Wednesday, May 31, 2017

Canada leads growth among G7 nations; Lacklustre growth for India; UAE among top 10 competitive countries

1 Canada leads growth among G7 (Simon Goodley & Phillip Inman in The Guardian) The UK has slumped to the bottom of the league table of advanced economies after Canada registered stellar growth in the first three months of the year.

Canada was the final member of the G7 to report its growth figures, which confirmed the UK as officially the joint worst performing member so far this year. The announcement marked a significant decline for the UK economy, which a year ago was outshining Germany, the US and Japan. In February it was announced that Germany had pipped the UK as the fastest-growing G7 nation during 2016 by 10 basis points.

However, the latest figures for Canada, which showed that growth accelerated to 0.9% in the first quarter, putting it top of the G7 performers, has left Britain languishing alongside Italy at the bottom of the table. Germany is in second spot at 0.6%, followed by Japan with 0.5%, France 0.4% and the US at 0.3%. The UK and Italy are then level on growth of just 0.2%.

The sluggish expansion in the first quarter provides the latest evidence that the early resilience to the EU referendum result last June is now wearing off as higher inflation puts consumers under pressure. Prices have been increasing since the Brexit vote because the referendum result sent the pound sharply lower and has raised the cost of imports to the UK. That higher inflation has hit household budgets and dented the main driver of UK growth, consumer spending.

2 Lacklustre growth for India (Khaleej Times) India's growth slowed to 7.1 per cent last year, according to official data, weaker than analysts expected but still the fastest rate of growth of any major economy. GDP growth for the 12 months ended March 31 was well below a revised figure of eight per cent for the previous year, and follows the government's shock move last November to ban most of the currency in circulation.

However the country of 1.25 billion is still reporting faster growth than rival China, at 6.7 per cent in 2016. Prime Minister Narendra Modi has defended his move to remove all Rs 500 (around $7.50) and Rs 1,000 notes from circulation as a necessary strike against corruption. The government argues it will boost revenues by dissuading people from using cash, which makes it easier to avoid tax.

The move hit cash-dependent sectors like real estate, jewellery and agriculture, and triggered massive lines outside banks in the weeks afterwards as authorities struggled to print replacement notes fast enough.

In a report earlier this week the World Bank said the fundamentals of India's economy remained strong and predicted an uptick in the economy with a national goods and services tax due to be introduced on July 1. The move will likely "yield substantial growth dividends from higher efficiencies" and increase state revenues in the long term, according to the bank.

3 UAE among top 10 competitive countries (Babu Das Augustine in Gulf News) The UAE made it into the coveted list of the ten most competitive countries in the world in the 2017, according to the IMD World Competitiveness Yearbook.

This year, the country improved its ranking by five positions from its 2016 overall global competitiveness ranking of 15th, securing a place among the world’s top ten most competitive nations. This year 63 countries are ranked, with Cyprus and Saudi Arabia making their first appearance.

Hong Kong has taken the top spot for the second year running. Switzerland and Singapore came in second and third, with the US placed fourth, its lowest position in five years and down from third last year. The Netherlands completed the top five, jumping three places from eighth last year.

The UAE’s achievement looks more emphatic as it has surpassed some of the world’s developed countries such as Norway, Canada, Germany, Taiwan and Finland — in 11th to 15th positions respectively — on the overall global competitiveness index. The indicators that stood out among the most improved countries are related to government and business efficiency as well as productivity.

Globally, the bottom of the table in competitiveness is largely occupied by countries experiencing political and economic upheaval. Among these are Ukraine (60), Brazil (61) and Venezuela (63).

Tuesday, May 30, 2017

Amazon shares hit $1,000; China boosts Kenya infra; Online shopping and lowly-paid couriers

1 Amazon shares hit $1,000 (BBC) Shares in online retail giant Amazon have risen above the $1,000 mark for the first time. The shares touched $1,001.2 at one point on Tuesday before slipping back to $996.7. It originally listed its shares in May 1997 for just $18 each.

Amazon now has a market capitalisation of about $478bn, which is more than twice that of Wal-Mart. After starting as a bookseller, it has steadily expanded to become much broader-based retailer. According to consultancy Slice Intelligence, Amazon now accounts for about 43% of all online sales in the US.

Amazon is now the fourth-largest US company by market capitalisation, behind Apple, Google owner Alphabet, and Microsoft. Alphabet's class A shares were also close to hitting four figures on Tuesday, trading at $996, meaning the company is worth around $681bn.

2 China boosts Kenya infra (San Francisco Chronicle) Kenya's president has opened the country's largest infrastructure project since independence, a Chinese-backed railway costing nearly $3.3 billion that eventually will link a large part of East Africa to a major port on the Indian Ocean as China seeks to increase trade and influence.

The railway replaces part of the 660-mile (1,062-kilometer) line known as the "lunatic express," which was built by the British more than a century ago and linked Lake Victoria with the port city of Mombasa. Kenya Railways says the newly opened stretch will reduce passengers' travel time from the capital, Nairobi, to Mombasa from more than 10 hours to four.

The Chinese-funded, Chinese-constructed project has drawn criticism from some observers who call it overpriced; its cost represents about 5 percent of Kenya's GDP. Activists have blocked the railway's second phase with a court order because of concerns about the impact on wildlife as it cuts across Nairobi National Park. Passengers on Monday's journey saw dozens of elephants, zebras and other wildlife en route to the coast.

The newly opened railway is the first phase of a project to connect Kenya's landlocked neighbors Uganda, Rwanda and South Sudan to Mombasa. Construction of this 301-mile section was scheduled to be completed in December, but observers said President Uhuru Kenyatta's government hastened its launch to boost his re-election bid in August.

China is Africa's top trade partner and the world's second largest economy. Last year, a largely Chinese-financed and Chinese-built railway opened between landlocked Ethiopia, one of the continent's fastest-growing economies, and a major port on the Gulf of Aden in Djibouti.

And China has more planned for Africa as part of its "Belt and Road" project, its largest foreign initiative to date with multibillion-dollar investments in ports, railways and other facilities. Kenyatta was one of many heads of state attending China's forum on the project earlier this month.

3 Online shopping and lowly-paid couriers (Robert Booth in The Guardian) Britain spends more online per head than any other country in the world, according to a study by the UK Cards Association. On average, each citizen spends £4,600 a year online, more than £1,000 more than Americans do. By 2025, British citizens will be placing orders for 2.7 billion parcels a year, more than double the 1.3bn being delivered this year, according to the online-retailers industry body, IMRG.

The apparent frictionlessness of online shopping is, however, an illusion. Across Britain, this hugely competitive industry is pushing tens of thousands of couriers to work uncertain hours for low pay, often under considerable pressure and with little or no employment protections, to get all these packets to our doors as quickly and cheaply as possible.

“Some consumers are aware we are earning so little, but there are plenty who really don’t care as long as it’s cheap,” says John, a self-employed courier for Hermes, the UK’s second-largest delivery company after Parcelforce.

John has calculated that he often takes home as little as £5.75 an hour, and rarely earns above the national minimum wage of £7.50. He is now delivering 80 parcels a day on average – up from about 55 last year – and has to lash sacks of parcels to the roof of his hatchback because the passenger seats are packed full.

For the past year, I have been investigating Britain’s fast-growing delivery industry, unearthing shocking stories of dismally low pay (less than £2 per hour, in one case) and severe job insecurity. Some couriers told me they have felt threatened with losing rounds if they are ever unavailable to work, even when their children have fallen seriously ill or a loved one has died.

Monday, May 29, 2017

Drones, driverless trucks and the jobs threat; US growth revised up to 1.2%; India failing in job creation

1 Drones, driverless trucks and the jobs threat (Max Opray in The Guardian) Morgan Stanley has forecast that freight operators could save $168bn a year by replacing humans with vehicles that drive themselves with no need for toilet breaks or sleep, and Uber last year bought an automated truck firm with the intention to roll out a global service.

It is a theory that has been put into practice in Australia: Rio Tinto has been relying on a fleet of driverless trucks at its iron ore mines in the Pilbara for years, yielding performance improvements of 12%.

A PWC study in 2015 predicted an 80% chance that Australia’s 94,946 professional drivers of road and rail vehicles would be replaced by automation in the next two decades. The prospect has union officials extremely concerned.

If self-driving vehicles – whether that is lumbering autonomous trucks driving for days without rest or airborne drones zipping across the skies – do push human drivers into unemployment queues, unions want compensation.

2 US growth revised up to 1.2% (BBC) The US economy grew at a faster pace than initially thought in the first three months of the year. The latest figures indicated the economy expanded at an annual pace of 1.2% in the quarter, up from the previous estimate of 0.7%.

The initial estimate had been seen as a blow to US President Donald Trump, who pledged in his election campaign to raise growth to 4%.cHowever, the revised figure still represents a slowdown from the 2.1% growth rate recorded in the final quarter of 2016.

Ben Herzon, senior economist at Macroeconomic Advisers, said temporary factors, such as lower spending on heating bills thanks to a relatively warm winter, restrained first quarter growth.

3 India failing in job creation (Mihir Sharma in Gulf News) Three years ago, Narendra Modi was sworn in as prime minister of India amid much hope and tremendous expectation. But Modi’s tenure cannot yet be judged a success for one central reason: He’s signally failed to create jobs for the desperate young people who gave him his massive mandate.

Three years in, some important steps forward have been taken, including the passage of a landmark reform of indirect taxes. Foreign investors remain bullish on the country. Yet Modi’s jobs record is even poorer than that of the much-maligned Congress government that he replaced. India needs to create as many as a million new jobs every month just to keep up with the growing population.

Under Modi, just over 10,000 jobs a month are being created instead, according to government figures from 2015. The scale of this failure is enormous — especially since it will add to the angry army of already underemployed young Indians.

Modi certainly didn’t worry about political capital last November, though, when he took the puzzling and destructive step of rendering 86 per cent of India’s currency illegal overnight. Far from paying a political price for a decision with a poor economic outcome, Modi and his party were rewarded with another unprecedented victory in state elections a few months later.

Modi seems to realise that he hasn’t moved swiftly enough to create jobs, which could cost him when he runs for re-election in 2019. That may be why his party and government have subtly changed the emphasis of their promises to the electorate. There is much more talk now of protecting cows — sacred to many Hindus — and of defending India’s interests in Kashmir.

No lower-middle-income country can ascend to middle-income status without generating mass employment, which in turn requires a dynamic manufacturing sector. Given the quickening pace of automation, India has precious little time left to ramp up industrialisation.

Sunday, May 21, 2017

Internet giants shine in data-driven economy; Arab nations struggle to get local talent; For Church of England a 17% ROI

1 Internet giants shine in data-driven economy (Goh Eng Yeow in Straits Times) Like US tech giants Alphabet and Facebook, China’s Tencent has been enjoying a sharp run-up this year. One common trait shared by all these firms is their ability to deploy far fewer assets and human resources than the traditional bricks-and-mortar companies to expand their businesses once they have achieved a certain scale in their operations.

What is interesting to note is that at the recent shareholder meeting of Berkshire Hathaway, its boss Warren Buffett bemoaned the fact that he failed to spot these winners early on and invest in them. Mr Buffett has remained true to his lifelong philosophy of investing only in what he can understand, but admitted that he should have understood Google.

One reason to want to buy these tech firms, based on Mr Buffett's investment philosophy, is the sustainable moat they have created for themselves to enable them to scale up their business without requiring huge amounts of capital. But the more important reason to want to get our hands on them is the fabulous treasure trove of consumer information they have built up on shopping, eating, travelling and wealth.

The Economist magazine recently described data as the most valuable commodity in the economy we live in, giving enormous power to the companies with access to it. By collecting more and more data, a firm has more scope to improve its products and attract more users which, in turn, generates even more data.

The Economist notes that this gives them a ‘God-eye view’ over their markets and beyond. "They can see when a new product or service gains traction, allowing them to copy it or simply buy the upstart before it becomes too great a threat," it said. This helps explain why Facebook was willing to fork out such a big sum - $22 billion - to buy the messaging service WhatsApp in 2014 even though it had no revenue to speak of.

The success of upstarts like Snapchat suggests new entrants can still make waves, despite the dominance of Facebook in social media networking. Even Apple's late boss, Mr Steve Jobs, might not have grasped the enormity of the changes which he had unleashed.

With a market value of over $460 billion, Tencent founded by Pony Ma is now worth almost half as much as all the companies listed on the Singapore Exchange, even though it has been listed for only 13 years.

2 Arabs struggle to get local talent (Francis Matthew in Gulf News) Arab countries all lag behind their peers around the world in getting the talents of their people into the work force. Three major reasons are the dominance of the public sector, the short comings of the private sector and a state-centred paradigm of development that has relied on oil revenue, foreign aid or remittances.

According to the third annual edition of the Mena Talent Competitiveness Index by INSEAD and the Centre for Economic Growth, the UAE was the top Arab state in the Competitiveness Index, and the UAE came 19th in the global survey of 118 states. Qatar was the second Arab state and was 21st in the global survey. These two states were well above the rest of the Arab states, with Saudi Arabia third (42nd in the global survey), Bahrain, Kuwait, Jordan and Oman following in that order.

The UAE scored very well in the ability to enable, attract and retain talent in which measures it was ranked well into the top 20 in the world, but it suffered from much lower rankings in its ability to grow talent, in which it was 40th in the world. An INSEAD commentator said this indicates a deep problem of a structural dependency on imported skills, which is inhibiting the country’s ability to grow its own skills base.

3 For Church of England, a 17% ROI (Simon Goodley in The Guardian) The case for profitable ethical investing has been bolstered by the Church Commissioners for England, as the fund announced divine returns on its financial portfolio for 2016.

The body, which manages investable assets worth £7.9bn in order to “support the Church of England as a Christian presence in every community”, said it had smashed targets by making a 17.1% return on investments during 2016 – figures which will be the envy of many high-profile figures in the fund-management industry.

The church’s fund’s outperformance over the past decade has slightly outpaced even the Yale Endowment fund, which is rated by the Financial Times (paywall) as the most admired in the sector. The Church Commissioners, whose target is making a return of inflation plus five percentage points, said it had been partly aided in 2016 by sterling’s weakness after the Brexit vote, with the fall in the value of the pound accounting for about half the gains made on its equity portfolio.

Friday, May 19, 2017

The oil glut persists; Impending end of manned air traffic control; First female ref in Bundesliga

1 The oil glut persists (Gulf News) After the first Opec oil production cut in eight years took effect in January, oil traders from Houston to Singapore started emptying millions of barrels of crude from storage tanks. Investors hailed the drawdowns as the beginning of the end of a two-year supply glut — raising hopes for steadily rising per-barrel prices. It hasn’t worked out that way.

Now, many of those same storage tanks are filling back up or draining more slowly than investors and oil firms had expected, according to global inventory estimates and more than a dozen oil traders and shipping sources who told Reuters about storage in facilities that do not make their oil volumes public.

The stalled drawdowns shed light on the broader challenge facing Opec — the Organisation of the Petroleum Exporting Countries — as it struggles to steer the industry out of the downturn caused by oversupply. With US shale oil production surging, inventories remain stubbornly high and prices appear stuck in the low-$50s per-barrel range.

Estimated inventories in industrialised nations totalled 3.025 billion barrels at the end of March — about 300 million barrels above the five-year average, according to the International Energy Agency’s latest monthly report. Preliminary April data indicated stocks would rise further, the IEA said. Crude stocks stood at a record 1.235 billion barrels.

2 Impending end of manned air traffic control (Gwyn Topham in The Guardian) Manned air traffic control towers, a reassuring fixture at airports since the dawn of civil aviation nearly a century ago, could soon be made obsolete by technological advances allowing arrivals and departures to be monitored from miles away using live streams of high-definition video.

A 50-metre control tower is being built at London City airport but it will be populated by a suite of HD cameras instead of humans, as it vies to become the first major hub in the world to manage its traffic remotely.

From 2019, the controllers’ window over the Docklands’ skyline in east London will be a bank of HD screens, joined in a seamless panorama in a digital control room at Nats, the UK’s national air traffic control service, in Swanwick, Hampshire. They will monitor a live feed from 14 cameras at London City, 80 miles away – and for now, a week’s worth of recorded action shot from a crane before the tower is built.

The airport believes it will allow staff to monitor aircraft on the runway and track the skies better than before. The complete 360-degree view has been condensed into a 225-degree arc, meaning the controller can in effect have eyes in the back of their heads – even if they peruse what appears to be a banana-shaped runway. From this room, the controller can pan and zoom cameras for a detailed view, sharper than the binoculars of old.

3 First female ref in Bundesliga (BBC) Bibiana Steinhaus will become the first female to referee in the Bundesliga. The 38-year-old police officer has been named as one of four new referees in Germany's top flight for 2017-18.

Steinhaus - the partner of English ex-Premier League and World Cup referee Howard Webb - has refereed second-tier games for six years. Webb, who is now leading efforts to introduce video technology to Major League Soccer, said he was "absolutely thrilled to bits" and believes it could help to inspire more women to reach the top level.

Steinhaus has faced scrutiny already in German football and admitted: "I have worked very hard for this in the last few years and suffered a few setbacks." When fourth official at a Bayern Munich match in October 2014, then Bayern coach Pep Guardiola put his arm around her shoulders as he argued about a refereeing decision. She brushed his arm off but the Spaniard was subsequently criticised in the media.

Fortuna Dusseldorf midfielder Kerem Demirbay was banned for five games in 2015 for saying "women have no place in men's football" after Steinhaus sent him off for a second bookable offence. He later apologised but was ordered by his club to referee a girls' football match as punishment.

Thursday, May 18, 2017

Japan economy grows faster than expected; Cisco cuts 1,100 jobs; Ford to axe jobs in North America, Asia

1 Japan economy grows faster than expected (BBC) Japan's economy grew faster than expected in the first three months of the year, according to official data. The economy grew 0.5% in the quarter, while the annualised rate of growth was 2.2% - the fastest rate for a year.

The figures means Japan has now recorded its longest period of expansion in more than a decade. The economy's prospects have been boosted by strong exports, a pick-up in consumption and investment for the Tokyo Olympics in 2020.

Exporters have been helped by the recent falls in the yen against the US dollar, which has made their products more competitive and has boosted the value of profits earned overseas. The data could provide a lift to Prime Minister Shinzo Abe as his government tries to encourage Japanese consumers and companies to spend more.

2 Cisco cuts 1,100 jobs (Straits Times) Cisco Systems, the biggest maker of equipment that runs the Internet, said it was cutting 1,100 jobs after reporting weaker-than-expected financial results in the past quarter.

A disappointing sales forecast also underscores the challenges facing its multibillion-dollar hardware business during an industry shift towards cheaper, software-based networking. Revenue in the current period may decline as much as 6 per cent from a year earlier, the company said.

That indicates sales of as little as $11.9 billion, far short of the average analysts' projection of $12.5 billion. Cisco also said it is cutting an additional 1,100 jobs on top of the 5,500 it announced last August. Cisco is one of the largest makers of Internet network equipment, making hardware for a range of industries ranging from telecommunications to connected devices. It had some 71,959 employees at the end of January.

Chief executive officer Chuck Robbins is trying to recast Cisco as a provider of networking services, seeking to reduce its dependence on hardware by offering more software and cloud-based products that provide predictable revenue.

3 Ford to axe jobs in North America, Asia (Khaleej Times) Ford Motor plans to shrink its salaried workforce in North America and Asia by about 10 per cent as it works to boost profits and its sliding stock price, a source familiar with the plan told Reuters.

A person briefed on the plan said Ford plans to offer generous early retirement incentives to reduce its salaried headcount by October 1, but does not plan cuts to its hourly workforce or its production.
The move could put the US automaker on a collision course with President Donald Trump, who has made boosting auto employment a top priority. Ford has about 30,000 salaried workers in the US. 

The cuts are part of a previously announced plan to slash costs by $3 billion, the person said, as US new vehicles auto sales have shown signs of decline after seven years of consecutive growth since the end of the Great Recession.

Following criticism from Trump, in January Ford scrapped plans to build a $1.6 billion car factory in Mexico and instead added 700 jobs in Michigan. In March, Ford said it would invest $1.2 billion in three Michigan facilities and create 130 jobs in projects, largely in line with a previous agreement with the United Auto Workers union.

Wednesday, May 17, 2017

Why Indian women are leaving work; Low unemployment, but people feel worse off; South Africa turning 'increasingly violent'

1 Why Indian women are leaving work (Soutik Biswas on BBC) Why are millions of women dropping out of work in India? The numbers are stark - for the first time in India's recent history, not only there was a decline in the female labour participation rate, but also a shrinking of the total number of women in the workforce.

Nearly 20 million Indian women quit work between 2004-05 and 2011-12. The labour force participation rate for women of working age declined from 42% in 1993-94 to 31% in 2011-12. Some 53% of the total drop - the largest chunk - happened among women aged 15-24 and living in villages. In rural areas, the female labour force participation rate dropped from 49% to 37.8% between 2004-05 and 2009-10.

While more than 24 million men joined the work force between 2004-5 to 2009-10, the number of women in the work force dropped by 21.7 million. A team of researchers from World Bank have attempted to find out why this is happening. One plausible explanation is the recent expansion of secondary education and rapidly changing social norms leading to "more working age young females opting to continue their education rather than join the labour force early".

Also, casual workers - mainly women - drop out of the workforce when wages increased for regular earners - mainly men - leading to the stabilisation of family incomes. To be sure, India has a poor record of female participation in the workforce: the International Labour Organisation ranked it 121 out of 131 countries in 2013.

2 Low unemployment but people feel worse off (Larry Elliott in The Guardian) Britain looks like a full employment economy. The unemployment rate is at its lowest since 1975. There are hundreds of thousands of job vacancies.

But Britain doesn’t feel like a full employment economy. When the jobless rate was this low in previous economic cycles, wages were rising because employers were competing for scarce labour. Firms were investing in new capital equipment because workers were becoming more expensive. Productivity was increasing.

Today none of that is happening. Wage growth is not picking up. Instead, it is stuck at the new normal of 2%. There are skill shortages but this is not translating into higher average earnings. Investment is weak and productivity is falling because the growth in the employed population is running ahead of the increase in national output.

John Philpott, an economist who specialises in employment, is right when he says the UK labour market looks better on paper than it feels in the pocket. It is unprecedented for record levels of employment to coincide with the workforce getting poorer.

One reason for the weakness of earnings growth is the ferocious squeeze on public sector pay, which – stripped of bonus payments – is rising at just 1.3% a year. A second factor is that employers are able to buy in cheap labour from overseas.

Finally, the nature of work seems to have changed. Work by David Blanchflower, Rui Costa and Stephen Machin has shown that earnings growth for the self-employed – who account for 15% of the workforce – has been particularly weak in recent years. People are working flat out in the gig economy but still struggling to make ends meet. The labour market has, for want of a better word, been Uberised.

3 South Africa turning ‘increasingly violent’ (Thabo Mokone in Johannesburg Times) Justice and correctional services minister Michael Masutha says prison population figures suggests that South Africa is increasingly becoming a violent society.

Masutha told MPs that long prison sentences of between 10 and 15 years increased by 77 percent‚ while the number of short sentences of between six and 12 months dropped by 51 percent in the years between 2003 and 2016. He said in the same period the number of offenders sentenced to 20 years and more had risen by a "staggering 439%" while those sentenced to life imprisonment had skyrocketed by a whopping 413%.

He said these figures were the main reason behind rising overcrowding in prisons and they also showed that the country was increasingly becoming more violent. Long term prison sentences were generally meted out against people committing serious crimes such as murder‚ assault‚ rape and other forms of sexual violence and robberies with aggravating circumstances among others.

"This says that we are increasingly becoming a violent society‚" he said. "Looking at these figures‚ there is an urgent need to create additional bed space (in prisons) and take extra levels of care over existing infrastructure which is dilapidating due to limited maintenance.

Tuesday, May 16, 2017

Greece back in recession; Ford to cut North America, Asia staff; Boy, 11, shows 'weaponisation of toys'

1 Greece back in recession (BBC) Greece has fallen back into recession for the first time since 2012, official figures from Eurostat show. The country's gross domestic product (GDP) fell by 0.1% in the first three months of the year after shrinking by 1.2% in the final quarter of 2016.

The figures come as Greek unions begin two days of industrial action against cuts to pensions and tax rises insisted on by creditors. Greece is still struggling to secure a new bailout from international lenders. Its government hopes the loan payment will be approved by a meeting of eurozone finance ministers on 22 May.

Howard Archer, chief economist at IHS Markit, said Greece's return to recession was largely due to uncertainty over the bailout. Eurostat said the European Union as a whole continued to grow in the first quarter, expanding by 2% compared with the same period last year.

2 Ford to cut North America, Asia staff (Straits Times) Ford Motor plans to shrink its salaried workforce in North America and Asia by about 10 per cent as it works to boost profits and its sliding stock price, a source familiar with the plan told Reuters.

A person briefed on the plan said Ford plans to offer generous early retirement incentives to reduce its salaried headcount by Oct 1, but does not plan cuts to its hourly workforce or its production. The Wall Street Journal reported that Ford plans to cut 10 per cent of its 200,000-person global workforce, but the person briefed on the plan disputed that figure.

Ford remains focused on its core strategies to "drive profitable growth," the company said in a statement. "Reducing costs and becoming as lean and efficient as possible also remain part of that work," it said. "

The automaker may face potential fallout from Republican US President Donald Trump, who has made boosting auto employment a top priority. But Ford plans to emphasize the voluntary nature of the staff reductions.

3 Boy, 11, shows ‘weaponisation of toys’ (The Guardian) An 11-year-old boy has stunned an audience of security experts by hacking into their Bluetooth devices to manipulate a robotic teddy bear, showing in the process how interconnected smart toys “can be weaponised”.

Reuben Paul, who is in sixth grade at school in Austin, Texas, and his teddy bear Bob wowed hundreds at a cyber-security conference in the Netherlands. “From airplanes to automobiles, from smartphones to smart homes, anything or any toy can be part of the Internet of Things (IOT),” he said. “From terminators to teddy bears, anything or any toy can be weaponised.”

Plugging into his laptop a device known as a “Raspberry Pi” – a small credit-card size computer – Reuben scanned the hall for available Bluetooth devices, and to everyone’s amazement including his own, suddenly downloaded dozens of numbers, including some of top officials.

Then using a computer language called Python he hacked into his teddy bear via one of the numbers to turn on one of its lights and record a message from the audience. “Most internet-connected things have a Bluetooth functionality ... I basically showed how I could connect to it, and send commands to it, by recording audio and playing the light,” he said.

They could be used to steal private information such as passwords, as remote surveillance to spy on kids, or employ GPS to find out where a person is, he said. More chillingly, a toy could say “meet me at this location and I will pick you up”, Reuben said.

His father, information technology expert Mano Paul, Paul said he been “shocked” by the vulnerabilities discovered in kids’ toys, after Reuben first hacked a toy car, before moving on to more complicated things.

Monday, May 15, 2017

Russia, Saudi Arabia back oil cut extension; On uninhabited island, 38m pieces of plastic wastes; UAE millennials 'not saving enough'

1 Russia, Saudi Arabia back oil cut extension (San Francisco Chronicle) Russia and Saudi Arabia have said they want to extend oil production cuts through the first quarter of 2018, in a move the two major producers say would support the market price.

Oil prices rose on the announcement that the countries want to extend the deal, which encompasses both nations in the Organization of the Petroleum Exporting Countries and some non-OPEC countries like Russia.

Russia and Saudi Arabia will now hold consultations with other producers "with the aim of achieving complete consensus" on the extended production cuts before the scheduled OPEC meeting May 25 in Vienna.

In late November, OPEC agreed to cut production by 1.2 million barrels a day, the first such reduction agreement since 2008. The following month, 11 non-OPEC oil-producing countries pledged to cut another 558,000 barrels a day, bringing the overall reduction to 1.8 million barrels a day.

Oil producers have been trying to boost prices, as crude futures trade around $50 a barrel, less than half their level from early 2014, though above the low of below $30 in early 2015. The joint announcement by Russia and Saudi Arabia chimes with a statement by major producers Iraq and Algeria, which argued for extending the cuts through the end of the year.

2 On uninhabited island, 38m pieces of plastic wastes (Elle Hunt in The Guardian) One of the world’s most remote places, an uninhabited coral atoll, is also one of its most polluted. Henderson Island, a tiny landmass in the eastern South Pacific, has been found by marine scientists to have the highest density of anthropogenic debris recorded anywhere in the world, with 99.8% of the pollution plastic.

The nearly 18 tonnes of plastic piling up on an island that is otherwise mostly untouched by humans have been pointed to as evidence of the catastrophic, “grotesque” extent of marine plastic pollution. Nearly 38m pieces of plastic were estimated to be on Henderson by researchers from the University of Tasmania and the UK’s Royal Society for the Protection of Birds, weighing a combined 17.6 tonnes.

The majority of the debris – approximately 68% – was not even visible, with as many as 4,500 items per square metre buried to a depth of 10cm. About 13,000 new items were washing up daily. Jennifer Lavers, of the University of Tasmania’s institute for marine and Antarctic studies, said the sheer volume of plastic pollution on Henderson had defied her expectations.

The largest of the four islands of the Pitcairn Island group, Henderson Island is a Unesco World Heritage Listed site and one of the few atolls in the world whose ecology has been practically untouched by humans. Lavers said her findings had proved to her nowhere was safe from plastic pollution. “All corners of the globe are already being impacted.”

3 UAE millennials ‘not saving enough’ (Rohma Sadaqat in Khaleej Times) A combination of complex economic conditions, rising bills when it comes to starting a family and increasing pressure to support their older relatives has put millennials in a tough spot when it comes to saving for their retirement.

A new study has shown that the majority of millennials in the UAE still haven't started saving for their retirement. However, they are also the generation that is the most concerned about the issues that they will face, should they run out of funds during their retirement.

New research from HSBC shows that 51 per cent of working age people across the country agree that millennials have experienced weaker economic growth than previous generations, a perception in line with the global average which stands at 53 per cent.

More worryingly, the research showed that 53 per cent of people in the UAE believe that millennials are paying for the economic consequences of the previous generations. As many as 41 per cent of millennials have not started saving for their retirement, compared to 35 per cent of Generation X and 29 per cent of baby boomers.

Sunday, May 14, 2017

Be worried about commodity slip ups; Toyota 'backs flying car project'; Can millennials own homes?

1 Be worried about commodity slip ups (Shelley Goldberg in Gulf News) The world has become more efficient both in commodity production and consumption over the last few decades. As a result of better technology, it costs less today to produce many commodities than it did even a few years ago.

In energy, horizontal fracking provides much greater output then ever imagined when we were drilling straight down into the earth’s surface. Today, workers will venture 2.5 miles deep to extract from a 30-inch wide vein of gold-rich ore.

The world’s deepest oil well, known as Z-44 Chayvo in Russia’s Far East, extends over 40,000 feet into the ground — equal to 15 of the world’s tallest skyscraper, the Burj Khalifa, stacked on top of each other. Industrialised farming is yielding crops faster and larger than ever while utilising less land.

On the consumption side, energy usage has dropped as office buildings, homes and appliances become more efficient. We utilise energy from sunlight, wind, ocean waves and biomass without having to drill for it. And our ability to recycle has increased substantially as we aim to close the loop in what’s referred to as the “circular economy.”

Thus, even in a world where the population increases daily, it still makes sense that commodity prices are falling. Consider an industry that isn’t a heavy consumer of commodities, such as financial services. Why should it care? Because they most likely have a solid client base that is negatively affected by lower commodity prices.

Lower commodity prices are indicative of an economy that is slowing, and portend a domino effect that negatively impacts the broader capital markets. Now is the time to question the assumptions behind the rosier economic forecasts — are they real and where are they coming from and can they be sustained under the current landscape of too much supply and insufficient demand?

2 Toyota ‘backs flying car project’ (BBC) Japanese carmaker Toyota has announced its backing for a group of engineers who are developing a flying car. It will give 40 million yen (£274, 000) to the Cartivator group that operates outside Toyota city in central Japan.

The Nikkei Asian Review reports Toyota and its group companies have agreed in principle to support the project. So far crowdfunding has paid for development of the so-called Skydrive car, which uses drone technology and has three wheels and four rotors.

Measuring 9.5ft (2.9m) by 4.3ft (1.3m), Skydrive claims to be the world's smallest flying car. It has a projected top flight speed of 100km/h (62mph), while travelling up to 10m above the ground. The team of 30 volunteers developing the Skydrive car hopes its prototype could be used to light the Olympic flame when Tokyo hosts the summer games in 2020.

3 Can millennials own homes? (Anurag Mathur in Straits Times) A recent survey by CBRE found that almost two-thirds of Asia-Pacific millennials are still living with their parents and 18 per cent have no plans to move out, with unaffordable real estate cited as the common factor.

So is home ownership simply beyond reach for millennials or do they just have no desire to take on the responsibility and commitment to finance a property?  According to HSBC's recent global survey - Beyond the Bricks - 83 per cent of millennials (those aged between 18 and 35) who do not own a home intend to buy one in the next five years. In other words, young people strongly value home ownership.

But buying a home is never easy. The HSBC report showed that globally 69 per cent of young people said that saving enough for a deposit was their biggest barrier to home ownership and 64 per cent cited the need for a higher salary.

Saturday, May 13, 2017

'Global system under enormous stress'; Another cyber-attack could be 'imminent'; China pledges $124bn for Belt & Road

1 ‘Global system under enormous stress’ (Nils Pratley & Jill Treanor in The Guardian) The bad news is that another economic crisis could strike within two years. The good – or better – news is that such a shock is not nailed on. It’s a 50% chance. But the developed world is approaching a T-junction. One road leads to higher growth and a more inclusive form of capitalism while the other turns towards recession, instability and turmoil.

The speaker is Mohamed el-Erian, one of the biggest names in financial markets, who advised President Obama. Born in New York to Egyptian parents, he spent 14 years at Pimco, the world’s biggest bond fund manager. Six of those years were as chief executive before he quit.

This is the nub of El-Erian’s analysis of why the developed world is approaching a fork in the road. The inequality generated by the current low-growth climate has three elements: inequality of wealth, income and opportunity. The last of the three – manifested in high youth unemployment in many eurozone countries, for example – is the most explosive element.

2 Another cyber-attack ‘could be imminent’ (BBC) Another major cyber-attack could be imminent after Friday's global hit that infected more than 125,000 computer systems, security experts have warned. UK security researcher ‘MalwareTech’, who helped to limit the ransomware attack, predicted "another one coming... quite likely on Monday".

The virus, which took control of users' files, spread to 100 countries, including Spain, France and Russia. In England, 48 NHS trusts fell victim, as did 13 NHS bodies in Scotland. Some hospitals were forced to cancel procedures and appointments, as ambulances were directed to neighbouring hospitals free from the computer virus.

MalwareTech, who wants to remain anonymous, was hailed as an "accidental hero" after registering a domain name to track the spread of the virus, which actually ended up halting it. The 22-year-old saaid: "It's very important that people patch their systems now.

Investigators are working to track down those responsible for the ransomware used on Friday, known as Wanna Decryptor or WannaCry. The virus exploits a vulnerability in Microsoft Windows software, first identified by the US National Security Agency, experts have said.

3 China pledges $124 bn for Belt & Road (Straits Times) Chinese President Xi Jinping has pledged $124 billion for his ambitious new Silk Road plan to forge a path of peace, inclusiveness and free trade, and called for the abandonment of old models based on rivalry and diplomatic power games. 

China has touted what it formally calls the Belt and Road initiative as a new way to boost global development since Xi unveiled the plan in 2013, aiming to expand links between Asia, Africa, Europe and beyond underpinned by billions of dollars in infrastructure investment. 

The initiative spans some 65 countries representing 60 per cent of the world population and around a third of global gross domestic product. The China Development Bank has earmarked $890 billion for some 900 projects. Belt and Road is seen as a practical solution to relieve China’s industrial overcapacity. But it could also serve Beijing’s geopolitical ambitions. 

Friday, May 12, 2017

Ransom-ware cyber-attack hits nearly 100 countries; German growth speeds up; Chinese spent $24bn on 'golden visas'

1 Ransom-ware cyber-attack hits nearly 100 countries (Julia Carrie Wong & Olivia Solon in The Guardian) A ransomware cyber-attack that may have originated from the theft of “cyber weapons” linked to the US government has hobbled hospitals in England and spread to countries across the world.

Security researchers with Kaspersky Lab have recorded more than 45,000 attacks in 99 countries, including the UK, Russia, Ukraine, India, China, Italy, and Egypt. In Spain, major companies including telecommunications firm Telefónica were infected.

By Friday evening, the ransomware had spread to the US and South America, though Europe and Russia remained the hardest hit, according to security researchers Malware Hunter Team. The Russian interior ministry says about 1,000 computers have been affected.

The malware was made available online on 14 April through a dump by a group called Shadow Brokers, which claimed last year to have stolen a cache of “cyber weapons” from the National Security Agency (NSA). At the time, there was skepticism about whether the group was exaggerating the scale of its hack.

The NSA is among many government agencies around the world to collect cyber weapons and vulnerabilities in popular operating systems and software so they can use them to carry out intelligence gathering or engage in cyberwarfare. The agency did not immediately respond to a request for comment.

Ransomware is a type of malware that encrypts a user’s data, then demands payment in exchange for unlocking the data. This attack was caused by a bug called “WanaCrypt0r 2.0” or WannaCry, that exploits a vulnerability in Windows. Microsoft released a patch (a software update that fixes the problem) for the flaw in March, but computers that have not installed the security update remain vulnerable.

2 German growth speeds up (BBC) Germany's economy grew strongly in the first three months of this year, driven by investment and consumption, official figures show. First-quarter GDP growth was 0.6%, faster than the October-to December 2016 figure of 0.4%.

Household and state spending were strong, while firms invested money in construction and equipment, said German statistics authority Destatis. Foreign trade also helped, as exports increased faster than imports. Germany has the largest economy in the eurozone and its performance is in marked contrast to that of other big countries, such as Italy and France.

3 Chinese spend $24bn on ‘golden visas’ (Khaleej Times) More than 100,000 Chinese have poured at least $24 billion in the last decade into "golden visa" programmes across the world that offer residence in exchange for investment, an Associated Press analysis has found. Nowhere is Chinese demand greater than in the US, which has taken in at least $7.7 billion and issued more than 40,000 visas to Chinese investors and their families in the past decade.

The flood of investors reflects how China's rise has catapulted tens of millions of families into the middle class. But at the same time, it shows how these families are increasingly becoming restless as cities remain choked by smog, home prices multiply and schools impose ever-greater pressure on children.

They also feel insecure about being able to protect their property and savings. Their money goes towards government bonds, businesses, mountain ski resorts, new schools and real estate projects, including a Trump-branded tower in New Jersey built by the Kushner Companies, once run by Jared Kushner, now a White House senior adviser.

China's "golden visa" investors are part of a wave characterised not by poverty, persecution or war, but by people with steady jobs and homes who are pursuing happiness that's eluded them in their homeland.

Key to their spending power is China's real estate boom. Real estate prices in China's largest cities have more than tripled in the last decade, with prices in Beijing rising by an average of 25 per cent a year during that time. Since late 2015 alone, Beijing's home prices have jumped 63 per cent, making a 1,300 square-foot (120 square-metre) apartment worth more than $1 million.