Monthly: July 2023

Teamsters Says US Trucking Firm Yellow Notifies It of Shutdown, Bankruptcy

The Teamsters said on Sunday that the union was served a notice that Yellow Corp. is ceasing operations and filing for bankruptcy. 

“Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” Teamsters General President Sean M. O’Brien said in a statement. 

Yellow did not immediately respond to a Reuters’ request for comment. 

Earlier in the day, The Wall Street Journal reported about the closure of the trucking firm’s operations which cited notices sent to customers and employees. Last week, WSJ also reported that the company has laid off a large number of workers. 

Earlier this month Yellow averted a threatened strike by 22,000 Teamsters-represented workers, saying the company will pay the more than $50 million it owed in worker benefits and pension accruals. 

The company said on Thursday it is exploring opportunities to divest its third-party logistics company Yellow Logistics Inc. and is engaged with multiple interested parties. 

Its customers include large retailers like Walmart WMT.N and Home Depot, manufacturers and Uber Freight, some of which have paused cargo shipments to the company for fear those goods could be lost or stranded if the carrier went bankrupt. 

In 2020, the Donald Trump-led government rescued the company with a $700 million pandemic relief loan in exchange for a 30% stake. 
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US State and Local Governments in Wage War for Workers

At the entrance to Missouri prisons, large signs plead for help: “NOW HIRING” … “GREAT PAY & BENEFITS.”

No experience is necessary. Anyone 18 and older can apply. Long hours are guaranteed.

Though the assertion of “great pay” for prison guards would have seemed dubious in the past, a series of state pay raises prompted by widespread vacancies has finally made a difference. The Missouri Department of Corrections set a record for new applicants last month.

“After we got our raise, we started seeing people come out of the woodwork, people that hadn’t worked in a while,” said Maj. Albin Narvaez, chief of custody at the Fulton Reception and Diagnostic Center, where new prisoners are housed and evaluated.

Public employers across the U.S. have faced similar struggles to fill jobs, leading to one of the largest surges in state government pay raises in 15 years. Many cities, counties and school districts also are hiking wages to try to retain and attract workers amid aggressive competition from private sector employers.

The wage war comes as governments and taxpayers feel the consequences of empty positions.

In Kansas City, Missouri, a shortage of 911 operators doubled the average hold times for people calling in emergencies. In one Florida county, some schoolchildren frequently arrived late as a lack of bus drivers delayed routes. In Arkansas, abused and neglected kids remained longer in foster care because of a caseworker shortage. In various cities and states, vacancies on road crews meant cracks and potholes took longer to fix than many motorists might like.

“A lot of the jobs we’re talking about are hard jobs,” said Leslie Scott Parker, executive director of the National Association of State Personnel Executives.

Lingering vacancies “eventually affects service to the public or response times to needs,” she added.

Workforce shortages worsened across all sorts of jobs due to a wave of retirements and resignations that began during the pandemic. Many businesses, from restaurants to hospitals, responded nimbly with higher wages and incentives to attract employees. But governments by nature are slower to act, requiring pay raises to go through a legislative process that can take months to complete — and then can take months more to kick in.

Meanwhile, vacancies mounted.

In Georgia, state employee turnover hit a high of 25% in 2022. Thousands of workers left the Department of Corrections, pushing its vacancy rate to around 50%. The state began a series of pay raises. This year, all state employees and teachers got at least a $2,000 raise, with corrections officers getting $4,000 and state troopers $6,000.

The Georgia Department of Corrections used an ad agency to bolster recruitment and held an average of 125 job fairs a month. It’s starting to pay off. In the first week of July, the department received 318 correctional officer applications — nearly double the weekly norm, said department Public Affairs Director Joan Heath.

Almost 1 in 4 positions — more than 2,500 jobs — were empty in the Missouri Department of Corrections late last year, which was twice the pre-pandemic vacancy rate in 2019.

Missouri gave state workers a 7.5% pay raise in 2022. This spring, Gov. Mike Parson signed an emergency spending bill with an additional 8.7% raise, plus an extra $2 an hour for people working evening and night shifts at prisons, mental health facilities and other institutions. The vacancy rate for entry level corrections officers now is declining, and the average number of applications for all state positions is up 18% since the start of last year.

At the Fulton prison, where staff shortages have led to a standard 52-hour work week, newly hired employees can earn around $60,000 annually — an amount roughly equal to the state’s median household income. The prison also is proposing to provide free child care to correctional officers willing to work nights.

If prison staffing is too low, “it can get dangerous” for both inmates and guards, Narvaez said.

Public safety concerns also have arisen in Kansas City, where a country music fan attacked before a concert last month waited four minutes for a 911 call to be answered and an hour for an ambulance to arrive. About one-quarter of 911 call center positions are vacant — “a huge factor” in the longer wait times to answer calls, said Tamara Bazzle, assistant manager of the communications unit for the Kansas City Police Department.

In Biddeford, Maine, a 15-person roster of 911 dispatchers dipped to just eight employees in July as people quit a “pressure cooker job” for less stress or better pay elsewhere, Police Chief JoAnne Fisk said. The city is now offering fully certified dispatchers $41 an hour to help plug the gaps on a part-time basis — $10 an hour more than comparable new workers normally would earn.

This month, Biddeford also launched a $2,000 bonus for city employees who refer others who get jobs. That comes a year after Biddeford adopted a four-day work week with paid lunch periods to try to make jobs more appealing, said City Manager Jim Bennett.

To attract workers, other governments have dropped college degree requirements and spiced up drab job descriptions.

Nationally, the turnover rate in state and local governments is twice the average of the previous two decades, according federal labor statistics.

Uncompetitive wages were the most common reason for leaving cited in exit interviews, according to a survey of 249 state and local government human resource managers conducted by MissionSquare Research Institute, a Washington, D.C. -based nonprofit. The hardest positions to fill included police and corrections officers, doctors, nurses, engineers and jobs requiring commercial driver’s licenses.

Along Florida’s east coast, the Brevard County transit system and school district have been competing for bus drivers. On days when drivers are lacking, the transit system has cut the frequency of bus stops on some routes. The school system, meanwhile, has asked some bus drivers to run a second route after dropping children off at school, often resulting in the second busload arriving late.

Since 2022, the county has twice raised bus driver wages to a current rate of $17.47 an hour. The school board recently countered with a $5 increase to a minimum $20 an hour for the upcoming school year. The goal is to hire enough drivers to regularly get kids to class on time, said school system communications director Russell Bruhn.

In Arkansas, the goal is to get foster kids into permanent homes in less than a year. But during the first three months of this year, the state met that target for just 32% of foster children — well below the national standard of over 40%. More than one-fifth of the roughly 1,400 positions in the Arkansas Division of Children and Family Services are vacant.

Many new employees leave in less than two years because of heavy caseloads and the “very difficult, emotionally tolling work,” Mischa Martin, the Department of Human Services’ deputy secretary of youth and families, told lawmakers last month.

“If we had a knowledgeable, experienced workforce,” she said, “they would be able to work cases in a better way to get kids home quicker.”
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While Eyeing China, Japan Backs Sri Lanka as Indo-Pacific Partner

COLOMBO, Sri Lanka — Japan’s Foreign Minister Yoshimasa Hayashi said Saturday that Sri Lanka is a key partner in a Tokyo-led initiative aimed at building security and economic cooperation around the Indo-Pacific but also at countering an increasingly assertive China.

Sri Lanka, strategically located in the Indian Ocean, is integral to realizing a free and open Indo-Pacific, Hayashi said. He was speaking after a meeting with his Sri Lankan counterpart, Ali Sabry, in the capital, Colombo.

The initiative, announced by Japanese Prime Minister Fumio Kishida in March includes Japan’s assistance to emerging economies, support for maritime security, a provision of coast guard patrol boats and equipment and other infrastructure cooperation.

Last year Sri Lanka, which owed $51 billion in foreign debt, became the first Asia-Pacific country since the late 1990s to default, sparking an economic crisis.

While Japan is Sri Lanka’s largest creditor, about 10% of its debt is held by China, which lent Colombo billions to build seaports, airports and power plants as part of its Belt and Road Initiative. In March, China agreed to offer Sri Lanka a two-year moratorium on loan repayments.

Hayashi said that he conveyed expectations for further progress in Sri Lanka’s debt restructuring process. He welcomed Sri Lanka’s efforts under an agreement with the International Monetary Fund, which includes anti-corruption measures and transparency in the policy-making process.

Sri Lanka’s Foreign Minister Sabry said that he, along with Sri Lankan President Ranil Wickremesinghe, invited Japan to resume investment projects already in the pipeline and to consider fresh investments in sectors such as power generation, ports and highways, and dedicated investment zones, as well as in the green and digital economy.

Over many decades, Japan became one of Sri Lanka’s key donors, carrying out key projects under concessionary terms. However, relations between the two countries came under strain after Wickremesinghe’s predecessor, Gotabaya Rajapaksa, unilaterally scrapped a Japan-funded light railway project following his election in 2019.

Sri Lanka’s Cabinet has already approved a proposal to restart the railway project.

Rajapaksa was forced to resign in July 2022 amid angry public protests over the country’s worsening economic crisis.
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Niger Loses Aid as Western Countries Condemn Coup

NIAMEY, Niger — The European Union has cut off financial support to Niger, and the United States has threatened to do the same after military leaders this week announced they had overthrown the democratically elected president, Mohamed Bazoum.

Niger is one of the poorest countries in the world, receiving close to $2 billion a year in official development assistance, according to the World Bank.

It is also a key security partner of Western countries such as France and the United States, which use it as a base for their efforts to contain an Islamist insurgency in West and Central Africa’s Sahel region. Previously seen as the most stable country among several unstable neighbors, Niger is the world’s seventh-biggest producer of uranium.

Niger’s foreign allies so far have refused to recognize the new military government led by General Abdourahamane Tchiani, previously head of the presidential guard, who officers declared head of state on Friday.

Bazoum has not been heard from since early Thursday when he was confined within the presidential palace, although the European Union, France and others say they still recognize him as the legitimate president.

“In addition to the immediate cessation of budget support, all cooperation actions in the domain of security are suspended indefinitely with immediate effect,” EU foreign policy chief Josep Borrell said in a statement.

Niger is a key partner of the European Union in helping curb the flow of migrants from sub-Saharan Africa. The EU also has a small number of troops in Niger for a military training mission.

The EU allocated $554 million from its budget to improve governance, education and sustainable growth in Niger over 2021-2024, according to its website.

The United States has two military bases in Niger with some 1,100 soldiers, and it also provides hundreds of millions of dollars to the country in security and development aid.

“The very significant assistance that we have in place for people in Niger is clearly in jeopardy,” said U.S. Secretary of State Antony Blinken. U.S. support depends on the continuation of democratic governance, he said.

The United Nations said the coup has not affected its deliveries of humanitarian aid.

It is unclear how much support the military junta has among Niger’s population. Some crowds came out in support of Bazoum on Wednesday, but the following day coup supporters were demonstrating in the streets.

The Economic Community of West African States, or ECOWAS, will hold an emergency summit in Nigeria on Sunday to discuss the situation.

After an emergency meeting on Friday, the African Union’s Peace and Security Council issued a statement demanding the military return to their barracks and restore constitutional order within 15 days. It did not say what would happen after that.
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Can Employers Force Teleworking Americans Back to the Office?

More than one-third of US workers are remote for at least part of the week
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Ukrainian, Polish Farmers Call for Solutions Amid Global Food Security Threat

The European Union allowed the free trade of Ukrainian crops after Russia invaded. The glut that resulted prompted some EU members to impose a ban on sales, which threatens the flow of the grain to world markets. VOA’s Myroslava Gongadze reports from Warsaw, Poland. VOA footage by Daniil Batushchak
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IMF, Argentina Reach Staff Deal on Loan Reviews to Unlock $7.5 Billion

WASHINGTON — The International Monetary Fund said on Friday that it has reached a staff-level agreement with Argentina to unlock about $7.5 billion and complete the fifth and sixth reviews of the struggling country’s $44 billion loan program.

The agreement, which still needs IMF Executive Board approval, eases some program requirements because a devastating drought has created a “very challenging” economic environment in Argentina, causing some end-of-June financial targets to be missed.

Reuters first reported that the agreement would combine the fifth and sixth reviews of Argentina’s IMF program — a move that provides additional loan funds sooner. The IMF said its board would meet to consider the agreement in the second half of August.

The Fund said in a statement that since the fourth review of the loan program in March, “Argentina’s economic situation has become very challenging due to the larger-than-anticipated impact of a drought, which had a significant impact on exports and fiscal revenues.”

“There have also been policy slippages and delays, which have contributed to strong domestic demand and a weaker trade balance,” the IMF said.

To sustain demand for Argentina’s peso currency, the agreement calls for authorities to ensure that policy interest rates remain “sufficiently positive in real terms.”

The agreement projects a more gradual accumulation of reserves, with a target of around $1 billion by the end of 2023, compared to an $8 billion goal set in March.

The agreement calls for Argentina to tamp down import demand with new foreign exchange taxes for imported goods and to strengthen expenditure controls. But its 2023 primary fiscal deficit target remains unchanged at 1.9% of GDP, the IMF said.

With no liquid currency reserves in the central bank, Argentina has recently introduced more peso exchange rates to stop the drainage. The Fund said that the program will need waivers because these measures are “against the introduction of multiple currency practices.”

The government will need to take some additional measures, known as prior actions, between the staff-level agreement and the board approval, according to a source familiar with the matter, who asked not to be named because the measures are still not public.

The next review is expected to take place in November, a month earlier than originally scheduled.

Argentina is set to have another three reviews on its 2022 IMF program by September 2024, although the IMF statement didn’t specify what would happen with those.

The IMF’s board approval of the reviews would come after a primary vote on Aug. 13 when Economy Minister Sergio Massa runs as one of the presidential candidates for the ruling coalition.

The country still needs to avoid a default with the Fund next week, with maturities of $2.6 billion due on Monday and almost $800 million due on Tuesday. Argentine officials are working to “get financing from several sources” to meet these obligations, the source added, without providing any further details. 

While it is not clear how the country will make those payments, Buenos Aires could potentially use a swap line with China, a move it recently made to complete part of its June payment to the IMF.
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Young Chinese Opt Out of Pressures at Home to Pursue Global Nomad Lifestyle

BANGKOK — Shortly after China opened its borders with the end of “zero-COVID,” Zhang Chuannan lost her job as an accountant at a cosmetic firm in Shanghai and decided to explore the world.

“The cosmetics business was bleak,” said Zhang, 34, because everyone wore face masks during the pandemic. After being laid off, she paid $1,400 for an online Thai course, got an education visa and moved to the scenic northern Thai city of Chiang Mai.

Zhang is among a growing number of young Chinese moving overseas not necessarily because of ideological reasons but to escape the country’s ultra-competitive work culture, family pressures and limited opportunities after living in the country under the strict pandemic policies for three years. Southeast Asia has become a popular destination given its proximity, relatively inexpensive cost of living and tropical scenery.

There are no exact data on the number of young Chinese moving overseas since the country ended pandemic restrictions and reopened its borders. But on the popular Chinese social media platform Xiaohongshu, hundreds of people have discussed their decisions to relocate to Thailand. Many get a visa to study Thai while figuring out their next steps.

At Payap University in Chiang Mai, around 500 Chinese began an online Thai course early this year.

Royce Heng, owner of Duke Language School, a private language institute in Bangkok, said around 180 Chinese inquire each month about visa information and courses.

The hunt for opportunities far from home is partly motivated by China’s unemployment rate for people ages 16 to 24, which rose to a record high of 21.3% in June. The scarcity of good jobs increases pressure to work long hours.

Opting out is an increasingly popular way for younger workers to cope with a time of downward mobility, said Beverly Yuen Thompson, a sociology professor at Siena College in Albany, New York.

“In their 20s and early 30s, they can go to Thailand, take selfies and work on the beach for a few years and feel like they have a great quality of life,” Thomson said. “If those nomads had the same opportunities they hoped for in their home countries, they could just travel on vacation.”

During the pandemic in China, Zhang was cooped up in her Shanghai apartment for weeks at a time. Even when lockdowns were lifted, she feared another COVID-19 outbreak would prevent her from moving around within the country.

“I now value freedom more,” Zhang said.

A generous severance package helped finance her time in Thailand, and she is seeking ways to stay abroad long-term, perhaps by teaching Chinese language online.

Moving to Chiang Mai means waking up in the mornings to bird songs and a more relaxed pace of life. Unlike in China, she has time to practice yoga and meditation, shop for vintage clothes and attend dance classes.

Armonio Liang, 38, left the western Chinese city of Chengdu in landlocked Sichuan province for the Indonesian island of Bali, a popular digital nomad destination. His Web3 social media startup was limited by Chinese government restrictions while his use of cryptocurrency exchange apps drew police harassment.

Moving to Bali gave him greater freedom and a middle-class lifestyle with what might be barely enough money to live on back home.

“This is what I cannot get in China,” said Liang, referring to working on his laptop on the beach and brainstorming with expatriates from around the world. “Thousands of ideas just sprouted up in my mind. I had never been so creative before.”

He also has enjoyed being greeted with smiles.

“In Chengdu, everyone is so stressed. If I smiled at a stranger, they would think I am an idiot,” he said.

Life overseas is not all beach chats and friendly neighbors, though. For most young workers, such stays will be interludes in their lives, Thompson said.

“They can’t have kids, because kids have to go to school,” Thompson said. “They cannot fulfill their responsibilities to their parents. What if their aging parents need help? They eventually will get a full-time job back home and get called back home because of one of those things.”

Zhang said she faces pressure to get married. Liang wants his parents to move to Bali with him.

“It’s a big problem,” Liang said. “They worry they will be lonely after moving out of China and worry about medical resources here.”

Huang Wanxiong, 32, was stranded on Bohol Island in the Philippines for seven months in 2020 when air travel halted during the pandemic. He spent his time learning free diving, which involves diving to great depths without oxygen tanks.

He eventually flew home to the southern Chinese city of Guangzhou but lost his job at a private tutoring company after the government cracked down on the industry in 2021. His next gig was driving more than 16 hours a day for a ride-hailing business.

“I felt like a machine during those days,” Huang said. “I can accept a stable and unchanging life, but I cannot accept not having any hope, not trying to improve the situation and surrendering to fate.”

Huang returned to the Philippines in February, escaping family pressures to get a better job and find a girlfriend in China. He renewed his Bohol Island friendships and qualified as a dive instructor.

But without Chinese tourists to teach and no income, he flew home again in June.

He still hopes to make a living as a diver, possibly back in Southeast Asia, although he also might agree to his parents’ proposal to emigrate to Peru to work in a family-run supermarket.

Huang recalled that he once surfaced too quickly from a 40-meter (131-foot) dive and his hands trembled from a dangerous lack of oxygen, known as hypoxia. The lesson he took was to avoid rushing and maintain a steady climb. Until his next move, he plans to use that free diver discipline to counter the anxieties of living in China.

“I will apply the calm I learned from the sea surrounding that island to my real life,” Huang said. “I will maintain my own pace.”
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Target ‘Niche’ Chinese Travelers, Not Numbers, Tourism Experts Tell Africa

African countries are investing heavily in trying to attract tourists from the world’s biggest outbound travel market, China, as they battle to recover from losses suffered during the travel bans of the COVID-19 pandemic.

“COVID wiped out large parts of tourism industries, especially in poorer parts of the world like Africa,” said Mike Fabricius, a specialist in tourism management, consulting and marketing for his Johannesburg-based company, The Journey. “Some African countries rely heavily on the foreign exchange that tourists bring in and the money they spend in domestic markets. To lose that for a few years was a heavy, heavy blow.”

In 2019, before the pandemic, the World Travel and Tourism Council (WTTC) estimated that tourism in Africa had a yearly growth rate of 5% and contributed an average of 8.5% to GDP.

The WTTC said direct investments into the tourism sector were about $29 billion, and that tourism created jobs for 24.3 million direct employees, accounting for 6.4% of Africa’s total working population.

It estimated that COVID-19 travel bans cost Africa at least a third to half of these numbers.

“We saw similar losses across all major African tourism markets,” said Peter Masila, a tourism lecturer at Moi University in Kenya.

Nomasonto Ndlovu, chief operations officer of South African Tourism, said 500,000 jobs were lost in the local tourism sector because of the pandemic.

“We’re confident of a good recovery by end 2024, especially because we’re targeting tourists from a huge market like China,” she said.

In 2019, 155 million Chinese tourists visited foreign destinations.

“It’s true that relatively few chose to come to Africa,” said Ndlovu. “Only 95,000 visited South Africa in 2019. So, we can’t blame COVID entirely for low numbers of Chinese visitors. As far as South Africa’s concerned, we’re now spending a lot of money on new plans and strategies to win more Chinese over, and I know other African countries are doing the same.”

Discounts on airfare

South Africa, Egypt, Kenya and Tanzania are some of the countries now offering more direct flights to China.

Kenya is partnering with Chinese social media platforms and marketing attractions such as the Maasai Mara game reserve on WeChat and TikTok.

Tanzania’s national airline is offering discounts of up to 50% on flights to and from China. Still, the country’s tourism board projects that only 45,000 Chinese will have visited Tanzania by the end of the year.

But Fabricius said African authorities were placing too much emphasis on numbers.

He has worked on tourism projects in China and elsewhere for the United Nations and the World Bank and formulated strategies for global tourism authorities.

“I don’t think Africa’s a place for the mass tourism Chinese market,” said Fabricius.

“The Chinese market has evolved a lot. It used to be thrown in one pot, like the Chinese only travel in big groups and take lots of pictures; they only go to the big places,” he said. “But with a new generation of travelers, there’s no longer such a thing as ‘the Chinese tourist’; it’s become a lot more diversified and segmented.”

Fabricius said the Chinese mass market remained focused on “iconic” international travel destinations, such as New York, Paris and London.

“Africa’s not going to attract that bulk market; it remains a niche destination for the Chinese,” he said. “So, what you want to do is attract Chinese tourists with focused interests in things like culture, wildlife and exploring.”

Rosemary Anderson, chairperson of the FEDHASA organization, which represents hospitality industries across Southern Africa, said continental authorities should indeed be promoting “unique experiences.”

“We have rich cultural assets and diverse experiences” she said. “South Africa, for example, offers every experience imaginable — wildlife safaris, stunning landscapes, vibrant culture and adventure activities. We need to emphasize experiences that are distinctive.”

‘Visa access is essential’

According to Anderson and Fabricius, government inefficiency and complicated visa requirements remain challenges to African efforts to lure Chinese tourists.

“Visa access is essential,” Fabricius said. “It’s no good having all this slick marketing and then your government lets you down by making it hard for the Chinese to get visas.”

Anderson agreed. “Although we (South Africa) have an e-Visa system that accepts applications by Chinese nationals, the process remains cumbersome and is not fully optimized.”

She suggested that marketing initiatives should span both the public and private sectors, ensuring that messaging is targeted to attract diverse budgets, ages, travel interests, preferences and travel motivations.

“We also need to do more to ensure that destination and product information is available on Chinese search engines and marketing on Chinese social media channels, like Weibo and WeChat,” she said.

Fabricius said efforts to attract Chinese visitors should “actually begin at home,” not in Beijing.

“China is Africa’s biggest trade partner, and many thousands of Chinese business travelers are visiting the continent every day,” he said.

“That creates another opportunity: These people who come on a business trip and then after that they tell others about their experiences and that creates a second wave of the leisure travel market,” he said.

This story originated in VOA’s English to Africa Service.
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Experts: Vietnam May Benefit as US Companies De-risk Supply Chains Now in China

WASHINGTON – Vietnam is well-positioned to draw U.S. investors seeking to de-risk supply chains now in China, but closer economic integration between Hanoi and Washington appears unlikely to lead to political realignment, according to experts.

Addressing local media in Hanoi during a recent visit, U.S. Treasury Secretary Janet Yellen hailed Vietnam as “a key partner” in the effort to reduce dependence on China by expanding manufacturing in the U.S. and with trusted partners.

“Vietnam welcomes the U.S. ‘friendshoring,’ which is beneficial to both countries and contributes to Vietnam’s growth,” Le Dang Doanh, an economist in Hanoi who served as an adviser to the late Prime Minister Vo Van Kiet, told VOA Vietnamese in a phone interview.

Friendshoring is the practice of focusing supply chain networks in countries regarded as political and economic allies.

Carl Thayer, emeritus professor with the University of New South Wales in Australia, said closer economic integration between Vietnam and the U.S. will not lead to Hanoi realigning with Washington against Beijing, he wrote to VOA in an email.

“Vietnam and the United States already have a substantial economic relationship. The further development of this relationship will be based on mutual benefit,” he said. “China is more concerned about Vietnam’s potential security and defense relations with the United States than it is with their bilateral economic relations.”

Beijing, however, is “extremely sensitive to any U.S.-Vietnam economic relationship that undermines China’s interests,” he said, stressing “neither Beijing or Hanoi view economic relations as a zero-sum game.”

Doanh said he has seen a shift of foreign direct investment (FDI) flows from China to Vietnam, especially since trade tensions began increasing between the U.S. and China during the Trump administration. A bilateral trade agreement that came into effect in 2001 facilitated Vietnamese exporting to the U.S., he said.

Vietnam “has no ambition” of attracting U.S. businesses to completely relocate from China given that “they are already well-entrenched there after many years of investment with billions of dollars,” Doanh said.

“Vietnam just expects them to shift parts of their production, which makes it more convenient to export to the U.S.,” he said. “Vietnam continues to attract FDI to match its advantages like cheap, young and productive labor.”

Hanoi, fearing possible retaliation from China, may want to keep Washington at a remove.

“Given the intensifying China-U.S. competition and proximity between China and Vietnam, Hanoi may feel reluctant to formally upgrade its comprehensive partnership with Washington,” said Bich Tran, adjunct fellow at Washington’s Center for Strategic and International Studies, told Reuters in March.

VOA Vietnamese contacted the Vietnamese Ministry of Planning and Investment to seek comments on what Vietnam will do to attract more investment from the U.S. but has yet to receive a response.

Bui Kien Thanh, an economist in Ho Chi Minh City, said Vietnam’s geographic location would give it a competitive edge in any regional competition for U.S. friendshoring.

“As a neighbor of China, Vietnam is a convenient destination for companies seeking to relocate from China,” Thanh told VOA Vietnamese over the phone.

“What’s more, Vietnam is located at the heart of the most populous and the most economically dynamic region of the world, between Northeast and South Asia,” he said.

Estimates of how much of the world’s trade passes through the South China Sea near Vietnam range from about 20% to 30%.

The U.S. currently ranks second to China in terms of value of bilateral trade with Vietnam, which topped almost $139 billion in 2022. And the U.S. is the largest export market for Vietnamese-made textiles, footwear and electronics.

Thanh said Hanoi “is well-disposed to Washington” and “very welcoming to U.S. businesses.” The two countries marked 10 years since the establishment of a Comprehensive Partnership this year.

In her Hanoi speech on July 21, Yellen cited green energy and semiconductor manufacturing as potential sectors for Vietnam to join the global supply chain. In 2021, Amkor, the Arizona-based provider of semiconductor packaging and test services, announced plans to build a smart factory in the northern Bac Ninh Province. Intel has its largest assembly and testing facility in Ho Chi Minh City, Vietnam’s largest city.

Thanh said that Vietnam “cannot develop its own semiconductor industry without U.S. help,” adding, “If Intel can open its largest facility in Vietnam, other American chip makers can make it too.”
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Iraqis Protest Dinar Deterioration After US Ban on Iraqi Banks

IRBIL, IRAQ — Dozens of people protested in front of the Central Bank of Iraq in Baghdad and bank owners called for official action to stem a sharp increase in the dollar exchange rate Wednesday, after the United States blacklisted 14 Iraqi banks. 

Over the past two days, the market rate of the dollar jumped from 1,470 dinar per dollar to 1,570 dinar per dollar. The jump came after the U.S. listed 14 private Iraqi banks among banks that are banned from dealing with U.S. dollars due to suspicions of money laundering and funneling funds to Iran. 

The ban was imposed by the U.S. Treasury Department and the Federal Reserve Bank of New York and was first reported by The Wall Street Journal on July 19.

“The listing of almost one-third of the private banks as banned from dealing with the U.S. dollar will have negative consequences from many perspectives,” Haidar al Shamaa, owner of a private bank in Baghdad said at a news conference Wednesday.

He called on “the brothers at the Iraqi government to work … to undo the damage which occurred to us specifically, and to the Iraqi banking section in general.”

The 14 banks facing the ban issued a joint statement urging the Iraqi government to address the issue and warning that banning a third of Iraq’s private banks from dollar trading would not only impact the dollar price but hinder foreign investment.

Protesters organized by a group calling itself Thuwar Tishreen (October Revolutionaries), which is connected to a movement that started mass protests in Iraq in 2021, also demanded that the government take action to halt inflation.

Also Wednesday, central bank chief Ali al-Allaq told the state-run Iraqi News Agency that his institution continues to provide dollars at the official rate of 1,320 dinar to the dollar for “all legitimate transactions” including “remittances and credits for various imports.”

He blamed the current rise in the street price of the dollar on the “reluctance of certain merchants” who “do not practice legitimate activities and operations” to use the official electronic platform used for currency requests.

On Sunday, the Iraqi Prime Minister Mohammed Shia al Sudani met with al-Allaq and discussed measures to stabilize the dinar price against the dollar.

A similar dive in the value of the dinar took place earlier this year after measures taken by the United States late last year to stamp out money laundering and the channeling of dollars to Iran and Syria from Iraq severely restricted Iraq’s access to hard currency.
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US Federal Reserve Raises Key Rate; Another Hike Possible in September

The U.S. Federal Reserve raised a key interest rate by a quarter of a percentage point on Wednesday, citing still-elevated inflation as a rationale for what is now the highest U.S. central bank policy rate since 2007.

The hike, the Fed’s 11th in its last 12 meetings, set the federal funds rate – the benchmark rate on overnight loans that banks charge each other – in the 5.25%-5.50% range. That level was last seen just prior to the 2007 housing market crash, and it has not been consistently exceeded on an effective basis for about 22 years.

“The [Federal Open Market] Committee will continue to assess additional information and its implications for monetary policy,” the Fed said in language that was little changed from its June statement and left the central bank’s policy options open as it searches for a stopping point to the current tightening cycle.

As it stated in June, the Fed said it would watch incoming data and study the impact of its rate hikes on the economy “in determining the extent of additional policy firming that may be appropriate” to reach its 2% inflation target.

Though inflation data since the Fed’s June 13-14 meeting has been weaker than expected, policymakers have been reluctant to alter their hawkish stance until there is more progress in reducing price pressures.

Fed Chair Jerome Powell said any future policy decisions would be made on a meeting-by-meeting basis, and that in the current environment officials could provide only limited guidance about what’s next for monetary policy.

But he didn’t rule out action if it was deemed necessary.

“It is certainly possible that we would raise the funds rate again at the September meeting if the data warranted, and I would also say it’s possible that we would choose to hold steady at that meeting” if that was the right policy call, Powell said in a press conference after the release of the policy statement.

But Powell cautioned against expecting any near-term easing in rates. “We’ll be comfortable cutting rates when we’re comfortable cutting rates, and that won’t be this year,” Powell said.

Yields on both the two- and 10-year Treasury notes moved down modestly from levels right before the release of the Fed’s policy statement, while U.S. stocks ended mixed. Futures markets showed bets on the path of Fed rate increases over the remainder of the year were little changed, seeing small odds of a rise in September.

“The forward guidance remains unchanged as the committee leaves the door open to further rate hikes if inflation does not continue to trend lower,” said Kathy Bostjancic, chief economist at Nationwide. “Our view is the Fed is likely done with rate hikes for this cycle since continued easing of inflation will passively lead to tighter policy as the Fed holds the nominal fed funds rate steady into 2024.”

‘Moderate’ growth

Key measures of inflation remain more than double the Fed’s target, and the economy by many measures, including a low 3.6% unemployment rate, continues to outperform expectations given the rapid increase in interest rates.

Job gains remain “robust,” the Fed said, while it described the economy as growing at a “moderate” pace, a slight upgrade from the “modest” pace seen as of the June meeting. The U.S. government on Thursday is expected to report the economy grew at a 1.8% annual pace in the second quarter, according to economists polled by Reuters.

Powell said he’s still holding out hope the economy can achieve a “soft landing,” a scenario in which inflation falls, unemployment remains relatively low and a recession is avoided.

“My base case is we’ll be able to achieve inflation moving back down to our target without the kind of really significant downturn that results in high levels of job losses,” he said, while noting that outlook is “a long way from assured.” He also noted that Fed staff economists are no longer predicting a recession as they have at recent meetings.

With about eight weeks until the next Fed meeting, a longer than usual interlude, continued moderation in the pace of price increases could make this the last rate hike in a process that began with a cautious quarter-percentage-point increase in March 2022 before accelerating into the most rapid monetary tightening since the 1980s.

In the most recent economic projections from Fed policymakers, 12 of 18 officials expected at least one more quarter-percentage-point increase would be needed by the end of this year.
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What Africa and Russia Have to Gain From Summit

JOHANNESBURG — African leaders, including South African President Cyril Ramaphosa, are heading to St. Petersburg this week for the second Russia-Africa Summit, as an isolated Moscow looks to shore up its influence in a key region.

Analysts told VOA that high on the agenda will be President Vladimir Putin’s nixing of an arrangement that allowed Ukrainian grain to reach foreign markets.

Putin will be under pressure to reassure them after he terminated a deal allowing safe passage of Ukrainian grain exports earlier this month — a move criticized by the African Union Commission as something that could negatively affect food security, especially in Africa.

The move has riled African governments, with one senior Kenyan official saying the axing of the agreement is “a stab [in] the back.”

Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa, said the decision not to renew the deal has already caused an increase in global food prices, which could hurt parts of Africa.

“Our very hope is that as the African leaders go to the Russia-Africa Summit, they can actually be able to have a much more sound conversation about the Black Sea grain deal — amongst other things that of course will be negotiated there — so that this can go back on the table and the exports can go,” Sihlobo said.

Earlier this week Putin himself sought to reassure African countries, relations with which have become increasingly important given Russia’s isolation by the West since its invasion of Ukraine last year. Many African countries have been hesitant to take sides in the conflict.

In a statement, Putin promised that Russia could replace the Ukrainian grain itself “both on a commercial and free-of-charge basis.”

Cameron Hudson, an analyst with the Center for Strategic and International Studies in Washington, said Putin is likely to use the St. Petersburg meeting, which starts Thursday, to appeal to African leaders’ direct needs.

“Obviously he’s trying to win back some friends from his exit from the grain deal,” Hudson said, “and also show that he has the power to kind of cut bilateral deals with African countries that put them frankly more in his need, which is exactly the position that he wants to be in.”

Analysts have noted that Russia has an outsized influence in Africa comparative to its trade and investment clout. This is sometimes because of the former Soviet Union’s support for the region’s 20th century liberation movements, and because of shared anti-Western sentiment.

At the first Russia-Africa Summit in 2019, Putin vowed to double trade with Africa to $40 billion over five years. Instead, it has been sitting at about $18 billion a year, compared with China’s record $282 billion worth of trade with Africa.

Despite its relatively minor economic clout, Moscow is keen to use the summit to project political heft, said Denys Reva, a researcher for the Institute of Security Studies in South Africa.

“Despite the fact that the level of investment has been low, the level of trade has been low, Russia has very cleverly learned, or realized, some of the problems that exist between Western states, the European Union and the U.S., and Africa, and has positioned itself, in a way, to separate itself from these traditional partners,” Reva said.

While the summit aims to position Russia as a global player, Russian media reported that fewer than half of the African countries attending are sending their heads of state.

Analysts also said the issue of the Wagner Group — the mercenary group that recently attempted a mutiny in Russia and which has operations in several African nations — will likely be raised on the summit’s sidelines.
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Amid Chinese Foreign Ministry Shake-Up, Wang on Africa Tour

This week as Beijing suddenly announced that China’s foreign minister Qin Gang had been removed after just seven months in the job, his predecessor and now replacement, seasoned diplomat Wang Yi, was on a tour of some of Africa’s key economies.

Wang participated in BRICS summit-related meetings in South Africa, infrastructure talks in Kenya, and pledges on debt relief in Ethiopia, meetings that analysts said illustrate China’s way of showing its commitment to the continent.

“Talk about hitting the ground running: news broke when Wang Yi was on tour as the director of the foreign affairs commission of the party’s central committee,” Lauren Johnston, senior China-Africa researcher at the South African Institute of International Affairs said of the revelation that Qin — who hadn’t been seen for a month — had been removed.

“His tour, now as foreign minister, includes South Africa, Nigeria, Kenya and Turkey — all big players in the Global South,” she told VOA.

Paul Nantulya, research associate for the Africa Center for Strategic Studies in Washington, told VOA that Wang’s trip to the region comes as China seeks to re-engage more with Africa in the wake of the COVID-19 pandemic.

However he noted: “It is rather unusual to have two high-level multicountry visits within a space of six months, because remember Qin Gang was in Africa at the beginning of the year for the inaugural Chinese foreign affairs visit.”

Cliff Mboya, a research fellow at the Afro-Sino Center for International Relations, suggested it might not be coincidence that Wang was in the region when Qin’s exit was announced, noting Wang could be “coming to re-establish relations and continue from where Qin Gang left.”

Requests and Promises

The analysts noted Kenya, South Africa and Nigeria, where Qin is also scheduled to travel, are the economic powerhouses of East, Southern and West Africa. Ethiopia, a surprise addition to Wang’s itinerary, is the seat of the African Union.

According to a statement from the Chinese Foreign Ministry, while in Addis Ababa Wang told Prime Minister Abiy Ahmed: “China encourages powerful and reputable enterprises to invest in Ethiopia and is willing to play a positive role in easing Ethiopia’s debt pressure.”

The country is billions of dollars in debt. Security there is also a concern as the strategic Horn of Africa nation emerges from a brutal civil war.

Next, in Kenya, Wang met with President William Ruto — who was elected last year and had talked tough on China during his campaign.

Nantulya noted that China is Kenya’s largest trading partner and a key security partner, and that Beijing has been “very anxious about the change of government” there and was obviously looking to cement ties.

According to a readout from the Chinese side, Ruto used the meeting with Wang to push for more infrastructure investment, despite analysts noting China has pulled back a bit recently from its major Belt and Road Initiative projects.

Kenya said it is willing to “deepen cooperation in the fields of railways, highways, water conservancy, aviation and renewable energy,” the Chinese Foreign Ministry said.

On his third stop, in South Africa, Wang attended security meetings related to the upcoming summit of the BRICS group of economies, which also includes Brazil, Russia and India. Wang spoke with his South African counterpart, Naledi Pandor, and President Cyril Ramaphosa.

According to the Chinese Foreign Ministry, Wang noted that “the friendship between China and South Africa has a long history, and the two countries have forged a profound friendship of comrades and brothers.”

Steven Kuo, a senior lecturer at the University of Cape Town and author of the book “Chinese Peace in Africa: From Peacekeeper to Peacemaker,” pointed out that Chinese rhetoric around “South-South cooperation” and anti-imperialism “does strike a chord with African countries. Increasingly African countries, including South Africa, see the West as hypocritical, so there are some ideological commonalities.”

Wang also promised South Africa that China would “expand cooperation in key minerals, digital economy, clean energy, environmental protection industries, marine resource development, poverty reduction and other fields.”

Looking Ahead

Wang’s trip comes as global powers vie for influence in Africa — which is youthful, growing and resource-rich.

This week has been a busy time for Africa diplomatically, with the U.S. Treasury undersecretary in Kenya and Somalia, Ukraine’s Foreign Minister Dymtro Kuleba trying to get support on a trip to Equatorial Guinea, and Russian President Vladimir Putin hosting leaders at a Russia-Africa summit in St. Petersburg from Thursday.

The next two stops on Wang’s schedule are a fourth African state, the continent’s largest economy, Nigeria, and Turkey.

Like Kenya, Nantulya noted, Nigeria has a new government, which might be one of the reasons it was chosen, as well as the fact that Beijing is increasing engagement in West Africa. Earlier this month China’s navy visited the country amid speculation it is seeking a military base somewhere on the Atlantic coast.

In August, President Xi Jinping is expected to attend the BRICS Summit in Johannesburg, along with all the other leaders of the bloc, except for Russian President Putin, who is unable to attend due to an International Criminal Court warrant out for his arrest.
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