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Cuba protests: Thousands rally against government as economy struggles – BBC News

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Cuban police arrest an anti-government protester in Havana. Photo: 11 July 2021

EPA

Thousands of Cubans have joined the biggest protests for decades against the island’s Communist government.

They marched in cities including the capital Havana, shouting, “Down with the dictatorship!”.

Images on social media showed what appear to be security forces detaining and beating some of the protesters.

Cubans have been angered by the collapse of the economy, as well as by restrictions on civil liberties and the authorities’ handling of the pandemic.

The protesters were demanding a faster coronavirus vaccination programme after Cuba reported a record of nearly 7,000 daily infections and 47 deaths on Sunday.

Last year, Cuba’s largely state-controlled economy shrank by 11%, its worst decline in almost three decades. It was hit hard by the pandemic and US sanctions.

Thousands of pro-government supporters also took to the streets after the president went on television to urge them to defend the revolution – referring to the 1959 uprising which ushered in decades of Communist rule.

President Miguel Díaz-Canel said the protests were a provocation by mercenaries hired by the US to destabilise the country.

“The order to fight has been given – into the street, revolutionaries!” he said in an address on TV.

The top US diplomat for Latin America, Julie Chung, tweeted: “We are deeply concerned by ‘calls to combat’ in Cuba.”

“We stand by the Cuban people’s right for peaceful assembly. We call for calm and condemn any violence.”

Police officer stands by as protesters overturn police vehicle, Cuba (11 July)

Getty Images

‘There is no freedom’

The anti-government protests began with a demonstration in the city of San Antonio de los Baños, southwest of Havana, but soon spread throughout the country.

Many of them were broadcast live on social networks, which showed marchers shouting slogans against the government and the president, and calling for change.

“This is the day. We can’t take it anymore. There is no food, there is no medicine, there is no freedom. They do not let us live. We are already tired,” one of the protesters, who gave his name only as Alejandro, told the BBC.

Posts on social media showed people overturning police cars and looting some state-owned shops which price their goods in foreign currencies. For many Cubans, these shops are the only way they can buy basic necessities but prices are high.

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Analysis – protests show growing anger

By Vanessa Buschschluter, Latin America and Caribbean editor, BBC News Online

While the crowds of protesters do not look particularly large, the significance of thousands of Cubans taking to the streets across the country can hardly be overstated.

Shouting “Freedom!” and “Down with Communism!” may be considered tame in other parts of the world, but doing so on the tightly controlled Communist-run island can easily land you in jail.

The fact that people are daring to do so in small towns where they can be easily identified by the Communist authorities shows the levels of anger fuelling these protests.

And with protesters live-streaming footage on social media sites, the government is finding it hard to hide evidence of the discontent.

A video uploaded by the Cuban foreign minister showing government loyalists marching and shouting “These streets belong to Fidel [Castro, the late Cuban revolutionary leader]” was quickly countered by government critics sharing footage of the protests.

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Cuba’s economy is struggling. Tourism, one of the most important sectors, has been devastated by the restrictions on travel during the Covid pandemic.

Sugar, which is mostly exported, is another key earner for Cuba. But this year’s harvest has been much worse than expected.

Cuba’s sugar monopoly, Azcuba, said the shortfall was to blame on a number of factors, including a lack of fuel and the breakdown of machinery which made bringing in the harvest difficult, as well as natural factors such as humidity in the fields.

As a result, the government’s reserves of foreign currency are depleted, meaning it cannot buy in imported goods to supplement shortages, as it would normally do.

Queues for food have been growing. In addition, power shortages have led to blackouts for several hours a day.

Some of the demonstrators sang Patria y Vida (“Fatherland and Life”), a rap and reggaeton hit. Its title plays on a slogan – Fatherland or Death – which dates back to the 1950s, when the late Fidel Castro’s revolutionaries overthrew the government.

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China's economy didn't bounce back in the second quarter, China Beige Book survey finds – CNBC

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China’s exports surged by 16.9% in May from a year ago, two times faster than analysts expected. Pictured here on June 15, 2022, are workers in Jiangsu province making stuffed toy bears for export.
Si Wei | Visual China Group | Getty Images

BEIJING — Chinese businesses ranging from services to manufacturing reported a slowdown in the second quarter from the first, reflecting the prolonged impact of Covid controls.

That’s according to the U.S.-based China Beige Book, which claims to have conducted more than 4,300 interviews in China in late April and the month ended June 15.

“While most high-profile lockdowns were relaxed in May, June data do not show the powerhouse bounce-back most expected,” according to a report released Tuesday. The analysis found few signs that government stimulus was having much of an effect yet.

Shanghai, China’s largest city by gross domestic product, was locked down in April and May. Beijing and other parts of the country also imposed some level of Covid controls to contain mainland China’s worst outbreak of the virus since the pandemic’s initial shock in early 2020.

In late May, Chinese Premier Li Keqiang held an unprecedentedly massive videoconference in which he called on officials to “work hard” — for growth in the second quarter and a drop in unemployment.

Transportation, construction companies aren’t telling you they’re getting new products. They’re telling you they’ve slowed investment, their new projects have actually slowed.
Shehzad H. Qazi
Managing Director, China Beige Book

Between the first and second quarters, hiring declined across all manufacturing sectors except for food and beverage processing, according to the China Beige Book report.

The employment situation likely won’t start to improve until China stimulates its economy more in the fall, China Beige Book Managing Director Shehzad H. Qazi said Wednesday on CNBC’s “Squawk Box Asia.”

So far, there’s been little sign that stimulus has kicked in, especially in infrastructure, said Qazi who is based in New York.

“Transportation, construction companies aren’t telling you they’re getting new products,” he said. “They’re telling you they’ve slowed investment, their new projects have actually slowed.”

Inventories surge, orders drop

Unsold goods piled up, except in autos. Orders for domestic consumption and overseas export mostly fell in the second quarter from the first. Orders for textiles and chemicals processing were among the hardest-hit.

The only standout domestically was IT and consumer electronics, which saw orders rise during that time. Orders for export grew in three of seven manufacturing categories: electronics, automotive and food and beverage processing.

“Weak domestic orders and expanding inventories indicate the presumed second-half improvement will be unpleasantly modest,” the report said.

The authors noted the services sector saw the greatest reversal. After accelerating in growth in the first quarter, services businesses saw revenue, sales volumes, capex and profits drop in the second quarter.

Across China, only the property sector and the manufacturing hub of Guangdong saw any year-on-year improvement, the China Beige Book said.

Official second-quarter gross domestic product figures are due out July 15. GDP grew by 4.8% in the first quarter from a year ago.

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U.S. Economy Shrank Worse-Than-Expected 1.6% Last Quarter As Recession Fears Grow – Forbes

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Topline

The economy last quarter posted its worst annualized showing since the pandemic-induced recession in 2020, the government said in an updated release Wednesday, blaming an unexpected decline in economic activity on the omicron variant of Covid-19 and decreased government assistance.

Key Facts

The U.S. economy shrank at an annual rate of 1.6% in the first quarter of 2022—the first decline since the second quarter of 2020, the Bureau of Economic Analysis reported Wednesday in a worse-than-expected update to last month’s figure, which showed a decline of 1.5%.

The update primarily reflected softer-than-expected spending on business inventories and residential investments, which was only partially offset by an uptick in consumer spending, the government said.

In the first quarter, a record wave of Covid-19 cases spurred by the omicron variant resulted in continued restrictions and business disruptions, while government assistance programs including forgivable loans to businesses and social benefits to households expired or tapered off—further preventing growth, according to the release.

Broad declines in exports, government spending and business inventories, along with increased imports, spurred the overall decline, the government said.

The overall drop stands in stark contrast to the economy’s better-than-expected growth of 6.9% in the fourth quarter, the fastest rate in nearly 40 years, thanks in part to a jump in exports and increased inventory investments by car dealers.

What To Watch For

Economists are widely calling for a return to growth this quarter, thereby avoiding the two consecutive quarters of negative GDP growth that constitute a technical recession, but a growing wave of experts have warned odds of a recession next year are growing. In a research note on Monday, analysts at S&P Global Ratings said aggressive Federal Reserve policy to combat ongoing price spikes will usher in low economic growth this year and potentially risk a recession, warning: “What’s around the bend next year is the bigger worry.” S&P put the odds of a recession in 2023 at 40%—more than the 35% odds Morgan Stanley issued last week.

Key Background

Though the economy quickly bounced back after the Covid recession in 2020, the Fed’s withdrawal of pandemic stimulus measures, Russia’s invasion of Ukraine and lingering Covid restrictions have heightened market uncertainty this year. Last quarter, the stock market posted its worst showing since the market crash in early 2020, with the S&P falling 5% and the tech-heavy Nasdaq 9%. “Recession risks are high—uncomfortably high—and rising,” Mark Zandi, chief economist at Moody’s Analytics, said in a recent note. “For the economy to navigate through without suffering a downturn, we need some very deft policymaking from the Fed and a bit of luck.”

Crucial Quote

In an email after April’s initial report, which estimated a 1.4% decline despite expectations for 1% growth, Bankrate analyst Mark Hamrick said the lackluster performance serves as a reminder of the “volatile and complicated times in which we live,” but that the contraction is “less worrisome” because key drivers of economic growth, such as consumer and business spending, have been holding up despite the widening trade deficit and big swings in business inventories.

Further Reading

Cathie Wood Claims Economy Already In A Recession—Warns Inflation And Inventories Pose ‘Big Problem’ (Forbes)

Unemployment Will Rise And ‘Extreme’ Price Pressures Continue As Fed Hikes Risk Recession, S&P Warns (Forbes)

Major Bank Is First To Forecast A Recession—More Could Follow (Forbes)

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Sudan’s economy dominated by military interests: Report – Al Jazeera English

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C4ADS report says crackdown on patronage networks was a contributing factor to last October’s coup.

The Sudanese military and security forces have a sprawling monopoly over the country’s economy, a system that must be tackled to restore the country’s transition to democracy, a report has concluded.

The report, by the Center for Advanced Defense Studies (C4ADS), was published on Wednesday alongside a database that identifies 408 entities controlled by security elites, including agricultural conglomerates, banks, and medical import companies.

Under Sudan’s former civilian-military transitional government, which was tasked with guiding Sudan’s transition towards democracy, an anti-corruption committee was formed to confiscate assets from figures who made a fortune under the former President Omar al-Bashir.

Observers have argued that the confiscations struck at the core of the military’s patronage networks and played a significant role in compelling senior officers to topple the civilian administration in a coup last October, which has been followed by months of protests.

But C4ADS said that countries that seek to support democracy in Sudan have the tools to weaken the country’s “deep state”.

“Governments, non-governmental organizations (NGOs), and private companies have a role in dismantling Sudan’s deep state through economic sanctions, de-risked aid, and increased due diligence around private investments,” the authors of the report said.

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Economic Monopoly

The report zoomed in on two major banks, Omdurman National Bank (ONB) and Khaleej Bank, which the military and security forces use to access global financial networks, respectively.

The military – through a web of front charities – owned 86 percent of the shares in the former, according to the report.

Khaleej Bank, meanwhile, was controlled mainly by joint ventures that belong to the United Arab Emirates and the Rapid Support Forces (RSF) – two players that have strong political and economic relations.

The latter is a paramilitary force that evolved out of tribal militias that rebel forces called the Janjaweed, which committed massacres in the western province of Darfur.

The report estimated that the family of RSF leader Mohamad Hamdan Dagalo – better known as Hemeti – controls 28.35 percent of the shares in Khaleej Bank.

The report also reviewed Zadna International Company for Investment Ltd, a majority-army-owned agricultural conglomerate, on whose board of directors Hemeti’s brother, Abdel Rahim Dagalo, sits.

The company has run numerous irrigation schemes and leased out plots of land to private investors, according to Suleiman Baldo, an expert on the predatory economy in Sudan and the founding director of the Sudan Transparency and Policy Tracker.

“The story about Zadna is that it was a public company that was simply taken over by the military, which is monopolising its revenue and not giving the ministry of finance access to any of it. That’s the problem with Zadna,” Baldo said.

Reputational Damage

The spokesperson for Sudan’s military, Nabil Abdullah, denied accusations that the army has a monopoly over civilian sectors in the economy, and said that Sudan’s former civilian administration was unwilling to assume partial control of military-owned companies.

“[The army] has no economic control [of the country]. This is a lie and misleading,” Abdullah told Al Jazeera.

The report by C4ADS said otherwise. The nonprofit followed policy experts, rights groups, and United States officials in calling for targeted sanctions on enterprises owned by the military and the RSF.

Baldo acknowledged that such a move could unintentionally hurt everyday civilians who are already struggling to survive after billions of dollars worth of development assistance and debt relief were halted in response to the coup.

He added that sanctions may not be necessary since the US has already released a business advisory that warns of reputational risks to Western companies that try to partner with military enterprises in Sudan. The findings published by C4ADS could further deter foreign companies and institutions from conducting business in the country.

“Even without the sanctions, the deterrence effect that sanctions cause already exists,” Baldo said.

[embedded content]

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