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The average price for a new vehicle in the United States soared above $49,000 in December, a record high.

With Americans increasingly price conscious at a time of high inflation and elevated interest rates, customer choice is a prominent theme at the 2023 Chicago Auto Show, the largest and longest-running auto show in North America.

A launchpad for manufacturers to showcase their latest offerings, previous auto shows have highlighted battery powered electric vehicles — commonly known as EVs and BEVs — that herald a carbon-free future for ground transportation.

While many EVs are also on display this year, manufacturers want customers to know they still have other options.

“We believe it shouldn’t be just one formula,” said Toyota regional manager Curt McAllister, noting that the company’s current product lineup, a mix of electric and gas-powered automobiles, reflects customer feedback. “Our customers are telling us they want choices. They just don’t want us to try to pigeonhole them into one subset.”

Which is why Toyota is profiling a fifth-generation Prius, a best-selling hybrid that uses both a battery and a gasoline-powered engine.

“We now have 21 hybrids across Toyota and Lexus,” said McAllister. “So it’s a big part of our carbon neutrality message.”

McAllister said Toyota isn’t ignoring the rapidly growing but more expensive battery powered electric vehicle market. “We know that BEVs are part of the future, but we want to make sure that we have something that not only makes sense but makes sense for their pocketbook.”

Though overall car sales down, EV sales up

Higher interest rates for car loans in 2022 slowed new vehicle purchases, marking the first drop in sales in a decade, even as carmakers worked to overcome supply chain problems such as shortages of microchips.

Even so, the number of EVs sold increased by about 65% from a year earlier, according to research firm Motor Intelligence. EVs made up nearly 6% of all new vehicles sold in the U.S. last year.

Despite recent price cuts for some electric vehicles that make them more competitive with gasoline-powered cars, many Americans remain reluctant to purchase battery powered electric vehicles.

One primary obstacle is what’s known as “range anxiety” — the concern about how far a vehicle can travel before having to recharge in a nation where gas stations still outnumber charging stations.

“Our customer base, some of them are not ready for EVs,” explained Chad Lyons, who is representing General Motors Chevrolet brand at the Chicago Auto Show. “So, actually our plan for the next five years is to offer EVs for those that are ready … but at the same time offer gas-powered vehicles for those that are not ready.”

Lyons said demand for gas-powered sedans has plummeted. As a result, his company’s lineup is focused on sport utility vehicles — commonly known as SUVs — including the redesigned gasoline-powered Trax compact SUV launching later this year, and priced similarly to Chevrolet’s sedans.

“People want vehicles that are higher up [higher riding] — that’s why you see so many SUVs right now being so popular,” he said.

‘The jelly bean proportion’

That preference is also reflected in Chevrolet’s electric vehicle lineup. Later this year, the brand will roll out two new SUV EVs, the Equinox and Blazer, and the choices don’t end there.

“Pickup trucks are the heart of America, and so we are going to offer the Silverado EV as well,” said Lyons.

“Everyone loves muscle cars,” said Dodge design manager Deyan Ninov, adding that customers want vehicles that look less electric and more classic. “I think if you look at all the electric cars out there right now, they all sort of look the same, they all have the same feeling and character they kind of have the same proportions — the jelly bean proportion.”

Ninov’s team has been working on an electric version of Dodge’s iconic Challenger, hoping to bring the “muscle car experience” to the battery-powered vehicle segment.

While manufacturers continue to emphasize choice, President Joe Biden has outlined a plan to ensure 50% of all vehicles on the road by 2030 are all electric. As a number of states consider mandates for electric vehicle adoption, California is leading the way, requiring all new vehicles sold in the state to be electric or hydrogen powered by 2035.
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U.S. inflation likely slowed again last month in the latest sign that consumer price increases are becoming less of a burden on America’s households. But Tuesday’s report from the government may also suggest that further progress in taming inflation could be slow and “bumpy,” as Federal Reserve Chair Jerome Powell has described it.

Consumer prices are expected to have risen 6.2% in January from 12 months earlier, down from a 6.5% year-over-year surge in December. It would amount to the seventh straight slowdown.

On a monthly basis, though, inflation is expected to have jumped 0.5% from December to January, according to a survey of economists by the data provider FactSet. That would be much faster than the 0.1% uptick from November to December.

So-called core prices, which exclude volatile food and energy costs to provide a clearer view of underlying inflation, are also expected to have slowed on a 12-month basis. They are forecast to have increased 5.5% in January from a year earlier, down from a 5.7% year-over-year rise in December.

But for January alone, economists estimate that core prices jumped 0.4% for a second straight month — roughly equivalent to a 5% annual pace, far above the Fed’s target of 2%.

“The process of getting inflation down has begun,” Powell said in remarks last week. But “this process is likely to take quite a bit of time. It’s not going to be, we don’t think, smooth, it’s probably going to be bumpy.”

Average gasoline prices, which had declined in five of the past six months through December, likely rose about 3.5% in January, according to an estimate from Nationwide. Food prices are also expected to have risen, though more slowly than the huge spikes of last summer and fall.

On a brighter note, clothing and airfare costs are thought to have barely budged from December to January. And economists have estimated that hotel room prices fell sharply.

Overall, the government’s inflation report will likely show the continuation of a pattern that has emerged in recent months: The costs of goods — ranging from furniture and clothing to toys and sporting goods — are falling. But the prices of services — restaurant meals, entertainment events, dental care and the like — are rising faster than they did before the pandemic struck and threaten to keep inflation elevated.

Goods have become less expensive because supply chain snarls that had inflated prices after the pandemic erupted in 2020 have unraveled. And Americans are shifting much of their spending toward services, after having splurged on items like furniture and exercise equipment during the pandemic.

Yet average wages are rising at a brisk pace of about 5% from a year ago. Those pay gains, spread across the economy, are likely inflating prices in labor-intensive services. Powell has often pointed to robust wage increases as a factor that’s driving up services prices and keeping inflation high even as other categories, like rent, are likely to decelerate in price.

The Biden White House last week calculated a measure of wages in service industries excluding housing — the sector of the economy that Powell and the Fed are most closely tracking. The administration’s Council of Economic Advisers concluded that wages in those industries for workers, excluding managers, soared 8% last January from a year earlier but have since slowed to about a 5% annual pace.

That suggests that services inflation could soon slow, especially if the trend continued. Still, wage gains of that level are still too high for the Fed’s liking. The central bank’s officials would prefer to see wage growth of about 3.5%, which they see as consistent with their 2% inflation target.

A key question for the economy this year is whether unemployment would have to rise significantly to achieve that slowdown in wage growth. Powell and other Fed officials have said that curbing high inflation would require some “pain” for workers. Higher unemployment typically reduces pressure on businesses to pay bigger wages and salaries.

Yet for now, the job market remains historically very strong. Earlier this month, the government reported that employers added 517,000 jobs in January — nearly twice December’s gain. The unemployment rate dropped to 3.4%, the lowest level since 1969. Job openings remain high.

Powell said last week that the jobs data was “certainly stronger than anyone I know expected,” and suggested that if such healthy readings were to continue, more rate hikes than are now expected could be necessary.

Other Fed officials, speaking last week, stressed their belief that more interest rate increases are on the way. The Fed foresees two more quarter-point rate hikes, at its March and May meetings. Those increases would raise its benchmark rate to a range of 5% to 5.25%, the highest level in 15 years.

The Fed lifted its key rate by a quarter-point when it last met on Feb. 1, after carrying out a half-point hike in December and four three-quarter-point increases before that.

The financial markets envision two more rate increases this year and don’t expect the Fed to reverse course and cut rates until sometime in 2024. For now, those expectations have ended a standoff between the Fed and Wall Street investors, who had previously been betting that the Fed would be forced to cut rates in 2023 as inflation fell faster than expected and the economy weakened. 
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Ford said Tuesday that it will cut 3,800 jobs in Europe over the next three years in an effort to streamline its operations as it contends with economic challenges and increasing competition on electric cars.

The automaker said 2,300 jobs will be eliminated in Germany, 1,300 in the United Kingdom and 200 elsewhere on the continent. It said its strategy to offer an all-electric fleet in Europe by 2035 has not changed and that production of its first European-built electric car is due to start later this year.

The Dearborn, Michigan-based company said it is looking for “a leaner, more competitive cost structure for Ford in Europe.” The automaker will embark on consultations “with the intent to achieve the reductions through voluntary separation programs.”

The job cuts come amid a sea change in the global auto industry from gas-guzzling combustion engines to electric vehicles. Governments are pushing to reduce the emissions that contribute to climate change, and a resulting race to develop electric vehicles has generated intense competition among automakers.

It’s even stirred tensions among Western allies as the U.S. rolls out big subsidies for clean technology like EVs that European governments fear could hurt homegrown industry.

Ford aims to cut 2,800 of the European jobs in engineering by 2025 as a result of the transition to electric cars that are less complex, though it plans to keep about 3,400 engineering jobs on the continent. The remaining 1,000 jobs will be cut on the administrative side.

“Paving the way to a sustainably profitable future for Ford in Europe requires broad-based actions and changes in the way we develop, build and sell Ford vehicles,” Martin Sander, general manager of Ford’s Model e unit in Europe, said in a statement. “This will impact the organizational structure, talent and skills we will need in the future.”

“These are difficult decisions, not taken lightly,” he added. “We recognize the uncertainty it creates for our team, and I assure them we will be offering them our full support in the months ahead.”

Ford also announced in August cuts of about 3,000 white-collar jobs in North America as it reduces costs to help make the long transition from internal combustion to battery-powered vehicles.

In a step in that direction, it said Thursday that it plans to build a $3.5 billion factory in Michigan that would employ at least 2,500 people to make lower-cost batteries for new and existing EVs.

Company officials reported that its net income fell 90% in the last three months of 2022 from a year earlier. It said costs were too high and that it contended with a global shortage of computer chips and other parts used in its vehicles.

In Europe, Ford has some 34,000 employees at wholly owned facilities and consolidated joint ventures.
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Pakistan and the International Monetary Fund have held days of talks on reviving a stalled $6.5 billion bailout program but have failed to reach a deal to help prevent a looming default facing the South Asian nation.

The 10-day talks with the IMF delegation were “extensive” and “concluded successfully” before the visitors left the country early Friday, Finance Minister Ishaq Dar told a hurriedly convened news conference in the Pakistani capital, Islamabad.

Dar said his team will hold a virtual meeting with the IMF Monday after reviewing a draft memorandum on broadly agreed-to policies the IMF mission shared with his government.

An IMF statement described the talks with Pakistani officials as constructive and said “considerable progress” had been made.

However, it stressed “this mission will not result in a board discussion,” a meeting that would lead to the release of a $1.1 billion tranche critical to supporting the country’s crisis-hit $350 billion economy.

The tranche was initially expected to be disbursed in December as part of the $6.5 billion bailout package Pakistan signed with the IMF in 2019. The program is due to end in June.

The IMF must reach a staff-level agreement with Islamabad, which then requires approval by the agency’s Washington headquarters before the funds are released.

“Virtual discussions will continue in the coming days to finalize the implementation details of these policies,” the IMF said in its post-visit statement. It went on to stress the “timely and decisive” implementation of the policies was crucial for Pakistan to “successfully regain macroeconomic stability and advance its sustainable development.”

Economic experts see the IMF deal as key to preventing Pakistan from defaulting on external payment obligations and paving the way for other global lenders, including the World Bank and foreign governments, such as those of Saudi Arabia and China, to release funds.

Last year’s unprecedented summer flooding has fueled Pakistan’s economic troubles, stemming mainly from lingering political turmoil and security challenges in the wake of rising insurgent attacks.

Inflation has been raging at historic levels, the rupee has lost more than 35% against the U.S. dollar, and central bank foreign exchange reserves dipped to less than $3 billion this week — the lowest in a decade. The depleting dollar reserves have forced the government to place restrictions on imports, causing a severe industrial decline in Pakistan.

The IMF has been pushing the nuclear-armed country to broaden its low tax base, do away with tax exemptions for the export sector, and raise low gasoline, power, and natural gas prices.

The reforms would likely increase inflation to new record levels if Pakistan eventually secures the staff-level agreement with the IMF, according to experts.
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US President Joe Biden celebrated his economic record this week during the annual State of the Union address. While US unemployment statistics are on the upswing, economists say there are clear economic challenges. Keith Kocinski reports.
Camera: Keith Kocinski and Rendy Wicaksana
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CAIRO — Egypt is embroiled in cost-of-living and currency crises, in part, exacerbated by Russia’s full-scale invasion of Ukraine nearly one year ago — the fallout of which has led to severe disruptions in global food and energy security. Vulnerable Cairenes struggle to cope with their ever-diminishing purchasing power. (Captions by Elle Kurancid)

 
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Southwest Airlines executives and union officials are appearing before the U.S. Senate Commerce Committee Thursday to explain the cancellation of 16,700 flights last December in the middle of the holiday traveling season.

In a statement to the media ahead of his testimony, Southwest Airlines Chief Operating Officer Andrew Watterson took full responsibility for the failures that left more than 1 million passengers stranded in airports around the United States.

“We messed up. We own that,” he said, and pledged to take steps to ensure there will not be a repeat in the future.

Casey Murray, president of the Southwest Airlines Pilots Association (SWAPA), is also scheduled to testify at Thursday’s hearing. In a statement, he blamed the airline’s outdated scheduling technology and operational processes.

Murray said the airline ignored warnings about the system for years and said SWAPA predicted the holiday meltdown a month before it happened.

In a statement ahead of the hearing, Senator Maria Cantwell, chairwoman of the Senate Commerce Committee, said she was eager to hear the pilot’s testimony on how the debacle could have been avoided if the airline had acted sooner. She said the committee will be considering how to strengthen protections for consumers.

Some information for this report was provided by Reuters.
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The United States’ two-way trade with other nations spiked in 2022, new federal data show, including trade with China despite increasing friction between the world’s two largest economies.

Even while posting record-high exports to 73 countries in 2022, the U.S. still ran a trade deficit of $1.19 trillion, up $101 billion from 2021, the U.S. Commerce Department said this week. The deficit reflected the fact that the U.S. also recorded record-high imports from 90 countries.

U.S. imports from China reached $537 billion in 2022 compared with $505 billion the previous year. The U.S. sold a record-high $154 billion in exports to the Chinese market, up slightly from $151 billion the previous year. The net trade deficit with China for 2022 was $383 billion.

The data, released Tuesday, came out just hours before U.S. President Joe Biden delivered the State of the Union address in which he promised to boost domestic manufacturing, to use only U.S.-made materials for a spate of infrastructure projects, and to remain focused on “winning the competition” against China.

However, what “winning” looks like may be difficult to determine.

Politics versus reality

Relations between the U.S. and China worsened during the past week, after Biden ordered the U.S. military to shoot down what intelligence officials said was a Chinese espionage balloon that had floated across the U.S. Prior to the shoot-down, U.S. Secretary of State Antony Blinken canceled a scheduled trip to Beijing.

The balloon incident followed months of rising tensions and calls from many U.S. officials for a “decoupling” of the Chinese and U.S. economies and “reshoring” of key manufacturing to the U.S. But while the Biden administration may be able to use preferential purchasing treatment to shut Chinese construction materials and other goods out of U.S. infrastructure projects, experts said there is little evidence of broader separation between the U.S. and Chinese economies.

“Regardless of the political rhetoric, which is tending towards a kind of rigid and suspicious environment between China and the United States, the practical moves on the ground from a business and commerce perspective show that there is a deep and sustained connection between the Chinese and U.S. economies,” Claire Reade, a senior counsel with the law firm Arnold & Porter and former assistant U.S. trade representative for China affairs, told VOA.

Mark Kennedy, director of the Wilson Center’s Wahba Institute for Strategic Competition, agreed, saying, “There has not been a broad-based decoupling … and many economists are seeing that there really hasn’t been a significant onshoring or reshoring. There are still strong ties, and to break those ties with China would be both difficult and costly.”

Trade as ‘ballast’

Craig Allen, president of the U.S.-China Business Council, told VOA it’s a good sign that trade between the U.S. and China has been persistently strong despite the imposition of tariffs by both sides and the Biden administration’s recent move to block the sale of cutting-edge microprocessors to China.

“Trade has acted as an important ballast in the relationship between Washington and Beijing in the past, and I think it’s still the case,” he said via email. “Competition is surely defining the contours of the relationship at the moment, and we hope that the relationship doesn’t sour any further as a result.”

“I think, to that point, this new data can be a silver lining,” said Allen. “Even though the United States and China are competing with one another, this last year of data and the growth in U.S. exports to China really shows that we can simultaneously maintain a trading relationship that benefits Americans.”

A delicate balance

Reade said the Biden administration, in its effort to privilege American manufacturers over Chinese firms, will face a difficult challenge. Insulating American companies from non-U.S. rivals could make them less able to compete internationally or could lead to tit-for-tat protectionism against U.S. firms.

At the same time, she said, there is strong evidence that many large Chinese firms, including those that manufacture the kinds of goods used in major infrastructure projects, receive favorable treatment from the Chinese government that insulates them from market pressures, unfairly advantaging them over competitors.

“To the extent the competition is not fair competition, it is also legitimate to not allow destructive price undercutting that decimates legitimate industries,” she said.

US economic strength

Looking beyond the U.S.-China relationship, experts said that much of the explanation for the rising trade deficit has to do with the relative strength of the U.S. economy compared with those of many of its trading partners. A strong dollar makes foreign goods and services more affordable for Americans, while making U.S.-made goods and services more expensive overseas.

“The big takeaway is that when you’re running a high-pressure economy, which the U.S. is, you’re going to import a lot of stuff,” Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, told VOA. “And that’s exactly what has happened. You’ve got the unemployment rate down to 3.4% and two job vacancies for every worker unemployed … that really speaks to just high-pressure demand.”

Although China was the largest source of imports to the U.S. in 2022, Canada and Mexico were the United States’ largest two-way trading partners. The countries share lengthy land borders with the U.S. and participate in a three-way free trade agreement. Total U.S.-Canada trade was $794 billion in 2022, and U.S.-Mexico trade was $779 billion.

After Canada, Mexico and China, Japan was the next largest of the United States’ trading partners, with $229 billion in goods trading hands last year.

The U.S. did $903 billion in two-way trade with the nations of the European Union in 2022, with the largest share, $220 billion, between the U.S. and Germany.

Other large two-way trading partners in 2022 were South Korea at $187 billion; the United Kingdom at $141 billion; Vietnam at $139 billion; Taiwan at $136 billion; and India at $133 billion.
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U.S. President Joe Biden followed up his State of the Union address with a trip Wednesday to the Midwestern state of Wisconsin to herald what he sees as the country’s economic advance on his watch.

Opposition Republicans, meanwhile, were calling for an end to what they call runaway government spending that Biden has sanctioned during his two years in the White House. 

The president visited a training center for the Laborers’ International Union of North America in the village of DeForest to discuss manufacturing jobs. Wisconsin is a perennial political battleground in presidential elections and almost certainly will again be a focal point in 2024, both for Biden as he nears a formal reelection bid in the coming months and his eventual Republican opponent, whether it is former President Donald Trump or someone else.

Under Biden, the U.S., with the world’s biggest economy, has added hundreds of thousands of new jobs every month as it recovers from the worst effects of the coronavirus pandemic that started in 2020.

The country’s 3.4% unemployment rate is the lowest in 53 years. But Republicans and Democrats alike say the country’s consumer price inflation rate, while easing in recent months, is still too high at an annualized 6.5% in December. 

Debt limit

Additionally, congressional Republicans and Biden are sparring over increasing the government’s $31.4 trillion debt limit, the amount it can borrow to pay its financial obligations. Republicans want sharp — but to date, unspecified — cuts in government spending in exchange for increasing the debt limit by June. 

That’s when the government is expected to run out of enough money in tax revenues to pay all its bills. Biden wants an unconditional debt limit increase but is willing to separately discuss future government spending.  

Biden and new House Speaker Kevin McCarthy have started talking about how to increase the debt ceiling but appear far from reaching an agreement in what are likely to be protracted discussions.  

After his Wisconsin visit, Biden was to head Thursday to another political battleground, the Southern state of Florida, where Trump lives during the winter months. In Tampa, Biden will accuse Republican lawmakers of wanting to shrink pension and health care benefits for older Americans, a potent issue in Florida where millions of retirees have settled.

Biden struck an optimistic, determined tone Tuesday in his second State of the Union address, lauding his legislative and policy achievements, reiterating his stances on contesting China and supporting Ukraine, and proclaiming that “though bruised, our democracy remains unbowed and unbroken.”

“Because the soul of this nation is strong, because the backbone of this nation is strong, because the people of this nation are strong, the state of the union is strong,” Biden said.

“I’m not new to this place. I stand here tonight — and I’ve served as long as about any one of you have ever served — I have never been more optimistic about the future of America,” he said. “We just have to remember who we are. We are the United States of America, and there is nothing, nothing beyond our capacity if we do it together.”

Benefits of spending

In the speech, he sought to explain how hundreds of billions of dollars in spending for infrastructure, climate change controls and computer chip manufacturing that he supported in the last two years will benefit Americans in the coming years.

A handful of Republican lawmakers heckled Biden during the speech, with Representative Marjorie Taylor Greene of Georgia calling him a “liar” when he suggested that at least some Republicans wanted to curtail funding for the pension and health care insurance plans for older Americans.

Biden seemed to enjoy the moment, and he prodded the hundreds of lawmakers in the House of Representatives chamber to stand in a show of support for not trimming funding for the Social Security and Medicare programs.

McCarthy tweeted after the speech: “Republicans offer a vision for a future built on freedom, not fearmongering.”

His deputy, House Majority Leader Steve Scalise of Louisiana, said on Twitter that Biden was “living in an alternate universe. Families can’t afford gas or food — and they feel unsafe in their communities.”
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A severe egg shortage in the U.S. is prompting a flood of unusual contraband at the U.S.-Mexico border: fresh eggs. Cesar Contreras reports this story, narrated by Veronica Villafañe.
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New nationwide strikes disrupted public transport and schools, as well as power, oil and gas supplies in France Tuesday, while tens of thousands of demonstrators marched in a third round of protests against planned pension reforms.

The protests came a day after French lawmakers began debating a pension bill that would raise the minimum retirement age from 62 to 64. The bill is the flagship legislation of President Emmanuel Macron’s second term.

Tens of thousands marched in the cities of Nice, Marseille, Toulouse, Nantes and elsewhere, as well as in Paris. Protesters in the French capital, many of whom were young, marched peacefully from the Opera area carrying placards reading “Save Your Pension” and “Tax Billionaires, Not Grandmas.”

France’s current pension system “is a democratic achievement in the sense that it is a French specialty that other countries envy,” said one protester, media worker Anissa Saudemont, 29.

“I feel that with high inflation, unemployment, the war in Ukraine and climate change, the government should focus on something else,” she added.

Last week, an estimated 1.27 million people demonstrated, according to authorities, more than in the first big protest day on Jan. 19. More demonstrations, called by France’s eight main unions, were planned for Saturday.

Rail operator SNCF said train services were severely disrupted Tuesday across the country, including on its high-speed network. International lines to Britain and Switzerland were affected. The Paris metro was also disrupted.

Saad Kadiui, 37, a consulting cabinet chief who had to go through a disrupted Paris train station Tuesday, said he did not support the “wearisome” strikes. “There are other ways to protest the pension reform,” he said.

Kadiui said he supported the principle of the pension reform but wanted the bill to be improved in parliament. “I think that for some jobs, 64 is too late,” he said.

Power producer EDF said the protest movement led to temporarily reduced electricity supplies, without causing blackouts. More than half of the workforce was on strike at the TotalEnergies refineries, according to the company.

The Education Ministry said close to 13% of teachers were on strike, a decrease compared to last week’s protest day. A third of French regions were on scheduled school breaks.

Macron vowed to go ahead with the changes, despite opinion polls showing growing opposition. The bill would gradually increase the minimum retirement age to 64 by 2030 and accelerate a planned measure providing that people must have worked for at least 43 years to be entitled to a full pension.

The government argues the changes are designed to keep the pension system financially afloat. France’s aging population is expected to plunge the system into deficit in the coming decade.

The parliamentary debate at the National Assembly and the Senate is expected to last several weeks.

Opposition lawmakers have proposed more than 20,000 amendments to the bill debated on Monday, mostly by the left-wing Nupes coalition.

Philippe Martinez, secretary general of the powerful CGT union, called on the government and lawmakers to “listen to the people.” Speaking on French radio network RT, he denounced Macron’s attitude as “playing with fire.”

Macron wants to show that “he is able to pass a reform, no matter what public opinion says, what the citizens think,” Martinez asserted.

The head of the CFDT union, Laurent Berger, also called on the government to “listen” to the crowd that took to the streets. “One can only respond to social tension through the democratic exercise of power,” he told French newspaper La Croix.

Rancor over the pension plan went beyond parliament’s raucous debate. The speaker of the lower house, the National Assembly, reported that the bill had triggered anonymous voicemails, graffiti and a threatening letter to the head of the chamber’s Social Affairs Committee.

“That’s enough,” Yael Braun-Pivet tweeted. “These acts are an attack on our democratic life. … We won’t tolerate it.”

Several lawmakers from the far-right National Rally party received voicemails during Monday’s debate saying that loved ones were hospitalized, in an apparent ploy to make them leave the assembly. The group’s leader, Marine Le Pen, said she was filing a legal complaint.
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Boeing plans to make staffing cuts in the aerospace company’s finance and human resources departments in 2023, with a loss of around 2,000 jobs, the company said.

“We expect about 2,000 reductions primarily in Finance and HR through a combination of attrition and layoffs,” Boeing said in a statement Monday. “While no one has been notified of job loss, we will continue to share information transparently to allow people to plan.”

The company, which recently relocated its headquarters to Arlington, Virginia, said it expects to “significantly grow” the overall workforce during the year. “We grew Boeing’s workforce by 15,000 last year and plan to hire another 10,000 employees this year with a focus on engineering and manufacturing,” the statement said.

Boeing’s total workforce was 156,000 employees as of Dec. 31, 2022, the company said.

The Seattle Times reported Boeing, which has been one of the largest private employers in Washington state, plans to outsource about a third of the eliminated positions to Tata Consulting Services in Bengaluru, India.

Mike Friedman, a senior director of communications, told the Times the other positions will be eliminated as the company makes reductions in finance and human resources support services.

“Over time, some of our corporate functions have grown quite large. And with that growth tends to come bureaucracy or disparate systems that are inefficient,” Friedman said. “So we’re streamlining.”

The Times reported about 1,500 of the company’s approximately 5,800 finance positions will be cut, with up to 400 more job cuts in human resources, which is about 15% of the department’s total staff.
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U.N. Secretary-General Antonio Guterres warned Monday that the world needs to wake up and take urgent action to change the trajectory on conflicts and geopolitical divisions, the climate crisis, and economic inequality.

“We need a course correction,” Guterres said as he laid out his 2023 priorities to the U.N. General Assembly.

“The good news is that we know how to turn things around — on climate, on finance, on conflict resolution, on and on,” he added. “And we know that the cost of inaction far exceeds the costs of action. But the strategic vision — the long-term thinking and commitment — is missing.”

He cited the recent announcement by the Bulletin of the Atomic Scientists to move the so-called Doomsday Clock 10 seconds closer to global catastrophe as a “wake-up call.”

On January 24, the organization’s board, citing Russia’s war in Ukraine and the threat of the use of nuclear weapons, said the planet is now “90 seconds to midnight.”

“This is the closest the clock has ever stood to humanity’s darkest hour, and closer than even during the height of the Cold War,” Guterres warned.

The organization of scientists, of which Albert Einstein was a founding member, created the clock in 1947 as an indicator of how close the world is to manmade global catastrophe.

Adding to the growing list of crises and concerns was Monday’s deadly 7.8 earthquake that struck parts of Turkey and Syria. Guterres said the United Nations is mobilizing to support the emergency response.

“Let’s work together in solidarity to help those hit by this disaster, many of whom are already in dire need of humanitarian aid,” he said.

The quake’s epicenter was in parts of Turkey and Syria with large populations of refugees and people affected by more than a decade of civil war in Syria.

Russia’s war

Guterres has been clear in condemning Russia’s 2022 invasion of Ukraine as a violation of the U.N. Charter and international law. He told the General Assembly that it has inflicted “untold suffering” on the Ukrainian people and had “profound” global implications. He voiced pessimism about the prospects for peace.

“The chances of further escalation and bloodshed keep growing,” he warned. “I fear the world is not sleepwalking into a wider war. I fear it is doing so with its eyes wide open.”

He criticized the “tactical” use of nuclear weapons as an “absurdity.”

Russian President Vladimir Putin has repeatedly warned he is ready to draw on his country’s entire arsenal, which includes nuclear weapons, to defend Russian territory. On Thursday, he repeated the threat in a speech criticizing Germany for helping to arm Ukraine.

“We are at the highest risk in decades of a nuclear war that could start by accident or design,” Guterres said. “We need to end the threat posed by 13,000 nuclear weapons held in arsenals around the world.”

The U.N. chief said the world needs peace, not just in Ukraine, but also in many corners of the planet. He said conflicts and political crises in Afghanistan, Myanmar, Africa’s Sahel region, Haiti, the Middle East and elsewhere are driving the suffering of two billion people.

“If every country fulfilled its obligations under the [U.N.] Charter, the right to peace would be guaranteed,” Guterres said. “When countries break those pledges, they create a world of insecurity for everyone.”
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Global airline traffic rose to over half of pre-pandemic levels in 2022 according to data released by the International Air Transport Association (IATA) Monday.

Since the beginning of the pandemic, airlines saw a sharp decline in travel in 2020 and 2021 and lost tens of billions of dollars. Profits started to return in 2022 as traffic picked up again.

Global traffic grew to 68.5% of pre-pandemic (2019) levels in 2022, and 64.4% from 2021.

In 2022, international traffic rose 152.7% in comparison to 2021, and 62.2% compared to 2019. As for domestic travel, it rose 10.9% compared to the previous year and 79.6% of pre-pandemic levels.

China recently reopened its borders after three years on January 8. Analysts emphasize that full recovery to pre-pandemic levels depends on how quickly travel to and from China can return.

Willie Walsh, IATA’s director general, is hopeful that traffic will continue to rise in 2023.

“The industry left 2022 in far stronger shape than it entered, as most governments lifted COVID-19 travel restrictions during the year and people took advantage of the restoration of their freedom to travel. This momentum is expected to continue in the New Year, despite some governments’ over-reactions to China’s reopening,” he said.

“It is vital that governments learn the lesson that travel restrictions and border closures have little positive impact in terms of slowing the spread of infectious diseases in our globally inter-connected world.”

Some information for this report came from Reuters.
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Oil producers may have to reconsider their output policies following a demand recovery in China, the world’s second-largest oil consumer, the International Energy Agency’s Executive Director Fatih Birol said Sunday.

Demand in China, the world’s largest crude importer and No. 2 buyer of liquefied natural gas, has become the biggest uncertain factor in global oil and gas markets in 2023 as investors bet on the speed of its recovery after Beijing lifted COVID restrictions in December.

“We expect about half of the growth in global oil demand this year will come from China,” Birol told Reuters on the sidelines of the India Energy Week conference.

He added that China’s jet fuel demand is exploding, putting upward pressure on demand.

“If demand goes up very strongly, if the Chinese economy rebounds, then there will be a need, in my view, for the OPEC+ countries to look at their (output) policies,” Birol said.

Producer group OPEC+ angered the United States and other Western nations in October when it decided to cut output by 2 million barrels a day from November through 2023, instead of pumping more to cut fuel prices and help the global economy as the U.S. advised.

Birol said he hoped such a situation does not repeat, and that OPEC+ — which includes members of the Organization of the Petroleum Exporting Countries and allies such as Russia — will return to a constructive role in the market as demand improves.

OPEC+ rolled over the group’s current output policy at a meeting Wednesday, leaving production cuts agreed last year in place.

Separately, Birol said price caps on Russian oil have achieved the objectives of both stabilizing oil markets and reducing Moscow’s revenues from oil and gas exports. Russia’s revenues likely fell by nearly 30% in January, or about $8 billion, compared with a year before, he added.

G-7 nations, the European Commission and Australia this week approved a $100 per barrel price cap on diesel and a $45 per barrel cap on discounted products such as fuel oil starting from Feb. 5.

This followed a similar measure they implemented Dec. 5 barring Western-supplied maritime insurance, finance and brokering for seaborne Russian crude unless it was sold below a $60 price cap.

Birol said fuel markets might face difficulties in the short term as global trade routes “reshuffle” to accommodate Europe drawing on more imports from China, India, the Middle East and the United States.

That could force other markets such as Latin America to scout for alternative imports, he said.

Europe has decided to end refined fuel imports from Russia starting Sunday.

Birol said however that the fuel market balance could improve from the second half as more refining capacity is added globally.
…

Marco Gonzales ventured to the Andean city of Cusco from his home in the Peruvian Amazon in 2007 with little more than $20, a smidgeon of English and a change of clothes poorly suited for the icy mountain air.

He started offering walking tours of the former Incan Empire capital in exchange for tips. Along the way he fell in love with a British backpacker, Nathalie Zulauf, and together the couple built a travel business and family.

But now it’s all at risk of collapsing along with so much of Peru’s once enviable economic stability.

The couple’s company, Bloody Bueno Peru, which caters to mostly foreign tourists from Britain and elsewhere, hasn’t seen a customer since December, when protesters demanding the resignation of caretaker President Dina Boluarte all but cut off access to the ancient ruins of Machu Picchu. Groups have canceled reservations months in advance, forcing the couple to dip into savings already depleted by the coronavirus pandemic.

“We’re waiting until March to see if the situation improves,” said Gonzales, 38, staring at a calendar he no longer bothers to update. “If it doesn’t we’ll have to explore other options, like shutting down the business and emigrating. At least in England we have Nathalie’s family.”

Others in Cusco have far less to fall back on.

The city of 450,000, normally a polyglot mecca of foreign travelers, is a ghost town these days. The Plaza de Armas, where women dressed in colorful Andean textiles used to pose for snapshots, now attracts demonstrators playing cat-and-mouse with heavily armored riot police.

Political turmoil is nothing new in Peru, which has seen six presidents in the last five years. In 1969, with a military dictatorship in power, Nobel Prize-winning author Mario Vargas Llosa posed this now iconic question to start his novel “Conversations in the Cathedral”: “At what precise moment did Peru screw itself?”

For a long time, the dysfunction was held in check and didn’t interfere with sacred cornerstones of the free-market economy like the key mining industry. Since 2000, Peru’s economy grew at an average annual rate of 4.4% — more than any country in South America —with low inflation and a stable currency. Until the pandemic hit, poverty had fallen by half.

But the scale of violence following President Pedro Castillo’s Dec. 7 impeachment and arrest for a clumsy effort to shutter Congress — unrest that has left 57 civilians dead and hundreds more injured — has revived class and racial divisions and has many Peruvians wondering whether the long period of uneasy stability has run its course.

“This dichotomy couldn’t last,” said Steven Levitsky, a Harvard University political scientist and co-author of the 2018 book, “ How Democracies Die.”

Signs of the economic fallout are everywhere.

In December — as the political crisis got underway — the number of foreigners arriving in Peru had already fallen to the lowest level since 2009, aside from the two years lost to COVID-19. Activity at three major copper and tin mines had been suspended because highways were blocked or their facilities attacked by protesters.

Peru is the world’s largest exporter of grapes and the protests hit during the height of harvest. Shipments in one major growing area are barely 4% of a year ago, according to Darío Núñez, whose company, Uvica, has been unable to fulfill orders by U.S. retailers such as Costco and Sam’s Club.

“The credibility of Peru as a brand is starting to suffer,” said Núñez. “I don’t see a light at the end of the tunnel.”

Peru’s democratic dysfunction, years in the making, accelerated with Castillo’s surprise election in 2021. A rural schoolteacher, he rose from obscurity to fill a void left by a broken political system, widespread graft and deep-seated racism.

His journey from an adobe home in one of Peru’s poorest areas to the presidential palace was fueled by fury in the long-neglected Andean highlands. But once in office, he shuffled his Cabinet almost weekly and was beset by corruption allegations that underscored his inexperience.

Elites in Congress, although even more discredited than Castillo, went on the offensive, using an obscure constitutional power to seek his impeachment for “moral incapacity.” This triggered Castillo’s move to shut down Congress, which backfired with his arrest on charges of rebellion — and vice president Boluarte’s ascension to power.

The current revolt has coalesced around an urgent demand: Boluarte’s departure. Congress could act by ordering early elections but has so far refused as lawmakers are reluctant to, in effect, fire themselves.

Levitsky said it’s too early to know how Peru’s crisis will unfold. One demand from protesters is that the constitution adopted during Alberto Fujimori’s 1990-2000 authoritarian rule and which strengthened free-market reforms be overhauled.

But whatever happens, Levitsky doesn’t see a return to the status quo.

“A state that doesn’t work is sooner or later going to fall into crisis,” he said. “They had 20 years to build a state and they failed miserably.”

Monuments to that failure are everywhere in Cusco: An unfinished highway that was supposed to bisect the city and the crumbling façade of the Hotel Cusco, a historic landmark owned by the city government.

But perhaps the biggest white elephant is the Hospital Antonio Lorena.

Rising above the city’s red tile roofs, the sleek glass-and-steel structure was supposed to be the most modern in southern Peru when construction began in 2012. But after three years, the Brazilian builder abandoned the project amid an investigation into cost overruns fueled by alleged bribes paid to Cusco’s governor and the wife of Peru’s then-president Ollanta Humala.

Today, the half-built skeleton is covered by graffiti amid peeling paint, exposed power cables and shattered glass. On Dec. 7 — the day Castillo was arrested — a ribbon-cutting ceremony was held to mark the start of a 730-day, $ 244 million rescue plan for the project by a new foreign consortium with technical assistance from France.

Jorge Zapata, the head of Peru’s construction lobby, blames greedy politicians for the standstill. Nationwide, over 2,500 state-funded infrastructure projects worth $7 billion are paralyzed due to mismanagement, he said.

Meanwhile, instead of guiding tourists, Gonzales now spends his days scouring Cusco for a propane gas cannister to cook and bathe the couple’s 5-month-old daughter, Willow.

At an industrial depot, dozens of desperate residents were lined up this week in hopes demonstrators blocking the highways would halt their pickets long enough to let the trucks delivering the propane reach the besieged city.

“This is really scary,” said Zulauf, as she bounced her baby on her knees staring at the long line from her car. “In Cusco, people live day-to-day. If they can’t work, I don’t know how they’re surviving.”

Among those in line was Fredy Deza, who spent the night in a sleeping bag on the sidewalk.

Deza, 40, said the all-night vigil recalled another dark period in Peru’s history, when he would wait with his mother in long lines for bread, sugar and other staples during the chaotic 1985-1990 presidency of Alan Garcia.

“It’s like we’re going back in time,” said Deza, who worked as a guide in Machu Picchu until he was let go in December.

Prices for propane and other scarce items in Cusco are soaring due to inflation that jumped to 8.7% in January, near the highest level in a quarter-century. A black market has emerged, with cannisters going for three times the listed price.

Adding to insult, the cooking gas many can no longer afford is pumped by a foreign-owned consortium from the resource-rich department of Cusco and transported by a pipeline to the capital, Lima, where the bulk is then exported. A projected second pipeline, which would deliver it to Cusco and other cities in the south, remains a pipe dream.

“It’s sad,” said Deza, as he prepared for another cold night, “that as owners of our gas we have to be enduring this.”
…

Marco Gonzales ventured to the Andean city of Cusco from his home in the Peruvian Amazon in 2007 with little more than $20, a smidgeon of English and a change of clothes poorly suited for the icy mountain air.

He started offering walking tours of the former Incan Empire capital in exchange for tips. Along the way he fell in love with a British backpacker, Nathalie Zulauf, and together the couple built a travel business and family.

But now it’s all at risk of collapsing along with so much of Peru’s once enviable economic stability.

The couple’s company, Bloody Bueno Peru, which caters to mostly foreign tourists from Britain and elsewhere, hasn’t seen a customer since December, when protesters demanding the resignation of caretaker President Dina Boluarte all but cut off access to the ancient ruins of Machu Picchu. Groups have canceled reservations months in advance, forcing the couple to dip into savings already depleted by the coronavirus pandemic.

“We’re waiting until March to see if the situation improves,” said Gonzales, 38, staring at a calendar he no longer bothers to update. “If it doesn’t we’ll have to explore other options, like shutting down the business and emigrating. At least in England we have Nathalie’s family.”

Others in Cusco have far less to fall back on.

The city of 450,000, normally a polyglot mecca of foreign travelers, is a ghost town these days. The Plaza de Armas, where women dressed in colorful Andean textiles used to pose for snapshots, now attracts demonstrators playing cat-and-mouse with heavily armored riot police.

Political turmoil is nothing new in Peru, which has seen six presidents in the last five years. In 1969, with a military dictatorship in power, Nobel Prize-winning author Mario Vargas Llosa posed this now iconic question to start his novel “Conversations in the Cathedral”: “At what precise moment did Peru screw itself?”

For a long time, the dysfunction was held in check and didn’t interfere with sacred cornerstones of the free-market economy like the key mining industry. Since 2000, Peru’s economy grew at an average annual rate of 4.4% — more than any country in South America —with low inflation and a stable currency. Until the pandemic hit, poverty had fallen by half.

But the scale of violence following President Pedro Castillo’s Dec. 7 impeachment and arrest for a clumsy effort to shutter Congress — unrest that has left 57 civilians dead and hundreds more injured — has revived class and racial divisions and has many Peruvians wondering whether the long period of uneasy stability has run its course.

“This dichotomy couldn’t last,” said Steven Levitsky, a Harvard University political scientist and co-author of the 2018 book, “ How Democracies Die.”

Signs of the economic fallout are everywhere.

In December — as the political crisis got underway — the number of foreigners arriving in Peru had already fallen to the lowest level since 2009, aside from the two years lost to COVID-19. Activity at three major copper and tin mines had been suspended because highways were blocked or their facilities attacked by protesters.

Peru is the world’s largest exporter of grapes and the protests hit during the height of harvest. Shipments in one major growing area are barely 4% of a year ago, according to Darío Núñez, whose company, Uvica, has been unable to fulfill orders by U.S. retailers such as Costco and Sam’s Club.

“The credibility of Peru as a brand is starting to suffer,” said Núñez. “I don’t see a light at the end of the tunnel.”

Peru’s democratic dysfunction, years in the making, accelerated with Castillo’s surprise election in 2021. A rural schoolteacher, he rose from obscurity to fill a void left by a broken political system, widespread graft and deep-seated racism.

His journey from an adobe home in one of Peru’s poorest areas to the presidential palace was fueled by fury in the long-neglected Andean highlands. But once in office, he shuffled his Cabinet almost weekly and was beset by corruption allegations that underscored his inexperience.

Elites in Congress, although even more discredited than Castillo, went on the offensive, using an obscure constitutional power to seek his impeachment for “moral incapacity.” This triggered Castillo’s move to shut down Congress, which backfired with his arrest on charges of rebellion — and vice president Boluarte’s ascension to power.

The current revolt has coalesced around an urgent demand: Boluarte’s departure. Congress could act by ordering early elections but has so far refused as lawmakers are reluctant to, in effect, fire themselves.

Levitsky said it’s too early to know how Peru’s crisis will unfold. One demand from protesters is that the constitution adopted during Alberto Fujimori’s 1990-2000 authoritarian rule and which strengthened free-market reforms be overhauled.

But whatever happens, Levitsky doesn’t see a return to the status quo.

“A state that doesn’t work is sooner or later going to fall into crisis,” he said. “They had 20 years to build a state and they failed miserably.”

Monuments to that failure are everywhere in Cusco: An unfinished highway that was supposed to bisect the city and the crumbling façade of the Hotel Cusco, a historic landmark owned by the city government.

But perhaps the biggest white elephant is the Hospital Antonio Lorena.

Rising above the city’s red tile roofs, the sleek glass-and-steel structure was supposed to be the most modern in southern Peru when construction began in 2012. But after three years, the Brazilian builder abandoned the project amid an investigation into cost overruns fueled by alleged bribes paid to Cusco’s governor and the wife of Peru’s then-president Ollanta Humala.

Today, the half-built skeleton is covered by graffiti amid peeling paint, exposed power cables and shattered glass. On Dec. 7 — the day Castillo was arrested — a ribbon-cutting ceremony was held to mark the start of a 730-day, $ 244 million rescue plan for the project by a new foreign consortium with technical assistance from France.

Jorge Zapata, the head of Peru’s construction lobby, blames greedy politicians for the standstill. Nationwide, over 2,500 state-funded infrastructure projects worth $7 billion are paralyzed due to mismanagement, he said.

Meanwhile, instead of guiding tourists, Gonzales now spends his days scouring Cusco for a propane gas cannister to cook and bathe the couple’s 5-month-old daughter, Willow.

At an industrial depot, dozens of desperate residents were lined up this week in hopes demonstrators blocking the highways would halt their pickets long enough to let the trucks delivering the propane reach the besieged city.

“This is really scary,” said Zulauf, as she bounced her baby on her knees staring at the long line from her car. “In Cusco, people live day-to-day. If they can’t work, I don’t know how they’re surviving.”

Among those in line was Fredy Deza, who spent the night in a sleeping bag on the sidewalk.

Deza, 40, said the all-night vigil recalled another dark period in Peru’s history, when he would wait with his mother in long lines for bread, sugar and other staples during the chaotic 1985-1990 presidency of Alan Garcia.

“It’s like we’re going back in time,” said Deza, who worked as a guide in Machu Picchu until he was let go in December.

Prices for propane and other scarce items in Cusco are soaring due to inflation that jumped to 8.7% in January, near the highest level in a quarter-century. A black market has emerged, with cannisters going for three times the listed price.

Adding to insult, the cooking gas many can no longer afford is pumped by a foreign-owned consortium from the resource-rich department of Cusco and transported by a pipeline to the capital, Lima, where the bulk is then exported. A projected second pipeline, which would deliver it to Cusco and other cities in the south, remains a pipe dream.

“It’s sad,” said Deza, as he prepared for another cold night, “that as owners of our gas we have to be enduring this.”
…