The heated debate over India’s cash ban continues, with critics saying it slowed an economy that was growing, while the government says economic momentum was barely affected.

Critics say the scrapping of 86 percent of the country’s currency last November cost India its status as the world’s fastest growing economy.

According to data released this week, from January to March, growth plunged to 6.1 percent – lower than China’s 6.9 percent growth in the same period.

Overall growth for the last financial year, which began in April 2016 and ended in March 2017, however, stood at 7.1 percent.

Finance Minister Arun Jaitley has tried to distance the disappointing economic numbers from the currency ban, citing other factors.

“There was some slowdown visible, given the global and domestic situation, even prior to demonetization in the last year,” he told reporters.

The slowdown affected almost all sectors of the economy, with farming, manufacturing and services all taking a hit. With people scrambling to get access to new notes, consumption slowed sharply, impacting both small shopkeepers and large businesses.

The government, however, is encouraged by forecasts that the economy is expected to recover swiftly on the back of monsoon rains, which are expected to be plentiful, and a slew of major reform measures.

As economists estimated growth this year will rebound to 7.4 percent, the government pointed out that India’s economy is still among the world’s top performers. Jaitley said given the global scenario, “7 to 8 percent growth, which at the moment is the Indian normal, is fairly reasonable and by global standards very good.”

There are widespread expectations of a major economic boost from India’s most ambitious tax reform action since independence – the launch of a nationwide tax that will replace a plethora of levies starting July 1.

The World Bank said this week the reform would lower the cost of doing business for firms and reduce logistics costs.

In the coming year, “we actually have very strong fundamentals of the Indian economy, GDP growth being up, exports have revived and there has been continued reform momentum,” said Frederico Gil Sander, a senior economist at the World Bank in New Delhi.

And while demonetization undoubtedly left its imprint on India by slowing down the economy, the government is optimistic there will be long-term gains because the move would help clean up an economy where many businesses and professionals evade taxes, resulting in the generation of what is known as “black money.”

“The message has gone loud and clear and it continues to this day that it is no longer safe to deal in cash,” said Jaitley.

Skeptics say only improved tax collections in the coming years will demonstrate whether that is true, or whether tax evasion remains a challenge in a country where cash transactions are the norm in large sectors of the economy.
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Long the preserve of geeky enthusiasts, bitcoin is going mainstream in Asia, attracting Mrs Watanabe — the metaphorical Japanese housewife investor — South Korean retirees and thousands of others trying to escape rock-bottom savings rates by investing in the cryptocurrency.

Asia’s moms and pops, regular investors in stock and futures markets, have been dazzled by bitcoin’s 100 percent surge so far this year. In comparison, the broader Asian stocks benchmark has gained 17 percent over the same period.

Even after a tumble from last week’s record $2,779.08 high, bitcoin rose more than 60 percent in May alone, driven higher in part by investors in Japan and South Korea stepping in as China cooled after a central bank crackdown earlier this year.

Legal tender in Japan

Over the last two weeks, and encouraged by Japan’s recognition of bitcoin as legal tender in April, exchanges say interest has jumped from the two countries. Bitcoin trades at a premium in both, because of tough money-laundering rules that make it hard for people to move bitcoin in and out.

“After I first heard about the bitcoin scheme, I was so excited I couldn’t sleep. It’s like buying a dream,” said Mutsuko Higo, a 55-year-old Japanese social insurance and labor consultant who bought around 200,000 yen ($1,800) worth of bitcoin in March to supplement her retirement savings.

“Everyone says we can’t rely on Japanese pensions anymore,” she said. “This worries me, so I started bitcoins.”

Thriving investment culture

Asia has proved fertile ground for bitcoin because of the region’s thriving retail investment culture, where swapping investment tips is common. China, Japan and South Korea are home to several of the world’s busiest cryptocurrency exchanges, according to a ranking by CoinMarketCap.

“Right now, it’s a form of speculation, like stocks,” said Park Hyo-jin, a 27-year-old South Korean who owns around 3 million won ($2,700) of bitcoin. “I don’t think anybody in South Korea buys bitcoin to use it.”

The risks, though, are rising too.

Bitcoin is largely unregulated across Asia, while rules governing bitcoin exchanges can be patchy.

In Hong Kong, bitcoin exchanges operate under money service operator licenses, like money changers, while in South Korea they are regulated similar to online shopping malls, trading physical goods. Often there are no rules on investor protection.

Park and Higo were drawn into bitcoin by friends. Others are attracted through seminars, social media groups and blogs penned by amateur investors.

Noboru Hanaki, a 27-year-old Japanese web marketer and bitcoin investor, said his personal finance blog gets around 30,000 page views each month. The most popular post is an explanation of bitcoin, he said, noting that when the bitcoin price surged last month, readership of the article doubled.

Rachel Poole, a Hong Kong-based kindergarten teacher, said she read about bitcoin in the press, and bought five bitcoins in March for around HK$40,000 ($5,100) after studying blogs on the topic. She kept four as an investment and has made HK$12,000 tax-free trading the fifth after classes.

“I wish I’d done it earlier,” she said.

Not everyone’s making money.

Scams, pyramid schemes

The bitcoin frenzy has spawned scams, with police in South Korea last month uncovering a $55 million cryptocurrency pyramid scheme that sucked in thousands of homemakers, workers and self-employed businessmen seduced by slick marketing and promises of wealth.

Leonhard Weese, president of the Bitcoin Association of Hong Kong and a bitcoin investor, warned amateur investors against speculating in the digital currency.

Some larger exchanges have voluntarily adopted security measures and compensation guarantees, according to their websites, although there are dozens of smaller platforms operating more or less unchecked.

In South Korea, the Financial Services Commission (FSC) has set up a task force to explore regulating cryptocurrencies, but it has not set a timeline for publishing its conclusions, an official there said.

In Japan — where memories are still fresh of the spectacular 2014 collapse of Mt. Gox, the world’s biggest bitcoin exchange at the time — the Financial Services Agency (FSA) said it supervises bitcoin exchanges, but not traders or investors.

Some professional investors say bitcoin can be a useful hedge to help diversify a portfolio, but investors should be cautious.

“This is an extremely volatile and innovative asset class,” said Pietro Ventani, managing director of APP Advisers, an asset allocation strategy firm.
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When General Motors CEO Mary Barra introduced the Chevrolet Bolt at the CES gadget show last year, she took a shot at Tesla.

Buyers can be confident because Chevy has 3,000 U.S. dealers to service the new electric vehicle, she said. The implication was that Tesla, with just 69 service centers nationwide, can make no such promise.

The uncharacteristic insult from Barra was designed to highlight the difference between 108-year-old GM and Tesla, a disruptive teenager. It also acknowledged a budding rivalry that could help determine whether Detroit or Silicon Valley sets the course for the future of the auto industry.

The tale of the tape favors GM. It has made billions in profits since returning to the public markets in 2010. GM got the Bolt, a $36,000 car that goes 238 miles per charge, to market before Tesla’s Model 3. Tesla, the 14-year-old company led by flamboyant CEO Elon Musk, has never posted an annual profit.

Yet, as both CEOs face shareholders for annual meetings Tuesday, it is Barra who must explain to skeptical investors why GM’s future is as bright as Tesla’s.

GM’s stock is trading around the $33 price of its initial public offering seven years ago. During that time, Tesla shares have soared more than tenfold to $335. Wall Street now values Tesla at about $55 billion, compared to around $50 billion for GM.

Despite efforts to paint themselves as technology companies, automakers can’t shake their giant, capital-intensive global manufacturing operations. The huge investment needed to build vehicles yields low profit margins compared with tech companies that make software or cell phones, says Michael Ramsey, an analyst with Gartner. GM’s net profit margin in 2016 was 5.7 percent. By comparison, Alphabet Inc., parent of Google, had a 22 percent margin.

Although it’s an automaker, Tesla started in the tech bucket and remains there in the eyes of investors and buyers, Ramsey says.

Tesla’s electric cars are the envy of the industry, and its semi-autonomous technology is among the most advanced on the road. Musk says Tesla’s California assembly plant – which used to be GM’s – will soon be among the most efficient in the world. And it’s branching into areas with potential for bigger returns, including solar panels, energy storage and trucking.

Tesla is absurdly overvalued if based on the past, but that’s irrelevant. A stock price represents risk-adjusted future cash flows,” Musk tweeted in April.

Still, Musk can’t risk any missteps as Tesla pivots from a niche manufacturer of 84,000 high-priced cars per year. The Model 3 sedan, Tesla’s first mainstream car, is due out later this year, but previous launches have been plagued with delays. Tesla has yet to prove it can build high-volume vehicles with quality and reliability, as GM does. Musk aims to make 500,000 vehicles per year in 2018; GM made more than 10 million cars and trucks last year.

GM, too, is stretching into new areas. Its Maven car-sharing service has 35,000 members in 17 North American cities, and it’s providing cars for ride-hailing services. GM is developing autonomous cars with Cruise Automation, a software company purchased last year. Its SuperCruise semi-autonomous driving system, due out this year, is designed to be safer than Tesla’s.

And GM isn’t the only automaker with a stagnant stock price. Of the seven best-selling carmakers in the U.S., only Toyota and Fiat Chrysler have seen significant growth in seven years. Ford, Honda and Hyundai all have lost value.

“Investors and the financial markets are much more interested in investing in the potential of what might be huge than in the reality of what’s already profitable and likely to remain so for years to come,” says Sam Abuelsamid, a senior analyst with Navigant Research.

Abuelsamid says GM could better trumpet its technology achievements. For instance, it scarcely markets the Bolt. By contrast, Musk builds hype with nightclub-like events for Tesla owners and Twitter banter with 8.8 million followers.

“The only way you can get people to perceive you in the same light as a company like Tesla is to demonstrate it,” Abuelsamid says.

Musk is crucial to Tesla’s success. The risk-taking billionaire founded PayPal and rocket company SpaceX before taking over Tesla. He espouses big ideas like Hyperloop high-speed transportation and colonizing Mars.

Barra, on the other hand, is a methodical engineer who rarely strays from script. She has only 29,500 Twitter followers. She’s a GM lifer who earned a company-paid MBA from Stanford; Musk left a Stanford graduate physics program after just two days to form a publishing startup.

“Mary is like a normal high-level performing executive,” Ramsey says. “Elon Musk is like an almost unrivaled superstar, even in comparison to Silicon Valley executives.”

Still, the big changes in the auto industry are in the early stages. Electric vehicles make up less than 1 percent of global auto sales and fully self-driving cars are years away. The economy can falter and company fortunes can shift. Already this year, sales in the U.S. and China are slowing, and GM pulled out of the European and Indian markets because they weren’t profitable.

GM knows the ups and downs of auto sales, but Tesla will have to learn to manage them. If the Model 3 is late and Tesla sales fall, its stock price could drop and reduce Tesla’s access to cheap capital, Ramsey says.

“I don’t think they’re completely immune to economic cycles,” he says. “That will be when we really know if Tesla can maintain this out-of-whack share value with their fundamentals.”
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Hundreds of businesses have urged President Donald Trump to keep the United States in the Paris climate deal, and there is evidence that business support for the agreement is growing.

As a presidential candidate, Trump called climate science a “fraud” and pledged to get out of the Paris climate accord if he won the election.

But many business leaders disagree with that goal. Major American firms, including Mars, Nike, Levi Strauss, and Starbucks signed a letter to Trump several months ago, arguing that failing to build a low-carbon economy puts U.S. “prosperity at risk.”

On Wednesday Tesla founder Elon Musk said he tried to persuade the president to stay in the accord, and said he would quit the White House business advisory council if Washington pulls out of the Paris agreement.

GE chief Jeff Immelt has written that customers, partners, and countries are demanding technology that generates electric power while improving energy efficiency and cutting costs.

Oil companies, like Chevron and rival ExxonMobil, recently argued that the Paris Agreement gives their firms a more predictable future, and therefore more manageable one. It also helps maintain U.S. influence over future talks.

Earlier this week, more than 60 percent of Exxon shareholders voted to require that the firm do more analysis and disclosure of the likely impact of tougher climate policies on company revenue. Previous efforts to force such disclosures failed to get a majority of votes from shareholders.

Some other business and conservative groups say Washington should leave the climate agreement. The Heritage Foundation, for example, says the accord has “devastating” economic costs” and “zero” environmental benefits. The report’s authors argue that the Paris deal will hurt economic growth and cut jobs.

 
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A handful of entrepreneurs have quietly formed communist Cuba’s first private small business association, testing the government’s willingness to allow Cubans to organize outside the strict bounds of state control.

More than a half million Cubans officially work in the private sector, with tens, perhaps hundreds, of thousands more working off the books. Cuba’s legal system and centrally planned state economy have changed little since the Cold War, however, and private business people are officially recognized only as “self-employed,” a status with few legal protections and no access to wholesale goods or the ability to import and export.

The government is expected to take an incremental step toward changing that Thursday when Cuba’s National Assembly approves a series of documents updating the country’s economic reform plan and laying out long-term goals through 2030. Those goals include the first official recognition of private enterprise and small- and medium-size businesses, although it could be years before any actual changes are felt on the ground in the country.

The Havana-based Association of Businessmen is trying to move ahead faster, organizing dozens of entrepreneurs into a group that will provide help, advice, training and representation to members of the private sector. The group applied in February for government recognition. While the official deadline for a response has passed, the group has yet to receive either an OK or negative attention from authorities, leaving it in the peculiar status known in Cuba as “alegal” or a-legal, operating unmolested but vulnerable to a crackdown at any time.

“People have approached with a lot of interest but they don’t want to join until we’re officially approved,” said Edilio Hernandez, one of the association’s founders. Trained as a lawyer, Hernandez also works as a self-employed taxi driver.

“Many people really understand that entrepreneurs need a guiding light, someone who helps them,” he said.

Another founder, Rodolfo Marino, has a construction license and has worked privately and under contract to state agencies. He said organizers of the association have gone door-to-door trying to recruit members by convincing them they need independent representation.

The group says roughly 90 entrepreneurs have signed up. Without legal recognition, the group is not yet charging membership fees, the organizers say. Until then, they meet occasionally in Marino’s Havana home to plan their path forward, which includes legal appeals for government recognition.

“We hope to push the country’s economic development forward,” he said.

The number of officially self-employed Cubans has grown by a factor of five, to 535,000 in a country of 11 million, since President Raul Castro launched limited market-based reforms in 2010. The government currently allows 200 types of private work, from language teacher to furniture maker. In reality, many officially self-employed people have become owners of small business, some with dozens of employees and hundreds of thousands of dollars in annual revenue — big number for a country where the monthly state salary is about $25.

Without access to government-controlled imports, exports or wholesale supplies, business owners are emptying the shelves of state stores, either by snapping up items as soon as they arrive or buying them stolen on the black market. That leaves them vulnerable to crackdowns and frequent extortion from state inspectors.

The government has taken a few tentative moves toward easing the situation in recent months — opening stores where owners of some of the country’s 21,000 bed-and-breakfasts and 2,000 private restaurants can buy large quantities of goods, although still at retail prices.

The state has also promised special access to gas and car parts to taxi drivers who comply with widely flouted government caps on fares.

Along with those small steps, the future of the Association of Businessmen is a gauge of Cuba’s openness to private enterprise and its ability to move forward, the group’s founders say.

“We really hope they approve us,” said Hernandez, the lawyer and taxi driver. “If they don’t, we’ll be in the hands of a state that considers us illegal and we won’t be able to reach our goal of representing entrepreneurs. If they do, it will be a sign that things are changing.”

 
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The head of a New York-based advocacy group has called on President Donald Trump and his older daughter to help secure the release of three men who reported labor violations at a Chinese company that makes shoes bearing the Ivanka Trump brand.

“We appeal to President Trump, Ivanka Trump herself, and to her related brand company to advocate and press for the release of our activists,” Li Qiang, executive director of China Labor Watch, the men’s employer, said Wednesday.

The Ivanka Trump brand has declined to comment.  The White House and Ivanka Trump’s lawyer did not immediately respond to requests for comment.  Calls to provincial police in China were not answered. Chinese Foreign Ministry spokeswoman Hua Chunying said she was unaware of the situation and declined to make further comments.

Hua Haifeng and two other labor activists, Li Zhao and Su Heng, had been covertly investigating labor conditions at two Chinese factories that make shoes for Trump and other brands, in the cities of Ganzhou and Dongguan. They disclosed preliminary findings to China Labor Watch, indicating workers at the factories had been subject to extremely long hours.

Hua was arrested in Jiangxi province on suspicion of illegally using eavesdropping equipment; he and the other two men disappeared Saturday and were last seen in Ganzhou, in southern Jiangxi province, China Labor Watch reported Tuesday.

The arrest and disappearances came amid Chinese President Xi Jinping’s crackdown on the country’s advocacy groups and civil society. In the past year, dozens of human rights activists have been detained in China.

The global human rights group Amnesty International called for the release of the three men if they are being held only for investigating possible labor abuses at the factories, which are owned by Huajian International.

“Activists exposing potential human rights abuses deserve protection, not persecution,” said Amnesty International spokesman William Nee. “The trio appear to be the latest to fall foul of the Chinese authorities’ aggressive campaign against human rights activists who have any ties to overseas organizations, using the pretense of ‘national security.’ ”

The relationship between the Trump family and China has received widespread attention since last year’s presidential campaign.  While Trump has accused China of taking coveted manufacturing jobs from the U.S., the Trump family has sought to benefit financially from the Chinese market.

Trump recently obtained more than 75 trademarks in China. The family of Jared Kushner, Ivanka Trump’s husband, is attempting to raise money from Chinese investors for a real estate venture.
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In the hot and humid town of Caicara, in the heart of Venezuela, some 20 piers jutting out of the vast Orinoco river gather mildew and rust.

Brazilian construction company Odebrecht was meant to build an 11-km (seven-mile) bridge in the town — the longest in the South American country — in 2011, but the project ground to a halt a year ago.

Now, a handful of workers do basic maintenance work.

The bridge, meant to link the towns of Caicara and Cabruta, is just one of several abandoned Odebrecht projects deteriorating under the Caribbean sun and dogged by corruption allegations.

Odebrecht has left at least 23 multimillion dollar projects unfinished or stalled in Venezuela, according to company and government documents, interviews with over two dozens workers, and site visits.

Late last year, Latin America’s largest engineering company admitted to paying hundreds of millions of dollars of bribes in 12 mostly Latin American countries in exchange for contracts.

The unfolding scandal has already led to the downfall of high-ranking officials across the region.

On Thursday, Brazil’s attorney general will share information from plea bargain deals by dozens of Odebrecht executives with relevant countries.

According to a leniency agreement with U.S. authorities, which was made public in December, Odebrecht and its representatives paid some $98 million in bribes to officials and intermediaries in Venezuela between 2006 and 2015 — the highest amount outside Brazil.

Cash-strapped

Yet many of the company’s projects in Venezuela ground to a halt even before the Odebrecht scandal exploded, likely due to lack of payment from the cash-strapped socialist government, sources said.

“All the state’s projects are paralyzed, not only Odebrecht’s,” said Wilmer Nolasco, a lawyer and president of Venezuela’s largest construction union, speaking in an office in Caracas adorned with a statue of late leftist leader Hugo Chavez.

Odebrecht’s stalled projects include the Caicara project, one other huge bridge, subway lines, a train to link dormitory towns with Caracas, hillside cable cars, an agricultural project, an overhaul of the country’s main airport, and a hydroelectric dam.

Nolasco, whose powerful SUTIC union works on several of Odebrecht’s projects, says that in some cases the Salvador, Brazil-based company stopped receiving payments two years ago and subsequently pulled the plug on building.

“The state hasn’t paid Odebrecht,” said Nolasco, citing meetings in which Odebrecht asked the government to pay. The Venezuelan unit of Odebrecht said in a statement sent to Reuters that the completion times for its projects are “within what is normal for contracts of that nature.”

“The flow of payments responds to the availability of resources assigned annually for the execution of each project,” it said in the statement. “The works currently being executed have timeframes compatible with those budgets.”

Venezuela’s public works and communications ministries did not respond to requests for comment.

Odebrecht has not formally left Venezuela, nor has the government of Nicolas Maduro canceled its contracts.

But Odebrecht’s projects are under the protection of the National Guard and other government personnel, according to a Reuters witness, and company logos have been erased from the gates of their camps. Maduro in February vowed his administration would finish the projects, though none of them have been reactivated.

As a consequence, some 200,000 jobs have been lost, according to union estimates. Some of the works will also have to be redone partially because of flooding or because the cement has oxidized, project engineers told Reuters.

“This is basically lost,” said one worker, pointing to a pile of materials for the construction of line 2 of the Los Teques subway near Caracas, already six years behind schedule.

Some 20 workers scour the tunnels to drain water that threatens to flood them.

Risky friendship

Odebrecht arrived in Venezuela in 1992 to build a mall in the oil hub of Maracaibo near the Colombian border.

It grew steadily but it was not until 2003, with the election of Luiz Inacio Lula da Silva as president of Brazil, that it began a string of mega-projects in Venezuela.

After 2003, Odebrecht won 32 projects worth some $40 billion in Venezuela, according to official numbers. Brazilian rivals Queiroz Galvao, Camargo Correa and Andrade Gutierrez received a total of eight.

Even when Ecuador’s former leftist president Rafael Correa kicked out Odebrecht in 2008, accusing it of a scam after a hydroelectric dam it built had severe problems, Chavez publicly defended the company.

“Odebrecht is a friendly company and in Venezuela it’s behaved itself extraordinarily well,” Chavez said at the time.

While Odebrecht largely completed its works on time until 2007, it then began to delay completion dates, according to government and company records and interviews with engineers that worked on the projects and with Odebrecht personnel.

Anti-corruption campaigners accuse Odebrecht and complicit state officials of prioritizing personal gain.

“Seeing the quantity of unfinished works and the privileges this company was given, we suppose it was better to receive bribes than to see the works through,” said Mercedes de Freitas, local head of anti-corruption campaign group Transparency International.

The majority of projects also ended up costing several times their initial price, according to documents on the projects seen by Reuters and speeches by officials.

One part of the Caracas hillside gondola system cost $262 million, five times that of a similar project in the Colombian city of Medellin, though the Venezuelan line is shorter and flatter.

The construction of a bridge over Lake Maracaibo in the west of the country is only 17 percent completed but has cost three times the original budget, according to the documents and speeches.

Opposition investigates

Odebrecht and its petrochemical unit Braskem in late December agreed to pay at least $3.5 billion, the largest penalty ever in a foreign bribery case, after pleading guilty in a U.S. federal court in Brooklyn.

In mid-February, Venezuela’s state prosecutor’s office raided the headquarters of Odebrecht in Caracas. It has not given details of what it found.

The opposition-led National Assembly in February began an investigation into possible embezzlement of some $16 billion in negotiations between the Venezuelan government and Odebrecht, according to preliminary inquiries.

The report says six Odebrecht projects were subject to overpricing, commissions, bribes, and poor planning, and also ran over budget. That was just the tip of the iceberg, the head of the congressional comptroller’s commission, Juan Guaido, told Reuters.

“Venezuelans paid seven times more to contract Odebrecht,” said Guaido, basing his estimate on preliminary investigations by his team.

Guaido said the majority of Odebrecht’s 32 projects were directly assigned, via binational agreements, instead of public tenders as in other Latin American countries.
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The owners of a Mexican hotel using the name Hotel California on Wednesday said a trademark infringement lawsuit by the Eagles, whose song “Hotel California” is arguably the band’s most famous, should be dismissed.

Hotel California Baja LLC, which runs the Todos Santos hotel in Baja California Sur, said the band long ago waived its trademark rights, having waited four decades to assert them since releasing the song “Hotel California” on a 1976 album with the same name.

The owner said it “flatly denies” the Eagles’ “baseless contention” that the 11-room hotel seeks to mislead travelers into thinking the property is associated with the band.

“Any alleged use of plaintiff’s trademarks is not likely to cause confusion, deception or mistake as to association, connection, sponsorship, endorsement, or approval of plaintiff,” the owner said in a filing in Los Angeles federal court.

Lawyers for the Eagles were not immediately available for comment.

In their May 1 lawsuit, the Eagles said the defendant encourages guests to believe their hotel is associated with the band, including piping its music through a sound system, to sell T-shirts and other merchandise.

The hotel is located about 1,000 miles (1,609 km) south of San Diego and 48 miles (77 km) north of Cabo San Lucas.

It was named Hotel California at its 1950 opening, underwent some name changes, and later revived the original name after a Canadian couple, John and Debbie Stewart, bought it in 2001.

U.S. District Judge Gary Klausner scheduled a conference in the case for Aug. 21.

The album “Hotel California,” won the 1977 Grammy Award for record of the year.

The case is Eagles Ltd v Hotel California Baja LLC et al, U.S. District Court, Central District of California, No. 17-03276.
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