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U.S. President Joe Biden Thursday hailed a new economic agreement among 14 Asia Pacific countries aimed at countering China’s regional economic dominance, saying the deal leaders signed at a summit of regional economies – which is not a formal trade agreement – will address key issues such as future semiconductor shortages by improving supply chain resilience.

The goal of the new pact, said the 14 leaders in a joint statement, is to “promote workers’ rights, increase our capacity to prevent and respond to supply chain disruptions, strengthen our collaboration on the transition to clean economies, and combat corruption and improve the efficiency of tax administration.”

Biden, speaking Thursday at the Asia-Pacific Economic Cooperation summit in San Francisco, acknowledged that negotiators failed to reach consensus on a key pillar of last year’s Indo-Pacific Economic Framework.

“We still have more work to do, but we’ve made substantial progress,” he said. “In record time we’ve reached consensus on three of the pillars of the IPEF.” The IPEF has four pillars, summarized as trade, supply chains, clean energy and infrastructure, and tax and anti-corruption.

Biden also announced a program to work with startup businesses to raise capital. That effort is based on the U.S. Partnership for Global Infrastructure and Investment, which is seen as the U.S. answer to China’s Belt and Road Initiative.

In highlighting the plan, Biden also emphasized the importance of the U.S. private sector.

“You’ve heard every one of my colleagues say one time or another that this can’t be done without trillions of dollars of private sector investment to get hold of this and get hold of it quickly to give them confidence to make those investments,” Biden said. “That’s going to create a pipeline of projects in partner countries and then match private sector financing with these projects, and it’s going to give those private sector investors confidence that their investment will be made according to the highest standards. Government investment is not enough. We need to mobilize private investment.”

Critics say the new economic agreement lacks market access provisions.

“For a country like us, we have to have at least market access,” Indonesian CEO Anindya Bakrie told VOA on the sidelines of the summit.

Joshua Kurlantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations, said most Southeast Asian states are “tepid” about the deal.

The bottom line, he said, is, “It’s not a trade deal, and the U.S. is not offering any market access in IPEF. And the Southeast Asian states can contrast that with actual trade deals that have been passed in Asia over the last seven years, including major, major trade deals that involve China, South Korea, Japan, and other big economies, as well as ASEAN being in the middle of that.”

However, he said, “they’re not going to say to the United States coming in with IPEF over the last couple of years, we reject this. They’re cordial and they do want a greater U.S. security presence.”

Siobhan Das, executive director of the American Malaysian Chamber of Commerce, took a rosier view.

“I actually believe it’s been successful already,” she said. “You’ve had 14 nations talking to each other for the last 18 months – how can that not be a success?”

Zack Cooper, a specialist in U.S. strategy in Asia at the American Enterprise Institute, told VOA on Thursday, as the 14 leaders smiled and posed for a photo, that “everyone agrees that the Indo Pacific economic framework is probably the best the Biden administration is going to do for now.”

“But it certainly doesn’t mean that they’re happy with IPEF or that they’re going to be satisfied with the version of IPEF they’re getting at APEC, which does not include trade,” he said. “And so it’s probably better than nothing.”
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US President Joe Biden on Thursday stressed the strength of America’s economic growth in a bid to sway 19 Asia-Pacific economies to partner with the U.S. — as China’s leader did the same at this week’s gathering of Asian leaders and powerful CEOs. The business world is asking: Why not both? VOA’s Anita Powell reports from San Francisco.
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Nigerian experts are hopeful that deals reached last week with Saudi Arabia will boost local oil production and help grow the economy. The deals included a pledge by Saudi officials to fix Nigeria’s four broken oil refineries, which haven’t worked in years, forcing Africa’s second-largest oil producer to import all of its fuel. 

The agreements between Nigerian authorities and their Saudi Arabian counterparts were made on the sidelines of the first ever Saudi-Africa summit held in Riyadh last week.

President Bola Tinubu met with Saudi Crown Prince Mohammed Bin Salman as part of his government’s efforts to attract investors, in a bid to reverse Nigeria’s economic slide.

Saudi officials pledged to fix Nigeria’s four refineries, located in Rivers, Delta and Kaduna states. None of the refineries have worked in years, forcing the country to rely on imports for fuel despite producing more than a million barrels of crude oil per day.

Fixing the refineries is expected to take about two years, according to a government official who spoke to journalists after last week’s agreement. 

Saudi Arabia also pledged to deposit huge sums of foreign exchange to boost Nigeria’s dwindling reserves worsened by the government’s floating of the national currency in June in a bid to unify the exchange rate system.

Faith Nwadishi, the executive director of the Center for Transparency Advocacy in Abuja, welcomes the Saudi deal.

“Considering the success that Saudi Arabia has made with their refineries and the natural resource that they have, one thing this will be able to achieve is to help Nigeria meet its production quota, help Nigeria resolve some of the conflicts around this issue of subsidy and non-operationalization of the four refineries that we have,” said Nwadishi.

Upon taking office in May, President Tinubu embarked on bold economic reforms including scrapping of the popular but expensive fuel subsidy, in a bid to decrease debt and attract more investments.

Fuel prices since then have soared, lending urgency to the need for domestic fuel production.

Nwadishi said the government first needs to be careful and subject the Saudi agreement to public scrutiny.

“What are the terms? Will government be willing to make these terms available to Nigerians so that we can really look and be able to assess them very objectively? What is it that we’re giving away? Are we giving over the entire management of our refineries to Saudi Arabia or they’re coming to give us technical assistance? Right now, it’s not very clear what the terms are,” she said.

Emmanuel Afimia, founder of Enermics, a Lagos based oil and gas consulting firm, is skeptical about the success of the deal.

“This administration is showing a reasonable level of political will to make things happen. I’ll most definitely like to wait until the technical details of this deal comes out but from where I’m looking at it, I don’t think it’s gonna be possible,” he said.

If the refineries functioned, Nigeria could process around 450,000 barrels of crude oil into fuel every day.

Nigerian officials say they will finalize the details of the deal with Saudi Arabia within six months. Many will be watching to see if the terms are favorable to Nigeria. 
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Malawi President Lazarus Chakwera has suspended his foreign trips and those of government officials as part of austerity measures to cushion the impact of the recent 44% devaluation of local currency on the country’s economy.

In his televised address to the nation Wednesday night, Chakwera ordered a cut by half on fuel allowances allocated to top government officials, including cabinet ministers.

The Reserve Bank of Malawi this month announced the devaluation of local currency to align it with the U.S. dollar on the black market. The move resulted in instant price increases for almost all commodities, including fuel and electricity, which increased by over 40%.

“I know that this decision has caused a lot of pain,” Chakwera said, “and I know that all of us now have to make big adjustments in spending so that we can prioritize those areas that are most productive.”

Chakwera said that he would be the first to make those adjustments, and that all of his international trips through the end of the fiscal year were canceled.

Chakwera also said he was freezing all public-funded international trips for public officers at all levels, including those in parastatals, or state-owned enterprises, until the end of the financial year in March.

“In fact, all Cabinet members currently abroad on public-funded trips must return to Malawi with immediate effect,” he said.

Analyst Victor Chipofya told local radio that Chakwera could have announced measures that would help generate more foreign exchange for the country rather than those that failed in the past.

“The country needs to build industries that would be able to export commodities to be able to have foreign currency,” he said. “Nothing like that came out from the president.”

Another political analyst, George Phiri, said Chakwera’s address failed to outline how the government will address challenges facing people in rural areas, where over 80% of Malawians live.

“The impact of devaluation has affected everyone across the board, whether he is the president or he is an ordinary Malawian in the rural and is not considered for the beneficiary of the [farm input] subsidy,” Phiri said. “What happened with those?”

However, the Malawi Human Rights Defenders Coalition said in a statement that if well implemented, the measures that Chakwera introduced would likely address the impact of devaluation on the country’s economy. 
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The U.S. House of Representatives voted 336-95 on Tuesday to approve a plan to avert a partial government shutdown on Saturday but at the same time push off contentious debates over spending priorities until early 2024.

Current funding for all government agencies expires at midnight on Friday, forcing Congress and the White House to reach a short-term deal to keep the government running.

The House approved a proposal by new Speaker Mike Johnson, leader of the narrow Republican majority in the chamber, that extends funding for some government agencies through mid-January and others until early February. 

By those two dates, Congress will have to debate and decide on spending levels throughout the government through next September, or again approve another short-term deal.

In passing his plan, Johnson received more votes from Democrats — 209 — than Republicans — 127. Opposing it were 93 Republicans and two Democrats.

The Senate is likely to also approve the proposal and send it to President Joe Biden for his signature.

Johnson has drawn the ire of a right-wing faction of his Republican colleagues because his budget plan does not include the spending cuts or policy changes they seek. Several of the archconservatives made clear they would vote against Johnson’s plan, forcing him to look for opposition Democratic votes to assure its passage.

It was just such a scenario in late September when then-Speaker Kevin McCarthy angered the right-wing bloc by winning Democratic votes to push through the seven-week spending plan that expires Friday at midnight. Days after that political fight, eight right-wing Republicans joined the unanimous Democratic caucus in ousting McCarthy from his speakership, a first in U.S. history.

There is no sign that Johnson faces a similar fate, since he is a stalwart conservative himself, and his like-minded colleagues appear, for the moment, to be giving him leeway in reaching a deal to keep the government open. 

Johnson said his “laddered” funding expiration dates in early 2024 are intended to avoid a Washington tradition: passage of a massive spending measure just before the Christmas and New Year’s holidays, appropriations bills that are so lengthy that few lawmakers have had time to read and digest them as Congress rushes to adjourn for its end-of-year recess. 

In the latest dispute, the hard-right Republican faction in the House has demanded spending cuts that more moderate Republican lawmakers and the virtually unanimous caucus of House Democrats, along with the Democratic-controlled Senate and Biden, have rejected.

Instead, Johnson’s plan would keep spending levels at the same level as in the fiscal year that ended September 30. Johnson also rejected attempts to include divisive cultural issues favored by some hard-right conservatives but also did not include billions of dollars in new financial assistance Biden sought for Ukraine and Israel as they fight their respective wars against Russia and Hamas militants.

Congress is expected to consider more funding for Ukraine and Israel in separate legislation in the coming weeks.

Without broad new funding for government agencies by midnight Friday, governmental operations that are deemed nonessential would be halted, such as camping at national parks, advice to taxpayers and some scientific research.

In recent days, credit rating agencies have downgraded the government’s credit rating because of the continuing budget uncertainty, a move that could lead to higher borrowing costs for the United States, where the national debt is now approaching $34 trillion. 
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With a government shutdown looming and a federal deficit that continues to climb, the bond rating firm Moody’s on Friday lowered its outlook for U.S. Treasury debt to “negative” from “stable.”  

The change is a signal that Moody’s, the only one of the three major credit ratings agencies that still considers U.S. debt worthy of its top rating, may soon apply a downgrade.  

The ratings firm confirmed that for now, its current top rating of Aaa still applies, and that the U.S. economy retains many advantages and strengths. However, in a gloomy assessment of the federal government’s capacity to address looming fiscal problems, the company warned of troubles to come.  

“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody’s expects that the U.S.’s fiscal deficits will remain very large, significantly weakening debt affordability,” the company said in a statement accompanying the announcement. “Continued political polarization within [the] U.S. Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability.”  

The news is likely to increase the volume of calls for the federal government to establish a “fiscal commission” of experts who would have the task of assembling a plan to adjust federal spending and the tax code to meet the country’s current needs.  

Interest rate changes  

The change by Moody’s reflects, in part, the reality that the era of near-zero interest rates, which allowed the government to borrow relatively painlessly, is now over, and that the relative cost of continued deficit spending — in which the U.S. borrows to pay for annual spending that exceeds revenues — is rising sharply.  

Under its current projections, the company said, by 2033 the interest payments alone on U.S. debt will be equal to 26% of federal revenues, up from 9.7% in 2022.  

Moody’s growing pessimism about the future sustainability of the United States’ nearly $34 trillion in outstanding debt echoes that of other ratings firms.  

Until recently, Standard & Poor’s had been the outlier among ratings firms. S&P downgraded the U.S. from AAA to AA+ during a fiscal crisis in 2011 and has maintained that level since. In August, the Fitch Ratings agency joined S&P, downgrading U.S. debt from its top rating of AAA to AA+.   

“Moody’s downgrade was entirely predictable considering the nation’s fiscal condition and budgetary mismanagement,” Stephen Ellis, president of the watchdog group Taxpayers for Common Sense, told VOA in an email exchange. “When you’re paying nearly $660 billion a year to service $33.7 trillion in debt, lurching from budgetary crisis to budgetary crisis is policymaker malpractice. Once again, the country is veering toward another government shutdown that is entirely preventable.”  

Inflection point  

While the rate of growth of the government’s debt has not changed dramatically, some observers wonder if Moody’s announcement, combined with the increased likelihood that interest rates are likely to remain elevated above recent levels for an extended period of time, could mark a turning point for the country.  

“There’s a chance that a couple of years from now, we’ll look back on this period as when the debt and the deficit again became a political concern, which it hasn’t been for some time,” said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.  

“There seems to be a lot more angst about it, in part because long-term yields have gone up so much,” Wessel told VOA. “And in that environment, every warning from a rating agency or surprising poll finding or some unexpected comment by a dovish economist, tends to get more attention — and for good reason.”  

Fiscal commission pondered  

The Moody’s announcement has some deficit watchdogs renewing calls for the creation of a “fiscal commission” empowered to come up with a plan to address the nation’s revenues and spending.  

In September, a bipartisan group of lawmakers in Washington introduced legislation that would create such a body. It would be made up of 16 members, including six members each from the House of Representatives and the Senate, divided evenly between the parties. The remaining four members would be outside experts, two appointed by Democrats and two by Republicans.  

The commission’s mandate would be to develop a plan to stabilize the country’s debt-to-GDP ratio at or below 100% within 10 years, to recommend changes to keep federal programs like Medicare and Social Security solvent, and to consider changes to federal spending and revenue collections necessary to reach those goals.  

Under the proposal, if a bipartisan majority of the committee’s members approve a set of final recommendations, the plan would be guaranteed an up-or-down vote in both houses of Congress, with no possibility of amendment.  

Best chance  

“A fiscal commission is absolutely the best chance we have of getting anything done right now,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Because it gives politicians a chance to build relationships and trust with each other and really study the issue, and understand how difficult it is instead of the kind of free lunch storylines they tell themselves.”  

There is some precedent for the creation of such a commission.  

In 2010, then-President Barack Obama created the National Commission on Fiscal Responsibility and Reform to undertake a similar task. More popularly known as the Simpson-Bowles Commission for its co-chairs Alan Simpson and Erskine Bowles, the group formulated a comprehensive overhaul of U.S. spending, including entitlement programs, as well as the tax code.    

However, the commission was unable to achieve a two-thirds supermajority among its members, and the plan was therefore never officially endorsed. A bill largely based on the plan was introduced in the House of Representatives, where it was soundly defeated.  

MacGuineas told VOA that a commission “has a good shot” at success, even though it would face an even tougher task than Simpson-Bowles did.  

“Today, the fiscal situation is worse, and the political situation is worse,” MacGuineas said. 
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China’s annual “Singles Day” sales bonanza wraps up at midnight Saturday, but consumers this year appear largely unswayed by its flashy deals and discounts as the world’s second-largest economy slows.

Conceived by tech giant Alibaba, “Singles Day” — which this year spanned well over a week — was launched in 2009 and has since ballooned into a yearly blockbuster retail period.

Sales for last year’s Singles Day reached $153 billion, according to a recent report by consultancy firm Bain.

But among consumers surveyed by Bain this year, 77% said that they did not plan to spend more than usual during the sales event.

“These days people are consuming less, people don’t really have much of a desire to buy lots of things,” recent graduate Zhang Chuwen, 23, told AFP.

She said her friends were instead using the sales to buy “everyday necessity products.”

Others say that this year’s Singles Day deals aren’t as good as in the past, and that some websites had raised prices beforehand, only to cut them for the holiday.

“The prices are not that different compared to other days,” Guan Yonghao, 21, told AFP.

“So I didn’t buy anything,” he added. “We will save a little because we are making less money.”

Jacob Cooke, co-founder and CEO of Beijing-based e-commerce consulting firm WPIC Marketing + Technologies, told AFP that Singles Day had “lost its luster” thanks to a combination of trends.

“The proliferation of livestreaming and secondary shopping festivals… means that the relative attraction of Singles Day as a time to load up on discounted goods has been reduced,” he said.

Slowing demand

Livestreamers — who draw in millions for e-commerce giants in China with marathon online sales pitches — also say they are noticing a downturn compared to previous iterations of the shopping event.

“This year’s Singles Day online sales are not as good as last year or two years ago,” Liu Kai, an e-commerce livestreamer, told AFP.

The name of the event riffs on a tongue-in-cheek celebration of singlehood inspired by the four ones in its date – Nov. 11, or 11/11.

But this year’s sales began on some platforms as early as late October.

Alibaba, like its main rival JD.com, withheld full sales figures for the shopping bonanza for the first time ever last year, saying instead that sales were flat from the year before.

The slowing sales follow an announcement this week that China slipped back into deflation in October, underscoring the work remaining for officials seeking to jumpstart demand.

Beijing has moved to shore up its ailing economy in recent months, unveiling a series of measures — particularly aimed at the ailing property sector — and announcing a huge infrastructure spending plan.
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Moody’s on Friday lowered its outlook on the U.S. credit rating to “negative” from “stable” citing large fiscal deficits and a decline in debt affordability, a move that drew immediate criticism from U.S. President Joe Biden’s administration.

The action follows a rating downgrade by another ratings agency, Fitch, earlier this year, which came after months of political brinksmanship around the U.S. debt ceiling.

Federal spending and political polarization have been a rising concern for investors, contributing to a selloff that took U.S. government bond prices to their lowest levels in 16 years.

“It is hard to disagree with the rationale, with no reasonable expectation for fiscal consolidation any time soon,” said Christopher Hodge, chief economist for the U.S. at Natixis. “Deficits will remain large … and as interest costs take up a larger share of the budget, the debt burden will continue to grow.”

The ratings agency said in a statement that “continued political polarization” in Congress raises the risk that lawmakers will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability.”

“Any type of significant policy response that we might be able to see to this declining fiscal strength probably wouldn’t happen until 2025 because of the reality of the political calendar next year,” William Foster, a senior vice president at Moody’s, told Reuters in an interview.

Republicans, who control the U.S. House of Representatives, expect to release a stopgap spending measure on Saturday aimed at averting a partial government shutdown by keeping federal agencies open when current funding expires next Friday.

Moody’s is the last of the three major rating agencies to maintain a top rating for the U.S. government. Fitch changed its rating from triple-A to AA+ in August, joining S&P which has had an AA+ rating since 2011.

While it changed its outlook, indicating a downgrade is possible over the medium term, Moody’s affirmed its long-term issuer and senior unsecured ratings at Aaa, citing U.S. credit and economic strengths.

Immediately after the Moody’s release, White House spokesperson Karine Jean-Pierre said the change was “yet another consequence of congressional Republican extremism and dysfunction.”

“While the statement by Moody’s maintains the United States’ Aaa rating, we disagree with the shift to a negative outlook. The American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset,” Deputy Treasury Secretary Wally Adeyemo said in a statement.

Adeyemo said the Biden administration had demonstrated its commitment to fiscal sustainability, including through over $1 trillion in deficit reduction measures included in a June agreement struck with Congress on raising the U.S. debt limit, and Biden’s proposal to reduce the deficit by nearly $2.5 trillion over the next decade.

Treasury yields have soared this year on expectations the Federal Reserve will keep monetary policy tight, as well as on U.S.-focused fiscal concerns.

The sharp rise in Treasury yields “has increased pre-existing pressure on U.S. debt affordability,” Moody’s said.

A Moody’s downgrade could exacerbate fiscal concerns, but investors have said they are skeptical it would have a material impact on the U.S. bond market, seen as a safe haven because of its depth and liquidity.

However, “it is a reminder that the clock is ticking and the markets are moving closer and closer to understanding that we could go into another period of drama that could lead ultimately to the government shutting down,” said Quincy Krosby, chief global strategist at LPL Financial.

Moody’s decision also comes as Biden, who is seeking reelection in 2024, has seen his support fall sharply in the polls. A New York Times/Siena poll released on Sunday showed him trailing former president Donald Trump, the leading Republican candidate, in five of six battleground states: Nevada, Georgia, Arizona, Michigan and Pennsylvania. Biden was ahead of Trump in Wisconsin. The outcome in those six states will help determine who wins the presidential election.

The Moody’s move will also heap pressure on congressional Republicans to advance funding legislation to avert a partial government shutdown.

U.S. House Speaker Mike Johnson has spent days in talks with members of his slim 221-212 Republican majority about several stopgap measures. The House and the Democratic-led Senate must agree on a vehicle that Biden can sign into law before current funding expires on Nov. 17.

“We cannot, in good conscience, continue writing blank checks to our federal government knowing that our children and grandchildren will be responsible for the largest debt in American history,” hardline Republican Representative Andy Harris said on X, formerly known as Twitter.

Infighting among House Republicans has led to flirtations with government shutdowns yet both parties have contributed to budget deficits.

Biden’s Democrats have backed a wide range of spending plans, while Republicans pushed through sharp tax cuts early in Donald Trump’s presidency that also fed the deficit. Neither party has seriously addressed rising costs of the Social Security and Medicare programs that represent a significant slice of federal spending.
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A new U.N. report paints a stark picture of the collapse of the Palestinian economy after a month of war and Israel’s near total siege of Gaza.

The gross domestic product shrank 4% in the West Bank and Gaza in the war’s first month, sending more than 400,000 people into poverty, an economic impact unseen in the conflicts in Syria and Ukraine, or any previous Israel-Hamas war, the U.N. said.

Gaza’s Hamas rulers launched a surprise attack on Israel on Oct. 7 killing more than 1,400 people, mainly civilians, and kidnapping about 240 others.

More than two-thirds of Gaza’s population of 2.3 million have fled their homes since Israel launched weeks of intense airstrikes followed by an ongoing ground operation, vowing to obliterate Hamas. The Hamas-run Health Ministry in Gaza said Thursday that 10,818 Palestinians, including more than 4,400 children, have been killed so far.

The rapid assessment of the economic consequences of the Gaza war released Thursday by the U.N. Development Program and the U.N. Economic and Social Commission for West Asia was the first U.N. report showing the devastating impact of the conflict especially on the Palestinians.

If the war continues for a second month, the U.N. projects that the Palestinian GDP, which was $20.4 billion before the war began, will drop by 8.4%, a loss of $1.7 billion. And if the conflict lasts a third month, Palestinian GDP will drop by 12%, with losses of $2.5 billion and more than 660,000 people pushed into poverty, it projects.

U.N. Development Program Assistant Secretary-General Abdallah Al Dardari told a news conference launching the report that a 12% GDP loss at the end of the year would be “massive and unprecedented.” By comparison, he said, the Syrian economy lost 1% of its GDP per month at the height of its conflict, and it took Ukraine a year and a half of fighting to lose 30% of its GDP, an average of about 1.6% a month.

At the beginning of 2023, the Palestinian territories – the West Bank and Gaza – were considered a lower middle-income economy with a poverty level of $6 per day per person, Economic Commission Executive Secretary Rola Dashti said.

In January, Gaza was grappling with high unemployment of about 46%, 3½ times higher than the West Bank’s 13%, the report said.

But just weeks of war has destroyed hundreds of thousands of jobs.

“As the war hits the one-month mark, 61% of employment in Gaza, equivalent to 182,000 jobs, is estimated to have been lost,” it said. “Around 24% of employment in the West Bank has also been lost, equivalent to 208,000 jobs.”

Al Dardari pointed to the massive disruption to the economy in the West Bank, which is responsible for 82% of Palestinian GDP, explaining that this is supposed to be the season for olive and citrus farmers to collect their products, but they can’t because of the war. And “the tourism season is practically gone – and agriculture and tourism represent 40% of the GDP in the West Bank,” he said.

In addition, Al Dardari said, there are major disruptions to trade, to the transfer of money from Israel to the Palestinian Authority, which controls the West Bank, and no investment.

The Economic Commission’s Dashti said “the level of destruction is unimaginable and unprecedented” in Gaza.

“As of November 3, it is estimated that 35,000 housing units have been totally demolished and about 220,000 units are partially damaged,” she said. The report said at least 45% of Gaza’s housing units have been destroyed or damaged.

If this persists, the majority of Gazans will have no homes. Al Dardari added that even if fighting ended now there will be massive long-term displacement, “with all its humanitarian, economic development and security consequences.”

Al Dardari said it breaks his heart that the Palestinian territories had become lower middle income economies, “because all of that growth and development is going to regress between 11, 16, or even 19 years if the fighting continues. … We will go back to 2002.”
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Businesses in the Ethiopian traditional clothing market say cheaper garments made by Chinese manufacturers is driving them out of work. Kennedy Abate has this report from the capital Addis Ababa, narrated by Vincent Makori.
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Farmers in the U.S. are closely connected to developments in Ukraine and are intently watching for clues about how the war is affecting not only farmers abroad, but also their own operations at home. VOA’s Kane Farabaugh has more from Decatur, Illinois.
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Many members of the Asia-Pacific Economic Cooperation bloc may profit from the trend of U.S. companies moving production out of China and into countries with a solid relationship with the United States. VOA’s Jessica Stone explains what this practice — called “friendshoring” — means.
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African leaders are pushing for renewal of a preferential U.S. trade policy, set to expire in 2025, that allows them duty-free access to the U.S. market. Kate Bartlett spoke with U.S. trade representative Katherine Tai about U.S.-China competition at the annual summit of the African Growth and Opportunity Act in Johannesburg and visited a factory that does business with both countries. Camera — Zaheer Cassim.
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Australian Prime Minister Anthony Albanese has invited Chinese President Xi Jinping to Canberra after what he called a “positive” landmark summit in Beijing.

Albanese is the first Australian prime minister to visit mainland China since 2016, following years of friction. The Canberra government says his trip to China is an important step in the stabilization of diplomatic relations after various political and trade disputes.

Amid disagreements over various geopolitical issues, including human rights and the origins of COVID-19, Beijing imposed bans and tariffs on a range of Australian imports.

Albanese has sought a less-confrontational approach to China after an election win in May 2022, with the aim of stabilizing relations with Australia’s main trading partner while acknowledging areas of disagreement.

Albanese said his meeting Monday with Chinese President Xi Jinping was “one of goodwill.” He said he raised the case of the Australian writer and democracy activist Yang Hengjun, who has been detained by China for almost five years.

Australian government officials are hopeful that the last remaining Chinese restrictions on the country’s export commodities, including seafood and beef, will be scrapped by the end of the year. China has also said it would undertake a five-month review of duties it imposed on Australian wine.

Albanese told reporters in Beijing that his talks with the Chinese leader were broad.

“I did discuss international issues with President Xi and the importance of stability in the region and open channels of communication,” he said. “We also discussed our bilateral relationship. I raised consular and human rights issues during the meeting as well.”

But opposition Liberal Party Senator Simon Birmingham told the Australian Broadcasting Corp. Tuesday that the Canberra government must remain vigilant about China’s ambitions.

“We have seen Australia’s and other international security chiefs provide new warnings about the extent of Chinese cyber espionage,” he said. “We have seen the Chinese navy undertake aggressive action against the Philippines in the South China Sea. Whilst this visit might be positive, the Albanese government [must] not get any rose-colored glasses about the challenges that are there as well.”

China accounts for about a third of Australia’s global trade. Analysts say that China is highly dependent on Australian raw materials, including iron ore and liquefied natural gas, to help build its economy.

Albanese has invited Xi to visit Australia in the near future, while the Chinese president also asked the Australian prime minister to return to China and visit other parts of his country.
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On Friday, U.S. President Joe Biden hosted leaders from Latin America, the Caribbean, and Canada at the inaugural Americas Partnership for Economic Prosperity Leaders’ Summit, which aimed to enhance economic ties, fortify U.S. investments in the region, and tackle immigration challenges. Veronica Villafane narrates this report by Paula Diaz.
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The cancellation of two large offshore wind projects in New Jersey is the latest in a series of setbacks for the nascent U.S. offshore wind industry, jeopardizing the Biden administration’s goals of powering 10 million homes from towering ocean-based turbines by 2030 and establishing a carbon-free electric grid five years later.

The Danish wind energy developer Ørsted said this week it’s scrapping its Ocean Wind I and II projects off southern New Jersey due to problems with supply chains, higher interest rates and a failure to obtain the amount of tax credits the company wanted.

Together, the projects were supposed to deliver over 2.2 gigawatts of power.

The news comes after developers in New England canceled power contracts for three projects that would have provided another 3.2 gigawatts of wind power to Massachusetts and Connecticut. They said their projects were no longer financially feasible.

In total, the cancellations equate to nearly one-fifth of President Joe Biden’s goal of 30 gigawatts of offshore wind power by 2030.

Despite the setbacks, offshore wind continues to move forward, the White House said, citing recent investments by New York state and approval by the Interior Department of the nation’s largest planned offshore wind farm in Virginia. Interior’s Bureau of Ocean Energy Management also announced new offshore wind lease areas in the Gulf of Mexico.

“While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of an expanding U.S. offshore wind industry — creating good-paying union jobs in manufacturing, shipbuilding and construction,” while strengthening the power grid and providing new clean energy resources for American families and businesses, the White House said in a statement Thursday.

Industry experts now say that while the U.S. likely won’t hit 30 gigawatts by 2030, a significant amount of offshore wind power is still attainable by then, roughly 20 to 22 gigawatts or more. That’s far more than the nation has today, with just two small demonstration projects that provide a small fraction of a single gigawatt of power.

Large, ocean-based wind farms are the linchpin of government plans to shift to renewable energy, particularly in populous East Coast states with limited land for wind turbines or solar arrays. Eight East Coast states have offshore wind mandates set by legislation or executive actions that commit them to adding a combined capacity of more than 45 gigawatts, according to ClearView Energy Partners, a Washington-based research firm.

“I think very few people would argue that the U.S. will have the gigawatts the Biden administration wants” by 2030, said Timothy Fox, a ClearView vice president. “But I do think eventually we will have it and will likely exceed it.”

Offshore wind developers have publicly lamented the global economic gales they’re facing. Molly Morris, president of U.S. offshore wind for the Norwegian company Equinor, said the industry is facing a “perfect storm.”

High inflation, supply chain disruptions and the rising cost of capital and building materials are making projects more expensive while developers are trying to get the first large U.S. offshore wind farms opened. Ørsted is writing off $4 billion, due largely to cancellation of the two New Jersey projects.

David Hardy, group executive vice president and CEO Americas at Ørsted, said it’s crucial to lower the levelized cost of offshore wind in the United States so Americans aren’t debating between affordability and clean energy. Hardy spoke at the American Clean Power industry group’s offshore wind conference in Boston last month on a panel with Morris.

“We’re probably a little bit too ambitious,” he said. “We came in hot; we came in fast, we thought we could build projects that were inexpensive, large projects right out of the gate. And it turns out that we probably still need to go through the same learning curve that Europe did, with higher prices in the beginning and a little slower pace.”

In May, there were 27 U.S. offshore wind projects that had negotiated agreements with states to provide power before the brunt of the cost increases hit, according to Walt Musial, offshore wind chief engineer at the National Renewable Energy Laboratory, an arm of the Energy Department. The delay between signing purchase agreements and getting final approval to build allowed unexpected cost increases to render many projects economically unfeasible, he said.

Musial called Ørsted’s announcement a setback for the industry but “not a fatal blow by any means.”

On Tuesday, the Biden administration announced approval of the nation’s largest offshore wind project. The Coastal Virginia Offshore Wind project will be a 2.6 gigawatt wind farm off Virginia Beach to power 900,000 homes. And even as Ørsted announced the New Jersey cancellations, it said it was investing with utility Eversource to move forward with construction of Revolution Wind, Rhode Island and Connecticut’s first utility-scale offshore wind farm, a 704-megawatt project.

The current outlook from S&P Global Commodity Insights is 22 gigawatts by 2030, though that will be revised due to the recent industry announcements.

New York state, meanwhile, recently announced the award of 4 gigawatts of offshore wind capacity as it seeks to obtain 70% of its electricity from renewable sources by 2030 and 9 gigawatts of offshore wind by 2035. That announcement came shortly after New York regulators rejected a request for bigger payments for four offshore wind projects worth a combined 4.2 gigawatts of power.

Any delay in offshore wind means continued reliance on fossil fuel-burning power plants, according to environmental advocates. “The quicker they come online, the quicker our air quality improves,” said Conor Bambrick, director of policy for Environmental Advocates NY.

New Jersey, under Democratic Gov. Phil Murphy, has established increasingly stringent clean energy goals, moving from 100% clean energy by 2050 to 100% by 2035. Murphy cast Ørsted’s decision as “outrageous” and an abandonment of its commitments, but the two-term Democrat said New Jersey plans to move forward with offshore wind.

The first U.S. commercial-scale offshore wind farms are currently under construction: Vineyard Wind off Massachusetts and South Fork Wind off Rhode Island and New York. 
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This week, the U.S. State Department confirmed that Washington’s plan to refurbish and extend the Lobito Corridor — a railway that will run through mineral-rich Zambia and the Democratic Republic of Congo to an Atlantic port in Angola — is moving full steam ahead.

Such ambitious infrastructure investments by other powers in Africa have been derailed in the past. For years, China has tried with mixed results to increase its influence in Africa and boost trade connectivity by investing in ports and railways.

Debt-incurring or unfinished projects undertaken as part of Beijing’s Belt and Road Initiative, or BRI, have been criticized, prompting what analysts see as a new focus on what Chinese President Xi Jinping has called a “small and beautiful” approach.

Now the West is stepping in, with the U.S., European Union, the three African nations and two financial institutions signing a memorandum of understanding last month to develop the partially existing Lobito Corridor.

Plans were outlined in an online media briefing this week, and a six-month feasibility study is expected to start before the end of the year, said Helaina Matza, the acting special coordinator for the Partnership on the Global Infrastructure Investment, or PGII. The intention is to get the 800 kilometers (500 miles) of new track built within five years at an estimated cost of more than $1 billion, she said.

When asked how the U.S. plans to sustain the project long-term and avoid the mistakes made by other foreign powers pursuing infrastructure projects on the continent, Matza was optimistic.

“It’s not all concessional financing going directly to governments,” she said, noting that a private partner, the Africa Finance Corp., is involved and will be putting “forward a plan for operation and maintenance and putting forward a plan around capacity development.”

While not mentioning China directly, she said: “I think we’ve learned from mistakes and projects that over the years, frankly, we’ve helped bail out because they needed refurbishment a little too quickly.”

Liu Pengyu, China’s Embassy spokesperson in Washington told VOA in an emailed response that there is “broad space for cooperation in the field of global infrastructure, and there is no question of various relevant initiatives contradicting or replacing each other.”

Liu also denied the frequent criticism that Beijing is using BRI and its projects to create spheres of influence.

“Any calculation to advance geopolitics in the name of infrastructure development is not welcome and doomed to fail,” he said.

Lessons from the BRI?

One of China’s largest BRI investments was the $4.7 billion Standard Gauge Railway in Kenya, which started operating in 2017 and connects the capital, Nairobi, with the port city of Mombasa.

The railway was supposed to connect to neighboring Uganda, as a way of bringing critical minerals to the coast, but it never got that far, leaving the cargo side of the business struggling. This week the Kenyan government announced a sharp increase in fares for passengers, citing rising fuel prices.

The announcement came on the heels of President William Ruto’s visit last month to China, where he was seeking a $1 billion loan to complete unfinished infrastructure projects. Some Kenyans have also criticized the project for not hiring enough locals to operate the railway.

Asked whether the existence of the BRI will help inform the new US/EU initiative, Yunnan Chen, a researcher at the global think tank Overseas Development Institute, said it has already had an impact.

“While the BRI can be criticized on many areas, one success it’s certainly had is to raise the profile of infrastructure in development, and crowded in greater interest — and welcome competition — in this space,” she said, noting the G7 now has the Partnership for Global Infrastructure and Investment and the E.U. has the Global Gateway. The first Global Gateway forum was held last month in Brussels, where the Lobito Corridor memorandum of understanding was signed.

“The fact that U.S. has taken such a deep interest in Angola — a major BRI partner and one of the largest recipients of infrastructure lending from China — is a clear sign they want to ramp up the competition directly in China’s spheres of interest,” she said.

While some of the Chinese projects have faced “legitimate criticism,” Chen said, railway projects can be difficult to make profitable based on passengers and freight if they are not linked to the mining sector.

“The Lobito Corridor may do better than some of the East African projects, since they will likely be directly connected to minerals/mining projects that justifies the freight, but it will be a test to see how the U.S. and EU will tackle the challenges that rail construction brings,” she said.

These challenges include social and environmental impacts and management of the railway once completed, all problems the Chinese have faced. Chen said it will be interesting to see how the West now fares “given the emphasis on higher standards.”

Matza, the acting PGII coordinator, said, “Our ethos for any sort of infrastructure we invest in is that the project is transparent.”

She said the U.S. wants to ensure that “the whole corridor is successful and that people who live along that corridor can participate not only in commerce but in other activities that really benefit the economic development of themselves and their countries.”

View from Africa

So who do ordinary Africans trust more when it comes to infrastructure investment, the U.S. or China?

VOA put that question to Johannesburg residents this week to see what they think.

Musician Luyolo Yiba, 29, was cynical as he sipped a drink at a sidewalk cafe.

“Both are looking at taking minerals, so it’s tricky to say this one is better than that one,” he said, adding that he doubts the U.S. is primarily concerned with helping the African people and that he expected the money to be lost to government corruption in Africa.

Zoyisile Donshe, an entrepreneur in his 40s, said he doesn’t think there needs to be competition for influence in Africa at all.

“They see that Africa is the future,” he said. “I love America, I love China as well. They’re creating opportunities in Africa. … I think most Africans would prefer them to cooperate.”

Asked whether the Lobito Corridor could end up being linked to any Chinese-built railways in the region, Matza said it was too soon to say but did not rule it out.

“There’s a lot of work happening, there’s maybe a Tazara refurbishment,” she said, referring to a railway linking Zambia and Tanzania. 

“There’s a lot of talks about an additional rail line that can continue south and maybe out through Mozambique,” she said. “We’re taking this on one piece at a time knowing what we can finance, support and help design.”
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