Author: CensorBiz

Many western companies and brands have temporarily closed their locations in Russia or stopped selling products there. But officials for the some of the companies say they will continue to support their employees. Karina Bafradzhian has the story, narrated by Anna Rice. VOA footage by Artyom Kohkan.
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One man’s loss may be another’s unfortunate gain, and the Ukraine conflict is proving a boon to some energy-producing nations as oil prices soar.

The war has given an unexpected boost to Norway’s oil revenues and now the country, concerned it will be seen as a war profiteer, is mulling what to do with its sudden windfall.

Fueled by the sanctions imposed on Russia after its invasion of Ukraine, the surge in oil and natural gas prices could see Norway racking up almost $170 billion in extra oil and gas revenue this year, according to Nordea bank.

Western Europe’s biggest oil and gas exporter and one of the richest countries in the world, Norway could pocket nearly $5,680 more than expected every second of the day without lifting a finger.

But the boon is giving it a guilty conscience.

“There are times when it’s not fun to make money, and this is one of them, given the situation,” said Petroleum and Energy Minister Terje Aasland in an interview with television channel TV2.

Most of Norway’s oil revenue ends up in the state’s coffers, through taxes, dividends and direct holdings in oil and gas fields, which it then places in its sovereign wealth fund, already the world’s biggest.

The fund has suffered from the global stock market falls in recent weeks but is still worth around $227,000 for each of Norway’s 5.4 million inhabitants.

“Norway cannot escape the unpleasant fact: This is a form of war profit,” the daily Dagbladet wrote in an editorial.

“While Ukraine is being destroyed, and most other countries are mainly feeling the negative effects of the war, such as higher energy prices, higher food prices and general inflation, we are making a gain,” it said.

“This must be reflected in the way we think about the use of money,” it added.

Multiuse Marshall Plan?

Many want to see a redistribution of all or part of the war gains.

Norway’s Green Party has called for the billions of additional petrodollars to be placed in a solidarity fund to be used as a sort of Marshall Plan for various needs.

It could be used to finance both humanitarian aid and the reconstruction of Ukraine, help Europe reduce its dependence on Russian gas and help the poorest countries counter soaring costs for energy and food, the party suggested.

“The extra oil revenue from the war should go to Ukraine, not us,” it said.

The center-left government has so far pledged up to $227 million in humanitarian aid to Ukraine.

‘Display leadership’

Prime Minister Jonas Gahr Store has insisted that Norway can help most by supplying as much gas as possible to Europe to help reduce its dependency on Russia.

Norway covers between 20% and 25% of the European Union’s and Britain’s needs via a vast network of gas pipelines, compared with between 45% and 50% for Russia.

European Climate Pact ambassador Paal Frisvold meanwhile suggested that Norway should forgo the profits and cap the price of gas sold to European countries, which are just emerging from the pandemic, some with heavy debts.

“Our profits are the invoices of others,” he told AFP.

“The most important thing is to show solidarity, to display leadership at a historic moment. My kids are going to ask me, ‘Dad, what did Norway do during the Ukraine war?’ I don’t want to tell them that we made a killing,” he said.

Norway’s government, which is currently drawing up its spring budget, said there was currently no plan for such a cap.
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Fewer Americans applied for unemployment benefits last week as layoffs continue to fall amid a strong job market rebound.

Jobless claims fell by 15,000 to 214,000 for the week ending March 12, down from the previous week’s 229,000, the Labor Department reported Thursday. First-time applications for jobless aid generally track the pace of layoffs.

The four-week average for claims, which compensates for weekly volatility, fell to 223,000 from the previous week’s 231,750.

In total, 1,419,000 Americans — a 50-year low — were collecting jobless aid the week that ended March 5, down 71,000 from the week before that.

Earlier this month, the government reported that employers added a robust 678,000 jobs in February, the largest monthly total since July. The unemployment rate dropped to 3.8%, from 4% in January, extending a sharp decline in joblessness to its lowest level since before the pandemic erupted two years ago.

U.S. businesses posted a near-record level of open jobs in January — 11.3 million — a trend has helped pad workers’ pay and added to inflationary pressures.

The Federal Reserve launched a high-risk effort Wednesday to tame the worst inflation since the early 1980s, raising its benchmark short-term interest rate and signaling up to six additional rate hikes this year.

The Fed’s quarter-point hike in its key rate, which it had pinned near zero since the pandemic recession struck two years ago, marks the start of its effort to curb the high inflation that followed the recovery from the recession. The rate hikes will eventually mean higher loan rates for many consumers and businesses.

The central bank’s policymakers expect inflation to remain elevated, ending 2022 at 4.3%, according to quarterly projections they released Wednesday.

Last week, the government reported that consumer inflation jumped 7.9% over the past year, the sharpest spike since 1982.

 
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Reports of counterfeit banknotes circulating in Myanmar have skyrocketed in recent weeks amid the junta’s mismanagement of the economy, but experts say the military regime is ill-equipped to address the problem because officials “only know how to give orders” but not implement them.

Since February, a growing number of posts have appeared on social media allegedly documenting fake high-denomination bills involved in public cash transactions, while offers for counterfeit kyats are commonly advertised online or papered on walls at bus terminals in cities and towns across the country.

Earlier this week, Facebook user “Rose Angle” posted a video in which he complained about a growing number of fake kyats and provided a demonstration of how the dye could be washed off one he claimed to have obtained simply by holding it under a running faucet. The post received several responses by users who included photos of what they claimed were counterfeit bills they had received in cash transactions.

RFA’s Myanmar Service spoke with sources in the business and banking communities, as well as other members of the public, who said they had personally dealt with fake currency and described the problem as increasingly severe.

A salesperson based in the seat of Bago region’s Pyay township told RFA that he was recently made to cover his company’s loss after he accepted counterfeit banknotes in one cash transaction.

“We didn’t realize it at first, but when we brought the notes to the bank, they determined that some of them were counterfeits,” he said, speaking on condition of anonymity.

“When such fake notes are discovered, we must pay from our own pockets and it’s not easy to do that when there are two or three 10,000-kyat counterfeit notes. It hurts a lot. Thirty thousand kyats [$17] is a lot for us.”

The salesperson said a similar incident occurred in mid-February and that he had discovered counterfeit currency twice that month. He now regularly examines the watermarks and thickness of all bills during cash transactions but noted that spotting fakes is difficult for average people who lack the tools to detect them.

Soe Tun, a businessman in the commercial capital Yangon, told RFA he had been forced to obtain a counterfeit bill detector because of the increase in fake bills in circulation.

“We have to be very careful these days as counterfeits are now more common than ever before,” he said, suggesting the problem had worsened since the junta seized power in a Feb. 1, 2021, coup, sending the economy into a freefall.

“For money changers, there are machines to detect these counterfeit notes, but they aren’t accessible to ordinary people. Otherwise, your best option is to deal with payments through bank accounts, particularly if there is a large amount of money involved.”

Other sources noted a proliferation of advertisements in recent weeks offering 1 million kyats [$560] worth of counterfeit bills for as little as 100,000 kyats [$56], which they said had exacerbated the problem.

Investigation under way

Aung Kyaw Than, the junta’s director general of the Central Bank’s financial management department, told RFA that efforts are being made to crack down on the sale of counterfeit notes online.

But he said that reports of such services are overblown.

“These are likely rumors, as I haven’t seen such sales being made,” he said, adding that the junta’s Ministry of Home Affairs “is investigating the matter to take proper action.”

Junta Deputy Information Minister Zaw Min Tun outright dismissed concerns over the reports of counterfeiting.

“We have discovered some counterfeit notes, but it wasn’t a lot,” he said, adding that the fakes “were not of high quality.”

“We’re also watching what’s happening on social media and trying to find out the source of the reports. We have found that [offers of counterfeit bills] weren’t being acted on. I just want to say that there’s no need to worry about this problem.”

The junta comments follow media reports citing an official announcement in January which said a police raid on counterfeit bill producers in Karen state’s Myawaddy township had nabbed more than 1,700 fake 10,000-kyat denomination bills along with uncut sheets of paper used to print currency.

Economist Zaw Pe Win said the problem will continue if the junta fails to put systematic controls in place.

“The problem with the military is that it only knows how to give orders, but it offers no systematic or technical policy for how to implement them. The junta just tries to fix problems however it sees fit,” he said.

“If the military doesn’t change that approach, things won’t get any better. Criminals will produce counterfeits, if given a chance, and they will be distributed to the public. Unless the junta can find an effective way to stop this, the situation will become worse.”

Zaw Pe Win said that the junta’s violent repression of anti-coup protests had destroyed investor confidence in Myanmar and the resulting economic turmoil, but ordinary people are the ones suffering the consequences.

He said the military must normalize foreign trade relations and provide stability if it hopes to repair the economy but has so far been unable or unwilling to do so.

Meanwhile, the proliferation of counterfeit notes has only added to the anxiety of a population already grappling with a rapidly depreciating kyat, rising commodity prices, and worsening food shortages in the wake of the coup.
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The U.S. Federal Reserve launched a high-risk effort Wednesday to tame the worst inflation since the early 1980s, raising its benchmark short-term interest rate and signaling up to six additional rate increases this year. 

The Fed’s quarter-point hike in its key rate, which had been pinned near zero since the pandemic recession struck two years ago, marks the start of its effort to curb the high inflation that followed the recovery from the recession. The rate hikes will eventually mean higher loan rates for many consumers and businesses. 

The central bank, in a policy statement, along with quarterly projections and remarks by Chair Jerome Powell at a news conference, pointed to a somewhat more aggressive approach to rate hikes than many analysts had expected. 

The projections showed that seven of the central bank’s 16 policymakers favor at least one half-point rate hike this year, suggesting that such a large increase is possible, said Michael Feroli, an economist at JPMorgan Chase. 

At his news conference, Powell stressed his confidence that the economy is strong enough to withstand higher interest rates. But he also made clear that the Fed is focused on doing whatever it takes to reduce inflation, over time, to its 2% annual target. Otherwise, Powell warned, the economy might not sustain its recovery from the pandemic recession. 

“We’re acutely aware of the need to restore price stability,” the Fed chair said. “In fact, it’s a precondition for achieving the kind of labor market that we want. You can’t have maximum employment for any sustained period without price stability.” 

Quarterly projections  

The Fed also released a set of quarterly economic projections Wednesday that underscored the potential for extended interest rate increases in the months ahead. Seven hikes would raise its short-term rate to between 1.75% and 2% at the end of 2022. Fed officials also forecast four more rate increases in 2023, which would boost its benchmark rate to 2.8%. 

That would be the highest level since March 2008. Borrowing costs for mortgage loans, credit cards and auto loans will likely rise as a result. 

“Clearly, inflation has moved front and center into the Fed’s thinking,” said Tim Duy, chief U.S. economist at SGH Macro Advisors. 

The central bank’s policymakers expect inflation to remain elevated, ending 2022 at 4.3%, according to quarterly projections they released Wednesday. The officials also forecast a much slower economic growth of 2.8% this year, down from a 4% estimate in December. 

But many economists worry that with inflation already so high — it reached 7.9% in February, the worst in four decades — and with Russia’s invasion of Ukraine driving up gas prices, the Fed may have to raise rates even higher than it now expects and potentially cause a recession. 

By its own admission, the central bank underestimated the breadth and persistence of high inflation after the pandemic struck. And many economists say the Fed has made its task riskier by waiting too long to begin raising rates. 

The Fed’s projections show that by the end of next year, the policymakers expect their short-term rate to be above “neutral” — the level at which they think the rate neither fuels nor slows economic growth. 

Roberto Perli, an economist at Piper Sandler, questioned Powell’s assurances that the economy could withstand such higher rates. 

“In the past, whenever the Fed has approached — let alone exceeded — neutral, the economy weakened sharply,” Perli wrote in a note to clients. “The risk of recession in 2023 and beyond is increasing.” 

Powell’s predictions 

Yet Powell downplayed the likelihood of an economic setback. 

“The probability of a recession in the next year is not particularly elevated,” he said. 

At his news conference, Powell said he believed that inflation would slow later this year as supply chain bottlenecks clear and more Americans return to the job market, easing upward pressure on wages. 

He also suggested that over time, the Fed’s higher rates will reduce consumer spending on interest rate-sensitive items such as autos and cars. Americans may also buy less as credit card rates increase. Those trends would eventually reduce businesses’ demand for workers and slow pay raises, which are running at a robust 6% annual rate, and ease inflation pressures. 

Powell noted that there are a near-record number of job openings, leaving 1.7 available jobs, on average, for every unemployed person. As a result, he expressed confidence that the Fed can lower demand for workers and wage growth without increasing unemployment. 

“All signs are that this is a strong economy,” he said, “one that will be able to flourish in the face of less accommodative monetary policy.” 

The Fed’s forecast for numerous additional rate hikes in the coming months initially disrupted a strong rally on Wall Street, weakening stock gains and sending bond yields up. But stock prices more than recovered their gains soon after the press conference began. 

Most economists say that sharply higher rates are long overdue to combat the escalation of inflation across the economy. 

“With the unemployment rate below 4%, inflation nearing 8%, and the war in Ukraine likely to put even more upward pressure on prices, this is what the Fed needs to do to bring inflation under control,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association. 

Powell is steering the Fed into a sharp U-turn. Officials had kept rates ultra-low to support growth and hiring during the recession and its aftermath. As recently as December, Fed officials had expected to raise rates just three times this year. 

One member of the Fed’s rate-setting committee, James Bullard, head of the Federal Reserve Bank of St. Louis, dissented from Wednesday’s decision. Bullard favored a half-point rate hike, a position he has advocated in interviews and speeches. 

The Fed also said it would begin to reduce its nearly $9 trillion balance sheet, which has more than doubled in size during the pandemic, “at a coming meeting.” That step will also have the effect of tightening credit for many consumers and businesses. 

Since its last meeting in January, the challenges and uncertainties for the Fed have escalated. Russia’s invasion has magnified the cost of oil, gas, wheat and other commodities. China has closed ports and factories again to contain a new outbreak of COVID-19, which will worsen supply chain disruptions and likely further fuel price pressures. 

In the meantime, the sharp rise in average gas prices since the invasion, up more than 60 cents to $4.31 a gallon nationally, will send inflation higher while also probably slowing growth — two conflicting trends that are notoriously difficult for the Fed to manage simultaneously. 

 
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India is exploring the possibility of buying oil from Russia amid sanctions imposed by Western countries in the wake of its invasion of Ukraine.

India’s petroleum and natural gas minister, Hardeep Singh Puri, said in parliament Tuesday that the government was having discussions with Russia on crude oil purchases.

“I myself have had a conversation with the appropriate levels of the Russian federation. There are discussions currently underway,” he told lawmakers. Puri said that the government was looking at issues such as availability and payment for the crude.

A report in the Times of India newspaper said that India is close to finalizing a deal to buy 3.5 million barrels of Russian crude at “deep discounts.” It attributed the report to people aware of the development but who requested anonymity to discuss the matter.

India is the world’s third largest importer of oil, depending on crude from overseas for over 80% of its needs.

The bulk of its supplies come from the Middle East and the United States, with Russian crude accounting for only about three per cent of its imports.

But the wild fluctuation in international prices following the outbreak of fighting in Ukraine has raised worries about the impact of a ballooning oil import bill on the nascent economic recovery that the country has posted in the last year.

Analysts say New Delhi’s talks on the purchase of crude from Moscow signal that India will keep the doors to trade with Russia open.

Russia has urged India to increase oil exports and investment. In a statement last Friday, Russian Deputy Prime Minister Alexander Novak said that Russia’s oil and petroleum product exports to India have approached $1 billion and there are “clear opportunities to increase this figure.” He also told Petroleum Minister Puri that Moscow was “interested in further attracting Indian investment to the Russian oil and gas sector and expanding Russian companies’ sales networks in India.”

Asked about the possibility that India could take up the Russian offer of discounted crude oil at her daily press briefing on Tuesday, White House Press Secretary Jen Psaki said, “Our message to any country continues to be that abide by the sanctions that we have put in place and recommended. But I don’t believe this would be violating that (sanctions).”

“But also think about where you want to stand when history books are written in this moment in time. And support for the Russian leadership is support for an invasion that obviously is having a devastating impact,” she added.

While the United States has banned Russian oil imports, the European Union has issued sanctions against some Russian companies without banning the purchase of Russian oil.

Resisting pressure from the United States and other Western allies, India has abstained from voting against Moscow at the United Nations. Analysts cite the country’s huge dependence on Russian weapons for its position.

India has called for an end to violence and a diplomatic solution to the crisis in Ukraine. But New Delhi has found itself in a difficult situation as it tries to balance its longstanding ties with Russia with its growing strategic partnership with Washington, that is seen as critical in countering China.
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Traditional Kashmiri carpet weavers are turning to a 21st century technology already embraced by French winemakers and other international purveyors to boost sales by reassuring buyers that they are buying authentic made-in-Kashmir carpets, not cheap imitations.

The technology, used to authenticate wine from Cabo Verde, watches made in Switzerland, Bashkir honey from Russia and Tushuri Guda cheese from Georgia, combines a digital QR code with geo-locational features to guarantee to buyers that a carpet was actually woven in Kashmir.

Carpets from the region are ranked among the finest in the world because of the fineness of the weaving and the quality of the wool and silk yarn.

Mahmood Ahmad Shah, director of Handloom & Handicrafts in Kashmir, says this is the first time the region’s pashmina or Kashmir silk carpets have received QR code-based geographical indications.

With QR code tagging, Shah expects to attract more clients, benefiting local artisans in Indian-administered Kashmir.

“We are optimistic that it would give boost to the $40 million [export] business and would benefit 54,000 artisans registered with the Department of Handloom & Handicrafts in Kashmir,” he told VOA.

The origin of Kashmir’s hand-knotted carpets, locally called as “Kalbaffi,” dates back to the 15th century. Sultan Zain-ul-Abidinis is believed to have sent Persian and Central Asian carpet weavers to Kashmir to teach the locals.

But Shah said the widespread sale of misbranded Kashmiri carpets has eroded trust among the consumers and led to the marginalization of local weavers such as Nissar Ahmad, a 50-year-old weaver from the outskirts of Srinagar who told VOA he works from 9:30 a.m. until 5 p.m. earning the equivalent of just $4.15.

“I have been into carpet weaving for over 35 years and at this age I can’t shift to any other economic activity to earn my living. With this earning, it is hard to manage daily expenses,” he said.

Shah said the certification will help the industry to regain customer trust, leading to a better life for the artisans.

From Gruyère cheese to Tequila, appellations of origin are jealously guarded by local growers and makers, especially in industries in which the quality of the product is directly linked to the place where it was made or grown. Many agricultural products, for example, are impacted by factors such as the climate and quality of soil.

The Srinagar-based Indian Institute of Carpet Technology (IICT) started labeling the Kashmiri carpets earlier this month, embedding such factors into the QR codes as the identity of the weaver, district, raw material, size, knots per square inch, pile height, quality and whether the weaver is an authorized GI user.

That information is readable on digital devices including smart phones, marking the first time the technology has been used in India. “Every piece of information you could ever want to know about a piece of carpet may be found in its QR code,” said Zubair Ahmad, director of the IICT.

Customers who are unable to scan the barcode can verify the product’s legitimacy by typing an alphanumeric code found on the label into a web browser. Ahmad said the label also bears certain information that can be read with infrared equipment, and which cannot be reproduced or damaged.

In order to participate in the program, artisans and manufacturers needs to register with the Indian federal government’s office of the Controller General of Patents, Designs & Trade Marks. According to the Geographical Indications Registry of India, so far there are 25 authorized users in Kashmir.

Shah said the government will be able to map the movement of each carpet in order to better evaluate the international market.

“When a customer scans the QR-tag through a smart phone fixed on the carpet, the department through block-chain technology will be able to trace the geographic location of the carpet and assess the demand from the various countries and will accordingly formulate market strategy.”

The institute has already received hundreds of carpets for labeling and expects the process to standardize the quality of hand knotted carpets. Shah hopes that will lead to Kashmiri carpets being valued on a par for price and quality with the best Iranian and Turkish hand knotted carpets.

A geographical indication can also highlight a product’s human-made attributes, such as manufacturing skills and traditions. The quality of handicrafts often depends on local natural resources and techniques handed down from one generation to the next.
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A massive container ship, owned by the same company whose vessel last year blocked the Suez Canal, has run aground near the U.S. port of Baltimore, U.S. officials said Monday.

The Ever Forward, a 1,096-foot (334-meter) vessel ran aground in the Chesapeake Bay shortly after leaving a Baltimore port Sunday night, William Doyle, the executive director of the Maryland Port Administration, said in a statement.

“There have been no injuries or spills,” Doyle clarified.

“The ship’s grounding is not preventing other ships from transiting to the Port of Baltimore,” he added, noting that efforts had been underway since Sunday night to free the stranded vessel.

The accident came almost exactly a year after the 200,000-ton container ship MV Ever Given became wedged in the Suez Canal during a sandstorm, blocking the key waterway for six days.

The Suez Canal is a vital artery from Asia to Europe that carries 10% of global maritime trade and provides Egypt with vital revenues.

Both vessels are owned by the Evergreen Marine Corp., which is based out of Taiwan.

The Ever Forward was bound for Norfolk, Virginia, when the accident happened, U.S. media reported. 
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Russian officials have said that they will move to nationalize the assets of Western companies that pull out of their country over its invasion of Ukraine, a decision that will cause significant economic harm to hundreds of businesses while, at least temporarily, preserving the jobs of the tens of thousands of Russians employed by them. 

As of Monday, at least 375 companies had announced some sort of pullback from Russia, according to a list maintained by the School of Management at Yale University. The list includes companies that have cut ties with Russia completely, as well as those that have suspended operations there while attempting to preserve the option to return. 

According to multiple media reports, dozens of Western companies have been contacted by prosecutors in Russia with warnings that their assets, including production facilities, offices, and intellectual property, such as trademarks, may be seized by the government if they withdraw from the country. 

Endorsed by Putin 

Russian President Vladimir Putin last week endorsed the proposed seizure of Western assets, a plan that was originally aired by a senior member of United Russia, the country’s dominant political party. 

United Russia’s proposal went beyond asset seizures, advocating a policy of arresting executives of foreign business who criticize the actions of the Russian government. According to Reuters, another proposal under consideration would target public companies if more than 25% of their shares are held by individuals from “unfriendly states.” A bill put forward by United Russia legislators would allow the government to force such firms into “external administration,” leading to the elimination of existing shareholder rights and the auctioning of new shares recognized by the Russian government. 

On Twitter last week, White House press secretary Jen Psaki warned that Russia could face further sanctions or legal action if it goes forward with the nationalization plan. “Any lawless decision by Russia to seize the assets of these companies will ultimately result in even more economic pain for Russia,” she wrote. 

New sort of expropriation 

There is a long history of governments expropriating the assets of foreign firms, but experts said that what Russia is threatening falls outside the typical pattern. In the past, governments have nationalized foreign businesses in the name of ideology, as Cuba did in the wake of the Communist revolution there, or because they want to capture the revenue going to private enterprise, as with Iran in the nationalization of its oil industry in 1951. 

Elisabeth Braw, a senior fellow at the American Enterprise Institute, told VOA that is not what is happening in Russia. 

“It’s not about Russia saying, ‘Well, we think we can run these companies better on our own,'” she said. “It’s really about punishing those companies, which makes it so different from various revolutionary governments that have seized Western companies’ assets in the past.” 

In other cases of nationalization, Braw said, the government seizing assets typically did so strategically. They chose business sectors, at least in part, based on the assumption that they had, or could quickly develop, the capacity to operate them independently. 

But Russia’s threat of blanket nationalization of foreign companies that leave the country would effectively put the Kremlin into the role of operating everything from McDonald’s fast-food franchises to Gillette razor factories to Mercedes-Benz car manufacturing plants. 

Success unlikely 

Experts said that Russia is likely to have a difficult time finding people with the expertise to run many of the foreign firms that might be subject to nationalization. The management ranks of most non-Russian firms have historically been heavily weighted with expatriates, many of whom have been rushing to get out of the country. 

“Some businesses, some manufacturing operations, might well fit the Russian model,” James O’Rourke, a professor of Management at the University of Notre Dame’s Mendoza College of Business, told VOA. 

Certain kinds of companies, he said, “might be run by an oligarch or a friend of the regime, and it might work out. But I don’t think most of them will.” 

O’Rourke said that even if Russia were able to find the managers needed to keep foreign businesses running, supply chain problems may prove insurmountable. McDonald’s, for example, sources its produce and baked goods from multiple different countries, most of which are actively engaged in the international effort to cut off trade with Russia. Gillette’s manufacturing facilities in Russia use machines made in the U.S. and Germany, which will be unwilling to supply spare parts. 

Political benefits 

The Russian government might be able to score a short-term public relations victory with its own people if it can portray the nationalization of Western businesses as an effort to retain jobs that might otherwise have been lost, said Braw, of the American Enterprise Institute. 

However, she said, unless the Kremlin can find a way to successfully perpetuate the companies’ operations without Western expertise or supplies, the PR benefits of nationalization are likely to be short-lived. 

 
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The United States has banned Russian energy imports and wants Saudi Arabia to increase oil production to mitigate a dramatic spike in gas prices. But just how willing Gulf states are to help bring oil prices down remains to be seen. VOA’s Senior Diplomatic Correspondent Cindy Saine reports.
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A shrinking number of well-known companies are still doing business in Russia, even as hundreds have announced plans to curtail ties. 

Burger King restaurants are open, Eli Lilly is supplying drugs, and PepsiCo is selling milk and baby food, but no more soda. 

The pace of businesses exiting Russia accelerated over the past week as the deadly violence and humanitarian crisis in Ukraine worsened, and as Western governments ratcheted up economic sanctions to punish Russia for its two-week-old invasion. Major oil companies BP and Shell walked away from multibillion-dollar investments. McDonald’s and Starbucks stopped serving customers. 

The companies that still have a presence in Russia say they have franchise owners or employees to consider; they don’t want to punish Russians by taking away food or medicine; or they provide software or financial services for Western businesses that aren’t easy to replace. 

“It’s a business calculation. On the stay side: How much revenue do they earn in Russia? Do they provide an essential service?” said Mary Lovely, a senior fellow at the Peterson Institute for International Economics in Washington. “Each day that passes, though, calculations change. Sanctions against Russia are likely to last a long time, along with rising revulsion.” 

Some companies in lower-profile industries like agriculture have been able to fly under the radar and avoid the type of social media pressure that had been directed at brands such as McDonald’s, Uniqlo and Starbucks, before they decided to cut ties this week, if only temporarily. 

But in this era of hyper-awareness that some customers and even employees have about the positions companies take on social and moral issues, those still doing business with — or in — Russia are putting their reputations on the line. 

Take Japanese clothing chain Uniqlo, which drew negative attention after the CEO of its parent company told the Nikkei newspaper in a story published Tuesday that the reason to keep nearly 50 Russian stores open was that: “clothing is a necessity of life.” By Thursday, Uniqlo said it would close the stores. 

“There’s potentially a big downside of companies to be on the wrong side of this,” Lovely said. 

Many large multinationals didn’t flee Russia at the start of the war. But that changed as the invasion led to increasing violence — and more than 2 million refugees fleeing Ukraine. 

There are now more than 300 companies that have curtailed operations in Russia, according to a list maintained by a team at Yale. Apple stopped shipments. Google paused ad sales. Automakers halted production. Hollywood studios ceased releasing films, and Netflix stopped streaming. 

Some of these decisions were driven by the need to comply with the sanctions Western governments leveled at Russia; others came because of supply chain issues or the fear of a hit to their reputations. Sanctions have already taken a toll on Russia’s economy and global trade. 

Some companies that plan to sever ties with Russia say it isn’t so simple. 

Citigroup said Wednesday that selling its 11 Russian bank branches will be difficult because the country’s economy has been cut off from the global financial system. Until then, Citi said it is “operating the business on a more limited basis” and is helping its U.S. and other corporate clients suspend their businesses in Russia. 

Likewise, Amazon says its biggest cloud-computing customers in Russia are headquartered elsewhere. The company said Tuesday it has stopped accepting new cloud-computing customers in Russia and that it plans to suspend e-commerce shipments to Russia. 

Fast-food companies often have franchising agreements that complicate an exit, because they don’t own those locations. 

That helps explain why Restaurant Brands International, owner of Burger King, is keeping its 800 restaurants open in Russia. And why Yum Brands, parent company of KFC and Pizza Hut, announced the closure of 70 company-owned KFCs across Russia, but not the nearly 1,000 franchisee-owned KFCs, or its 50 Pizza Hut locations. 

This sometimes applies to hotels as well: Marriott says its Russian hotels are owned by third parties, and it’s evaluating their ability to remain open. 

“I think a lot of these companies are expecting a backlash if they’re staying,” said Susanne Wengle, a political science professor and Russia expert at Notre Dame. 

McDonald’s action in Russia was easier: it owns most of the 850 restaurants in Russia it will temporarily close. 

But there are companies that remain in Russia — whether in whole or in part — and say that it’s because they view their products as essential. 

Pharmaceutical company Eli Lilly is one of them. “We continue to distribute medicines in Russia as patients with cancer, diabetes and auto-immune diseases everywhere count on us to support them,” said spokesperson Tarsis Lopez, noting that EU and U.S. sanctions do not apply to medicine. 

PepsiCo said it will stop selling soda but will continue to supply milk, baby formula and baby food in Russia. And Unilever said it will keep selling “everyday essential” Russian-made food and hygiene products to Russians, but that it will stop exporting and advertising these products. 

Tech companies have their own balancing act. Providers of internet-based services like Google, Twitter and Facebook have been mostly reluctant to take actions that could deprive Russian citizens access to information other than what they get from state media. (Russia blocked Facebook and Twitter, however, and then TikTok largely suspended its service in the country.) 

The response from industrial food producers has been complicated by Russia’s role as a major exporter of wheat and other commodities. 

Bunge, which has assets of $121 million in Russia, said Thursday that its Russian oilseed plant will operate and serve the domestic market, but that it has suspended “any new export business.” Farm equipment maker John Deere said it has stopped machine shipments to Russia; it is monitoring a Russian plant that makes seeding equipment and its dealer network in the country “day-by-day.” Cargill and ADM, other agriculture companies, have not responded to questions. 

These companies don’t want the Russian government to seize their assets should they close up shop, said Vincent Smith, an economics professor at Montana State University. 

Other companies point to their employees’ livelihoods in rationalizing decisions to stay, or not completely sever ties. 

Starbucks initially expressed concern for its 2,000 Russian employees before reversing course Tuesday. The Kuwaiti company that franchises its 130 Russian stores is closing them but continuing to pay employees. 

British American Tobacco on Wednesday said it would keep making and selling cigarettes in Russia, where it has 2,500 employees, citing a “duty of care” for employees. 

 
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Sudan’s military rulers this week announced an emergency committee to address the country’s collapsing economy and pointed to its gold mining as a possible boost. Sudan’s ambassador to Russia has denied reports that Moscow has been smuggling gold from Sudan in preparation for sanctions over its invasion of Ukraine. But Sudanese analysts say gold smuggling is rampant, including to Russia.

State media on Thursday said the ruling Sovereign Council’s second in command, General Mohamed Hamdan Dagalo, known as Hemeti, met with gold miners who vowed to supply the central bank with gold.

The report came after Hemeti gave a rare press statement this week on efforts to prevent the country’s economic collapse.

Sudan’s exports dropped 85% in January and prices for everything are quickly rising — one of the main sparks for the 2019 uprising that led the military to oust former president Omar al-Bashir.

In remarks to media Monday, Hemeti announced an economic emergency committee to address the issues. Among other measures, he pointed to Sudan’s gold mining, which amounts to at least 50 tons per year, as a potential solution.

Hemeti says one of the most important resources that can help boost Sudan’s economy is the gold. He says security forces have arrested a lot of people smuggling gold, 40 buyers in all. He says the buyers are not the problem and asks, from whom are they buying this gold? That’s the question, he says, adding, “We will find out.”

Hemeti gave no details on the nationalities of those arrested, the timing, or who was suspected of buying how much smuggled gold.

His comments came just days after a report in the British Telegraph newspaper said Russia prepared for sanctions over its Ukraine invasion by buying smuggled Sudanese gold.

Hemeti didn’t comment on the allegation in his remarks.

Late last month, Hemeti began a week-long visit to Moscow as much of the world was criticizing Russia for preparing to invade its neighbor.

The Kremlin’s invasion began as Hemeti met with Russian officials to discuss expanding and strengthening cooperation with Sudan.

After the general’s trip to Moscow, he reaffirmed a Bashir-era deal for Russia to open a navy base in Port Sudan, which for Russia to open a navy base in Port Sudan, which — if carried out — would be Russia’s first in Africa.

Sudan’s Foreign Ministry spokesman refused to comment on the allegations of Russian gold smuggling.

But in a written response to VOA through a messaging application, Sudan’s acting ambassador to Russia Onor Ahmed Onor dismissed the claims.

“I have nothing to say other than it is fake news and a story created from the imagination of the Telegraph reporter,” read the text.

Hemeti commands the Rapid Support Forces (RSF), which grew out of the Janjaweed militias that human rights groups say committed crimes against humanity in Sudan’s Darfur region.

Analysts say the RSF is itself involved in gold smuggling.

Salah AlDoma is dean of political science at Khartoum’s Omdurman Islamic University.

“Russia surely obtained gold from several sources, not only Sudan,” he said. “But, yes, Sudan is one of the countries that the Russian companies managed to benefit from with secret agreements with the RSF and other entities like the former ruling National Congress Party. Russia, like many countries, benefited from smuggling Sudanese gold.”

The RSF office refused to take a call from VOA seeking comment on the allegations.

A spokesman at Sudan’s Ministry of Minerals confirmed to VOA that two Russian gold mining companies are operating in the country — Elianze and Meroe Gold, a subsidiary of M-Invest.

But the ministry’s spokesman would not comment on allegations of gold smuggling.

A 2019 report by CNN says M-Invest, a Russian company linked to the Kremlin and Russian mercenaries, was heavily involved in smuggling gold out of Sudan.

CNN reported in 2019 that M-Invest, a mining company the U.S. says is owned by Russian President Vladimir Putin’s ally, Yevgeny Prigozhin, also advised Sudanese authorities how to quash public protests.

Authorities say Prigozhin is behind the Wagner Group of Russian mercenaries that U.N. experts have accused of human rights abuses from Syria to Libya to the Central African Republic.

While it’s not clear to what extent the Russian companies are still involved in Sudan’s gold mining, analysts say most of it has been off the books.

Sanhori Eissa, the former head of economics at Sudan’s largest newspaper Al-Rayaam, says exporting Sudan’s gold to Russia remains a smuggling operation, as is the case with nine other neighboring countries of Sudan.

“The export is probably done through the United Arab Emirates [UAE], through Khartoum international airport. The only outlet is the UAE, where Sudan’s [smuggled] gold gets refined and stamped as an emirate product then [re-]exported,” he said.

It was not possible to independently verify Eissa’s claims.

Sudan was headed for international relief from lenders but was cut off from foreign assistance after an October military coup overthrew the transitional government formed after Bashir’s ouster.

Since the coup, ongoing street protests against military rule have left at least 85 people dead.

Some information in this report came from Reuters.
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Propelled by surging costs for gas, food and housing, consumer inflation in the U.S. jumped 7.9% over the past year, the sharpest spike since 1982 and likely only a harbinger of even higher prices to come.

The increase reported Thursday by the Labor Department reflected the 12 months ending in February and didn’t include most of the oil and gas price increases that followed Russia’s invasion of Ukraine on Feb. 24. Since then, average gas prices nationally have jumped about 62 cents a gallon to $4.32, according to AAA.

Even before the war further accelerated price increases, robust consumer spending, solid pay raises and persistent supply shortages had sent U.S. consumer inflation to its highest level in four decades. What’s more, housing costs, which make up about a third of the government’s consumer price index, have risen sharply, a trend that’s unlikely to reverse anytime soon.

The government’s report Thursday also showed that inflation rose 0.8% from January to February, up from the 0.6% increase from December to January.

For most Americans, inflation is running far ahead of the pay raises that many have received in the past year, making it harder for them to afford necessities like food, gas and rent. As a consequence, inflation has become the top political threat to President Joe Biden and congressional Democrats as the midterm elections draw closer. Small business people say in surveys that it’s their primary economic concern, too.

Seeking to stem the inflation surge, the Federal Reserve is set to raise interest rates several times this year beginning with a modest hike next week. The Fed faces a delicate challenge, though: If it tightens credit too aggressively this year, it risks undercutting the economy and possibly triggering a recession.

Energy prices, which soared after Russia’s invasion of Ukraine, jumped again this week after Biden said the United States would bar oil imports from Russia. Oil prices did retreat Wednesday on reports that the United Arab Emirates will urge fellow OPEC members to boost production. U.S. oil was down 12% to $108.70 a barrel, though still up sharply from about $90 before Russia’s invasion.

Yet energy markets have been so volatile that it’s impossible to know if the decline will stick. If Europe were to join the U.S. and the United Kingdom and bar Russian oil imports, analysts estimate that prices could soar as high as $160 a barrel.

The economic consequences of Russia’s war against Ukraine have upended a broad assumption among many economists and at the Fed: That inflation would begin to ease this spring because prices rose so much in March and April of 2021 that comparisons to a year ago would show declines.

Should gas prices remain near their current levels, Eric Winograd, senior economist at asset manager AllianceBernstein, estimates that inflation could reach as high as 9% in March or April.

The cost of wheat, corn, cooking oils and such metals as aluminum and nickel have also soared since the invasion. Ukraine and Russia are leading exporters of those commodities.

Even before Russia’s invasion, inflation was not only rising sharply but also broadening into additional sectors of the economy. Many prices have jumped over the past year because heavy demand has run into short supplies of items like autos, building materials and household goods.

But even for some services unaffected by the pandemic, like rents, costs are also surging at their fastest pace in decades. Steady job growth and high home prices are encouraging more people to move into apartments, elevating rental costs by the most in two decades. Apartment vacancy rates have reached their lowest level since 1984.

In the final three months of last year, wages and salaries jumped 4.5%, the sharpest such increase in at least 20 years. Those pay raises have, in turn, led many companies to raise prices to offset their higher labor costs.

Soaring energy costs pose a particularly difficult challenge for the Fed. Higher gas prices tend to both accelerate inflation and weaken economic growth. That’s because as their paychecks are eroded at the gas pump, consumers typically spend less in other ways.

That pattern is akin to the “stagflation” dynamic that made the economy of the 1970s miserable for many Americans. Most economists, though, say they think the U.S. economy is growing strongly enough that another recession is unlikely, even with higher inflation.
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While soaring oil prices hit consumers worldwide, their misfortune means a fortune for others.

There will certainly be a “significant boost in government revenue” for some oil-producing African countries as oil prices hit their highest levels since 2008 after the U.S bans imports of Russian oil, the African Energy Chamber tells VOA.

“Nigeria, Angola, Libya, South Sudan, Gabon, the Congo and Ghana are going to see a significant boost in government revenue,” said Verner Ayukegba, senior vice president at Johannesburg-based African Energy Chamber.

However, he said, despite the economic breather for these African economies, most of the countries on the continent are heavily dependent on imports of refined products and will see their expenditures balloon.

“Countries like South Africa who are not producers but major economies who import crude oil to be able to refine for their industries, countries are going to see an increase in their import bills,” he said.

Skyrocketing crude oil prices and the rising cost of living on the continent also threaten to increase inflation, says Bala Zakka, a petroleum engineer based in Lagos, Nigeria.

“In Nigeria today, diesel has been deregulated. A liter of diesel goes for 450 Nigerian Naira ($1.08), and this is where you will appreciate the pains that Nigerians are going through,” Zakka said.

The oil analyst was unhappy that Africa’s most populous nation of 200 million people relies on imported refined products despite having the capacity to locally refine oil for domestic use like gas, diesel and kerosene.

Nigeria is the main oil producer in Africa and the largest crude oil exporter on the continent.

According to data from Statista, in 2020, Nigeria led the exports of crude oil from Africa. Overall, those exports amounted to about 5.4 million barrels per day in that year.

Meanwhile, the African Energy Chamber’s Ayukegba said that because of the uptick in oil prices globally, most African nations are likely to see more exploration for new oil and gas sources.

“Exploration spend is going to lead to much more oil and gas activities off the coast of Africa. The Gulf of Guinea for instance, and also in onshore locations,” he told VOA.

”There’s drilling going on in places like Namibia at the moment, where Total and Shell have come up with significant discoveries,” he added.
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A Ukrainian man charged last year with conducting one of the most severe ransomware attacks against U.S. targets has been extradited to the United States and made a court appearance Wednesday, the U.S. Justice Department said.

According to an August 2021 indictment, Yaroslav Vasinskyi accessed the internal computer networks of several victim companies and deployed Sodinokibi/REvil ransomware to encrypt the data on their computers, the Justice Department said in a statement.

Vasinskyi was allegedly responsible for the July 2021 ransomware attack against Florida software provider Kaseya, the department said.

Reuters could not reach a representative of Vasinskyi. Kaseya did not immediately return a message seeking comment.

The Ukrainian national was accused in the indictment of breaking into Kaseya over the July 4 weekend last year and simultaneously distributing with accomplices REvil ransomware to as many as 1,500 Kaseya customers, encrypting their data and forcing some to shut down for days, the Justice Department said.

While most of the 1,500 businesses paralyzed as a result around the globe faced limited concerns, the disruption was felt keenly in places such as Sweden, where hundreds of supermarkets had to close because their cash registers were inoperative, and New Zealand, where schools and kindergartens were knocked offline.

Vasinskyi was charged in the indictment with breaking into the victim companies and installing encryption software developed by the core REvil ransomware hacking group. REvil directly handled the ransom negotiations and split the profits with Vasinskyi and other affiliates. This model allowed the notorious ransomware gang to extort numerous companies for cryptocurrency.

Vasinskyi was arrested in Poland in October. The Justice Department charged him and a Russian late last year.

U.S. law enforcement authorities transported Vasinskyi to Dallas, Texas, where he arrived March 3, the Justice Department said Wednesday.

REvil was involved in an attack last year against top global meat processor JBS S.A.
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President Joe Biden on Wednesday signed an executive order on government oversight of cryptocurrency that urges the Federal Reserve to explore whether the central bank should create its own digital currency.

Treasury Secretary Janet Yellen said the effort would “promote a fairer, more inclusive, and more efficient financial system” while countering illicit finance and preventing risks to financial stability and national security.

The Biden administration views the explosive popularity of cryptocurrency as an opportunity to examine the risks and benefits of digital assets, said a senior administration official who previewed the order Tuesday on the condition of anonymity, terms set by the White House.

Under the executive order, Biden also directed the Treasury Department and other federal agencies to study the impact of cryptocurrency on financial stability and national security.

Brian Deese and Jake Sullivan, Biden’s top economic and national security advisers, respectively, said the order establishes the first comprehensive federal digital assets strategy for the United States.

“That will help position the U.S. to keep playing a leading role in the innovation and governance of the digital assets ecosystem at home and abroad, in a way that protects consumers, is consistent with our democratic values and advances U.S. global competitiveness,” Deese and Sullivan said Wednesday in a joint statement.

The action comes as lawmakers and administration officials are increasingly voicing concern that Russia may be using cryptocurrency to avoid the impact of sanctions imposed on its banks, oligarchs and oil industry because of the invasion of Ukraine.

Last week, Democratic Sens. Elizabeth Warren, Mark Warner, and Jack Reed asked the Treasury Department to provide information on how it intends to inhibit cryptocurrency use for sanctions evasion.

The Biden administration has argued that Russia won’t be able to make up for the loss of U.S. and European business by turning to cryptocurrency. Officials said the Democratic president’s order had been in the works for months before Russia’s Vladimir Putin invaded Ukraine last month.

Daleep Singh, a deputy national security and economic adviser to Biden, told CNN on Wednesday that “crypto’s really not a workaround for our sanctions.”

The executive order had been widely anticipated by the finance industry, crypto traders, speculators and lawmakers who have compared the cryptocurrency market to the Wild West.

Despite the risks, the government said, surveys show that roughly 16% of adult Americans — or 40 million people — have invested in cryptocurrencies. And 43% of men ages 18-29 have put their money into cryptocurrency.

Coinbase Global Inc., the largest cryptocurrency exchange in the United States, said the company had not seen a recent surge in sanctions evasion activity.

Yellen said last week that “many participants in the cryptocurrency networks are subjected to anti-money laundering sanctions” and that the industry is not “completely one where things can be evaded.”

As for the Federal Reserve getting involved with digital assets, the central bank issued a paper in January that said a digital currency “would best serve the needs” of the country through a model in which banks or payment firms create accounts or digital wallets.

Some participants in digital currency welcome the idea of more government involvement with crypto.

Adam Zarazinski, CEO of Inca Digital, a crypto data company that does work for several federal agencies, said the order presents the opportunity to provide “new approaches to finance.”

“The U.S. has an interest in growing financial innovation,” Zarazinski said. He added that China and Russia were looking at crypto and building their own currency. More than 100 countries have begun or are piloting their own digital sovereign currency, according to the White House.

Katherine Dowling, general counsel for Bitwise Asset Management, a cryptocurrency asset management firm, said an executive order that provides more legal clarity on government oversight would be “a long term positive for crypto.”

But Hilary Allen, a financial regulation professor at American University, cautioned against moving too fast to embrace cryptocurrencies.

“I think crypto is a place where we should be putting the brakes on this innovation until it’s better understood,” she said. “As crypto becomes more integrated into our financial system it creates vulnerabilities not just to those who are investing in crypto but for everybody who participates in our economy.”

On Tuesday, the Treasury Department said its financial literacy arm would work to develop consumer-friendly materials to help people “make informed choices about digital assets.”

“History has shown that, without adequate safeguards, forms of private money have the potential to pose risks to consumers and the financial system,” said Nellie Liang, undersecretary for domestic finance.

Bitcoin and cryptocurrency related stocks got a boost Wednesday following Biden’s executive order.

The price of Bitcoin was up 9.8% at $42,211, according to Coindesk. Shares in cryptocurrency exchange Coinbase Global surged 9.3% in midday trading, while online brokerage Robinhood Markets rose 4.5%.

Riot Blockchain, which focuses on cryptocurrency mining, jumped 11.5%. Digital payments platforms also rose. PayPal added 4.9% and Block climbed 10.55%.
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The European Union has agreed to expand its third round of sanctions being imposed on Russia to target a larger number of oligarchs and officials close to President Vladimir Putin over Moscow’s unprovoked invasion of Ukraine.

The French Presidency of the European Council said in a series of tweets on March 9 that the new sanctions added would apply to “Russian leaders and oligarchs and their family members implicated in the Russian aggression against Ukraine.”

The third round of sanctions being imposed on Russia, the largest EU package agreed since the invasion began on February 24, includes a freeze on the Russian central bank’s assets in the bloc and a ban on Kremlin media in the European Union.

The French Presidency said the new sanctions approved on March 9 also include targeting the maritime sector and measures aim at excluding three Belarusian banks from the SWIFT financial payment messaging system, while also clarifying the issue of cryptocurrencies and giving a complete list of technologies and goods that cannot be sold between Russia and the bloc.

It did not detail which banks in Belarus, which has assisted Moscow in the invasion, are affected or which technologies and goods are included in the sanctions.

“These sanctions will be formally adopted by the Council by written procedure with a view to their rapid publication in the Official Journal of the European Union,” it said.

The EU has now sanctioned 680 people and 53 entities since Russia annexed Crimea in 2014, recognized the independence of the regions of Luhansk and Donetsk in eastern Ukraine, and invaded the country in February.
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