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Investors are closely watching the latest news on the rapidly spreading Omicron variant for signs of how much the virus could impact the U.S. economy and earnings as the market heads into what has historically been a strong time of year for equities.

Overall, the S&P 500 is slightly ahead since Nov. 24, prior to news of the variant hitting markets. It marked a record-high close on Thursday, as encouraging developments gave investors more ease about the economic impact of the variant.

“The market is extremely reactionary now and every little bit of news has a huge impact,” said George Young, a portfolio manager at Villere & Co. Young is planning on taking advantage of any Omicron-induced volatility to add to stocks that rely on tourism and travel such as bank company First Hawaiian Inc . Shares of the company are up 14.4% for the year to date.

The Omicron variant is causing infections to double in 1.5 to 3 days, according to the World Health Organization. The variant now accounts for 73% of all new U.S. cases, up from less than 1% at the beginning of the month.

Still, questions about Omicron’s virulence have made investors less pessimistic than the original reaction. The S&P 500 closed down 2.3% on Nov. 26 after the variant was discovered, on fears of fresh economic lockdowns.

A South African study offered hope about the severity of Omicron and the trend of COVID-19 infections on Wednesday. Shares of vaccine makers slumped in December as investors expect the Omicron variant’s impact to be limited based on recent data.

That bodes well for what is known in the market as a Santa Claus rally. Historically, U.S. stocks have risen during the last five trading days of December and the first two days of January in 56 out of 75 years since 1945, according to data from CFRA Research. This year, the time period starts on Dec. 27. The average Santa Claus rally has boosted the S&P 500 by 1.3% since 1969, according to the Stock Trader’s Almanac.

It is unclear to what extent Wall Street analysts expect Omicron to affect earnings and the economy. Estimated 2022 S&P 500 earnings growth was at 8.3% as of Friday, compared with 8.0% at the start of December, according to Refinitiv data.

Goldman Sachs cut its estimate for U.S. GDP growth to 3.8% from 4.2% due to the uncertainty of the impact of the Omicron wave.

Possible Volatility

While there will likely be some economic impact from Omicron, U.S. consumer spending will likely remain strong, said Cliff Hodge, chief investment officer for Cornerstone Wealth.

He is focused on any signs that Senator Joe Manchin could reach an agreement to support President Joe Biden’s signature $1.75 trillion Build Back Better climate and social spending bill. Manchin, who would provide one of the key votes to pass the bill in a divided Senate, said on Sunday that he could not support the bill in its current form. Senate Majority Leader Chuck Schumer said that the Senate will vote on the bill in early January.

“We need a little bit of good news whether on the Manchin front or Omicron to get a rally going,” Hodge said. “We are fully invested and anticipate a little bit of a relief rally into January.”

The week ahead will be light on economic data, with the release of the S&P Case-Shiller U.S. home price index on Tuesday among the few notable data points.

The lack of new reads of the strength of the economy at a time when coronavirus case counts are rising may leave the stock market more volatile through the end of the year, said Dana D’Auria, co-chief investment officer of Envestnet PMC.

“The market has gotten pretty good at pricing in and leading off from what we are learning about on the health side,” she said.

Should Omicron cases continue to spike or there are signs that economic restrictions could be reimposed, investors will likely rebalance into the shares of giant technology companies such as Apple Inc that have emerged as defensive plays given their large cash positions and revenue growth as a result of remote work, D’Auria said.

“At the end of the day if Omicron really causes problems I would be ready for a more volatile market” well into the new year, she said.
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U.S. airlines called off hundreds of flights for a third day in a row on Sunday as surging COVID-19 infections due to the highly transmissible Omicron variant grounded crews and forced tens of thousands of Christmas weekend travelers to change their plans. 

Commercial airlines canceled 656 flights within, into or out of the United States on Sunday, slightly down from nearly 1,000 from Christmas Day and nearly 700 on Christmas Eve, according to a tally on flight-tracking website FlightAware.com. 

Further cancellations were likely, and more than 920 flights were delayed. 

The Christmas holidays are typically a peak time for air travel, but the rapid spread of the Omicron variant has led to a sharp increase in COVID-19 infections, forcing airlines to cancel flights with pilots and crew needing to be quarantined. 

Delta Air Lines Inc expected more than 300 of its flights to be canceled on Sunday. 

“Winter weather in portions of the U.S. and the Omicron variant continued to impact Delta’s holiday weekend flight schedule,” a Delta spokesperson said in an emailed statement, adding that the company was working to “reroute and substitute aircraft and crews to get customers where they need to be as quickly and safely as possible.” 

When that was not possible, it was coordinating with impacted customers on the next available flight, the spokesperson said. 

Globally, FlightAware data showed that nearly 2,150 flights were called off on Sunday and another 5,798 were delayed, as of 9.40 a.m. EST (1440 GMT). 

Omicron was first detected in November and now accounts for nearly three-quarters of U.S. cases and as many as 90% in some areas, such as the Eastern Seaboard. The average number of new U.S. coronavirus cases has risen 45% to 179,000 per day over the past week, according to a Reuters tally. 

While recent research suggests Omicron produces milder illness and a lower rate of hospitalizations than previous variants of COVID-19, health officials have maintained a cautious note about the outlook.
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Airlines continued to cancel hundreds of flights Saturday because of staffing issues tied to COVID-19, disrupting holiday celebrations during one of the busiest travel times of the year.

FlightAware, a flight-tracking website, noted nearly 1,000 canceled flights entering, leaving or inside the U.S. Saturday, up from 690 flights scrapped on Friday. Over 250 more flights were already canceled for Sunday. FlightAware does not say why flights are canceled.

Delta, United and JetBlue had all said Friday that the omicron variant was causing staffing problems leading to flight cancellations. United spokesperson Maddie King said staffing shortages were still causing cancellations and it was unclear when normal operations would return. “This was unexpected,” she said of omicron’s impact on staffing. Delta and JetBlue did not respond to questions Saturday.

According to FlightAware, the three airlines canceled more than 10% of their scheduled Saturday flights. American Airlines also canceled more than 90 flights Saturday, about 3% of its schedule, according to FlightAware. American spokesperson Derek Walls said the cancellations stemmed from “COVID-related sick calls.” European and Australian airlines have also canceled holiday-season flights because of staffing problems tied to COVID-19. 

For travelers, that meant time away from loved ones, chaos at the airport and the stress of spending hours standing in line and on the phone trying to rebook flights. Peter Bockman, a retired actor, and his daughter Malaika, a college student, were supposed to be in Senegal on Saturday celebrating with relatives they hadn’t seen in a decade. But their 7:30 p.m. flight Friday from New York to Dakar was canceled, which they found out only when they got to the airport. They were there until 2 a.m. trying to rebook a flight.

“Nobody was organizing, trying to sort things out,” he said, faulting Delta for a lack of customer service. “Nobody explained anything. Not even, ‘Oh we’re so sorry, this is what we can do to help you.'” 

Their new flight, for Monday evening, has a layover in Paris, and they are worried there will be issues with that one as well. They have already missed a big family get-together that was scheduled for Saturday.

FlightAware’s data shows airlines scrapped more than 6,000 flights globally for Friday, Saturday and Sunday combined as of Saturday evening, with almost one-third of affected flights to, from or within the United States. Chinese airlines made up many of the canceled flights, and Chinese airports topped FlightAware’s lists of those with most cancellations. It wasn’t clear why. China has strict pandemic control measures, including frequent lockdowns, and the government set one on Xi’an, a city of 13 million people, earlier this week. 

Air China, China Eastern and Lion Air, an Indonesian airline with many canceled flights, did not respond to emails Saturday. 

Flight delays and cancellations tied to staffing shortages have been a regular problem for the U.S. airline industry this year. Airlines encouraged workers to quit in 2020, when air travel collapsed, and were caught short-staffed this year as travel recovered. 

To ease staffing shortages, countries including Spain and the U.K. have reduced the length of COVID-19 quarantines by letting people return to work sooner after testing positive or being exposed to the virus. 

Delta CEO Ed Bastian was among those who have called on the Biden administration to take similar steps or risk further disruptions in air travel. On Thursday, the U.S. shortened COVID-19 isolation rules for health care workers only.
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Kenya’s government recently said it will pay more than $800 million of the debt owed by the national carrier, Kenya Airways, and give it nearly half-a-billion dollars in budget support over the next two years.  Economists disagree on whether the government is making the right move.  

The government recently said it will support the airways for two years to remain competitive.

The government recently requested $800 million from the International Monetary Fund to fund the bailout.  The state owns 49 percent of the airline.

Samuel Nyandemo is a lecturer at the University of Nairobi, teaching economics. He says the government has no business supporting money-losing companies.

“It’s not the work of the government to subsidize non-profit making entities,” Nyandemo said. “Instead, the government should try to privatize such kinds of bodies that are not able to stand on their own feet. So, it’s defeatist for the government to borrow money and start subsidizing a body like Kenya Airways which has monopoly power in the market and this is just because of mismanagement.”

In September, Kenya Airways Chief Executive Officer Allan Kilavuka said the airline suffered a net loss of $100 million between January and June. The company lost $130 million in the same period in 2020.

The airline has been effected by COVID-19-related travel restrictions and flight cancellations.

James Shikwati, a Nairobi-based economist, says the financial hardship caused by the pandemic means the airline is qualified to receive support from the government.

“I think the flexibility of the challenges caused by COVID we would say it makes sense if you keep it alive using all the instruments available that can ensure it goes back to profitability,” Shikwati said. 

Kenya Airways’ financial challenges began in 2012.  

Nyandemo says the carrier is being mismanaged.  

“Kenya Airways has over-employed staff. They are overpaying pilots,” Nyandemo said. “All this has led to inefficiencies in terms of operational cost and that’s why the Kenya airways is not able to break even.  Besides that, there is gross mismanagement.”

The Kenyan government has been pushing for the nationalization of the airline but parliament has so far blocked the action.

The International Monetary Fund said in a statement the government has canceled a plan to fully nationalize the airline.

Shikwati says the airline can be profitable if managed well.

“Kenya Airways and Ethiopian airlines have always been competing,” Shikwati said. “Kenya, in the 80s, chose the path of privatizing as a way to make the airline competitive. I think Ethiopia at that time picked on being national heavy government-supported. So now you compare with the realities going on, creating a mixed bag in my view is not a problem. It should be something that can make the airline remain competitive.”  

Some economists are calling on the airline to restructure its operations, downsize its staff, negotiate new leases and contracts and use the government’s support and authority. 
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Sino-U.S. trade tensions could flare up again as it appears China will miss its obligations under a nearly expired agreement that emerged from a dispute during the administration of former U.S. President Donald Trump, analysts said. 

The Economic and Trade Agreement signed by the two superpowers in January 2020 is set to end December 31. Trade observers say China has not complied with a clause that obligates it to buy imports of manufactured goods, farm products, energy products and certain services from the U.S. at a total of $200 billion more than the 2017 total. China purchased $186 billion in goods and services in 2017 before the trade war, according to U.S. government figures.

China has had trouble complying because of delays in Chinese aircraft orders from the U.S. and pandemic-related setbacks, said Matthew Goodman, senior vice president for economics with the Washington-based Center for Strategic & International Studies, a research group. 

“I do think that the Biden administration is going to follow through on this agreement and hold China to account,” Goodman told VOA. “I don’t see any reason that they’re going to change tack.”

China had met just 62% of its import purchasing goal as of October, according to an analysis by Chad Bown, senior fellow with the Peterson Institute for International Economics, another research organization in Washington. 

U.S. manufacturers may have lacked capacity as well to meet the demand for China-bound goods, said Bashar Malkawi, a University of Arizona law professor who specializes in trade. China’s pandemic-era border closures further harmed U.S. exports, he said.

The nearly four-year-old trade dispute launched by Trump over the Sino-U.S. trade imbalance has placed tariffs on $550 billion worth of goods, including $350 billion originating in China. The dispute also led to a chill in broader two-way relations that would run through Trump’s term. 

“The environment between these two countries is toxic,” Malkawi said. “Trade war and mistrust have been raging since 2018 and will not ease for the foreseeable future.”

What’s next 

The U.S. trade representative’s office did not reply to a query for this report asking whether China had lived up to the agreement. Its website does not indicate what might happen in 2022. 

U.S. Trade Representative Katherine Tai said in a speech at the Center for Strategic & International Studies in October  that the U.S. government will discuss with China its “performance” and that under the agreement, China had made “commitments that benefit certain American industries, including agriculture, that we must enforce.”

The U.S. side will “work to enforce the terms of phase one,” she added, referring to the terms of the deal.

Tai indicated that the United States had yet to review the agreement. 

China hopes the U.S. government “will create favorable conditions for the two nations to expand trade cooperation,” Ministry of Commerce spokesperson Gao Feng said Thursday, as quoted by the China Daily news website. 

Gao said China had “exerted strenuous efforts to offset negative impact from factors such as the COVID-19 pandemic, the global economic recession and the constraint of supply chain” to carry out the agreement, according to the website.

China is the largest goods trading partner of the United States, with $559.2 billion passing both ways in 2020, according to the trade representative’s office.

U.S. goods and services trade with China totaled about $615.2 billion in 2020, with imports at $450.4 billion.

Expiration of the trade deal potentially gives China an opening to negotiate for buying the U.S. goods that it needs, said Song Seng Wun, an economist in the private banking unit of Malaysian bank CIMB. China traditionally buys U.S. foodstuffs, civilian aircraft and aircraft parts. Its tech firms depended on American supplies before the trade war as well. 

“I suppose it always boils down to what China wants to buy and what the U.S. wants to sell,” Song said. “China can be more selective in buying. Politics matters more at this point.” 

Chinese officials might consider asking to buy the U.S. goods that China needs most, possibly swapping out the ones in today’s agreement, said Stuart Orr, School of Business head at Melbourne Institute of Technology in Australia. 

“I think China is probably going to have to try to renegotiate, and the reason probably motivating that will be the volume of supplies of some of the things that it actually needs,” he said.
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Under pressure from U.S. auto safety regulators, Tesla has agreed to stop allowing video games to be played on center touch screens while its vehicles are moving. 

The National Highway Traffic Safety Administration says the company will send out a software update over the Internet so the function called “Passenger Play” will be locked and won’t work while vehicles are in motion. 

The move comes one day after the agency announced it would open a formal investigation into distracted driving concerns about Tesla’s video games, some of which could be played while cars are being driven. 

An agency spokeswoman says in a statement Thursday that the change came after regulators discussed concerns about the system with Tesla.

The statement says NHTSA regularly talks about infotainment screens with all automakers. A message was left Thursday seeking comment from Tesla, which has disbanded its media relations department. 

The agency says its investigation of Tesla’s feature will continue even with the update. 

“The Vehicle Safety Act prohibits manufacturers from selling vehicles with defects posing unreasonable risks to safety, including technologies that distract drivers from driving safely,” NHTSA’s statement said. The agency said it assesses how manufacturers identify and guard against distraction hazards through misuse or intended use of screens and other convenience technology. 

The agency announced Wednesday that it would formally investigate Tesla’s screens after an owner from the Portland, Oregon, area filed a complaint when he discovered that a driver could play games while the cars are moving. 

The agency said that the “Passenger Play” feature could distract the driver and increase the risk of a crash. 

The probe covers about 580,000 Tesla Models S, X, Y and 3 from the 2017 through 2022 model years. 
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U.S. chipmaker Intel is facing criticism in China after it apologized Thursday for a letter the firm sent to suppliers asking them “to ensure that its supply chain does not use any labor or source goods or services from the Xinjiang region.”

On Thursday, Intel posted a Chinese-language message on its WeChat and Weibo accounts apologizing for “trouble caused to our respected Chinese customers, partners and the public. Intel is committed to becoming a trusted technology partner and accelerating joint development with China.”

Intel’s apology came as U.S. President Joe Biden signed the Uyghur Forced Labor Prevention Act, which bans the import of goods produced by Uyghur slave labor. Under the measure, a company is prohibited from importing from China’s Xinjiang region unless it can prove that its supply chains have not used labor from Uyghurs, ethnic Muslims reportedly enslaved in Chinese camps.

Beijing denies complaints of abuses in the mostly Muslim region.

Intel is just the latest multinational firm to be caught up in the struggle over the Uyghurs issue as China prepares to host the Winter Olympics in February. Intel is among the International Olympic Committee sponsors. According to Reuters, 26% of Intel’s 2020 total revenue was earned in China.

Earlier this month, Intel’s letter to suppliers asking them to be sure not to use labor, products or services from Xinjiang cited restrictions imposed by “multiple governments.”

That sparked a backlash in China, with calls for a boycott and criticism of the company in state and social media. Global Times, a Chinese state-run newspaper, called Intel’s request to suppliers “arrogant and vicious,” according to reports.

Wang Junkai, also known as Karry Wang, a singer with the popular boy band TFBOYS, said on Weibo on Wednesday that he would not serve as an Intel brand ambassador. “National interests exceed everything,” he said, according to wire service reports.

Chinese officials acknowledged Intel’s apology.

China’s Foreign Ministry spokesperson said at a daily briefing in Beijing that “we note the statement and hope the relevant company will respect facts and tell right from wrong,” according to Reuters.

The White House also appeared to note the company’s apology.

Without naming Intel, Jen Psaki, the White House press secretary, said at a briefing Thursday that U.S. companies “should never feel the need to apologize for standing up for fundamental human rights or opposing repression,” according to reports.

Some information for this report came from The Associated Press and Reuters. 

 
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The number of Americans applying for unemployment benefits was unchanged last week, remaining at a historically low level that reflects the job market’s strong recovery from the coronavirus recession last year.

Jobless claims remained at 205,000. The four-week average, which smooths out week-to-week ups and downs, rose to just over 206,000. The numbers suggest that the spread of the omicron variant did not immediately trigger a wave of layoffs.

Altogether, 1.9 million Americans were collecting traditional unemployment aid the week that ended Dec. 11.

The weekly claims numbers, a proxy for layoffs, have fallen steadily most of the year. Employers are reluctant to let workers go at a time when it’s so tough to find replacements. The United States had a near-record 11 million job openings in October, and 4.2 million Americans quit their jobs — just off September’s record 4.4 million — because there are so many opportunities.

The job market has bounced back from last year’s brief but intense coronavirus recession. When COVID hit, governments ordered lockdowns, consumers hunkered down at home and many businesses closed or cut back hours.

Employers slashed more than 22 million jobs in March and April 2020, and the unemployment rate rocketed to 14.8%.

But massive government spending — and eventually the rollout of vaccines — brought the economy back. Employers have added 18.5 million jobs since April 2020, still leaving the U.S. still 3.9 million jobs short of what it had before the pandemic. The unemployment rate has fallen to 4.2%, close to what economists consider full employment.
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Cambodia is basing hopes for a post-pandemic economic recovery on free trade agreements with China and South Korea, and membership in the Regional Comprehensive Economic Partnership.

RCEP is a free-trade agreement including the 10 members of the Association of Southeast Asian Nations, as well as China, Japan, South Korea, Australia and New Zealand that will come into effect Jan. 1. RCEP trade pact member countries will have a combined gross domestic product of $26.2 trillion, or about 30% of global GDP.

Analysts said Phnom Penh had aggressively pursued these trade deals amid the crushing economic impact of the COVID-19 pandemic and withdrawal of some trade perks by the European Union prompted by Cambodia’s human rights and democratic record.

Planning Minister Chhay Than has said more than 6 million jobs in the informal economy have been lost or will be lost due to COVID-19, and the United Nations Development Program expects Cambodia’s poverty rate could double to 17.6% of the population this year.

“They’re absolutely vital to Cambodia’s economic future. The markets for Cambodia in the next several years are going to be primarily its neighboring countries,” said Bart Edes, senior associate at the Center for Strategic and International Studies in Washington.

Cambodia’s economy has rapidly evolved since the end of 30 years of war in 1998, with Phnom Penh moving firmly into China’s orbit over the last decade. Two-way trade topped $8 billion in 2020 and is expected to reach $10 billion in 2023 with October’s signing of the FTA.

A similar agreement was also inked with South Korea after two-way trade reached $880 million in 2020. Under that deal Cambodia will lift tariffs on 93.8% of all products traded, and South Korea will remove tariffs on 95.6% of all items.

RCEP will eliminate up to 90% of tariffs on goods traded between signatories over the next 20 years, which analysts said would further underpin regional integration by building upon China’s Belt and Road Initiative infrastructure projects.

Edes said the world’s booming economies are disproportionately located in Asia, where Cambodia is strategically positioned as a regional hub among much bigger neighbors Thailand, Vietnam, and the rest of ASEAN, making it an attractive investment destination.

“It’s not just China, it’s other countries in Asia. But these trade agreements, by having rules to the game are very important to Cambodia, these are positive moves for the country, for the people and for the economy and job opportunities,” he said.

Just 20% of Cambodia’s workforce is employed in the formal economy and the remaining 80%, which includes farmers, work in the informal economy, government sources said.

Thirty percent of Cambodians live on or just above the poverty line of $1.90 a day.

The situation was not helped by the withdrawal of some EU trade benefits under its Everything But Arms policy in August of last year, which tied tariff-free access to European markets to ensuring standards of democracy.

Brendan Lalor, a director with Ernst & Young in Cambodia, said the loss of tariff-free access for some goods, such as garments, to the EU and the pandemic had spurred the government into ratifying FTAs.

“With the FTA coming into effect obviously all your import tariffs, quotas, taxes, export restrictions all fall away so that should stimulate further bilateral trade between the two countries,” he said, referring to the FTAs with China and South Korea.

“So there is every chance that an FTA with Korea and China should offset the effects of the partial removal of the EBA,” he said, referring to the EU policy, adding Cambodia was ideally placed to take advantage of RCEP and cross-border trade.

Prime Minister Hun Sen has also said he wants an FTA with Russia.

Cambodia exports include garments, footwear and other apparel, travel products, beverages, electrical and electronic components, pharmaceuticals and agricultural products ranging from rubber to palm oil, cassava and cashews.

Under RCEP, Commerce Minister Pan Sorasak forecast the Cambodian GDP would grow by 2%, with exports up by 7.3% and investment by 23.4% with the elimination of tariffs on 90% of goods traded among signatories over the next 20 years.

“The RCEP agreement will become the core foundation for trade and investment in the region, further expand regional value chains and create more employment and market opportunities for peoples and businesses in the region,” he told Parliament.

However, Wim Conklin, country program director for the Solidarity Center in Cambodia, sounded a note of caution, warning FTAs and RCEP could result in a flood of cheaper goods coming into this country, including plastics, batteries and small household appliances.

“Overall, there could be some positive benefit but at the same time who benefits is always a question,” he said. “A much bigger country having a free trade agreement with another country is never going to be a real level playing field.”

He said FTAs had to be achieved for the benefit of the whole population, as opposed to specific sectors, such as banks and financial services, but he added that cheaper imports could provide a boost for producers and that in turn could benefit workers.

“Will that mean they might get higher wages because greater profits’ being made or certain costs are going down? We hope that might be the case but I’m not sure,” he said. 

 
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The U.S. Securities and Exchange Commission has declined an effort by Apple Inc. to skip a shareholder proposal asking the iPhone maker to provide greater transparency in its efforts to keep forced labor out of its supply chain. 

A group of shareholders earlier this year asked Apple’s board to prepare a report on how the company protects workers in its supply chain from forced labor. The request for information covered the extent to which Apple has identified suppliers and sub-suppliers that are a risk for forced labor, and how many suppliers Apple has taken action against. 

In a letter from the SEC reviewed by Reuters on Wednesday, regulators denied Apple’s move to block the proposal, saying that “it does not appear that the essential objectives of the proposal have been implemented” so far. 

The letter means that Apple will have to face a vote on the proposal at its annual shareholder meeting next year, barring a deal with the shareholders who made it. 

Apple did not immediately respond to a request for comment. 

American lawmakers last week passed a bill banning imports from China’s Xinjiang region over concerns about forced labor. 

“There’s rightfully growing concern at all levels of government about the concentration camplike conditions for Uyghurs and other Turkic Muslims living under Chinese government rule,” Vicky Wyatt, campaign director for SumOfUs, a group supporting the shareholder proposal, said in a statement on Wednesday. 

Apple routinely asks the SEC to skip shareholder proposals, and the requests are granted about half the time. 

The SEC also denied Apple’s request to skip a shareholder proposal that would give investors more information about the company’s use of nondisclosure agreements.
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As Americans enter the holiday season, the US supply chain is plagued with delays in moving goods from ports to warehouses, and on to stores and consumers.  A shortage of truck drivers is often given as a reason.  As Mike O’Sullivan reports, some experts and drivers see another pervasive problem, a lack of coordination along the supply chain.

Camera: Roy Kim, Po Yu Chen
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Lawmakers in Ghana exchanged blows late Monday evening over a proposed electronic payment tax.The government says the new tax would boost revenue for development, but parliament has been split over the idea and fights broke out when supporters tried to force a vote.

Ghanaians in general, and the opposition in particular, have vehemently opposed the proposed 1.75% tax on electronic transactions, popularly known as e-levy, contained in the 2022 budget.

If passed, the law would include taxes on mobile money payments, which is used by 40% of Ghanaians 15 years and older, according to a 2021 data by the central bank. 

Up against a deadline, the government wanted the bill passed under a certificate of urgency on the last day of sitting. But a brawl broke out on the floor when the first deputy speaker, Joseph Osei-Owusu, pushed for the vote.

The regular speaker was absent from the session. Opposition MP Mahama Ayariga says the deputy was circumventing normal procedure in an attempt to force the bill through parliament.

“The house is governed by rules. And so when you make it right for persons to undermine those rules what do you expect the MPs to do. They won’t just sit aside and watch the person undermine the rules,” he said.

The acting speaker, Osei-Owusu, says he operated within the standing orders of Ghana’s parliament and had the right to vote for the bill under consideration.

“As long as we can change over then that advantage is restored. In my view and I still hold that view strongly that as long as we can change the seat at any time there should not be that disadvantage,” he said. “Otherwise, no proceedings will go on. Why should I come and preside so that I can’t take any decision, what is the point?”

About 50 lawmakers took part in the brawl.Only one was injured, the minister of youth and sports who got a cut in the face. 

The executive director of the African Center for Parliamentary Affairs (ACEPA), Rasheed Draman, told a local radio station that Ghana should brace for more gridlock in the current parliament.

“I have never seen anything like this. And for me I have said this since the beginning of the year that if we’re not careful this is how the eighth parliament is going to be. It will be characterized by a lot of confusion and a lot of gridlock,” he said.

Parliament has now been adjourned until January 18 to give lawmakers more room to consult on the controversial electronic levy.
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U.S. President Joe Biden’s administration says it is looking to push ahead with work on a social safety net spending bill after a key Democrat in the Senate said he could not support it. 

White House press secretary Jen Psaki told reporters at a briefing Monday that the administration is ready to “work like hell” with West Virginia Senator Joe Manchin and other members of the Democratic caucus in order to achieve its goal. 

“What’s most on the President’s mind is the risk of inaction,” Psaki said.  “And if we do not act to get this legislation done and the components in it, not only will costs and prices go up for the American people, but also we will see a trajectory in economic growth that is not where we want it to be.” 

Manchin has been a focal point in talks within the Democratic Party as leaders pushed to get the $2 trillion package passed by this week.  The legislation includes plans to expand health care for older Americans, provide universal pre-kindergarten classes, authorize new funding to combat climate change and offer more financial support for low-income Americans. 

Manchin has expressed opposition to the amount of spending, and in a radio interview Monday he reiterated that in his view the bill included too much spending without enough restrictions on incomes or work requirements for recipients. 

Earlier Monday, Senate Majority Leader Chuck Schumer said the Senate would vote “very early in the new year” on a revised version of the bill already approved by the House of Representatives. 

Manchin’s vote is essential for Democrats in the politically divided Senate as they try to pass one of the key elements of Biden’s legislative agenda.  None of the 50 Republicans in the 100-member chamber supports the plan. 

Democrats had hoped to push through the legislation on a 51-50 vote before Christmas, with Vice President Kamala Harris providing the tie-breaking vote.   

Some information for this report came from the Associated Press and Reuters.
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A centrist U.S. Democratic lawmaker, Senator Joe Manchin of West Virginia, said Sunday he is definitively opposed to President Joe Biden’s roughly $2 trillion social safety net spending plan, likely dooming its passage without further sharp revisions in its scope and cost. 

Manchin’s vote was essential in the politically divided Senate for passage of one of the key elements of the Democratic president’s legislative agenda. None of the 50 Republicans in the 100-member chamber supports the plan to expand health care for older Americans, provide universal pre-kindergarten classes, authorize new funding to combat climate change and offer more financial support for low-income Americans. 

Democrats had hoped to push through the legislation on a 51-50 vote before Christmas, with Vice President Kamala Harris providing the tie-breaking vote. The House of Representatives has already approved a version of the bill. 

But Manchin, who discussed the measure at length last week with Biden, told the “Fox News Sunday” show, “If I can’t go home and explain it to the people of West Virginia, I can’t vote for it. And I cannot vote to continue with this piece of legislation.” 

“I just can’t,” Manchin said. “I’ve tried everything humanly possible. I can’t get there. This is a ‘no’ on this legislation.” 

The White House said the lawmaker last week offered a framework for a compromise on the legislation and “promised to continue conversations in the days ahead, and to work with us to reach that common ground.” 

White House press secretary Jen Psaki said in a statement that if Manchin’s comments “indicate an end to that effort, they represent a sudden and inexplicable reversal in his position, and a breach of his commitments to the President and the Senator’s colleagues in the House and Senate.” 

She rebuffed Manchin’s claims that the legislation would add to the surge in consumer prices in the United States, the highest in nearly four decades, or add to the country’s long-term debt, now more than $29 trillion, because the new spending would be paid for with higher taxes on corporations and wealthy individuals.

One of the key Senate architects of the legislation, Senator Bernie Sanders of Vermont, reacted angrily to Manchin’s refusal to support fellow Democratic colleagues and vote for it. Sanders said Manchin “doesn’t have the guts” to take on special business interests who would be impacted most by the legislation.

Sanders told CNN’s “State of the Union” show he wants the Senate to vote on the measure anyway, even if it is headed to defeat, to force Manchin to publicly account for his vote. 

“He’s going to have a lot of explaining to do with the people of West Virginia,” Sanders said. “Let him vote ‘no’ and explain it to the world.” 
…

In the months since President Joe Biden warned Russia’s Vladimir Putin that he needed to crack down on ransomware gangs in his country, there hasn’t been a massive attack like the one last May that resulted in gasoline shortages. But that’s small comfort to Ken Trzaska.

Trzaska is president of Lewis & Clark Community College, a small Illinois school that canceled classes for days after a ransomware attack last month that knocked critical computer systems offline.

“That first day,” Trzaska said, “I think all of us were probably up 20-plus hours, just moving through the process, trying to get our arms around what happened.”

Even if the United States isn’t currently enduring large-scale, front-page ransomware attacks on par with ones earlier this year that targeted the global meat supply or kept millions of Americans from filling their gas tanks, the problem hasn’t disappeared. In fact, the attack on Trzaska’s college was part of a barrage of lower-profile episodes that have upended the businesses, governments, schools and hospitals that were hit.

The college’s ordeal reflects the challenges the Biden administration faces in stamping out the threat — and its uneven progress in doing so since ransomware became an urgent national security problem last spring.

Smaller-scale attacks continue

U.S. officials have recaptured some ransom payments, cracked down on abuses of cryptocurrency, and made some arrests. Spy agencies have launched attacks against ransomware groups and the U.S. has pushed federal, state and local governments, as well as private industries, to boost protections.

Yet six months after Biden’s admonitions to Putin, it’s hard to tell whether hackers have eased up because of U.S. pressure. Smaller-scale attacks continue, with ransomware criminals continuing to operate from Russia with seeming impunity. Administration officials have given conflicting assessments about whether Russia’s behavior has changed since last summer. Further complicating matters, ransomware is no longer at the top of the U.S.-Russia agenda, with Washington focused on dissuading Putin from invading Ukraine.

The White House said it was determined to “fight all ransomware” through its various tools but that the government’s response depends on the severity of the attack.

“There are some that are law enforcement matters and others that are high impact, disruptive ransomware activity posing a direct national security threat that require other measures,” the White House statement said.

Ransomware attacks — in which hackers lock up victims’ data and demand exorbitant sums to return it — surfaced as a national security emergency for the administration after a May attack on Colonial Pipeline, which supplies nearly half the fuel consumed on the East Coast.

The attack prompted the company to halt operations, causing gas shortages for days, though it resumed service after paying more than $4 million in ransom. Soon after came an attack on meat processor JBS, which paid an $11 million ransom.

Biden met with Putin in June in Geneva, where he suggested critical infrastructure sectors should be “off limits” for ransomware and said the U.S. should know in six months to a year “whether we have a cybersecurity arrangement that begins to bring some order.”

He reiterated the message in July, days after a major attack on a software company, Kaseya, that affected hundreds of businesses, and said he expected Russia to take action on cybercriminals when the U.S. provides enough information to do so.

Since then, there have been some notable attacks from groups believed to be based in Russia, including against Sinclair Broadcast Group and the National Rifle Association, but none of the same consequence or impact of those from last spring or summer.

‘Whole-of government’ effort

One reason may be increased U.S. government scrutiny, or fear of it.

The Biden administration in September sanctioned a Russia-based virtual currency exchange that officials say helped ransomware gangs launder funds. Last month, the Justice Department unsealed charges against a suspected Ukrainian ransomware operator who was arrested in Poland and has recovered millions of dollars in ransom payments. Gen. Paul Nakasone, the head of U.S. Cyber Command, told The New York Times his agency has begun offensive operations against ransomware groups. The White House says that “whole-of-government” effort will continue.

“I think the ransomware folks, the ones conducting them, are stepping back like, ‘Hey, if we do that, that’s going to get the United States government coming after us offensively,'” Kevin Powers, security strategy adviser for cyber risk firm CyberSaint, said of attacks against critical infrastructure.

U.S. officials, meanwhile, have shared a small number of names of suspected ransomware operators with Russian officials, who have said they have started investigating, according to two people familiar with the matter who were not authorized to speak publicly.

It’s unclear what Russia will do with those names, though Kremlin spokesperson Dmitry Peskov insisted the countries have been having a useful dialogue and said “a working mechanism has been established and is actually functioning.”

It’s also hard to measure the impact of individual arrests on the overall threat. Even as the suspected ransomware hacker awaits extradition to the U.S. following his arrest in Poland, another who was indicted by federal prosecutors was later reported by a British tabloid to be living comfortably in Russia and driving luxury cars.

Some are skeptical about attributing any drop-off in high-profile attacks to U.S. efforts.

“It could have just been a fluke,” said Dmitri Alperovitch, former chief technology officer of the cybersecurity firm Crowdstrike. He said asking Russia to crack down on large-scale attacks won’t work because “it’s way too granular of a request to calibrate criminal activity they don’t even fully control.”

Top American officials have given conflicting answers about ransomware trends since Biden’s discussions with Putin. Some FBI and Justice Department officials say they’ve seen no change in Russian behavior. National Cyber Director Chris Inglis said there’s been a discernible decrease in attacks but that it was too soon to say why.

It’s hard to quantify the number of attacks given the lack of baseline information and uneven reporting from victims, though the absence of disruptive incidents is an important marker for a White House trying to focus its attention on the most significant national security risks and catastrophic breaches.

Victims of ransomware attacks in the past few months have included hospitals, small businesses, colleges like Howard University — which briefly took many of its systems offline after discovering a September attack — and Virginia’s Legislature.

Not if, but when

The attack at Lewis & Clark, in Godfrey, Illinois, was discovered two days before Thanksgiving when the school’s IT director detected suspicious activity and proactively took systems offline, said Trzaska, the president.

A ransom note from hackers demanded a payment, though Trzaska declined to reveal the sum or identify the culprits. Though many attacks come from hackers in Russia or Eastern Europe, some originate elsewhere.

With vital education systems affected, including email and the school’s online learning platform, administrators canceled classes for days after the Thanksgiving break and communicated updates to students via social media and through a public alert system.

The college, which had backups on the majority of its servers, resumed operations this month.

The ordeal was daunting enough to inspire Trzaska and another college president who he says endured a similar experience to plan a cybersecurity panel.

“The stock quote from everyone,” Trzaska said, “is, ‘Not if it’s going to happen, but when it’s going to happen.’” 
…

The Chinese telecom giant Huawei has consistently claimed it does not actively partner with the Chinese government in gathering intelligence on individuals within China, but a report by The Washington Post this week showing the company appears to have marketed surveillance technology to government customers calls the company’s assertions into question.

The report comes as major parts of the large company’s operations remain severely restricted by sanctions imposed by the United States under former President Donald Trump, which were renewed, and in some cases tightened, by President Joe Biden.

The newspaper obtained more than 100 PowerPoint presentations that were briefly posted to a public page of the company’s website. The trove of documents suggests the company was marketing various surveillance-related services, including voice recognition technology, location tracking and facial-recognition-based area surveillance.

The presentations indicate the company also marketed systems meant to monitor prisons, like those in which China is currently believed to be holding an untold number of Uyghurs in the Western province of Xinjiang. The system tracked prisoners’ labor productivity, as well as their time spent in reeducation classes and data that might indicate the effectiveness of those classes.

Additionally, the materials appeared to market workplace surveillance tools, meant to monitor employees’ workplace performance and to spot workers who spend time resting or using personal electronics on the clock.

Huawei denial

In a statement provided to VOA, a Huawei spokesperson said, “Huawei has no knowledge of the projects mentioned in The Washington Post report.”

It continued, “Like all other major service providers, Huawei provides cloud platform services that comply with common industry standards. Huawei does not develop or sell systems that target any specific group of people and we require our partners comply with all applicable laws, regulations and business ethics. Privacy protection is our top priority and we require that all parts of our business comply with all applicable laws and regulations in the countries and regions where we operate.”

The Post, in its article, noted the company’s official watermark appeared on the pages of the PowerPoint presentation, and that several included a page noting a “Huawei Technologies Co. Ltd.” copyright.

Electronic security experts said the revelation of the PowerPoint presentations linking Huawei to state security wasn’t surprising, despite the company’s denials.

“Huawei has been closely linked to the security services from the start,” Jim Lewis, senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies, told VOA.

Lewis said the warnings about the company have been coming from American officials since George W. Bush was president but had not been taken seriously until the past few years, when China became more aggressive about asserting itself on the world stage.

“What’s changed is the audience,” Lewis said. Between China’s and [Chinese President] Xi Jinping’s behavior, people are willing to hear now about the problems with Huawei in a way they weren’t before.”

Punishing sanctions

The United States has, for several years, been warning that Huawei represents a security risk to the interests of the U.S. and its allies. Despite the company’s claims to the contrary, U.S. officials say they believe the company has close ties to Chinese state security agencies and that its telecommunications products could be used to gather information on, or disrupt the activities of, China’s rivals.

Officials also point to a law in China that obligates private companies to cooperate with government agencies in the collection of data deemed important to state security.

In 2019 and 2020, the U.S. began aggressively moving against Huawei on a number of fronts.

The Trump administration fought against the company’s effort to market the networking equipment necessary to roll out 5G wireless technology. 5G is the next generation of mobile connectivity and is expected to greatly enhance the ability of internet-connected devices to communicate, facilitating everything from self-driving vehicles to remote surgery.

The U.S. declared, among other things, it would cease sharing intelligence with allies who allow Huawei to supply critical pieces of their nations’ telecommunications infrastructure, arguing the company presented too much of a security risk.

As a result, a number of countries have barred the company’s technology from their 5G systems and others, including Britain, have begun the expensive process of removing Huawei equipment that already had been installed.

Smartphone setback

Until recently, Huawei was one of the biggest sellers of smartphones in the world and enjoyed near-complete dominance in the Chinese market. Other sanctions levied against the company, however, have severely damaged that business.

The U.S. barred firms from licensing or selling the company technology critical to some of its products. That included Google, which in 2019 said it would no longer license its Android operating system — the world’s most popular — for use in new phones made by the company.

Intel and Qualcomm, two major makers of microchips, were banned from selling their most advanced technology to Huawei. The ban extended to contract chipmakers, like Taiwan Semiconductor Manufacturing Corp., the world’s largest.

The result has been a drastic decline in the sale of Huawei smartphones, both globally and within China.

“The core of their devices business was smartphones, and their market share has just continued to decline,” Ryan Reith, a vice president with International Data Corporation, told VOA.

Reith said the prospects for recovery do not look good for the company’s smartphone business.

“We don’t see any way that the brand itself turns around,” he said. “So, it’s probably on its way out.”
…

Policymakers at the U.S. central bank, the Federal Reserve, moved aggressively Wednesday to fight raging inflation in consumer prices for American shoppers and businesses. 

The policymakers announced they soon would end their stimulus to fight the economic damage from the coronavirus pandemic and signaled they could increase their benchmark interest rate three times next year. 

With consumer prices surging at an annualized 6.8% pace in November, the biggest jump in nearly four decades, the Fed said it will move faster to wind down its vast asset purchase program by March, rather than the initial goal of mid-2022, that it had used to boost the world’s biggest economy from the ravages of the pandemic. 

The Fed, in a statement after a two-day policy meeting in Washington, said the bond purchases could be ended faster “in light of inflation developments and the further improvement in the labor market.” 

For the moment, the central bank kept its benchmark interest rate near zero, a widely watched standard that influences the interest rates that consumers pay to borrow money to buy such big-ticket items as cars, and businesses pay to expand their operations or buy machinery. 

But the central bank said as it ends its purchase of billions of dollars of bonds, it could then hike its benchmark rate by a quarter of a percentage point three times in 2022, to keep inflation from getting out of hand without causing other problems in the American economy. 

“Economic developments and changes in the outlook warrant this evolution of monetary policy,” Fed Chair Jerome Powell told reporters during a post-meeting news conference. “The economy has been making rapid progress toward maximum employment.” 

While only a small percentage of consumers need to buy a new or used car, everyone needs to eat, and most American adults drive a vehicle of some sort. So, they have been especially hit in recent months by sharply rising food prices and increasing prices for gasoline, although gas prices are now receding again as world crude oil prices drop. 

One recent poll showed that 80% of Americans think prices at grocery stores especially are too high.

Powell presaged Wednesday’s policy shift two weeks ago when he said the central bank needed to act to keep inflation in check. 

“Almost all forecasters do expect that inflation will be coming down meaningfully in the second half of next year,” Powell said. “But we can’t act as though we’re sure of that. We’re not at all sure of that.” 

The end-of-meeting Fed statement said, “Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation.” 

But it said, “Risks to the economic outlook remain, including from new variants of the virus.” 

 
…