Month: September 2018

Fearing Debt Trap, Pakistan Rethinks Chinese ‘Silk Road’ Projects

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After lengthy delays, an $8.2 billion revamp of a colonial-era rail line snaking from the Arabian Sea to the foothills of the Hindu Kush has become a test of Pakistan’s ability to rethink signature Chinese “Silk Road” projects due to debt concerns.

The rail megaproject linking the coastal metropolis of Karachi to the northwestern city of Peshawar is China’s biggest Belt and Road Initiative (BRI) project in Pakistan, but Islamabad has balked at the cost and financing terms.

Resistance has stiffened under the new government of populist Prime Minister Imran Khan, who has voiced alarm about rising debt levels and says the country must wean itself off foreign loans.

“We are seeing how to develop a model so the government of Pakistan wouldn’t have all the risk,” Khusro Bakhtyar, minister in Pakistan’s planning ministry, told reporters recently.

The cooling of enthusiasm for China’s investments mirrors the unease of incoming governments in Sri Lanka, Malaysia and Maldives, where new administrations have come to power wary of Chinese deals struck by their predecessors.

Pakistan’s new government had wanted to review all BRI contracts. Officials say there are concerns the deals were badly negotiated, too expensive or overly favored China.

But to Islamabad’s frustration, Beijing is only willing to review projects that have not yet begun, three senior government officials have told Reuters.

China’s Foreign Ministry said, in a statement in response to questions faxed by Reuters, that both sides were committed to pressing forward with BRI projects, “to ensure those projects that are already built operate as normal, and those which are being built proceed smoothly.”

Pakistani officials say they remain committed to Chinese investment but want to push harder on price and affordability, while re-orientating the China-Pakistan Economic Corridor (CPEC) — for which Beijing has pledged about $60 billion in infrastructure funds — to focus on projects that deliver social development in line with Khan’s election platform.

China’s Ambassador to Pakistan, Yao Jing, told Reuters that Beijing was open to changes proposed by the new government and “we will definitely follow their agenda” to work out a roadmap for BRI projects based on “mutual consultation.”

“It constitutes a process of discussion with each other about this kind of model, about this kind of roadmap for the future,” Yao said.

Beijing would only proceed with projects that Pakistan wanted, he added. “This is Pakistan’s economy, this is their society,” Yao said.

Islamabad’s efforts to recalibrate CPEC are made trickier by its dependence on Chinese loans to prop up its vulnerable economy.

Growing fissures in relations with Pakistan’s historic ally the United States have also weakened the country’s negotiating hand, as has a current account crisis likely to lead to a bailout by the International Monetary Fund, which may demand spending cuts.

“We have reservations, but no other country is investing in Pakistan. What can we do?” one Pakistani minister told Reuters.

Crumbling railways

The ML-1 rail line is the spine of country’s dilapidated rail network, which has in recent years been edging toward collapse as passenger numbers plunge, train lines close and the vital freight business nosedives.

Khan’s government has vowed to make the 1,872 km (1,163 mile) line a priority CPEC project, saying it will help the poor travel across the vast South Asian nation.

But Islamabad is exploring funding options for CPEC projects that depart from the traditional BRI lending model — whereby host nations take on Chinese debt to finance construction of infrastructure – and has invited Saudi Arabia and other countries to invest.

One option for ML-1, according to Pakistani officials, is the build-operate-transfer (BOT) model, which would see investors or companies finance and build the project and recoup their investment from cashflows generated mainly by the rail freight business, before returning it to Pakistan in a few decades time.

Yao, the Chinese envoy, said Beijing was open to BOT and would “encourage” its companies to invest.

Rail mega-projects under China’s BRI umbrella have run into problems elsewhere in Asia. A line linking Thailand and Laos has been beset by delays over financing, while Malaysia’s new Prime Minister Mahathir Mohamad outright cancelled the Chinese-funded $20 billion East Coast Rail Link (ECRL).

Beijing is happy to offer loans, but reticent to invest in the Pakistan venture as such projects are seldom profitable, according to Andrew Small, author of a book on China-Pakistan relations.

“The problem is that the Chinese don’t think they can make money on this project and are not keen on BOT,” said Small.

Off-book debts

During President Xi Jinping’s visit to Pakistan in 2015, the ML-1 line was placed among a list of “early harvest” CPEC projects that would be prioritized, along with power plants urgently needed to end crippling electricity shortages.

But while many other projects from that list have now been completed the rail scheme has been stuck.

Pakistani officials say they became wary of how early BRI contracts were awarded to Chinese firms, and are pushing for a public tender for ML-1.

Partly to help with price discovery, Pakistan asked the Asian Development Bank (ADB) to finance a chunk of the rail project through tendering. The ADB began discussions on a $1.5-2 billion loan, but China insisted the project was “too strategic”, and Islamabad kicked out the ADB under pressure from Beijing in early 2017, according to Pakistani and ADB officials.

“If it’s such a strategic project then it should be a viable project for them to finance on very concessional terms or invest in?” said one senior Pakistani official familiar with the project, referring to the BOT model.

China’s foreign ministry said Beijing was engaged in “friendly consultations” with Pakistan on the rail project.

Chinese companies participated in BRI projects in an open and transparent way, “pooling benefits and sharing risks,” it said.

Analysts say Pakistan will struggle to attract non-Chinese investors into the project, which may force it to choose between piling on Chinese debt or walking away from the project. In 2017, Pakistan turned down Chinese funding for a $14 billion mega-dam project in the Himalayas due to cost concerns and worries Beijing could end up owning a vital national asset if Pakistan could not repay loans, as occurred with a Sri Lankan port.

Khan’s government chafes at several Chinese intercity mass transport projects in Punjab, the voter heartland of the previous government, which now need hundreds of millions of dollars in subsidies every year.

They also fume about the risk of accumulating off-books sovereign debt through power contracts, where annual profits of above 20 percent, in dollar terms, were guaranteed by the previous administration.

With the ML-1 line, there are also those who harbor doubts closer to home, including the previous government’s finance minister, Miftah Ismail, who said his ministry had always had concerns about its viability.

“When people say it’s a project of national importance, that usually means it makes no sense financially,” he said.
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Nobel Prizes Still Struggle With Wide Gender Disparity

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Nobel Prizes are the most prestigious awards on the planet but the aura of this year’s announcements has been dulled by questions over why so few women have entered the pantheon, particularly in the sciences.

The march of Nobel announcements begins Monday with the physiology/medicine prize.

Since the first prizes were awarded in 1901, 892 individuals have received one, but just 48 of them have been women. Thirty of those women won either the literature or peace prize, highlighting the wide gender gap in the laureates for physics, chemistry and physiology/medicine. In addition, only one woman has won for the economics prize, which is not technically a Nobel but is associated with the prizes.

Some of the disparity likely can be attributed to underlying structural reasons, such as the low representation of women in high-level science. The American Institute of Physics, for example, says in 2014, only 10 percent of full physics professorships were held by women.

But critics suggest that gender bias pervades the process of nominations, which come largely from tenured professors.

“The problem is the whole nomination process, you have these tenured professors who feel like they are untouchable. They can get away with everything from sexual harassment to micro-aggressions like assuming the woman in the room will take the notes, or be leaving soon to have babies,” said Anne-Marie Imafidon, the head of Stemettes, a British group that encourages girls and young women to pursue careers in science, technology, engineering and mathematics.

“It’s little wonder that these people aren’t putting women forward for nominations. We need to be better at telling the stories of the women in science who are doing good things and actually getting recognition,” she said.

Powerful men taking credit for the ideas and elbow grease of their female colleagues was turned on its head in 1903 when Pierre Curie made it clear he would not accept the physics prize unless his wife and fellow researcher Marie Curie was jointly honored. She was the first female winner of any Nobel prize, but only one other woman has won the physics prize since then.

More than 70 years later, Jocelyn Bell, a post-graduate student at Cambridge, was overlooked for the physics prize despite her crucial contribution to the discovery of pulsars. Her supervisor, Antony Hewish, took all of the Nobel credit.

Brian Keating, a physics professor at the University of California San Diego and author of the book “Losing the Nobel Prize: A Story of Cosmology, Ambition, and the Perils of Science’s Highest Honor,” says the Nobel Foundation should lift its restrictions on re-awarding for a breakthrough if an individual has been overlooked. He also says posthumous awards also should be considered and there should be no restriction on the number of individuals who can share a prize. Today the limit is three people for one prize.

“These measures would go a long way to addressing the injustice that so few of the brilliant women who have contributed so much to science through the years have been overlooked,” he said.

Keating fears that simply accepting the disparity as structural will seriously harm the prestige of all the Nobel prizes.

“I think with the Hollywood #MeToo movement, it has already happened in the film prizes. It has happened with the literature prize. There is no fundamental law of nature that the Nobel science prizes will continue to be seen as the highest accolade,” he said.

This year’s absence of a Nobel Literature prize , which has been won by 14 women, puts an even sharper focus on the gender gap in science prizes.

The Swedish Academy, which awards the literature prize, said it would not pick a winner this year after sex abuse allegations and financial crimes scandals rocked the secretive panel, sharply dividing its 18 members, who are appointed for life. Seven members quit or distanced themselves from academy. Its permanent secretary, Anders Olsson, said the academy wanted “to commit time to recovering public confidence.”

The academy plans to award both the 2018 prize and the 2019 prize next year — but even that is not guaranteed. The head of the Nobel Foundation, Lars Heikensten, has warned that if the Swedish Academy does not resolve its tarnished image another group could be chosen to select the literature prize each year.

Stung by criticism about the diversity gap between former prize winners, the Nobel Foundation has asked that the science awarding panels for 2019 ask nominators to consider their own biases in the thousands of letters they send to solicit Nobel nominations.

“I am eager to see more nominations for women so they can be considered,” said Goran Hansson, secretary-general of the Royal Swedish Academy of Sciences and vice chairman of the Nobel Foundation. “We have written to nominators asking them to make sure they do not miss women or people of other ethnicities or nationalities in their nominations. We hope this will make a difference for 2019.”

It’s not the first time that Nobel officials have sought diversity. In his 1895 will, prize founder Alfred Nobel wrote: “It is my express wish that in the awarding of the prizes no consideration shall be given to national affiliations of any kind, so that the most worthy shall receive the prize, whether he be Scandinavian or not.”

Even so, the prizes remained overwhelmingly white and male for most of their existence.

For the first 70 years, the peace prize skewed heavily toward Western white men, with just two of the 59 prizes awarded to individuals or institutions based outside Europe or North America. Only three of the winners in that period were female.

The 1973 peace prize shared by North Vietnam’s Le Duc Tho and American Henry Kissinger widened the horizons — since then more than half the Nobel Peace prizes have gone to African or Asian individuals or institutions.

Since 2000, six women have won the peace prize.

After the medicine prize on Monday, the Royal Swedish Academy of Sciences will announce the Nobel in physics on Tuesday and in chemistry on Wednesday, while the Nobel Peace Prize will be awarded Friday by the Norwegian Nobel Committee. On Oct. 8, Sweden’s Central Bank announces the winner of the economics prize, given in honor of Alfred Nobel.

 
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Croatian Vintner Ages Wines in Amphoras on Adriatic Sea Floor

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Traditional two-handled ceramic jars known as amphoras were used extensively in ancient Greece to store and transport a variety of products, especially wine. These days they are more likely to be found in shipwrecks than in stores. But wine-filled amphoras are once again being found on the sea floor, not from sunken ships, but deliberately placed there by a special Eastern European winery. Faith Lapidus explains.
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Some US Catholic Churches Close as Attendance Flags

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The Catholic Church is closing parishes across the American Midwest and Northeast in response to years of flagging attendance. Changing demographics and an overall trend of secularism is partly to blame, but repeated cases of sexual abuse in the church have not helped. Reporter Teresa Krug reports from the Midwestern state of Iowa, where some church members are questioning why they should stay.
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Using Art to Unite a Divided Neighborhood

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Sedgwick Street in Chicago is a thoroughfare divided by race and socio-economics. The area was settled by German, Irish and Sicilian immigrants. But in the 1950s and ’60s, when the original settlers began moving out, African-Americans, Puerto Ricans and so-called hippies started moving in. Today, Sedgwick Street remains a social and economic demarcation line between the haves and the have-nots. But as VOA’s Mariama Diallo reports, one art studio owner hopes to use art to unite the neighborhood.
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Tesla, Musk Settle Fraud Suit for $40M

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Tesla Chief Executive Officer Elon Musk and the electric car company have agreed to pay a total of $40 million and make a series of concessions to settle a government lawsuit alleging Musk duped investors with misleading statements about a proposed buyout of the company.

The Securities and Exchange Commission announced the settlement Saturday, two days after filing a case seeking to oust Musk as CEO.

The settlement will require Musk to relinquish his role as chairman for at least three years, but he will able to remain as CEO.
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Canada FM Postpones UN Speech as Trade Talks Intensify

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Canadian Foreign Affairs Minister Chrystia Freeland postponed her U.N. speech Saturday as free-trade talks between the U.S. and Canada intensified.

Freeland had been scheduled to deliver Canada’s address to the General Assembly in New York, but Canada exchanged the slot with another country. Freeland may or may not give the speech on Monday.

A senior Canadian government official said they were making progress in the talks but that it wasn’t certain that they would reach a deal soon. The official, who spoke on condition of anonymity, said Canada would sign only a good deal.

Canada, the United States’ No. 2 trading partner, was left out when the U.S. and Mexico reached an agreement last month to revamp the North American Free Trade Agreement. The U.S. and Canada are under pressure to reach a deal by the end of the day Sunday, when the U.S. must make public the full text of the agreement with Mexico.

U.S. President Donald Trump has said he wants to go ahead with a revamped NAFTA, with or without Canada. It is unclear, however, whether Trump has authority from Congress to pursue a revamped NAFTA with only Mexico, and some lawmakers say they won’t go along with a deal that leaves out Canada. 

Dairy tariffs

Among other things, the negotiators are battling over Canada’s high dairy tariffs. Canada also wants to keep a NAFTA dispute-resolution process that the U.S. wants to jettison.

U.S.-Canada talks bogged down earlier this month, and most trade analysts expected the Sept. 30 deadline to come and go without Canada’s reinstatement. They suspected that Canada, which had said it wasn’t bound by U.S. deadlines, was delaying the talks until after provincial elections Monday in Quebec, where support for Canadian dairy tariffs runs high.

But trade attorney Daniel Ujczo of the Dickinson Wright law firm, who follows the NAFTA talks closely, said the United States put pressure on Canada, contending there would “consequences” if it didn’t reach an agreement by the end of the day Sunday. Trump has repeatedly threatened to start taxing Canadian auto imports. Ujczo put the odds of a deal this weekend at 75 percent. 

Relations between the two neighbors have been strained since Trump assailed Canadian Prime Minister Justin Trudeau at the Group of Seven meeting in June, calling him “weak” and “dishonest.” Canadian leaders have objected to Trump’s decision to impose tariffs on Canadian steel, citing national security.
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A Pakistani American Startup Fighting Media Censorship

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According to the latest report by the Committee to Protect Journalists in Pakistan, fatal violence against journalists has declined, but fear and self-censorship have grown. In this era, five Pakistani American students at Harvard University have created a startup that challenges censorship using the latest block-chain technology. Their mission is “making journalism truly free.” Saqib Ul Islam visited Harvard’s innovation lab to bring us the story of a new company called “Inkrypt.”
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Genetic Engineering Spurs New Hope in Malaria Fight

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Scientists have managed to wipe out a population of mosquitoes in a laboratory using a type of genetic engineering known as a gene drive. The intervention prevented the females from reproducing and caused the entire population to die off. Scientists hope the method can be transferred from the lab to the real world to tackle mosquito populations that spread diseases like malaria, as Henry Ridgwell reports.
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US Consumers Spend More; Inflation Flattens

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U.S. consumer spending increased steadily in August, supporting expectations of solid economic growth in the third quarter, while a measure of underlying inflation remained at the Federal Reserve’s 2 percent target for a fourth straight month.

Economists said Friday’s report from the Commerce Department should allay fears of the economy overheating and likely keeps the U.S. central bank on a gradual path of interest rate increases. The Fed raised rates Wednesday for the third time this year and removed the reference to monetary policy remaining “accommodative.”

“Growth is solid and inflation pressures modest,” said Chris Rupkey, chief economist at MUFG in New York. “This is exactly the environment the Fed needs to move interest rates up at a gradual pace as further rate hikes start to look like tightening.”

Consumer spending

The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.3 percent last month after an unrevised 0.4 percent gain in July. Spending last month was driven by outlays on health care, which offset a drop in motor vehicle purchases.

August’s increase in consumer spending was in line with economists’ expectations. When adjusted for inflation, consumer spending rose 0.2 percent after climbing 0.3 percent in July.

The report came on the heels of data Thursday showing a decline in orders for key capital goods in August and a further widening of the goods trade deficit, which prompted economists to downgrade their gross domestic product growth estimates for the third quarter to as low as a 2.8 percent annualized rate.

Third-quarter GDP growth forecasts were previously as high as a 4.4 percent pace.

Economic growth

The economy grew at a 4.2 percent rate in the second quarter, powered by robust consumer spending. Economists said data in hand suggested that consumer spending was on track to grow around 3.6 percent in the third quarter, close to the 3.8 percent pace set in the April-June period.

Consumer spending is being driven by a tightening labor market, which is starting to boost wage growth, as well as higher savings. It is also being supported by robust consumer confidence.

A separate report Friday showed the University of Michigan’s consumer sentiment index at a six-month high in September. A survey earlier this week from the Conference Board showed consumer confidence hitting an 18-year high in September.

The Conference Board places more weight on the labor market.

The dollar was trading higher against a basket of currencies, while U.S. Treasury yields fell. Stocks on Wall Street were little changed in late afternoon trade.

Eyes on tariffs

In August, spending on goods increased 0.3 percent, likely lifted by higher gasoline prices. Spending on goods rose 0.5 percent in July. Outlays on services advanced 0.4 percent, with spending on health care accounting for much of the increase.

There was a moderation in monthly price gains in August. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components was unchanged. That was the weakest reading since March 2017 and followed a 0.2 percent gain in July.

August’s flat reading left the year-on-year increase in the so-called core PCE price index at 2.0 percent. The core PCE index is the Fed’s preferred inflation measure. It hit the U.S. central bank’s 2 percent inflation target in March for the first time since April 2012.

Economists say inflation could slightly overshoot its target amid concerns an escalating trade war between the United States and China could lead to price increase for a range of consumer goods.

Washington on Monday slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The United States and China had already imposed tariffs on $50 billion worth of each other’s goods.

Walmart Inc, the largest U.S. retailer, said last week it might hike prices because of the duties on Chinese imports.

“With this $200 billion increase, you are effectively tripling the amount of goods subject to a tariff and that has potential to influence prices,” said Tim Quinlan, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

JPMorgan estimates that the tariffs could add 0.2 to 0.3 percentage point to core inflation.

In August, personal income rose 0.3 percent after increasing by the same margin in July. Wages jumped 0.5 percent, the biggest gain in seven months, after rising 0.3 percent in July.

The saving rate was unchanged at 6.6 percent last month.
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Google CEO to Testify Before US House on Bias Accusations

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Google Chief Executive Sundar Pichai has agreed to testify before the U.S. House Judiciary Committee later this year over Republican concerns that the company is biased against conservatives, a senior Republican said Friday.

Republicans want to question Google, the search engine of Alphabet Inc, about whether its search algorithms are influenced by human bias. They also want to probe it on issues such as privacy, classification of news and opinion, and dealing with countries with human rights violations.

Pichai met with senior Republicans on Friday to discuss their concerns, House Majority Leader Kevin McCarthy said.

McCarthy told reporters after the meeting that it was “very productive” and “frank.”

“I think we’ve really shown that there is bias, which is human nature, but you have to have transparency and fairness,” McCarthy said. “As big tech’s business grows, we have not had enough transparency and that has led to an erosion of trust and, perhaps worse, harm to consumers.”

Alphabet Inc’s Google unit has repeatedly denied accusations of bias against conservatives. Pichai left the meeting without comment.

Pichai wrote in an internal email last week that suggestions that Google would interfere in search results for political reasons were “absolutely false. We do not bias our products to favor any political agenda.”

The CEO had been scheduled to be in Asia this week but canceled the trip to be in Washington.

The hearing will take place after the midterm congressional elections in November, McCarthy said.

Google came under fire from members of both parties earlier this month for refusing to send a top executive to a Senate Intelligence Committee hearing that included Facebook Inc and Twitter Inc executives.

Republicans have also raised concerns about Google’s dominance. Earlier this week, the Justice Department met with state attorneys general to focus on the need to protect consumer privacy when big technology companies amass vast troves of data, but came to no immediate conclusions.

Asked if Republicans will push to break up Google, McCarthy said: “I don’t see that.” He said the hearing will look at privacy, bias issues, China and other matters.

Pichai is also meeting with Democratic lawmakers and is due to meet with White House economic adviser Larry Kudlow on Friday, a White House official said Thursday.
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Ousting Musk at Tesla Viewed as Difficult, Possibly Damaging

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Tesla without Elon Musk at the wheel? To many of the electric car maker’s customers and investors, that would be unthinkable. But that’s what government securities regulators now want to see.

The Securities and Exchange Commission has asked a federal court to oust Musk as Tesla’s chairman and chief executive officer, alleging he committed securities fraud with false statements about plans to take the company private.

The agency says in a complaint filed Thursday that Musk falsely claimed in an Aug. 7 statement on Twitter that funding had been secured for Tesla Inc. to go private at $420 per share, a substantial premium over the stock price at the time.

The SEC is asking the U.S. District Court in Manhattan to bar Musk from serving as an officer or director of a public company. It also is asking for an order enjoining Musk from making false and misleading statements along with repayment of any gains as well as civil penalties.

Ousting Musk, who has a huge celebrity status with more than 22 million Twitter followers, would be difficult and could damage the company. He’s viewed by many shareholders as the leader and brains behind Tesla’s electric car and solar panel operations.

The stock market shuddered at the prospect. Shares slid more than 12 percent to $269.52 in Friday morning trading after a number of analysts either downgraded the stock or issued negative notes.

Citi analyst Itay Michaeli downgraded Tesla Inc. shares to Sell/High Risk from Neutral/High Risk, telling investors in a note that the SEC case raises the risk of Musk’s ouster.

“There’s little question that Mr. Musk’s departure would likely cause harm to Tesla’s brand, stakeholder confidence and fundraising — thereby increasing the risk of triggering a downward confidence spiral given the state of Tesla’s balance sheet,” Michaeli wrote.

​’Reputational harm’

He also told investors that Musk could stay on, but “the reputational harm from this might still prevent the stock from immediately returning to ‘normal.’ ” Michaeli set a $225 one-year price target for the stock.

Tesla shares have a $130 “Musk premium” due to future business driven by Musk as a disrupter of multiple industries, but that could go away if Musk is ousted, Barclays analyst Brian Johnson wrote in a note.

“Should the SEC be successful in barring Mr. Musk from serving as an officer or director, investors would focus back on the value of Tesla as a niche automaker,” wrote Johnson, who reiterated an “Underweight” rating and set a price target of $210.

CFRA analyst Garrett Nelson downgraded the stock from “hold” to “sell” and reduced his price target to $225. “Despite Musk’s recent erratic behavior, we think most investors want him to remain with the company and they value shares at what we view as extremely lofty multiples given the potential for Musk’s vision to drive future growth,” he wrote. “Given uncertainty about Musk’s role going forward, we think a lower valuation is justified.”

Musk, in a statement issued by Tesla, disputed the SEC’s claims. “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way,” the statement said.

According to a person knowledgeable about talks between Tesla and federal securities regulators, Musk rejected a settlement that would have allowed him to pay a small fine and stay on as CEO of the electric car company if he agreed to certain conditions, including restrictions on when he could release information publicly.

The person, who asked not to be identified because the negotiations were private, said Friday that Musk rejected the offer because he didn’t want a blemish on his record.

The SEC complaint alleges that Musk’s tweet harmed investors who bought Tesla stock after the tweet but before accurate information about the funding was made public.

No license in ‘celebrity status’

“Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders,” Steven Peikin, co-director of the SEC’s Enforcement Division, said in a statement. “An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly.”

Peter Henning, a law professor at Wayne State University and a former SEC lawyer, said it’s the first fraud case involving use of social media by the CEO of a public company. Musk and Tesla didn’t fully disclose details of the plan in the Aug. 7 tweet or in later communications that day as required, he noted.

“You can’t make full disclosure in 280 characters,” he said, referring to the length limit of a tweet.

Joseph Grundfest, a professor at Stanford Law School and former SEC commissioner, said Musk will likely want to settle before trial so that he could conceivably stay on as CEO, with some constraints such as prohibiting him from making public statements without supervision. But Musk also could agree to step down as CEO and instead take another title, such as chief production officer.

Grundfest also said that the challenge for the SEC is to “appropriately discipline Musk while not harming Tesla’s shareholders.”

According to the complaint, Musk met with representatives of a sovereign investment fund for 30 to 45 minutes on July 31 at Tesla’s Fremont, Calif., factory. Tesla has identified the fund as Saudi Arabia’s Public Investment Fund, which owns almost 5 percent of the company.

Fund representatives expressed interest in taking Tesla private and asked about building a factory in the Middle East, Musk told the SEC. But at the meeting, there was no discussion of a dollar amount or ownership stake for the fund, nor was there discussion of a premium to be paid to Tesla shareholders, the complaint said. Musk told the SEC that the lead representative of the fund told him he would be fine with reasonable terms for a go-private deal.

No specific terms

“Musk acknowledged that no specific deal terms had been established at the meeting and there was no discussion of what would or would not be considered reasonable. Nothing was exchanged in writing,” the complaint stated.

The SEC alleged in the 23-page complaint that Musk made the statements using his mobile phone in the middle of a trading day. That day, Tesla shares closed up 11 percent from the previous day.

The statements, the complaint said, “were premised on a long series of baseless assumptions and were contrary to facts that Musk knew.” Later in the month, Tesla announced that the go-private plan had been scrapped.

In its complaint, the SEC said that Musk’s statements hurt short sellers, who are investors who borrow a company’s stock betting that it will fall. Then they buy the shares back at a lower price and return them to the lenders, pocketing the profit.

In August, more than $13 billion worth of Tesla shares were being “shorted” by investors, the complaint said, as the stock was under pressure due to questions about Tesla’s finances and Musk’s erratic behavior.

Mark Spiegel, a short-seller and constant Musk critic, applauded the SEC for pursuing what he predicted would be easy for the government to prove.

Tesla’s board said in a statement Thursday night that it is “fully confident in Elon, his integrity, and his leadership of the company.” 
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WHO Chief Urges Action on Deadly Non-Communicable Diseases

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Seven in 10 people worldwide die from cardiovascular diseases, cancer, diabetes and chronic lung diseases, according to a study published in The Lancet earlier this month.

These diseases not only rob people prematurely of their lives, they cost enormous amounts of money. The Lancet report estimated that over the next 15 years, the costs to developing countries alone is projected to total more than $7 trillion.

Three years ago, world leaders pledged to reduce premature deaths from these non-communicable diseases by one-third by the year 2030.

At Thursday’s U.N. General Assembly meeting in New York, WHO Director-General Tedros Adhanom Ghebreyesus said less than half of the world’s countries will meet that target, urging world leaders to recommit to these goals.

Tedros called for more political commitment and domestic investment. He said he knew from his own experience that “with political commitment, anything is possible. Without it, progress is slow.”

Tedros mentioned a list of what he called “best buys,” policy changes that cost little but produce huge rewards. “WHO’s best buys are cost-effective and affordable for all countries. Spending to build a healthier population is not a cost. It’s an investment in human capital that pays a rich reward.”

Tedros urged countries to increase tobacco taxes, restrict advertising for alcohol, and lower the amount of salt, sugar and fat in food products. Doing this will lower the risks for diabetes, cancer, heart disease and stroke. He advised countries to vaccinate girls against cervical cancer.   

Tedros also recommended that countries provide universal health coverage as the best way to prevent and treat non-communicable diseases.

He said if these policies were implemented globally, they would save 10 million lives by 2025 and prevent 17 million strokes and heart attacks by 2030. And, again, focusing on economic benefits, Tedros said implementing “best buys” would generate $350 billion in economic growth in the poorest countries between now and 2030.

 

 
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Rebel Attacks Rise in Ebola-Infected Areas in Eastern DRC

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A rise in violence in the eastern Democratic Republic of Congo is displacing more people and hampering humanitarian efforts, including operations to stop the spread of Ebola, the United Nations refugee agency warns.

More than 20 people have been killed in recent attacks in the Beni area of Congo’s North Kivu province and farther north in Ituri province, both near the border with Uganda. 

The UNHCR estimates more than a million people are displaced in North Kivu. And, it notes, more people are fleeing their homes in the face of increasing attacks. 

The main rebel groups — the Allied Democratic Forces and National Army for the Liberation of Uganda — have been active in the Beni area for some time. However, UNHCR spokesman Babar Baloch tells VOA fighting has reached the city itself for the first time, making it risky for staff to move around.

“Many humanitarians have had to stop their activities. But, UNHCR, we are trying to send colleagues into Beni town as soon as we can to provide humanitarian assistance to those who have been affected by the recent rounds of violence,” Baloch said.

Beni is the epicenter of an Ebola outbreak in eastern DRC, and is the base for anti-Ebola operations by the World Health Organization. These operations were shut down temporarily following recent rebel attacks. 

WHO reports 154 confirmed and probable cases of Ebola in the area, including 101 deaths. The agency resumed its activities in Beni on Wednesday, despite security concerns. 

WHO officials say they cannot afford to halt operations and allow the deadly Ebola virus to spread. 
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Facebook Tightens Security After Announcing Breach

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The security breach Facebook announced Friday that affected 50 million users was a setback for the social media giant, which has been working for months to regain customers’ trust over how it handles their data.

In addition to the 50 million users whose log-on information could have been accessed by hackers, the company required as a precaution another 40 million to log on to be able to get on their accounts. Facebook said it reported the breach of the company’s code, which the firm said it fixed, to law enforcement.

The social media company was not sure Friday whether any personal information had been gathered or misused, but it scrambled to address the issue, which was discovered earlier in the week. Facebook users may find they have to relink their Facebook accounts to their Instagram accounts, and possibly to third-party apps, which users often log on to with their Facebook accounts.

In a call Friday with reporters, Guy Rosen, Facebook vice president of product management, said that the breach appeared to be very broad with no specific country targeted. “We’ll update with what we learn,” he said. 

Focus on elections

The breach came just weeks before the U.S. midterm elections, something the company has been keenly focused on.

More than 300 Facebook workers are scouring the platform, looking for false news, fake accounts and disinformation campaigns by foreign state-sponsored operatives that may be trying to sway voters. Facebook executives have said that they did not do enough to address these issues in the run-up to other elections such as the 2016 U.S. presidential race and that they are working to fix them.

In addition, Facebook’s relationship with its 2 billion users took a hit last spring when it was disclosed that an outside researcher who was given access to Facebook data used the information for political campaigns. As a result, the company contacted users whose information might have been seen or used by the outside firm Cambridge Analytica.

“We have a responsibility to protect your data, and if we can’t, then we don’t deserve to serve you,” Facebook CEO Mark Zuckerberg said in a statement posted to his Facebook page in March.

‘View As’ tool

The company said hackers exploited the privacy feature known as “View As,” which lets users see how their own profiles would look to other people. Facebook said hackers were then able to use the security flaw to steal log-in keys, called access tokens, that could allow them to access people’s accounts.

“We’re a big fan of ‘View As’ here at EFF,” said Gennie Gebhart, associate director of research at the Electronic Frontier Foundation, the digital civil liberties group. “It’s one good way to make sure that your privacy settings are the way you want them to be. I can see what my friends see or friends of friends see.”

But by checking what a friend can see, the “View As” tool actually made one’s friend vulnerable to this hack.

A relatively new feature that allowed users to upload “Happy Birthday” videos was part of a combination of three bugs that contributed to the vulnerability, the social media firm said.

“It’s one of those weird things that daisy-chained together,” Gebhart added.

Facebook said it was shutting down “View As” until further notice.

The hackers “used the access tokens to query data, but there are no public reports of abusing the access to post updates to timelines or spread disinformation,” said Travis Smith, principal security researcher at Tripwire, a security firm. “This could be because they were only after data or it could be that their attack was cut off midstream by Facebook before they could reach their ultimate goal.”

Security advice

Affected Facebook users should take some additional steps, said Gary Davis, the chief consumer security evangelist at security firm McAfee, who wrote about the Facebook hack in a blog post.

Among them, users should change their log-in information. “Since this flaw logged users out, it’s vital you change up your log-in information,” he wrote. 

He also stressed users should update their Facebook apps as soon as possible.

“Facebook has already issued a fix to this vulnerability, so make sure you update immediately,” he wrote.
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McCartney Pens Book for His Grandchildren

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Paul McCartney has written a children’s book called Hey Grandude!, a name the 76-year-old former member of The Beatles says came from one of his grandchildren.

“I’ve got eight grandchildren and they’re all beautiful and one day one of them said to me ‘Hey Grandude!’ I said ‘What?’ and I thought, I kind of like that,” McCartney said in a video he posted Thursday on Twitter.

“From then on, I was kind of known as Grandude.”

The picture book tells the story of a grandfather with four grandchildren and is illustrated by Toronto-based artist Kathryn Durst.

“He calls them ‘Chillers.’ They love him and they go on adventures with him and he’s kind of magical,” McCartney said.

McCartney is currently on his “Freshen Up” world tour featuring songs from his latest album, “Egypt Station.”

The book will be published by Penguin Random House UK and is available for pre-order before it goes on sale in Sept. 2019.
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Barbra Streisand to Trump in New Song: Don’t Lie To Me

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When Barbra Streisand started writing lyrics for her new political song, “Don’t Lie to Me,” she initially aimed for “very subtle” references to President Donald Trump. But she couldn’t help herself.

“I just went ballistic,” she said.

“Don’t Lie to Me,” released Thursday, finds a passionate Streisand questioning the nation’s leader and pleading for change. Lyrics include, “How do you sleep when the world keeps turning?/All that we built has come undone/How do you sleep when the world is burning?/Everyone answers to someone.”

“I just can’t stand what’s going on,” the Oscar, Grammy and Emmy winner said in a phone interview Wednesday night with The Associated Press. “His assault on our democracy, our institutions, our founders — I think we’re in a fight. … We’re in a war for the soul of America.”

“Don’t Lie to Me” appears on her new album, “Walls,” her first project of mainly original tracks since 2005. It will be released Nov. 2.

Streisand, a proud and outspoken Democrat who has campaigned for politicians over the years, said she felt moved to write original music because of what’s happening in the world. Of “The Rain Will Fall” — another new song she co-wrote — she says, “You can spell rain several ways.”

“But it’s my prophecy,” she said, laughing. “I hope it comes true.”

“Don’t Lie to Me” came to life during a road trip. Streisand said listening to the news in the car “was making me sick, listening to lies, listening to things that are such craziness.” So she turned on music and felt motivated to write a new song.

“I wanted to talk about the things that were making me feel so sad, heartbroken,” she said. “I’m a kind of fierce American. I don’t know who we are anymore as a country. Are we embracing people who flee oppression? Or are we separating children from parents, putting them in cages? I don’t know if people care about the planet, the survival of the planet. Do they care about clean air? Clean water? Clean food? If they do, how could they vote for somebody like Trump, who believes it’s a hoax?”

Streisand adds, “I’m frightened for this country. And yet, I have hope.”

On her 11-track “Walls” album, she also reworked classics like “Imagine,” “What a Wonderful World” and “What the World Needs Now.”

Streisand, 76, said she “kind of dedicates this album to the young people who are speaking out.”

“It’s important that people vote. It’s important that people believe in the power of their own voice and how much that changes things. It’s like the kids speaking out, the Parkland kids,” she said.

“It’s easy to feel powerless now but we’re not if each of us speak up and get out and vote,” she added.
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DC Fashion Week Features International Hybrid Designs

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Fashion designer Ellen London uses textiles from all over the world in her designs, sometimes mixing them — combining a Thai fabric, for example — with one from the U.S. Appalachian region.

“I believe that textiles and fashion have an idea to teach people about understanding and connection of different cultures through fabric,” London told VOA during a recent showing at (Washington) DC Fashion Week.

As a former Peace Corps volunteer, London discovered what she calls her “gypsy” spirit. It has taken her all over the world in search of native textiles that she converts into “wearable” art with the help of her Thai design partner and a group of female tailors.

According to her website, her collection includes “East and West African wax and printed fabrics, washed silks and cotton wovens from Thailand, and designer-created Japanese Shibori and Nigerian Adire batik techniques on some of our new designs. Indigo and batik have found their place on virtually every continent.”

Color and texture aside, London said her work is about “respect and including people, rather than excluding them.”

London is a natural for DC Fashion Week because she fits the vision of event founder Ean Williams, who sees Washington, D.C., “as the center of international fashion.”

DC? Fashion?

Ride the subway in Washington, and it will quickly become apparent that the nation’s capital is not a couture town. Residents dress conservatively, if not in clothes that are often stodgy.

To Williams, this is a waste of considerable opportunity.

“D.C., of course, is known for politics,” he mused. “But there are so many things to do in Washington, from opera to museums to concerts to theater to great poolside parties to mainstream society events to after-parties. There are so many great opportunities for people to dress to impress.”

Williams combines politics with Hollywood glamour to label his vision of Washington “Pollywood.”

For the past 14 years, he has staged fashion week twice a year. DC Fashion Week started with local designers showcasing their collections and has evolved into an international event, attracting designers from all over the world.

The DC Fashion Week organization is a nonprofit, so most of the costs are donated by vendors and sponsors. As a result, designers can show their collections at minimal cost, making the event affordable to young designers and international ones.

“Trying to participate in other shows can become very expensive for a designer. So, participating in DC is just a great opportunity,” said swimsuit designer Camile Case, who is from Jamaica.

As always, the 29th fashion week took place in a variety of venues — this fall at Madame Tussaud’s Wax Museum and the French embassy. Each sold-out event featured a different category of designer, including emerging talent and international couturiers.

“The hope and goal of fashion week … is that every country send their best designer and talent to showcase, like the Olympics,” said Williams, who is a self-taught designer himself. “We want to show what the fashion community of the world has to offer to the consumer.”

Models & guests

DC Fashion Week, unlike fashion weeks in other cities, provides an opportunity for models with many backgrounds and different shapes.

From Nigeria, Bukola Aeosun was participating in her second fashion week. “I like the diversity in races and colors and textures and sizes. I think that is very empowering and it’s exciting.”

“Fashion is for everyone,” Williams said. “We started with inclusivity. We started with having diverse models, models of different sizes, models of different ages.”

The audience is diverse, too. From Pakistan, Maliha Cheema attended fashion week for the first time.

“I really enjoyed the show,” she said. “I love how inclusive it was. There are models of every size, and there is a hijabi and everything.”
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Brad Smith on Microsoft’s $40M AI for Humanitarian Action Program

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VOA contributor Greta Van Susteren talks with Brad Smith, Microsoft’s President and Chief Legal Officer about the tech giant’s new Artificial Intelligence program.
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Italian Stocks Fall on Populist Government’s Spending Plans

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Italy’s stock market fell sharply Friday after the new populist, euroskeptic government announced a sharp public spending increase that will push the budget deficit to 2.4 percent of gross domestic product next year, risking a collision with the European Union.

The benchmark FTSE MIB dropped 2.2 percent early Friday, hours after the government announced its first financial targets since taking office three months ago. 

Italy’s government partners, the 5-Star movement and the League, pressed for money to fulfill campaign pledges, namely a basic citizen’s income for job seekers and a flat tax. Finance Minister Giovanni Tria, who is politically unaligned, had wanted to keep the budget deficit capped at no more than 2 percent.

The leader of the 5-Star Movement, Luigi Di Maio, called the document approved early Friday by the Cabinet “a maneuver of the people.”

“The historic measures are a victory,” Di Maio said. “It is not the government that wins, but citizens. It is a maneuver that allows us to relaunch investments and growth.”

The 2019 deficit target is a significant jump from the 2018 target of 1.6 percent, set by the former center-left government, but still remains within the 3-percent ceiling set by the EU. The European Union has been pressing Italy to address its deficit in a bid to reduce the country’s debt, the second largest in the EU after Greece. 

The spending targets contained in the document calls for spending of 27 billion euros, including blocking an increase in value-added tax, launching the 5-Star Movement’s basic income scheme, undoing pension reforms and introducing a flat tax.

 

To pay for the new spending, the government has pledged a tax amnesty, a spending review and possible changes to tax breaks.

 

The government must submit a draft budget to the EU by Oct. 15.
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