Monday, January 23, 2017
Trump withdraws from Trans-Pacific Partnership; London air pollution 'very high' for first time; Weak growth challenges Gulf banks
1 Trump withdraws from Trans-Pacific Partnership (David Smith in The Guardian) Donald Trump has begun his effort to dismantle Barack Obama’s legacy, formally scrapping a flagship trade deal with 11 countries in the Pacific rim. The new president also signed executive orders to ban funding for international groups that provide abortions, and placing a hiring freeze on non-military federal workers.
The TPP was never ratified by the Republican-controlled Congress, but several Asian leaders had invested substantial political capital in it. Their countries represent roughly 13.5% of the global economy, according to the World Bank. Trump’s election opponent, the Democrat Hillary Clinton, had also spoken out against the TPP.
The move also intensified speculation over the future of the 17-year-old North American Free Trade Agreement (Nafta). There were reports that Trump would sign an executive order on Monday to begin renegotiating terms with Canada and Mexico.
He did move to reinstate a ban on providing federal money to international non-government organizations that perform abortions or provide information about them. The policy also prohibits taxpayer funding for groups that lobby to legalize abortion or promote it as a family planning method.
Republican administrations have tended to institute such a ban while Democrats have reversed it, most recently President Obama in 2009. Trump signed it one day after the anniversary of the supreme court’s 1973 Roe v Wade decision that legalized abortion in the US. Activists fear that the precedent is now under threat.
Earlier, Trump met a group of top business leaders including Elon Musk, the head of SpaceX, and the executives from Dell, Johnson & Johnson and Lockheed Martin. He set out plans to cut regulations for businesses in the US and slash the company tax rate from 35% “down to anywhere from 15 to 20%”.
2 London air pollution ‘very high’ for first time (San Francisco Chronicle) London's mayor has issued a "very high" air pollution alert for the first time, as cold, windless weather allowed emissions across the whole of southeast England to build up over the weekend.
The London air monitoring team at King's College London said pollution in the capital was at "black," the highest level, meaning people should reduce physical exertion outdoors. The rise in pollution was caused by a combination of traffic pollution and wood burning, it added. That combined with an import of pollution from the continent on Sunday.
Officials warned that many other places across Britain were also suffering from high levels of pollutants known as particulate matter.
3 Weak growth challenges Gulf banks (Babu Das Augustine in Khaleej Times) Weak economic environment will continue to weigh on the financial profiles of banks across the Gulf Cooperation Council (GCC) countries in 2017 and 2018, according to banking sector analysts.
“The end of the commodities boom has also increased the pressure on GCC banks’ asset quality and profitability indicators. While we expect to see further weakening in some of these indicators in 2017-2018, we think that GCC banks have built sufficient buffers to make the overall impact on their financial profiles manageable,” said S&P global Ratings credit analyst Mohammad Damak.
Over the past one year loan growth to private sector has taken a beating. Growth in lending to the private sector halved to 5 per cent on average as of September 30, 2016, compared with 10 per cent in 2015. In 2017-2018, S&P analysts expect this situation to continue as the government’s policy response to lower oil prices continues to take the form of spending cuts and the postponement of infrastructure projects.
The less-supportive economic environment is expected to result in further deterioration in asset quality. As of September 30, 2016, these indicators plateaued for the GCC banks and analysts see further deterioration in 2017-2018. S&P expects the downward trend to last for at least two years, barring any unexpected increase in hydrocarbons prices.