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Technology is Latest Trend Reshaping Fashion

Technology is permeating and changing almost every industry, including fashion. From how clothes are made and purchased to your relationship with what you wear, computing power is reshaping fashion as we know it. VOA’s Elizabeth Lee has the details.

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One of Sudan’s Lost Boys Finds a Way to Help Other Refugees

A cup of coffee is a good way for many to start the day. But it can also do far greater good. Manyang Kher, a former Sudanese child refugee – one of the so-called Lost Boys and now a US citizen – is passionate about helping refugees build a brighter future. And he does it with coffee. VOA’s June Soh talked with the founder of a social enterprise, 734 coffee. VOA’s Carol Pearson narrates her report.

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World Bank Shareholders Back $13 billion Capital Increase

The World Bank’s shareholders on Saturday endorsed a $13 billion paid-in capital increase that will boost China’s shareholding but bring lending reforms that will raise borrowing costs for higher-middle-income countries, including China.

The multilateral lender said the plan would allow it to lift the group’s overall lending to nearly $80 billion in fiscal 2019 from about $59 billion last year and to an average of about $100 billion annually through 2030.

“We have more than doubled the capacity of the World Bank Group,” the institution’s president, Jim Yong Kim, told reporters during the International Monetary Fund and World Bank spring meetings in Washington. “It’s a huge vote of confidence, but the expectations are enormous.”

The hard-fought capital hike, initially resisted by the Trump administration, will add $7.5 billion paid-in capital for the World Bank’s main concessional lending arm, the International Bank for Reconstruction and Development.

Its commercial-terms lender, the International Finance Corp, will get $5.5 billion paid-in capital, and IBRD also will get a $52.6 billion increase in callable capital.

Lending rules

The bank agreed to change IBRD’s lending rules to charge higher rates for developing countries with higher incomes, to discourage them from excessive borrowing.

IBRD previously had charged similar rates for all borrowers, and U.S. Treasury officials had complained that it was lending too much to China and other bigger emerging markets.

U.S. Treasury Secretary Steven Mnuchin said earlier Saturday that he supported the capital hike because of the reforms that it included. The last World Bank capital increase came in 2010.

Cost controls

The current hike comes with cost controls and salary restrictions that will hold World Bank compensation to “a little below average” for the financial sector, Kim said.

He added that there was nothing specific in the agreement that targeted a China lending reduction, but he said lending to China was expected to gradually decline.

In 2015, China founded the Asian Infrastructure Investment Bank, and lends heavily to developing countries through its government export banks.

The agreement will lift China’s shareholding in IBRD to 6.01 percent from 4.68 percent, while the U.S. share would dip slightly to 16.77 percent from 16.89 percent. Washington will still keep its veto power over IBRD and IFC decisions.

Kim said the increase was expected to become fully effective by the time the World Bank’s new fiscal year starts July 1. Countries will have up to eight years to pay for the capital increase.

The U.S. contribution is subject to approval by Congress.

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EU, Mexico Reach New Free Trade Deal

The European Union and Mexico reached an agreement Saturday on a new free trade deal, a coup for both parties in the face of increased protectionism from the United States under President Donald Trump.

Since its plans for a trade alliance with the United States were frozen after Trump’s election victory, the EU has focused instead on trying to champion open markets and seal accords with other like-minded countries.

The agreement in principle with Mexico follows a deal struck last year with Japan and comes ahead of talks next week with the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay.

“With this agreement, Mexico joins Canada, Japan and Singapore in the growing list of partners willing to work with the EU in defending open, fair and rules-based trade,” said European Commission President Jean-Claude Juncker.

For Mexico, a deal with the EU is part of a strategy to reduce its reliance on the United States, the destination of 80 percent of its exports. That has become more urgent, given Trump’s push to rewrite the North American Free Trade Agreement.

The EU and Mexico wanted to update a trade deal agreed to 21 years ago that largely covers industrial goods. The new deal adds farm products, more services, investment and government procurement, and include provisions on labor and environmental standards and fighting corruption.

The European Commission said that, under the deal struck Saturday, practically all trade in goods with Mexico will be duty-free, including for farm products such as Mexican chicken and asparagus and European dairy produce.

The deal will for example cut Mexican tariffs of up to 20 percent on cheeses such as gorgonzola and increase EU pork exports, the Commission said. 

It will also allow Mexican companies to bid for government contracts in Europe and EU companies for those in Mexico, including at the state level.

Mexican Economy Minister Ildefonso Guajardo said both sides had achieved a major update of their original accord.

“It needed to be more ambitious in the agricultural sector, it needed to be more ambitious in services, it needed to be more ambitious in many of the elements that in the end we managed to agree on after two years of work,” he said.

Guajardo said the deal would grant his country better access for products including orange juice, tuna, asparagus, honey, egg white albumin, as well as “equitable access” for meat products.

It is also set to recognize “geographical indications” for certain food and drink, a key EU demand.

Such indications protect agricultural produce, for example, dictating that the term “champagne” can only be used for sparkling wine from northern France.

It was not clear, however, how the divisive issue of “manchego” cheese had been settled. The EU says the term should only apply to sheep’s milk cheese from central Spain, but Mexico has its own “manchego” made from cow’s milk.

Negotiators from both sides will continue to work on technical details to produce a final text by the end of the year.

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IMF Says Trade Tensions, Debt Load Threaten World Economy

The International Monetary Fund’s policymaking committee said Saturday that a strong world economy was threatened by increasing tension over trade and countries’ heavy debt burden. Longer-term prospects are clouded, it said, by sluggish growth in productivity and aging populations in wealthy nations.

In a statement at the end of three days of meetings, the lending agency urged countries to take advantage of the broadest-based economic expansion in a decade to cut government debt and to enact reforms that will make their economies more efficient.

The IMF expects the world economy to grow 3.9 percent this year and next, which would be the strongest since 2011. But an intensifying dispute between the U.S. and China over Beijing’s aggressive attempt to challenge U.S. technological dominance has raised the prospect of a trade war that could drag down worldwide growth.

“Trade tensions are not to the benefit of anyone,” said Lesetja Kganyago, who leads the policymaking committee and is governor of the South African Reserve Bank.

The U.S. has resisted pressure to back off President Donald Trump’s protectionist “America First” trade policies.

Treasury Steven Mnuchin urged the IMF to do more to address what the Trump administration says are unfair trade practices and called on the World Bank to steer cheap loans away from China and toward poorer countries.

Unfair trade policies “impede stronger U.S. and global growth, acting as a persistent drag on the global economy,” Mnuchin said.

He appealed for the IMF to go beyond its traditional role as an emergency lender for countries in financial distress and said it should more closely monitor the practices of countries that persistently run large trade surpluses.

“The IMF must step up to the plate on this issue, providing a more robust voice,” Mnuchin said. “We urge the IMF to speak out more forcefully on the issue of external imbalances.”

The World Bank, he said, must not back away from shifting its lending from fast-growing developing countries such as China to poorer nations. In a speech prepared for the bank’s policy committee, Mnuchin urged the bank to aim its resources at “poorer borrowers and away from countries better able to finance their own development objectives.”

Many have used the finance meetings to protest Trump’s protectionist trade policies, which mark a reversal of seven decades of U.S. support for ever-freer global commerce.

“We strongly reject moves toward protectionism and away from the rules-based international trade order,” said Már Guðmundsson, governor of the Central Bank of Iceland. “Unilateral trade restrictions will only inflict harm on the global economy.”

While finance officials struggled to find common ground with Washington on trade, they agreed on the importance of coordinating other policies in an effort to sustain the strongest global economic expansion since the 2008 financial crisis.

“We have to keep this group working together,” said Nicolas Dujovne, Argentina’s treasury minister.

In addition to wrangling over trade, finance officials from the Group of 20 powerful economies focused on geopolitical risks and rising interest rates, two threats to growth. Dujovne, whose country is chairing the G-20 this year, met with reporters Friday to summarize talks held as a prelude to the IMF-World Bank meetings.

The U.S. has rattled financial markets with a series of provocative moves in recent weeks.

Last month, it imposed taxes on imported steel and aluminum, and later proposed tariffs on $50 billion in Chinese products as a punishment for Beijing’s aggressive efforts to obtain U.S. technology. China countered by targeting $50 billion in U.S. exports. Trump then ordered his trade representative to go after up to $100 billion more in Chinese products.

Finance leaders repeatedly sounded warnings about a potential trade war.

“The larger threat is posed by increasing trade tensions and the possibility that we enter a sequence of unilateral, tit-for-tat measures, all of which generate uncertainties for global trade and GDP growth,” Roberto Azevêdo, director-general of the World Trade Organization, told the IMF’s policy committee.

French Finance Minister Bruno Le Maire said the steel and aluminum tariffs could lead to retaliation by other countries and “a significant risk that the situation could escalate.” He said “tensions between the U.S. and China have taken a worrying turn.”

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China: No Military Aim of Corridor Project With Pakistan

China has strongly refuted suggestions its multibillion-dollar economic corridor now under construction with Pakistan has “hidden” military designs as well.  

Beijing has pledged to invest about $63 billion in Pakistan by 2030 to develop ports, highways, motorways, railways, airports, power plants and other infrastructure in the neighboring country, traditionally a strong ally.

 

The Chinese have also expanded and operationalized the Pakistani deep water port of Gwadar on the Arabian Sea, which is at the heart of the massive bilateral cooperation, known as the China-Pakistan Economic Corridor, or CPEC. The strategically located port is currently being operated by a Chinese state-run company .

China has positioned CPEC as the flagship project of its $1-trillion global Belt and Road Initiative, or BRI, championed by President Xi Jinping.

“I want to make it very clear, BRI initiative and with CPEC under it, it’s purely a commercial development project. We don’t have any kind of military or strategic design for that,” said Yao Jing, Chinese ambassador to Islamabad. He made the remarks in an exclusive interview with VOA.

Within five years of finalizing and launching CPEC, Jing said that 22 “early harvest” projects out of the 43 total projects under CPEC have been completed or are under construction, with a total investment of around $19 billion, the largest influx of foreign investment in Pakistan’s 70-year-old history. The projects have already brought 60,000 local jobs and effectively addressed the country’s once crippling energy crisis.

 

Power plants built under the joint venture, officials say, will have added more than 10,000 megawatts of electricity to the national grid by June, leading to a surplus of power.

While speaking to VOA, the Chinese diplomat urged the United States and India to “come to the CPEC project” and “witness the progress on the ground” for themselves, saying it will enable them overcome misunderstandings vis-a-vis CPEC.

“There are some kind of doubts that may be there are some things hidden in it. I think that when you have an objective lens to look at this project and to come to the ground to find this progress on the ground then you may have a better understanding of what we are doing here,” said Jing.

The Chinese envoy was responding to concerns expressed in Washington and New Delhi that Beijing could try to turn Gwadar into a military port in the future to try to dominate the Indian Ocean.

Jing explained that a state-to-state defense-related cooperation has for decades existed between the two allied nations and China through “normal channels” is determined to contribute to “military and strategic ability’ of Pakistan.

“We don’t want to make the CPEC as such a kind of platform,” the ambassador emphasized.

However, he added, it is “natural and understandable” that the project’s massive size and design has raised doubts and suspicions” about its aims.   

The skepticism about Chinese intentions stems from, among other things, a massive airport being built in Gwadar, with a landing strip of 12-kilometers. China has given nearly $300 million to Pakistan for the construction of the airport.

“Basically, it is for China and Pakistan to make this project a successful economic project, then we can make it clear our intention here,” Jing said.

India is also opposed to CPEC because a portion of the project is located on territory that is claimed by both New Delhi and Islamabad. But Pakistan and China both dismiss the objections as politically-motivated.

CPEC aims to link the landlocked western Chinese region of Xinjiang to Gwadar, allowing ships carrying China’s oil imports and other goods from the Persian Gulf to use a much shorter and secure route and avoid the existing troubled route through the Strait of Malacca.

There are currently up to 10,000 Chinese nationals working on CPEC-related projects in Pakistan. Ambassador Jing said that 21 new mega-projects, including the establishment of Special Economic Zones across the country, are ready to be launched in the next stage with particular emphasis on encouraging private engagement.

In the next five to seven years, officials estimate, CPEC will have created employment for half-a-million Pakistanis. The country’s troubled economy, lately impacted by insecurity and energy crisis, has grown 5.4 percent in the previous financial year, the fastest rate in a decade, and officials forecast the expected growth in the year ending June 2018 will be six percent.

Pakistan’s deepening cooperation with China comes as the country’s diplomatic relations with the U.S. continue to deteriorate. Washington complains that Islamabad is not doing enough to eliminate terrorist groups using the country’s soil for attacks against neighboring countries, including Afghanistan.

While U.S. economic assistance has significantly reduced in recent years, the Trump administration also suspended military assistance to Pakistan in January and linked its restoration to decisive actions against terrorist groups.

 

Pakistan strongly rejects the allegations and says it is being scapegoated for the U.S.-led coalition’s failures in ending the war in Afghanistan. .

China is also worried about the spread of regional terrorism in the wake of a low-level Muslim separatist insurgency in its troubled Xinjiang border region. But Beijing has steadfastly supported Islamabad’s counterterrorism efforts and dismisses U.S. criticism of them.

China’s arms exports to Pakistan have in recent years exponentially increased while exports of military hardware from the country’s traditionally largest supplier, the U.S., have reportedly declined to just $21-million in 2017 from $1-billion.

“China will never leave Pakistan. I shall say we have confidence in the future of Pakistan,” said Chinese Ambassador Jing, when asked whether terrorism-related concerns might also push Beijing away from Islamabad.

China’s investment under CPEC has also encouraged hundreds of private Chinese companies and thousands of Chinese nationals to arrive in Pakistan to look for business opportunities and buy property. The influx of the foreigners has raised alarms among local businesses and sparked worries that the Chinese labor force will take away local jobs.

Jing stressed that China and Pakistan are working together to promote mutual people-to-people connectivity through enhanced education and cultural linkages to improve mutual understanding.

Ambassador Jing says there are eight Chinese universities working to promote Pakistan’s official Urdu language while 12 Pakistan-study centers are working to promote mutual understanding between the two countries. There are 22,000 Pakistanis seeking education in China.

Pakistani officials say currently, about 25,000 students are learning Chinese language in 19 universities and four Confucius Institutes affiliated with the Chinese Ministry of Education.

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France: EU Needs Full Exemption from US Tariffs

The European Union needs to be exempted from steel and aluminum tariffs announced by the United States in order to work with Washington on trade with China, France’s Finance Minister Bruno Le Maire said Friday.

“We are close allies between the EU and the United States. We cannot live with full confidence with the risk of being hit by those measures and by those new tariffs. We cannot live with a kind of sword of Damocles hanging over our heads,” Le Maire told a press conference during the International Monetary Fund and World Bank spring meetings. 

“If we want to move forward … if we want to address the issue of trade, an issue of the new relationship with China, because we both want to engage China in a new multilateral order, we must first of all get rid of that threat,” he said.

U.S. President Donald Trump announced a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports last month to counter what he has described as unfair international competition.

Le Maire said the EU’s exemption from the tariffs should be “full and permanent.”

The EU is seeking compensation from the United States for the tariffs through the World Trade Organization. Brussels has called for consultations with Washington as soon as possible and is drawing up a list of duties to be slapped on U.S. products.

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DOJ: Did AT&T, Verizon Make it Hard to Switch?

The Justice Department has opened an antitrust investigation into whether AT&T, Verizon and a standards-setting group worked together to stop consumers from easily switching wireless carriers.

 

The companies confirmed the inquiry in separate statements late Friday in response to a report in The New York Times. 

 

The U.S. government is looking into whether AT&T, Verizon and telecommunications standards organization GSMA worked together to suppress a technology that lets people remotely switch wireless companies without having to insert a new SIM card into their phones. 

 

The Times, citing six anonymous people familiar with the inquiry, reported that the investigation was opened after at least one device maker and one other wireless company filed complaints.

Verizon, AT&T respond 

Verizon, which is based in New York, derided the accusations on the issue as “much ado about nothing” in its statement. It framed its efforts as part of attempt to “provide a better experience for the consumer.” 

 

Dallas-based AT&T also depicted its activity as part of a push to improve wireless service for consumers and said it had already responded to the government’s request for information. The company said it “will continue to work proactively within GSMA, including with those who might disagree with the proposed standards, to move this issue forward.”

 

GMSA and the Justice Department declined to comment.

Merger trial

 

News of the probe emerge during a trial of the Justice Department’s case seeking to block AT&T’s proposed $85 billion merger with Time Warner over antitrust concerns. That battle centers mostly on the future of cable TV and digital video streaming.

 

Verizon and AT&T are the two leading wireless carriers, with a combined market share of about 70 percent.

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Wells Fargo to Pay $1B to Settle Customer Abuse Charges

American banking giant Wells Fargo has agreed to pay federal regulators $1 billion to settle charges that it failed to identify and avert problems related to its mortgage and auto lending operations.

The bank has admitted it sold unwanted or unnecessary automobile insurance to hundreds of thousands of its auto loan customers.

Wells Fargo, the largest mortgage lender in the U.S., has also admitted to forcing thousands of customers to pay unnecessary fees in order to lock in interest rates on their home mortgages.

The bank will pay $500 million to the Consumer Financial Protection Bureau and another $500 million to the Treasury Department’s Office of the Comptroller, the largest fines ever imposed by either agency.

None of the money will go directly to the victims, although the bank has agreed to offer restitution.

This is the latest chapter in broad and long-running scandals that have brought the bank under intense federal scrutiny.

Wells Fargo was also rocked by a widely-reported scandal during which the bank admitted employees activated as many as 3.5 million bank and credit card accounts without customer authorization.

Citing “widespread abuses,” the Federal Reserve, the central banking system of the U.S., took an historical action earlier this year by ordering that Wells Fargo could not grow beyond $1.95 trillion in assets. The Federal Reserve also required the bank to replace several board members.

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Reports: $1B Fine for Wells Fargo for Illegal Sales

U.S. news reports say Wells Fargo will be fined as much as $1 billion for illegally selling customers car insurance policies they did not want or need, and for charging unnecessary fees in connection with mortgages.

This would be the largest fine ever imposed by federal bank regulators and the Consumer Financial Protection Bureau.

The fine is part of a settlement regulators negotiated with the bank.

Wells Fargo and federal officials have not commented on the reports.

The San Francisco-based lender admitted selling the unwanted insurance policies to hundreds of thousands of car loan customers. In many cases, the borrowers could not afford both the insurance and car payments and their cars were repossessed.

Many U.S. banks have enjoyed looser federal regulations under President Donald Trump’s pro-business administration.

But Trump denied reports that Wells Fargo would not be punished, tweeting in December that fines and penalties against the bank would, if anything, be substantially increased.

“I will cut regs but make penalties severe when caught cheating,” he wrote.

Wells Fargo previously paid a $185 million fine for opening bank and credit card accounts in its customers’ names without telling them.