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The U.S. government recorded its second largest budget deficit on record in fiscal year 2021, but it was down somewhat from 2020. 

This year’s deficit was $2.77 trillion compared to $3.13 trillion last year, with both years reflecting massive government spending in response to the COVID-19 pandemic. 

The Biden administration said the lower number was due to a recovering economy leading to increased tax revenues. 

“Today’s joint budget statement is further evidence that America’s economy is in the midst of a recovery,” Treasury Secretary Janet Yellen said in a statement issued with the acting head of the Office of Management and Budget, Shalanda Young. 

Before the fiscal 2020 record deficit, the previous record was $1.4 trillion in 2009 as the Obama administration spent heavily to try to lift the country out of the recession caused by the 2008 financial crisis. 

Some information in this report comes from Reuters and The Associated Press. 

 
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The long sheds at North America’s largest bitcoin mine look endless in the Texas sun, packed with the type of machines that have helped the United States to become the new global hub for the digital currency. 

The operation in the quiet town of Rockdale was part of an already bustling U.S. business — now boosted by Beijing’s intensified crypto crackdown that has pushed the industry west. 

Experts say rule of law and cheap electricity in the United States are a draw for bitcoin miners, whose energy-gulping computers race to unlock units of the currency. 

“There’s a lot of competitors coming into Texas because they are seeing the same thing (as) when we came here,” said Chad Everett Harris, CEO of miner Whinstone, which operates the Rockdale site owned by U.S. company Riot Blockchain.  

China was the undisputed heartland of crypto mining with about two-thirds of global capacity in September 2019, but last month Beijing declared illegal all transactions involving crypto money as it seeks to launch one of its own. 

Figures released Wednesday by the University of Cambridge showed that activity in the United States more than doubled in the four months to the end of August, increasing the market share held by the world’s biggest economy to 35.4%. 

Samir Tabar, chief strategy officer at miner Bit Digital, said the company started to pull out of China in 2020 and accelerated that process as the crackdown intensified. They have operations in the United States and Canada. 

“China’s bitcoin mining ban was basically an unintentional gift to the U.S.,” he said. “Thanks to their ban an entire sector migrated to North America — along with innovation, labor and machines.” 

Some of the key pulls toward the United States are simply a democratic government, a court system and the power to protect property rights. 

“If you’re going to make long-term investments and accumulate wealth in a country, you want to have some confidence that it’s not going to be taken away by the government,” said David Yermack, a crypto expert at New York University.  

‘Poetic’ return to America  

He expected the shift to the United States to be temporary, saying places like Nordic countries have cheap and abundant renewable energy, as well as plenty of cold weather to cool the hot-running mining machines.  

The steady increase in U.S.-based mining operations has fanned the ongoing environmental criticisms of the industry’s massive annual electricity consumption — more than what the Philippines uses in a year, according to Cambridge University data. 

An ongoing backlash has been fueled by concerns the industry relies on carbon-emitting power sources that contribute to climate change. 

“To think that we’re causing harm or pollution or all those things here … the majority of our power comes out of the ERCOT grid and that profile is extremely friendly to the environment,” Harris said, referring to the Texas power network operator. 

According to ERCOT’s data for 2020, about 46% of its power came from natural gas while wind and solar combined for 25% with coal at 18%. 

The price miners pay for electricity is key, and a place like Texas is desirable because the market is de-regulated so companies can have more flexible terms, said Viktoriya Zotova, a business school professor at Georgetown University. 

“In principle, they can buy the electricity when it’s cheaper and not buy it when it’s more expensive,” she said. 

While there are obvious reasons for the crypto world’s migration, some also see a bit of poetry in mining operations coming to the United States from China. 

Tabar, from miner Bit Digital, said his company has a site in Buffalo, New York, which used to be one of the country’s main manufacturing hubs but lost jobs and prosperity as production work shifted to places like China. 

“There is a bit of a poetic thing going on,” he noted. “It dawned on me how this is going full circle.” 
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China’s economic growth is sinking under pressure from a construction slowdown and power shortages, prompting warnings about a possible shock to its trading partners and global financial markets. 

The world’s second-largest economy grew by a weaker-than-expected 4.9% over a year ago in the three months ending in September, down from the previous quarter’s 7.9%, government data showed Monday. Factory output, retail sales and investment in construction and other fixed assets all weakened. 

Manufacturing has been hampered by official curbs on energy use and shortages of processor chips and other components due to the coronavirus pandemic. Construction, an industry that supports millions of jobs, is slowing as regulators force developers to cut reliance on debt that Chinese leaders worry is dangerously high. 

“Ripple effects to the rest of the world could be significant” due to weaker Chinese demand for raw materials, said Mo Ji of Fidelity International in a report. “Even developed markets, including the U.S., would not be immune to a significant tightening in global financial conditions as a result of a negative China growth shock accompanied by financial stress.” 

Compared with the previous quarter, the way other major economies are measured, output barely grew in the July-September period, expanding by just 0.2%. That was down from 1.2% in the April-June period and one of the past decade’s weakest quarters. 

The slowdown adds to pressure on Beijing to prop up activity by easing borrowing controls and spending more on building public works. But forecasters said even if that happens, activity will weaken before policy changes take effect. 

“Growth will slow further,” Louis Kuijs of Oxford Economics said in a report. 

Chinese leaders are trying to steer the economy to more sustainable growth based on domestic consumption instead of exports and investment and to reduce financial risk. 

Construction and housing sales, an important source of demand for steel, copper and other industrial imports, have slowed since regulators ordered developers to reduce their debt levels. 

One of the biggest, Evergrande Group, is struggling to avoid defaulting on $310 billion owed to banks and bondholders. That has fueled fears about other developers, though economists say the threat to global financial markets is small. 

Factories in some provinces were ordered to shut down in mid-September to avoid exceeding official goals for energy use and energy intensity, or the amount used per unit of output. Some warned deliveries of goods might be delayed, raising the possibility of shortages of smartphones and other consumer products ahead of the Christmas shopping season. 

Factory output barely grew in September, expanding by only 0.05% compared with August. That was down from the 7.3% growth for the first nine months of the year. 

Private sector forecasters have cut their growth outlook this year for China, though they still expect about 8%, which would be among the world’s strongest. The ruling Communist Party’s official target is “more than 6%,” which leaves Beijing room to keep its controls in place. 

The near-term outlook “remains difficult,” said Rajiv Biswas of IHS Market in a report. Real estate also is suffering from “fears of contagion to some other property developers.” 

This year’s economic figures have been exaggerated due to comparison with 2020, when factories and stores were closed to fight the coronavirus. 

Output grew by a record 18.3% in the first quarter of 2021, but forecasters said the rebound already was leveling off. 

In September, growth in retail spending weakened to 4.4% over a year earlier, down from 16.4% in the first nine months. 

Investment in real estate, factories, housing and other fixed assets rose 0.17% in September, down from 7.3% for the first nine months. 

The latest figures indicate “the property sector fallout will be a significant drag on growth in the coming quarters,” said Fidelity’s Mo. “Even significant policy easing now, which is still unlikely in our view, will take time to propagate into the real economy.” 

Auto sales in the global industry’s biggest market fell 16.5% in September from a year earlier, according to the China Association of Automobile Manufacturers. The group said production was disrupted by shortages of processor chips. 

Imports, an indicator of Chinese domestic demand, rose 17.6% in September over a year earlier, but that was about half the previous month’s 33% growth. 
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Union leaders have angrily reacted to the Zimbabwean government’s announcement Sunday that workers who have not been vaccinated against COVID-19 will no longer be allowed at work and will not be paid. This is seen as part of efforts to deal with high vaccination hesitancy in the southern African nation. .

Ndabaningi Nick Mangwana, Zimbabwe’s secretary for information, over the weekend told government-controlled media that all civil servants who have not been vaccinated against COVID-19 will not be allowed to work come Monday. 

“There is no extension to the deadline of 15 October, when civil servants are expected to all having been vaccinated, failure of which those who are not vaccinated would not be allowed to work. And further to that is the fact that those who are not vaccinated and those who are not working will not be paid because the thrust is that if you do not work, you don’t get paid,” he said.

Schoolteachers, who constitute the largest proportion of Zimbabwe’s civil servants, say the Friday deadline the government set was unilateral. 

“Fundamentally, there was no agreement over the issue of vaccination,” said Takavafira Zhou, president of Progressive Teachers Union of Zimbabwe. “Our position as workers has always remained that we encourage our members to be vaccinated. But by no means should our encouragement be misconstrued for mandatory vaccination. Our position is very clear: vaccination must be voluntary. Not mandatory. We must invest in the efficacy of vaccination — explaining to members how vaccination would assist them in terms of boosting their immunity but that has not been done.” 

Zimbabwe’s government says it has fully vaccinated 2,472,859 people since the program started in February. 

Zhou said Zimbabweans were shunning vaccinations for several reasons that the government must first understand, from religious reasons to lack of knowledge about COVID-19 vaccines to lack of trust in the imported Chinese SINOVAC and SINOPHARM vaccines. 

He said all civil servants must continue coming to work while unions were considering going to court over purported dismissals. 

“The members will only stop going to work if there is a formal letter from the Public Service Commission dismissing them. But even with that formal letter, it will still be challenged because its legality must also be established. But as of now the teachers still remain at their stations, demotivated of course, shimmering in poverty and misery but they remain employees of the government,” he said.

Zimbabwe currently has 132,333 confirmed coronavirus infections and 4,657 deaths, according to the Johns Hopkins Coronavirus Resource Center, which tracks the global outbreak. Civil servants — especially teachers — have long complained about lack of adequate protective equipment in classrooms to curb the spread of COVID-19. Zimbabwe’s government, however, maintains it is providing enough resources in the fight against the pandemic. 

 
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Like other ranchers across the country, Rusty Kemp for years grumbled about rock-bottom prices paid for the cattle he raised in central Nebraska, even as the cost of beef at grocery stores kept climbing.

He and his neighbors blamed it on consolidation in the beef industry stretching back to the 1970s that resulted in four companies slaughtering more than 80% of the nation’s cattle, giving the processors more power to set prices while ranchers struggled to make a living. Federal data show that for every dollar spent on food, the share that went to ranchers and farmers dropped from 35 cents in the 1970s to 14 cents recently.

It led Kemp to launch an audacious plan: Raise more than $300 million from ranchers to build a plant themselves, putting their future in their own hands.

“We’ve been complaining about it for 30 years,” Kemp said. “It’s probably time somebody does something about it.”

Crews will start work this fall building the Sustainable Beef plant on nearly 400 acres near North Platte, Nebraska, and other groups are making similar surprising moves in Iowa, Idaho and Wisconsin. The enterprises will test whether it’s really possible to compete financially against an industry trend that has swept through American agriculture and that played a role in meat shortages during the coronavirus pandemic.

The move is well timed, as the U.S. Department of Agriculture is now taking a number of steps to encourage a more diverse supply in the beef industry.

Still, it’s hard to overstate the challenge, going up against huge, well-financed competitors that run highly efficient plants and can sell beef at prices that smaller operators will struggle to match.

‘They’re ready to take a risk’

The question is whether smaller plants can pay ranchers more and still make a profit themselves. An average 620-kilogram steer is worth about $1,630, but that value must be divided between the slaughterhouse, feed lot and the rancher, who typically bears the largest expense of raising the animal for more than a year.

David Briggs, the CEO of Sustainable Beef, acknowledged the difficulty but said his company’s investors remain confident.

“Cattle people are risk takers and they’re ready to take a risk,” Briggs said.

Consolidation of meatpacking started in the mid-1970s, with buyouts of smaller companies, mergers and a shift to much larger plants. Census data cited by the USDA shows that the number of livestock slaughter plants declined from 2,590 in 1977 to 1,387 in 1992. And big processors gradually dominated, going from handling only 12% of cattle in 1977 to 65% by 1997.

Currently four companies — Cargill, JBS, Tyson Foods and National Beef Packing — control more than 80% of the U.S. beef market thanks to cattle slaughtered at 24 plants. That concentration became problematic when the coronavirus infected workers, slowing and even closing some of the massive plants, and a cyberattack last summer briefly forced a shutdown of JBS plants until the company paid an $11 million ransom.

The Biden administration has largely blamed declining competition for a 14% increase in beef prices from December 2020 to August. Since 2016, the wholesale value of beef and profits to the largest processors has steadily increased while prices paid to ranchers have barely budged.

Trying to retain workers with higher pay

The backers of the planned new plants have no intention of replacing the giant slaughterhouses, such as a JBS plant in Grand Island, Nebraska, that processes about 6,000 cattle daily — four times what the proposed North Platte plant would handle.

However, they say they will have important advantages, including more modern equipment and, they hope, less employee turnover thanks to slightly higher pay of more than $50,000 annually plus benefits along with more favorable work schedules. The new Midwest plants are also counting on closer relationships with ranchers, encouraging them to invest in the plants, to share in the profits.

The companies would market their beef both domestically and internationally as being of higher quality than meat processed at larger plants.

Chad Tentinger, who is leading efforts to build a Cattlemen’s Heritage plant near Council Bluffs, Iowa, said he thinks smaller plants were profitable even back to the 1970s but that owners shifted to bigger plants in hopes of increasing profits.

Now, he said, “We want to revolutionize the plant and make it an attractive place to work.”

‘They’re extremely efficient’

Besides paying ranchers more and providing dividends to those who own shares, the hope is that their success will spur more plants to open, and the new competitors will add openness to cattle markets.

Derrell Peel, an agricultural economist at Oklahoma State University, said he hopes they’re right, but noted that research shows even a 30% reduction in a plant’s size will make it far less efficient, meaning higher costs to slaughter each animal.

Unless smaller plants can keep expenses down, they will need to find customers who will pay more for their beef, or manage with a lower profit margin than the big companies.

“We have these very large plants because they’re extremely efficient,” Peel said.

According to the North American Meat Institute, a trade group that includes large and mid-size plants, the biggest challenge will be the shortage of workers in the industry.

It’s unfair to blame the big companies and consolidation for the industry’s problems, said Tyson Fresh Meats group President Shane Miller.

“Many processors, including Tyson, are not able to run their facilities at capacity in spite of ample cattle supply,” Miller told a U.S. Senate committee in July. “This is not by choice: Despite our average wage and benefits of $22 per hour, there are simply not enough workers to fill our plants.”

The proposed new plants come as the USDA is trying to increase the supply chain. The agency has dedicated $650 million toward funding mid-size and small meat and poultry plants and $100 million in loan guarantees for such plants. Also planned are new rules to label meat as a U.S. product to differentiate it from meat raised in other countries.

“We’re trying to support new investment and policies that are going to diversify and address that underlying problem of concentration,” said Andy Green, a USDA senior adviser for fair and competitive markets. 
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At an emergency conference this week, the European Union pledged more than 1 billion dollars in humanitarian aid to Afghanistan and neighboring countries, as the United Nations warns millions of Afghans are facing famine. But the United States has been cautious, saying it is sending humanitarian aid, but cannot provide funds directly to the Taliban-led government until they start respecting human rights and women’s rights. VOA’s Senior Diplomatic Correspondent Cindy Saine reports.
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Kenyan authorities say the economic losses caused by COVID are driving more people to fish illegally. Poaching has tripled since last year and caused the daily catch to drop from an estimated 600 tons to 200 tons, according to Kenya’s Maritime Fisheries Research Institute. As a result, the Coast Guard has been deployed to protect lakes from poachers. Victoria Amunga reports from Naivasha.
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The United States announced Friday an additional 9.6 million doses of Pfizer coronavirus vaccine are being shipped to Pakistan through the global vaccine-sharing COVAX initiative.

The shipment brings to more than 25 million the total number of COVID-19 vaccine doses donated by Washington to the Pakistani people, said the American Embassy in Islamabad.

“The United States is proud to partner with Pakistan to get effective, life-saving Pfizer vaccinations into the arms of Pakistanis, and Pakistan has done a great job of distributing our donated vaccines,” U.S. Chargé d’affaires Angela Aggeler was quoted as saying. “This donation comes just in time for young Pakistanis over age 12 to get their first jabs.” 

COVID-19 infections are decreasing in Pakistan, with fewer than 1,000 new daily cases reported on average. The government last week eased restrictions on almost all public movement, education activities and businesses across the country of roughly 220 million people.

The latest government data show there have been 1,262,771 confirmed cases of infections, 39,953 of them active, and 28,228 COVID-19-related deaths since the pandemic hit Pakistan. 

Officials reported Friday that more than 95 million doses have been administered to Pakistanis, including roughly 1 million in last 24 hours alone, since the national vaccination drive was rolled out in February.

The vaccination campaign has largely relied on Chinese vaccine, but the U.S. donations are helping officials overcome critical shortages of Western-developed anti-coronavirus shots. 

“These Pfizer vaccines are part of the 500 million Pfizer doses the United States purchased this summer to deliver to 92 countries worldwide, including Pakistan, to fulfill President [Joe] Biden’s commitment to provide safe and effective vaccines around the world and supercharge the global fight against the pandemic,” the U.S. Embassy noted in its statement. 

Washington has also delivered $63 million in COVID-19 assistance to Islamabad. 

The COVAX program is co-led by Gavi (the Vaccine Alliance), the WHO (World Health Organization) and CEPI (the Coalition for Epidemic Preparedness). The United States is the single largest contributor supporting the initiative toward global COVID-19 vaccine access.
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The Biden administration is taking steps to address the economic risks from climate change, issuing a 40-page report Friday on government-wide plans to protect the financial, insurance and housing markets and the savings of American families.

Under the report, the mortgage process, stock market disclosures, retirement plans, federal procurement and government budgeting are all being reconsidered so the country could price in the risks being created by climate change. The report is a follow-up to a May executive order by President Joe Biden that essentially calls on the government to analyze how extreme heat, flooding, storms, wildfires and broader adjustments to address climate change could affect the world’s largest economy.

“If this year has shown us anything, it’s that climate change poses an ongoing urgent and systemic risk to our economy and to the lives and livelihoods of everyday Americans, and we must act now,” Gina McCarthy, the White House national climate adviser, told reporters.

February storm in Texas led to widespread power outages, 210 deaths and severe property damage. Wildfires raged in Western states. The heat dome in the Pacific Northwest caused record temperatures in Seattle and Portland, Oregon. Hurricane Ida struck Louisiana in August and caused deadly flooding in the Northeast.

The actions being recommended by the Biden administration reflect a significant shift in the broader discussion about climate change, suggesting that the nation must prepare for the costs that families, investors and governments will bear.

The report is also an effort to showcase to the world how serious the U.S. government is about tackling climate change ahead of the United Nations Climate Change Conference running from Oct. 31 to Nov. 12 in Glasgow, Scotland.

Among the steps outlined is the government’s Financial Stability Oversight Council developing the tools to identify and lessen climate-related risks to the economy. The Treasury Department plans to address the risks to the insurance sector and availability of coverage. The Securities and Exchange Commission is looking at mandatory disclosure rules about the opportunities and risks generated by climate change.

The Labor Department on Wednesday proposed a rule for investment managers to factor environmental decisions into the choices made for pensions and retirement savings. The Office of Management and Budget announced the government will begin the process of asking federal agencies to consider greenhouse gas emissions from the companies providing supplies. Biden’s budget proposal for fiscal 2023 will feature an assessment of climate risks.

Federal agencies involved in lending and mortgages for homes are looking for the impact on the housing market, with the Department of Housing and Urban Development and its partners developing disclosures for homebuyers and flood and climate-related risks. The Department of Veterans Affairs will also look at climate risks for its home lending program.

The Federal Emergency Management Agency is updating the standards for its National Flood Insurance Program, potentially revising guidelines that go back to 1976.

“We now do recognize that climate change is a systemic risk,” McCarthy said. “We have to look fundamentally at the way the federal government does its job and how we look at the finance system and its stability.”
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First-time claims for U.S. unemployment compensation dropped last week to their lowest point since the coronavirus pandemic swept into the United States more than a year and a half ago, the Labor Department reported Thursday. 

A total of 293,000 jobless workers filed for assistance, down 36,000 from the revised figure of the week before. It was the lowest claims figure since the 256,000 total in mid-March last year, the government said.

The new figure was an indication the U.S. economy, the world’s largest, remains on a general recovery from the worst economic effects of the 19-month coronavirus pandemic, even as President Joe Biden and Washington policy makers voice concerns about other economic warning signs.

Filings for unemployment compensation often have been seen as a current reading of the country’s economic health, but economists are wary of sharply rising consumer prices, consumer goods supply chain issues that have severely slowed the unloading of dozens of container ships off the U.S. Pacific coast, and meager job growth.

Even as the U.S. said last month that its world-leading economy grew by an annualized rate of 6.7% in the April-to-June period, in September it added only a disappointing 194,000 new jobs, down further from the August figure of 235,000. The jobless rate fell to 4.8%, but that was because thousands of workers dropped out of the labor force.

The two-month total of more jobs was down sharply from the more than 2 million combined figure added in June and July.

About 8.4 million workers remain unemployed in the United States. There are 10.4 million available jobs in the country, but the skills of the available workers often do not match what employers want, or the job openings are not where the unemployed live.

Even with the limited job growth, the size of the U.S. economy — nearly $23 trillion — now 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.

Policy makers at the Federal Reserve, the country’s central bank, have signaled that in November they could start reversing the bank’s pandemic stimulus programs and next year could begin to increase its benchmark interest rate.

How fast the U.S. economic growth continues is unclear. The delta variant of the coronavirus is posing a threat to the recovery even as the number of new cases has been declining in recent weeks, now down to under 100,000 a day from the 150,000 or so that were being recorded. The number of deaths each day also has been dropping somewhat below the 2,000 total of a few weeks ago.

But more than 65 million eligible Americans remain unvaccinated — and many are refusing to get inoculated. Thousands of workers have gotten shots in the last three weeks, some under the threat from their employers that they would be fired from their jobs if they did not.

Biden has ordered workers at companies with 100 or more employees to get vaccinated or be tested weekly for the coronavirus. In addition, he is requiring 2.5 million national government workers and contractors who work for the government to get vaccinated if they haven’t already been inoculated, but it will be weeks before the mandates take full effect.

Some anti-vaccination advocates are filing suit to block Biden’s orders while a handful of conservative Republican state governors, including Texas Governor Greg Abbott and Florida Governor Ron DeSantis, remain adamantly opposed to vaccination mandates in their states. But some local school districts and businesses are ignoring their directives and imposing the mandates anyway. 

More than two-thirds of U.S. adults have now been fully vaccinated against the coronavirus, and overall, 56.6% of the U.S. population of 332 million, according to the Centers for Disease Control and Prevention.
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Pakistan International Airlines (PIA) Thursday suspended flights to Afghanistan’s capital, Kabul, over what the state-run carrier alleged was “heavy-handed” interference by the neighboring country’s ruling Taliban.

The suspension came on the same day a Taliban Transport Ministry statement warned it will stop PIA flight operations between Islamabad and the Afghan capital unless the airline reduces ticket prices to the levels that existed before mid-August, when the Islamist group took control of the country.

The statement also ordered Afghan airlines Kam Air to reduce fares on the Kabul-Islamabad route to previous levels or face a halt to their flight operations.

“We have suspended our flights (between Islamabad and Kabul) indefinitely,” PIA spokesman Abdullah Khan told VOA on Thursday.

“The decision has been taken due to an inappropriate behavior by the local (Taliban) administration and inadequate conditions for flight operations,” Khan said.

He explained that PIA was flying charter flights out of Kabul on “purely humanitarian grounds,” and it was the only international airline linking the Afghan capital through Pakistan to the rest of the world.

“Information has been conveyed to PIA and Kam Air private company to reduce the fare on the Kabul-Islamabad route to the level prior to the victory of the Islamic Emirate. If the airlines do not agree to this proposal, their operations on the route will be stopped,” the Taliban said in the statement.

Both PIA and Kam Air operate chartered flights with high fares, citing high insurance costs as the reason for not resuming commercial operations.

PIA had been flying regular commercial flights between Islamabad and Kabul until the Taliban takeover of the country in August, and passengers were being charged up to $200 for a return ticket.

With most international airlines no longer flying to Afghanistan, PIA-chartered flights out of Kabul are charging $1,500 for a one-way ticket to Islamabad.

“The insurance cost of these flights is very high and the charter price cannot be reduced as per the insistence of (Taliban) authorities,” PIA’s Khan said.

PIA officials have complained that their staff in Kabul have faced last-minute changes in regulations and flight permissions and “highly

intimidating behavior” from Taliban commanders. They alleged the airline’s country representative had been held at gunpoint for hours at one point and was freed only after the Pakistan Embassy intervened.

Taliban officials have not yet commented on the allegations leveled by PIA officials.
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France has threatened to retaliate against Britain in yet another post-Brexit dispute, this time over fishing rights in what the British call the English Channel and the French refer to as La Manche, the narrow arm of the Atlantic Ocean separating England’s southern coast from the northern shores of France.

French government spokesman Gabriel Attal said Wednesday retaliation could begin by the end of next week.

France is fuming at the British government’s refusal to allow more French boats to fish in its territorial waters near Britain’s Channel Isles. Britain has issued 325 fishing licenses but declined 125 applications from French fishermen who say they also have been trawling those waters in recent years. Under the terms of the trade deal struck last year by Britain with the European Union as it exited the bloc, they should be granted access too, the fishermen say.

An exasperated French government has threatened a dramatic escalation in the dispute and warned it is considering cutting or reducing electricity supplies to the Channel Islands and the British mainland, which gets 7% of its power from France.

The dispute over French trawlers accessing waters off Britain’s Channel Islands prompted British Prime Minister Boris Johnson earlier this year to dispatch Royal Navy vessels to patrol the area with France responding by sending patrol ships to protect French trawlers.

On Tuesday French Prime Minister Jean Castex said his government was ready to review all bilateral cooperation with Britain, and French President Emmanuel Macron has been pressing the EU to consider wider reprisals.

Speaking in France’s National Assembly Castex called on the EU to get tougher with Britain and said Brussels should “do more.” He added, “We will refer the matter to the arbitration panel of the agreement to lead the British to respect their word [and] we will question all the conditions for the more global implementation of the agreements concluded under the aegis of the European Union, but also, if necessary, the bilateral cooperation that we have with the United Kingdom,” he said.

But Brussels appears reluctant to get deeply involved in the fishing dispute, although officially it is backing Paris and has berated the British.

Dueling  

France’s Europe Minister Clément Beaune has outlined some possible reprisals, including slapping tariffs on British fish exports. “Britons need us to sell their products, including from fishing, they need us for their energy, for their financial services and for their research centres,” Beaune said last week. “All of this gives us pressure points. We have the means to modulate the degree of our cooperation, to reduce it, if Britain does not implement the agreement,” he added.

In the grander scheme of things, a dispute over 125 fishing licenses would seem a minor matter that should not derail relations between European neighbors, but the two governments have been dueling angrily for months and the clash over post-Brexit fishing is adding venom to an already poisonous relationship.

Diplomats on both sides describe Anglo-French relations as “dreadful” and acknowledge they have never been as bad in their professional lifetimes. They say for a comparison you would have to go back to the 1960s. That was when French President Gen. Charles de Gaulle kept slamming the door on British Prime Minister Harold Macmillan’s efforts to get France’s backing for Britain to join the then-European Community. Macmillan was reduced to tears of frustration after one meeting with De Gaulle.

But at least the two statesmen met face-to-face. The British say they have been trying to arrange sit-down talks for months between Johnson and Macron. Their French counterparts say they doubt a sit-down between the two leaders would accomplish anything.

Other historians cite as a comparison the 1890s when Britain and France were locked in rivalry in a scramble for African colonies. That competition eventually ended when the two signed in 1904 the Entente Cordiale, a set of agreements that marked a significant improvement in Anglo-French relations.

But there are few prospects of a new Entente Cordiale. Some former British diplomats agree there is little point in a Johnson-Macron face-to-face. “The bilateral rows are more numerous and more public than at any time since the major rift over Iraq in 2003. Some level of trust has to be rebuilt before a summit would be worthwhile,” tweeted Peter Rickets, a retired senior diplomat and former chairman of Britain’s Joint Intelligence Committee under Prime Minister Tony Blair.

Post-Brexit friction

Since formally departing the EU more than year ago — and in the years of ill-tempered negotiations between Brussels and London leading up to Brexit — hardly a week has gone by without the British and French sniping at each other, a squabbling that has been amplified by Britain’s notoriously Francophobe tabloid press and France’s equally patriotic media.

In his New Year address in January, Macron assured Britain that France would remain a “friend and ally” despite Brexit, but he slammed the British decision to leave the bloc as one born from “lies and false promises.”

This year alone the two countries have clashed cross-Channel migration with London accusing French authorities of not doing enough to stop migrants and asylum-seekers — more than 10,000 this year so far — crossing La Manche in dinghies and small boats. The French have accused Britain of not having paid money it promised to help French authorities police their coastline to prevent migrants from trying to cross the Channel.

The countries have clashed also over supplies of the COVID vaccine made by AstraZeneca, a British-Swedish company, with the French left fuming at the Johnson government’s frequent readiness to compare the speed of the vaccine rollout earlier in the year in Britain with the much slower inoculation programs in France and the rest of Europe.

British ministers this week accused France of having stolen – earlier this year – five million coronavirus vaccine doses manufactured in Holland but destined for Britain. They say Macron worked with EU chiefs to divert the large batch of Oxford/AstraZeneca jabs to France. British government officials told Britain’s The Sun newspaper that the diversion was “outrageous” and could have cost lives, if Britain had not managed to secure Pfizer vaccines.

And the two governments have bickered over Australia’s decision last month to abandon a $66 billion deal to buy 12 French diesel-electric submarines and to purchase instead at least eight much more sophisticated nuclear-powered attack boats from Britain and America.

France’s defense minister cancelled scheduled talks with her British counterpart as the submarine row reverberated and amid accusations from Paris that Britain had been “opportunistic” and underhanded. Johnson responded blithely by saying in Franglais, “I just think it’s time for some of our dearest friends around the world to prenez un grip [get a grip] about all this and donnez-moi un break [give me a break].”

With next year’s French presidential election looming and the British prime minister under mounting economic pressure, both Macron and Johnson have domestic political reasons to prolong the duel, fear some political commentators. “French President Emmanuel Macron faces a tough and unpredictable election in six months’ time, and British Prime Minister Boris Johnson is looking for distractions and scapegoats as reality starts to contradict his cheerful bluster about a plucky, triumphant, stand-alone Brexit Britain,” John Lichfield, a former foreign editor of Britain’s Independent newspaper, noted in a commentary for the Politico.eu news site.

“Both countries are obsessed with each other, for different reasons, and often with silly outcomes,” tweeted Jonathan Eyal, an associate director of the Royal United Services Institute, a London defense think tank.

Ten EU member states including Germany, Italy, Spain and Belgium have joined the French in signing a joint statement that calls on Britain to abide by the terms of the Brexit trade agreement and to ensure “continuity” for French fishing fleets. But the joint statement also called for a negotiated solution and avoided any mention of retaliation.

Privately, EU officials say they are determined to ensure the Anglo-French fishing dispute does not escalate and are playing down the prospect of the bloc as a whole agreeing to retaliatory action. Their priority is on resolving a bigger dispute between the EU and Britain over Northern Ireland.
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President Joe Biden on Wednesday announced a plan to clear the backlog of container ships off the coast of Southern California by launching 24-hour operations at the port of Los Angeles. Mike O’Sullivan reports.
Camera: Roy Kim
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Finance ministers from the Group of 20 economies Wednesday pledged to keep economic stimulus policies in place to ensure a recovery from the COVID-19 pandemic.

Amid ongoing risks, “We will continue to sustain the recovery, avoiding any premature withdrawal of support measures,” according to the official communique released after the G-20 meeting.

While the global recovery has been solid, the statement notes that it has been “highly divergent” among countries.

“We reaffirm our resolve to use all available tools for as long as required to address the adverse consequences of COVID-19, in particular on those most impacted,” the statement continued.

At the same time, officials are closely watching rising prices, the statement said.

The meeting of finance ministers and central bank governors is being held at a time when suppliers are struggling to meet renewed demand and bottlenecks are causing shortages of key materials and pushing prices higher.

Oil prices, notably, have spiked above $80 a barrel for the first time in years.

The World Bank estimates 8.5% of global container shipping is stalled in or around ports, twice as much as in January.

Italy’s central bank chief Ignazio Visco agreed with the International Monetary Fund and others who have said the inflation pressures are mostly the result of transitory factors like the surge in demand.

But he acknowledged that “these may take months before fading away.”

G-20 central bankers are studying the issue to see if there are “more structural factors at work” in the bigger-than-expected inflation spike, and “whether there is some component which starts being transitory but that could become permanent,” Visco told reporters.

Central bankers are walking a fine line between supporting the recovery with easy financial conditions while warding off a permanent increase in inflation.

“Supply chain issues are being felt globally — and finance leaders from around the globe must collaborate to address our shared challenges,” said U.K. Chancellor of the Exchequer Rishi Sunak, who chaired the meeting of the world’s richest nations.

The G-20 communique said central banks “will act as needed” to address price stability “while looking through inflation pressures where they are transitory.”

But World Bank President David Malpass warned that some of the price spikes “will not be transitory.”

“It will take time and cooperation of policymakers across the world to sort them out.”

IMF chief Kristalina Georgieva said the lag in vaccination rates to contain the pandemic in developing nations is contributing to the supply constraints, and “as long as it widens, this risk of interruptions in global supply chains is going to be higher.” 

 
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A report marking the International Day for Disaster Risk Reduction finds many deaths and economic losses from natural disasters could be averted by investing in preventive risk reduction measures. 

Climate-related disasters have nearly doubled over the past 20 years, with developing countries bearing the brunt of the damage. Though extreme weather events and other emergencies are growing, the U.N. Office for Disaster Risk Reduction says little money is being allocated to help countries prevent or reduce risks. 

The report finds $133 billion of official development assistance was allocated for disaster-related aid between 2010 and 2019, but only $5.5 billion was invested in measures to reduce the risks and lessen the impact of disasters. 

For every $100 spent on disaster-related development aid, only 50 cents goes toward protecting development from the impact of disasters, according to the report. 

Ricardo Mena, director of the Office for Disaster Risk Reduction, said even that low-level funding should be better targeted to address the needs of poorer, more vulnerable countries. 

“One would think that countries that are more prone to disasters and that experience higher mortality rates would be the ones where DRR, disaster risk reduction, financing would be allocated the most. But that is unfortunately not the case,” he said. “Insufficient investment is being provided to prevent future disasters in areas where high mortality is likely.” 

Mena said failure to invest in DRR is like buying a nice car that has no brakes.

“Investing in DRR, we know it makes sense and, in terms of cost-benefit, it is tremendously positive,” he said. “So, yes, we are saying it is better to attack the underlying factors of risk, then having to spend more money at a time when disasters actually happen.” 

Academic studies find every dollar invested in disaster risk reduction prevention can result in savings of $3 to $15 in disaster losses. 

Mena is calling for an increase in funding to help poor countries adapt to climate change and implement national strategies for disaster risk reduction. 

 
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From the United States to Germany, developed countries are scrambling to source energy supplies and satisfy a booming consumer demand for goods. 

Supply chains disrupted by the COVID-19 pandemic are straining to cope and factories are unable to meet the surge in demand from consumers, who are spending far more than normal, a consequence of governments pumping $10 trillion collectively into their economies, say business analysts.

Shortages in Britain have made headlines with shoppers facing empty food shelves, with fruits and vegetables especially in short supply. Supermarket bosses warned Wednesday they might have to ration meat to prevent panic buying, particularly in the run-up to Christmas. 

Britain’s supply challenges have been intensified by its departure from the European Union, its main trading partner. But European neighbors, as well as the United States, are also reporting shortages of clothing and electronic goods. Manufacturers say they are finding it hard to source microchips due to factory shutdowns in Asia. 

Politicians have sought to reassure voters that things will return to normal soon and that shortages are transitory.

But are they? 

Some economists and trade analysts fear the developed world may be entering a new era of scarcity partly because of climate action, which will be costly and slow economic growth, and because of a growing trend toward economic protectionism. 

While few doubt that carbon reduction in economies is essential, if an existential climate disaster is to be averted, a rise in the imposition of tariffs and quotas and government regulations, aimed at restricting imports, has free market advocates and economists worried. 

Shortage economy 

They say turning away from globalization and free trade will slow economic growth, lead to scarcity, reduce productivity, and make the world poorer. Britain’s influential Economist magazine this week warned, “Around the world, economic nationalism is contributing to the shortage economy.” 

The magazine’s editors say, “Trade policy is no longer being written with economic efficiency in mind.” They pointed to the recent decision by U.S. President Joe Biden to keep in place tariffs from the prior administration of President Donald Trump, which average around 19%, on Chinese goods. 

Free trade opponents welcome the trend, arguing globalization results in job losses in developing countries, leads to increasing and unfair economic disparities and income inequalities, results in the exploitation and underpayment of workers and roils local communities. 

Debate aside on the benefits or drawbacks of globalization, economic protectionism has been increasing in recent years. Data compiled by the London-based Center for Economic Policy Research suggests that more than 50% of exports from G-20 countries are subject to trade measures, up from 20% in 2009. 

Global cross-border investment has declined dramatically during the past two pandemic years, but even before the emergence of the coronavirus, it was falling according to figures published by the Organization for Economic Cooperation and Development, a Paris-based intergovernmental body with 38 member states. 

Since 2015 foreign direct investment by companies has fallen by half relative to world GDP, according to the OECD. 

Governments are increasingly showing a reluctance to sign new free trade deals and instead have been talking up the need to boost manufacturing capacity and the economic security of their countries. 

Analysts and business leaders also say geopolitical rivalry, where nations see trade as a zero-sum game, meaning there have to be winners and losers, is also playing an increasing role in the policy-making and economic thinking of governments. 

Last week, a group of CEOs from some of the world’s biggest companies, brought together by the World Economic Forum, WEF, an independent international organization, called for greater global trade cooperation. In a joint statement, the business leaders drawn from 17 countries highlighted the potential of trade and investment to speed the global economic recovery from the pandemic. 

“We believe trade and investment support human development and that global recovery can be built upon a trade recovery. Governments must creatively re-engage on trade reform and refrain from protectionism,” they said. 

And the CEOs added, “Through jointly upholding environmental and social standards, trade cooperation should prevent a race to the bottom and avoid harmful distortions to markets for goods and services. Trade cooperation can improve outcomes for underrepresented members of society, including women and minorities.” 

Last month, Biden played down the prospects of a post-Brexit free trade deal between the United States and Britain during bilateral talks with British Prime Minister Boris Johnson at the White House.

Biden said he would discuss the issue “a little bit” with Johnson, who has been eager to strike an agreement with the U.S. in the wake of Britain’s exit from the EU. 

Later, Johnson told British reporters that a U.S.-UK trade deal was “just not a priority” for the Biden administration. 

The U.S. is not alone in running shy of new free trade deals and focusing on national self-reliance and boosting manufacturing capacity. When first elected in 2014, India’s prime minister, Narendra Modi, raised the prospect of implementing wide-ranging economic reforms and opening his country much more to free trade. 

Some incremental reforms were introduced, but soon after entering office Modi put a pause on trade deals and adopted policies focused on India supplying the goods and services it needs from within the country, rather than getting them from abroad. 

There has been some tempering of Modi’s self-reliance policy since, but his government has been highly cautious in discussing regional trade deals, say analysts.
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