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First-time claims for U.S. unemployment compensation dropped sharply last week to a 52-year low, easily falling below the figure recorded at the start of the coronavirus pandemic that has played havoc with the U.S. economy over the last 20 months, the Labor Department reported Wednesday

A total of 199,000 jobless workers filed for assistance last week, down 71,000 from the revised figure of the week before and the lowest recorded figure since November 1969, the government said. The new weekly figure was also well below the 256,000 total in mid-March of last year when the pandemic first swept into the country and employers started laying off workers by the hundreds of thousands.

The new figure was an indication the U.S. economy, the world’s largest, remains on a recovery path from the worst economic effects of the coronavirus pandemic.

The advance is occurring even as President Joe Biden and Washington policy makers, along with consumers, voice concerns about the biggest increase in consumer prices in three decades and supply chain issues that have curtailed delivery of some products to retail store shelves.

The declining number of claims for unemployment benefits shows that many employers are hanging on to their workers even as millions have quit jobs to move to other companies offering higher pay and more benefits.

U.S. employers added 531,000 jobs in October, the biggest monthly gain in three months and the unemployment rate dropped to 4.6%. But the U.S. economy is still short more than four million jobs since February 2020.

Even as consumers worry about higher food and fuel prices, President Biden said Tuesday, “We’re experiencing the strongest economic recovery in the world.”

“Even after accounting for inflation, our economy is bigger and our families have more money in their pockets than they did before the pandemic,” Biden said. “And America is the only major economy in the world that can say that.”

About 7.4 million workers remain unemployed in the United States. There are 10.4 million available jobs in the country, but the skills of available workers often do not match what employers want, or the job openings are not where the unemployed live. In addition, many of the available jobs are low-wage service positions that the jobless are shunning.

The annual size of the U.S. economy — nearly $23 trillion — exceeds its pre-pandemic level as it recovers faster than many economists had predicted during the worst of the business closings more than a year ago.

The Federal Reserve, the country’s central bank, is curtailing its year-plus support for the U.S. economy during the worst of the pandemic. It announced earlier this month it would cut its $120-billion-per-month purchase of Treasury investments and mortgage-backed securities by $15 billion by the end of November. In addition, the Fed is reducing purchases to $90 billion per month in December but left its benchmark interest rate unchanged.

How fast U.S. economic growth continues is unclear. The delta variant of the coronavirus continues to pose a threat to the recovery, with more new cases being recorded again after the number had declined in recent weeks.

About 90,000 new cases have been added in recent days, up from about 75,000 daily in recent weeks. The number of deaths each day has been dropping, to about 1,000 a day, from the 2,000 total of a few weeks ago.

About 60 million eligible Americans remain unvaccinated against the coronavirus, a figure Biden says is “unacceptably high.” The president has mandated that 84 million workers at companies with 100 or more employees get vaccinated by January 4 or be tested frequently, but the order is being contested in a raft of lawsuits that have yet to be decided.
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Economists say China’s model of investment in Africa is gaining public support, despite the debt burden it imposes on many countries. According to economic experts and the locals, the United States’ multibillion dollar investments in Africa are less visible and make less of an impact on people’s daily lives. Victoria Amunga reports from Nairobi.
Videographer: Amos Wangwa
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The shutdown of internet access via mobile phone networks that began Saturday dragged on for a fourth day Tuesday. The government said in a statement the shutdown is in the interest of national defense and public security and will last until around 10 p.m. tonight.

VOA talked to some Burkinabes on the streets of Ouagadougou to ask how the shutdown was affecting them and what they thought of the government’s decision.

Alexi Sawadogo, a physician, spoke outside a bank on one of the city’s busy boulevards. He said he was there to check his account balance as the shutdown meant he could no longer do so online. 

“It disconnects us from our friends who are outside the country, with whom we communicate regularly,” he says. He notes that he understands that it is because of the French convoy that was blockaded in the north, but says insecurity is not a valid reason and that the government needs to review its strategy. 

The shutdown has come in the wake of protests in recent days that have blocked a French military supply convoy that is attempting to travel from Ivory Coast to Niger. Protesters say they want an end to French military intervention in the regional war against Islamist militants. 

There have also been protests against the government’s handling of security, after a terrorist group believed to be associated with al-Qai da killed more than 50 military police in an assault on a base in northern Burkina Faso on November 14th. 

Ali Dayorgo, a university student, said the shutdown has affected his ability to work and learn the latest news.

He says he doesn’t understand why the shutdown is happening, but he hears the voice of the Burkinabe youth. “I feel the anger of the youth,” he expressed, adding that even if he doesn’t join protests against insecurity, he supports them.

A funeral for some of the victims of the attack is taking place in Ouagadougou today. 

Drabo Mahamadou is the national executive secretary of the “Save Burkina Faso Movement,” one of the protest groups that is calling for President Roch Kabore to resign. He said they have called on the population to attend Tuesday’s funeral and to attend a protest on Saturday.

He says, because the government is insensitive to pain, we are calling on the population to come out en masse on the 27th. We want [protesters] to prove that this government is not helping Burkina Faso. It is the government that is causing harm to the Burkinabé people.

A government spokesperson could not be reached for comment.

Eloise Bertrand is a research fellow at the University of Portsmouth who focuses on Burkina Faso. She thinks the restrictions on the internet are unwise; pointing out that “this shutdown may well backfire against the government. We can see that civil society groups and stakeholders who were not really involved in protests against the French convoy are annoyed and angered by this internet shutdown.”

Reports suggest the French military convoy is now waiting in the town of Zinaire, about 30 kilometers north of the capital. Protests are also said to be taking place in the town.

With the demonstrations continuing, it remains to be seen if the government will lift the internet shutdown tonight. Further protests are scheduled for Saturday.
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The United States and five other countries said Tuesday they plan to tap their strategic oil reserves for refining into gasoline and other energy products in a coordinated effort to cut rising costs that their consumers are paying.

The White House said that over the coming months through April 2022 the U.S. would make 50 million barrels of oil available for sale to refiners from its Strategic Petroleum Reserve that currently holds 621 million barrels of oil in four salt caverns along the Gulf of Mexico coastline.

The U.S. oil release by itself – and spread out over several months — may not make much difference in the cost of gasoline that American motorists are now paying – a national average of $3.40 a gallon (3.8 liters), which is the highest figure since 2014.

But an accurate possible cost reduction could not immediately be calculated because it was not known how much oil the other five countries – China, Japan, South Korea, India and Britain – plan to release from their reserves.

Also, key oil producers in the Mideast, led by the 13-member Organization of the Petroleum Exporting Countries, could cut their own production to offset a flood of new oil on the world market from the six countries. Such an offsetting cut in the amount of oil on the world market could keep oil more or less at its current global Brent benchmark crude price of about $80 a barrel.   

The higher cost of gasoline and home heating for the upcoming winter months in the U.S. has contributed to the biggest inflation surge in consumer prices in the U.S. in 31 years – 6.2% at an annualized rate in October.  

The higher energy and food costs have also led to sharply declining voter approval ratings for U.S. President Joe Biden 10 months into his four-year White House term and less than a year before congressional elections across the country. The high inflation rate is a distinct political worry for the Democratic president and his political allies in Congress as they try hold on to their narrow control of both the Senate and House of Representatives.

In making the oil release announcement, the White House said, “American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic.”

“That’s why President Biden is using every tool available to him to work to lower prices and address the lack of supply,” the statement said. “The president stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic.”

The Biden administration is also looking at potential price manipulation in oil and gas markets with a Federal Trade Commission investigation.  

The coordinated international release of oil would be the first one since 2011, when the U.S. and 27 other countries replaced about 140 million barrels in output lost as a result of three months of conflict in Libya.

Under the U.S. oil release plan, the U.S., starting next month, will trade 32 million barrels of oil with buyers who will agree to send the same amount back to the government sometime between 2022 and 2024, to replenish the reserve.

The other 18 million barrels are being released as part of a previously authorized sale from the reserve, which the Energy Department is now moving to do earlier than first planned.
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U.S. President Joe Biden on Monday reappointed Jerome Powell to a second term as chair of the country’s central bank, the Federal Reserve, saying that Powell has played a pivotal role in helping the United States recover from the worst of the economic downturn caused by the coronavirus pandemic.

Biden’s reappointment of Powell, 68, to one of the most important economic policy positions in the world, ends weeks of speculation in financial markets and in Washington political circles. Some progressive Democrats in Congress had pushed Biden to name Fed Governor Lael Brainard to head the Fed, but the president instead named her as vice chair.

Biden’s appointment of Powell, a Republican and former private equity executive, to another four-year term is a rare instance in which he renamed a key official first appointed by his Republican predecessor, former President Donald Trump, as the Fed chief.

Financial markets greeted the Powell reappointment favorably, with all major U.S. stock indexes up sharply in early trading Monday.

In politically fractious Washington, Powell enjoys wide bipartisan support and is expected to again win Senate confirmation. Of the 84 lawmakers who voted for him four years ago, 68 of them are still in office, equally split between Democrats and Republicans.

Powell was first named to the Fed’s seven-member policy-making board a decade ago by then-President Barack Obama, another Democrat, before being elevated to Fed chair by Trump. Biden also has three other current or upcoming vacancies to fill on the Fed board, which broadly sets economic policy for the U.S., the world’s largest economy.

Biden said the U.S. has made “remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again,” and praised the work of Powell and Brainard. Under Powell, the Fed provided stimulus money to boost the recovery.

“As I’ve said before, we can’t just return to where we were before the pandemic, we need to build our economy back better, and I’m confident that Chair Powell and Dr. Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before,” Biden said in a statement.

“Together, they also share my deep belief that urgent action is needed to address the economic risks posed by climate change and stay ahead of emerging risks in our financial system,” the president said.

“Fundamentally, if we want to continue to build on the economic success of this year, we need stability and independence at the Federal Reserve – and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” Biden said.

U.S. Treasury Secretary Janet Yellen, herself a former Fed chair, praised Powell’s reappointment, as did several Republican senators.

“The steady leadership of Chair Powell & the Federal Reserve helped ensure our economy was able to recover from a once-in-a-generation health & economic crisis,” Yellen said. “I’m pleased our economy will continue to benefit from his stewardship, & the expertise & experience of Lael Brainard.”
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This holiday season promises to be an extraordinary one. Experts say supply chain issues, the pandemic, inflation and online sales will impact holiday shopping. Maxim Moskalkov has the story. VOA video by Anatolie Casenco.
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A Kenyan ride-hailing company has introduced electric bicycle rentals for the first time in the capital, where air pollution and motor vehicle traffic are problems. Lenny Ruvaga reports from Nairobi.
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A Sydney restaurant is using a Chinese-made, multi-lingual hospitality robot to address chronic staff shortages as Australia’s economy begins to recover from COVID-19 lockdowns and border closures. 

The robot waiter is programmed to know the layout of the tables and delivers food from the kitchen. It is also multi-lingual, programmed to communicate in English and Mandarin. The so-called BellaBot is built by the Chinese firm PuduTech. 

Each machine costs about $17,000. They can be leased for $34 per day for each device, or the equivalent of two hours’ wages for restaurant staff. The devices are in use in other Australian restaurants and imports into Australia appear to be unaffected by recent trade tensions between the two countries. 

Liarne Schai, the co-owner of the Matterhorn Restaurant in Sydney, is delighted with her new mechanical staff member. 

“Ah, love the robot. Love the robot, she makes my life a lot easier. It is like a tower that has got four trays. It will carry eight of our dinner plates in one go. She is geo-mapped to the floor (customer names, location of tables, etc.) The robot knows where all our tables are,” Schai said.  

Australia’s hospitality workforce has traditionally relied on international students. They have, however, been restricted from entering after Australia closed its borders to most foreign nationals in March 2020 in an effort to curb the spread of the coronavirus.  

Labor shortages are affecting not only hospitality in Australia, but a range of industries from construction to information technology.  

Liarne Schai says she has tried for months without success to recruit workers. 

“It is the biggest issue we have at the moment. We have been running ads for chefs, for waiters, for kitchen hands for six months and we have had zero applicants. We are offering above award wages, we are offering bonuses, we are offering everything you can think of to attract appropriate staff and I am not even getting inappropriate staff, or untrained staff. I am just getting nobody.” 

Labor shortages should ease when Australia reopens its borders to foreign nationals, but analysts expect many vacancies will remain unfilled.  

Employer groups have demanded that Australia increase its intake of migrant workers. 

Australia’s official unemployment rate stands at 5.2%.   

But with more than 700,000 Australians without a job, there are calls for the government to boost domestic training programs and wages. 
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On a recent afternoon, Tina Singh watched nearly a dozen students at a suburban Los Angeles truck-driving school backing up their practice vehicles into parking spaces. Many had never operated a manual transmission before.

“It’s an exciting time to be a truck driver right now because there’s so much demand for drivers,” said Singh, the school’s director. “Our yards are busy, and they’re very vibrant with a lot of activity.”

Business is booming at the California Truck Driving Academy amid a nationwide shortage of long-haul drivers that has led to promises of high pay and instant job offers. The Inglewood school has seen annual enrollment grow by almost 20% since last year, and has expanded to offering night classes.

“Everything in this country runs by truck at some point or another,” Singh said. “And so, you know, you need truck drivers to move goods.”

The U.S. is about 80,000 drivers short due to a convergence of factors, according to Nick Vyas, executive director of the University of Southern California’s Marshall Center for Global Supply Chain Management.

Consumer spending is 15% above where it was in February 2020, just before the pandemic paralyzed the economy. Production rose nearly 5% over the past year as U.S. factories worked to keep up with an increased demand for goods, according to the Federal Reserve. Imports have narrowed the gap.

At the same time, many U.S. workers decided to quit jobs that required frequent public contact. This created shortages of workers to unload ships, transport goods and staff retail shops.

In California, the straining supply chain is illustrated at the Ports of Los Angeles and Long Beach, where dozens of ships wait off the coast to be unloaded. The average wait is nearly 17 days, despite around-the-clock port operations beginning in October.

A lack of drivers at the ports has helped fuel the surge at the nearby California Truck Driving Academy, where instructors in reflective vests keep watch as students practice steering big rigs around a fenced-in paved lot.

“You’re kind of helping the community out, and you’re making money at the same time,” student Thierno Barry said. “It’s a win-win situation.”

Barry, 23, was happy to be behind the wheel on his first day, despite rolling over several orange safety cones.

“I feel great, especially during the pandemic,” he said.

Meanwhile, the school is facing its own shortage — of truck driving instructors.
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For weeks, governments and policymakers across the world have been suggesting the recent spikes in consumer and energy prices are transitory and rising inflation will ease, once pandemic-related chain-supply disruptions and labor shortages are resolved and the global economy reboots.

But recent figures suggest inflation may persist for some time, prompting worries about an explosive cost-of-living crisis, which could roil the domestic politics of countries and disrupt the electoral plans of incumbent parties and their leaders.

Central bankers have been saying the price increases of goods, rent, food and energy are one-offs, the consequences of economies struggling to recover from the induced coma of COVID-19 lockdowns and pandemic restrictions. But new data on inflation from around the world have exceeded forecasts, and central bankers are now being criticized for failing to act to restrain surging prices.

Bank of England stands pat

Central banks are coming under mounting pressure to raise interest rates but are nervous about acting too hastily and reversing recovery by reducing stimulus measures. The Bank of England earlier this month decided not to raise interest rates despite its governor, Andrew Bailey, earlier saying bankers “will have to act and must do so if we see a risk, particularly to medium-term inflation and to medium-term inflation expectations.”

Recent figures show inflation in Britain has now jumped to its highest level in nearly a decade, with the consumer price index climbing 4.2% in October from a year earlier. The Bank of England has an official inflation target of 2%. The bank’s decision not to raise its key rate, leaving it at 0.1%, confounded the financial markets and sent the pound plunging in value, and the inaction is still being criticized by many economic commentators.

They include Neil Wilson of Markets.com, who says the governor’s “credibility is at stake.”

Likewise, in the United States, the Federal Reserve is coming under fire over rising inflation. Earlier this week, Mohamed El-Erian, chief economic adviser at Allianz and an influential commentator, said he thought America’s central bank was losing credibility over its long-standing view that inflation is transitory.

“I think the Fed is losing credibility. I’ve argued that it is really important to re-establish a credible voice on inflation and this has massive institutional, political and social implications,” he said.

El-Erian told CNBC-TV the Federal Reserve’s inflation stance risked undermining President Joe Biden’s economic agenda, warning that policymakers should not forget that those on low incomes are the hardest hit by rising consumer prices.

In the US

The rapid increase in household living costs already is being felt by Americans.

According to a series of opinion polls conducted by the pollster YouGov for The Economist magazine, 46% of Americans said they believed the state of the economy was “getting worse,” with only 19% saying it was “getting better.”

In the U.S., the consumer price index rose 6.2% in the 12 months ending in October, the highest rate in three decades. Americans said rising wages were not keeping up with rapidly increasing prices. Fifty-six percent of the respondents to YouGov said they were having trouble affording fuel, 48% could not easily pay their rent or mortgages and 45% said they were struggling to feed their families.

Some member states of the European Union also are facing a cost-of-living crisis.

Romania reported in October an annual inflation rate of 6.5%, the highest increase in consumer prices among EU member states in southeast Europe, according to Eurostat, the EU’s statistical office. Eurozone inflation is running at 4.1%, more than double the European Central Bank’s target.

Increases seen as transitory

This week, European Central Bank President Christine Lagarde conceded that Eurozone inflation likely would remain elevated for longer than had been expected. She remained wedded to the idea that price increases were likely transitory, and she was still forecasting inflation would drop below the bank’s 2% target in the medium term.

“We still see inflation moderating in the next year, but it will take longer to decline than originally expected,” she told lawmakers at the European Parliament.

Some economists in Europe, however, question her optimism. They say the pandemic is far from over, pointing to a fourth wave prompting rising cases across much of the continent and the prospect of a return of economically damaging retractions. Germany has declared a state of emergency and Austria has announced a full lockdown to begin Monday, becoming the first European country to go back under a full lockdown and the first to make COVID-19 vaccination compulsory.

Germany’s coronavirus situation is so grave that a lockdown, including for the vaccinated, cannot be ruled out, German Health Minister Jens Spahn said Friday.

“We are in a national emergency,” he told a news conference.

The path back to normality is now again murky for Europe, and economists say the impact of a fourth wave of the coronavirus on household budgets is going to be significant — this at a time when the price of almost everything is going through the roof.
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In its annual report on the status of global trade, the World Trade Organization finds that the increasing interconnectedness of the world’s economies is a double-edged sword. 

While this globalization makes individual countries more vulnerable to short-term shocks, the WTO says, it also allows them to recover far more quickly than they would have in the past. 

The report finds, among other things, that global trade in merchandise, after plummeting sharply in the early months of the coronavirus pandemic, has already rebounded to above pre-pandemic levels. By the middle of 2022, trade volumes will have caught up with the pre-pandemic trend, meaning that the amount of goods being bought and sold internationally will be at the same level that economists would have predicted if there had been no pandemic at all. 

In a foreword to the report, WTO Director-General Dr. Ngozi Okonjo-Iweala said the global response to the COVID-19 pandemic is an example of both the challenges and the benefits of increased globalization. 

“The deep interconnections of travel, trade and financial flows that characterize our era allowed the novel coronavirus and its associated economic shocks to spread around the world in a matter of weeks. Earlier pandemics took months, even years, to go global,” she wrote.

“Yet, globalization was also at the heart of why this virus was met with vaccines in record time. Scientists were able to share ideas and technology across borders, backed by public and private funding for research and development,” she wrote. “As the new vaccines proved to be safe and effective, supply chains cutting across hundreds of sites in a dozen or more countries came together to provide the specialized inputs and capital goods needed for vaccine production on a large scale — all within a year.” 

Shortages in the US 

Scott Lincicome, a senior fellow in economic studies at the Cato Institute and a frequent writer on trade issues, told VOA that the WTO’s analysis holds up to scrutiny. 

“We’ve seen this play out during the pandemic,” Lincicome said. “Companies that were more domestically oriented really didn’t end up better off than more globally diversified companies.” 

In the United States, he said, some of the most significant shortages and price increases involved goods the United States largely produces on its own, like pickup trucks and food. 

“Pickup trucks were in higher shortage last year than sedans, and we import more sedans,” he said. “If you look at food production this year, most of our food production is domestic. But some of the biggest shortages and price hikes we’re seeing are on food.” 

Interconnectedness tied to stability 

The report also found that the more diversified a country’s trading relationships were with the rest of the world, the less likely they were to experience significant economic volatility. 

Drawing on data collected by the International Monetary Fund, the authors established that countries with high levels of trade diversification in 2008 were likely to suffer far less volatility, measured as deviation from average annual Gross Domestic Product, over the 10-year period ending in 2018. 

“Trade allows a country to diversify its sources of demand and supply, thereby reducing the country’s exposure to country-specific demand and supply shocks,” the report finds. “For example, when a country has multiple trading partners, a domestic recession or a recession in any one of its trading partners translates into a smaller demand shock for its producers than when trade is more limited.” 

‘Reshoring’ production may not be helpful 

The report also warns against the temptation of “reshoring,” that is, the effort some countries are making to become self-sufficient in key industries.

Especially in the early months of the pandemic, there were calls in many countries, including the United States, to reduce reliance on foreign suppliers for critical medical equipment, personal protective gear and vaccine components. 

In another example, former President Donald Trump placed tariffs on foreign-made steel in an effort to force the return of steel production to the United States, saying it was necessary for national security to be self-sufficient in the production of the metal.

Trump’s effort was ultimately unsuccessful, and if the report is correct, that may be reason for U.S. companies that use steel to be grateful. 

“Restricting trade and promoting national self-sufficiency almost inevitably render national economies less efficient in the long run, as such policies ultimately drive up prices of goods and services and restrict access to products, components and technologies,” the report warns. 

Lincicome said the ultimate goal of the WTO in dissuading countries from reshoring production is to maintain healthy economic ties across borders.

“The WTO is responding to a pretty significant threat from certain policymakers, whose knee-jerk response to the pandemic is to employ more protectionism,” he said. “In terms of economics, that’s a bad idea. But also, I think in terms of geopolitics, the more that countries turn inward, the more likelihood there is for there to be some sort of future tensions.” 

 
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María Ribeiro da Silva, 64, spent a hot afternoon hawking a new contraption to acquaintances and friends who passed by her small grocery store on the outskirts of São Paulo, Brazil’s largest city and home to more than 12 million people.

Everyone who passed by received the same invitation from her: “Come, come and see my stove. It’s beautiful. I made it.”

Each guest received the same explanation: “I built a real wood fire oven, with a chimney and everything. No more smoke, no more heat.”

It had been almost 50 years since Ribeiro da Silva cooked with firewood. Since she arrived in São Paulo in 1974, fleeing drought, hunger and poverty in the impoverished northeast region of Brazil, she has only cooked with gas.

“I spent my childhood using firewood. We didn’t have gas. We didn’t have the money to have a real stove. But since I arrived in Sao Paulo … wood was in the past,” she told VOA. 

But with the Brazilian economy worsening, and the devastating effects of the COVID-19 pandemic on the poorest parts of the population, firewood has become the only option for millions of families like Ribeiro da Silvas’. 

It was a slow and gradual process for Ribeiro da Silva. First, firewood was only used in extreme cases when the gas ran out and there was not enough money to replace it. But when she lost her job as a cleaner at a company in downtown São Paulo six months ago, firewood became the primary fuel to cook food.

“Now, I only use the gas stove for simple things like making coffee or heating the food I cooked on firewood. I don’t have any more money to buy gas. The price is too high. It’s impossible,” she said. 

Skyrocketing fuel prices

According to data from the Brazilian Institute of Geography and Statistics, at least 25% of the Brazilian population is using wood as their primary cooking source.

This was before the onset of the COVID-19 pandemic.

“Due to the pandemic, the Brazilian Statistical Institute stopped carrying out quarterly in-person surveys, so we don’t have data for 2020 and 2021,” said Adriana Gioda, a professor in the department of chemistry at Pontifical Catholic University of Rio de Janeiro and a leading researcher on firewood consumption by Brazilian families. 

“But since 2016, when the federal government cut subsidies for residential gas and tied the fuel price policy to the international prices, there has been a steady growth in the use of firewood to make food,” she told VOA. 

Fuel prices have been rising steadily over the past five years but have skyrocketed since President Jair Bolsonaro took office in 2019. He promised not to interfere with the country’s state oil company and allow fuel prices to follow the international market.

This year alone, the price of residential gas rose by an average of 35%. Liquefied petroleum gas is the primary fuel for food production in Brazil, and its cost is linked directly to the price of the oil barrels.

‘Back in time’ 

“In the interior of Brazil, in rural and more isolated areas, using firewood is a tradition. But what impressed us most is that the use of wood is advancing precisely in the most urban areas, in large Brazilian cities, such as Rio de Janeiro and São Paulo,” Gioda said. 

And it is rising in areas such as Jardim Marajoara, a poor neighborhood of migrants from the northeast region of Brazil on Sao Paulo’s outskirts, where Ribeiro da Silva lives. It is in these regions that the poorest and those most affected by the economic crisis are concentrated.

Juarez Viana, a bus driver who also lost his job during the pandemic, has turned to firewood to cook. He, like Ribeiro da Silva, lives in a suburb of São Paulo that is sprawling into the last green areas of the city. Once a week, he crosses the street and enters a small forest to fetch wood.

“It’s hard work, and it seems like I’ve gone back in time,” said Viana, who is also a migrant from the Brazilian northeast. At 49, he remembers cooking with wood as a child. “But it’s worth it. We do not have more money to buy gas. The price is out of control. I’ve never seen anything like this.”

“We are going back in time, going back at least half a century,” said pulmonologist Elie Fiss, a research director at Hospital Alemão Oswaldo Cruz. “Since the 1960s, we no longer saw respiratory problems related to the use of firewood for cooking. But with so many people going back to the firewood, this is a problem that will soon return to hospitals.”

 
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Marco Metzler of Switzerland gets 2,000 new followers a day on LinkedIn, all watching to see what will happen to his money. Metzler invested $50,000 last month in the offshore bonds of real estate developer China Evergrande Group to see if he would get any returns. The former Fitch Ratings analyst is not expecting much. He’s out to prove a point about China’s troubled property sector by chronicling the fate of his investment on social media. 

“I was concerned about what was going on, and from my past I’m able to read rating reports and also to see what’s going on in the world in economics, and I felt obligated to speak out to the world and to warn about that situation,” Metzler told VOA. “We didn’t invest to get the money back, so I’m fully aware this will be lost.” 

Evergrande has struggled since last year, when the Chinese government began clamping down on the country’s property sector to rein in excessive debt and cap speculation.

Towering apartment blocks today extend far into the suburbs of major Chinese cities, but many flats are unoccupied, owned instead by absentee speculators and their banks. Evergrande Group, one of China’s biggest property developers by revenue, is now selling assets and may be staring down a massive restructuring to ease debt. 

Companies or governments that invest in offshore bonds, and individuals who trade stocks listed outside mainland China and its $15.42 trillion economy, are coming to terms — albeit more quietly than Metzler — with the Chinese property crisis of 2021. These troubles are threatening bond returns, lowering some stock prices and could erode at least a quarter of the world’s second largest economy. 

“I don’t think anyone debates the importance of the real estate market on the Chinese economy,” said James Macdonald, head of the property services firm Savills Research in Shanghai, who estimates real estate at 25% to 30% of China’s economy. 

“If we do see a significant slowdown in the real estate market, it will have an impact in terms of domestic economic growth rates, and that could have a knock-on effect in terms of global economy,” Macdonald said. 

As many analysts have noted, any major economic shocks that hit China, a country closely tied to the global manufacturing supply chain, and whose massive consumer base importers and exporters rely on, are inevitably felt around the world. 

Property crisis: Evergrande and beyond 

Evergrande is a bellwether firm that is more than $300 billion in debt. Hong Kong-listed shares in Evergrande have tumbled since February, though the developer averted default in October by paying interest on an overseas bond. 

Another Chinese development giant, Kaisa Group Holdings, faces limited funding access and uncertainty over refinancing a “significant amount” of U.S.-dollar bond payments into next year “in light of ongoing capital-market volatility,” Fitch said in an e-mailed news release last month. 

Smaller property developers are likely to rattle bond markets outside China because they are “less sound” than bigger ones, said Lillian Li, a vice president-senior credit officer at the Moody’s ratings service. 

“We see that the offshore bond market has actually shown larger volatility than the domestic market in front of these regulatory crackdowns, including in the property sector,” Li said. 

The Hang Seng Properties Index in Hong Kong, where foreigners are allowed to trade shares of Chinese companies, has lost about 1.2% year to date. 

Municipal officials in some cities capped home purchase prices in September to deter speculators, further hobbling property momentum in China. The domestic property market could shrink by half a percent in 2022, Li said. Last month, prices for new as well as resale homes fell amid a fall in construction starts. 

What happens next 

Evergrande has offered its investors cash payment by installments as well as putting forth actual structures as repayment assets, the state-run China Daily news website says. 

Central government officials hope to contain property speculation and leave property for people to occupy, the official Xinhua News Agency reports. 

About $52 billion in Chinese property bonds will mature next year and $44 billion the following year, said Henry Chin, Asia Pacific research head with the real estate services firm CBRE. Other bond issuers will default, he forecasts. 

No offshore investors want the bonds now, said Liang Kuo-yuan, president of the Taipei-based Yuanta-Polaris Research Institute, though he believes Taiwanese insurers and pension funds have invested in the past. 

“Taiwan’s insurers more or less will buy high-yield and high-risk investment products, because the interest rates on policies they’ve sold in the past are too high,” Liang said. 

Evergrande was once seen as the epitome of a Chinese property mainland market, Liang added. China’s real estate sector, the world’s largest, grew briskly from 2010 to 2018, says investment bank J.P. Morgan. 

But not all is lost, some analysts say. 

Investors in private equity for distressed debt could get a lift from China’s property spillover if companies look for new ways to repay debt, said Chin of CBRE. Some stock-buying vehicles have made money, too. Shares of the TAO-Invesco China Real Estate exchange-traded fund of Chinese stocks including Evergrande, for example, has grown 65% year to date. 

But back in Switzerland, Metzler wrote on LinkedIn that Evergrande had “officially defaulted on overdue interest payments” and that his current company, DMSA, would file a bankruptcy case against the group. He calls China’s property market “a first domino” in a broader financial and economic crisis. 

“The old system needs to come down before a new system will be established,” he told VOA. 
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U.S. President Joe Biden is headed Wednesday to the country’s auto-manufacturing hub in Detroit, Michigan, to promote the sale of all-electric vehicles in the future even as motorists are facing sharply higher gasoline prices to fuel the cars they almost uniformly drive now.

Biden, on a victory lap to highlight provisions of the trillion-dollar infrastructure package he championed and signed into law on Monday, plans to visit an electric vehicle assembly plant at General Motors, the biggest U.S. car maker that says it plans to go all-electric by 2035.

The president’s infrastructure package calls for construction of $7.5 billion worth of electric vehicle charging stations across the country — perhaps a half-million chargers — but Americans have been slow to embrace the purchase of electric vehicles. Last year, only 1.7% of vehicles sold in the U.S. were battery-powered, one-third of the Chinese market, and far behind world-leading Norway, where nearly three-fourths of vehicles sold are plug-in.

Ahead of his visit to Detroit, the White House said that with Biden’s approval of the infrastructure legislation, he “has sent a clear signal to the rest of the world that America can lead this race as we choose to build these electric vehicles and batteries in the United States and advance our national security by strengthening our domestic supply chains.”

The White House said the legislation will boost the creation of high-paying, union jobs, while two key Biden advisers, Brian Deese, director of the National Economic Council, and Jake Sullivan, national security adviser, said in an opinion column in the Detroit Free Press that the infrastructure legislation will help America regain its global competitiveness. 

“Nobody knows this better than Detroit, which has been at the heart of American industrial strategy in the past and now can again,” the Biden advisers said.

But currently, many more electric vehicles are sold in Europe and China because of financial incentives for consumers and government regulations. Surveys show there are about 1.3 million electric vehicles in use in the U.S. out of a world total of 7 million, but Biden has set a goal of 50% electric vehicle sales in the U.S. by 2030.

For the moment, however, many U.S. motorists are concerned about spiraling gasoline prices they are paying at service stations, the highest since 2014. U.S. motorists are typically paying $3.30 a gallon (3.8 liters), $1.08 more than 12 months ago, pinching household budgets, along with higher food prices.

But some Republican opponents of Biden, even some who voted for the infrastructure package like Senate Republican leader Mitch McConnell, have attacked Biden for being focused with electric vehicle technology at a time when Americans are faced with higher gasoline prices and natural gas price hikes to heat their homes in the winter months ahead.

“The Biden administration doesn’t have any strategic plan to snap its fingers and turn our massive country into some green utopia overnight,” McConnell said Tuesday.

“They just want to throw boatloads of government money at things like solar panels and electric vehicles and hope it all works out,” said McConnell, one of 19 Republican senators who voted in favor of the infrastructure bill, along with 13 Republicans in the House of Representatives.

Biden wants to provide more incentives to push American motorists to buy electric vehicles, calling for a $7,500 tax credit for those who buy electric vehicles through 2026 as part of his $1.85 trillion social safety net legislation that the House is planning to vote on later this week.
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The World Health Organization says Europe is once again the epicenter of the pandemic. As Henry Ridgwell reports, the latest wave of infections is casting a shadow over recent signs that European economies were rebounding.
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Treasury Secretary Janet Yellen told Congress Tuesday that she believed she would run out of maneuvering room to avoid the nation’s first-ever default soon after December 15. 

In a letter to congressional leaders, Yellen said that she believed Treasury could be left with insufficient resources to keep financing the government beyond December 15.

Yellen’s new date is 12 days later than the December 3 date she provided in a letter to Congress on October 18, after Congress had just passed a $480 billion increase in the debt limit days before as a stopgap measure. 

As she has done in the past, Yellen urged Congress to deal with the debt limit quickly to remove the possibility of a potential default on the nation’s obligations. 

“To ensure the full faith and credit of the United States, it is critical that Congress raise or suspend the debt limit as soon as possible,” Yellen wrote to congressional leaders. 

Yellen has repeatedly warned that failure to deal with the debt limit and allowing the government to default would be catastrophic and likely push the country into a recession. 

In her letter, Yellen said that the extra time reflected more up-to-date estimates of government revenues and spending and was impacted by the infrastructure bill that President Joe Biden signed into law Monday. That legislation requires the transfer by Treasury of $118 billion by December 15 into the Highway Trust Fund. 

Yellen said that while she had a “high degree of confidence she will be able to finance the U.S. government through Dec. 15” and complete the Highway Trust Fund transfer, there are scenarios where the government will be left with insufficient resources to finance operations beyond that date, she said. 

The need to raise or suspend the debt limit is just one of the budget issues facing Congress. Lawmakers must also approve a budget by December 3, when the current stopgap funding measures run out. Failure to do that would trigger a government shutdown. 

And Democrats are aiming to approve a $1.75 trillion measure to expand the social safety net and deal with climate change threats. Speaker Nancy Pelosi has said she hopes the House can pass this measure, which Republicans oppose, this week. It must also pass the Senate. 

 
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Lawmakers on Capitol Hill are renewing a push to pass legislation that would boost U.S. competition with China, amid rising concerns about the global supply chain.     

Senate Majority Leader Chuck Schumer said Tuesday the long-stalled U.S. Innovation and Competition Act (USICA) would be added to the National Defense Authorization Act (NDAA), the massive annual defense spending bill that needs to be passed by the end of the year.   

“A generation ago we used to produce about a third of the world’s chip supply – now fewer than 12% are made in America while other countries have lapped us, particularly China. This hurts American workers, American consumers and American national security. We should pass USICA this year – and it’s a bipartisan bill – so we can strengthen domestic chip production,” Schumer said Tuesday in remarks on the Senate floor.   

The USICA passed the U.S. Senate by a 68-32 vote in June but has yet to receive a vote in the U.S. House of Representatives. If passed, the measure would provide $190 billion in funding aimed at addressing areas of competition with China, including semiconductor production, technology security and training for the U.S. workforce. The bill would also provide for automatic sanctions on Chinese companies committing intellectual theft or cyberattacks in the United States. 

Sources told Reuters this week that China is actively lobbying against the legislation, sending letters to U.S. executives urging them to lobby Congress to alter or drop those bills.   

In a statement released in June when the USICA passed the U.S. Senate, the Foreign Affairs Committee of China’s National People’s Congress (NPC), said “The bill is full of Cold War mentality and ideological prejudice … It slanders China’s development path and its domestic and foreign policies.”   

The Biden administration has expressed support for the measures. But any version of the NDAA passed in the U.S. Senate would still have to be reconciled and passed in the U.S. House before heading to the White House to be signed into law.   

Addressing U.S. competition with China is one of the few areas of broad bipartisan support on Capitol Hill, although lawmakers differ on the approach. 

Following President Biden’s virtual meeting with Chinese President Xi Jinping this week, ranking Senate Foreign Relations Committee member Senator Jim Risch said in a statement, “While President Biden used this meeting to raise concerns regarding Beijing’s unfair trade and economic practices and the importance of transparency in global health, it’s past time for concrete results from Beijing. If President Xi actually wants a cooperative relationship with the United States, then he must stop threatening Taiwan.”   

Republican Senator Marco Rubio filed dozens of amendments to the NDAA addressing U.S. competition with China this week, including measures that would strengthen the U.S. relationship with Taiwan, provide funding for analysis of Chinese economic initiatives in developing African nations and clear the way for sanctions on Chinese individuals involved in reclaiming disputed areas in the South China Sea.   

There is strong bipartisan support in the U.S. Senate for another measure that would provide U.S. support for Taiwan’s admission into the Inter-American Development Bank as a non-borrowing member.   

“Despite Beijing’s reckless and hostile tactics to deny it participation on the world stage, Taiwan has proven a formative and effective partner across the Western hemisphere,” said Senate Foreign Relations Committee Chairman Bob Menendez in a bipartisan October 27 statement supporting the legislation.   

Earlier this week, six U.S. lawmakers visited Taiwan as part of a congressional visit to the island whose status has proved to be a constant irritant in U.S.-Chinese relations. China condemned the use of an American military aircraft for the visit.
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