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For a second year, the war in Ukraine is adding to worries for American farmers already pinched by higher interest rates. VOA’s Kane Farabaugh speaks with farmers in the Midwest state of Illinois about the impact of world events as they launch another planting season. Camera: Kane Farabaugh.
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Japan and the United States will issue a joint statement on technology cooperation on Friday that will commit them to closer cooperation in research and development of advanced chips and other technologies, a Japanese government source said.

Japan’s Minister of Economy, Trade and Industry Yasutoshi Nishimura and U.S. Secretary of Commerce Gina Raimondo will meet in Detroit in the U.S. on the sidelines of the 2023 APEC Ministers Responsible for Trade Meeting, Yomiuri reported earlier. In addition to semiconductors, they will discuss artificial intelligence and quantum technology, the newspaper added.

They want to deepen ties between research and development hubs in Japan and the U.S., the Japanese official told Reuters, asking not to be identified because he is not authorised to talk to the media. It will be another incremental step as they map out their future technology cooperation, he added.

As Washington and Tokyo reduce their exposure to Chinese supply chains amid growing tension, they are working together to expand chip manufacturing to ensure access to advanced components that they see as essential for economic growth.

Japan has established a new chip maker, Rapidus, that is working with International Business Machines Corp (IBM)(IBM.N) to develop advanced logic semiconductors, and is offering subsidies to U.S. memory maker Micron Technology Inc (MU.O) so it can expand production there.

Japan, along with the Netherlands, has also agreed to match U.S. export controls that will limit the sale of some chipmaking tools in China.

The meeting between Nishimura and Raimondo comes after the leaders of the Group of Seven advanced democracies agreed at a meeting in Hiroshima, Japan, to reduce their exposure to China because of its “economic coercion.”

Raimondo on Thursday met China’s Minister of Commerce Wang Wentao in Washington where the pair exchanged views on trade, investment and export policies.
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The U.S. economy grew at a lackluster 1.3% annual rate from January through March as businesses wary of an economic slowdown trimmed their inventories, the government said Thursday in a slight upgrade from its initial estimate.

The government had previously estimated that the economy grew at a 1.1% annual rate last quarter.

The Commerce Department’s revised measure of growth in the nation’s gross domestic product — the economy’s total output of goods and services — marked a deceleration from 3.2% annual growth from July through September and 2.6% from October through December.

Despite the first-quarter slowdown, consumer spending, which accounts for around 70% of America’s economic output, rose at a 3.8% annual pace, the most in nearly two years and an encouraging sign of household confidence. Specifically, spending on physical goods, like appliances and cars, rose 6.3%, also the fastest growth rate since April-June of last year.

A cutback in business inventories shaved 2.1 percentage points off January-March growth.

The steady slowdown in economic growth is a consequence of the Federal Reserve’s aggressive drive to tame inflation, with 10 interest rate hikes over the past 14 months. Across the economy, the Fed’s rate increase have elevated the costs of auto loans, credit card borrowing and business loans.

With mortgage rates having doubled over the past year, the real estate market has already taken a beating: Investment in housing fell at a 0.2% annual rate from January through March. In April, sales of existing homes were 23% below their level a year earlier.

As the Fed’s rate hikes have gradually slowed growth, inflation has eased from the four-decade high it reached last year. Still, consumer prices were still up 4.9% in April from a year earlier — well above the Fed’s 2% target.

The economy’s slowdown is widely expected to lead to a recession later this year. For now, though, most sectors of the economy other than housing are showing surprising resilience. Retail sales have continued to rise. So have orders for manufactured goods.

Most significantly, the nation’s job market remains fundamentally solid. In April, employers added 253,000 jobs, and the unemployment rate matched a 54-year low. The pace of layoffs remains comparatively low. And job openings, though declining, are still well above pre-pandemic levels.
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The European Union fined Meta a record $1.3 billion on Monday and ordered it to stop transferring user data across the Atlantic by October, the latest salvo in a decadelong case sparked by U.S. digital snooping fears.

The privacy fine of 1.2 billion euros from Ireland’s Data Protection Commission is the biggest since the EU’s strict data privacy regime took effect five years ago, surpassing Amazon’s 746 million euro penalty in 2021 for data protection violations.

The Irish watchdog is Meta’s lead privacy regulator in the 27-nation bloc because the Silicon Valley tech giant’s European headquarters is based in Dublin.

Meta, which had previously warned that services for its users in Europe could be cut off, vowed to appeal and ask courts to immediately put the decision on hold.

“There is no immediate disruption to Facebook in Europe,” the company said.

“This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and U.S.,” Nick Clegg, Meta’s president of global and affairs, and Chief Legal Officer Jennifer Newstead said in a statement.

It’s another twist in a legal battle that began in 2013 when Austrian lawyer and privacy activist Max Schrems filed a complaint about Facebook’s handling of his data following former National Security Agency contractor Edward Snowden’s revelations about U.S. digital snooping.

The saga has highlighted the clash between Washington and Brussels over the differences between Europe’s strict view on data privacy and the comparatively lax regime in the U.S., which lacks a federal privacy law.

An agreement covering EU-U.S. data transfers known as the Privacy Shield was struck down in 2020 by the EU’s top court, which said it didn’t do enough to protect residents from the U.S. government’s electronic prying.

That left another tool to govern data transfers — stock legal contracts. Irish regulators initially ruled that Meta didn’t need to be fined because it was acting in good faith in using them to move data across the Atlantic. But it was overruled by the EU’s top panel of data privacy authorities last month, a decision that the Irish watchdog confirmed Monday.

Meanwhile, Brussels and Washington signed an agreement last year on a reworked Privacy Shield that Meta could use, but the pact is awaiting a decision from European officials on whether it adequately protects data privacy.

EU institutions have been reviewing the agreement, and the bloc’s lawmakers this month called for improvements, saying the safeguards aren’t strong enough.

Meta warned in its latest earnings report that without a legal basis for data transfers, it will be forced to stop offering its products and services in Europe, “which would materially and adversely affect our business, financial condition, and results of operations.”

The social media company might have to carry out a costly and complex revamp of its operations if it’s forced to stop shipping user data across the Atlantic. Meta has a fleet of 21 data centers, according to its website, but 17 of them are in the United States. Three others are in the European nations of Denmark, Ireland and Sweden. Another is in Singapore.

Other social media giants are facing pressure over their data practices. TikTok has tried to soothe Western fears about the Chinese-owned short video sharing app’s potential cybersecurity risks with a $1.5 billion project to store U.S. user data on Oracle servers.
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U.S. President Joe Biden said Sunday that opposition Republicans in the House of Representatives must move away from their “extreme position” on government spending in order to reach a deal with Democrats to raise the country’s borrowing limit before it runs out of cash to pay its bills.

The government could come up short to meet its financial obligations as soon as June 1, but the Democratic president said at a news conference in Hiroshima, Japan, that there will be no agreement to avert a catastrophic default affecting the U.S. and global economies only on Republican terms.

“It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely, on their partisan terms,” Biden said at the end of a Group of Seven summit of the leaders of the world’s wealthiest democracies.

Biden said he had done his part by offering ways to raise the country’s $31.4 trillion borrowing limit so the U.S. government can keep paying its bills, such as interest on government bonds, stipends to U.S. pensioners and payments to health care providers and salaries for government employees and contractors. He said, “It’s time for the other side to move from their extreme position.”

Biden was expected to talk later Sunday with Republican House Speaker Kevin McCarthy about the debt ceiling negotiations, possibly as he flies back to Washington on Air Force One. While Biden was in Japan, his negotiators met with key Republicans, but the talks produced no agreement, with both sides digging in for their viewpoints on government spending for the year starting in October.

“My guess is he’s going to want to deal directly with me in making sure we’re all on the same page,” Biden said of McCarthy.

Treasury Secretary Janet Yellen told NBC’s “Meet the Press” show that the date when the government runs out of cash to pay its current bills remains uncertain, but that an expected June 15 infusion of tax payments may not come soon enough to avert a default.

“There’s always uncertainty about tax receipts and spending,” Yellen said. “And so, it’s hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15th, while being able to pay all of our bills, is quite low.”

She said decisions have not been made on which bills would go unpaid if the government defaults.

“I would say we’re focused on raising the debt ceiling and there will be hard choices if that doesn’t occur,” Yellen said. “There can be no acceptable outcomes if the debt ceiling isn’t raised, regardless of what decisions we make.”

Biden said he still believes a compromise remains within reach to avert what would be the first-ever U.S. government default, roiling world stock markets, diminishing the U.S. credit rating and forcing many U.S. businesses to lay off thousands of workers.

“I’m hoping that Speaker McCarthy is just waiting to negotiate with me when I get home. … I’m waiting to find out,” Biden said.

Republicans in the House have called for sharp government spending cuts, rejecting the alternatives proposed by the White House, which has called for closing tax loopholes and more limited spending reductions. In the past, previous presidents and congressional leaders have reached deals to raise the country’s debt limit 78 times in give-and-take negotiations in which neither side got everything on its wish list.

This time, Republicans want increased work requirements for able-bodied poor people receiving government assistance, but Democrats say that under such a proposal several hundred thousand people could lose the benefits they now receive.

Republicans also are seeking cuts in funding for the country’s tax-collection agency and asking the White House to accept provisions from their proposed immigration overhaul to stem the tide of migrants trying to enter the U.S. at the Mexican border.

The White House has countered by keeping defense and nondefense spending flat during the next budget year starting October 1, which would save $90 billion in 2024 and $1 trillion over 10 years.

“I think that we can reach an agreement,” Biden said.

But he acknowledged, “I can’t guarantee that [Republicans] wouldn’t force a default by doing something outrageous.”
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The United Nations and Turkey have negotiated a two-month extension to an agreement allowing Ukraine farmers to continue to export of millions of tons of grain. That’s good news for Dutch farmer Kees Huizinga, who has been farming in Ukraine for 20 years. Anna Kosstutschenko reports.
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Fewer Americans applied for jobless benefits last week after a previous spike that some took as a sign that higher interest rates were finally cooling the labor market.

Applications for jobless claims for the week ending May 6 fell by 22,000 to 242,000, from 264,000 the week before, the Labor Department reported Thursday. The weekly claims numbers are broadly as representative of the number of U.S. layoffs.

The four-week moving average of claims, which flattens some of the week-to-week fluctuations, ticked down by 1,000 to 244,250. Analysts have pointed to a sustained increase in the four-week averages as a sign that layoffs are accelerating, but are reluctant to predict that a spike in layoffs is imminent.

Overall, 1.8 million people were collecting unemployment benefits the week that ended April 29, about 8,000 fewer than the previous week.

Since the pandemic purge of millions of jobs three years ago, the U.S. economy has added jobs at a breakneck pace and Americans have enjoyed unusual job security. That’s despite interest rates that have been rising for more than a year and fears of a looming recession.

Early this month, the Fed raised its benchmark lending rate for the 10th time in a row in its bid to cool the economy and bring down four-decade high inflation. Though the labor market still favors workers, there have been some recent indications that the Fed’s policy actions are working.

In April, U.S. employers added a healthy 253,000 jobs and the unemployment rate dipped to 3.4%, matching a 54-year low. But the figures for February and March were revised lower by 149,000 jobs, potentially signaling that the Fed’s rate policy strategy is starting to cool the job market.

The government also recently reported that U.S. job openings fell in March to the lowest level in nearly two years.

The Fed is hoping to achieve a so-called soft landing — lowering growth just enough to bring inflation under control without causing a recession. Economists are skeptical, with many expecting the U.S. to enter a recession later this year.

Last month, the Commerce Department reported that U.S. economy slowed sharply from January through March, decelerating to just a 1.1% annual pace as higher interest rates hammered the housing market and businesses reduced inventories.

There have been an increasing number of high-profile layoffs recently, mostly in the technology sector, where companies added jobs at a furious pace during the pandemic. IBM, Microsoft, Salesforce, Twitter, Lyft, LinkedIn and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each announced two sets of job cuts since November.

But it’s not just the tech sector that’s trimming staff. McDonald’s, Morgan Stanley and 3M also announced layoffs recently. 
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President Joe Biden on Wednesday sought to assure Americans that the U.S. would not default on its debts as the White House and top congressional leaders conducted tense, protracted budget negotiations in which Republicans were seeking substantial spending cuts in exchange for raising the debt limit.

“I’m confident that we’ll get the agreement on the budget and America will not default,” Biden said as he prepared to leave Washington for a Group of Seven summit in Japan with the leaders of some of the world’s biggest economies. “And every leader in the room understands the consequences if we fail to pay our bills. And it would be catastrophic for the American economy and the American people if we didn’t pay our bills.”

The White House argues that the two events — setting a budget and raising the debt ceiling to pay for expenses the U.S. has already incurred — should not be linked, as they are in the budget presented by Republican House Speaker Kevin McCarthy. Biden insists that Congress raise the current $31.4 trillion debt ceiling without conditions on future spending.

McCarthy’s budget seeks future spending caps, new work requirements for able-bodied public assistance beneficiaries and changes to approve domestic energy projects at a faster pace.

Biden said he had appointed senior members of his administration to negotiate with McCarthy’s team in his absence. An administration official told VOA that the team includes one of Biden’s closest, longtime advisers, Steve Ricchetti; the head of his budget office, Shalanda Young; and the head of his legislative affairs team, Louisa Terrell.

Biden added that the negotiators met Tuesday night — just hours after Biden ended his meeting with McCarthy and congressional leaders — and that they would also meet Wednesday.

“To be clear, this negotiation is about the outlines of what the budget will look like, not about whether or not we’re going to, in fact, pay our debts,” the president said. “Leaders all agreed we will not default.”

McCarthy said default was never his plan.

“We already had taken default off the table because the House Republicans passed a bill that raised the debt ceiling, limited our future spending, saved taxpayers money by being able to pull back unspent money and waste and actually grow our economy by making our economy stronger and helping lifting people out of poverty into work,” the House speaker told reporters outside the West Wing of the White House on Tuesday.

Biden has indicated he is willing to talk about future spending limits to pare chronic overspending by the government, where annual trillion-dollar deficits have been common for years. But it’s not clear what parts of McCarthy’s plan he is willing to swallow.

“I’m not going to accept any work requirements that go much beyond what is already — what I voted for years ago — for the work requirements that exist,” Biden said Wednesday when asked by reporters. “But it’s possible there could be a few others, but not anything of any consequence.”

Yellen’s warning

The negotiations come under a tight deadline, with Treasury Secretary Janet Yellen warning that the U.S. could run out of cash to meet all its obligations by June 1 and then could default on some of them.

“A default would crack open the foundations upon which our financial system is built. And it’s very conceivable that we’d see a number of financial markets break, with worldwide panic triggering margin calls, runs and fire sales,” she said Tuesday before the leaders met.

Although the current debt limit was reached in January, Yellen and U.S. financial officials have taken what they describe as “extraordinary measures” to juggle U.S. spending accounts to keep paying the government’s bills.

The United States has never defaulted on its debt. Top government officials have warned that doing so would have immediate and widespread consequences inside the U.S., including massive U.S. worker layoffs and delayed payments to U.S. pensioners, government contractors and health care providers treating older Americans.

Congress has raised the debt ceiling 78 times under both Democratic and Republican presidents, including three times during the four-year term of former President Donald Trump.

If an agreement is reached in Washington’s politically charged atmosphere, it might be a matter of semantics whether a debt ceiling increase and a tandem cut in future spending are linked. Both Biden and congressional Republicans want to be able to claim victory.

The two sides are debating to what extent the debt ceiling would be raised and for how long, as well as specific spending cuts House Republicans recently approved in a narrow vote over united Democratic opposition.
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U.S. President Joe Biden, House Speaker Kevin McCarthy and other top congressional leaders appeared no closer Tuesday to a deal aimed at reaching agreement on raising the country’s debt ceiling so the government can borrow more to pay its existing obligations.     

The impasse comes amid dire warnings from the U.S. Treasury that a default could cause “worldwide panic” and “catastrophe,” and as Biden prepares to leave Wednesday for a summit in Japan with the world’s top seven economies.     

The looming crisis also scotched Biden’s plans to visit Papua New Guinea and Australia after the summit, the White House said in a statement.      

“It’s unfortunate we are where we are,” McCarthy said after the hourlong Oval Office meeting ended. “But the good thing about it is Republicans always look to find a solution.”    

Senate Majority Leader Charles Schumer, a Democrat, said the group did agree on some key issues.     

“We all agreed that the only path forward is to reach a bipartisan agreement anchored in common ground,” he said. “We all agree that default is not an acceptable option and must be avoided.”    

And Biden said his staff would continue to work toward a deal in his absence.   

“There’s still work to do, but I made it clear to the speaker and others that we’ll speak regularly over the next several days, and the staff’s going to continue meeting daily to make sure we do not default,” he said.     

Also Tuesday, Treasury Secretary Janet Yellen warned that “a default would crack open the foundations upon which our financial system is built. And it’s very conceivable that we’d see a number of financial markets break, with worldwide panic triggering margin calls, runs and fire sales.”    

Yellen said, “If Congress does not address the debt limit, there are no good options the Treasury or the government can use to save us from catastrophe.”  

Biden has insisted that Congress raise the current $31.4 trillion debt ceiling without conditions on future spending. McCarthy and congressional Republicans have called for substantial cuts in future government spending in exchange for raising the debt limit for a year.    

That scenario would require a new round of debt ceiling negotiations amid the early phase of the 2024 presidential primary elections.

Although the current debt limit was reached in January, Yellen and U.S. financial officials have taken what they describe as “extraordinary measures” to juggle U.S. spending accounts to keep paying the government’s bills. She said the U.S. could run out of cash to meet all its obligations by June 1 and then could default on some of them.     

The United States has never defaulted on its debt. Yellen and other top government officials have warned that doing so would have immediate and widespread consequences inside the U.S., including massive U.S. worker layoffs and delayed payments to U.S. pensioners, government contractors and health care providers treating older Americans.      

The U.S. Congress has raised the debt ceiling 78 times under both Democratic and Republican presidents, including three times during the four-year term of former President Donald Trump. 

While Biden has said he would not link an increase in the debt ceiling to future government spending cuts, he has said that separately, he is willing to talk about future spending limits to pare the chronic overspending by the government, where annual trillion-dollar deficits have been common for years.     

If an agreement is reached in Washington’s politically charged atmosphere, it might be a matter of semantics whether a debt ceiling increase and a tandem cut in future spending are linked. Both Biden and congressional Republicans want to be able to claim victory.     

The two sides are debating to what extent the debt ceiling would be raised and for how long, as well as specific spending cuts Republicans in the House of Representatives recently approved in a narrow vote over united Democratic opposition.      

The Republicans have called for future spending caps, new work requirements for able-bodied poor people receiving government financial assistance and implementing changes to approve domestic energy projects at a faster pace.    

Some information in this story came from The Associated Press. Margaret Besheer contributed to this report.
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Zimbabwe’s central bank on May 8 launched a gold-backed digital currency it hopes will reduce the demand for US dollars and the devaluation of the Zimbabwe dollar.  But analysts say the government-controlled foreign-exchange market is fueling the problem.  Columbus Mavhunga reports from Harare, Zimbabwe.

Camera: Blessing Chigwenhembe
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U.S. President Joe Biden, House Speaker Kevin McCarthy and other top congressional leaders are meeting Tuesday at the White House in a new effort to reach agreement on raising the country’s debt ceiling so the government can borrow more to pay its existing obligations. 

Biden has insisted that Congress raise the current $31.4 trillion debt ceiling without conditions on future spending. McCarthy and congressional Republicans have called for substantial cuts in future government spending in exchange for raising the debt limit for a year.  

That scenario would require a new round of debt ceiling negotiations amid the early phase of the 2024 presidential primary elections. 

Although the current debt limit was reached in January, Treasury Secretary Janet Yellen and U.S. financial officials have taken what they describe as “extraordinary measures” to juggle U.S. spending accounts to keep paying the government’s bills. She says the U.S. could run out of cash to meet all its obligations by June 1 and then could default on some of them. 

The U.S. has never defaulted on its debt. Yellen and other top government officials have warned that doing so would have immediate and widespread consequences, including calamity on U.S. and global stock markets, massive U.S. worker layoffs and delayed payments to U.S. pensioners, government contractors and health care providers treating older Americans. 

The U.S. Congress has raised the debt ceiling 78 times under both Democratic and Republican presidents, including three times during the four-year term of former President Donald Trump. Biden has adamantly called for an increase, but Trump, the leading 2024 Republican presidential contender after losing his 2020 reelection bid to Biden, expressed indifference to a possible default last week at a political town hall in New Hampshire. 

“I say to the Republicans out there, congressmen and senators, if [Biden and Democrats] don’t give you massive cuts you are going to have to do a default,” Trump said. “But it’s better than what we are doing right now because we are spending money like drunken sailors.” 

“You might as well do it now because you’ll have to do it later,” he said.  

Last week, Biden and the congressional leaders of both political parties met without reaching a debt ceiling agreement but directed their staffs to continue discussions in the last few days.  

While Biden has said he would not link an increase in the debt ceiling to future government spending cuts, he has said that separately, he is willing to talk about future spending limits to pare the chronic overspending by the government, where annual trillion-dollar deficits have been common for years. 

If an agreement is reached, in Washington’s politically charged atmosphere, it might be a matter of semantics whether a debt ceiling increase and a tandem cut in future spending are linked. Both Biden and congressional Republicans want to be able to claim victory. 

In recent days, the White House has voiced cautious optimism on a potential agreement, but on Monday, McCarthy expressed doubts. 

“I don’t think we’re in a good place,” McCarthy said. “I know we’re not.” 

Chuck Schumer, the Senate Democratic Majority Leader, said, “We welcome a bipartisan debate about our nation’s fiscal future. But we’ve made it plain to our Republican colleagues that default is not an option. Its consequences are too damaging, too severe. It must be taken off the table.” 

The two sides are debating to what extent the debt ceiling would be raised and for how long, as well as specific spending cuts Republicans in the House of Representatives recently approved in a narrow vote over united Democratic opposition.  

The Republicans have called for future spending caps, new work requirements for able-bodied poor people receiving government financial assistance and implementing changes to approve domestic energy projects at a faster pace.

The urgency of the talks is complicated because of Biden’s plans to leave Washington on Wednesday for a trip to Japan for a meeting of the leaders of the Group of 7 allied countries, with stops also planned in Australia and Papua New Guinea. 
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The world’s biggest chocolate producers are enjoying record profits – but are failing to pass on the benefits to cocoa farmers, many of whom are suffering falling incomes and worsening poverty, according to a report from the charity Oxfam. Henry Ridgwell reports.
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The world’s biggest chocolate producers are enjoying large profits while failing to pass on the benefits to cocoa farmers, many of whom are suffering falling incomes and worsening poverty, according to a report from the charity Oxfam.

The report was published ahead of World Fair Trade Day on May 13.

Falling incomes

The analysis focuses on Ghana, the world’s second-largest producer of cocoa. The charity says farmer’s incomes in the country have fallen since the start of the coronavirus pandemic in 2020.

“An Oxfam survey of more than 400 cocoa farmers supplying chocolate corporations across Ghana found that their net incomes have fallen on average by 16 percent since 2020, with women’s incomes falling by nearly 22 percent. Nine out of ten farmers said they are worse off since the pandemic,” the report says.

The authors add that up to “90 percent of Ghanaian cocoa farmers do not earn a living income, meaning they cannot afford enough food or other basics such as clothing, housing and medical care. Many of the 800,000 farmers in the country survive on just $2 a day.”

Several local and global factors have driven down farmers’ wages, said Uwe Gneiting, a co-author of the Oxfam report.

“COVID, of course, was a big disruption. But then also the war in Ukraine and the resulting economic crisis, coupled with some more longer-term challenges, like the impacts of climate change and aging farms, which is a big issue in Ghana,” Gneiting told VOA, adding that there are widespread social and environmental consequences.

“Lower incomes really have shown to facilitate the use of children on farms, so child labor, which is a big problem of course in Ghana and other cocoa producing countries. But also deforestation – that farmers are more likely to go out and cut down more trees and or to expand their farms and to make a living.”

Bumper profits

At the same time, Oxfam says profits for the world’s biggest chocolate firms have increased.

“The world’s four largest public chocolate corporations, Hershey, Lindt & Sprüngli, Mondelēz and Nestlé, have together made nearly $15 billion in profits from their confectionary divisions alone since the onset of the pandemic, up by an average 16 percent since 2020. They paid out on average more than their total net profits (113 percent) to shareholders between 2020 and 2022,” the report said.

Oxfam also analyzed the wealth of the two biggest private chocolate corporations, Mars and Ferrero, which has risen by $39 billion since 2020, giving them a combined net worth of around $157 billion.

Ghana and Ivory Coast – the world’s two biggest cocoa producers – signed a deal in 2021 to try to get a bigger share of the chocolate industry’s profit. The two governments set a minimum market price or living income differential for cocoa and also insist on a premium payment – an extra sum of money paid directly to farmers per ton of cocoa.

But Oxfam says the payments have failed to meaningfully increase farmers’ incomes.

Declining yields

“Oxfam analyzed the sustainability programs of ten of the top chocolate manufacturers and traders operating in Ghana… None of the programs achieved their stated goal of increasing cocoa production and, consequently, boosting farmer income. In fact, the crop yields of farmers in the corporations’ supply chains declined by 25 percent between 2020 and 2022,” the report said.

“Cocoa farmers surveyed by Oxfam said they are being paid a premium of $35 to $40 per ton of cocoa. The average cocoa farmer in Ghana produces about one ton of cocoa annually. They need to earn $2,600 more per year to get a living income,” according to the Oxfam report.

The entire supply chain is unbalanced, argues author Uwe Gneiting.

“If you as a company are profitable, at the same time as the producers of your most critical raw material are falling deeper into poverty and there’s something wrong with your business model,” he told VOA.

Response

In an email, Lindt & Sprüngli told VOA it pays Ghanaian farmers a $60 per ton premium and has invested over $20 million in cocoa sustainability programs in 2021.

“The Lindt & Sprüngli Farming Program aims to contribute to building resilient livelihoods for farmers, their families, and farming communities by taking a holistic approach to increasing farming household incomes. We are addressing this through a combination of measures,” the email said.

Hershey told VOA in an email that the company “has had a long-term commitment to supporting increased incomes for cocoa farming households. We are investing in proven approaches such as cash transfers and village savings and loan associations, implementation of sustainable and regenerative farm management practices and creating greater access to education in cocoa growing communities.”

Mondelēz and Nestlé did not respond to VOA requests for comment.
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Bank runs, cybersecurity and supply chain reliability were among items on the agenda of closed-door financial talks Friday in Japan by the Group of Seven advanced economies. 

Tensions with China, and with Russia over its war on Ukraine, loomed large on the wide horizon of issues the G-7 is tackling this year in Japan, its only Asian member. 

But while G-7 finance ministers and central bank chiefs discussed ways to protect the international rules-based order and prevent what they are calling “economic coercion” by China, Beijing lashed back, accusing the club of wealthy nations of hypocrisy. 

China is a victim of economic coercion, Chinese Foreign Ministry spokesperson Wang Wenbin said Friday. 

“If any country should be criticized for economic coercion, it should be the United States. The U.S. has been overstretching the concept of national security, abusing export controls and taking discriminatory and unfair measures against foreign companies,” Wang said in a routine news briefing. 

China accuses Washington of hindering its rise as an increasingly affluent, modern nation through trade and investment restrictions that the United States says are needed to protect American economic security. 

Speaking before the talks began, U.S. Treasury Secretary Janet Yellen said such measures are “narrowly targeted” and focused on national security. 

“It’s not focused on undermining China’s economic competitiveness or preventing them to advance economically,” Yellen said. 

Asked what G-7 countries mean by trying to prevent “economic coercion,” namely by China, Yellen cited trade actions by Beijing against Australia as one example. 

“There have been examples of China using economic coercion on countries that take actions that China’s not happy with from the geopolitical perspective,” she said. “We in the G-7 share a common concern with this kind of activity and are looking to see what we can try to do to try to counter this kind of behavior.” 

China’s relations with the 27-nation European Union, which is also a member of the G-7, have also been frayed by friction over trade and over its tacit support for Russia. 

Leaders attending the talks in Niigata said they would be considering ways to prevent countries from skirting sanctions against Moscow meant to hinder its ability to continue the war. 

Both the U.S. and European Union maintain they are not advocating “decoupling,” or dismantling extensive economic ties with China, but support “de-risking” relations to avoid becoming too dependent on China. 

For its G-7 presidency, Japan has prioritized launching a partnership with low- and middle-income countries to build “robust supply chains” to help cut carbon emissions. One key area of concern for all G-7 countries is the heavy concentration in China of suppliers of rare earth materials needed in many high-tech products. 

Meanwhile, recent failures of banks in the U.S. and Europe have added to the complexity of steering the world economy toward a sustained recovery from the pandemic while cooling inflation that surged to multidecade highs in the past year. 

“It’s become clear that financial worries can spread in an instant via social networking sites, and online banking, allowing money withdrawals outside business hours, can cause bank runs,” Japanese Finance Minister Shunichi Suzuki said Thursday. 

The collapses of Silicon Valley Bank and other lenders stemmed largely from the pressure of interest rate hikes that, by making borrowing more expensive, are designed to slow business activity and cool inflation. 

The meetings in Niigata are a good chance to “compare notes and to see how we can make the world a little bit more stable and reach the price stability that we very much want to arrive at in short order,” Christine Lagarde, head of the European Central Bank, said in videotaped comments posted online. 

Overhanging the financial experts’ talks is the question of whether U.S. President Joe Biden and Congress will agree to raise the ceiling on the national debt before the U.S. government runs out of money to pay its bills. Yellen said a default on the national debt would be catastrophic and was “unthinkable.” 

A meeting between Biden and lawmakers on the issue was pushed back to May 18 to allow staff talks to continue over the weekend. Administration officials portrayed it as a positive step, and it did not appear to indicate a breakdown in talks. 

The three days of talks in Niigata, a port city on the Sea of Japan, are the last in a series of ministerial meetings to prepare for a summit of G-7 leaders next week in Hiroshima.
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Apple will launch its first online store in Vietnam next week, the company said Friday, hoping to cash in on the country’s young and tech-savvy population.

The iPhone maker is among a host of global tech giants including Intel, Samsung and LG, that have chosen Vietnam for assembly of their products.

But up to now, the Silicon Valley giant has sold its products in Vietnam’s market of 100 million people via authorized resellers.

“We’re honored to be expanding in Vietnam,” said Deirdre O’Brien, Apple’s senior vice president of retail in an online statement in Vietnamese.

The country’s communist government says it wants 85 percent of its adult population to have access to a smartphone by 2025, up from the current 73 percent.

Less than a third of the country’s mobile users have an iPhone, according to market research platform Statista.

Through online stores, “clients in Vietnam can discover products and connect with our experienced experts,” O’Brien said in the statement.

The production of accessories and assembly of mobile phones account for up to 70 percent of electronics manufacturing in Vietnam. Products are mainly for export.

Official figures said Vietnam’s mobile phone production industry reported an import-export turnover of U.S. $114 billion last year, a third of the country’s total import-export revenue.
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A renewed political dispute between the federal government of Somalia and the Puntland federal member state, and a failure of the fragile reforms to boost revenue collection and fiscal transparency, could endanger Somalia’s hope for full debt relief from the International Monetary Fund and other multilateral lenders by the end of the year, officials and experts warn.

“Strengthening fiscal transparency is a requirement for Somalia to secure not only debt forgiveness but also more loans from the International Monetary Fund,” said Hussein Abdikarim, Somalia’s former presidential adviser.

“If Somalia fails to continue the steady progress it has made so far on its financial reforms, it could lose hope of paring its debt to around $550 million from $5.2 billion by 2023,” he added.

In February 2020, the executive boards of the IMF and the World Bank announced that Somalia was eligible for debt relief following economic and institutional reforms.

In October 2022, the IMF said its staff reached a staff-level agreement with Somalia that would allow the release of $10 million to the East African country, once reviewed and approved by the board.

Economic and financial experts are concerned about challenges that could reverse the hard-earned gains of the poor and heavily indebted tiny horn of Africa Nation.

“Lack of competitive procurement, lack of agreement(s) between the levels of government and its federal member states on fiscal federalism, and lack of transparency in several oil and gas deals are the main current challenges that could jeopardize and hinder Somalia’s progress towards winning reliable financial credibility,” Hussein Siad, an independent economic consultant and Somalia’s former vice minister of finance, told VOA in a phone interview.

“A government cannot work without the necessary mechanisms to operate, including laws, regulations, manuals and trained or skilled staff members that can implement government policies,” Siad said.

The debt owed by Somalia to external creditors is estimated to be more than $5 billion. Somalia owes the single biggest debt — $1 billion — to the United States.

Countries that become eligible for the Heavily Indebted Poor Countries (HIPC) Initiative of the IMF and World Bank have to commit to economic and financial reforms, as well as poverty reduction and political stability.

Corruption

In response to the concerns, Somali President Hassan Sheikh Mohamud on Thursday signed a set of anti-corruption directives aimed at boosting the legitimacy and credibility of the country’s financial institutions, a government statement said.

In the early morning Cabinet meeting, Somalia’s Council of Ministers approved the anti-corruption directives before the president endorsed them.

Reading a statement, government spokesman Farhan Jimale said, “The key directives, eight in number, included combating corruption, fostering accountability, strengthening public financial management systems and meritocracy, as well as improving the efficiency and effectiveness of government institutions.”

The statement also said, “The announced steps seek to increase transparency and accountability through financial disclosures by public officials, enhanced enforcement capacity, and expanded merit-based recruitment.”

The IMF’s board is expected to review the staff-level agreement reached with Somalia in early December.

Mohamud has urged an immediate implementation of the directives.

In 2019, his predecessor, Mohamed Abdullahi Mohamed, signed the country’s anti-corruption bill into law, but critics say the implementation of the law has been a challenge.

The nonprofit Transparency International ranks Somalia as one of the most corrupt countries in the world.

In its 2022 Corruptions Perceptions Index, Transparency International put Somalia at the bottom, saying, “Along with constant violence, Somalia’s President Hassan Sheikh Mohamud dissolved two very important anti-corruption bodies with a ‘wave of the hand’ decree.”

According to Somalia’s Criminal Code, active and passive bribery, attempted corruption, extortion, bribing a foreign official and money laundering are crimes.

“The debt relief is a big hope for Somalia to reclaim its financial position within the international community and allows our country to rejoin global economy after a 30-year exile,” a senior government economist told VOA on the condition of anonymity because he was not authorized to speak.

The official said if corruption and unnecessary political disputes remain, Somalia will miss a golden opportunity to clear its debts.

Somalia’s outlook remained clouded, with GDP growth for 2022 projected at 1.9%, down from 2.9% in 2021, and inflation projected to reach 9% from 4.6% in 2021, the IMF said.

Political dispute

The concerns grew following tension over a long-simmering dispute between the leaders of the federal government of Somalia and the northeastern semi-autonomous region of Puntland.

For months, Puntland has been reluctant to collaborate with the federal government on national issues, including debt relief programs, accusing Mogadishu of refusing to share power and foreign aid with the regions in line with the country’s federal system.

The political dispute took a turn for the worse this week when the leaders exchanged strong verbal accusations.

Puntland President Said Abdullahi Deni on Tuesday accused Mohamud and Somali Prime Minister Hamza Abdi Barre of “attempting to destabilize the relatively stable region.”

“The president and his prime minister have agreed to refuse the Puntland democracy and its willingness to hold one man, one vote elections,” Deni told his supporters.

Deni’s accusations came a day after Barre accused Puntland of jeopardizing the country’s debt relief efforts.

“Somalia’s debt relief program is in danger because Puntland has been refusing to participate in national meetings on the issue,” Barre warned. “If this fails because of Puntland, it will be a black scar on Puntland’s history, and its leaders will be responsible.”
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U.S. President Joe Biden and the top Republican and Democrats in Congress are set to meet Tuesday at the White House amid an impasse about raising the country’s debt limit. 

Republicans House Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell will be joined by Democrats House Democratic leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer as the group discusses the impending deadline to make sure the government can pay for spending it has already incurred. 

Republicans are insisting on spending cuts before they will agree to raise the debt ceiling, while Biden has said Congress has a duty to pay its bills and that the two issues should be addressed separately. 

SEE ALSO: A related video by VOA’s Patsy Widakuswara

U.S. Treasury Secretary Janet Yellen told lawmakers last week that the Treasury’s ability to pay all of the government’s bills could run short as early as June 1. 

She told CNBC on Monday there was a “very big gap” between the Democratic and Republican positions and warned that not raising the debt limit would bring “economic catastrophe.” 

Some information for this report came from The Associated Press, Agence France-Presse and Reuters 
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