The head of the United Nations World Food Program (WFP) on Tuesday said the North Korean leadership is hopeful that following a possible denuclearization deal, the international community will increase humanitarian aid for millions of people in the country who are living in poverty and suffering from malnutrition.

“There is a tremendous sense of optimism by the leadership, by the people I met with, in the hopes that they will be turning a new chapter in their history, a new page,” said David Beasley, the Executive Director of the WFP during a briefing in Seoul.

The WFP director visited North Korea for four days last week, spending two days in Pyongyang and two visiting rural areas outside the capital. Beasley said he was given “remarkable” access during his visit to the restrictive state where contact with foreigners is tightly controlled. Government minders also accompanied him during his visit.

Beasley, a former governor of the U.S. state of South Carolina, was nominated to head the WFP last year by U.S. Ambassador to the U.N. Nikki Haley, who is also a former South Carolina governor.

With the upcoming summit between U.S. President Donald Trump and North Korean leader Kim Jong Un now scheduled to be held in Singapore on June 12, there are increased expectations that an agreement will be reached to dismantle the North’s nuclear, missile and chemical weapons programs that threaten the U.S. and its allies.

Details over the scope and timing of the denuclearization process must still be worked out, but the North Korean leader has indicated he wants to resolve the dispute to focus on improving the economic conditions of the country.

Widespread malnutrition

Ending the severe U.S. led sanctions banning 90% of North Korean trade that were imposed for the North’s repeated nuclear and missile tests, would open the door to increased economic investment and cooperation.

Humanitarian assistance has been exempted from the economic sanctions, but Beasely said import restrictions has made it more complicated to bring in aid, and made potential donors reluctant to contribute for fear of inadvertently violating sanctions.

Beasley’s North Korean itinerary included trips to WFP funded projects, including a children’s nursery in South Hwanghae province, located near the inter-Korean border, and a cookie factory in North Pyongan province, near the border with China. In the last year the WFP has made over 1,800 site visits to assure that aid provided went to those who need it most.

The WFP director said poverty and food shortages were prevalent, particularly in rural areas.

“Going from village to village while we did not see starvation, there were clearly issues of under-nutrition or malnutrition,” he said.

WFP provides food aid to an estimated 650,000 women and children in North Korea every month, although funding shortfalls, the organization says, have caused rations to be reduced or suspended in some cases.

The WFP is hoping to greatly increase food aid to North Korea after a nuclear deal is reached and sanctions are revoked. But Beasely said the leadership in Pyongyang must provide even greater access and transparency to clearly demonstrate the need for assistance, and to assure donors that their contributions will go to those who need it most.

“I said very clearly that we want to work with you, we want to help you, but you must help us,” said Beasely.

Agriculture reforms

The U.S. provided North Korea significant food aid in the 1990s to ease severe famine conditions that caused widespread starvation and deaths that were due in part to the loss of Soviet support and a failed communist agriculture model that caused food production to decline.

However Washington ended the bilateral aid program later due in part to concerns that assistance was being redirected to support the North Korea’s military, and to free up more resources for the country’s nuclear development program.

North Korea currently produces five million metric tons of food a year, but the WFP estimates it needs between six and seven million metric tons annually to feed its population of 25 million. Around 10 million North Koreans suffer from malnutrition or under-nutrition, according to the WFP director.

Farmers in North Korea also face significant hardship in producing enough food for the population, with only 15 to 20 percent of land suitable for agriculture in the mostly mountainous terrain, and often lacking fertilizers and modern tractors to cultivate the fields.

In recent years North Korean leader Kim Jong Un instituted agricultural reforms allowing farmers to keep or sell a portion of what they produce. These financial incentives have been credited with helping to stabilize food production despite floods and droughts that regularly occur.

Lee Yoon-jee contributed to this report.

 
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Even before US and Chinese officials sit down this week for a second round of high-level trade talks in Washington, both sides have been signaling a willingness to try and make a deal or at least meet the other halfway.

Whether or not that will be enough to get them across the finish line remains to be seen, analysts say.

Late last week at a forum sponsored by the Center for Strategic and International Studies in Washington D.C., Chinese Ambassador Cui Tiankai signaled China’s willingness to address a range of issues from the deficit to the protection of intellectual property rights.

Deficit detente

Cui said that while it is overly simplistic to say trade deficit means loss and surplus means gain, there is a clear need for better macroeconomic coordination between the two countries.

“A huge deficit for you and a huge surplus for us – I don’t think this should continue,” he said. “I don’t think it will continue. For us, such an imbalance is already a problem rather than a benefit.”

When Treasury Secretary Steven Mnuchin and China’s Vice Premier Liu He led trade delegations earlier this month in Beijing, the deficit loomed large. A leaked list of some of Washington’s demands included a request that China help cut the trade deficit between the two countries by $100 billion a year over the next two years.

Many have scoffed at the figure and the possibility that Beijing could bridge such a seemingly huge gap, but Cui’s remarks are telling.

Gene Ma, head of China research at the Institute of International Finance, said that even though negotiations may be hard, messy and ugly, that is better than not negotiating.

And while there is room for hope, any agreement is unlikely without some compromise, he said.

“A lot of the tough measures put out can eventually be watered down, the tariffs can be postponed, some sectors can be wavered, China can buy more products from the U.S.,” he said. “There is something that both sides can do, but of course there are other sectors that are harder such as technologies.”

China has long been criticized for its trade policies, for forcing foreign companies to hand over technology in return for access to its markets and its rampant problem of intellectual property theft.

In a bid to change that, the Trump administration launched an investigation into Beijing’s policies and trade practices related to technology transfer, innovation and intellectual property.

The president has threatened to levy up to $150 billion in tariffs against China and the deadline for that action is fast approaching.

A public hearing will be held on Tuesday in Washington to discuss the tariffs, and if he chooses, President Trump could place a levy on Chinese goods as early as next week.

If he does, China has pledged to respond in kind, threatening to raise tariffs on some $50 billion in American goods, including soybeans.

IC Bargaining Chip

As for Beijing’s demands, one big concern is Washington’s recent decision to place a seven-year ban on the sale of American components to Chinese mobile phone maker ZTE.

In the first round of talks, Beijing demanded that the United States amend the ruling. And then late last week, just days before talks were set to resume in Washington, the company claimed that its main business operations had ceased due to the ban imposed by the U.S. government.

The move has highlighted the incredible leverage Washington has when it comes to technology, but also limits as well.

Over the weekend, however, U.S. President Donald Trump said that he was working with Chinese President Xi Jinping to throw a lifeline to the company. Trump’s about-face has sparked outrage from some and concern from others. Some argue that if Trump does anything to reverse the ruling, he would be interfering with law enforcement.

Others said the move will conveniently buy the administration more time to strike a deal.

The Wall Street Journal has reported that the two sides are narrowing in on a deal that could see Washington use the ZTE ban in exchange for a reprieve of Chinese tariffs on billions of dollars of American agricultural products.

But there are other obvious reasons for Trump’s shift. The most glaring of them is that while the ban would hurt ZTE and highlights how China lags far behind in the computer chip industry, it is also an issue of American jobs.

“Unlike soybeans, finding customers for such a large amount of semiconductor chips in such a short period of time is not easy and that would not only impact on American jobs but go against Trump’s campaign promises,” said Eric Zhou, a Beijing-based commentator. “And because of that it’s more pragmatic [for Washington] to use the ban as a policy measure and trade war bargaining chip.”

Brian Kopczynski contributed to this report.
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In a warehouse on the outskirts of Indonesia’s capital, supervisors at e-commerce company Lazada use bikes or electric scooters to zip around a floor the size of four soccer fields, where up to 3,000 staff pack and dispatch goods around the clock.

The warehouse is one of five that Lazada has opened across Indonesia to cut costs and expand its reach in an archipelago whose 17,000 islands are sprinkled across an area bigger than the European Union.

Chinese tech firms, including Lazada’s top investor, Alibaba Group Holding, have poured at least $6 billion into nearly every aspect of Indonesian e-commerce.

Lazada uses Alibaba’s inventory management systems and has tied up with ride-hailing companies, often using their motorbikes to deliver goods in a country with creaking infrastructure and traffic-clogged cities.

The payoff could be huge. It is a market forecast to grow from about $7 billion last year to $63 billion by 2027, according to Morgan Stanley.

“Indonesia, both in terms of the customers and behavior, is a very unique challenge and we need to adapt,” Florian Holm, co-chief executive at Lazada Indonesia, told Reuters.

Lazada and Tokopedia, in which Alibaba is also an investor, dominate Indonesia in customer traffic, with more than 117 million monthly website visits each, according to data from e-commerce aggregator iPrice.

Alibaba doubled its investment in loss-making Lazada to $4 billion in April, underscoring its global ambition to secure a bigger share of the e-commerce market.

Between the investment and the rewards, however, lie enormous complexities.

The World Bank has said logistical costs swallow up around a quarter of Indonesia’s gross domestic product, citing bottlenecks in supply chains, long dwelling times in ports and lengthy trade clearances.

Lazada has opened warehouses in places like Balikpapan, on the coast of Borneo, to avoid hauling everything from Jakarta.

Holm said that had in some cases reduced shipping costs by 90 percent.

Competitive pressure is growing. Another Chinese heavyweight, JD.com, arrived in Indonesia in 2016. And the U.S. giant Amazon, which opened a warehouse in Singapore last year, may be prepared to dip a toe into the Indonesian market soon.

Chinese influence

Indonesia’s e-commerce sales are set to rise from 3 percent of retail activity now to 19 percent by 2027, Morgan Stanley estimates. The same report said there were 159 million smartphones in Indonesia at the end of 2016, a number that could rise to 275 million by 2021.

Indonesia’s young population and room for improvement in transportation and communications add to the prospects for growth, the bank said.

That has attracted other Chinese companies. Tencent Holdings, which owns regional e-commerce player SEA, has entered the fray.

Tencent and JD.com have stakes in Indonesia’s ride-hailing firm Go-Jek, while JD.com has invested in online travel company Traveloka.

But Usman Akhtar, a partner at Bain & Co. in Jakarta, said Indonesian companies such as Blibli, backed by a unit of the Djarum group, remain a force.

“I would not characterize Indonesia as turning into a replica of China’s e-commerce market, at least not yet,” said Akhtar, referring to how JD.com and Alibaba dominate in China.

Kusumo Martanto, who heads Blibli, told Reuters the company had seven warehouses in Indonesia with seven more planned, and said it was important for local e-commerce companies to compete against Chinese players.

Alibaba founder Jack Ma is on an Indonesian government steering committee for e-commerce, advising on areas such as tax, cyber security and human resources.

Indonesia’s communications minister, Rudiantara, said there was no conflict of interest in Ma’s role, describing him as a “guru” who could help sell the country’s potential.

But some policies seem to be turning toward Ma’s home turf.

Indonesia, which is trying to tackle a shortage of talent in the digital sector, dropped sponsorships for 20 students to study in places like Australia and the United States.

Instead, 10 students will go to India and 10 to China to study this year “because the future of the digital economy is in China and India,” said the minister, who uses one name.

Eying Amazon

Caterine, a 30-year-old housewife who lives west of Jakarta, used to shop in conventional stores once a week, but after her baby was born six months ago, she has been shopping online two to three times a week for convenience.

“I prefer online shopping because it is quick. I can just click and click and the goods will arrive,” she said, adding she mostly used Shopee and Tokopedia for goods such as diapers and clothing.

Morgan Stanley said delivery times of all types across Indonesia are down to about 3 days from 10 days, while deliveries in big cities can take 24 hours or less.

While in urban areas delivery times have greatly improved, other parts of Indonesia’s e-commerce supply chain are still inefficient, said Willson Cuaca, co-founder of East Ventures, a tech investment fund.

“To send goods from point A to B, the logistics company needs at least two modes of transport,” he said, referring to the complications of operating across so many islands.

Amazon, by contrast, prefers to control its own supply chains from start to finish. But entering a market like Indonesia could require it to revisit that strategy.

Amazon Singapore did not respond to a request for comment on whether it had plans for Indonesia.

Much of the U.S. giant’s international focus has been on developing its business in India, even though some view its entry into Singapore last year as a stepping stone for expansion in the region.

“At this moment, I believe it is trying to test the market, by selling products through third-party sellers,” said Daniel Tumiwa of the Indonesian e-commerce Association.

Zhang Li, who heads JD.com’s Indonesian joint venture with Provident Capital JD.ID, was not overly concerned about competition from the likes of Amazon.

“E-commerce is a global and borderless business, so we have to prepare and do continuous improvement to make our customers happy,” Zhang said.

 
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The European Union on Monday warned Britain time was running out to seal a Brexit deal this fall and ensure London does not crash out of the bloc next March, adding to pressure on Prime Minister Theresa May.

May’s spokesman, however, said the “focus is on getting this right” rather than meeting a deadline.

The EU’s Brexit negotiator Michel Barnier told 27 ministers of the bloc meeting in Brussels on Monday that “no significant progress” had been made in negotiations with London since March, the Bulgarian chairwoman of the talks said.

Diplomats and officials in Brussels have raised doubts about whether the bloc and London will be able to mark a milestone in the negotiations at the summit of EU leaders on June 28-29.

The current schedule puts progress in June as an important step towards a final Brexit deal in October, which would leave enough time for an elaborate EU ratification process before the Brexit day.

“October is only five months from now and still some key issues related to the withdrawal agreement need to be settled.

In June we need to see substantive progress on Ireland, on governance and all remaining separation issues,” said Deputy Prime Minister Ekaterina Zakharieva of Bulgaria, which holds the EU’s rotating presidency.

‘No clear stance’

German, Austrian and Dutch ministers all echoed the same concern, saying Britain has not made its position clear in detail on parts of the negotiations.

“We are concerned that there is no clear stance, no clear position from the British. The clock is ticking,” German EU Minister Michael Roth told his EU peers.

“We need now to be making substantial progress, but that is not happening. What is worrying us in particular is the Northern Ireland question where we expect a substantial accommodation from the British side.”

At home, May is stuck between a rock and a hard place with staunch Brexit supporters pushing to sever ties with the EU and others advocating keeping close customs cooperation with the bloc to reduce frictions in future trade.

May’s spokesman said London was working on two options for post-Brexit customs cooperation.

Under a customs partnership, Britain could collect tariffs on goods entering the country on the EU’s behalf. Under a second idea, for a streamlined customs arrangement, traders on an approved list would be able to cross borders freely with the aid of automated technology.

Pressure

But the EU has said London must come up with a solution for the Irish border conundrum and highlights that has not happened.

Both sides worry that reinstating a physical border between EU-member Ireland and Britain’s province of Northern Ireland – including to manage customs – could revive violence there.

Other outstanding issues include guarantees for expatriate rights, agreeing on security cooperation and trade rules after Brexit.

With May’s cabinet, her ruling Conservative party and the British split on Brexit, the prime minister has come under increasing pressure at home in recent weeks to make a decision on customs.

The Brexit schedule is tightening, sources said, which helps the EU negotiating strategy to pile pressure on London before the June summit but mostly is due to lack of substantial headway in the talks.

Dutch Foreign Minister Stef Blok said it was too early to discuss an extension of the timeline, but added: “The aim is now to conclude a deal in the time schedule that has been agreed on  … I very much hope we will agree but there are no guarantees, unfortunately.”

 
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Investors looking to buy Venezuela’s new cryptocurrency may want to head to a little-known Moscow bank whose biggest shareholders are President Nicolas Maduro’s socialist government and two state-controlled Russian companies under U.S. sanctions.

Evrofinance Mosnarbank has emerged as the only international financial institution so far willing to defy a U.S. campaign to derail the world’s first state-backed digital currency, called the petro, even before it begins to function.

Early would-be investors who registered with Venezuela’s government and downloaded the petro’s wallet software — available in Spanish, English and Russian — were then invited to buy the cryptocurrency by wiring a minimum of 1,000 euros to a Venezuelan government account at Evrofinance.

The bank’s place in the rollout of the petro is further evidence of Russia’s role in the creation of a cryptocurrency that much of the digital world has shunned but that Maduro hopes will allow Venezuela to circumvent U.S. financial sanctions imposed last year.

At the petro’s launch on Feb. 21, Maduro heaped praise on two Russians in the audience who worked with wealthy, Kremlin-connected businessmen, thanking their previously unknown startups — Zeus Exchange and Aerotrading — for their role developing what he joked would be a kind of “kryptonite” against U.S. economic dominance.

A day later, he dispatched his economy minister to Moscow to brief his Russian finance counterpart.

And in March, the Russian Association of Cryptocurrency and Blockchain awarded the Venezuelan government an award for its role “challenging the de-facto powers of the international financial system.”

‘Fighting a common bully’

Russia’s interest in the petro stems from its own increasingly pariah status in the west, said Claiborne W. Porter, the former head of the U.S. Justice Department’s bank integrity unit. As relations with the U.S. and European Union become more tense, both countries are looking for ways to demonstrate political strength while moving money outside the American financial system.

“Like kids on the playground, Venezuela and Russia think they are fighting a common bully in U.S. sanctions, so they’re going to try and form a united front,” said Porter, who is now the Washington-based head of investigations at consulting firm Navigant.

Russia has provided Venezuela with billions in debt relief over the years and is a major investor in the country’s oil industry. That financial lifeline has become more important since the Trump administration last year banned Americans from lending money to the nearly bankrupt government and now threatens to slap sanctions on the OPEC nation’s oil industry if Maduro goes ahead with presidential elections this month that are widely seen as a sham. In March, Trump signed an executive order banning Americans from any dealings with the petro.

Evrofinance and its executives didn’t return repeated email requests for comment. But after The Associated Press’ inquiries, all references to the bank were removed from the petro’s wallet, leaving prospective buyers with no guidance on how to actually buy it, though it’s still listed for sale in rubles and euros as well as three other widely circulated cryptocurrencies.

Venezuela’s government purchased a 49 percent stake in Evrofinance in 2011, making the bank, which traces its history back a century as a western financial outpost for the Soviet Union, a vehicle for binational trade and investment projects, with almost $800 million in assets.

The rest of the shares are held by two major banks, state-controlled VTB and Gazprombank, which were sanctioned by the U.S. and European nations in 2014 over President Vladimir Putin’s annexation of Crimea.

It’s unclear how many petros the government has sold. Maduro boasted this month that the government had raised $3.3 billion in the pre-sale phase. But so far only a small fraction of the petros appears to have been distributed to buyers, according to the blockchain where the digital currency’s movements can be publicly tracked.

‘Scam’

Experts say that the petro is of little interest to foreigners other than drug traffickers and others active in Venezuela’s burgeoning criminal underworld. Even offshore trading platforms like Bitfinex are refusing to deal in the petro for fear of violating sanctions. Rating website ICOindex.com, which tracks initial coin offerings of cryptocurrencies, called it a “scam.”

“An overwhelming majority of ICOs don’t deliver on what they promise because their promoters are outright scammers or fall short on technical expertise,” said Alejandro Machado, a Venezuelan-born computer scientist who consults for crypto startups.  “In the case of the Venezuelan government, both reasons apply.”

One of the two Russians who signed agreements with Maduro to position the petro globally, Denis Druzhkov, had been fined $31,000 and barred for three years by the Chicago Mercantile Exchange for fraudulent trading in futures’ contracts. Zeus Exchange, which Druzhkov created alongside a Kremlin-connected industrialist, said in a statement that it has never had any business ties with the Venezuelan government and that Druzhkov resigned after abusing his authority.

The other, Fedor Bogorodskiy, used to help run the credit card division at a bank controlled by a Russian oligarch.  He has lived in Uruguay since 2009, combining telecommunications business with part-time promotion of Russian culture. He told The AP that his company, Aerotrading, whose website consists of a single home page with no company information, immediately ceased all work on the petro after Trump announced his ban.

Despite the pressure, Maduro is showing no signs of slowing down. He’s given government institutions — from ministries to airports — 120 days to start accepting the petro as legal tender in all transactions. He’s also paved the way for the creation of 16 local exchanges where Venezuelans will be able to purchase petros with their fast-depreciating bolivars. Also in the works is a second state-backed cryptocurrency tied to the country’s gold reserves.

But gaining international acceptance remains an uphill battle.

Yuri Pripachkin, president of the Russian blockchain group that honored Venezuela, said that while the Kremlin is keeping a close eye on the petro it hasn’t been involved in its development. Still, he said as long as sanctions are used as a foreign policy tool to punish governments that challenge U.S. policies, the incentives to seek out alternative means of financing will remain. He also dismissed the idea that the petro could be used to fund criminal activity.

“That’s a fairy tale,” said Pripachkin. “The most popular currency for terrorists and criminals the world over is the U.S. dollar, not crypto, and nobody is suggesting we ban dollars. This is just an attempt to stop crypto from expanding.”

 
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In South Africa, workers will soon begin construction of a new 100 megawatt solar power plant near the town of Pofadder. In Morocco, expansion of a giant solar power plant near the city of Ourzazate will soon increase its capacity to 580 megawatts. Solar energy has been slower to arrive in West Africa, but  growth is underway.

West Africa’s largest solar power station was officially opened in November 2017. It’s at Zagtouli, on the outskirts of Burkina Faso’s capital Ouagadougou. It cost $55 million to build; the money came from France and the European Union. Zagtouli now delivers 30 megawatts to the national power grid.

Before Zagtouli, this was West Africa’s largest, at Bokhol, in Senegal. It opened in 2016, cost $30 million to build but the money story here is different.

Charlotte Aubin, founder and director of Greenwish, a renewable energy company, was closely involved. She helped create the first Independent Power Producer, or IPP, with money from Senegalese investors and an international fund backed by three European governments.

“The first project we did was in Senegal and it was a milestone for the continent as well as Greenwish,” said Aubin. “It was the first solar IPP that came out of the ground in Sub-Saharan Africa. It’s now providing electricity to 160,000 people in Senegal at a 40 percent discount to the cost of the grid at the time.”

Forty percent less? How is that possible? Moussa Coulibaly, who runs Air Com, one of Mali’s oldest solar power companies, explains.

It’s the expansion of the technology, Coulibaly told VOA. The more people want a product, the cheaper it gets. Led by investment from the United States and China, the industry has been rapidly scaling up. Production costs have come down as a result. Coulibaly says he has seen the price of a solar panel reduced by more than 500 percent in Mali… in only twelve years. He says today, a solar panel will cost you CFA 50,000 — that’s about $90.

Something else has changed too in the region: the law. Until recently, independent power producers like Air Com and the Greenwish project could not exist. The law simply prohibited it. Senegal lifted the ban on non-state power production in 1998; Mali did it in 2000, while Burkina Faso legalized IPPs only last year.

Senegal now has four solar power stations. Burkina Faso is building two more. South Africa and Morocco have dozens each. And the list is getting longer: Kenya, Ethiopia, Mozambique, Ghana, Mauritania…

At nighttime, an estimated 600 million Africans still use candles and kerosene lamps to light their homes. Many live in the continent’s vast rural zones. How do you get all those millions connected?

Charlotte Aubin has an idea that would use existing structures — telephone towers.

“There are about 240,000 towers that are off-grid or bad grid that could benefit from clean tech solution… but we are also looking at doing more for [the] population.”

Interest in off-grid solar is booming in West Africa. Companies like Air Com in Mali build small local grids, tailor-made for the communities they serve.

Coulibaly says we make an estimate of the electricity needs of a particular village — now and in the future. And then we build an independent local solar-powered grid based on those estimates.

It’s true: solar alone will not be enough to fulfill Africa’s energy needs. But for private power producers and small independent off-grid networks, the future looks bright.

 

 
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