ISTANBUL, Oct 17 (Reuters) – President Tayyip Erdogan said on Sunday that the United States had proposed the sale of F-16 fighter jets to Turkey in return for its investment in the F-35 programme, from which Ankara was removed after purchasing missile defence systems from Russia.
Reuters reported earlier this month that Turkey made a request to the United States to buy 40 Lockheed Martin-made F-16 fighter jets and nearly 80 modernization kits for its existing warplanes. read more
Speaking to reporters before departing for a trip to West Africa, Erdogan said Turkey wants a return for its investment in the F-35 programme and that talks on the issue are ongoing.
“There is the payment of $1.4 billion we have made for the F-35s and the U.S. had such a proposal in return for these payments,” Erdogan said.
“And regarding this, we said let’s take whatever steps are needed to be taken to meet the defence needs of our country,” he said, adding that the new F-16 jets would help develop its fleet.
Ankara had ordered more than 100 F-35 jets, made by Lockheed Martin Corp (LMT.N), but the U.S. removed Turkey from the programme in 2019 after it acquired Russian S-400 missile defence systems.
The decades-old partnership between the NATO allies has gone through unprecedented tumult in the past five years over disagreements on Syria policy, Ankara’s closer ties with Moscow, its naval ambitions in the eastern Mediterranean, U.S. charges against a state-owned Turkish bank and erosion of rights and freedoms in Turkey.
Ankara’s purchase of the S-400s has also triggered U.S. sanctions. In December 2020, Washington blacklisted Turkey’s Defence Industry Directorate, its chief, Ismail Demir, and three other employees.
Since then the U.S. has repeatedly warned Turkey against buying further Russian weaponry. But Erdogan has indicated Ankara still intends to buy a second batch of S-400s from Russia, a move that could deepen the rift with Washington.
The request for the jets will likely have a difficult time getting approval from the U.S. Congress, where sentiment towards Turkey has soured deeply over recent years.
There is bipartisan support in U.S. Congress to push the Biden administration to put further pressure on Ankara, primarily over its purchase of Russian weapons and its human rights track record.
Ankara has said it hopes for better ties under U.S. President Joe Biden.
Reporting by Ali Kucukgocmen
Editing by Raissa Kasolowsky;
Our Standards: The Thomson Reuters Trust Principles.
VCs eye investment in Polygon – Yahoo Movies Canada
A number of investors including Sequoia Capital India and Steadview Capital are in talks to back Polygon, which operates a framework for building and connecting Ethereum-compatible blockchain networks, by way of tokens purchase, three sources familiar with the matter told me.
The investors are looking to purchase tokens worth $50 million to $150 million, sources said, requesting anonymity as the talks are private. As is common with these token transactions, investors will be able to buy the coins at a slight discount. (20% discount on the average price of MATIC in the past one month, from what I have heard.)
Deliberations are ongoing, so the terms may change. Nobody had a comment early last week.
Polygon, formerly known as Matic, has established itself as one of the most popular layer two solutions. The firm, whose market cap has exceeded $14 billion, processes over 7.5 million transactions a day and allows thousands of decentralized apps to continue to use Ethereum as the settling layer but avoid the increasingly pricey gas fee.
Aave, Sushi Swap, and Curve Finance are among some of the largest bluechip projects that have deployed on Polygon, which has amassed one of the largest developer ecosystems (even when compared to some layer 1 blockchains).
Image credits: Polygon
An investment will mark a shift in the investors’ perception of India-based Polygon, which until recent years struggled to receive backing from most prominent venture firms in the South Asian market. (Most VCs in India, it’s worth noting, were also not actively tracking the web3 space until a few quarters ago.) Furthermore, Polygon has had to confront at least one episode where some of its early investors requested their money back during a bear cycle, according to two people familiar with the matter.
The firm returned money to some of those investors and survived. “It’s one of the themes with the Polygon team. Their perseverance is next level,” said a former employee.
Polygon, which received backing from entrepreneur and investor Mark Cuban this year, is among dozens of side-chains and roll-up networks that is hopeful that Ethereum will continue its dominance even as a handful of other layer one projects such as Polkadot, and Solana, which is backed by Multicoin Capital and A16z, are attempting to court the nascent but fast-growing developer ecosystem.
On Bankless podcast earlier this year, Polygon co-founder Sandeep Nailwal (pictured above) said the web3 developer ecosystem today is centred around Ethereum and he is hopeful that the network effect won’t dissipate. On the same podcast, Nailwal and Mihailo Bjelic, another co-founder of Polygon, said Polygon is increasingly expanding its offerings to build a blockchain infrastructure.
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London (CNN Business)Britain’s economy needs much more investment. Business says it’s unlikely to get it any time soon.
China's Special Bonds Can't Halt Property-Led Investment Slump – BNN
(Bloomberg) — China is betting that a pickup in infrastructure spending can spur investment and cushion a property-led slowdown which has dragged economic growth down to almost its lowest pace in more than three decades.
But because the property curbs are hitting government revenue from selling land, Beijing will need to ease its tough campaign to crack down on “hidden” local government debt if it wants a long-lasting revival in infrastructure spending.
Premier Li Keqiang last month urged local governments to make better use of the proceeds from the sale of 3.65 trillion yuan ($573 billion) in “special” bonds to counteract “downward pressure” on the economy. The bonds are used to fund specific projects rather than general expenditures and regional authorities have almost completed the sale of this year’s quota.
The quota could be expanded to 4 trillion yuan next year, according to state media reports, but even that amount of funding would be small relative to China’s total infrastructure spending needs. Bloomberg Economics estimates infrastructure investment will reach about 23 trillion yuan in 2021, which implies special bonds can only around 16% of that expenditure.
The remainder is mainly paid for with money from land sales and local government financing vehicles, which are companies set up by local governments to raise debt from loans and bond sales and then keep that borrowing off of government balance sheets. Both those sources of financing are under strain from property sector curbs and a campaign against “financial risks.”
Those financing vehicles raised less money in 2021 as Beijing ordered local governments to cut their “hidden” off-balance sheet debt. LGFV’s net local bond issuance — the excess of newly sold bonds over repayments — in the first 11 months of the year was 1.95 trillion yuan, down from 2.19 trillion yuan in the same period last year, according to Bloomberg estimates.
The platforms have found it harder than in the past to obtain loans from banks and from non-bank “shadow” financing because Beijing has been shrinking the shadow finance sector as part of its financial de-risking effort. They have also raised less from foreign investors: LGFV’s net issuance of dollar-denominated bonds through the end of last month more than halved to $5.7 billion.
The property crackdown is also reducing local government’s sales of land to property developers, a major source of funds for local government investment. Infrastructure spending growth has moved almost exactly in line with land sales revenue growth in recent years, according to analysis from Goldman Sachs Group Inc., while the correlation with special bond and LGFV bond issuance is less significant.
Beijing’s efforts to slow the real estate market began cutting into land sales volumes and prices this summer. Local government income from land sales shrank by more than 10% year-on-year in August, September and October, the largest and most sustained decline since 2015, according to Wei He, an analyst at Gavekal Dragonomics.
In the first 10 months of the year, infrastructure investment rose just 1% compared with the same period a year earlier, leaving local governments with unspent funds.
“The positive factors such as money that hasn’t been spent this year will be countered by the negative impact from land sales,” He said. “Therefore I do not expect a significant acceleration in infrastructure spending to materialize next year.”
To be sure, “special” bond issuance has been concentrated at the end of this year, which could translate into a slight pick-up in infrastructure spending in the first half of 2022 if the funds are quickly put to use. But local governments have been struggling to find suitable projects to fund with special bonds whose conditions stipulate that investments must generate enough income to repay the bond principal and interest.
Local governments’ land sale revenue could fall 10% year-on-year in 2022, according to Gavekal’s He. That means if Beijing really wants infrastructure investment to increase, it will need to loosen the constraints on LGFVs, compromising on its goal to control debt-levels in the economy.
“If the economy softens in 2022 and the government needs to increase infrastructure spending to support economic growth, there would be easing in financing for LGFVs,” said Ivan Chung, associate managing director at Moody’s Investors Service in Hong Kong.
©2021 Bloomberg L.P.
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