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MELBOURNE, Australia — Air Vanuatu filed for bankruptcy protection on Friday a day after the South Pacific state-owned carrier cancelled all international flights, stranding thousands of travelers.

The airline on Wednesday canceled more than 20 flights to and from the Australian cities of Sydney and Brisbane, and the New Zealand city of Auckland for the rest of the week. The airline said it was the result of “extended maintenance requirements” on their aircraft.

Ernst & Young Australia’s Morgan Kelly, Justin Walsh and Andrew Hanson were appointed liquidators in an equivalent of a U.S. Chapter 11 bankruptcy, the firm said in a statement. The liquidators said safety and maintenance checks would be made before normal operations resumed.

Kelly said the airline’s existing management team would remain in place.

“Air Vanuatu is critical to the people of the Republic of Vanuatu and a strategically important business to the nation,” Kelly said. “Our team is working closely with management to ensure continuity of service to customers and to ensure services continue as seamlessly as possible.”

“The outlook for the airline is positive, despite pressures on the broader industry, and we will be focused on securing the future of this strategically vital national carrier,” he added.

Affected travelers would be informed of this disruption and rebooked on flights as soon as operations resumed, the statement said.

Air Vanuatu operates four planes, including one Boeing 737 and three turboprop planes.

Tourism contributed 40% of Vanuatu’s gross domestic product.

The Vanuatu Tourism Office apologized to travelers for the disruption.

“This is an evolving situation and we will continue to post updates,” the office said in a statement.

The office’s chief executive Adela Issachar said the administrator was in discussions with Virgin Australia and Fiji Airways, airlines that currently service Vanuatu, about flying stranded passengers.

“The updated schedule should be advised soon so we’re all looking forward for that,” Issachar told Australian Broadcasting Corp.

Kelly said Air Vanuatu had been impacted by labor shortages, rising operating costs, elevated interest rates and tropical cyclones on tourist numbers in recent years.

“We’ll be looking at all options. And the Vanuatu government has indicated that they would prefer to resume operations as quickly as possible. Our role as voluntary liquidators will be to look at to assess all options to achieve that and make that sustainable,” Kelly told reporters.

“So that might involve some kind of sale process, it may involve some kind of partnership arrangement with another airline,” Kelly added.

Australian tourist Sally Witchalls said she and four friends had been checking out of their Port Vila hotel on Wednesday morning when they were told at reception that their Air Vanuatu flight would not fly that day.

She has since discovered that her travel insurance did not cover an airline going into voluntary administration, as Air Vanuatu had done, or bankrupt.

“We’re now on our own working out how we pay for the accommodation from here on out while we wait to see how the situation with Air Vanuatu unfolds,” Witchalls told ABC.
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Beijing — Two of China’s wealthiest cities said Thursday they would lift all restrictions on buying homes, joining a growing list of urban areas rolling back curbs as they look to prop up the faltering property market.

Many Chinese cities imposed restrictions and tough credit requirements on home purchases well over a decade ago in an effort to tamp down soaring prices and rampant speculation.

But they are now reversing those policies in a bid to stem an economic slump characterized by a debt crisis among developers, low demand and falling prices.

The eastern city of Hangzhou — home to 12.5 million people — said Thursday it had ditched all purchase restrictions “to promote the [market’s] stable and healthy development”.

“From the date of issuance… those who buy lodgings within the bounds of this city will no longer have their purchasing qualifications reviewed,” it said.

Hangzhou, a major innovation hub home to tech giants such as Alibaba, is one of the most desirable and expensive places to buy property in China.

In a separate announcement, the northwestern city of Xi’an, which has a population of 13 million, said it had also cancelled all such restrictions.

The announcements quickly racked up more than 230 million views on social media site Weibo, where many users were doubtful the policy would make any difference.

“With Hangzhou’s house prices, what’s the point of cancelling buying restrictions? I still can’t afford it,” wrote one commenter.

Bill Bishop, publisher of the influential Sinocism newsletter, called the move “a sign of desperation.”

“If this does not goose sales there will be more trouble as prices will have to adjust downward a lot,” he wrote on social media site X.

More than 20 cities have abolished home purchase restrictions since the beginning of last year, according to an AFP tally.

Chengdu in southwestern China said last month it would no longer look at prospective buyers’ household registration documents, social security and other conditions before greenlighting purchases.

Several of the biggest cities, including Beijing, Shanghai and Shenzhen, have partly lifted curbs but have resisted dumping them entirely.

Property and construction account for more than a quarter of China’s gross domestic product, but the sector has been under unprecedented strain since 2020.

That year, authorities tightened developers’ access to credit in a bid to reduce mounting debt.

Since then, major companies including Evergrande and Country Garden have teetered on bankruptcy, while falling prices have dissuaded consumers from investing in property.

Measures introduced by the central government to support the sector have so far had little effect.

And President Xi Jinping has largely stuck to his often-touted maxim that “houses are for living in, not for speculation.”

Last month, the International Monetary Fund said China’s economic recovery from the pandemic could falter if the crisis was not properly addressed.

“Without a comprehensive response to the troubled property sector, growth could falter, hurting trading partners,” it warned in its World Economic Outlook report.
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Nairobi, Kenya — Digital experts called on African countries Tuesday for laws to protect the data of individuals and businesses, saying that a single digital market in which data can safely flow across borders would help overcome barriers to commerce and trade on the continent.

African government information and communications technology representatives, international organizations, diplomats and experts are meeting in Nairobi, Kenya, this week to discuss how data can move freely from one country to another without risking people’s privacy and safety.

Kenyan Information, Communication and Digital Economy Minister Eliud Owalo said Africa needs to improve its laws to deal with emerging issues in the digital space.

“What will enable African countries to remain relevant in the digital marketplace will be our level of creativity and innovation, strategic agility and maneuverability in the digital space,” he said. “And that means we need to continuously, based on what is happening in our operational environment, look at our laws, policies and regulations.”

In its 2023 Londa report, the Paradigm Initiative — an organization that monitors digital rights, environment and inclusion in Africa — said internet shutdowns and disruptions, data protection, disinformation, cybersecurity, surveillance and a lack of freedom of expression and information affect the continent’s digital growth and sustenance.

Experts say that data plays an important role in every sector and that sharing it makes information more accessible, increases collaboration and facilitates knowledge exchange, leading to innovation and growth in business and relations among states.

Paul Russo, the head of Kenya Commercial Group, which operates in seven African countries, says the discussion about data sharing and security is important for businesses.

“This is not only a new area that we need to work together to bring to life, but I also think it’s important for our own businesses to be sustainable,” he said. “At the heart of every business, particularly for those of us in the private sector, is data — both integrity and confidentiality and protection of that data.”

Data misuse and abuse is a worldwide concern, and fears continue to spark debate on how best to safeguard, regulate, monitor and benefit from the available data.

European Union Deputy Head of Mission to Kenya Ondrej Simek said that data protection requires global effort and that gaps must be filled through law.

“Collaboration between data protection authorities around the world is needed to advance the regional and global harmonization of legal and regulatory frameworks,” Simek said.

“One area of specific importance is that of safe cross-border data flows,” he said. “A first step is ensuring the data protection laws are in place. The second one is obviously to operationalize them effectively. These are critical steps toward Africa’s single digital market and toward a global area for safe data exchange.”
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LONDON — Chinese President Xi Jinping offered few concessions to his counterpart and host Emmanuel Macron as he wrapped up a two-day visit to France on Tuesday evening. Both presidents are seeking to mend ties on Xi’s first trip to Europe in five years, after relations were soured by trade disputes and Beijing’s support for Russia in its invasion of Ukraine.

Macron invited Xi high into the Pyrenees Mountains, the home region of the French president’s maternal grandmother. Beneath snowy peaks shrouded in fog, the two leaders and their wives watched traditional dancers before dining on locally produced ham, lamb, cheese and blueberry pie.

French officials said the mountain trip on Tuesday would provide a chance for less- formal one-on-one discussions after the pomp and ceremony of Xi’s official state welcome in Paris on Monday.

Relations have worsened significantly since Xi last visited the region in 2019, before the coronavirus pandemic. Europe accuses Beijing of subsidizing industries that are undercutting its own companies in areas such as electric vehicles — but Macron told his Chinese guests that the European Union is not seeking to cut economic ties.

“Our shared objective is to continue our relationship,” Macron told delegates Monday at the Franco-Chinese Business Council in Paris. “There is no logic in decoupling from China. It’s a desire to preserve our national security, just as you do for your own. It’s a desire for mutual respect and understanding, and a desire to continue to open up trade, but to ensure that it is fully fair at all times, whether in terms of tariffs, aid or access to markets.”

China’s response

Xi made no immediate concessions, said analyst Steve Tsang, director of the China Institute at the University of London School of Oriental and African Studies.

“Xi Jinping does not feel that China has an overcapacity issue. And he feels that the European position on Chinese EVs, for example, is unreasonable. But then of course he is also trying to engage with the French and potentially having a leading Chinese car manufacturer setting up facilities in France, as a kind of incentive to persuade that maybe it’s in France’s interest to engage with China and welcome Chinese EVs,” Tsang told VOA.

The trade relationship is tilted in Beijing’s favor, according to Nicholas Bequelin, a senior fellow at Yale Law School’s Paul Tsai China Center.

China “has a major export economy towards Europe. The trade deficit in Europe is huge and growing. The de-risking or anti-subsidy policies that the European Union wants to put in place will take a lot of time — and because they affect the different countries in the European Union differently, it is very difficult to get to an agreement,” Bequelin said.

Russia threat

Europe faces the more pressing security threat of Russia, as the Kremlin’s forces slowly advance in eastern Ukraine. China has given Moscow diplomatic and economic support, despite Western appeals for Beijing to help end the illegal invasion.

Xi declared a “no limits” partnership when Russian President Vladimir Putin visited Beijing in February 2022, just days before the Kremlin’s tanks rolled across the Ukrainian frontier.

A recent U.S. assessment concluded that China is providing vital components such as machine tools and microelectronics that Russia is using to make weapons. Last year, trade between China and Russia hit a record $240 billion.

Speaking in Paris Monday, Xi rejected European accusations that China was aiding Russia’s war.

“China is neither the creator of the crisis, nor a party, a participant of the war. However, we didn’t just watch the fire burning across the river but have been playing an active role in achieving peace,” Xi told reporters.

Europe’s message

China’s claim is demonstrably false — and European leaders must take a tougher line, said analyst Igor Merheim-Eyre, a policy adviser at the European Parliament and research fellow at the University of Kent.

“We’ve already had [German] Chancellor Olaf Scholz, we’ve had Macron, we’ve had Charles Michel, the president of the European Council, we have [EU Commission] President [Ursula] von der Leyen, all making trips to Beijing and repeating the same message: that China should not be supporting Russia in its aggression against Ukraine. And in those two years, I see no change,” Merheim-Eyre told VOA.

“What they’ve really failed at is spelling out to Xi Jinping what will be the cost of China supporting Russia’s war of aggression — which it clearly is. I mean if it wasn’t, we wouldn’t already have four Chinese companies on the EU sanction list. And the circumventions are much broader than that,” he said.

Costs for China

Europe should make the costs clear, said analyst Tsang, because China’s “policy has always been one of declaring neutrality, supporting Putin and refusing to pay a price for that.”

Sanctioning Chinese companies that are supplying Russia’s military would likely be effective, he said. “For Xi Jinping, the important thing is that he stays in power, and that means he has to keep the Chinese economy on an even keel. Supporting Putin is a desirable thing — but fundamentally staying in power overrides the aspirational goal of undermining U.S. global preeminence and leadership.” Tsang said.

“Shared interest”

Von der Leyen on Monday urged Beijing to help end the war. “We agree that Europe and China have a shared interest in peace and security. We count on China to use all its influence on Russia to end Russia’s war of aggression against Ukraine,” she said in a recorded video address.

But European leaders should be more realistic about Beijing’s ambitions, argued analyst Merheim-Eyre.

“I’m looking at my world map, and I’m trying to see where exactly this common interest lies. Because wherever I look, from Africa to the South China Sea to Ukraine, China is playing a destructive role, and I do not see common areas of interest in these matters.”

After visiting France, Xi was headed Tuesday for Serbia, a key Balkan partner in Beijing’s Belt and Road investment program. On Wednesday, Xi is due to travel to Hungary, his closest European ally and a longtime thorn in the side of EU unity on Russia and China policy.

VOA’s Mandarin Service contributed to this story.
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KASHAN, Iran — The historic Kashan bazaar in central Iran once sat on a major caravan route, its silk carpets known the world over. But for the weavers trying to sell their rugs under its ancient arches, their world has only unraveled since the collapse of Iran’s nuclear deal with world powers and wider tensions with the West.

Rug exports, which exceeded $2 billion two decades ago, have plummeted to less than $50 million in the last year in the Persian calendar that ended in March, according to government customs figures. With fewer tourists coming and difficulties rising in making international transactions, Iranian rugs are going unsold as some weavers work for as little as $4 a day.

“Americans were some of our best customers,” said Ali Faez, the owner of one dusty carpet shop at the bazaar. “Rugs are a luxury product and they were eager to buy it and they used to make very good purchases. Unfortunately, this has been cut — and the connection between the two countries for visitors to come and go has gone away.”

Kashan’s rug-weaving industry has been inscribed in UNESCO’s list of the world’s “intangible cultural heritage.” Many of the weavers are women, with the skills needed for the Farsi weaving style passed down from generation to generation, using materials like vine leaves and the skins of pomegranate fruit and walnuts to make the dyes for their threads. A single rug can take months to make.

For decades, Western tourists and others would pass through Iran, picking up rugs as gifts and to take back home. After the 1979 Islamic Revolution, the U.S. increased sanctions on Iran’s theocratic government over the U.S. Embassy siege, Tehran’s links to militant attacks and other issues.

But in 2000, the outgoing administration of former President Bill Clinton lifted a ban on the import of Iranian caviar, rugs and pistachios.

“Iran lives in a dangerous neighborhood,” then-Secretary of State Madeleine Albright said at the time. “We welcome efforts to make it less dangerous.”

By 2010, with concerns rising over Iran’s nuclear program, the U.S. again banned Iranian-made Persian rugs. But in 2015, Iran struck a nuclear deal with world powers which greatly reduced and drastically lowered the purity of Tehran’s stockpile of enriched uranium. The rug trade was allowed once again.

Three years later, in 2018, then-President Donald Trump unilaterally withdrew the U.S. from the nuclear deal. Since then, Iran began enriching uranium at near-weapons-grade levels and has been blamed for a series of attacks at sea and on land, including an unprecedented drone-and-missile attack targeting Israel last month.

For the carpet weavers, that’s meant their wares were once again banned under U.S. law.

“It started when Trump signed that paper,” Faez told The Associated Press, referring to the renewed sanctions. “He ruined everything.”

Abdullah Bahrami, the head of a national syndicate for handwoven rug producers, also blamed the collapse of the industry on the Trump sanctions. He put the value of exports to the U.S. as high as $80 million annually prior to the sanctions.

“The whole world used to know Iran by its rugs,” Bahrami told the state-run IRNA news agency in March.

Making things worse is what carpet sellers see as a drop in tourists to Kashan as well. High-value American and European tourism in Iran has largely stopped, the daily Shargh newspaper warned last year. Ezzatollah Zarghami, Iran’s minister of tourism, insisted in April that 6 million tourists visited the country over the last 12 months, though that likely includes religious pilgrims as well as Afghans and Iraqis with less spending money.

But even those tourists that do show up face the challenge of Iran’s financial system, where no major international credit card works.

“I had a Chinese customer the other week. He was struggling to somehow make the payment because he loved the rug and didn’t want to let go of it,” Faez said. “We have to pay a lot of commission to those who can transfer money and have bank accounts abroad. Sometimes they cancel their orders because they don’t have enough cash with them.”

The collapse of the rial currency has left many Iranians also unable to purchase the handwoven rugs. Wages in the industry are low, leading to a growing number of Afghan migrants working in workshops around Kashan as well.

Designer Javad Amorzesh, one of just a few of Kashan’s old-school artists, said his orders have fallen from 10 a year to just two. He has laid off staff and now works alone in a cramped space.

“Inflation rose every hour. People were hit repeatedly by inflation,” he said. “I used to have four to five assistants in a big workshop.”

Offering a bitter laugh alone in his workshop, he added, “We’ve been left isolated.”
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WASHINGTON — The nation’s employers pulled back on their hiring in April but still added a decent 175,000 jobs in a sign that persistently high interest rates may be starting to slow the robust U.S. job market. 

Friday’s government report showed that last month’s hiring gain was down sharply from the blockbuster increase of 315,000 in March. And it was well below the 233,000 gain that economists had predicted for April. 

Yet the moderation in the pace of hiring, along with a slowdown last month in wage growth, will likely be welcomed by the Federal Reserve, which has kept interest rates at a two-decade high to fight persistently elevated inflation. Hourly wages rose a less-than-expected 0.2% from March and 3.9% from a year earlier, the smallest annual gain since June 2021. 

The Fed has been delaying any consideration of interest rate cuts until it gains more confidence that inflation is steadily slowing toward its target. Fed rate cuts would, over time, reduce the cost of mortgages, auto loans and other consumer and business borrowing. 

Stock futures jumped Friday after the jobs report was released on hopes that rate cuts might now be more likely sometime in the coming months. 

Even with the April hiring slowdown, last month’s job growth amounted to a solid increase, although it was the lowest monthly job growth since October. With the nation’s households continuing their steady spending, many employers have had to keep hiring to meet their customer demand. 

The unemployment rate ticked up 3.9% — the 27th straight month in which it has remained below 4%, the longest such streak since the 1960s. 

Last month’s hiring was led by health care companies, which added 56,000 jobs. Warehouse and transportation companies added 22,000 and retailers 20,000. 

The state of the economy is weighing on voters’ minds as the November presidential campaign intensifies. Despite the strength of the job market, Americans remain generally exasperated by high prices, and many of them assign blame to President Joe Biden. 

America’s job market has repeatedly proved more robust than almost anyone had predicted. When the Fed began aggressively raising rates two years ago to fight a punishing inflation surge, most economists expected the resulting jump in borrowing costs to cause a recession and drive unemployment to painfully high levels. 

The Fed raised its benchmark rate 11 times from March 2022 to July 2023, taking it to the highest level since 2001. Inflation did steadily cool as it was supposed to — from a year-over-year peak of 9.1% in June 2022 to 3.5% in March. 

Yet the resilient strength of the job market and the overall economy, fueled by steady consumer spending, has kept inflation persistently above the Fed’s 2% target. 

The job market has been showing other signs of eventually slowing. This week, for example, the government reported that job openings fell in March to 8.5 million, the fewest in more than three years. Still, that is nevertheless a large number of vacancies: Before 2021, monthly job openings had never topped 8 million, a threshold they have now exceeded every month since March 2021. 

On a month-over-month basis, consumer inflation hasn’t declined since October. The 3.5% year-over-year inflation rate for March was still running well above the Fed’s 2% target. 
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The average income of people around the world will be cut by one-fifth because of climate change by the middle of the century, according to a new report by Germany’s Potsdam Institute for Climate Impact Research, published in the journal Nature. Henry Ridgwell has more.
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Paris, France — G7 environment ministers committed on Tuesday to ramp up the production and deployment of battery storage technology, an essential component for increasing renewable energy and combating climate change.  

Here is how and why batteries play a vital role in the energy transition:   

Growing demand

Batteries have been central to the rise of electric vehicles (EVs) but are also critical to wind and solar power because of the intermittent nature of these energy sources.  

Surplus electricity must be stored in batteries to stabilize distribution regardless of peaks in demand, or breaks in supply at night or during low winds.   

Battery deployment in the energy sector last year increased more than 130 percent from 2022, according to a report released last week by the International Energy Agency (IEA).    

The main markets are China, the European Union and the United States. 

Following closely are Britain, South Korea, Japan and developing nations in Africa, where solar and storage technology is seen as the gateway to energy access.  

Six-fold goal

To triple global renewable energy capacity by 2030 — a goal set at the UN climate conference in December — the IEA says a six-fold increase in battery storage will be necessary.  

Clean energy is essential to reduce emissions from burning fossil fuels and to hope to keep the international target of restricting global warming to 1.5 degrees Celsius above pre-industrial levels.   

The total storage capacity required to achieve this target is an estimated 1,500 gigawatts by 2030.  

Of this, 1,200 GW will need to be supplied by batteries.

Cost challenges

In less than 15 years, the cost of batteries has fallen by 90 percent.  

“The combination of solar PV and batteries is today competitive with new coal plants in India. And just in the next few years, it will be cheaper than new coal in China and gas-fired power in the United States,” IEA chief Fatih Birol said last week.   

“But still the pace is not fast enough to reach our goals in terms of climate change and energy security.”  

Costs will have to come down further, he said, while calling for supply chains to be diversified.   

Most batteries are currently produced by China.   

But some 40 percent of planned battery manufacturing projects are in the United States and Europe, according to the IEA.   

If those projects are realized, they would be nearly sufficient to meet the needs of those countries.

Metal matters

Another thorny issue is the availability of critical metals like lithium and cobalt that are essential to make batteries.  

Experts say the development chemical alternatives could complement the dominant lithium-ion technology.  

“Transition in the technology will reduce the amount of lithium” needed, said Brent Wanner, head of the IEA’s power sector unit, adding, “this includes shifting to sodium-ion batteries.” 

Beyond 2030, high-density solid-state batteries that offer a longer lifespan are expected to become commercially available. 

There are other storage options, although not as widely applicable or available as batteries.

Pumped storage hydropower has long been used in the hydroelectric sector.

The transformation of electricity into hydrogen, which can be stored and transported, is a new technology expected to become more readily available. 

Be flexible

Renewable energy is not entirely reliant on storage and measures can be taken to improve the flexibility of its production to meet demands.   

Industry and governments are gearing up for the transition.   

The European Union’s Energy Regulators Agency called on member states in September to assess their “flexibility potential” based on estimates that renewables will need to double by 2030.   

Such a rise requires greater “flexibility” in grids, meaning energy can be stored and distributed consistently despite fluctuating production and demand.   

The G7 said Tuesday it would not only support more production and use of battery storage, but promote technological advancements in the sector as well as grid infrastructure.

 
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Washington — U.S. consumers appear less optimistic about the jobs market and more worried about future financial conditions, bringing a closely watched confidence metric to its lowest level since July 2022, a survey showed Tuesday.

The consumer confidence index fell to 97.0 in April, said The Conference Board, significantly below the 104.0 reading that analysts anticipated.

This marks the third straight month consumer confidence has worsened, the report said, and comes as President Joe Biden struggles to boost perceptions about the economy as his reelection campaign ramps up.

“Consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income,” said Dana Peterson, chief economist at The Conference Board.

But she added that despite the slip, “optimism about the present situation continues to more than offset concerns about the future.”

The biggest worries surrounded “elevated price levels, especially for food and gas,” said Peterson.

Meanwhile, politics and global conflicts were “distant runners-up,” she added.

While consumers rated current business conditions “positively,” their views of the labor market weakened with more reporting that jobs are hard to get, said The Conference Board.

Consumers also became less upbeat about their families’ financial situations, both currently and in the future.

“Perceptions about the labor market deteriorated even as job growth remains robust, and the unemployment rate is historically low,” noted Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

“A deteriorating trend in sentiment could persist,” she cautioned.

This risks bogging down spending and growth, given that inflation remains persistent and interest rate cuts are “not imminent,” she said.
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HAVANA — Alejandro Fonseca stood in line for several hours outside a bank in Havana hoping to withdraw Cuban pesos from an ATM, but when it was almost his turn, the cash ran out. He angrily hopped on his electric tricycle and traveled several kilometers to another branch, where he finally managed to withdraw some money after wasting the entire morning.

“It shouldn’t be so difficult to get the money you earn by working,” the 23-year-old told The Associated Press in a recent interview.

Fonseca is one of an increasing number of frustrated Cubans who must grapple with yet another hurdle while navigating the island’s already complicated monetary system — a shortage of cash.

Long queues outside banks and ATMs in the capital, Havana, and beyond start forming early in the day as people seek cash for routine transactions such as buying food and other essentials.

Experts say there are several reasons behind the shortage, all somehow related to Cuba’s deep economic crisis, one of the worst in decades.

Omar Everleny Perez, a Cuban economist and university professor, says the main culprits are the government’s growing fiscal deficit, the nonexistence of banknotes with a denomination greater than 1,000 pesos (about $3), stubbornly high inflation and the nonreturn of cash to banks.

“There is money, yes, but not in the banks,” said Perez, adding that most of the cash is being held not by salaried workers but by entrepreneurs and owners of small- and medium-size business who are more likely to collect cash from commercial transactions but are reluctant to return the money to the banks.

This, Perez says, is either because they don’t trust the local banks or simply because they need the pesos to convert into foreign currency.

Most entrepreneurs and small business owners in Cuba must import almost everything they sell or pay in foreign currency for the supplies needed to run their businesses. Consequently, many end up hoarding Cuban pesos to later change into foreign currency on the informal market.

Converting those Cuban pesos to other currencies poses yet another challenge, as there are several, highly fluctuating exchange rates on the island.

For example, the official rate used by government industries and agencies is 24 pesos to the U.S. dollar, while for individuals, the rate is 120 pesos to the dollar. However, the dollar can fetch up to 350 Cuban pesos on the informal market.

Perez notes that in 2018, 50% of the cash in circulation was in the hands of the Cuban population and the other half in Cuban banks. But in 2022, the latest year for which information is available, 70% of cash was in the wallets of individuals.

Cuban monetary authorities did not immediately respond to AP’s emailed request for comment.

The shortage of cash comes as Cubans grapple with a complex monetary system in which several currencies circulate, including a virtual currency, MLC, created in 2019.

Then, in 2023 the government announced several measures aimed at promoting a “cashless society,” making the use of credit cards mandatory to pay for some transactions — including purchases of food, fuel and other basic goods — but many businesses simply refuse to accept them.

Making things worse is stubbornly high inflation, meaning more and more physical bills are needed to buy products.

According to official figures, inflation stood at 77% in 2021, then dropped to 31% in 2023. But for the average Cuban, the official figures barely reflect the reality of their lives, since market inflation can reach up to three digits on the informal market. For example, a carton of eggs, which sold for 300 Cuban pesos in 2019, these days sells for about 3,100 pesos.

All while the monthly salary for Cuban state workers ranges between 5,000 and 7,000 Cuban pesos (between $14 and $20).

“To live in an economy that, in addition to having several currencies, has several exchange rates and a three-digit inflation is quite complicated,” said Pavel Vidal, a Cuba expert and professor at Colombia’s Javeriana University of Cali.
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SYDNEY — The Asian Development Bank holds its annual meeting in Tbilisi, Georgia, next week, with discussions on climate change and the world’s aging population high on the agenda.

The four-day summit, starting Thursday, marks the first time that the ADB’s 68 members have gathered for a meeting in Georgia, which joined the multilateral development bank in 2007.

“Georgia sits at the crossroads of Europe and Asia,” said Shalini Mittal, a principal economist for Asia at the Economist Intelligence Unit.

“This meeting signifies ADB’s agenda of bridges to the future where technology and expertise from the West can be used to enhance structural reforms in Asia,” Mittal told VOA.

Alongside numerous panel discussions and a keynote speech from ADB President Masatsugu Asakawa, finance ministers from Association of Southeast Asian Nations member countries Japan, China and South Korea will also meet on the sidelines.

“Given the geopolitical uncertainty with the Ukraine-Russia war and tensions in Asia with China’s problematic relations with its neighbors, I think the meeting is taking place at a crucial time,” said Jason Chung, a senior adviser with the Project on Prosperity and Development at Washington’s Center for Strategic and International Studies.

“It provides an additional path to have meaningful discussions on global economic issues,” Chung told VOA.

Climate change stressed

The issue of climate change is set to headline proceedings at the conference, with the ADB now marketing itself as the climate bank for the Asia-Pacific region.

The bank pledged a record $9.8 billion of climate finance in 2023, supporting developing countries to cut greenhouse emissions and adapt to extreme conditions as global warming continues.

“Storm surges, sea level rise, heat waves, droughts, and floods — all our countries suffer from all of the imaginable impacts of climate change,” said Warren Evans, who, as senior special adviser on climate change in the ADB president’s office, acts as the institution’s climate envoy.

The bank says that the Asia-Pacific region was hit by over 200 disasters last year alone, with many of them weather related, a problem that shows no sign of letting up.

“Right now, there’s a heatwave in Bangladesh that is causing severe impacts. Schools are closed, they’re seeing a drop in agricultural productivity, hospitals are getting overloaded with people with heatstroke,” Evans told VOA.

“Mortality rates are going up and, of course, women and children are the most vulnerable to those impacts,” he said.

While much of the Asia-Pacific region is extremely vulnerable to climate change, it is also a huge driver of the phenomenon.

The region contributes more than half of global carbon dioxide emissions, with a heavy reliance on coal as a source of energy, according to the ADB.

To try to reach net zero targets, many Asia-Pacific nations require huge investment to convert to clean energy alternatives.

One way that the ADB is tackling this issue is through a program targeting coal-burning power plants, a major contributor to emissions.

“With private sector partners and sovereign funding, we’re refinancing coal-fired power plants in order to be able to close them down early,” Evans said. The ADB’s “energy transition mechanism” uses private and public capital to refinance investments in coal-fired power, allowing power purchase agreements to be shortened and plants to be closed as much as a decade earlier than planned. The financing is also used to fund clean energy projects to generate the power that would have come from the coal plant.

The project looks to replace these plants with clean energy alternatives, ensuring that power is generated more sustainably.

A coal-burning power plant in Indonesia’s West Java is set to become the first to be retired early under the initiative.

“The communities that are impacted will have support, allowing people to find new jobs or to get social welfare,” Evans said.

Aging population in Asia

During the Tbilisi summit, the ADB will also launch a major report on aging population, which also affects member countries’ economies.

According to the bank, 1 in 4 people in the Asia-Pacific region will be over 60 by 2050, close to 1.3 billion people.

“The speed of aging is very quick in Asia, because of the rapid progress in the social development that has taken place in the region,” said Aiko Kikkawa, a senior economist for the ADB’s Aging Well in Asia report.

Researchers have investigated the implications of this demographic transition, with Kikkawa finding that the Asia-Pacific region is currently “unprepared” for aging populations.

“Large numbers of older people do report a substantial disease burden, lack of access to decent jobs or essential services, such as health and long-term care, and even lack of access to pension coverage,” Kikkawa told VOA.

The ADB has pledged to help to improve the lives of older people across the Asia-Pacific region, by supporting the rollout of universal health coverage and providing infrastructure for ‘age-friendly cities’ that are more accessible for older people.

Poverty to be addressed

While much of the focus in Tbilisi will be on climate change and aging populations, the ADB’s core edict remains to eradicate extreme poverty in its many developing country members.

That task has become even more challenging in an environment of high inflation and growing government debt.

However, Chung, the former U.S. director of the ADB, told VOA he believes that this goal should be at the center of discussions in the Georgian capital.

“The ADB should focus on its core mission of alleviating poverty and creating paths for economic growth in the developing member countries.

“While climate risk is important, I think given the state of uncertainty, it is important to provide support to create economic conditions for growth,” he told VOA.
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