Day: January 22, 2018

The International Monetary Fund says the global economy grew at a faster than expected 3.7 percent pace in 2017 and will do better this year and next.

IMF Managing Director Christine Lagarde called predictions of strengthening growth “very welcome news.” She spoke Monday in Davos, Switzerland, at the annual World Economic Forum.

IMF experts say 120 nations, representing three-quarters of the global economy, saw growth last year. IMF experts said tax cuts in the United States will have a positive but “short term” impact on the economy.

Lagarde urged political and economic leaders to take advantage of good times to make reforms that will soften the impact of the next, inevitable, economic downturn.

She said there is “significant” uncertainty in the year ahead, where a long period of low interest rates may have inflated the value of stocks and other assets to unsustainable levels. She also says a rise in debt levels is a concern.

Growth must be more inclusive, she added. She also said more efforts to retrain people displaced by automation, create opportunities for young people and bring more women into the labor force will all help.

Lagarde is only one of many leaders expected to speak at the Davos gathering. U.S. President Donald Trump is scheduled to address fellow heads of state and others later this week, but White House officials say Washington’s current political impasse that has shut down many normal functions of government make that trip “not very likely.”
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Some in the U.S. solar-power industry are hoping a decision this week by President Donald Trump doesn’t bring on an eclipse.

Companies that install solar-power systems for homeowners and utilities are bracing for Trump’s call on whether to slap tariffs on imported panels.

The solar business in the U.S. has boomed in recent years, driven by falling prices for panels, thanks in part to cheap imports. That has made solar power more competitive with electricity generated from coal and natural gas.

A green-technology research firm estimates that tariffs could cost up to 88,000 U.S. jobs related to installing solar-power systems.

On the other side are two U.S. subsidiaries of foreign companies that argue the domestic manufacturing of solar cells and modules has been decimated by a flood of imports, mostly from Chinese companies with operations throughout Asia.

The four members of the U.S. International Trade Commission – two Republicans and two Democrats – unanimously ruled in October that imported panels are hurting American manufacturers, although they differed on exactly how the U.S. should respond. Trump has until Friday to act on the agency’s recommendations for tariffs of up to 35 percent.

Trump has wide leeway – he can reject the recommendations, accept them, or go beyond them and impose tougher tariffs. Congress has no authority to review or veto his action. Countries harmed by his decision could appeal to the World Trade Organization.

The trade case grew out of a complaint by Suniva Inc., a Georgia-based subsidiary of a Chinese company, which declared bankruptcy last April. Suniva was joined by SolarWorld Americas, the U.S. subsidiary of a German company. Both blame their difficulties on a surge of cheap imports, mostly from Asia. Suniva wants higher tariffs than those recommended by the trade commission.

The U.S. Commerce Department imposed stiff anti-dumping duties on imported panels made from Chinese solar cells in 2012. Tim Brightbill, SolarWorld Americas’ lawyer, said Chinese companies have gotten around those sanctions by assembling panels from modules produced in other Asian countries such as Malaysia and Vietnam. That makes the current trade case even more important, he said.

“It is a global case. It addresses the global import surge,” Brightbill said. “We need the strongest possible remedies from President Trump to maintain solar manufacturing here in the United States.”

A consultant for SolarWorld said tariffs on imports could create at least 12,000 jobs and up to 45,000 depending on capacity growth, and that installer jobs would also increase.

While U.S. solar manufacturing has shriveled, installations – from home rooftops to utility-scale operations – have boomed. Installations have soared more than tenfold since 2010, with the biggest jump coming in 2016, after prices for solar panels collapsed.

The Solar Energy Industries Association, a trade group for U.S. installers, says tariffs would drive up the cost of installing solar-power systems, leading to a drop in demand.

“We are selling energy that can be created by wind, by natural gas, by hydro, by coal, by nukes. When you raise the price of what we are selling, we can’t compete,” said Abigail Ross Hopper, the group’s president.

Jim Petersen, CEO of PetersenDean, a California company that installs solar rooftop panels mostly for residential customers, once favored tariffs on imported panels, which he found to be of inferior quality. He has changed his mind.

Petersen said tariffs could stunt his business by raising the cost of a job, which ranges from $6,000 to $60,000 or more. He said he might be forced to lay off up to 25 percent of his 3,200 installers.

“This is bad for American jobs, bad for the consumer,” he said.

In the New Mexico desert, Albuquerque-based Affordable Solar is working on a $45 million solar farm to help power a massive new data center for Facebook. The company’s president, Kevin Bassalleck, said tariffs would hurt homegrown companies that make racks, tracking systems and electronics that are part of a power system. He said jobs at those companies are hard to outsource.

“If you ever set foot in a solar module assembly factory, most of what you see are robots. There are very few people,” he said. “But if go out on to any one of our project sites like the Facebook project, you would see a small army of people working and installing things.”

U.S. Sen. Martin Heinrich, a New Mexico Democrat and advocate for renewable energy, says his state could lose more than 1,500 jobs by 2020 if tariffs are imposed, and tariffs won’t revive U.S. solar manufacturing.

“The jobs that have been lost because of cheaper solar cells have already been lost,” Heinrich said in an interview. “These tariffs are then going to take the very rapidly growing, successful, good jobs that we have built in manufacturing of the other equipment, in installing, and reduce those jobs to a fraction of what they should be.”

The conventional wisdom is that Trump will impose sanctions. Developers anticipating tariffs began flooding foreign manufacturers with orders last fall, driving up prices.

Brightbill, the lawyer for SolarWorld Americas, sounded confident.

“This administration’s focus is on U.S. manufacturing and U.S. jobs and getting tough on China for the trade deficit,” he said, “so we think the administration’s goals are very well-aligned with saving U.S. solar manufacturing.”
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The exiled former leader of the Maldives said Monday that this year’s presidential election could be the last chance to extricate his country from increasing Chinese influence, which he described as a land grab in the guise of investments in island development.

Mohamed Nasheed told reporters in Sri Lanka’s capital that current President Yameen Abdul Gayoom has opened the doors to Chinese investment without any regard for procedure or transparency.

“A large emerging power is busy buying up the Maldives,” Nasheed said, explaining that he was referring to China.

China is “buying up our lands, buying up our key infrastructure and effectively buying up our sovereignty,” he said.

China considers Maldives to be key cog in the Indian Ocean in its “One Belt One Road” project along ancient trade routes through the Indian Ocean and Central Asia. The initiative is Chinese President Xi Jinping’s signature project and envisages building ports, railways and roads to expand trade in a vast arc of countries across Asia, Africa and Europe.

Nasheed is disqualified from contesting the presidency this year due to a prison sentence. He is now living in exile in Britain after going there for medical treatment while in prison.

Nasheed said he is awaiting a decision from the U.N. Human Rights Committee, which he hopes will ask the Maldivian government to allow him to run in the election. His trial on terrorism charges and 13-year prison sentence in 2015 drew widespread international criticism for an alleged lack of due process.

The U.N. working group on arbitrary detention said Nasheed’s sentencing was unlawful.

Nasheed became the archipelago state’s first democratically elected president 10 years ago, ending a 30-year autocratic rule. However, he resigned in 2012 after public protests for ordering the arrest of a senior judge.

He lost the 2013 presidential election to Gayoom.

Maldives’ democratic gains have largely diminished under Gayoom’s presidency, with all of his potential election opponents either jailed or in exile. Nasheed says the opposition parties are in discussion to field a common candidate if he is unable to run.

“President Yameen wants a coronation; not an election. We won’t let that happen,” he said.

There was no immediate comment from the government.
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In Davos this week, participants can experience “a day in the life of a refugee.” Or hear about ways to uphold the Paris climate accord and promote free trade. Or rub elbows with any number of leaders of African countries.

Enter Donald Trump.

The World Economic Forum in Davos, Switzerland, is meant — pretentiously perhaps — to be a place for the world’s decision-makers to put their power to good use. The theme this year is “Creating a Shared Future in Fractured World,” an ambition not likely to turn up on the U.S. president’s Twitter feed.

Instead, Trump will bring his zero-sum message of “America First,” and will speak last among the parade of world leaders — from places like India, France and Canada — who are gathering from Tuesday to Friday in the Swiss snows.

As with most things Trump, there are stark contrasts between how attendees view his visit. Some are happy and hope for dialogue. Others unabashedly say they wish he would stay away and accuse him of a lack of compassion and vision for the world that are out of place in Davos.

“I find it quite sad he’s coming to the WEF, but I imagine nothing can be done about it,” said Buddhist monk Matthieu Ricard, a longtime disciple of the Dalai Lama.

While his trip — which was still on schedule despite the U.S. government shutdown — may seem incongruous, unwelcome or unexpected, he will be sticking to one key aspect of the WEF’s original ambition in starting the annual forum in Davos 47 years ago: Business. An array of Cabinet officials is also due to tag along, suggesting the U.S. is preparing a big economic and diplomatic push.

Some have suggested it’s ironic that Trump, a self-styled populist despite his penchant for the penthouse, is attending the elite Alpine event. Others speculated he could have felt a need to regain the Davos spotlight for the United States a year after Chinese President Xi Jinping stole the show by casting China as a champion of free trade and stability — and many companies responded by turning greater attention toward it.

An administration official said Trump is expected to tout the booming U.S. economy and measures like his recent tax overhaul, while again criticizing trade practices that he sees as unfair toward the U.S. The official, who spoke only on condition of anonymity to discuss internal plans, said Trump made the decision to go because he thinks he has a positive economic message.

With Wall Street surging, Trump has some cheerleaders on the economic front — even if they hope he’ll be more accommodating.

“I think it’s really good that he’s going,” said Bill Thomas, chairman of business services KPMG International. “The American economy is dependent on global engagement, and I think he’s in Davos because he knows that.”

Some wonder whether Trump can win over the Davos set, or whether they might succeed in turning his ear — and give him a chance to reboot his administration’s image abroad.

“Corporate America, in terms of economic policies, is very pleased with the way the administration is going,” said Andy Baldwin, a regional managing partner for financial services firm EY. But he acknowledged that Trump controversies elsewhere had “overshadowed some of the policies.”

Outside of business, though — whether among human rights advocates, environmentalists, peaceniks or free-trade proponents — Trump is shunned.

“Despite its formal name, Davos is about more than economics,” said Kenneth Roth, executive director of Human Rights Watch, in an e-mail. “So while Trump undoubtedly intends to trumpet U.S. economic progress, many Davos participants will question his racist, misogynistic, and xenophobic rhetoric and policies.”

“Unless he plans an unexpected apology and reversal, he will face a far colder reception than he probably anticipates,” he said.

Parts of the jet-set have it in for Trump. Elton John, whose song title “Rocket Man” Trump used to deride North Korean leader Kim Jong Un, will be in Davos, as will actress Cate Blanchett, who shaped chewing gum into a phallus on late-night TV to mock Trump just days after he took office. So will several African leaders whose countries Trump allegedly dismissed with a vulgarity earlier this month.

Small protests have started, and others are expected in Zurich on Tuesday and possibly in Davos on Thursday. A Swiss anti-Trump petition has garnered more than 16,000 supporters online, calling on him to stay away. Authorities are boosting security for only the second visit by a serving U.S. president to Davos, after Bill Clinton in 2000.

Some might even see a snub in French President Emmanuel Macron’s decision to not stick around to see Trump even though the White House initially had announced a face-to-face meeting in Davos.

In his speech Wednesday, Macron is expected to offer a “lucid” diagnosis about globalization, and raise environmental concerns, an adviser said. Macron’s speech could shape up as a counter narrative, and though he wasn’t expected to mention Trump by name “you can read between the lines,” the adviser said, on condition of anonymity because he was not authorized to speak publicly about the matter.

“It’s good to have the president here, if the snow conditions and the situation in Washington allow us,” WEF founder Klaus Schwab told The Associated Press on Monday, alluding to the U.S. government shutdown that could spoil Trump’s plans to attend. The White House has said it’s monitoring the situation day to day, and Schwab said: “At the moment we cannot make a comment on that [Trump’s attendance].”

Trump has, in a way, already been on hand in Davos. During last year’s event, which coincided with his inauguration, many attendees gawked at TV sets as Trump declared “America First” from the Capitol steps.

When he arrives this year, discretion may be the order of the day: Zurich airport, the closest big hub, has announced a lockdown on press access for the arrival of Air Force One.

Switzerland’s Young Socialists party is revving up to protest to register pent-up anger about how Trump lost the popular vote in 2016, but won the election, and suspicions of Russian meddling in that contest.

“He’s sexist, he’s racist,” said Tamara Funiciello, the group’s president. “And I don’t think it’s responsible to speak with him.”

 
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On a sweltering early summer afternoon in Miami’s Little Havana, President Donald Trump told a cheering Cuban-American crowd that he was rolling back some of Barack Obama’s opening to Cuba in order to starve the island’s military-run economy of U.S. tourism dollars and ratchet up pressure for regime change.

That doesn’t appear to be happening. Travel to Cuba is booming from dozens of countries, including the U.S. And the tourism dollars from big-spending Americans seem to be heading into Cuba’s state sector and away from private business, according to Cuban state figures, experts and private business people themselves.

The government figures show that 2017 was a record year for tourism, with 4.7 million visitors pumping more than $3 billion into the island’s otherwise struggling economy. The number of American travelers rose to 619,000, more than six times the pre-Obama level. But amid the boom — an 18 percent increase over 2016 — owners of private restaurants and bed-and-breakfasts are reporting a sharp drop-off.

“There was an explosion of tourists in the months after President Obama’s detente announcement. They were everywhere!” said Rodolfo Morales, a retired government worker who rents two rooms in his home for about $30 a night. “Since then, it’s fallen off.”

The ultimate destination of American tourism spending in Cuba seems an obscure data point, but it’s highly relevant to a decades-old goal of American foreign policy — encouraging change in Cuba’s single-party, centrally planned system. For more than 50 years, Washington sought to strangle nearly all trade with the island in hopes of spurring economic collapse. Obama changed that policy to one of promoting engagement as a way of strengthening a Cuban private sector that could grow into a middle class empowered to demand reform.

Cuba’s tourism boom began shortly after Obama and Cuban President Raul Castro announced in December 2014 that their countries would re-establish diplomatic relations and move toward normalization. U.S. cruise ships began docking in the Bay of Havana and U.S. airlines started regular flights to cities across the island. Overall tourism last year was up 56 percent over Cuba’s roughly 3 million visitors in 2014.

While the U.S. prohibits tourism to Cuba, Americans can travel here for specially designated purposes like religious activity or the vaguely defined category of “people-to-people” cultural interaction.

Obama allowed individuals to participate in “people-to-people” activities outside official tour groups. Hundreds of thousands of Americans responded by designing their own Cuban vacations without fear of government penalties.

Since Cuba largely steers tour groups to government-run facilities, Americans traveling on their own became a vital market for the island’s private entrepreneurs, hotly desired for their free spending, heavy tipping and a desire to see a “real” Cuba beyond all-inclusive beach resorts and quick stops on tour buses. The surge helped travel-related businesses maintain their role as by far the most successful players in Cuba’s small but growing private sector.

Trump’s new policy re-imposed the required for “people-to-people” travel to take place only in tour groups, which depend largely on Cuban government transportation and guides.

As a result, many private business people are seeing so many fewer Americans that it feels like their numbers are dropping, even though the statistics say otherwise.

“Tourism has grown in Cuba, with the exception of American tourism,” said Nelson Lopez, a private tour guide. “But I’m sure that sometime soon they’ll be back.”

While Trump’s new rules didn’t take effect until November, their announcement in June led to an almost immediate slackening in business from individual Americans, many Cuban entrepreneurs say.

The situation was worsened by Hurricane Irma striking Cuba’s northern coast in September and by a Cuban government freeze on new licenses for businesses including restaurants and bed-and-breakfasts. Cuban officials say the freeze was needed to control tax evasion, purchase of stolen state goods and other illegality in the private sector, but it’s had the effect of further restricting private-sector activity in the wake of Trump’s policy change.

Cuban state tourism officials did not respond to requests for comment.

Trump’s policy changes did not touch flights or cruise ships. Jose Luis Perello, a tourism expert at the University of Havana, said more than 541,000 cruise ship passengers visited Cuba in 2017, compared with 184,000 the previous year. Even as entrepreneurs see fewer American clients, many of those cruise passengers are coming from the United States, he said.

Yunaika Estanque, who runs a three-room bed-and-breakfast overlooking the Bay of Havana, says she has been able to weather a sharp drop in American guests because a British tour agency still sends her clients, but things still aren’t good.

“Without a doubt our best year was 2016, before the Trump presidency,” she said. “I’ve been talking with other bed-and-breakfast owners and they’re in bad shape.”
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