For fourth year, world tourism rises faster than trade; India stays fastest-growing economy; Profit for Volkswagen despite scandal

1 For fourth year, world tourism rises faster than trade (BBC) The UN World Tourism Organisation says tourism spending has outpaced global trade for the fourth year in a row. The US followed by China are the world's most popular destinations, followed by France and Spain.

According to the UNWTO's figures, released earlier this month, international tourism grew by 4% in 2015 generating $1.4trn. In comparison, global trade increased by just 2.8% in 2015 according to the World Trade Organisation.

In 2015, tourism accounted for 7% of the world's total exports up from 6% in the previous year. Tourism spending, which includes accommodation, food, entertainment, and services, has helped to offset drops in exports that have occurred as commodity prices have fallen.

Falling commodity prices have lowered the overall value of imports for many countries. According to the CPB Netherlands Bureau of Economic Policy Analysis, 2015 was the worst year for world trade since 2009.

The increase in international tourism came even as attacks at transportation hubs and on airlines raised concerns about travellers' safety. The US and China, along with the UK were the leading sources for outbound travellers. The number of outbound tourist from China has risen every year since 2004 with their spending increasing by 25% last year.

http://www.bbc.com/news/election-us-2016-36420693

2 India stays fastest-growing economy (The Times of India) India gathered momentum from January to March to extend its lead as the world's fastest growing large economy, helping Prime Minister Narendra Modi craft an impressive sales pitch for meetings with investors in the US next week.

Having swept to power two years ago promising to revitalise Asia's third-largest economy, Modi has boosted spending on defence and infrastructure, while consumer demand has risen thanks to lower interest rates. Those pro-growth policies helped gross domestic product grow a faster-than-expected 7.9% year-on-year in the March quarter, faster than the December quarter's 7.2%.

India's growth has overtaken that of fellow Asian giant China, which grew 6.7% in the March quarter - the slowest in the world's second largest economy in seven years. The figures from India's Statistics office also showed GDP grew 7.6% in the 2015/16 fiscal year that ended in March, faster than a 7.2 percent growth in the previous year.

Modi has tried to stimulate corporate capital spending through debt-fuelled higher public spending. Still, capital investment fell an annual 1.9 percent compared with a 1.2 percent growth in the December quarter.

Growth in the March quarter was driven by a rebound in farm output, an improvement in mining and a sharp pickup in electricity production. The farm sector grew by 2.3% from a year ago compared with a 1.0% contraction in the December quarter.

http://timesofindia.indiatimes.com/business/india-business/Surging-growth-helps-India-retain-fastest-growing-economy-tag/articleshow/52526766.cms

3 Profit for Volkswagen despite scandal (San Francisco Chronicle) German automaker Volkswagen saw its net profit fall 19 percent in the first three months of the year — but showed it can still make money even as it grapples with a costly scandal over cars rigged to cheat on diesel emissions tests.

The company called it a "respectable" result considering the tough conditions and said it had the financial resources to weather the scandal. The flagship Volkswagen brand, the one most associated with the scandal and with the most rigged cars, barely broke even. The company made most of its profits at its luxury brands Audi and Porsche and the financial services branch.

Profits in the January-March period fell to 2.37 billion euros ($2.63 billion) from 2.93 billion euros a year earlier, the company said Tuesday. The figure fell short of the 2.44 billion euros expected by analysts surveyed by financial information provider FactSet. Revenue fell 3.4 percent to 50.96 billion euros due in part to shifts in currency exchange rates.

Still, the company reported it had bulked up on its cash reserves and said it was well-funded to deal with the effects of the scandal, which include costs for recalls, fines and lawsuits. The automotive division was sitting on 26 billion euros in net liquidity, up 5 billion from a year ago. Tuesday's earnings release contained no new estimate of the overall cost of the scandal; the company set aside 16.2 billion euros from earnings last year, when it lost 1.4 billion euros.

http://www.sfgate.com/news/world/article/Net-profit-down-19-pct-at-scandal-hit-VW-in-1st-7953745.php

Funds crunch hits Gulf nations' projects; Is Opec relevant anymore?; A male majority in Sweden

1 Funds crunch hits Gulf nations’ projects (Babu Das Augustine in Gulf News) Lower oil prices will constrain the amount of funding available to GCC governments to finance capital and infrastructure projects which will force them to look at alternate solutions according to audit, consulting and financial advisory firm Deloitte.

“Spending in the region will need to be better prioritised in order to ensure it meets social and economic development. Governments will have to seek for the private sector involvement, innovate and find alternative funding sources to fund their project requirements,” said Cynthia Corby, Audit partner and Middle East Infrastructure and Capital Projects leader at Deloitte.

Shrinking banking sector liquidity and rising funding costs are expected to increase cost of bank funding for projects across the GCC. Overall bank liquidity in the Gulf region started to weaken visibly from the second half of 2015, and the trend is expected to continue this year.

According to Deloitte’s Middle East Powers of Construction report, the announced country budgets for 2016 outline cuts on spending imposed by low oil prices, but in a measured way, as well as the introduction of new income sources. Saudi Arabia is planning to reduce spending by 11 per cent this year to$227 billion.

The UAE, the most diversified economy among the GCC countries, is set to register the first current account deficit in decades, which is expected to widen to Dh129 billion this year. The IMF has urged the UAE to pursue growth-enhancing reforms and advance economic diversification. In 2015, fuel subsidies were eliminated which has produced significant savings.

Kuwait introduced a new PPP law in March 2015 while Oman is preparing regulations to enable the use of PPPs to develop major infrastructure and housing projects. In Qatar, the potential for PPPs is significant, considering its $125 billion infrastructure investment program to support its National Vision 2030 economic development plan.

http://gulfnews.com/business/sectors/banking/funding-crunch-leaves-gcc-projects-in-the-lurch-1.1837469

2 Is Opec relevant anymore? (Debbie Carlson in The Guardian) As the Organization of Petroleum Exporting Countries (Opec) meets on 2 June, questions are rising about the oil cartel’s continuing relevance.  Many Opec members have suffered as the oil price has collapsed and countries, most notably Saudi Arabia and Iran, have fought to retain market share rather than set prices by adjusting production.

Crude-oil prices briefly fell under $30 a barrel for both Brent and West Texas Intermediate earlier this year, but have rebounded, with values touching $50 for Brent last week. Unarguably the price war has hurt the US shale industry as many Opec members had wanted. Increased demand because of the low prices is adding to their optimism that the price war has worked. The higher prices mean oil producers can breathe a little easier, although even at $50 those prices aren’t making money.

The lack of consensus has many in the oil market questioning whether Opec remains relevant any more, especially as non-Opec producers like the US are a big part of the global oil market now. John England, vice-chairman, US and Americas oil and gas leader for Deloitte, said the global oil surplus created by Opec overproduction and US shale output left Opec in a tricky position.

“Suppliers have more power in times of scarcity. Right now we’re perceived to be in a time of abundance in terms of oil supply. The inability to reach consensus has limited their ability to impact the market the way they have in the past. So I think they’ve been less relevant,” England said.

But Opec is not dead, he adds, noting they have weathered commodity cycles before. Carsten Fritsch, commodities analyst at Commerzbank, agreed that for now the cartel seems obsolete, but when total supply and demand become balanced, Opec may become important again.

https://www.theguardian.com/business/2016/may/30/opec-oil-market-prices-production-meeting

3 A male majority in Sweden (San Francisco Chronicle) Famous for its efforts to put women on an equal footing with men, Sweden is experiencing a gender balance shift that has caught the country by surprise: For the first time since record-keeping began in 1749, it now has more men than women.

Swedes don't quite know what to make of this sudden male surplus, which is highly unusual in the West, where women historically have been in the majority in almost every country. But it may be a sign of things to come in Europe as changes in life expectancy and migration transform demographics.

Despite a natural birth rate of about 105 boys born for every 100 girls, European women have historically outnumbered men because they live longer. An Associated Press analysis of national and European Union population statistics suggests women will remain in the majority in most European countries for decades to come. But the number of men per 100 women, known as the sex ratio, is increasing, slowly in Europe as a whole and quickly in some northern and central European countries.

Norway swung to a male surplus in 2011, four years before Sweden, while Denmark and Switzerland are nearing a sex ratio of 100. Germany, which had an unnatural deficit of men after two world wars, has seen its sex ratio jump from 87 in 1960 to 96 last year. Meanwhile, Britain's sex ratio rose from 93 to 97 in the same period. British statistics officials project that men will be in the majority by 2050.

Last year there were 12 million more women than men in the EU, which has a population of just over 500 million people. That gap is projected to narrow in coming decades "mainly because of the decreasing gap in life expectancy," said Eurostat spokeswoman Baiba Grandovska.

Experts say men, particularly in western Europe, are living healthier lives than their fathers, drinking and smoking less, and benefiting from better treatment of heart disease. In wealthy countries, men have moved away from mining and other dangerous occupations to safer white-collar jobs.

http://www.sfgate.com/news/world/article/It-s-raining-men-Sweden-sees-historic-gender-7952781.php

Middle East IoT spend to reach $3.2bn in three years; UAE hikes fuel prices; The case against negative interest rates

1 Middle East IoT spend to reach $3.2bn in three years (Issac John in Khaleej Times) With the GCC governments encouraging industries and businesses to get ready for the Internet of Things (IoT) and leverage its uses towards energy management, the total IoT spend in the Middle East is set to double by 2019.

Schneider Electric, a global specialist in energy management and automation, said IoT would trigger the next wave of enterprise digital transformation, unifying the worlds of OT and IT and fuelling a mobile and digitally enabled workforce.

According to the International Data Corporation (IDC), the total IoT spending in the Middle East will reach $1.8 billion in 2016 and then increase to $3.2 billion by 2019, with manufacturing, transportation and utilities accounting for up to 50 per cent of this total. Vendors and solution providers must be quick to adapt their offerings to be compatible with the IoT.

http://khaleejtimes.com/business/technology/internet-of-things-spend-in-me-set-to-hit-32b-in-three-years

2 UAE hikes fuel prices (Gulf News) The United Arab Emirates’ Ministry of Energy hiked fuel prices further for the month of June. The new prices were announced as global oil prices recover due to rise in demand and disruptions in supplies specially from Nigeria.

Brent, the global benchmark, was trading at around $50 per barrel, the highest since November. In a land mark decision in July last year, the Ministry of Energy liberalised fuel prices and new pricing policy linked to global prices was implemented.

A fuel price committee headed by the Under Secretary of the Ministry of Energy was constituted to determine fuel prices every month. The prices are based on the average global prices for diesel and petrol with the addition of operating costs and profit margins of the distributing companies. The new fuel prices will come into effect from June 1.

http://gulfnews.com/business/sectors/energy/fuel-prices-in-uae-hiked-for-june-1.1836619

3 The case against negative interest rates (Robert Skidelsky in The Guardian) Negative interest rates are simply the latest fruitless effort since the 2008 global financial crisis to revive economies by monetary measures.

When cutting interest rates to historically low levels failed to revive growth, central banks took to so-called quantitative easing: injecting liquidity into economies by buying long-term government and other bonds. It did some good, but mostly the sellers sat on the cash instead of spending or investing it.

Enter negative interest rate policy. The central banks of Denmark, Sweden, Switzerland, Japan, and the eurozone have all indulged. The US Federal Reserve and the Bank of England are being tempted.

The policy is supposed to work by aligning the market rate of interest with the expected rate of profit, an idea derived from the Swedish economist Knut Wicksell. The problem is that whereas until now it had been believed that nominal interest rates cannot fall below zero, an investor’s expected rate of return on a new investment may easily fall to zero or lower when aggregate demand is depressed.

The World Bank has pointed out that negative rates can have undesirable effects. They can erode bank profitability by narrowing interest-rate margins. They can also encourage banks to take excessive risks, leading to asset bubbles. Lower interest rates on deposits may cause large sections of the economy to become cash-based, while pension and insurance companies may struggle to meet long-term liabilities at a fixed nominal rate.

But, quite apart from these problems, the real case against negative interest rates is the folly of relying on monetary policy alone to rescue economies from depressed conditions. Keynes put it in a nutshell: “If we are tempted to assert that money is the drink which stimulates the system into activity, we must remind ourselves that there may be several slips between the cup and the drink.”

Events following the crash of 2008 clearly show that monetary policy on its own cannot achieve a level of economic activity close to its potential. The state must be involved. Whether the capital spending appears on the books of the central government or on the balance sheet of an independent investment bank is secondary. Negative interest rates are simply a distraction from a deeper analysis of what went wrong – and what continues to go wrong.

https://www.theguardian.com/business/2016/may/25/negative-interest-rates-the-case-against-john-maynard-keynes

US interest rates to rise again; High minimum wages may cost South Africa dear; 'FB will track non-users, too'

1 US interest rates to rise again (Jana Kasperkevic in The Guardian) Federal Reserve chair Janet Yellen had a message for Wall Streeters anxiously wanting to depart for the long weekend: interest rate hikes are coming.

The US central bank is expected to announce two to three interest rate hikes this year after it increased rates in December for the first time in nearly a decade. Yellen said that the economy is continuing to improve despite the weak growth reported in the first quarter.

Before Yellen’s statement, the US commerce department revised up its gross domestic product figured for the first quarter. US GDP – the broadest measure of the health of the economy – rose at 0.8% instead of the 0.5% reported last month. The Atlanta Federal Reserve is currently estimating second-quarter GDP rising at a 2.9% rate.

Yellen, too, said that she expects GDP to pick up and the labor market to continue to improve. The Fed will continue to monitor incoming data and will assess the risks to the outlook, she said. While she did not mention what those risks are, the Fed had previously focused on risks posed by Britain’s potential exit from the European Union, “Brexit”, and by the lingering uncertainty over China’s economy.

Yellen also pointed out that the unemployment rate is nearing full employment, labor participation has increased in the past few months, and that oil prices and dollar depreciation, which can influence inflation, have both stabilized.

“It’s appropriate for the Fed to gradually and cautiously increase our overnight interest rate over time,” said Yellen, adding: “Probably in the coming months such a move would be appropriate.”

https://www.theguardian.com/business/2016/may/27/interest-rate-hike-janet-yellen-federal-reserve-memorial-day

2 High minimum wages may cost South Africa dear (Johannesburg Times) Ratings agency Fitch has warned the ANC to avoid introducing populist measures such as a minimum wage in the run-up to local elections, while Cosatu has threatened to strike over the government's slow implementation of the proposed policy.

Fitch, which rates South Africa at BBB-, one notch above speculative grade, is expected to publish a review of the country's debt rating on June 3. The government is mulling the implementation of a national minimum wage but has not set a date for its introduction.

"The authorities may see a need to react to the discontent about insufficient improvement to living standards by pushing costly social programmes," Fitch head of EMEA sovereign ratings Jan Friederich told a banking conference, referring to the upcoming elections.

"Authorities may feel, if they have a poor showing, that there is a need for quick fixes like the introduction of a high minimum wage that would appear to help the poor but may also discourage investment," he said.

http://www.timeslive.co.za/thetimes/2016/05/27/Fitch-High-minimum-wage-will-cost-SA

3 ‘FB will track non-users, too’ (Khaleej Times) In a bid to expand its user base, social media giant Facebook has announced it will begin displaying ads to web users who are not members of its social network.

"Facebook will use cookies, 'like' buttons and other plug-ins embedded on third-party sites to track members and non-members alike," a report in The Wall Street Journal said. The company said it will be able to better target non-Facebook users and serve relevant ads to them.

"Publishers and app developers have some users who are not Facebook users. We think we can do a better job powering those ads," Andrew Bosworth, vice president of Facebook's ads and business platform, was quoted as saying.

Meanwhile, Facebook's practices have come under criticism from regulators in Europe over privacy concerns. Facebook began displaying a banner notification at the top of its News Feed for users in Europe, alerting them to its use of cookies as mandated under an EU directive.

Facebook believes that targeted advertising can more accurately target non-members using the vast amounts of data it already has on the nearly 1.7 billion people who use the site, the report said. The company said that "it can use that data to make inferences about the behaviour of non-members, an approach known as "lookalike" targeting".

http://khaleejtimes.com/business/facebook-will-track-you-even-if-youre-not-a-user

China loses No 2 creditor rank to Germany; Millennials aren't buying homes; Sports stars as tech-preneurs

1 China loses No 2 creditor rank to Germany (Straits Times) Germany edged out China as the world's second-largest supplier of external credit for the first time in at least a decade last year as the Asian giant's authorities went to great lengths to support a weakening yuan.

China's net foreign assets fell to $1.6 trillion at the end of last year, while Germany's rose to $1.62 trillion, according to calculations by Bloomberg. Japan, the top creditor since 1991, remained the biggest with $2.82 trillion.

The shift underscores the global implications of last year's turbulence in China, where almost $1 trillion of capital is estimated to have fled with the central bank burning through $513 billion of its foreign reserves to prop up its currency. Yet it's likely a bump in the road rather than a reversal in fortunes, with China set to eclipse Japan to become the world's largest net creditor in coming years, according to the Washington-based Brookings Institution.

While China has sold reserves since the hoard peaked at $4 trillion in 2014, it is still accumulating net foreign assets evident in the large current account surplus, according to a report this month from Mr David Dollar, a senior fellow at Brookings.

http://www.straitstimes.com/business/china-loses-no-2-creditor-rank-to-germany

2 Millennials aren’t buying homes (Suzanne McGee in The Guardian) Somebody is buying houses in the US – but it sure isn’t millennials. Just ask their parents. They’ll be the ones worrying in the kitchen about whether their little darlings will ever leave.

Purchases of single-family homes posted a whopping 16.6% jump during April over March’s levels, the largest such one-month gain recorded in more than eight years, and the median price point hit a record $321,100.

Prices and sales should be rising. Mortgage rates remain close to record lows, the private sector created 160,000 new jobs in April – and the national unemployment rate is now only 5%. Even taking into account all the debate over the ways in which that unemployment figure understates the actual rate (and fails to capture underemployment by swaths of the population), that’s not to be sneezed at.

Still, there’s one demographic group that, notably, isn’t touring open houses or scouring online listings in search of their new homes. No prizes for guessing which one. Far from buying new homes, millennials increasingly aren’t even renting. The proportion of this demographic – aged around 18 to 35 – who end up living with their parents has been on the rise steadily since the Great Recession, peaking at about 36%, according to the Pew Research Center.

Now, for the first time in 130 years, living with your parents has become the most common living arrangement for young men and women aged 18 to 34, Pew reported this week. No wonder voters are turning, in their millions, to “protest candidates” such as Donald Trump and Bernie Sanders, who promise (in very, very different ways) to upend the economic system as it exists today.

Apartment List, an online rental marketplace, ran some numbers and calculated that it would take an average of a decade for millennials to come up with the required 20% down payment to buy a home in the dozen or so most in-demand urban locales.

It’s also a challenge to corporate interests. For every business that figures out a way to cater to this new way of living – millennials won’t own cars, so Uber and Zipcar will thrive; millennials won’t buy homes, so co-living projects such as those developed by WeWork might be the model of the future, not suburban developments of semi-detached houses – scores won’t.

http://www.theguardian.com/money/us-money-blog/2016/may/27/housing-market-real-estate-millennials-living-at-home-with-parents

3 Sports stars as tech-preneurs (Jaia Thomas in San Francisco Chronicle) The average National Basketball Association salary during the 2015-2016 season was a cool $4,021,836. But not all athletes are out buying big cars and bigger houses, as the stereotype goes. Instead, they're becoming busy entrepreneurs.

Indeed, as the current NBA season comes to a close, many players are using a portion of their salaries to launch and invest in tech companies for the coming off season. Professional athletes across all sports, from the NBA to the National Football League, in fact, are investing time, energy and effort into the tech space.

Golden State Warriors superstar Steph Curry is a high-profile example. Curry was perhaps best known this season for his three pointers on the court. However, many may not know that he is also the co-owner of two tech startups off the court -- Slyce and CoachUp.

Social media maven and New York Knicks center Kevin Seraphin is another athlete heavily involved in the tech space. A few years ago, he launched Thorolgraffix, a photo-editing app that allows users to add filters, masking and various effects to their social media postings. Seraphin is currently beta-testing a new social networking app called Looks.

Various associations, such as the National Football League Players Association (NFLPA), are doing their part to expose more players to the tech space. Earlier this year, the NFLPA facilitated a "Tech Tour," arranging site visits and meetings for NFL players in Silicon Valley. Players met with tech companies that focus on such areas as social media, gaming, mobile apps and wearable technology.

Rob Wilson, CEO of Wilson Insight, says he believes that more and more athletes are jumping into tech because today’s generation of professional athletes have grown up with tech as a significant part of their lives. They came up in the explosion of mobile devices and social media, so they are a much more tech-savvy generation.

http://www.sfgate.com/news/article/Professional-Athletes-The-Next-Generation-of-7943186.php

Qatar stuns market with $9bn bond sale; China, US clash over cheap steel imports; FB, Microsoft plan private internet highway under water

1 Qatar stuns market with $9bn bond sale (Siddhesh Suresh Mayenkar in Gulf News) In what could be termed as the biggest bond issue in the Middle East, Qatar sold $9 billion in Eurobonds, its first in a gap of four years, to bridge the widening deficit.

The size of the offer was almost double than the original to benefit from lower pricing ahead of a rate rise by the US Federal Reserve and exploit the available liquidity without having to pay a materially higher premium.

The country borrowed across three maturities, selling $3.5 billion in five-year notes at 120 basis points over US Treasuries, the same amount in 10-year bonds at 150 basis points over Treasuries and $2 billion of 30-year paper at a 210 basis-point spread, reports said.

Qatar is the latest among countries in the Gulf Co-operation Council after Abu Dhabi raised $5 billion in a similar issue last month, to tap the international bond market to plug deficit caused by falling prices of crude oil, from which these countries earn most of its revenues. ADCB expects Qatar’s deficit to be at 4.4 per cent of the GDP in 2016.

Qatar issue would be closely watched by Saudi Arabia, which also plans to tap the international bond market, in terms of pricing and the amount of interest it generates. Moody’s Investors Service cut its rating on Saudi Arabia to A1 from Aa3, five notches above junk, while Qatar rating was kept unchanged, although outlook was revised to negative.

http://gulfnews.com/business/sectors/investment/surprising-markets-qatar-raises-9-billion-in-eurobond-sale-1.1835502

2 China, US clash over cheap steel imports (BBC) Beijing has accused the US of damaging trade after Washington levied new duties of up to 450% on a specific steel imports from China. It was the latest move by the US against cheap steel imports. The new tax to protect domestic production affects corrosion-resistant steel. Lower duties will be put on steel from a number of other countries.

It comes one week after the US raised taxes on cold-rolled flat steel, which is widely used in car production. Beijing said it was unhappy with the US "deliberately suppressing" imports, describing it as an "irrational" move harmful to co-operation between the two countries. The US also issued duties of between 3% and 92% on corrosion-resistant steel from Italy, India, South Korea and Taiwan.

The 450% duty on Chinese products replaces a duty of 256% that had been introduced last year. US and European steel producers claim that Chinese producers are selling at below-cost prices and thereby distorting the global market. India's Tata Steel has put its loss-making steel plants in the UK up for sale.

In May, the EU launched an investigation of Chinese steel exports following large protests by steelworkers. At the G7 meeting in Japan, the EU's Jean Claude Juncker said the bloc was ready to step up its measures to defend the steel industry. China though dismisses such criticism, insisting that the country's steel mills are not selling their products at dumping or below-cost prices.

http://www.bbc.com/news/business-36385853

3 FB, Microsoft for private internet highway under water (Danny Yadron in The Guardian) Facebook and Microsoft are going underwater. The two technology companies have announced they are to install an undersea cable from the east coast of the US to Spain to help speed up their global internet services.

Fast connectivity is particularly important to Facebook, which wants to encourage users across the world to broadcast live video and meet in virtual reality. Both activities can consume vast amounts of bandwidth.

The project marks yet another example where technology companies are assuming roles traditionally left to public utilities or the government, and until now undersea cables have traditionally been laid by telecommunications incumbents.

Meanwhile, Google continues to expand Fiber, its high-speed internet program, Amazon.com effectively is building its own postal service, Uber is attempting to replace regulated cab companies and Facebook is bringing wireless internet to Africa.

The cable will travel from northern Virginia in the US, a major junction point in the global internet, to Bilbao in Spain, and then onward to the rest of Europe, Africa, the Middle East and Asia. The companies said it will be highest-capacity undersea cable yet across the Atlantic. The cost wasn’t disclosed.

An infrastructure-focused subsidiary of Telefónica, the Spanish telecom provider, will manage the cable. Construction is scheduled to begin in August 2016 and be completed by October 2017. Even though Telefónica will sell access to the cable to other companies, Facebook and Microsoft are ensuring they will get premier access to quick data transfers across the sea. In effect, the companies will have their own private highway between two major markets.

https://www.theguardian.com/technology/2016/may/26/facebook-microsoft-internet-cable-underwater

Greece averts crisis, stares at huge debt; Foxconn replaces '60,000 workers with robots'; Microsoft cuts 1,850 jobs at Nokia

1 Greece averts crisis, stares at huge debt (San Francisco Chronicle) It's all but official: this summer's Greek crisis has been called off. After an 11-hour meeting, European officials agreed to unfreeze more rescue loans and to consider ways to lighten Greece's debt load. That means Greece stands to get 10.3 billion euros ($11.5 billion) from its bailout loan package from European governments and the International Monetary Fund.

The money means Greece can make debt payments coming due in July. There won't be fears of a disastrous default and forced exit from the euro currency, as there were before Greece sealed a similar deal in July, 2015.

The country, however, is still far from safe financially or economically, meaning its crisis could yet flare up and once again cause jitters for the global economy. The IMF says Greece's debt, which is currently 180 percent of GDP, is "unsustainable." It wants European creditors to agree to lower interest rates on past rescue loans they gave Greece, and to push out their repayment dates.

The Europeans agree debt relief is possible. But Wednesday's deal puts off discussion of concrete terms for debt relief until 2018. Germany, the most influential of the governments that loaned Greece money, is reluctant to go to its parliament for approval of more breaks for Greece ahead of national elections in October 2017.

http://www.sfgate.com/news/world/article/What-next-for-Greece-Loan-averts-crisis-but-debt-7945046.php

2 Foxconn replaces ’60,000 workers with robots’ (BBC) Apple and Samsung supplier Foxconn has reportedly replaced 60,000 factory workers with robots. One factory has "reduced employee strength from 110,000 to 50,000 thanks to the introduction of robots", a government official told the South China Morning Post.

Xu Yulian, head of publicity for the Kunshan region, added: "More companies are likely to follow suit." China is investing heavily in a robot workforce. Foxconn Technology Group confirmed that it was automating "many of the manufacturing tasks associated with our operations" but denied that it meant long-term job losses.

Since September 2014, 505 factories across Dongguan, in the Guangdong province, have invested 4.2bn yuan (£430m) in robots, aiming to replace thousands of workers. Kunshan, Jiangsu province, is a manufacturing hub for the electronics industry.

Economists have issued dire warnings about how automation will affect the job market, with one report, from consultants Deloitte in partnership with Oxford University, suggesting that 35% of jobs were at risk over the next 20 years.

Former McDonald's chief executive Ed Rensi recently said a minimum-wage increase to $15 an hour would make companies consider robot workers. "It's cheaper to buy a $35,000 robotic arm than it is to hire an employee who is inefficient, making $15 an hour bagging French fries," he said.

http://www.bbc.com/news/technology-36376966

3 Microsoft to cut 1,850 jobs at Nokia (The Guardian) Microsoft is cutting up to 1,850 jobs in its smartphone business just two years after it bought handset maker Nokia in an ill-fated attempt to take on market leaders Apple and Samsung.

In a move that clearly puts the stamp of two-year chief executive Satya Nadella on the US company, Microsoft said it would shed the bulk of the jobs in Finland and write down $950m from the business. It did not say how many employees currently work on smartphones in the group as a whole.

Remaking Microsoft, known primarily for its software, into a more device-focused company was a hallmark of previous chief executive Steve Ballmer. In one of his last major acts, Ballmer closed a deal to buy Nokia’s struggling but once-dominant handset business for about $7.2bn in late 2013. The deal closed in April 2014, two months after Nadella became boss.

Since then, Nadella has shaved away at the phone business, starting with a 2015 restructuring that put the devices group, previously a stand-alone unit under the former Nokia chief, Stephen Elop, under the Windows group. Run by Terry Myerson, the Windows division is the company’s biggest.

Global market share of Windows smartphones fell below 1% in the first quarter of 2016, according to research firm Gartner. Last year, Microsoft announced $7.5bn of write-downs and 7,800 job cuts in its phone business. Earlier this month, Microsoft sold its entry-level feature phones business for $350m.

Nokia had around 40% of the world’s mobile phone market in 2008 before it was eclipsed by the rise of touch-screen smartphones. Nokia, now focused on telecom network equipment, just last week said it was cutting around 1,000 jobs in Finland following its acquisition of Franco-American rival Alcatel-Lucent .

https://www.theguardian.com/technology/2016/may/26/microsoft-to-cut-1850-jobs-at-struggling-former-nokia-smartphone-unit

Eurozone unlocks €10.3bn bailout loan for Greece; Pisa tests to include global skills; Singapore non-oil exports slide 9%

1 Eurozone unlocks €10.3bn bailout loan for Greece (Jennifer Rankin in The Guardian) European officials have agreed to unlock €10.3bn in bailout money for Greece as the International Monetary Fund made a significant climbdown in its demand for upfront debt relief for the recession-hit country.

Greece’s international creditors emerged from an 11-hour meeting in Brussels having agreed on steps to ease the burden of Greece’s €321bn debt mountain, worth 180% of annual economic output.

But the debt relief plan was a far cry from the “upfront” and “unconditional” debt relief the IMF had demanded, when it warned that Greece would face an ever-growing bill to service its loans. Poul Thomsen, director of the IMF’s European programme, said the IMF had made “a major concession”.

The fund had been locked in a stand-off with Germany, which was adamant that debt relief could not be considered before the end of Greece’s current €86bn bailout programme in mid-2018. Germany’s reluctance to make concessions is also thought to stem from fear of antagonising voters ahead of federal elections, due in October 2017 at the latest.

The €10.3bn is the long-delayed second instalment of Greece’s third bailout agreed last August, worth €86bn.

The Syriza-led government of Alexis Tsipras voted through €1.8bn of revenue-raising measures, including tax increases on coffee, tobacco, internet use and a higher VAT. These followed an unpopular pensions reform voted in by a narrow majority earlier this month. The government has also created a privatisation fund to sell off state assets, in effect security for the loans.

http://www.theguardian.com/world/2016/may/24/eurozone-officials-hope-to-give-greece-next-tranche-of-bailout

2 Pisa tests to include global skills (Andreas Schleicher on BBC) Pisa tests, an international standard for comparing education systems around the world, could include a new measurement of global skills in the next round of tests in 2018.

The OECD, which runs the tests in maths, reading and science, is considering adding another test which would look at how well pupils can navigate an increasingly diverse world, with an awareness of different cultures and beliefs.

Education leaders around the world are increasingly talking about the need to teach "global competences" as a way of addressing the challenges of globalisation. Globalisation can mean different things to different people. It can mean innovation and higher living standards for some - but it can also contribute to social division and economic inequality.

In the past, education was about teaching people something. Now, it is also about making sure that children develop a reliable compass, the navigation skills and the character qualities that will help them find their own way through an uncertain, volatile and ambiguous world.

Schools need to prepare students for a world where many will need to collaborate with people of diverse cultural origins. They will need to appreciate different ideas, perspectives and values. It's a world in which people need to decide how to trust and collaborate across differences.

The OECD sees global competence as being shaped by three principles - "equity", "cohesion" and "sustainability". Today, all three principles are at risk. But the OECD sees global competence as the centrepiece of a broader vision for 21st-Century education.

http://www.bbc.com/news/business-36343602

3 Singapore non-oil exports slide 9% (Chia Yan Min in Straits Times) Singapore's non-oil domestic exports slid 9 per cent in the first three months of the year from a year ago, trade agency IE Singapore said.

The agency also revised its forecast for the full-year downwards, amid a lacklustre global environment. It now expects non-oil domestic exports to decline between 3 and 5 per cent this year, from an earlier forecast of 0 to 2 per cent growth.

Shipments to eight out of 10 of Singapore's top export markets slid in the first quarter, IE data showed. The biggest contributors to the contraction were China, Taiwan and the European Union. Both electronic and non-electronic non-oil domestic exports were hit.

http://www.straitstimes.com/business/economy/singapore-non-oil-exports-slide-9-in-q1-full-year-forecast-cut-to-5-to-3

'China needs massive bailout'; World's first 3D-printed office in UAE; Uber tests self-driving car; People of no religion outnumber Christians in England & Wales

1 ‘China needs massive bailout’ (Straits Times) Charlene Chu, a banking analyst who made her name warning of the risks from China's credit binge, said a bailout in the trillions of dollars is needed to tackle the bad-debt burden dragging down the nation's economy.

Speaking eight days after a Communist Party newspaper highlighted dangers from the build-up of debt, Ms Chu said she was yet to be convinced the government is serious about deleveraging and eliminating industry overcapacity.

She also argued that lenders' off-balance-sheet portfolios of wealth-management products (WMPs) are the biggest immediate threat to the nation's financial system, with similarities to Western bank exposures in 2008 that helped to trigger a global meltdown.

She estimated as much as 22 per cent of all China's outstanding credit may be nonperforming by the end of this year, compared with an official bad-loan number for banks in March of 1.75 per cent. "The stock of Chinese banks' off-balance-sheet WMPs grew 73 per cent last year. There is nothing in the Chinese economy that supports a 73 per cent growth rate of anything at the moment” she said.

"We call off-balance-sheet WMPs a hidden second balance sheet because that's really what it is - it's a hidden pool of liabilities and assets. In this way, it's similar to the Special Investment Vehicles and conduits that the Western banks had in 2008, which nobody paid attention to until everything fell apart and they had to be incorporated on-balance-sheet.

"The mid-tier lenders is where these second balance sheets are very large. China Merchants Bank is a good example. Their second balance sheet is close to 40 per cent of their on-balance-sheet liabilities. Enormous. However, the idea that China needs a massive bailout in the trillions of US dollars isn't something I think the authorities are on board with or accept yet. They still believe they can grow out of it."

http://www.straitstimes.com/business/banking/china-needs-massive-bailout-in-the-trillions-of-dollars-says-top-banking-analyst

2 World’s first 3D-printed office in UAE (Khaleej Times) "The rapidly changing world requires us to accelerate our pace of development, for history does not recognize our plans but our achievements," Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai said while opening the 'Office of the Future', the first 3D-printed office in the world.

The unique building on the Emirates Towers premises will house the temporary office of the Dubai Future Foundation. Shaikh Mohammed stated: “We announce today the opening of the first 3D-printed office in the world, after less than a month of launching Dubai 3D printing strategy which showcases a modern model of construction.”

Shaikh Mohammed pointed out that the competitive advantages of 3-D printing in terms of lower costs and faster delivery will make the UAE one of the most important sustainable economic hubs, enabling the effective use of this technology to establish future cities in all sectors.

The office space covers up to 250 square metres, while the exterior design reflects the most innovative forms of future work place. The 3D-printed office was constructed using a special mixture of cement and a set of building material designed and made in the UAE and the US.

A 3D-printer measuring 20 feet high, 120 feet long and 40 feet wide was used to print the building. The printer features an automated robotic arm to implement printing process. The labour involved included one staff to monitor the function of the printer, seven people to install the building components on site, and a team of 10 electricians and specialists to take care of the mechanical and electrical engineering. As a result, the labour cost was cut by more than 50 per cent compared to conventional buildings of similar size.

The full model took only 17 days to print after which the internal and external designs were adopted. The office was installed on site within two days, which is significantly faster than traditional construction methods.

http://khaleejtimes.com/nation/government/shaikh-mohammed-opens-the-worlds-first-3d-printed-office

3 Uber tests self-driving cars (Emily Price in San Francisco Chronicle) One of the first self-driving Ubers is hitting the streets within the next few weeks .The ride-sharing company is deploying a self-driving Ford Fusion, a test car from its Advanced technologies Center.

The vehicle is loaded with sensors and will be mapping the areas it drives through while simultaneously testing the car’s self-driving capabilities. Don’t worry, the car won’t be alone. In the driver’s seat will be a trained employee that will be monitoring how the car performs, and will be there to grab the wheel if anything happens.

“[A total of] 1.3 million people die every year in car accidents — 94% of those accidents involve human error. In the future we believe this technology will mean less congestion, more affordable and accessible transportation, and far fewer lives lost in car accidents,” Uber said in its blog.

Uber isn’t the only one looking into self-driving cars. Lyft and General Motors have teamed up to work of a self-driving taxi of their own, and they plan on testing self-driving Chevrolet Bolt vehicles on public roads within the next year. In January, GM made a $500 million investment in the ride-sharing service.

http://blog.sfgate.com/techchron/2016/05/19/uber-is-testing-self-driving-cars-but-not-in-san-francisco/

4 People of no religion outnumber Christians in England & Wales (Harriet Sherwood in The Guardian) The number of people who say they have no religion is rapidly escalating and significantly outweighs the Christian population in England and Wales, according to new analysis.

The proportion of the population who identify as having no religion – referred to as “nones” – reached 48.5% in 2014, almost double the figure of 25% in the 2011 census. Those who define themselves as Christian – Anglicans, Catholics and other denominations – made up 43.8% of the population.

“The striking thing is the clear sense of the growth of ‘no religion’ as a proportion of the population,” said Stephen Bullivant, senior lecturer in theology and ethics at St Mary’s Catholic University in Twickenham.

The new analysis will fuel concern among Christian leaders about growing indifference to organised religion. This year the Church of England said it expected attendance to continue to fall for another 30 years as its congregations age and the millennial generation spurns the institutions of faith.

According to Bullivant’s report, both the Anglican and Catholic churches are struggling to retain people brought up as Christians. Four out 10 adults who were raised as Anglicans define themselves as having no religion, and almost as many “cradle Catholics” have abandoned their family faith to become “nones”. Neither church is bringing in fresh blood through conversions. Anglicans lose 12 followers for every person they recruit, and Catholics 10.

http://www.theguardian.com/world/2016/may/23/no-religion-outnumber-christians-england-wales-study