in Texas that flooded last month during Hurricane Harvey.

The agency has not provided details about which Superfund sites the material came from, why the contaminants at issue have not been identified and whether there’s a threat to human health.

The one-sentence disclosure about the 517 containers was made Friday night deep within a media release from the Federal Emergency Management Agency summarizing the government’s response to the devastating storm.

A dozen sites

At least a dozen Superfund sites in and around Houston were flooded in the days after Harvey’s record-shattering rains stopped. Associated Press journalists surveyed seven of the flooded sites by boat, vehicle and on foot. The EPA said at the time that its personnel had been unable to reach the sites, though they surveyed the locations using aerial photos.

The Associated Press reported Monday that a government hotline also received calls about three spills at the U.S. Oil Recovery Superfund site, a former petroleum waste processing plant outside Houston contaminated with a dangerous brew of cancer-causing chemicals. Records obtained by the AP showed workers at the site reported spills of unknown materials in unknown amounts.

Local pollution control officials photographed three large tanks used to store potentially hazardous waste completely underwater Aug. 29. The EPA later said there was no evidence that nearby Vince Bayou had been impacted.

PRP Group, the company formed to clean up the U.S. Oil Recovery site, said it does not know how much material leaked from the tanks, soaking into the soil or flowing into the bayou. As part of the post-storm cleanup, workers have vacuumed up 63 truckloads of potentially contaminated storm water, totaling about 315,000 gallons.

It was not immediately clear whether those truckloads accounted for any of the 517 containers cited in the FEMA media release Friday. The EPA has not responded to questions from AP about activities at U.S. Oil Recovery for more than a week.

Waste pit underwater

About a dozen miles east, the San Jacinto River Waste Pits Superfund site is on and around a low-lying island that was the site of a paper mill in the 1960s, leaving behind dangerous levels of dioxins and other long-lasting toxins linked to birth defects and cancer. The site was covered with floodwaters when the AP surveyed it Sept. 1.

To prevent contaminated soil and sediments from being washed down river, about 16 acres of the site was covered in 2011 with an “armored cap” of fabric and rock. The cap was reportedly designed to last for up to 100 years, but it has required extensive repairs on at least six occasions in recent years, with large sections having become displaced or been washed away.

The EPA has not responded to repeated inquiries over the past two weeks about whether its assessment has determined whether the cap was similarly damaged during Harvey.

The companies responsible for cleaning up the site, Waste Management Inc. and International Paper, have said there were “a small number of areas where the current layer of armored cap is thinner than required.”

“There was no evidence of a release from any of these areas,” the companies said, adding that sediments there were sampled last week.

The EPA has not yet released those test results to the public.

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Banned Books Week Emphasizes Freedom to Read

This is banned books week in the United States, an annual event that points out censorship and emphasizes the freedom to read. In Washington, the public library system has hidden around the city hundreds of copies of six books that may be banned or challenged in some libraries and schools in the U.S. People who find these books can take them home for free. VOA’s Deborah Block brings us to a bookstore where customers are searching for the books they want to read.

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Amid Increased International Sanctions, North Korea Turns to Bitcoin for Cash

North Korea’s cash-strapped regime has long sought workarounds to the increasingly harsh international sanctions aimed at tightening the financial noose around its nuclear and missile programs.

 

Now, according to Recorded Future, an intelligence research firm backed by Google Venture, Pyongyang is making a foray into cyberspace, launching a bitcoin “mining” operation, which saw a dramatic spike in its activity in mid-May.

Although the bitcoin activity amounts to only a token amount of funds at this point, there is significant potential for it to become a major source of income for the regime, the company said.

Is North Korea’s pursuit of bitcoin, the best-known cryptocurrency used for purchasing goods and services online, something the United States as well as the international community should worry about?

WATCH: What is bitcoin?

VOA Korean spoke with Priscilla Moriuchi, a Recorded Future director. Formerly with the National Security Agency (NSA) as threat intelligence manager and senior expert on East Asia and Pacific regional and cyber issues, she discussed in detail her findings on North Korea’s cyberactivities. Her answers have been edited for clarity and length.

Could you describe how Recorded Future first detected the North Korean activity in bitcoin?

Priscilla Moriuchi: The bitcoin mining [from North Korea] started on May 17 and continued through the end of our data set, which was July 3. This was a critical moment in terms of bitcoin [mining activities] because before then, I haven’t seen any activity that we had insight into indicating that [the North Koreans] were interested in bitcoin.

Is there any substantive evidence for the North Korean bitcoin mining operation?

Moriuchi: [Mining] bitcoin is very computationally intensive. It requires a lot of energy and high capacity computers. It also requires a lot of internet bandwidth because it constantly communicates with other bitcoin nodes (a peer-to-peer network consisting of computers, which allows for transactions to be broadcast to other users worldwide) to validate the blockchain (the digital ledger technology that records all virtual money transactions) that they are putting together. So mining activity is pretty distinct in terms of volume, and the [internet] ports and protocols (IP address) that are used are also pretty distinct. It can give you a decent signature.

Who is running the North Korean bitcoin mining operations, and why do you think the country has finally begun mining bitcoin?

Moriuchi: The first [hypothesis] is that it could have been an activity conducted by the state, whether it be the military or the intelligence services, for the purposes of raising funds for the regime. The second hypothesis is that it was an individual user … but because of the bandwidth and energy that were required, it would have to be known or permitted by the state and the leadership.

Over the past few years, we’ve seen increasingly tough sanctions levied upon North Korea by the United States, other international partners and by the United Nations. Those sanctions have increasingly cut off North Korea’s access to the traditional financial system and [its] ability to generate funds for state operations. We believe that bitcoin and cryptocurrency mining or activity involving cryptocurrency is a way for North Korea to generate funds and get around some of the sanctions.

Do you think North Korea has come to a conclusion that using cryptocurrency to generate funds for the regime is safer than other illicit ways — for instance, smuggling drugs or counterfeiting money?

Moriuchi: [Mining bitcoin or any other cryptocurrency] is not illegal. There’s nothing about [using cryptocurrency] that puts North Korea in a worse spot in terms of sanctions or legal violations. So that’s one. Two, you can buy many things. You can exchange cryptocurrency for actual currency, but you can also buy physical goods with cryptocurrency. So it’s another way for them to purchase things they might need without using the financial system.

There were reports that North Korea might have launched cyberattacks against South Korean virtual currency exchanges. Do the North Koreans have such a capacity?

Moriuchi: Yes, definitely. When it comes to North Korean hacking activities, we broadly underestimate their capabilities because many people believe [it is] such an isolated country where most people don’t have access to the internet and ask how they can possibly have indigenous experts, how they can possibly train people well enough to be able to conduct some of these very sophisticated hacks.

But what we have come to know over time is that they are sophisticated actors. They do have in-depth understanding of internet networks and communications.

Do you believe North Korea meddled in the Sony hack in 2014?

Moriuchi: Yes, both the federal government like the FBI (Federal Bureau of Investigation) and NSA have both come out and said that North Korea was behind the Sony attack. I think most people who follow North Korea agree with the government assessments.

It seems that reasons differ for North Korea’s cyberattacks against South Korean virtual currency exchanges and for the Sony attack. Why is that so?

Moriuchi: North Korean cyberactivities really started about 2008 and 2009. [They were] mainly toward South Korean government, corporations and media, as well as some U.S. government entities, and they were intended to [cause] chaos and to disrupt South Korea and undermine systems there. After the Sony attack, [there seemed to be a] transition in most of the North Korean attacks that we in the private sector have been able to follow toward financial services, toward generating money and raising funds. I think we are in this new period in terms of North Korean cyberactivity.

How much profit does North Korea make from mining bitcoin?

Moriuchi: At current rates, let’s say [North Korea] earned about $100,000. So in terms of the amount of money that North Korea may need for their missile program, $100,000 is probably not very much. If you put that next to what experts estimate North Korea pulls in just through its other kinds of criminal operations, such as the drug trade, drug smuggling and counterfeiting of U.S. dollar bills, around $500 million to $1 billion a year, $100,000 is a drop in the bucket.

Given the token amount of money North Korea makes through the bitcoin mining activity, is it far-fetched to say the North is tapping this digital currency exchange in order to evade sanctions and earn income for the regime?

Moriuchi: Cryptocurrency, specifically bitcoin mining, is one other method for them to circumvent sanctions and to generate funds. It’s not the primary means of earning funds for the regime right now, but it’s certainly something that they could expand and that would be much more difficult for the international community to be able to track and limit.  

Why is it so hard to track the bitcoin activity?

Moriuchi: Bitcoin was designed to be anonymous, and it doesn’t keep track of identifiers, such as IPs and usernames, while mining, buying or spending bitcoin.

Additionally in the WannaCry attack, in early August three bitcoin wallets associated with WannaCry were emptied. What we saw were many steps taken by presumably the North Koreans to further obfuscate where the funding was going. So first off, they went through a bitcoin mixer, which is a service that essentially throws all the bitcoin into one pot and then out comes the amount you threw in but it’s not the same bitcoin that you put in. So it anonymizes your identity. After going through that, they then convert it to another cryptocurrency. So they went to great lengths to avoid even the slim chance that they could be attributed through their bitcoin transactions.

What do you think about the claim that the U.S. could take out North Korea’s missiles before launch through jamming or other cyber methods?

Moriuchi: There are two internets [in North Korea]. One, the global internet, and then the domestic intranet, the one that regular North Koreans, though a small number, actually have access. And then you have various other networks within the country — the government’s and the military’s. The connections between the global internet and anything inside North Korea are very few, based on the research that I did. So [even] if it was possible for the United States or whoever to attack a North Korean missile site or a launch using a cyberattack, it would be very difficult.

 

How did you become interested in analyzing North Korean internet activities?

Moriuchi: We have this very unique set of data … and we felt like we can give much more context to the whole debate about North Korea, especially about their cyberactivity. We did a big analysis over the past few months, and we came away with a number of conclusions based on North Korean leadership internet activity. The biggest one for us was that, based on the activity that we saw, the North Korean ruling elite and their leadership are much more active and engaged in the world, popular culture, international news, and with contemporary services, than most outsiders would have believed. They go to Facebook, they go to Instagram every day, they stream video and a lot of other things that many of us do. The 0.1 percent of [the North Korean population] who has access to the world internet does those same things.

Jenny Lee contributed to this report which originated on VOA Korean.

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