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Giant US Bank Reveals 29 Percent Pay Gap Between Men, Women

Female employees at Citigroup Inc around the world are paid just 71 percent of what men earn, the giant bank said on Wednesday, declaring its intentions to close its gender pay gap.

A Citigroup shareholder group that sought data on the pay gap said the bank is the first U.S. company to disclose such figures.

The U.S.-based bank employs more than 200,000 people in more than 100 countries, and more than half those employees are female, it said.

Tackling the 29 percent gap means increasing the number of women in senior and higher-paying roles, promoting women to at least 40 percent of assistant vice president through managing director jobs, Citigroup said in a statement.

Citigroup said it disclosed the data in response to a shareholder proposal from Arjuna Capital, an investment management firm.

The bank said its “raw pay gap” showed median pay for females globally was 71 percent of the median for men.

The raw gap measures the difference in median total compensation not adjusted for job function, level and geography.

With those adjustments, women are paid an average of 99 percent of what men are paid, it said.

“We have work to do, but we’re on a path that I’m confident will allow us to make meaningful progress,” Sara Wechter, head of human resources, said in a statement.

In the United States overall, women last year working full-time year-round earned 80 percent of what men earned, according to commonly cited data from the U.S. Census Bureau.

Congress outlawed pay discrimination based on gender in 1963, yet public debate over why wages still lag drastically for women has snowballed in recent years.

Globally, the World Economic Forum reported an economic gap of 58 percent between the sexes for 2016, costing the global economy $1.2 trillion annually.

Last January, Citigroup said it was increasing compensation for women and minorities to bridge pay gaps in the United States, the United Kingdom and Germany, becoming the first big U.S. bank to respond to a shareholder push to analyze and disclose its gender pay gap.

This past year it expanded its pay equity review beyond those three countries to its workforce globally, it said.

 

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World Economic Forum Warns of Impact of Global Tensions

International tensions and nationalist politics can further weigh on the global economy this year and hinder efforts to deal with big issues such as climate change, the organizers of next week’s Davos forum warned Wednesday.

In its annual Global Risks Report, the World Economic Forum said the world is evolving into “a period of divergence following a period of globalization.”  A “darkening” economic outlook, in part fostered by geopolitical tensions between the United States and China, “looks set to further reduce the potential for international cooperation in 2019,” it said.

 

“With global trade and economic growth at risk in 2019, there is a more urgent need than ever to renew the architecture of international cooperation,” said Borge Brende, President of the World Economic Forum, which hosts an annual gathering of business and political leaders in the Swiss ski resort of Davos.

 

“We simply do not have the gunpowder to deal with the kind of slowdown that current dynamics might lead us towards,” he added.

 

In 2018, the global economy slowed more than most experts had predicted and stock markets posted their worst year in a decade. Much of that has been blamed on the standoff between the U.S. and China over trade that has led to both sides imposing tariffs on hundreds of billions worth of goods.

 

The report, which is based on the views of around 1,000 experts and decision-makers from around the world, found that 88 percent of respondents expect a “further erosion” of global trading rules and agreements that will hold back growth.

 

The U.S.-China relations will be one of the main talking points at next week’s gathering in Davos, with a number of high level representatives from each side due to attend, including U.S. Treasury Secretary Steven Mnuchin and China’s vice president, Wang Qishan. Britain’s upcoming exit from the European Union will be another key issue after British lawmakers overwhelmingly rejected the Brexit deal Prime Minister Theresa May had negotiated with the EU.

 

The 2016 vote to leave the EU had been driven in large part by a belief that Brexit would restore decision-making powers to Britain. U.S. President Donald Trump has used similar justifications to employ his “America First” policies on a range of international issues, such as climate change.

 

One area identified as being affected by the more fractured geopolitical environment is the need to modernize critical infrastructure projects around the world, such as roads, bridges and power networks, firstly and foremost to avoid accidents such as the collapse of a bridge in Genoa, Italy, last summer that killed 43 people.

 

John Drzik, President of Global Risk and Digital at Marsh, which helped with the preparation of the report, said the “more protectionist economic environment” is increasing costs and causing delays. The introduction of steel tariffs by the United States, he noted, raised the costs of an infrastructure project in Detroit by approximately 13 percent.

 

“Persistent underfunding of critical infrastructure worldwide is hampering economic progress, leaving businesses and communities more vulnerable both to cyberattacks and natural catastrophes, and failing to make the most of technological innovation,” he said.

 

 

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Angola’s Oil Reforms: Miracle or Mirage?

Angolan President Joao Lourenco has made headline-grabbing changes in the nation’s vital oil sector since taking power in 2017.  Economists say these changes should improve Angola’s economy, and may even provide a model for other resource-rich African nations.  But Lourenco’s critics say the reforms are cosmetic and haven’t brought benefits to ordinary Angolans.

 Oil has long been a blessing and a curse for citizens of this Southern African nation.  Allies of longtime president Jose Eduardo dos Santos allegedly enriched themselves off oil profits, while most citizens remained desperately poor.

But since taking office in 2017, Lourenco has been making welcomed changes.

“The current president really, really has — I wouldn’t say he has turned it around, he has taken some major steps that the industry has been waiting and the economy has been looking at,” said NJ Ayuk,  head of the Johannesburg-based Centurion Law Group and chairman of the Africa Energy Chamber of Commerce. “And we are seeing things improving if these steps are actually implemented and they actually go forward.”

Lourenco is trying to diversify the oil-dependent economy, announcing the nation’s first diamond auction later this month.

He also sacked several of the former president’s children from top positions, including his daughter, who was running the state oil company Sonangol.

Lourenco also reformed Sonangol, streamlining operations and regulations to make it easier for foreign investors to work in the oil sector.

Economist Cobus de Hart of NKC African Economics said it’s too soon to be optimistic.

“Most of the improvement is due to higher oil prices,” he told VOA. “And obviously it will take some time for the reforms at Sonangol to translate to increased earnings and also a marked improvement in inefficiencies. But moves have thus far seem to have attracted more interest from global oil majors to invest more in the country.”

Angolan journalist and human rights activist Rafael Marques, a frequent critic of the government, said the leadership changes at the state oil company are cosmetic and misleading.

“The way contracts are allocated, you still have companies that belong to politically exposed persons providing services,” he said. “So, some reforms are being implemented. But the point is not to replace one set of crooks by another set of crooks. Most of the public contracts [Lourenco is] signing off are without public tender. And remember, that’s where the oil money goes to.”

Nonetheless, Ayuk, who recently visited Angola, said he is hopeful. 

He said if Angola continues reforming its oil industry, it could trigger similar efforts in other African countries.

“What is really exciting is that most observers are looking at this and saying, ‘Maybe this could be something that we can really build upon and look at as a model that works for Africa.’ The truth of the matter is that if Angola gets it right, there is no reason why Mozambique or South Africa, or Namibia, or Nigeria, or Equatorial Guinea cannot get it right. Because people are tired of not seeing these resources translate to development.“

 

 

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Economic Fallout Mounts as US Government Shutdown Continues

The White House has doubled projections of how much economic growth is being lost because of the partial government shutdown, now in a record 26th day with no end in sight to President Donald Trump’s standoff with opposition Democrats over his demand for taxpayer money to build a barrier at the southern border with Mexico.

Kevin Hassett, the chairman of Trump’s Council of Economic Advisers, said Tuesday the country’s robust economy has already lost a half percentage point from the shutdown, during which 800,000 government workers have been furloughed or forced to work without pay. He said quarterly economic growth is being reduced by .13 of a percent each week the shutdown continues.

Trump is meeting Wednesday with a group of nearly 50 Democratic and Republican lawmakers that calls itself the Problem Solvers Caucus, as he continues to make the case for more than $5 billion in funding for construction of the border wall aimed at stopping illegal migration into the United States. Democrats have offered $1.3 billion in new border security funding, but none specifically for a wall.

Taking to Twitter, Trump cited other examples of walls he argued were 100 percent successful.

Pelosi asks to delay State of Union speech

House Speaker Nancy Pelosi, leader of the Democratic majority in the House of Representatives and a staunch opponent of Trump’s call for a wall, asked him Wednesday to delay his scheduled January 29 State of the Union address before Congress unless the shutdown ends this week, or deliver his address in writing, a practice presidents followed more than 100 years ago.

Pelosi cited security concerns, noting that the U.S. Secret Service, which guards Trump and his family, and the Homeland Security agency have not been funded during the shutdown, “with critical departments hamstrung by furloughs.”

About one-fourth of government operations has been impacted since December 22, closing some museums, curtailing airport security operations and limiting food inspections, among other government services.

The Trump administration recalled 50,000 federal civil servants on Tuesday, many of them to help process refunds during the country’s annual tax return filing season, but they, like other “essential” employees already working without being paid, also will not be compensated until the impasse over border wall funding ends.

Bill guarantees back pay

Trump is set Wednesday to sign a bill to guarantee that federal workers, regardless of whether they were forced to work or furloughed during the shutdown, eventually get paid their lost wages, as has been done during previous shutdowns over the last several decades.

Workers for private contract companies hired by the government, however, are unlikely to recoup lost wages. If the shutdown lasts another week, government workers will miss their second paycheck this month.

Helping hand for furloughed workers

Some financial institutions have adopted programs to help those workers deal with a sudden loss in income, while a number of Washington area restaurants are giving away meals to federal workers.

The charity World Central Kitchen, which is known for its work feeding people in disaster zones such as Puerto Rico after a hurricane devastated the U.S. territory in 2017, is opening a popup stand Wednesday in Washington to feed federal employees.

The site is on Pennsylvania Avenue, about halfway between the Capitol and the White House, and the group’s founder, chef José Andrés, said the location is symbolic of the need for Americans to come together.

“We’re going to be open for any federal family that needs food,” Andrés said in a Twitter video announcing the project. “We will have food for you to eat or food to take home. But also I hope it will be a call to action for our senators and congressman and especially President Trump to make sure that we end this moment in the history of America where families are about to go hungry.”

While Trump and Democratic leaders blame each other for the situation dragging on, a number of recent polls have put more of the responsibility on the president.

Most Americans blame Trump for impasse

A Reuters/Ipsos poll released Tuesday indicated 51 percent of respondents blame Trump and 34 percent blame congressional Democrats. In the same poll, 62 percent of people said they support adding more border patrol agents, and there was a roughly even split of 43 percent of people both supporting and opposing additional fencing at the border.

The Senate and House were both due to be in recess next week, but leaders in both chambers have said that break will be canceled if the shutdown is still in effect.

“We’re going to stay out for a long time, if we have to,” Trump told supporters in a conference call Tuesday.

In Congress, the House has passed several bills that would follow Pelosi’s plan to reopen the government for now and debate the border later, while Senate Majority Leader Mitch McConnell has said he will not bring up any legislation that Trump would not support.

McConnell vs Schumer

McConnell on Tuesday called on Senate Democrats to make “an important choice.”

“They could stand with common sense, with border experts, with federal workers, and with their own past voting records by the way, or they could continue to remain passive spectators complaining from the sidelines as the speaker refuses to negotiate with the White House,” McConnell said.

Senate Minority Leader Chuck Schumer said Trump should “see the pain” the shutdown is causing.

“He’d benefit from listening to the stories of federal civil servants who were working without pay, locked out of their jobs, maybe then President Trump will understand the damage he’s causing by holding these people hostage until he gets what he wants,” Schumer said. “Meanwhile, Leader McConnell, Senate Republicans are hiding in the shadows as if they have some kind of aversion to doing their job when it involves the slightest break with the president.”

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Globalization, Climate Change Top Agenda of World Economic Forum

More than 3,200 government, business, academics and civil society leaders will address issues of globalization, climate change and other matters of world importance next week at the annual World Economic Forum in the plush Swiss Alpine village of Davos.

The list of participants reads like the Who’s Who of the most powerful, successful and inventive movers and shakers in the world. They will be rubbing shoulders during hundreds of formal sessions and workshops, as well as in private bilaterals on the sidelines of the meeting. They will discuss and seek solutions to some of humanity’s most vexing problems.

The theme of this year’s gathering is Globalization “4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution.” That refers to the emerging technology breakthroughs in such fields as artificial intelligence and robotics.

Founder and executive chairman of the World Economic Forum Klaus Schwab says this fourth wave of globalization needs to be human-centered. He says globalization in its present form is not sustainable. He says globalization must be made more inclusive.

“Globalization produced winners and losers, and so there were many more winners in the last 24, 25, 30 years. But now we have to look after the losers — after those who have been left behind…what we need is a moralization, or re-moralization, of globalization,” he said.

The program is very wide-ranging. For example, U.N. Secretary-General Antonio Guterres will discuss the state of the world. He will broach issues like climate change, fighting poverty and sustainable development. There will be special sessions by others about ways to make economic growth more inclusive, on rethinking world trade, as well as many scientific, artistic and cultural meetings.

Leaders from all regions of the world will attend. The Middle East will be represented by the presidents of Libya and Iraq. Israeli Prime Minister Benjamin Netanyahu will be there. So will Palestinian Prime Minister Mahmoud Abbas.

Six or seven presidents from Africa will be in attendance. And organizers of the forum say there is great interest in an appearance by the new Ethiopian prime minister, Abiy Ahmed, who has established peace with Eritrea during his first six months in office.

The forum president, Borge Brende, says a strong United States delegation will attend next week’s event, although President Donald Trump canceled his participation.

“We fully understand that, of course, President Trump will have to stay in D.C. as long as the government is facing this shutdown. We are very pleased, though, that the U.S. will be participating with key secretaries,” he said.

Brende confirms that among those coming will be Secretary of State Mike Pompeo, fresh from his travels in the Middle East, Secretary of the Treasury Steve Mnuchin, and Secretary of Commerce Wilbur Ross.

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‘Made in China 2025’ Feels Trade War Pinch

Although it is unclear if the United States and China will be able to meet a 90-day deadline and strike a deal on trade by March 2, the tussle is clearly adding to uncertainty about the future fate of the Chinese government’s strategic plan named “Made in China 2025.”

The plan itself is much like other countries’ goals to move up the industrial value chain. According to Beijing’s plan, China aims to make the country a world leader in 10 key sectors such as robotics, information technology, and artificial intelligence by 2025.

However, what has raised concerns is how China is going about reaching that goal.

Foreign companies and governments have voiced growing concern about the plan and the Chinese policy and practice of forcing companies to hand over technology in exchange for access to the country’s massive economy.

At the same time, analysts believe Beijing has done little to stop Chinese companies from stealing technology through their operations overseas.

Dilute or delay?

Pushback from abroad has already impacted the implementation of Made in China 2025, said Anna Holzman, a junior research associate with the Berlin-based Mercator Institute of China Studies (MERICS).

“The tough stance followed by actions taken by the United States has notably increased the sense of urgency amongst Chinese policymakers to speed-up the development of domestic capabilities,” she said.

Aside from the trade deficit, forced technology transfers are a key reason why President Donald Trump launched the trade war. It is also the main component of ongoing negotiations between the world’s two biggest economies.

During last week’s talks, China said the two sides made progress on addressing the issue of technology transfers as well as other structural problems.

But the trade dispute, rising investment restrictions on its companies in western countries, and declines in its own industrial economy have some arguing that Beijing may be forced to either dilute or delay the plan.

Over the past few months, officials have stopped mentioning the plan. Beijing recently ordered Chinese companies not to force foreign firms based in China to surrender their technologies. And for the first time in years, the Made in China 2025 plan did not figure in the list of development priorities outlined by the central government for 2019.

Great leap forward

The move by officials to downplay and stop mentioning the plan and other recent measures to open up China’s economy are positive signals, said Scott Kennedy, deputy director of the Freeman Chair in China Studies at the Center for Strategic & International Studies in Washington.

“But they are going to need to be backed up by a much more broad, clear, transparent, change in policies that everyone can see, that are across the board, if you really want to convince the United States and others that China is taking a great leap forward in economic liberalization,” he said.

But while Washington waits for China to change its tune, it is unlikely to shift its increasingly tough stance on technology that has already impacted major Chinese tech firms such as Huawei and ZTE.  A growing number of countries have taken steps to ban Huawei from participating in the build of fifth-generation networks or 5G.

“Technology issues will continue to be there. President [Donald] Trump has a very confrontational position against Huawei as well as ZTE. So this will continue,” Lourdes Casanova, director at Cornell’s Emerging Markets Institute, said while referring to two major Chinese technology companies.

Last week, Poland arrested a Huawei employee on spying charges. Polish authorities say there is no connection between the arrest and the company, but at the same time, they have taken steps to urge the EU and NATO to jointly ban Huawei products.

The arrest of the Huawei employee in Poland follows the detention of the company’s chief financial officer Meng Wanzhou in Canada.

Chinese investments slump

Chinese companies often pour money into investments in the U.S. to acquire new technologies and learn new ways of doing business. But now, stepped up scrutiny of investments imposed by Washington and the deterioration of U.S.-China trade relations has led to a sharp decline.

Last year, according to data compiled by the research firm Rhodium Group, Chinese investments in the U.S. hit a seven-year low of $4.8 billion, a steep drop of 84 percent from $29 billion in 2017.

And 2019 is likely to be equally dismal.

“Washington is moving to implement tougher screening of venture capital and other high-tech acquisitions; and the dark cloud over U.S.-China relations is unlikely to disappear, although a major deal between China and the U.S. could help revitalize investor appetite in sectors with low national security sensitivities,” said New York-based Rhodium Group.

Digging in

However, some analysts believe that Western restrictions and criticisms has made the 2025 program a lot more important for China than in the past. Instead it has pushed Beijing to step up its pursuit of technological leadership and self-sufficiency.

China is merely reducing the propaganda around the 2025 program and talking less about it, said Xiaoyu Pu, author of a recent book, “Rebranding China: Contested Status Signaling in the Changing Global Order.”

“Regardless of any re-branding exercises and concessions made by the Chinese government to appease Western minds, efficient policy implementation in industries and technologies listed under the Made in China 2025 scheme remains a top priority,” Pu said.

 

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France’s Macron Launches ‘Grand Debate’ Following Protests

French President Emmanuel Macron is formally launching a “grand debate” to try to appease the yellow vest movement following weeks of anti-government protests.

Macron heads Tuesday to Grand Bourgtheroulde, a small town in Normandy, where he is to meet about 600 mayors and local officials.

 

Despite a high security presence, a ban on traffic and restricted access to the town, dozens of yellow vests protesters gathered outside the town to express their discontent.

 

“We are being prevented from accessing the village,” said protester Florence Clement. “I was crossing the road with my yellow vest but I was asked to remove it because it’s forbidden.”

 

Macron started his journey with a stop in the small town of Gasny to attend a local officials’ meeting, where some expressed their concerns over the loss of purchasing power of retirees and civil servants.

Macron addressed this week a “letter to the French” to encourage people to express their views on a series of economic and political matters during a three-month “grand debate.”

 

The consultation will take place through local meetings and on the internet. The debate will focus on taxes, public services, climate change and democracy.

 

The French leader, whose popularity ratings hit record lows at the end of last year, hopes the process will help quell anger over his economic policies.

About 84,000 people turned out last weekend for the ninth round of anti-government demonstrations across France, according to the French Interior Ministry.

 

The yellow vest movement, prompted in November by a tax hike on diesel fuel, has expanded to encompass demands for wider changes to France’s economy to help struggling workers. Protesters have denounced Macron’s pro-business policies as favoring the rich.

 

The movement is named for the fluorescent garments French motorists are required to keep in vehicles.

 

 

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China Reports Record Trade Surplus with US, Amid Signs of Slowing Economy

China’s trade surplus with the United States rose dramatically in 2018, despite a tit-for-tat tariff war with the U.S. that has roiled global markets.

The surplus stood at a record-high $323.3 billion, compared to $275.8 billion recorded the year before. 

Data released Monday by China’s customs bureau shows the country’s exports to the U.S. grew more than 11 percent in 2018. Imports from the United States rose only slightly (0.7 percent). 

But the data also revealed that exports slowed by 3.5 percent last month, as the administration of President Donald Trump imposed a series of stiff tariffs on billions of dollars of Chinese goods to force Beijing to buy more American goods and to resolve issues involving technology, intellectual property and cyber theft issues.

The data also revealed mixed news about the strength of the world’s second-biggest economy – while China’s global trade surplus was $352 billion for 2018, its global exports dropped 4.4 percent in December compared to a year earlier, while imports plunged 7.6 percent, suggesting softening demand both at home and abroad.

Figures released by the China Association of Automobile Manufacturers show that car sales fell in 2018 – the first time in 20 years for a decline.

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Detroit Auto Show, and Industry, Prepare for Transition

The auto industry gathered in Detroit on Sunday, on the eve of the last winter edition of North America’s premiere auto show, as carmakers grapple with a contracting market and uncertainty in the year ahead.

Concerns over the health of the global economy and a US-China trade war loomed over the North American International Auto Show, as it prepared to open Monday with the first five days dedicated to the media and industry insiders. The show opens to the general public on January 19.

While a number of major announcements were expected — including an anticipated strategic alliance between Ford and Volkswagen — there will be fewer automakers and new car unveilings, making it more subdued. 

“This is a transition year for the Detroit show,” said analyst Michelle Krebs of Autotrader. “It’s kind of emblematic of where the industry is. We’re in a transition in the industry.”

After a 10-year boom, analysts expect North American auto sales to contract in 2019, as consumers face pressures and carmakers grapple with multiple uncertainties. 

Rising interest rates and car prices have squeezed car buyers, and fewer of them are able to afford increasingly pricey, technology-heavy cars. 

Kelley Blue Book predicted the average new-car price was up about three percent in 2018 to more than $36,000.

  • Tariffs cause uncertainty –

Meanwhile, tariffs on imported steel and aluminum products and a potentially intensifying trade dispute between the Donald Trump administration and Beijing has automakers spooked, analysts said.

“Tariffs already had an impact in 2018,” said Cox Automotive chief analyst Jonathan Smoke, adding that 47 percent of the vehicles sold in the US in 2018 were imported. 

“We believe about two percent of today’s prices are because of the tariffs that were already implemented.”

The US is considering additional tariffs of 25 percent. Should it announce such a move by the February 17 deadline, it could have a substantial impact on the industry and stock markets, Smoke said. 

“We believe that they are likely to move forward with some form of that tariff, because it becomes then a lever for them to force… further negotiations.”

Should tariffs raise car prices further, analysts said it could substantially depress the new car market. Consumers would flock to relatively cheaper used cars, which are in ample supply. 

A growing number of lightly-used, tech-heavy vehicles leased during the sales boom of the last few years are being returned to dealerships.

The auto dealers association, which organizes the show, also was contending with the uncertainty of the show’s very relevance. Almost all German carmakers abandoned the show this year, as more and more important announcements are made at other gatherings. 

Next year, the Detroit show will move from January, when it has been held for some 40 years, to June.

  • Goodbye winter – 

Organizers hope the summer weather will allow for outdoor events that allow attendees to try out the new cars and technologies on display.

“It’s run out of gas now,” said Krebs. “June could be a rebirth for the show.”

Among the few notable unveilings this year will be from Ford, which is expected to display a redesigned Explorer SUV and a more powerful version of its iconic Mustang sports car under the name Shelby GT500. 

SUVs and trucks will once again be the highlight, a symptom of North American consumers’ shift away from sedans and small cars. Trucks and SUVs made up a majority of new purchases in the US last year. 

“The SUVs have become cars with SUV bodies sitting on top of them,” said Karl Brauer of Kelly Blue Book. 

Detroit’s big three automakers have been ending production of almost all of their sedans and small cars, succumbing to the pressure of falling demand.

To hedge against the threat of a global economic downturn, GM has announced plans to close underutilized US plants that made smaller, less profitable vehicles. 

Ford planned similar cost-cutting moves in Europe.

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