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In a historic move, the African Union has secured a permanent place in the Group of 20, also known as the G20, a development that could have major implications for Africa’s role in global geopolitics. 

As the continent faces an array of challenges, ranging from climate change to political instability and economic inequality, experts disagree on how big an impact G20 membership will have as the AU joins 20 of the world’s largest economies.

Robert Besseling, chief executive officer of Pangea-Risk, an intelligence advisory group based in South Africa and Britain, told VOA it is more of a symbolic development than a substantive event.

“The AU seat at the G20 will be meaningless,” Besseling said, if the African body cannot react decisively to events that include “the spree of military coups and irregular elections that have set back Africa’s democratic trajectory in recent months.”

Seven African countries have experienced military-led coups since 2020, most recently Gabon and Niger, raising questions about political stability, the lack of which makes it harder to address pressing issues like terrorism and food shortages in many countries.

Dennis Matanda, adjunct professor of American politics and international business at Catholic University, told VOA English to Africa Service’s TV program “Africa 54” that Africa’s membership in the G20 could pay dividends.

“There is a real opportunity here for the African Union to come to the table. And that is a strength, and that is the opportunity,” he said. He added that “the significance here is that for the first time, the African Union is being juxtaposed with the European Union.”

Besseling, however, has doubts about the AU’s ability to act cohesively.

He also said the AU’s membership in the G20 is mainly driven by tensions on the world stage between competing alliances.

“The G20 is increasingly becoming a counterweight to the China-led BRICS, and the AU’s entry should be viewed in that same context of geopolitical rivalry,” Besseling said.

On a more positive note, Besseling said the AU’s entry into the G20 may help diversify global alliances and open new avenues for cooperation.

Matanda said it is time for African nations to defend their own interests and not be used to further the objectives of global powers.

“I think we need to stop thinking about what the other places want, what China wants, what Europe wants, and start the process of generating Africa’s own narrative,” Matanda said. “Africa, the African Union, needs to undertake a comprehensive assessment of its opportunities. And the primary opportunity here is the region’s development finance institutions.”

As the G20 evolves into a forum of considerable influence, the AU’s presence amplifies the continent’s voice within this arena, he said.

“If they’re going to have global capital playing in Africa, you need to come to the table with the best people who can actually control the finances and basically channel those resources to the opportunities that achieve the most effective impact for the region,” Matanda said. “And from that perspective, we need to remember that the African Union can be all it wants to be, but it needs to have more power.”

This story originated in the Africa Division. English to Africa’s Esther Githui-Ewart contributed to the report.
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The European Commission – the European Union’s executive branch – has downgraded its economic forecast for the Eurozone, saying inflation is still too high, consumer spending is down and Germany, the continent’s largest economy, is in recession.

At a news conference in Brussels Monday, EU Economy Commissioner Paolo Gentiloni said they are now predicting the gross domestic product (GDP) of the 27-nation EU will expand at eight-tenths of one percent for 2023, and at 1.3 percent in 2024.

Those numbers are down from the May projections of 1.1 and 1.6 percent, respectively.

Gentiloni said Germany’s GDP was significantly weaker than expected in the first half of this year, with declining wages driving down consumer spending, and lower external demand leading to subdued exports.

He said the German economy is now projected to shrink by 0.4 percent in 2023, “a significant downward revision” from a May prediction of 0.2 percent growth.

He said they are forecasting that Italy’s and the Netherlands’ economies will also grow more slowly this year, with GDP expansion of 0.9 percent and 0.5 respectively, down from earlier projections of 1.2 percent and 1.8 percent.

But the commission said the economies of France and Spain will grow faster than previously expected this year, projecting 1.0 percent and 2.2 percent growth respectively, instead of the previously seen 0.7 percent and 1.9 percent.

Some information for this report was provided by the Associated Press, Reuters and Agence France-Presse.

 
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Richie Olsten has been in Maui’s helicopter tour business for a half century, so long he’s developed a barometer for the tourism-dependent economy: rental cars parked at the island’s airport.

There are so many since wildfires killed at least 115 people in the historic town of Lahaina that Olsten is worried about a full-blown economic catastrophe. Restaurants and tour companies are laying off workers, and unemployment is surging.

State tourism officials, after initially urging travelers to stay away, are now asking them to come back, avoid the burn zone and help Maui recover by spending their money. Airlines have started offering steep discounts, while some resorts have slashed room rates by 20% or are offering a fifth night free.

“I know what a terrible disaster that was. But now we’re in crisis mode,” Olsten said. “If we can’t keep the people that have jobs employed, how are they going to help family members and friends that lost everything?”

The number of visitors arriving on Maui sank about 70% after the Aug. 8 fire, down to 2,000 a day.

Olsten’s Air Maui Helicopters now operates one or two flights a day, compared with 25 to 30 before the fires.

As Air Maui’s director of operations, Olsten said his company has laid off seven of its 12 dispatchers. Pilots have been spared because they only get paid when they work. Typically, they fly eight times a day, four to five days a week. That has fallen to one day a week, and only one or two flights.

Many Maui hotels are housing federal aid workers and Lahaina residents who lost their homes. Even so, only half of available hotel rooms are occupied, said Mufi Hannemann, president of the Hawaii Lodging & Tourism Association.

Even those in South Maui, 48 kilometers south of Lahaina, are half empty. Hannemann called the situation “pretty grim.”

One of Maui’s most venerable restaurants, Hali’imaile General Store, laid off about 30 workers and temporarily closed after business shrank to one-tenth of pre-fire levels.

“It just fell off a cliff,” said Graeme Swain, who owns the place with his wife, Mara.

They cut staff to preserve cash and spare Hali’imaile the fate of the San Diego software company Swain was running in 2008. When the housing bubble burst and the U.S. plunged into recession, he kept all employees “to the bitter end,” crushing the business.

Swain wants Hali’imaile — which was founded as a general store for pineapple plantation workers a century ago and became a restaurant in 1987 — to last decades more.

“It takes a lot of soul-searching of what’s the right thing to do to protect that place,” said Swain, who plans to hire everyone back. He aims to reopen next month.

Mass layoffs are showing up in government data. Nearly 8,000 people filed for unemployment on Maui during the last three weeks of August compared with 295 during the same period in 2022.

University of Hawaii economists expect Maui’s jobless rate to climb as high as 10%. It peaked at 35% during the COVID-19 pandemic, but in July was just 2.5%. And this time, there are no pandemic-era Paycheck Protection Program loans for businesses, nor any enhanced unemployment checks for the jobless.

Clothing designer Gemma Alvior estimates that locals make up almost all the clientele at her Kahului store, Pulelehua Boutique. But that may not shield her in a place where the tourism industry accounts for 75% of private sector jobs.

“If they don’t have a job, they’re getting laid off, how are they going to buy stuff?” she said. “What do they need to buy clothes for if they’re not working?”

One reason visitor traffic plunged is that Hawaii’s leaders, joined by Hollywood celebrities, told travelers to vacate the island.

The day after the fire, the Hawaii Tourism Authority, a quasi-state agency, said visitors on “non-essential travel are being asked to leave Maui” and that “non-essential travel to Maui is strongly discouraged.”

The agency said the community needed to focus on recovery and helping those who had to evacuate.

Around the world, people saw video and photos of travelers jamming the Kahului airport to board flights out.

That message has since changed.

“Maui’s not closed,” Mayor Richard Bissen said in a recent interview.

People shouldn’t go to Lahaina or the surrounding West Maui area — “It’s not a place to stare,” Bissen said — but the rest of Maui needs tourists. “Respect the West, visit the rest,” is the motto some have adopted.

The Hawaii Tourism Authority drafted and publicized a map showing Lahaina and West Maui in relation to the rest of the island, highlighting just how much was still open. The authority is also launching a $2.6 million marketing plan to lure tourists back.

Two days after the fire, Jason Momoa, a Hollywood actor and Native Hawaiian, told his 17 million Instagram followers, “Do not travel to Maui.” More recently, he advised: “Maui is open. Lahaina is closed.”

Travel to areas outside West Maui should return to pre-fire levels by Thanksgiving, predicted Carl Bonham, an economics professor at the University of Hawaii at Manoa. Discounted airfares and marketing appeals should help, he said.

Gov. Josh Green told a meeting of the state Council on Revenues that he expects authorities to reopen most of West Maui to travelers on Oct. 8, with the exception of fire-damaged neighborhoods. The area, which includes beach resorts in Kaanapali, north of historic Lahaina, has 11,000 hotel rooms. That’s half Maui’s total.

The disaster prompted state officials on Wednesday to lower their 2023 economic growth prediction for the entire state to 1.1%, down from 1.8%. Next year, they expect 1.5% growth instead of 2%.

Bonham estimated the fires would depress state tax revenues by $250 million this fiscal year but said he was “encouraged” by the plan to reopen West Maui in one month.

The council, which produces tax revenue forecasts, predicted Thursday that state tax revenue would rise 1.3% during the current fiscal year compared with last year. The governor and lawmakers are required to use the panel’s forecasts to draft their budgets.
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The cost of building an artificial intelligence product like ChatGPT can be hard to measure.

But one thing Microsoft-backed OpenAI needed for its technology was plenty of water, pulled from the watershed of the Raccoon and Des Moines rivers in central Iowa to cool a powerful supercomputer as it helped teach its AI systems how to mimic human writing.

As they race to capitalize on a craze for generative AI, leading tech developers, including Microsoft, OpenAI and Google, have acknowledged that growing demand for their AI tools carries hefty costs, from expensive semiconductors to an increase in water consumption.

But they’re often secretive about the specifics. Few people in Iowa knew about its status as a birthplace of OpenAI’s most advanced large language model, GPT-4, before a top Microsoft executive said in a speech it “was literally made next to cornfields west of Des Moines.”

Building a large language model requires analyzing patterns across a huge trove of human-written text. All that computing takes a lot of electricity and generates a lot of heat. To keep it cool on hot days, data centers need to pump in water — often to a cooling tower outside its warehouse-sized buildings.

In its latest environmental report, Microsoft disclosed that its global water consumption spiked 34% from 2021 to 2022 (to nearly 1.7 billion gallons, or more than 2,500 Olympic-sized swimming pools), a sharp increase compared to previous years that outside researchers tie to its AI research.

“It’s fair to say the majority of the growth is due to AI,” including “its heavy investment in generative AI and partnership with OpenAI,” said Shaolei Ren, a researcher at the University of California, Riverside, who has been trying to calculate the environmental impact of generative AI products such as ChatGPT.

In a paper due to be published later this year, Ren’s team estimates ChatGPT gulps up 500 milliliters of water (close to what’s in a 16-ounce water bottle) every time you ask it a series of between 5 to 50 prompts or questions. The range varies depending on where its servers are located and the season. The estimate includes indirect water usage that the companies don’t measure — such as to cool power plants that supply the data centers with electricity.

“Most people are not aware of the resource usage underlying ChatGPT,” Ren said. “If you’re not aware of the resource usage, then there’s no way that we can help conserve the resources.”

Google reported a 20% growth in water use in the same period, which Ren also largely attributes to its AI work. Google’s spike wasn’t uniform — it was steady in Oregon, where its water use has attracted public attention, while doubling outside Las Vegas. It was also thirsty in Iowa, drawing more potable water to its Council Bluffs data centers than anywhere else.

In response to questions from The Associated Press, Microsoft said in a statement this week that it is investing in research to measure AI’s energy and carbon footprint “while working on ways to make large systems more efficient, in both training and application.”

“We will continue to monitor our emissions, accelerate progress while increasing our use of clean energy to power data centers, purchasing renewable energy, and other efforts to meet our sustainability goals of being carbon negative, water positive and zero waste by 2030,” the company’s statement said.

OpenAI echoed those comments in its own statement Friday, saying it’s giving “considerable thought” to the best use of computing power.

“We recognize training large models can be energy and water-intensive” and work to improve efficiencies, it said.

Microsoft made its first $1 billion investment in San Francisco-based OpenAI in 2019, more than two years before the startup introduced ChatGPT and sparked worldwide fascination with AI advancements. As part of the deal, the software giant would supply computing power needed to train the AI models.

To do at least some of that work, the two companies looked to West Des Moines, Iowa, a city of 68,000 people where Microsoft has been amassing data centers to power its cloud computing services for more than a decade. Its fourth and fifth data centers are due to open there later this year.

“They’re building them as fast as they can,” said Steve Gaer, who was the city’s mayor when Microsoft came to town. Gaer said the company was attracted to the city’s commitment to building public infrastructure and contributed a “staggering” sum of money through tax payments that support that investment.

“But, you know, they were pretty secretive on what they’re doing out there,” he said.

Microsoft first said it was developing one of the world’s most powerful supercomputers for OpenAI in 2020, declining to reveal its location to the AP at the time but describing it as a “single system” with more than 285,000 cores of conventional semiconductors and 10,000 graphics processors — a kind of chip that’s become crucial to AI workloads.

Experts have said it can make sense to “pretrain” an AI model at a single location because of the large amounts of data that need to be transferred between computing cores.

It wasn’t until late May that Microsoft’s president, Brad Smith, disclosed that it had built its “advanced AI supercomputing data center” in Iowa, exclusively to enable OpenAI to train what has become its fourth-generation model, GPT-4. The model now powers premium versions of ChatGPT and some of Microsoft’s own products and has accelerated a debate about containing AI’s societal risks.

“It was made by these extraordinary engineers in California, but it was really made in Iowa,” Smith said.

In some ways, West Des Moines is a relatively efficient place to train a powerful AI system, especially compared to Microsoft’s data centers in Arizona, which consume far more water for the same computing demand.

“So if you are developing AI models within Microsoft, then you should schedule your training in Iowa instead of in Arizona,” Ren said. “In terms of training, there’s no difference. In terms of water consumption or energy consumption, there’s a big difference.”

For much of the year, Iowa’s weather is cool enough for Microsoft to use outside air to keep the supercomputer running properly and vent heat out of the building. Only when the temperature exceeds 29.3 degrees Celsius (about 85 degrees Fahrenheit) does it withdraw water, the company has said in a public disclosure.
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Established in 1999, the group of 20 – also known as G20 – is an informal gathering between heads of state from 20 of the world’s largest economies. While the annual summit has traditionally focused on economic cooperation, the agenda has since expanded to include talks on how to respond to climate change, the COVID-19 pandemic, and most recently Russia’s war against Ukraine. How do these summits work and what can we expect from the upcoming September meeting in India?
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An American private sector delegation opened meetings in Afghanistan with officials and local counterparts Wednesday in the first interaction since the Taliban seized power from a U.S.-backed government two years ago.

Jeffrey Grieco, president of the Afghan American Chamber of Commerce, or AACC, in the United States, is leading the delegation.

Addressing a televised meeting in Kabul of business representatives that Greico co-hosted with Taliban Deputy Prime Minister for Economic Affairs Abdul Ghani Baradar, he said the U.S. government backs the visit.

U.S. officials did not immediately comment on Greico’s assertion.

The American businessman credited the de facto Afghan authorities for establishing peace in the country, saying they have also “greatly eliminated” corruption. “It’s not all gone, but it’s mostly gone.”

He said his team is seeking to elevate private sector activities and explore ways to ease hardships facing Afghans over the past two years.

“The next year is going to be equally hard as the donors are reducing funding for Afghanistan, both humanitarian food security and other funding, at a key moment when Afghanistan needs funding for humanitarian purposes,” he said.

On Tuesday, the U.N. World Food Program announced that a “massive funding shortfall” had forced it to cut rations for 10 million people in the country this year, warning that time is running out to avert catastrophe in Afghanistan.

“The private sector can be a powerful agent of change and an agent of support when a country like Afghanistan is suffering,” Grieco said at the event, where local women business leaders were also in attendance.

“We think that business is the way to increase knowledge and increase more program activities for the core in Afghanistan, and you are great examples for us,” he told the Afghan female participants.

Barader said in his keynote speech that his government had established nationwide “comprehensive security” and “straightforward investment regulations” to attract domestic and foreign investments in Afghanistan.

The Taliban deputy prime minister cited several mining contracts signed in Kabul last month with Asian and European investors, including some from China, Turkey, Iran and Britain, worth almost $6.5 billion.

Grieco pledged to work closely with Bradar’s office to promote business-to-business ties, stressing the need for the Taliban to ensure security and protection of investment assets.

“What we saw and heard this week is that the Emirate government is ready for a market-based economic system for Afghanistan,” Grieco said, using the official title of the Taliban administration, the “Islamic Emirate of Afghanistan.”

“The last [Afghan] government didn’t even understand what a market-based economic system is,” he said.

The president of the U.S.-based AACC said his team has been working in Washington with banking sector representatives to help facilitate the return of Afghanistan’s frozen foreign exchange reserves of about $9 billion.

Grieco explained to the audience that the funds are in the U.S. central bank and European countries. He noted that the money cannot be returned to Afghanistan’s central bank for the time being due to economic sanctions on the Taliban.

“We need the Afghan Bankers’ Association to work tougher now to figure out how to approach the return of the commercial bank assets because there has been a change in our government’s thinking in the last few months,” Grieco said. “They are now willing to consider the return of those assets.”

While speaking to the Kabul gathering, Arthur Groom, a longtime international gemstone investor in Afghanistan, said that while some U.S. investors left the country after the Taliban takeover, his company stayed.

“We need to change some minds … because all I have heard here in many meetings is that it’s not safe here, women are not happy here, and the kids aren’t going to the schools, it’s dirty here. It’s completely opposite from what I saw,” Groom said.

Groom said his investment in Afghanistan aims to bring technology into the country to modernize the mining sector and teach modern technology in gem-cutting to enable locals, including the government, to benefit from their natural resources.

The Taliban reclaimed power in August 2021 as the U.S.-led NATO troops withdrew from the country after almost 20 years of war with the then-Taliban insurgents.

The new fundamentalist authorities have since imposed their strict interpretation of Islamic law, known as Sharia, banning girls from schools beyond the sixth grade, barring many women from workplaces, including those working for aid agencies, and prohibiting their entry into public parks, gyms and bathhouses.

The restrictions have deterred the international community from recognizing the Taliban government. However, Afghanistan’s neighbors and many regional countries have retained or reopened their embassies in Kabul following the power shift two years ago.

The Taliban said they had established peace in Afghanistan and almost eliminated illicit narcotics production to address international concerns, arguing that their policies align with Afghan culture and Islam.

“The rest is our internal matter, and no one should interfere in it like we don’t interfere in other countries’ affairs,” Taliban Foreign Minister Amir Khan Muttaqi said last week in a speech in Kabul in response to criticism of their treatment of Afghan women and other alleged human rights abuses.
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Fishing grounds choked by water hyacinths. Songbird eggs gobbled up by rats. Power plant pipes clogged by zebra mussels. And electrical lines downed by brown tree snakes.

These are just a few examples of the environmental chaos sown by invasive species, whose spread around the world has seen economic damages quadruple every decade since 1970, scientists said on Monday.

The team of 86 researchers from 49 countries released a four-year assessment of the global impacts of some 3,500 harmful invasive species, finding that economic costs now total at least $423 billion every year, with the alien invaders playing a key role in 60% of recorded plant and animal extinctions.  

“We also know this is a problem that is going to get much, much worse,” said ecologist Helen Roy, co-chair of the United Nations Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)report.

Warmer temperatures under climate change are expected to further drive the expansion of invasive species.

Invasive species are plants or animals, often moved around by human activity, that take hold in an environment with deleterious effects. These range from outcompeting native wildlife, damaging infrastructure, and threatening human health and livelihoods.

Impacts are often slow to materialize, but can be catastrophic when they do.  

The deadly wildfires in Hawaii last month were driven by flammable invasive grasses, scientists said, brought over from Africa as livestock pasture. 

Invasive mosquito species, too, can spread diseases such as dengue, malaria, Zika, and West Nile.

“Invasive species are affecting not only nature but also people and causing terrible loss of life,” said report co-chair Anibal Pauchard of Chile’s Institute of Ecology and Biodiversity.

Eradicating invaders

About three-quarters of the negative impacts from invasive species occur on land, especially in forests, woodlands, and farmed areas.

While invasives can come in many forms, including microbes, invertebrates and plants, animals often have the greatest environmental impact, Roy said, particularly predators.

On islands, many species have evolved without predators and are therefore “very naive,” said Pauchard, with few defenses. “Birds in New Zealand had no experience with rats until humans came and brought rats. Their nests are at ground level.”

Getting rid of invasive species once they are established, however, is difficult.

Some small islands have seen success in eradicating invasive rats and rabbits with trapping and poisonings. But larger populations that are quick to reproduce can be tricky. And invasive plants often leave their seeds lying dormant in the soil for years.

Prevention measures through border biosecurity and import controls, scientists said, is most effective.

Last December, the world’s governments committed in the Kunming-Montreal Global Biodiversity Framework to reducing the introduction and establishment of priority invasive species by at least 50 percent by 2030. 
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China’s economic growth is slowing down as policymakers try to fix a property market downturn, with troubles at major developer Country Garden in focus. Concerns are mounting over whether the world’s second-largest economy is coming closer to a crunch point:

What is causing China’s economic slowdown?

Unlike consumers in the West, Chinese people were left largely to fend for themselves during the COVID-19 pandemic and the revenge spending spree that some economists expected after China reopened never took place.

Moreover, demand for Chinese exports has been softening as key trading partners have been grappling with rising living costs.

And with 70% of Chinese household wealth tied up in real estate, a big slowdown in the sector is trickling through to other parts of the economy.

There have been major concerns over China’s economy before. Is this time different?

Alarm bells over the economy rang during the global financial crisis in 2008-09 and during a capital outflow scare in 2015. China revived confidence then with a shock boost to infrastructure investment and by encouraging property market speculation, among other measures.

But the infrastructure upgrades have created too much debt, and the property bubble has burst, posing risks to financial stability today.

Given China’s debt-fueled investment in infrastructure and property has peaked and exports are slowing in line with the global economy, China only has one other source of demand to tinker with: household consumption.

In that sense, this slowdown is different.

Whether China bounces back largely depends on whether it can convince households to spend more and save less, and whether they will do so to such an extent that consumer demand compensates for weaknesses elsewhere in the economy.

Why is low household spending a problem?

Household consumption, as a percentage of gross domestic product (GDP), was among the lowest in the world even before COVID, with economists identifying it as a key structural imbalance in an economy relying too heavily on debt-fueled investment.

Economists blame weak domestic demand for subdued investment appetite in the private sector and for China sliding into deflation in July. If it persists, deflation could exacerbate the economic slowdown and deepen debt problems.

The imbalance between consumption and investment is deeper than Japan’s before it entered its “lost decade” of stagnation in the 1990s.

Will China’s economic slowdown get worse?

Weak data readings have prompted some economists to flag the risk that China may struggle to meet its economic growth target of about 5% for 2023 without more government spending.

About 5% is still a much higher growth rate than many other major economies will achieve, but for one that invests roughly 40% of its GDP every year – about twice as much as the United States – economists say it remains a disappointing figure.

There is also uncertainty about the government’s appetite for large fiscal stimulus, given high levels of municipal debt.

Stress in the property market, which accounts for about a quarter of economic activity, raises further concern about the ability of policymakers to arrest the slide in growth.

Some economists warn that investors will have to get used to much lower growth. A minority of them even raise the prospect of Japan-like stagnation.

But other economists say many consumers and small businesses may already feel economic pain as deep as during a recession, given youth unemployment rates above 21% and deflationary pressures weighing on profit margins.

Will interest rate cuts help?

Major Chinese banks on Friday cut interest rates on a range of yuan deposits, to mitigate pressure on their profit margins and give themselves room to reduce lending costs for borrowers, including by lowering mortgage rates.

While policymakers hope lower rates would boost consumption, economists warn the deposit rate cuts accompanying them result in a transfer of funds from consumers who save to those that borrow. Transfers of resources from the government sector to households would make a more meaningful long-term impact.

Rate cuts may also create risks of yuan depreciation and capital outflows, which China will be keen to avoid.

China’s central bank said on Friday it will cut the amount of foreign exchange that financial institutions must hold as reserves for the first time this year, to counter pressure on the yuan.

What more can China’s government do?

Economists want to see measures that would boost the household consumption share of the GDP.

Options include government-funded consumer vouchers, significant tax cuts, encouraging faster wage growth, building a social safety net with higher pensions, unemployment benefits and better, and more widely available, public services.

No such steps were flagged at a recent Communist Party leadership meeting, but economists are looking to a key party conference in December for more profound structural reforms.
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Merchants throughout Pakistan closed their shops Saturday to protest the country’s steep electricity bills and mounting inflation.

The general public has already mounted protests about Pakistan’s soaring cost of living. 

“Everyone is participating” in the shutdown, Lahore’s Township Traders Union president, Ajmal Hashmi, told AFP, “because the situation has become unbearable.”

A deal with the International Monetary Fund has forced Pakistan to cut popular subsidies that helped cushion true costs.

Meanwhile, Pakistan’s caretaker prime minister, Anwaarul Haq Kakar, has said the high prices are not an issue because there is no “second option.”

“When you subsidize, you shift your fiscal obligations to the future,” he said. “Rather than addressing the issue, you just delay it.”
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Afghanistan’s Taliban announced Thursday they have signed more than $6.5 billion worth of mining contracts with local and foreign companies from China, Iran, Turkey and Britain.

Shahabuddin Dilawar, the Taliban minister of mines and petroleum, said the seven contracts cover the extraction and processing of gold, copper, iron, lead and zinc in four Afghan provinces — Takhar, Ghor, Herat and Logar.

The nationally televised signing ceremony occurred as the de facto Afghan authorities marked the second anniversary of the withdrawal of all U.S.-led NATO troops from the country after nearly 20 years of war with the then-insurgent Taliban.

Dilawar said the seven contracts signed Thursday “will collectively bring a $6.557 billion investment” and create thousands of jobs in Afghanistan.

The minister said that an agreement awarded to a Chinese company for gold extraction in Takhar would bring the Taliban government a 65% share of the earnings over five years.

Dilawar said other contracts involving Turkish, Iranian and British investments for mining and processing iron ore in Herat would earn the government a 13% share over 30 years. “It will eventually turn Afghanistan into an exporter of iron,” he said.

Skeptics question the viability of the contracts, citing international economic sanctions imposed on the country after the Taliban reclaimed power in August 2021.

“The Afghan financial and banking sector is almost paralyzed and dysfunctional. Hence, no financial transactions or valuations,” Tamim Asey, a former official with the Afghan ministry of mines and petroleum, wrote on X, formerly known as Twitter.

He argued that the Afghan ministry “lacks technical-legal-police capacity” to manage and oversee such mining contracts.

“The legal-policy framework for the mining sector is not only vague but almost nonexistent. The regime doesn’t even have a constitution, let alone mining legal framework,” Asey said.

Earlier this year, a Chinese firm signed an oil extraction contract with the Taliban administration. Beijing lately has also shown interest in investing in lithium mining in Afghanistan.

The landlocked South Asian country reportedly has more than $1 trillion worth of precious minerals, including deposits of highly sought-after lithium used in rechargeable batteries.

The Taliban have stabilized Afghanistan’s economy and increased trade with neighboring and other countries, according to regional officials and independent monitors.

The World Bank said in its report last month that “the year-on-year inflation has been negative” for the past two months in Afghanistan.

“The supply of goods has been sufficient, but demand is low. Over 50% of Afghan households struggle to maintain their livelihoods and consumption,” the report said. It added that the local currency, the Afghani, appreciated against major trading currencies in the first seven months of 2023.

But the Taliban’s men-only government in Kabul remains under fire from the world because of its restrictions on women’s access to work and education.

Since seizing power from a U.S.-backed Afghan government on Aug. 15, 2021, the Taliban have imposed their strict interpretation of Islamic law, or Sharia, in the conflict-torn nation.

Edicts from reclusive Taliban supreme leader Hibatullah Akhundzada primarily set the policy guidelines for his government.

Akhundzada has banned girls from attending schools past the sixth grade and most women from working for the government and nongovernmental aid groups in a country where two-thirds of the population needs humanitarian assistance. The Taliban have closed thousands of women-run salons nationwide. Women are barred from visiting public parks and gyms and undertaking road trips without a male guardian.

The treatment of Afghan women has deterred foreign governments from recognizing the Taliban administration in Kabul, known as the Islamic Emirate of Afghanistan.

The last American soldier departed Afghanistan on Aug. 30, 2021, ending the longest war in U.S. history.

On Wednesday, President Joe Biden defended his troop exit decision in a statement marking the second anniversary of ending the Afghan war.

“We have demonstrated that we do not need a permanent troop presence on the ground in harm’s way to take action against terrorists and those who wish to do us harm,” Biden said.

The president referred to the July 30, 2022, drone strike that killed al-Qaida leader Ayman al-Zawahiri in his home in downtown Kabul.
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U.S. Commerce Secretary Gina Raimondo wrapped up a four-day visit to China on Wednesday in the latest move by U.S. President Joe Biden’s administration to stabilize commercial and trade links between the world’s two largest economies.

In public remarks Wednesday, Raimondo said that she is hopeful about holding regular and direct talks with Chinese officials, but that she is “very clear-eyed” and does not expect every issue with Beijing will be resolved “overnight.”

Earlier in her visit, she said American companies have told her that China’s unlevel playing field and unpredictable regulatory environment with steep penalties have made the country “uninvestible.”

Raimondo said the two sides planned to hold meetings with technical experts to talk about disputes over protecting trade secrets as well as sharing information about export controls.

“We are not returning to the days when we had dialogue for dialogue’s sake, but shutting down communication and de-coupling services is neither in our economic or national security goals,” Raimondo told reporters during a phone briefing.

While the United States and China maintain more than $700 billion in annual trade, escalating tensions in recent years have made it more challenging for U.S. firms to operate in China.

“I did mention that my own emails had been hacked,” she said, “and I mentioned that as an example of an action that erodes trust at a time that we are trying to stabilize the relationship and increase channels of communication.”

U.S. officials have said Washington is not seeking a “de-coupling” with the Beijing government, but focusing on “de-risking.” Biden signed an executive order earlier this month to restrict U.S. investments in some sensitive and high-tech industries in China, including in semiconductors, microelectronics, quantum computing and certain artificial intelligence capabilities.

In Beijing, Chinese officials said the United States was engaging in “de-coupling” under the guise of “de-risking.” China’s Ministry of Commerce said in a statement on Aug. 10 that the U.S. decision “seriously disrupts the security of global industrial and supply chains.”

The two countries have traded other restrictions in recent months.

In May, China’s Cyberspace Administration banned its corporations from buying memory chips from U.S.-based Micron Technology Inc., as the U.S. works with its allies to ensure that advanced semiconductor manufacturing stays out of the reach of the Chinese industry.

In March, Chinese officials closed the Beijing offices of the U.S. due diligence company Mintz Group and detained five of its employees, accusing the firm of doing “unapproved statistical work.” With 18 offices worldwide, Mintz Group specializes in background checking, fact gathering and internal investigations.

Raimondo visited Shanghai Disneyland and a Boeing facility, as well as New York University’s campus in Shanghai on Wednesday, after meetings with Chinese Premier Li Qiang and Chinese Vice Premier He Lifeng on Tuesday.  She held meetings with Chinese Minister of Commerce Wang Wentao on Monday.

Although Raimondo agreed to launch an information exchange on export control enforcement and a new working group on commercial issues, Congressional critics are skeptical about Washington’s ability to work constructively with Beijing.

Congressman Michael McCaul, a Republican who chairs the House Committee on Foreign Affairs, accused the Biden administration of being “at best naive” in starting a working group with China.

McCaul said it is a dangerous move because the Chinese Communist Party, or CCP, “steals U.S. intellectual property and hacks the emails of senior government officials, including Secretary Raimondo. The administration must stop treating the CCP as anything other than an adversary who will stop at nothing to harm our national security and spread its malign authoritarianism around the globe.”

Raimondo’s visit follows recent trips by other senior U.S. officials, including CIA Director Bill Burns in May and U.S. Secretary of State Antony Blinken in June, as well as separate trips by U.S. Secretary of the Treasury Janet Yellen and U.S. Special Envoy on Climate John Kerry in July.
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Brazilian mining company Vale SA sees declining steel demand in China, the world’s largest producer, but the situation is not as dire as some indicators suggest, the company’s vice president of iron ore solutions told Reuters.

Vale is “cautiously optimistic” about the largest global consumer of iron ore, as China’s economy has proved resilient, despite uncertainties surrounding possible stimulus measures to achieve growth targets, the Vale executive, Marcello Spinelli, said.

“We can see that there is demand [for steel]. It’s declining, but not to the extent that some isolated indicators show to some analysts,” Spinelli said. “When you reconcile it with the property numbers [in the construction sector], there is this divergence.”

Vale is heavily dependent on sales to China, even as it works to diversify with its base metals unit. Last year, China bought 190 million metric tons (290 million tons) of iron ore and pellets from Vale, representing around 63% of total sales in those segments, according to company data.

Spinelli acknowledged significant distrust among analysts about China’s building sector, following liquidity problems for some real estate developers. However, he said many analysts overlook that nondeveloper entities are actively constructing homes at elevated levels, partially offsetting the decline.

He also said low iron ore and steel inventories offer support for the market.

Iron ore inventories at China’s ports are at their lowest levels in almost three years, around 118 million metric tons (130 million tons), according to data from consultancy SteelHome. Prices are still holding above $110 per metric ton, but far from this year’s peak near $130 and last year’s high of $150.

“There’s a lot of volatility because nobody knows what the central government is going to decide [about stimulus]. We have to wait a bit,” Spinelli said.

“We’re cautious optimists, that’s what we are. There is a stabilization of the economy at a very high level, and with some adjustment, yes, [growth] will slow moderately over the next five, 10 years, but in a way that is already foreseen,” he said.
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Toyota said Tuesday it has been hit by a technical glitch forcing it to suspend production at all 14 factories in Japan.

The world’s biggest automaker gave no further details on the stoppage, which began Tuesday morning, but said it did not appear to be caused by a cyberattack.

The company said the glitch prevented its system from processing orders for parts, resulting in a suspension of a dozen factories or 25 production lines on Tuesday morning.

The company later decided to halt the afternoon shift of the two other operational factories, suspending all of Toyota’s domestic plants, or 28 production lines.

“We do not believe the problem was caused by a cyberattack,” the company said in a statement to AFP.

“We will continue to investigate the cause and to restore the system as soon as possible.”

The incident affected only Japanese factories, Toyota said.

It was not immediately clear exactly when normal production might resume. 

The news briefly sent Toyota’s stocks into the red in the morning session before recovering.

Last year, Toyota had to suspend all of its domestic factories after a subsidiary was hit by a cyberattack.

The company is one of the biggest in Japan, and its production activities have an outsized impact on the country’s economy.

Toyota is famous for its “just-in-time” production system of providing only small deliveries of necessary parts and other items at various steps of the assembly process.

This practice minimizes costs while improving efficiency and is studied by other manufacturers and at business schools around the world, but also comes with risks.

The auto titan retained its global top-selling auto crown for the third year in a row in 2022 and aims to earn an annual net profit of $17.6 billion this fiscal year.

Major automakers are enjoying a robust surge of global demand after the COVID-19 pandemic slowed manufacturing activities.

Severe shortages of semiconductors had limited production capacity for a host of goods ranging from cars to smartphones.

Toyota has said chip supplies were improving and that it had raised product prices, while it worked with suppliers to bring production back to normal. 

However, the company was still experiencing delays in the deliveries of new vehicles to customers, it added.
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If all goes according to plan, in a few weeks people will be sipping a shake that Marcelo Salazar has been developing for three years, made from the Amazon jungle’s cornucopia.

His company Mazo Mana Forest Food has partnered with communities that live from the forest and gather the Brazil nuts, cocoa beans, acai, mushrooms, fruits and other ingredients that go into the drinks. They have received some backing from a business incubator based in Manaus that focuses on sustainable forest businesses, to counter an economy based on logging and ranching.

“To turn the game around, I think it takes a new generation of ventures that combine different business models,” Salazar said.

Some hope sustainable ventures like this will be part of a new “bioeconomy,” a buzzword at the Amazon Summit in Belem in early August, where policymakers voiced eagerness to protect the rainforest and provide a livelihood for tens of millions of rainforest residents.

But beyond general support for the notion, there was little consensus about what exactly a bioeconomy should look like. Salazar attended and spoke on a panel organized by Brazil’s environment ministry titled “The challenge of building an Amazon bioeconomy.”

The idea is not new. It is the latest term for sustainable livelihood, or sustainable development or the green economy. Small to mid-size examples of it exist across the Amazon.

Besides the Brazil nuts and acai harvesters, people are making chocolate from native cocoa. A sustainable fishery for one of the world’s largest freshwater fish has given river communities an alternative to logging. Production of sneakers for fashionable Parisians has restored hope for a community of rubber tappers who labored on the verge of obsolescence with the advent of synthetic rubber.

“The challenge is scale,” Para state Gov. Helder Barbalho said in an interview on the sidelines of the summit. His state is believed to be the only one in Brazil that has an actual bioeconomy plan. Para is Brazil’s top producer of acai, yet its economy is far more dependent on iron ore exports to China. So much land in Para has been converted to pasture for an estimated 27 million cattle that it emits more greenhouse gases than any Amazon country besides Brazil.

But when it comes to larger sustainable enterprises, there are few success stories. The brightest example has been cosmetics company Natura, which two decades ago launched a product line using ingredients from traditional Amazon communities and family farms.

Developing these relationships took patience and research, said Priscila Matta, sustainability senior manager at Natura.

When the company started, local people were felling ucuuba trees to make brooms. They tripled their income by leaving the trees standing and selling the seeds to Natura. That is just one among dozens of Natura’s bioingredients, helping the company contribute to the conservation of more than 2 million hectares (about 7,700 square miles) of forest.

About 8% of what Natura spent on raw inputs last year went for Amazon bioingredients. They come from 41 communities – home to 9,120 families – who in 2022 received about $9 million, some of it direct payments to keep the forest standing.

The bioeconomy pitch can also veer toward pie-in-the-sky. Speaking to reporters at the Amazon Summit, Brazil’s planning and budget minister Simone Tebet said that driving a vibrant economy while keeping the forest standing “is our dream, but dreams exist to be realized.”

“Banks are interested,” Tebet said. “Imagine big industries without smokestacks, industries for the good, taking root in Amazon states … learning from the Indigenous people from whom everything comes.”

Para state’s bioeconomy plan strikes a similarly utopian tone: “The Amazon Forest is like an enormous library of knowledge and wisdom that has yet to be discovered,” it reads.

The plan gets into specifics, naming 43 forest-compatible products that could be exported, including acai, cocoa, cassava, pepper, fish species and essential oils for cosmetics.

Para has started building a complex to serve as a bioeconomy incubator to house researchers and start-ups, scheduled for completion before the state capital of Belem hosts the 2025 global climate conference. Para’s public bank, Banpara, has launched a subsidized lending program for small farmers who want to develop agroforestry.

“We can balance the scenario of a living forest and people being cared for, being seen,” Barbalho said in the interview.

Neighboring Amazonas state is developing a bioeconomy plan with the financial support of the U.S. Agency for International Development.

The federal government is also starting to move beyond mere words. This month, Brazil’s economy minister, Fernando Haddad, announced an Ecological Transformation Plan. It proposes using a climate fund to back sustainability projects and setting up rules for Brazil’s carbon market.

But some earlier efforts reveal pitfalls.

A state condom factory in the Amazon city of Xapuri that opened in 2008 during President Luiz Inacio Lula da Silva’s previous term was supposed to provide a market for hundreds of rubber-tapper families living in the region where the late environmental leader Chico Mendes was killed. The factory closed 10 years later, after federal subsidies came to an end. Locals resorted to cattle ranching and today the region ranks high for deforestation.

Cocoa beans are another cautionary tale. The trees can be a way to let forest grow back where it has been cut down but its appeal in places like the Ivory Coast and Ghana has meant massive deforestation to make way for the more lucrative trees.

Salazar, the CEO of Mazo Mana, the forest shake company, views his enterprise as both social-minded and market-savvy. It reserves nearly 10% equity for its partner community associations and, to the extent possible, production takes place locally to add value and develop expertise.

Salazar thinks the sustainable companies that succeed and grow big will be those with a mission to solve the Amazon’s problems, and they will drive a transformation toward an economy that recognizes the value of the forest.
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Record-breaking temperatures, reduced rainfall and changes in the natural climate are set to damage Thailand’s economy and increase poverty, experts say.

Thailand is suffering from droughts caused by the El Niño weather event, which is drying up land for the growth of key crops in the country’s farmlands.

Rainfall in Thailand has been below average this year, with a 25% reduction nationwide up until July, according to the Thai Meteorological Department. It has forced the government to advise some farmers to switch to other crops that use less water if planting has not already begun.

“It was less rain in central Thailand for the past couple of months.

As [the World Meteorological Organization] said that July was the hottest July in history. But the hottest month of the year [for Thailand] is April,” said Chaowat Siwapornchai, a meteorologist in Bangkok.

“As a long-term trend, we continue facing rising temperatures combined this year with El Niño], which is developing the situation we are facing,” he added.

The La Niña phenomenon is the natural cooling of the water in the central and eastern Pacific Ocean. It occurs every few years yet affects weather changes worldwide. The El Niño pattern does the opposite, developing warm water, that brings drier weather and reduces rainfall, contributing to extreme hot weather in the Asia region. Extreme heat has also been common this year in India, China, Laos, Pakistan and Vietnam.

In a report published last month, the World Meteorological Organization said that El Niño conditions have developed in the Pacific for the first time in seven years, adding that there is a 90% probability El Niño will continue until the end of 2023. The report says there is almost a certainty the next five years will be the warmest on record, with one of the five years in that period being the warmest ever recorded.

But for Thailand, the Southeast Asian country has already experienced record-breaking temperatures earlier this year.

In April, the city of Tak recorded a highest-ever temperature of about 45.5 degrees Celsius. The same month saw Thailand’s heat index – which determines what the temperature feels like because of humidity – measure at a record 53.9 Celsius in the Chonburi province and the popular tourist island of Phuket.

The scorching temperatures also have forced Thai households to use more electricity, such as in air conditioning homes, causing power consumption to soar to record levels in April and May.

And last week, in the Korat area, water levels in the Lam Takhong Dam dropped to the point that a historic part of Thailand reappeared. The Thai-America Road, built and used during the Vietnam War and used by the U.S Air Force as a route to its base in Udon Thani, has re-emerged. The road is usually submerged under the dam waters, which have dropped to less than half of capacity, the Khaosod English newspaper reported.

Kiatanantha Lounkaew, an economic lecturer at the Thammasat University in Bangkok, says the droughts from El Niño will harm the economic livelihood of the Thai people.

“The key crops that could be affected are rice, corn, and sugar cane. The household incomes of those who cultivate these crops are low. Thus, this effect could result in persistent poverty. Impoverished households will not have sufficient resources to mitigate the effects of the drought,” he told VOA via email.

Data shows about 40% of Thai farmers live below the poverty line.

“Since these produce items are the main staple for Thai people and are used to feed farm animals, rising prices would be felt throughout the economy. As shown by past empirical evidence, there is a clear correlation between drought spells and inflation, especially food inflation. Those with low incomes will be more vulnerable to the effects, as about 50% to 70% of their monthly earnings are spent on food.”

Agriculture accounts for up to 9% of Thailand’s GDP. The country is the world’s second-largest rice exporter, and the third largest exporter of raw sugar. The industry employs about a third of Thailand’s labor force, including millions of farmers.

Following an economic decline during the peak of the COVID-19 pandemic, Thailand, Southeast Asia’s second largest economy, has seen a rebound and 3.5% GDP growth was forecast for 2023.

Earlier in August, the Bank of Thailand’s policy committee warned the economy could shrink because of weather concerns and political uncertainty, Reuters reported.

Kiatanantha says the droughts could hamper Thailand’s agricultural competitiveness.

“In the long run, it will affect the competitiveness of Thailand’s agricultural sector. Agricultural households facing volatile income will find it hard to remain competitive, as doing so requires further investment to improve their yield and the quality of their produce.

“Additionally, such a prospect would ‘push’ people who are able to do so into other economic sectors. Changing the workforce composition will exert further downward pressure on the agricultural sector, ensuring regional and sectoral inequality,” Kiatanantha said.
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U.S. trade has shifted away from China due to policies enacted by the Biden and Trump administrations, but U.S. reliance on China-linked supply chains has not necessarily been reduced and consumers have faced higher costs, according to new research presented Saturday at a Federal Reserve economic symposium.

Despite deglobalization fears after the coronavirus pandemic and Russia’s invasion of Ukraine, overall trade “has held steady at just under 60% of world (gross domestic product) rather than gone into freefall,” Laura Alfaro, an economist at Harvard Business School, and Davin Chor, an associate professor at the Tuck School of Business at Dartmouth, concluded in their paper, which was presented at the annual gathering of central bankers and economists in Jackson Hole, Wyoming.

But U.S. tariffs on Chinese goods, recently enacted industrial policies, and the pandemic, do seem to have touched off a “‘great reallocation’ in supply chain activity: Direct US sourcing from China has decreased,” from 21.6% of U.S. imports as of 2016 to 16.5% last year, Alfaro and Chor wrote.

What’s less certain is what that means, with the authors saying the shift from China is raising prices for consumers without clearly providing offsetting benefits in the form of, for example, improved manufacturing efficiency in the U.S.

It is not even certain that the decline in China’s U.S. import share represents a true delinking, they said.

Vietnam and Mexico, for example, appear to have captured much of the reallocated trade, the authors said, based on an analysis of goods import and export patterns, while an increase in U.S. purchases of less processed goods from abroad was “indicative of some reshoring of production stages.”

And among companies, they said, “concerns are being voiced over the wisdom of sprawling supply chains that can expose firms and countries to the risk of disruptions,” from events like the pandemic or severe weather, or policy shocks like tariffs.

Yet in the background, the researchers noted that China had “stepped up” its trade and investment activity with Vietnam and Mexico, as well as other countries.

“The U.S. could well remain indirectly connected to China through its trade and global value chain links with these third-party countries,” they argued.

Prices for goods from some countries, moreover, were beginning to rise.

“The recent policy restrictions to shift sourcing patterns or even to encourage substitution toward domestic inputs are poised to add to wage and cost pressures in the U.S.,” the research found, a pointed conclusion as the Fed tries to lower inflation by slowing the U.S. economy. 
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A crowd of what appeared to be several hundred protesters in the southern Druze city of Suwaida, Syria, chanted slogans targeting the Syrian government Saturday on the seventh day of a growing movement calling for economic and political reform.

An economic crisis across Syria has hit the general population hard, making daily life extremely difficult and sparking protests that seemingly are causing ripples to several other parts of the country.

Activists in Suwaida said they are not trying to overthrow the government but to prompt leaders to try harder to improve the economic situation, citing the deteriorating exchange rate of the Syrian pound, the lifting of fuel subsidies, and price hikes on bread and other food.

One protest leader, Marwan Hamzeh, told Saudi-owned al-Arabiya TV that the government has “not appeared to make any use of its security forces to crack down on the latest protests,” adding that it’s “unclear why.” Some observers, however, say the government is concerned about provoking a wave of violence like that which sparked the much larger protest movements of 2011.

Although Arab media broadcast video of protesters in several parts of the country calling for the “fall of the regime,” Joshua Landis, who heads the Middle East Studies department at the University of Oklahoma, told VOA that “most of the protesters are calling for more government activity in the economic life of the country, rather than a collapse of the government.”

“It’s an odd situation because the Syrians who are demonstrating all want more government services, not less,” Landis said. “They want more electricity, they want subsidies, they want better schooling, they want the currency to be stabilized. They are desperate. They want higher salaries.”

Landis noted that Druze leaders criticized the protesters that burned down their province’s town hall in a previous protest movement last December, telling them they were “destroying the infrastructure needed to run their province rather than harming the government.”

Activist Hamzeh said that “90% of all government offices that collect revenue for land sales, vehicle registration and other taxes have been closed during the week of protests,” and that “most people have stopped paying their taxes to the government.”

One middle-aged protester, looking tired but enthusiastic, told Druze social media it is “time for the government to clean up its act and govern fairly, rather than favoring certain sectors of the population.”

He said that protesters were calling for freedom, justice, dignity and humanity, in addition to demanding the law be applied fairly to everyone.

The Saudi-owned Asharq al Awsat newspaper reported Friday that the protest movement has “spread to the Bedouin tribes in the south of Syria” from their initial communal origin among the Druze in Suwaida, “making them more of a national movement.”

Several Kurdish leaders, including Ilham Ahmed, have expressed support, insisting that “peaceful protests are the correct path to achieve democratic change.”

The Arab League normalized ties with the Syrian government in May, but those ties remain shaky. Investment in Syrian infrastructure has been slow to materialize, partly because of ongoing U.S. economic sanctions on the Assad government.
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