Ukrainian officials say farmland used for planting spring crops could more than halved this year because of the war.
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Month: May 2022
Retired Boeing 737 Turned Hotel Permits Flights of Fantasy
When you think about places to get some rest, airplanes don’t normally come to mind. Aerotel is trying to change all that. Romain Chanson reports for VOA from northern South Africa, in this piece narrated by Carol Guensburg.
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US Senate to Vote on Abortions Rights Bill
Democrats are moving forward this week on a Senate vote on a bill that would codify abortion rights into federal law, in the wake of a leaked draft from the Supreme Court that signals a possible end to the landmark 1973 Roe v. Wade decision that legalized abortion nationwide. As Arash Arabasadi reports, the legislation is expected to be blocked by Senate Republicans.
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Leaked US Court Opinion Mobilizes Abortion Rights Supporters, Opponents
The U.S. Supreme Court may overturn federal protections for abortions, according to a leaked draft of an opinion expected in the next few months. That would leave the legal status of abortions up to individual states. For VOA, Deana Mitchell reports from Texas, where women are not permitted to have abortions beyond six weeks of pregnancy.
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As Beijing COVID Outbreak Proves Stubborn, Mass Tests Becoming Routine
Millions of Beijing residents queued up for another round of COVID-19 tests Sunday as China’s capital seeks to trace and isolate every infection to contain a small but stubborn outbreak — and avoid a Shanghai-type prolonged lockdown.
Strict COVID curbs in Beijing, Shanghai and dozens of other major cities across China are taking a psychological toll on its people, weighing on the world’s second-largest economy and disrupting global supply chains and international trade.
But Chinese authorities are unwavering in their commitment to stamp out the coronavirus, rather than live with COVID like many countries that are easing or ditching virus measures. Last week the authorities threatened action against critics of the zero-COVID policy.
Most of the 25 million people in the commercial hub of Shanghai, China’s most populous city, had been confined to their housing compounds for more than a month. Many complain of not being able to get food or to access emergency health care or other basic services.
Parts of Shanghai have seen their risk levels officially downgraded to the point where government rules would in theory allow them to leave their residences.
But while some were allowed out for brief walks or grocery trips, most were still stuck behind the locked gates of their compounds, causing widespread frustration and occasionally leading to rare altercations with hazmat-suited authorities.
Beijing was desperate to avoid such drama, relentlessly working to track and isolate infections.
On Sunday, residents lined up for another round of tests in the Chaoyang, Fangshan and Fengtai districts and small parts of others where infections had been detected over the past two weeks.
It has become an almost daily routine in the capital. Even if they are not subject to the mass tests, many still need to show a recent negative result to get to work or enter various venues.
Health app ‘abnormalities’
Beijing has closed gyms and entertainment venues, banned dine-in services at restaurants and shut scores of bus routes and almost 15% of its sprawling subway system.
The streets were less hectic than usual, with many not wanting to risk any activity that could classify them as close contacts of COVID patients, forcing them into quarantine.
Businesses that remained open were suffering.
A barber who asked to be identified only by his surname, Song, said his salon at a high-end shopping mall in Chaoyang has seen far fewer clients since the outbreak.
“They’re afraid of getting abnormalities in their health apps,” Song said, referring to the mobile monitoring software all residents must use. “North of us are malls and offices that have been sealed, and their apps might mark them as close contacts if they came.”
Song said his salon will try to stay open for as long as possible, but he was not sure for how long.
Beijing’s daily COVID cases are in the dozens, much lower than Shanghai’s at this point in its own outbreak, when infections were in the triple digits and rising.
Shanghai’s cases fell for a ninth day, Sunday data showed, but remained in the thousands.
Like other cities in China, Shanghai is building thousands of permanent PCR testing stations. With most residents still indoors, this seems to anticipate a gradual return to normal life when people are back out on the streets.
But authorities have warned that remains far off.
Top Chinese leaders meeting last week said the nation would fight any comment or action that distorted, doubted or repudiated its COVID policy. Shanghai party and city officials have also warned against complacency.
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Russian Blockade of Ukrainian Sea Ports Sends Food Prices Soaring
The U.N. Food and Agriculture Organization (FAO) says global food prices stabilized last month at a very high level but were slightly lower than in March, which saw the highest ever jump in food prices.
FAO officials see little prospect of a significant decrease in the price of food as long as the Russian-Ukrainian war goes on. Both countries combined account for nearly a third of the world’s wheat and barley exports and up to 80% of sunflower seed oil shipments.
The FAO’s deputy director in the markets and trade division, Josef Schmidhuber, said disruption in the export of those and other food commodities from Ukraine is taking a heavy toll on global food security. He said poor countries are suffering most because they are being priced out of the market.
“It is an almost grotesque situation that we see at the moment,” he said. “In Ukraine, there are nearly 25 million tons of grain that could be exported but they cannot leave the country simply because of the lack of infrastructure and the blockade of the ports. At the same time…there is no wheat corridor opening up for exports from Ukraine.”
Ukraine’s summer crop of wheat, barley, and corn will be harvested in July and August. Despite the war, Schmidhuber said harvest conditions are not dire. He said about 14 million tons of grain should be available for export.
However, he notee there is not enough storage capacity in Ukraine. He added there is a great deal of uncertainty about what will happen over the next couple of months as the conflict grinds on.
“And what we also see, and that is, of course, only anecdotal evidence, that grain is being stolen by Russia and is being transported on trucks into Russia,” Schmidhuber said. “The same goes for agricultural implements, tractors, etc., etc. And all that could have a bearing on agricultural output.”
The FAO official said the situation in Ukraine indicates that the current problem is not one of availability, but one of access. He said there is enough grain to go around and feed the world. The problem, he said, is the food is not moving to the places where it is needed.
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Europe’s Farmers Stir Up Biogas to Offset Russian Energy
In lush fields southwest of Paris, farmers are joining Europe’s fight to free itself from Russian gas.
They’ll soon turn on the tap of a new facility where crops and agricultural waste are mashed up and fermented to produce “biogas.” It’s among energy solutions being promoted on the continent that wants to choke off funding for Russia’s war in Ukraine by no longer paying billions for Russian fossil fuels.
Small rural gas plants that provide energy for hundreds or thousands of nearby homes aren’t — at least anytime soon — going to supplant the huge flows to Europe of Russian gas that powers economies, factories, business and homes. And critics of using crops to make gas argue that farmers should be concentrating on growing food — especially when prices are soaring amid the fallout of the war in Ukraine, one of the world’s breadbaskets.
Still, biogas is part of the puzzle of how to reduce Europe’s energy dependence.
The European Biogas Association says the European Union could quickly scale up the production of bio-methane, which is pumped into natural gas networks. An investment of 83 billion euros ($87.5 billion) — which, at current market prices, is less than the EU’s 27 nations pay per year to Russia for piped natural gas — would produce a tenfold increase in bio-methane production by 2030 and could replace about a fifth of what the bloc imported from Russia last year, the group says.
The farmers around the Paris-region village of Sonchamp feel their new gas plant will do its bit to untie Europe from the Kremlin.
“It’s not coherent to go and buy gas from those people who are waging war on our friends,” said Christophe Robin, one of the plant’s six investors, who farms wheat, rapeseed, sugar beets and chickens.
“If we want to consume green (energy) and to avoid the flows and contribution of Russian gas, we don’t really have a choice. We have to find alternative solutions,” he said.
Biogas is made by fermenting organic materials — generally crops and waste. Robin likened the process to food left too long in a container.
“When you open it, it goes ‘Poof.’ Only here, we don’t open it. We collect the gas that comes from the fermentation,” he said.
The gas from their plant could meet the needs of 2,000 homes. It will be purified into bio-methane and injected into a pipeline to the nearby town of Rambouillet, heating its hospital, swimming pool and homes.
“It’s cool,” said Robin. “The kids will benefit from local gas.”
Like in the rest of Europe, the production of bio-methane in France is still small. But it is booming. Almost three bio-methane production sites are going online every week in France on average and their numbers have surged from just 44 at the end of 2017 to 365 last year. The volume of gas they produced for the national network almost doubled in 2021 compared to the previous year and was enough for 362,000 homes.
France’s government has taken several steps to quicken bio-methane development since Russia invaded Ukraine on Feb. 24. The industry says bio-methane met almost 1% of France’s needs in 2021 but that will increase to at least 2% this year and it could make up 20% of French gas consumption by 2030, which would be more gas than France imported last year from Russia.
The Sonchamp farmers took out 5 million euros ($5.3 million) in loans and received a 1-million-euro state subsidy to build their plant, Robin said. They signed a 15-year contract with utility firm Engie, with a fixed price for their gas. That will limit their ability to profit from high gas prices now but ensures them a stable income.
“We’re not going to be billionaires,” said Robin.
Workers are finishing the construction and the plant is almost ready to be connected to the network. Piles of agricultural waste — wheat husks, pulped sugar beets, onion peelings, even chicken droppings — have been prepared to be fed into the giant bubble-like fermentation tanks.
Winter barley specially grown to make gas will make up about 80% of the 30 tons of organic material that will be fed each day into the plant.
Robin insists that the barley won’t interfere with the growing of other crops for food, which critics worry about. Instead of one food crop per year, they’ll now have three harvests every two years — with the barley as extra, sandwiched in between, Robin said.
In Germany, the biggest biogas producer in Europe, the government is cutting down on crop cultivation for fuels. The share of corn permitted in biogas facilities will be lowered from 40% to 30% by 2026. Financial incentives will be provided so operators use waste products such as manure and straw instead.
Germany is estimated to have over 9,500 plants, many of them small-scale units supplying rural villages with heat and electricity.
Andrea Horbelt, a spokeswoman for the German biogas association, said the production of bio-methane could be doubled in a matter of years but also wouldn’t be cheap.
“Using biogas for electricity is more expensive than solar and wind, and will always remain so,” she said.
At the end of their gas-making process, the Sonchamp farmers will also get nitrogen- and potassium-rich wastes from the fermenters that they’ll use to fertilize their fields, reducing their consumption of industrial fertilizer.
“It’s a circular economy and it’s green. That pleases me,” Robin said. “It’s a superb adventure.”
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Growing African Mangrove Forests Aim to Combat Climate Woes
In a bid to protect coastal communities from climate change and encourage investment, African nations are increasingly turning to mangrove restoration projects, with Mozambique becoming the latest addition to the growing list of countries with large scale mangrove initiatives.
Mozambique follows efforts across the continent — including in Kenya, Madagascar, Gambia and Senegal — and is touted as the world’s largest coastal or marine ecosystem carbon storage project. Known as blue carbon, carbon captured by these ecosystems can sequester, or remove, carbon dioxide from the atmosphere at a faster rate than forests, despite being smaller in size.
Mozambique’s mangrove restoration project — announced in February alongside its UAE-based partner Blue Forest Solutions — hopes to turn 185,000 hectares (457,100 acres) in the central Zambezia and southern Sofala provinces into a forest which could capture up to 500,000 tons of carbon dioxide, according to project leaders.
“Blue carbon can be utilized not only to sequester tons of carbon dioxide but to also improve the lives of coastal communities,” Vahid Fotuhi, the Chief Executive officer of Blue Forest, told the Associated Press. “There are around one million hectares of mangroves forests in Africa. Collectively they’re able to sequester more carbon dioxide than the total annual emissions of a country like Croatia or Bolivia.” He added these projects would create green jobs and promote biodiversity.
Africa’s major mangrove forests have been decimated in recent decades due to logging, fish farming, coastal development, and pollution, leading to increased blue carbon emissions and greater exposure of vulnerable coastal communities to flooding and other threats to livelihood.
But the continent’s growing attention on mangrove restoration can be attributed in part to the successful Mikoko Pamoja project, initiated in 2013 in Kenya’s Gazi Bay, which protected 117 hectares (289 acres) of mangrove forest and replanted 4,000 trees annually, spurring other countries to also address their damaged coastal land and recreate its success.
Mikoko Pamoja, Swahili for ‘mangroves together’, centered its efforts around protecting the small communities in Gazi and Makongeni villages from coastal erosion, loss of fish and climate change. It was dubbed the “world’s first blue carbon project” and earned the community of just 6,000 global fame, accolades, carbon cash and greater living standards.
“Mikoko Pamoja has led to development of projects in the community, including installation of water,” Iddi Bomani, the village chairperson of the Gazi community, said. “Everyone has water available in their houses.”
“It especially leads to improved livelihoods through job creation when done by communities,” Laitani Suleiman, a committee member of the Mikoko Pamoja, added.
Several other projects have come to fruition since. In Senegal, 79 million replanted mangrove trees are projected to store 500,000 tons of carbon over the next 20 years. Neighboring Gambia launched its own reforestation effort in 2017, with Madagascar following suit with its own preservation project two years later. Egypt is planning its mangrove restoration project ahead of hosting the United Nations climate conference in November this year.
The projects have sparked a clamor for the sale of carbon credits, a type of permit that allows for a certain amount of emissions as remuneration for forest restoration or other carbon offset projects. Gabon was offered a recent pay package of $17 million through the Central African Forest Initiative due to its protection efforts, but complaints persist on the low prices offered to African governments.
“Africa remains excluded from a lot of financing available under climate change,” Jean Paul Adam, head of the climate division at the Economic Commission for Africa, said, adding that a lack of financing means nations on the continent are unable to build up their resilience to climate change.
He added that “nature-based solutions and advocating for a fair development price of carbon” would propel the African economy.
And the benefits of reforestation can be significant, according to Coral Reef Alliance’s Marissa Stein.
“Restoring and protecting our marine habitats plays a key role in maintaining the health of our planet,” she said, adding that mangroves alone store up to four times more carbon per hectare than tropical rainforests. The Global Mangroves Alliance also estimates that mangroves reduce damages and flood risk for 15 million people and can prevent over $65 billion of property damage each year.
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Why Is Afghanistan’s Economy Collapsing?
A UN report recently warned 97% of Afghanistan’s population could sink below the poverty line.
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UNICEF: Ukraine War Has Devastating Psychological Impact on Children
The U.N. Children’s Fund, UNICEF, reports the war in Ukraine is having a devastating impact on children, with tens of thousands requiring psychological and social care.
Millions of children in Ukraine have suffered from more than two months of relentless bombing and shelling, a lack of food, the inability to go to school, and the loss of other essential services.
This psychological trauma, says UNICEF, has created a child protection crisis of extraordinary proportions.
U.N. agencies report more than 6,800 civilian casualties, including more than 3,300 killed. Some 7.7 million people have been displaced inside Ukraine and more than 5.7 million others have sought refuge in neighboring countries, including nearly two-thirds of all children in Ukraine.
Before Russia invaded Ukraine February 24, more than 90,000 children were living in institutions, orphanages, boarding schools, and other care facilities—nearly half of them are children with disabilities.
Speaking from the western city of Lviv, Aaron Greenberg, UNICEF’s Regional Child Protection Adviser for Europe and Central Asia Region, said tens of thousands of these children have been returned to families. Unfortunately, he said, many children are not receiving the care and protection they require, especially children with disabilities.
“The war has impacted all children’s psychosocial well-being. All of them,” he said. “Children have been uprooted from their homes, separated from caregivers, and directly exposed to war. Children have been shaken by bomb explosions and the blaring sirens of missile alert systems…. And, most importantly, many children have witnessed or experienced physical and sexual violence.”
Greenberg said UNICEF and partners are working to help these traumatized children. Since the war started, he said more than 140,000 children and their caregivers have received mental health and psychosocial services. He said UNICEF currently has 56 mobile units operating across the country, including in the east where fighting is most intense.
“Over 7,000 women and children have been reached by violence prevention, risk mitigation and violence response services, including GBV, gender-based violence, including in the eastern areas of the country,” he said. “But it is not enough. And although we are all working in overdrive, I think we must be prepared with more specialized services for child survivors of physical and sexual violence.”
Greenberg noted that children with disabilities have suffered disproportionately in this war and must receive urgent support. He added that the government, UNICEF, and partners are scaling up more services to these very vulnerable children.
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US Added 428,000 Jobs in April Despite Surging Inflation
America’s employers added 428,000 jobs in April, extending a streak of solid hiring that has defied punishing inflation, chronic supply shortages, the Russian war against Ukraine and much higher borrowing costs.
Friday’s jobs report from the Labor Department showed that last month’s hiring kept the unemployment rate at 3.6%, just above the lowest level in a half-century.
The economy’s hiring gains have been strikingly consistent in the face of the worst inflation in four decades. Employers have added at least 400,000 jobs for 12 straight months.
At the same time, the April job growth, along with steady wage gains, will help fuel consumer spending and likely keep the Federal Reserve on track to raise borrowing rates sharply to try to slow inflation. Early trading Friday in the stock market reflected concern that the strength of the job market will keep wages and inflation high and lead to increasingly heavy borrowing costs for consumers and businesses. Higher loan rates could, in turn, weigh down corporate profits.
“With labor market conditions still this strong — including very rapid wage growth — we doubt that the Fed is going to abandon its hawkish plans,″ said Paul Ashworth, chief U.S. economist at Capital Economics.
The latest employment figures contained a few cautionary notes about the job market. The government revised down its estimate of job gains for February and March by a combined 39,000. And the number of people in the labor force declined in April by 363,000, the first drop since September. Their exit slightly reduced the proportion of Americans who are either working or looking for work from 62.4% to 62.2%.
Still, at a time when worker shortages have left many companies desperate to hire, employers kept handing out pay raises last month. Hourly wages rose 0.3% from March and 5.5% from a year ago.
Across industries last month, hiring was widespread. Factories added 55,000 jobs, the most since last July. Warehouses and transportation companies added 52,000, restaurants and bars 44,000, health care 41,000, finance 35,000, retailers 29,000 and hotels 22,000. Construction companies, which have been slowed by shortages of labor and supplies, added just 2,000.
Yet it’s unclear how long the jobs boom will continue. The Fed this week raised its key rate by a half-percentage point — its most aggressive move since 2000 — and signaled further large rate hikes to come. As the Fed’s rate hikes take effect, they will make it increasingly expensive to spend and hire.
In addition, the vast economic aid that the government had been supplying to households has expired. And Russia’s invasion of Ukraine has helped accelerate inflation and clouded the economic outlook. Some economists warn of a growing risk of recession.
For now, the resilience of the job market is particularly striking when set against the backdrop of galloping price increases and rising borrowing costs. This week, the Labor Department provided further evidence that the job market is still booming. It reported that only 1.38 million Americans were collecting traditional unemployment benefits, the fewest since 1970. And it said that employers posted a record-high 11.5 million job openings in March and that layoffs remained well below pre-pandemic levels.
What’s more, the economy now has, on average, two available jobs for every unemployed person. That’s the highest such proportion on record.
And in yet another sign that workers are enjoying unusual leverage in the job market, a record 4.5 million people quit their jobs in March, evidently confident that they could find a better opportunity elsewhere.
Still, the nation remains 1.2 million jobs short of the number it had in February 2020, just before the pandemic tore through the economy.
Chronic shortages of goods, supplies and workers have contributed to skyrocketing price increases — the highest inflation rate in 40 years. Russia’s invasion of Ukraine in late February dramatically worsened the financial landscape, sending global oil and gas prices skyward and severely clouding the national and global economic picture.
In the meantime, with many industries slowed by labor shortages, companies have been jacking up wages to try to attract job applicants and retain their existing employees. Even so, pay raises haven’t kept pace with the spike in consumer prices.
That’s why the Fed, which most economists say was much too slow to recognize the inflation threat, is now raising rates aggressively. Its goal is a notoriously difficult one: a so-called soft landing.
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As US Federal Reserve Raises Rates, Emerging Markets Brace for Impact
Experts warn that the Federal Reserve’s efforts to tamp down inflation in the United States could have damaging effects, perhaps lasting several years, on developing economies around the world by encouraging capital flight, raising the rates on sovereign debt and destabilizing their currencies.
On Wednesday, the central bank announced that the Federal Open Market Committee, which sets the benchmark federal funds rate, had voted to increase the target rate by one-half of 1%, to between 0.75% and 1%. Further, the Fed indicated that it aimed to impose a series of additional half-point increases through the remainder of the year.
“Inflation is much too high, and we understand the hardship it is causing, and we are moving expeditiously to bring it back down,” Fed Chair Jerome Powell said in a news conference after the committee meeting Wednesday.
When Powell said that increases of more than 50 basis points were not currently part of the central bank’s plan, he offered some relief to those wondering whether the Fed might be considering even larger increases. Nevertheless, the prospect of the Fed going into full inflation-fighting mode has many concerned about the impact its actions might have on developing countries.
Multiple concerns
There are a number of reasons emerging markets might suffer when U.S. interest rates rise.
One is the prospect of capital flight. Investors who have invested in emerging markets to take advantage of higher rates of return may find investment in the U.S. more attractive as rates rise, prompting them to move capital to the U.S.
Higher interest rates in the U.S. can also result in higher rates globally. In April, the International Monetary Fund issued a report that found that 60% of low-income developing countries were either already experiencing debt distress or were at high risk of doing so. The report warned, “Past episodes suggest that rapid interest rate increases in advanced economies can tighten external financial conditions for emerging market and developing economies.”
Another danger to emerging economies in a rising interest rate environment is currency depreciation, which reduces purchasing power and increases the difficulty of servicing debt denominated in foreign currencies, such as the U.S. dollar.
Historical perspective
Economic historian Jamie Martin, an assistant professor at Georgetown University, told VOA that there is a strong historical correlation between sharp interest rate increases in the U.S. and catastrophic economic consequences in the developing world.
In the years after World War I, a rise in rates orchestrated in part by the Fed and the Bank of England helped reverse a recession in major industrialized countries. However, it resulted in several years of curtailed growth in nonindustrialized countries.
Similarly, the Fed’s aggressive rate hikes in the early 1980s successfully tamed double-digit inflation in the U.S. but pushed global interest rates so high that numerous developing countries, particularly in Latin America, defaulted on their debts.
In 2013, when then-Fed Chair Ben Bernanke hinted that rate increases were on the horizon, the impact on emerging markets was instant, with capital rapidly flowing out and currency instability setting in.
“History should counsel extreme caution,” Martin said. “Because, over as long as a century, when the U.S. Fed and other kinds of globally systemic central banks have moved to aggressively tighten monetary policy, almost every time, it’s had dramatic global effects. Particularly in what we have come to call developing economies.”
Fed research supports concern
The impact of U.S. rate increases on the developing world has not always been well understood. Paul Volcker, the Federal Reserve chairman who orchestrated the increasing of interest rates to nearly 20% in the 1980s, would later say that his focus had been on the U.S. and that the impact on the developing world hadn’t been part of his calculus.
“Africa was not even on my radar screen,” he said.
Now, though, the connections between actions by the Fed and the broader global economy are better understood.
In a 2021 article published by the central bank, Fed economists Jasper Hoek and Emre Yoldas, and Steve Kamin of the American Enterprise Institute noted that there are multiple instances in which rate increases in the U.S. have been shown to “increase debt burdens, trigger capital outflows, and generally cause a tightening of financial conditions that can lead to financial crises.”
While they didn’t find that economic crises in emerging markets always resulted from U.S. rate hikes, one of their observations would seem to apply to the current circumstances: “If higher rates are driven mainly by worries about inflation or a hawkish turn in Fed policy … this will likely be more disruptive for emerging markets.”
Pushed ‘over the edge’
Organizations that track the indebtedness of developing countries warn that conditions across the developing world are already dire. In particular, the effects of the coronavirus pandemic as well as a global spike in food prices exacerbated by the war in Ukraine have already created severe economic disruption.
A recent debt default by Sri Lanka has some concerned that further defaults may be coming.
“Many lower income countries have already been pushed into (a) deep debt crisis by the pandemic and rising energy and food prices,” Jerome Phelps, head of advocacy for the London-based Jubilee Debt Campaign, told VOA in an email exchange.
“They are diverting crucial resources away from healthcare and the needs of communities to debt payments, often to U.S. and European banks who stand to make large profits if repaid in full,” Phelps wrote. “Rising U.S. interest rates will push many over the edge by making their debt payments suddenly more expensive, for no fault of their own. We need urgent debt cancellation so that countries can prioritize recovery from the multiple crises they face.”
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Asian Markets Tumble on Wall Street Rout, Pound Slumps
Asian equities tumbled Friday following a rout on Wall Street fueled by worries over rising interest rates and surging inflation, while the pound extended losses the day after taking a beating on fears of a U.K. recession.
Global markets have been battered this year by a series of crises including surging inflation, rising interest rates, China’s economic slowdown and the war in Ukraine.
There was some relief after the Federal Reserve on Wednesday lifted borrowing costs 50 basis points — the most since 2000 — but suggested a feared 75-point lift was not on the agenda for now.
However, U.S. traders ran for the hills Thursday as they contemplated a period of fierce monetary tightening by the U.S. central bank as it struggles to contain inflation running at a more than 40-year high.
The Nasdaq — dominated by tech firms particularly sensitive to higher rates — lost 5%, while the Dow and S&P 500 fell more than 3%.
“Valuations become even more sensitive, very sensitive, when rates are going up and that is what we are experiencing,” Kristina Hooper, at Invesco, told Bloomberg Television.
“It’s just getting exacerbated as we get into the thick of monetary-policy tightening in the U.S.”
That sell-off filtered through to Asia, where Hong Kong tanked more than 3% as tech firms took a hit. Meanwhile, the European Chamber of Commerce in the city called the finance hub’s stringent pandemic travel restrictions and frequent flight bans a “nightmare” for businesses.
The remarks come a week after the Australian Chamber of Commerce recommended that Hong Kong follow the lead of Singapore or Japan by lowering quarantine requirements for business travelers.
Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei and Manila also tanked. However, Tokyo ended the morning slightly higher.
Adding to the selling pressure was ongoing weakness in China’s economy caused by strict lockdowns and other containment measures as officials struggle to bring a COVID flare-up under control by sticking to a zero-COVID policy.
Various districts in Beijing told residents on Thursday to work from home, while Shanghai, the biggest city in the country, remains essentially shut down.
On currency markets the pound continued to struggle a day after plunging more than 2% in reaction to the Bank of England’s updated forecast that warned annual inflation would top 10% and the economy would contract later this year.
Crude rose after key oil producers led by Saudi Arabia and Russia refused to lift output more than their planned marginal increase as they weighed tight supply concerns caused by the Ukraine war.
“OPEC’s inability to ramp up production when desperately needed by the market is compounding an already dangerous supply deficit,” said Stephen Innes, of SPI Asset Management.
“This means geopolitical tensions will remain high, and while there are some demand-side risks at the moment, it seems likely that the threat of supply disruption will be the dominant driver at this time,” he said.
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Spacex Capsule Splashes Down, Bringing 4 Astronauts Home From 6-Month Mission
The third long-duration astronaut team launched by SpaceX to the International Space Station (ISS) safely returned to Earth early Friday, splashing down in the Gulf of Mexico off Florida to end months of orbital research ranging from space-grown chilies to robots.
The SpaceX Crew Dragon capsule carrying three U.S. NASA astronauts and a European Space Agency (ESA) crewmate from Germany parachuted into calm seas in darkness at the conclusion of a 23-hour-plus autonomous flight home from the ISS.
The splashdown, at about 12:45 a.m. EDT (0445 GMT) was carried live by a joint NASA-SpaceX webcast.
The Endurance crew, which began its stay in orbit on Nov. 11, consisted of American spaceflight veteran Tom Marshburn, 61, and three first-time astronauts — NASA’s Raja Chari, 44, and Kayla Barron, 34, and their ESA colleague Matthias Maurer, 52.
Camera shots from inside the crew compartment showed the astronauts strapped into their seats, garbed in helmeted white-and-black spacesuits.
It took splashdown-response teams less an hour to reach the capsule bobbing in the water, hoist it onto the deck of a recovery vessel and open the hatch to let the astronauts out for their first breath of fresh air in nearly six months.
The return from orbit followed a fiery re-entry plunge through Earth’s atmosphere generating frictional heat that sent temperatures outside the capsule soaring to 1,930 degrees Celsius.
Two sets of parachutes billowed open above the capsule in the final stage of descent, slowing its fall to about 24 kph before the craft hit the water off the coast of Tampa, Florida.
Applause from the SpaceX flight control center in suburban Los Angeles was heard over the webcast, which showed infrared images of the capsule on its final descent.
The newly returned astronauts were officially designated as NASA’s “Commercial Crew 3,” the third full-fledged, long-duration team of four that SpaceX has flown to the space station under contract for the U.S. space agency.
SpaceX, founded in 2002 by Elon Musk, the billionaire CEO of electric carmaker Tesla Inc. who recently clinched a deal to buy Twitter, supplies the Falcon 9 rockets and Crew Dragon capsules now flying NASA astronauts to orbit from U.S. soil.
The company also controls those flights and handles the splashdown recoveries, while NASA furnishes the crews and launch facilities at the Kennedy Space Center in Cape Canaveral, Florida, and manages U.S. space station operations.
Microgravity cotton & combustion
California-based SpaceX has launched seven human spaceflights in all over the past two years — five for NASA and two for private ventures — as well as dozens of cargo and satellite payload missions since 2012.
Crew 3 returned to Earth with some 250 kilograms of cargo, including loads of ISS research samples.
Aside from carrying out routine maintenance while in orbit some 400 kilometers above Earth, the astronauts contributed to hundreds of science experiments and technology demonstrations.
Highlights included studies of the genetic expression in cotton cells cultured in space, gaseous flame combustion in microgravity and the DNA sequences of bacteria inside the station. Crew members also tested new robot devices, harvested chili peppers grown in orbit and conducted experiments in space physics and materials science.
Barron and Chari performed a spacewalk to prepare the station for another in a series of new lightweight roll-out solar arrays, to be used eventually on the planned Gateway outpost that will orbit the moon.
Crew 3’s return comes about a week after they welcomed their replacement team, Crew 4, aboard the space station. One of the three Russian cosmonauts also now inhabiting the station, Oleg Artemyev, assumed command of the ISS from Marshburn in a handover before Endurance departed early Thursday.
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US to Bring No Pandemic Funds to Global COVID-19 Summit
With the coronavirus killing an estimated 15 million people worldwide, including nearly 1 million in the United States, the Biden administration, despite a lack of funding for domestic and international pandemic response, is set to mobilize a global effort to end the acute phase of COVID-19.
The move comes as the World Health Organization announced that the COVID-19 pandemic directly or indirectly caused 14.9 million deaths worldwide from January 1, 2020 to December 31, 2021.
The U.S. will co-host the second Global COVID-19 Summit on May 12, following the first in September 2021. The virtual summit will mark a shift from a crisis management strategy to the more sustainable approach of building resilient public health systems.
“The virus — after omicron particularly — has shown us that we have to evolve our strategy,” a senior administration official told VOA. The goal, the official said, is to reduce transmission, deaths and hospitalizations rather than eradicate the virus.
The summit will focus on “supporting locally led solutions” toward global goals, which include getting shots into arms, enhancing access to tests and treatments, and generating sustainable financing for future pandemic preparedness.
“We cannot have just one solution, which might fit all of these different situations,” Dr. Thierno Baldé of the World Health Organization’s Africa regional office told VOA. “The reality is to try to understand that, and therefore to have the most appropriate solution constructed commonly, with different countries, with different partners.”
To galvanize international support, the U.S. will co-host the event together with CARICOM (Caribbean Community) chair Belize; Group of Seven president Germany; Group of 20 President Indonesia, and African Union chair Senegal.
No pandemic funding
The U.S., however, will bring no new pledges to the summit table. The administration’s request for $22.5 billion in additional COVID-19 response money, including $5 billion for global pandemic funding, has been stuck for weeks largely because of Republican lawmakers who insist they won’t pass it unless the administration brings back Title 42. The Trump-era order allows authorities at the Mexican border to turn away migrants during a pandemic emergency.
The lack of funding jeopardizes the administration’s global pandemic response, including Global Vax, an international initiative launched in December to turn vaccines into vaccinations in 11 African countries, and which is set to run out of money in September. It could also undermine the administration’s ability to galvanize other countries’ commitments, particularly at an event that has been designed with a “step up to speak up” approach, meaning that countries can secure a speaking role only if they bring either financial pledges or policy commitments to support summit goals.
White House press secretary Jen Psaki told VOA the summit would highlight to Congress the need for more funding so that the U.S. “can continue to be the arsenal of vaccines for the world.” She noted that even without the additional funding, the U.S. remains the largest contributor to the global fight against the pandemic.
Lack of global coordination
The first two years of the pandemic were marked by rich countries stockpiling more doses than they needed for boosters and protection against new variants, which threatened supplies to lower-income countries, where vaccination rates were low.
Now, with 2 billion doses of vaccine being produced each month, the problem is not a lack of supply but slowing demand and poor delivery capacity — problems that activists argue also stem from lack of coordination.
“If we’d had a coordinated global plan to end the pandemic, we wouldn’t now be in the situation where there’s quite a lot of vaccine doses but not enough money to actually distribute them in countries that need them,” Tom Hart told VOA. Hart is president of the ONE Campaign, an advocacy organization that fights preventable disease.
Beyond vaccines, the summit will also seek to improve access to testing and treatment, including by scaling up production and diversifying local and regional manufacturing capacity. Current efforts to achieve that include technology transfer agreements and the so-called TRIPS (Trade-related Aspects of Intellectual Property Rights) waiver proposal by South Africa and India at the World Trade Organization that called for intellectual property waivers on COVID-19 therapeutics and diagnostics. While the proposal is supported by more than 100 member countries, negotiations have been gridlocked for months.
Test to treat
Meanwhile, the Biden administration has recently rolled out a national “test to treat” program that tests people for COVID-19 and immediately treats them with the Pfizer antiviral drug Paxlovid if results are positive. It now aims to introduce similar pilot projects in other countries.
“The exact model may be different because the health systems are different,” the administration official said, noting that additional hurdles need to be addressed, including securing supplies of the generic drugs nirmatrelvir and ritonavir, which make up Paxlovid — a drug that is prohibitively expensive for lower- to middle-income countries.
Dr. Krishna Udayakumar, founding director of the Duke Global Health Innovation Center, told VOA that it would be up to Pfizer, Merck and other companies that already have antivirals on the market to work with countries and existing multilateral systems to get these “test to treat” pilot projects in place so when the money and the supply ramp up, countries can scale up quickly.
In March, the Medicines Patent Pool, a United Nations-backed organization, signed agreements with 35 manufacturers in 12 countries to produce nirmatrelvir and ritonavir, but these are unlikely to be on the market until 2023. Udayakumar said the U.S. was working to make an affordable generic version of Paxlovid available within several months.
The Global COVID-19 Summit aims to secure pledges to help close the gap of about $15 billion in funding that the WHO says the world needs. While those pledges will be made, advocates are pessimistic.
“It’s not clear whether that’s being coordinated, whether one country or one region will have more than it needs and another region will go without,” Hart said. “That’s the problem with no coordination and no global plan.”
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Ukraine, Climate Goals Push Some in Europe to Reconsider Nuclear
There is renewed interest nuclear energy in Europe driven in part by climate goals but also the war in Ukraine – especially as the European Union moves to cut all energy ties with Russia. But tapping nuclear power remains expensive, time consuming and deeply controversial. For VOA, Lisa Bryant takes a look at the debate from Paris. Camera: Lisa Bryant
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Next Battle Over Access to Abortion Will Focus on Pills
It took two trips over state lines, navigating icy roads and a patchwork of state laws, for a 32-year-old South Dakota woman to get abortion pills last year.
For abortion-seekers like her, such journeys, along with pills sent through the mail, will grow in importance if the Supreme Court follows through with its leaked draft opinion that would overturn the landmark Roe v. Wade decision and allow individual states to ban the procedure.
The woman, who spoke on the condition of anonymity because she was concerned for her family’s safety, said the abortion pills allowed her to end an unexpected and high-risk pregnancy and remain devoted to her two children.
But anti-abortion activists and politicians say those cross-border trips, remote doctors’ consultations and pill deliveries are what they will try to stop next.
“Medication abortion will be where access to abortion is decided,” said Mary Ziegler, a professor at Florida State University College of Law who specializes in reproductive rights. “That’s going to be the battleground that decides how enforceable abortion bans are.”
Use of abortion pills has been rising in the U.S. since 2000 when the Food and Drug Administration approved mifepristone — the main drug used in medication abortions. More than half of U.S. abortions are now done with pills, rather than surgery, according to the Guttmacher Institute, a research group that supports abortion rights.
Two drugs are required. The first, mifepristone, blocks a hormone needed to maintain a pregnancy. A second drug, misoprostol, taken one to two days later, empties the uterus. Both drugs are available as generics and are also used to treat other conditions.
The FDA last year lifted a long-standing requirement that women pick up abortion pills in person. Federal regulations now also allow mail delivery nationwide. Even so, 19 states have passed laws requiring a medical clinician to be physically present when abortion pills are administered to a patient.
South Dakota is among them, joining several states, including Texas, Kentucky, Arkansas, Ohio, Tennessee and Oklahoma, where Republicans have moved to further restrict access to abortion pills in recent months.
Those moves have spurred online services that offer information on getting abortion pills and consultations to get a prescription. After the woman in South Dakota found that the state’s only abortion clinic could not schedule her in time for a medication abortion, she found an online service, called Just The Pill, that advised her to drive to Minnesota for a phone consultation with a doctor. A week later, she came back to Minnesota for the pills.
She took the first one almost immediately in her car, then cried as she drove home.
“I felt like I lost a pregnancy,” she said. “I love my husband and I love my children and I knew exactly what I had to say goodbye to and that was a really horrible thing to have to do.”
Besides crossing state lines, women can also turn to international online pharmacies, said Greer Donley, a professor specializing in reproductive health care at the University of Pittsburgh Law School. Some women also are having prescribed pills forwarded through states without restrictions.
“It allows for someone to have an abortion without a direct role of a provider. It’s going to be much harder for states to control abortion access,” she said, adding, “The question is how is it going to be enforced?”
Abortion law experts say it’s an unsettled question whether states can restrict access to abortion pills in the wake of the FDA’s decision.
“The general rule is that federal law preempts conflicting state law,” said Laura Hermer, a professor at the Mitchell Hamline School of Law in St. Paul, Minnesota. “There is no question that the FDA has proper authority to regulate the drugs used in medication abortions. The question is whether a state can make a viable, winning argument that, for public health purposes, it needs to further regulate access to the relevant medications.”
Hermer said she doesn’t think there is a valid public health reason because the published evidence is that the drugs are “exceptionally safe.” But if the Supreme Court overrules Roe v. Wade and a state gives embryos and fetuses full rights as people “then all bets would be off.”
The Planned Parenthood regional organization that includes South Dakota doesn’t believe it can legally mail abortion pills to patients there.
Telemedicine providers have to abide by the laws of the state where the patient is, said Dr. Sarah Traxler, chief medical officer for Planned Parenthood North Central States in St. Paul. She acknowledged that some organizations disagree.
“But,” she added, “we don’t feel like we have liberty to mail pills from Minnesota to other places in the country where it’s illegal to provide medication abortion.”
Sue Leibel, the state policy director for Susan B. Anthony List, a prominent organization opposed to abortion, acknowledged that medication abortions have “crept up” on Republican state lawmakers.
“This is a new frontier and states are grappling with enforcement mechanisms,” she said, adding, “The advice that I always give — if you shut the front door, the pills are going to come in the back door.”
Leibel maintained women should not be prosecuted for seeking abortions, keeping with a long-standing principle of many abortion opponents. She suggested the next target for state enforcement should be the pharmacies, organizations and clinics that provide the abortion pills. She also said abortion-rights opponents should focus on electing a presidential candidate who would work to reverse the FDA’s decision.
The FDA said a scientific review supported broadening access to the drugs and found complications were rare. The agency has reported 26 deaths associated with the drug since 2000, though not all of those can be directly attributed to the medication because of existing health conditions and other factors.
However, with new legal battles on the horizon and abortion seekers going to greater lengths to obtain the procedure, Donley, the law school professor, worried that state lawmakers will turn their attention toward the women who get the pills.
Indeed, a Louisiana House committee advanced a bill Wednesday that would make abortion a crime of homicide for which a woman ending her pregnancy could be charged, along with anyone helping her.
“Many anti-abortion legislators might realize the only way to enforce these laws is to prosecute the pregnant person themselves,” Donley said.
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Stocks Slump 3% as Worries Grow Over Higher Interest Rates
A sharp sell-off left the Dow Jones Industrial Average more than 1,000 points lower Thursday, wiping out the gains from Wall Street’s biggest rally in two years, as worries grow that the higher interest rates the Federal Reserve is using in its fight against inflation will derail the economy.
The benchmark S&P 500 fell 3.6%, marking its biggest loss in nearly two years, a day after it posted its biggest gain since May 2020. The Nasdaq slumped 5%, its worst drop since June 2020. The losses by the Dow and the other indexes offset the gains from a day earlier.
“Yesterday’s sharp rally was not rooted in reality, and today’s dramatic selloff is a reversal of that misplaced exuberance,” said Ben Kirby, co-head of investments at Thornburg Investment Management.
Wall Street’s breakneck day-to-day reversal reflects the degree of investors’ uncertainty and unease over the array of threats the economy is facing, starting with inflation running at the highest level in four decades, and how effective the Federal Reserve’s bid to tame higher prices by jacking up interest rates will be.
On Wednesday, the Federal Reserve announced a widely expected half-percentage point increase in its short-term interest rate. Stocks bounced around following the move but then sharply rose as bond yields fell after Fed Chair Jerome Powell reassured investors by saying the central bank wasn’t considering shifting to more aggressive, three-quarter point rate hikes as the Fed continues with further rate increases in coming months.
But whatever relief Powell’s remarks gave stock investors vanished Thursday. Stocks slumped and bond yields climbed. The yield on the 10-year Treasury note rose to 3.04%. Rising yields are sure to put upward pressure on mortgage rates, which are at their highest level since 2009.
Investors remain uneasy about whether the Fed can do enough to tame inflation without tipping the economy, which is showing signs of slowing, into a recession. In addition to high inflation and rising interest rates, investors are grappling with uncertainty over lingering supply chain disruptions and geopolitical tensions.
“The biggest issue is there are just a lot of moving parts and the unanswered question is to what extent as the Fed attempts to tame inflation will that result in economic slowing, and perhaps, a recession,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
The S&P 500 fell 153.30 points to 4,146.87, while the Nasdaq slid 647.16 points to 12,317.69. The Dow briefly skidded 1,375 points before closing down 1,063.09 points, or 3.1%, to 32,997.97.
Smaller company stocks also fell sharply. The Russell 2000 fell 78.77 points, or 4%, to 1,871.15.
Musk Gets $7B Backing for Twitter Bid From Tech Heavyweights
Billionaire Elon Musk has strengthened the equity stake of his offer to buy Twitter with commitments of more than $7 billion from a range of investors, including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.
Other investors include Sequoia Capital Fund, which pledged $800 million, and VyCapital, which pledged $700 million, according to a Thursday filing with the U.S. Securities and Exchange Commission. But Ellison, who is also a and Tesla board member, is making the biggest contribution, pegged at $1 billion.
Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud has pledged 35 million in Twitter shares in support of Musk, according to the filing.
Musk in earlier regulatory filings revealed that he has sold roughly $8.5 billion worth of shares in Tesla to help fund the purchase. Musk later tweeted that he doesn’t plan any further sales of the company’s shares, meaning he would need outside commitments to help fund the $44 billion deal.
Because of the new funding listed in the SEC filing Thursday, Musk will cut the $12.5 billion in margin loans he was leaning on in half, to $6.25 billion. The transaction is also now being funded by $27.25 billion in cash and equities, up from $21 billion.
The Thursday filing also said that Musk is in ongoing talks with other parties including former Twitter CEO Jack Dorsey, who is the second largest individual stakeholder in the company after Musk.
“This was a smart financial and strategic move by Musk that will be well received across the board and also shows the Twitter deal is now on a glide path to get done by the end of this year,” wrote analyst Dan Ives who follows Twitter for Wedbush.
Shares of Twitter Inc. have remained below the per-share offering bid by Musk of $54.20 because there are still doubts on Wall Street about whether the deal will go through.
Shares of the San Francisco social media platform rose 2% before the opening bell, to $50.10.
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US Central Bank Boosts Key Interest Rate by Half Percentage Point
The U.S. central bank, the Federal Reserve, raised its benchmark interest rate by a half percentage point on Wednesday and scaled back its support for the American economy, a pointed effort to curb surging inflation in the world’s largest economy.
The interest rate increase, pushing its federal-funds rate to a target range between 0.75% and 1%, was the largest since 2000, and could quickly ricochet through the U.S. economy, increasing borrowing rates for businesses and consumers alike, with the goal of curbing spending and cutting inflation. The Fed usually increases interest rates in quarter-point increments.
The cost of consumer goods has been spiraling for months in the U.S., and an 8.5% year-over-year increase was recorded in March, the biggest jump in four decades. U.S. consumers are paying sharply higher prices for food, housing and gasoline at service stations, squeezing family budgets.
Aside from increasing the interest rate, the Fed said that starting next month it would scale back its $9 trillion asset portfolio in another move to curb inflation.
After a two-day meeting in Washington, the Fed said in a statement, “The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain.”
It added, “The invasion and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions” in world trade.
After the meeting, Fed chairman Jerome Powell said at a news conference that “inflation is much too high, and we understand the hardship it is causing.”
But he said the Federal Reserve has various measures it can take over the coming months to bring the inflation rate to the Fed’s 2% average target, but not so fast that it sends the U.S. economy into a recession.
Ahead of this week’s meeting, policymakers had already said they could raise interest rates several more times through the end of 2022 to slow the surge in consumer prices.
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