Category: Business

WASHINGTON — The United States and five other countries said Tuesday they plan to tap their strategic oil reserves for refining into gasoline and other energy products in a coordinated effort to cut rising costs that their consumers are paying.

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

President Joe Biden, in an address at the White House, said it was the largest withdrawal from the oil reserves but cautioned that “it will take time” for motorists to realize any drop in gasoline prices at service stations.

“This is a problem not just in the U.S. but around the world,” Biden said, blaming oil-rich countries for not ramping up production enough to meet world demand.

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

But an accurate possible cost reduction could not immediately be calculated because it was not known how much oil four of the other five countries – China, Japan, South Korea and Britain – plan to release from their reserves. India said it would release 5 million barrels.

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

Before hearing the details of the U.S. oil release plan, Suhail Al-Mazrouei, energy minister of the United Arab Emirates, one of OPEC’s biggest producers, said he saw “no logic” in increasing UAE’s supply, Reuters reported.

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

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

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

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

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

Biden said world oil prices have dropped in recent weeks by 10%, but “the price at the pump hasn’t budged a penny.”

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

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

The other 18 million barrels are being released as part of a previously authorized sale from the reserve, which the Energy Department is now moving to do earlier than first planned.

 

Source: Voice of America

WASHINGTON — President Joe Biden’s signature Build Back Better package of climate and social spending passed the House of Representatives on Friday morning, 220-213, less than 24 hours after the Congressional Budget Office (CBO) produced an analysis of the legislation finding that it would add a relatively modest $160 billion to the federal debt over the next 10 years.

The bill, which still must pass the narrowly divided Senate, dedicates more than half a trillion dollars to spending on measures to combat climate change, provides funding for universal pre-school, expands access to healthcare, and provides tax credits to families with children, among other things.

The rapid passage of the bill after the CBO announced the verdict on its costs underlines the importance of that agency to the legislative process in Washington, as well as lawmakers’ willingness to be flexible about how they read the agency’s analyses.

A significant number of Democrats who represent contested districts – enough to scuttle the bill if they had voted against it – had been concerned about the political impact of Republican claims that the bill would greatly expand the federal debt. Last week, these mostly moderate Democrats told Democratic House Speaker Nancy Pelosi that they would not vote for the bill without a CBO analysis that showed it was fully paid for.

Detailed ‘budget score’

The CBO is a non-partisan federal agency within the legislative branch created in 1974 that is considered by many economists the gold standard for analyzing the budgetary impact of proposed legislation and its long-term impact on the federal debt.

On Thursday afternoon, the CBO began releasing its analysis of the bill, known as a “budget score.” It found that the combination of spending and tax breaks contained in the package add up to $2.4 trillion and that elements that would raise revenue or reduce spending add up to $2.27 trillion.

One element of the CBO report caused some confusion because of the way the numbers were presented. The official release said that the bill would result in a $367 billion increase in the debt over 10 years, because it did not account for the revenue effects of the increased IRS enforcement. In a different statement, the agency estimated $207 billion of increased revenue related to IRS enforcement, leaving the ultimate budget deficit increase at $160 billion over a decade.

A flexible reading of the CBO

In a political climate where Democrats and Republicans generally distrust each other, the CBO is still seen as above the fray, delivering non-partisan analysis. The agency’s judgment that the addition to the debt would average out to just $16 billion per year meant that the legislation does not officially pay for itself.

That’s where the flexibility in reading CBO analysis kicked in.

A key element of the bill is an $80 billion increase in funding for the Internal Revenue Service to enforce the nation’s tax laws. The White House and a number of outside groups, including a bipartisan coalition of former IRS commissioners, had projected that the investment would return $400 billion in increased tax revenue over a decade. But CBO only estimated a $207 billion return.

“CBO is notoriously cautious about predicting revenue increases from IRS enforcement,” said William A. Galston, a senior fellow in the Brookings Institution’s Governance Studies program.

“Estimating revenues from enforcement is an art not a science,” Galston said. “Bottom line, nobody knows for sure.”

It was that uncertainty, and the generally accepted understanding that CBO is very cautious about estimating tax revenue, that gave all but one of the moderate Democrats the wiggle room they needed to throw their support behind the bill.

“They took the position, after the CBO score came out, that it was good enough,” said Galston. “It enabled them to make a good faith claim that the bill was completely paid for.”

Republicans disagree

Not surprisingly, Republicans in the House chose to take a much more literal reading of the CBO’s analysis, and slammed the Democrats for passing a bill that will add to the national debt.

“This is the single most reckless and irresponsible spending in the history of this country,” House Republican Leader Kevin McCarthy declared.

McCarthy’s comment came during a marathon speech that stretched for more than eight hours, ending shortly before 6 a.m. on Friday. The overnight monologue took advantage of a loophole in House rules that allows the leader of either of the parties to take unlimited floor time, and forced Democrats to delay a vote they had hoped to take on Thursday.

CBO’s sway in the Senate unclear

The CBO score may have been enough to convince moderate Democrats in the House of Representatives to vote in favor of the bill, but the problems it faces in the Senate go deeper than the legislation’s effect on the federal deficit.

The Democrats have only 50 votes in the 100-seat Senate, and must rely on Vice President Kamala Harris to cast a vote in the event of a tie. That means Democrats cannot afford to lose any votes on the bill.

The most prominent member of the party likely to break from the pack is West Virginia Senator Joe Manchin, who has been publicly skeptical of specific parts of the bill, and has been more generally concerned that an increase in government spending will lead to further increases in inflation.

Manchin’s constituents tend to be older and more likely than most Americans to be on a fixed income. That makes them especially vulnerable to price inflation, which was recently measured at an annual rate of 6.2%, the highest in more than 30 years.

Source: Voice of America

For weeks, governments and policymakers across the world have been suggesting the recent spikes in consumer and energy prices are transitory and rising inflation will ease, once pandemic-related chain-supply disruptions and labor shortages are resolved and the global economy reboots.

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

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

Bank of England stands pat

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

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

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

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

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

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

In the US

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

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

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

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

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

Increases seen as transitory

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

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

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

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

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

The path back to normality is now again murky for Europe, and economists say the impact of a fourth wave of the coronavirus on household budgets is going to be significant — this at a time when the price of almost everything is going through the roof.

Source: Voice of America

NAIROBI, KENYA — A Kenyan recycling company is improving sanitation for slum dwellers in Nairobi and turning the waste products into fertilizer for farmers.

Anita Mutinda walks to a small structure located inside the cluster of makeshift houses that she calls home, in the heart of Mukuru kwa Ruben, a poor neighborhood in Kenya’s capital Nairobi.

The structure is one of the toilets installed by a company providing the much-needed service here. It is one of the reasons that Mutinda rented and has lived here for five years.

She says life where she lived before was hard because she had to pay five shillings every time she needed to use a public toilet, and it was far from the house. Here, she doesn’t have to pay a single cent to access this facility.

Her landlady, Deborah Kerubo, says the availability of the toilet facility on her property has become a major selling point.

She says tenants want a facility that has both day and night access. If they don’t get that, they will keep moving, she says, until they get what they are looking for.

No sewage system

Mukuru kwa Ruben, like many other slum areas in Kenya’s capital, is not connected to a sewage system. An estimated 60% of the population lives with this lack of sanitation.

Elijah Gachoki, a clinical officer at a local community health center, says these conditions are a major cause of communicable diseases. “We start getting water wash diseases, conjunctivitis, and skin diseases, so there is a need for proper safe and adequate provision of sanitation,” he expressed.

It is a gap that Sanergy, a company providing sanitation solutions, says it is bridging. Sanergy provides toilets that separate liquid and dry waste and help with waste management in the informal settlements.

Sheila Kibuthu, Sanergy Kenya’s external relations manager, says the company believes in not wasting any waste. On a regular basis, she notes “we make sure that we provide a waste management service where all of the sanitation waste is generated is then safely removed and transported to our organics recycling factory for processing along with other forms of organic waste.”

Turned into fertilizer

The toilet waste is collected daily and mixed with other organic waste from the community. It is then processed at Sanergy’s plant on the outskirts of Nairobi and turned into organic fertilizer and other agricultural inputs like high protein feed for livestock.

“One of the biggest challenges farmers are facing today is soil infertility, so what the organic fertilizer does is that it helps restore the soil fertility and that way farmers can improve their yields.”

Sanergy believes more and more farmers will be served as it keeps the cycle of turning waste into useful products going, while providing a necessary service.

Currently, the company has more than 5,000 toilets spread across 11 informal settlement areas in Nairobi, serving over 140,000 residents.

Source: Voice of America

Manama, Auditor General of the National Audit Office (NAO) Shaikh Ahmed bin Mohammed Al Khalifa, received employees with continuous service of more than 10 years, and employees who recently qualified as Certified Fraud Examiner (CFE) and Certified Anti-Money laundering Specialist (CAMS) to honor their achievements and their contributions to the NAO’s development.

Shaikh Ahmed congratulated the employees and wished them further success in their future endeavors. He stressed the NAO’s ongoing efforts to provide a work environment that supports initiative and achievement as part of its strategy to achieve excellence in the field of auditing and advance and conduct its work in a highly professional manner.

The auditor general Shaikh Ahmed emphasized the importance of continued investment in the development of employees and national competencies as they are the real capital of any successful institution.

He said that the NAO is dedicated to support and motivate all its employees by enhancing their professional and technical capacity through ongoing training and professional courses as part of its development program to obtain internationally accredited professional qualifications in auditing and accounting.

Source: Bahrain News Agency

U.S. retail sales surged in October, the Commerce Department reported Tuesday, in a signal that at least at the start of the annual holiday shopping season, consumers were not scared off by sharply increasing prices.

Retail sales increased 1.7% last month, more than twice the advance of eight-tenths of a percent in September. Sales have now increased three straight months.

Brian Deese, director of the White House’s National Economic Council, touted the favorable report, saying, “In short, families have seen an increase in real disposable income, and stores and restaurants have the supplies to drive this recovery.”

He said that the retail sales report showed “that even as we work to address the real challenge that elevated inflation from supply chain bottlenecks poses for Americans’ pocketbooks and outlook, the economy is making progress.”

With U.S. consumer price inflation at a three-decade high, it is an open question whether robust consumer spending will continue during the holiday shopping season through the end of 2021.

The government reported last week that consumer prices increased at an annualized rate of 6.2% in October, with sharply higher prices for gasoline and food affecting consumers the most.

The Commerce Department said that October spending was up 4% at online retailers, along with big gains at electronics, appliance and hardware stores. Gas price increases pushed up the sales total at service stations by 3.9% while vehicles sales revenue increased 1.8%.

Aside from higher prices, U.S. consumers are facing shortages of many items they may want to buy.

Several dozen container ships filled with consumer goods from Asia are anchored off the U.S. Pacific coast waiting for docking and unloading at California ports, a supply chain snarl that government officials are gradually unraveling but are far from fully resolving

Source: Voice of America

The Syrian private Cham Wings Airlines, said that, it suspended flights to Belarus’ Minsk airport on Saturday, Belarusian media reported.

The arrival screen yesterday at the Minsk international airport showed flights from Damascus having been cancelled.

The European Union is considering imposing new sanctions on carriers connecting Minsk with destinations in the Middle East, as migrants came to the Polish border through Minsk.

Cham Wings Airlines said that, “Since the majority of Cham Wings passengers flying to Minsk are of Syrian nationality … Cham Wings Airlines has taken the decision to suspend its flights to Minsk.”

President of Belarus, Alexander Lukashenko said in an interview that, there is no one plane of the national Belarusian air carrier Belavia, that brought migrants from the Middle East to Belarus.

Source: Nam News Network

Thailand, the Asia-Pacific Economic Cooperation (APEC) chair next year, is committed in ensuring the continuity of the APEC Putrajaya Vision 2040 by pursuing the forum’s three economic drivers.

The three drivers are – trade and investment, innovation and digitalisation, and strong, balanced, secure, sustainable and inclusive growth.

Prime Minister Prayuth Chan o-cha said Thailand will continue APEC’s work to keep markets open through the rules-based multilateral trading system.

“At the same time, we will take advantage of the opportunity to re-think APEC’s conversation on trade and investment…that reflects the evolving needs and interests of businesses and our wider communities,” he said at the APEC CEO Summit 2021 held virtually on Friday.

“This is the engine driving our APEC host year priorities,” he said.

New Zealand Prime Minister Jacinda Ardern is to chair APEC Economic Leaders’ Meeting (AELM) virtually later tonight with all 21 APEC Economic Leaders expected to participate in the meeting themed “Join, Work, Grow, Together”.

“I believe that our theme and priorities echo the call by the business community to revitalise our economies, and make them stronger and more resilient,” he said.

Meanwhile, in facilitating trade and investment, Prayuth said the region must be reconnected again.

“It is our priority to safely and seamlessly resume cross-border travel.

“Progress towards reconnecting the region is essential to APEC’s path to recovery. Therefore, restoring connectivity will be one of our priorities next year, and we will pursue APEC’s recommendation to come up with a way to strengthen coordination and drive APEC-wide work on safe passage,” he said.

He added that APEC needs to be ever more connected in the longer term, harnessing digitalisation and innovation to further facilitate cross-border movements within APEC to ensure a healthy flow of goods, services, business people and the public at large.

APEC launched the Putrajaya Vision 2040 in November 2020, under which the world’s most dynamic regional economies will cooperate toward building an open, dynamic, resilient and peaceful Asia-Pacific.

Source: Nam News Network

South African electricity public utility, Eskom, apologised yesterday, for continued rolling blackouts in the country.

Andre de Ruyter, CEO of Eskom, also announced that, load shedding will be reduced to stage three from stage four.

“We understand this is a huge inconvenience to the country, we apologise for the negative impact this had had, not only on the business industry but also on those students, who are currently writing matric exams,” de Ruyter told media.

The CEO said, stage four will be downgraded to stage three, which will last until Friday. After maintenance has been completed on several units, load shedding will cease Saturday morning.

Power outages started last month. Eskom escalated load shedding from stage two to stage four, due to unplanned breakdowns this week.

Eskom implements load shedding due to high demand or urgent maintenance at certain power stations.

Stage two load shedding means that up to 2,000MW of capacity needs to be shed. Consumers can expect to be shed up to six times over a four-day period for two hours at a time.

During Stage four load shedding, consumers can expect to be shed up to 12 times over a four-day period. These blackouts exerted devastating effects on small businesses and the overall economy.

CEO of Business Unity South Africa, Cas Coovadia, said, “economic impact” of load shedding was dire.

“New capacity must urgently be added to the grid,” he said, “we call on the president and his cabinet to demonstrate decisiveness in this crisis. The president must demonstrate to the nation that the government is doing everything in its power to address this crisis.”

Source: Nam News Network