Swiss luxury watchmaker Audemars Piguet said it would launch a second-hand business this year, becoming the first big brand to announce plans to tap into a fast-growing market for pre-owned premium watches.

The company told Reuters it would launch the business at its outlets in Switzerland this year. If this proved successful, it would roll out the operation in the United States and Japan.

“Second-hand is the next big thing in the watch industry,” Chief Executive Francois-Henry Bennahmias told Reuters in an interview at the SIHH watch fair in Geneva this week.

Going to the ‘dark side’

Luxury watchmakers have hitherto eschewed the second-hand trade, fearing diluting the exclusivity of their brands and cannibalizing their sales. They have instead ceded the ground to third-party dealers.

But some are now looking to change tack, driven by an industry-wide sales slowdown combined with a second-hand market that is expanding rapidly, fuelled by online platforms like Chrono24 and The RealReal.

“At the moment, in watches, we leave it to what I call the ‘dark side’ to deal with demand for pre-owned pieces,” added Bennahmias, whose company is known for its octagonal Royal Oak timepieces that sell for 40,000 Swiss francs ($41,680) on average.

“Anybody but the brands (is selling second hand) — it’s an aberration commercially speaking,” he said.

Others may follow

Several smaller brands, including H.Moser & Cie and MB&F, have signaled interest in the second-hand trade.

“It is important to control the sale of second-hand watches to protect the owners and the value of watches already in the market by keeping the grey market in check,” H.Moser & Cie boss Edouard Meylan told Reuters.

MB&F, which plans to launch second-hand sales via its website this year, told Reuters it expected to typically give a 20-30 percent discount on second-hand watches. A spokesman said customers buying from established watch brands could feel confident they were getting genuine products in good working order and with a valid warranty.

Bigger brands Rolex, Patek Philippe, Swatch Group, Richemont and Breitling all declined to comment, when asked whether they planned to enter the second-hand market, while LVMH’s watch division was not immediately available.

Starting small

Audemars Piguet said it would initially allow customers to trade in old watches as part-exchange for new ones, and then sell the second-hand watches. It has not yet decided whether to buy second-hand watches for cash.

Experts say the second-hand luxury watches business, mostly done via online platforms or specialized retailers, is growing rapidly as a new generation of customers that values variety more than permanent ownership enters the luxury world.

In an example of the discounts offered online, a diamond-studded Audemars Piguet Royal Oak “with moderate scratches” sells for $9,450 on The RealReal, about a third of the estimated retail price.

Kepler Cheuvreux analyst Jon Cox said he estimated the size of the second-hand market at $5 billion a year in revenue, including watches sold at auction, and that it had outperformed the market for new pieces in the last couple of years.

That is still dwarfed by a new luxury watch sector worth 37 billion euros ($45.3 billion), according to consultancy Bain & Cie. However Swiss watch exports fell 3.3 percent in 2015 and 9.9 percent in 2016 before posting a modest 2.8 percent rise in the first 11 months of 2017.

US top market for pre-owned

The United States, where sales of new watches have been falling for years, is the No. 1 market for pre-owned watches, followed by Britain and Japan, said U.S. retailer Danny Govberg, who sells new watches for Rolex and other brands, but also an increasing number of second-hand timepieces.

His company said its second-hand sales had grown by 37-40 percent year-on-year over the past five years. In an example of prices, it said it listed a second-hand Audemars Piguet Royal Oak for $24,950 compared with a $32,000 retail price.

Together with a partner in Hong Kong and a Singapore-based investor, Govberg recently launched global e-commerce platform WatchBox for buying and selling pre-owned luxury watches.

“People sell us watches by the bucket,” he said.

He said many people sold watches to buy a new one so the pre-owned market was actually driving new sales, like in the car market. 

“The brands are still trying to figure it out, they don’t have the solution yet,” he said.
…

Foreign investors in Vietnam will welcome a fairer, more predictable set of business practices as the government pursues the heads of local firms over corruption, analysts believe.

Some foreign companies might review their own books to ensure clean accounting, as prosecutors investigate executives in Vietnamese firms over suspected graft. Most will laud the crackdown as steps toward transparency, fairness in business and better-run local partner companies, economists predict.

“The corruption cleanup, I think so far, seems to be well received,” said Song Seng Wun, an economist with the private banking unit of CIMB in Singapore. “There is at least on the surface an effort to clean up and be more transparent in the way of doing business as a way to ensure firmer ground.”

Increased confidence among foreign factory investors, who already like Vietnam for its cheap land and labor, would help buoy the Southeast Asian country’s overall economy.

Foreign investment anchors Vietnam’s $202 billion GDP, which the Asian Development Banks expects will expand by 6.5 percent this year.

​Corruption crackdown widens

High-level graft trials swept Vietnam in much of 2017 as citizens complained vociferously about a range of violations, from bribery during traffic stops to illegal land-use deals.

In September, a court in Hanoi handed a death sentence to the former chairman of state-owned gas and oil firm PetroVietnam and sentenced an official from Vietnam-based OceanBank to life imprisonment for “roles in a multimillion-dollar graft case that has riveted the nation,” according to the local media outlet VnExpress International.

Nguyen Xuan Son, who had served as chairman of the board, received the death penalty for misappropriating $13.6 million from the bank, the news outlet said.

This month, former ruling Communist Party Politburo member Dinh La Thang went on trial along with 21 other officials from PetroVietnam and its affiliates. He is accused of causing losses of about $35 million.

Trinh Xuan Thanh, former head of PetroVietnam Construction, faces charges in this case over violating economic management regulations and misappropriating property. He generated international attention in August when the German government accused agents from Hanoi of abducting him in Berlin as he was seeking asylum.

Observers say this trial is part of Communist Party General Secretary Nguyen Phu Trong’s broader campaign against corruption.

The nonprofit advocacy group Transparency International ranked Vietnam 113 of 176 countries and regions evaluated in 2016 for perceptions of corruption. New York-based business compliance consultancy Gan Integrity cites bribery, political interference and “facilitation payments” across industries in Vietnam.

The same year the government told its legislature that numerous officials had been “neglecting their duties and failing to uphold moral standards and political virtues,” VnExpress reported.

​Local-foreign schism

Foreign-owned firms may review in-house accounting or money-handling procedures now to make sure they’re following rules in case a disgruntled employee contacts authorities, business experts say.

Western firms generally follow strict British anti-corruption laws when in Vietnam, though investors from elsewhere in Asia may use different standards, said Ralf Matthaes, managing director of Infocus Mekong Research, a market research company in Ho Chi Minh City.

Ford Motor Co. and Intel are among the best-known foreign investors. But most capital comes from South Korea, Singapore, Japan and Taiwan. Foreign-operated factories usually make goods, from garments to smartphones, for export.

“There are variances between different countries,” said Dustin Daugherty, senior associate in business intelligence with the consultancy Dezan Shira & Associates in Ho Chi Minh City.

Overall, he said, “they are much more compliance-oriented by far. They’re much more concerned about following the rules. There are fewer corners cut.”

In 2017, registered foreign direct investment in Vietnam reached $29.68 billion as of Dec. 20, an increase of 44 percent from the same period of 2016, according to Ministry of Planning and Investment data.

Foreign and local companies often benefit from each other now rather than competing. Local suppliers provide raw material to foreign-owned factories, for example, or offer back-end support. The state gas firm and OceanBank faced no direct competition from foreign investors.

But a clean company could lose out on land deals, subsidies or government procurement if competing with a corrupt one willing to make payoffs.

Eventually state firms may take on foreign ones overseas, said Carl Thayer, emeritus professor with the University of New South Wales in Australia. That shift would raise the urgency for fair play in business.

Vietnamese officials, he said, are “trying to once again a renewed effort to improve the performance of state-owned enterprise, equitize and privatize them, make them more efficient so they can deal with foreign competition and go abroad and perform.”

Corruption “doesn’t seem to affect the flow of foreign investment but it hurts Vietnam,” said Thayer, who specializes in Southeast Asian affairs.
…

Widow Ahatho Turuga lost 20 of her goats to drought early last year, but the shopkeeper is planning to reinvest in her herd once she has saved enough money.

“I think I will start with four goats and see how it goes,” she said, rearranging soap on the upper shelf of her shop in Loglogo, a few kilometers from Marsabit town.

She recalled how frequent droughts had left her on the edge of desperation, struggling to care for six of her own children and four others she adopted after their mother died.

But Turuga is finding it easier to cope since taking part in a rural entrepreneurship program run by The BOMA Project, a nonprofit helping women in Kenya’s dry northern areas beat extreme poverty and adapt to climate change.

The U.S. and Kenya-based organization provides two years of business and life-skills training, as well as mentorship.

Groups of three women are each given a startup grant of 20,000 Kenyan shillings ($194.55) and a progress grant of 10,000 shillings to set up a business.

After graduating, they carry on operating their businesses — mainly small shops selling groceries and household goods — either together or on their own.

The women also club together in savings groups of at least 15 people, who put away anything from 400 shillings a month each, and make loans to members at an interest rate of 5 to 10 percent.

Habibo Osman, a mother of five who was in the same group as Turuga, has been able to support her family even after divorcing her husband.

The 1,200 shillings she earns each week from the shop she established as a BOMA business has enabled her to enroll her eldest child, aged five, in nursery school. She is now hoping to save enough to buy her own land.

No more aid

Ahmed “Kura” Omar, BOMA’s co-founder and deputy country director, said his native Marsabit is one of Kenya’s driest counties. It is often hit by prolonged drought, with many families losing livestock in its mainly pastoralist economy, he added.

“Given that there is no foreseeable end to these drought patterns, we need to stop relying on food distribution and aid money, and create more sustainable, life-long solutions,” Kura told Reuters.

BOMA CEO Kathleen Colson said the program aimed to help break the cycle of dependency on aid, giving women power over their lives and the means to move out of extreme poverty.

“People need to be treated with dignity and be empowered to achieve self-sufficiency and effect change on a community level,” she said.

BOMA asks villagers to help identify the poorest women among them to participate in the training. After completing the program, they help other women, a process that raises income levels across the entire area.

Bakayo Nahiro, a widow and mother of six, belongs to the Namayana women’s saving group in Kargi in Marsabit. She has amassed 25,000 shillings in savings, but said profit margins go down in drought periods as people take shop goods on credit when they have no livestock to sell.

Money is power

Jane Naimirdik, a BOMA trainer and mentor, said communities in Marsabit are highly patriarchal, but the program helps women gain a voice in society.

The practice of grouping women in threes creates mutual accountability but also offers protection from husbands who may want to take money from them, she added.

“We once handled a case where the husband tried to take the wife’s savings by force, but we approached [him] and told him the money did not belong to his wife but to the women’s savings group and he understood,” said Naimirdik.

Moses Galore, Kargi’s village chief, said no such incidents had been reported to him, and men appreciated their wives’ financial contribution to the household.

Magatho Mifo, a BOMA business owner, said her husband was happy about her commercial activities as she could now provide for her family while he travels for days in search of pasture for his herd.

Her neighbors’ wives and children buy goods on credit when the men are away looking for grazing, and repay her when they return. This helps the community during lean times and generates more income for her business, she said.

“My husband sometimes gets angry when I attend the women’s group meetings, because they can last a long time, but once I arrive home with a bag of food or something else, all is forgotten,” said Khobobo Gurleyo, another entrepreneurship program member.

Business partnerships

BOMA mentor Naimirdik said the women are also trained in conflict management to strengthen their business partnerships.

Ideally, each group includes women of different ages so as to benefit from the experience of older members and to make the program sustainable as it passes to subsequent generations, she said.

In addition, the women receive information about family planning and the importance of having small families, as well as child and maternal health and hygiene, she added.

The BOMA Project has reported positive results in the communities where it works in Marsabit County and Samburu East, with about 15,700 women enrolled in its program since 2008.

Data collected during a 2016 exit survey of participants found that after two years, 99 percent of BOMA businesses were still open.

Members experienced a 147 percent increase in their income, and a 1,400 percent increase in their savings, alongside a 63 percent drop in children going to bed hungry.

The BOMA Project plans to expand its program across East Africa’s drylands by partnering with governments and other development agencies.

In Kenya, it is undertaking a pilot program with the government involving 1,600 women in Samburu, in addition to its existing work.

The project aims to reach 1 million women and children by 2022, said CEO Colson.
…

Turkey’s main business lobby on Thursday called on the government to end the state of emergency as parliament extended it for a sixth time since it was imposed after an attempted coup in 2016.

Emergency rule allows President Tayyip Erdogan and the government to bypass parliament in passing new laws and allows them to suspend rights and freedoms. More than 50,000 people have been arrested since its introduction and 150,000 have been sacked or suspended from their jobs.

The Turkish parliament on Thursday voted to extend the state of emergency, with the ruling AK Party and the nationalist opposition voting in favor.

Rights groups and some of Turkey’s Western allies fear Erdogan is using the crackdown to stifle dissent and crush his opponents. Freedom House, a Washington-based watchdog, downgraded Turkey to “not free” from “partly free” in an annual report this week.

In order to preserve its international reputation, Turkey needs to start normalizing rapidly, Erol Bilecik, the head of the TUSIAD business lobby said.

“The first step in that regard is bringing an end to the state of emergency,” he told a meeting in Istanbul.

Parliament was due to extend emergency rule after the national security council on Wednesday recommended it do so.

The state of emergency has negatively impacted foreign investors’ decisions, another senior TUSIAD executive said.

“As Turkey takes steps towards becoming a state of law, direct investments will increase, growth will accelerate, more jobs will be created,” Tuncay Ozilhan said, adding that he hoped this would be the last extension of emergency rule.

The government says its measures are necessary to confront multiple security challenges and root out supporters of the cleric Fethullah Gulen, whom it blames for the coup attempt. Gulen has denied any involvement.

But critics fear Erdogan is pushing the NATO member towards greater authoritarianism.

Some 30 emergency decrees have been published since the failed coup. They contain 1,194 articles and cover defense, security, the judiciary, education and health, widely restructuring the relationship between the state and the citizen.

A total of 2,271 private educational institutions have been shut down in the crackdown, as well as 19 labor unions, 15 universities, 49 hospitals and 148 media outlets.

The two co-heads of Turkey’s pro-Kurdish opposition party, parliament’s third-largest, are in jail on terrorism charges, as are several of the parties deputies.

The Turkish Journalists’ Association says about 160 journalists are in jail, most held since the failed coup. Last year, the Committee to Protect Journalists called Turkey the world’s top jailer of journalists.
…

Nigeria moved closer to turning the first part of a long-awaited oil industry bill into law after the lower house passed the same version of the legislation approved by the Senate last year, a lawmaker in the House of Representatives said on Thursday.

It is the first time both houses have approved the same version of the bill. It still needs the president’s signature to become law.

The legislation, which Nigeria has been trying to pass for more than a decade, aims to increase transparency and stimulate growth in the country’s oil industry.

Under President Muhammadu Buhari’s administration, the Petroleum Industry Bill was broken up into sections to ease passage.

The House of Representatives passed the first part called the Petroleum Industry Governance Bill (PIGB) on Wednesday.

“The PIGB, as passed yesterday, is the same as passed by the Senate. We have harmonized everything and formed the National Assembly Joint Committee on PIB,” Alhassan Ado Doguwa, a lawmaker in the House of Representatives, told reporters in the capital Abuja.

“Every consideration of the bills is now under the joint committee. We have broken the jinx after 17 years. We are working on the other accompanying bills.”

Doguwa is the chairman of the lower house’s Ad-hoc Committee on the Petroleum Industry Bill (PIB) as well as of the National Assembly Joint Committee on PIB.

The joint committee is working on two more bills as part of the PIB.

The governance section deals with management of the Nigerian National Petroleum Corporation (NNPC).

Uncertainty over terms affecting taxation of upstream oil development has been the main sticking point holding back billions of dollars of investment for the oil industry. This will be addressed later in an accompanying bill.

Shell, Chevron, Total, ExxonMobil and Italy’s Eni are major producers in Nigeria through joint ventures with the state oil firm NNPC.

The PIGB would create four new entities whose powers would include the ability to conduct bid rounds, award exploration licenses and make recommendations to the oil minister on upstream licenses.

“It’s an unprecedented step forward. The PIB is something that has defied the last two governments,” Antony Goldman of PM Consulting said.

“The detail of what is agreed will determine the extreme to which the bill takes politics out of the sector and tackles systemic corruption.”

 
…

На сайті «Укрзалізниці» 17 січня з’явилася функція придбання квитків з пересадками, повідомив виконувач обов’язків голови компанії Євген Кравцов у Facebook.

«Це рішення набагато спростить пошук і придбання проїзних документів за складним маршрутом та пропонуватиме альтернативний варіант поїздки не прямим сполученням. Ми намагались максимально спростити пошук необхідних квитків, тому в онлайн-замовленні вказуються станція пересадки та час очікування», – написав Кравцов.

Він зазначив, що всі квитки пасажири зможуть оплатити однією сумою наприкінці замовлення.

Раніше Кравцов повідомляв, що від 16 січня в міжнародних касах «Укрзалізниці» з’явилася змога розраховуватися платіжними картками.

«Укрзалізниця» є національним перевізником вантажів та пасажирів. Метою діяльності компанії, як йдеться на її сайті, «є задоволення потреб у безпечних та якісних залізничних перевезеннях, забезпечення ефективного функціонування та розвитку залізничного транспорту, створення умов для підвищення конкурентоспроможності галузі тощо».
…

Wall Street roared upward Wednesday, with investor enthusiasm sending all three major stock indices to record finishes, and the Dow to its first close above 26,000 points.

The blue-chip Dow gained 1.3 percent to close at 26,115.65 — just eight trading sessions after breaking the 25,000 mark — with strong showings from Boeing, IBM and Intel. 

The broader S&P 500 added 0.9 percent to close at 2,802.56, while the tech-heavy Nasdaq gained a full percentage point to settle at 7,298.28.

With just 11 trading days so far in 2018, Wednesday’s session marked the seventh time this year all three major indices closed at all-time highs.

Maris Ogg of Tower Bridge Associates told AFP the sustained rally was boosted by a “confluence of good news,” including strong company earnings, slashed corporate tax rates, higher worker compensation and new investment.

“This is a boost for productivity” and gave market players greater confidence, she said.

IBM gained 2.9 percent after analysts upgraded their price target for the company’s stock, and chipmaker Intel rose a similar amount, while aviation giant Boeing jumped 4.7 percent after announcing a joint venture to make aircraft seats.

Buoyant markets were comforted in midafternoon as a Federal Reserve survey portrayed the national economy growing at a “modest to moderate” pace.

Persistent cold weather in the United States helped oil prices shrug off weakness early in the weak, helping oil stocks nudge markets higher.

Exxon Mobil rose 1.2 percent, and ConocoPhillips increased 1.7 percent, while Royal Dutch Shell and Chevron each rose 0.3 percent.

The jubilant performance came despite continued pain at General Electric, which sank 4.7 percent as investors worked to evaluate component businesses within the company ahead of a possible breakup.

Goldman Sachs fell 1.8 percent after reporting a steep quarterly drop in trading income.
…

Financial crime fighters at the U.S. Treasury are “aggressively” pursuing virtual currency platforms that lack strong internal safeguards against money laundering, a top official told a Senate panel on Wednesday.

With more criminals using the emerging asset class to store and transmit their ill-gotten gains, Treasury’s Financial Crimes Enforcement Network (FinCEN) will pursue malfeasant virtual currency platforms even if they are located overseas, Sigal Mandelker, the U.S. Treasury Department’s undersecretary for terrorism and financial crimes, told the Senate Banking Committee.

U.S.-based platforms for bitcoin and other virtual currencies are required to comply with antimoney laundering (AML) rules including filing suspicious activity reports, with around 100 such platforms registered with FinCEN. But many other countries have no such requirements.

“The real vulnerability that we all have to address is that while we have regulatory authorities in place here in the United States and we do enforce those… we need other countries to do the same,” Mandelker told the committee’s hearing on U.S. antimoney laundering laws.

Mandelker said the U.S. government would also encourage other countries to introduce stricter regulation of virtual currencies, which law enforcement officials say are attractive to criminals making illegal transactions because they can be used anonymously.

In July, the Treasury moved to shut down the website of Russia’s BTC-e exchange, one of the world’s largest bitcoin platforms, and ordered it to pay a $110 million fine for allegedly facilitating transactions involving ransomware, computer hacking, and drug trafficking, among other crimes.

A U.S. jury also indicted a Russian man in July in connection with the alleged crimes perpetrated by the platform.

Regulators and governments around the world are still debating how to address risks posed by cryptocurrencies. In recent weeks, South Korea, Japan and China have all made noises about a regulatory crackdown while officials in France vowed to investigate the emerging asset class.

Senators on Wednesday expressed concerns over the risks posed by cryptocurrencies to the global financial system with Democratic Senator Mark Warner saying the U.S. had “a lot of work to do” to get a grip on the issue.

U.S. markets regulators said this month they plan to take more aggressive enforcement action against exchanges that may be defrauding investors or allowing market manipulation.

The price of bitcoin slumped to $10,000 on Wednesday, halving in value from its peak price of almost $20,000 hit just in December, with investors gripped by fears regulators could clamp down on the volatile currency.
…

Apple is planning to build another corporate campus and hire 20,000 workers during the next five years as part of a $350 billion commitment to the U.S. economy.

The pledge announced Wednesday is an offshoot from the sweeping overhaul of the U.S. tax code championed by President Donald Trump and approved by Congress last month.

Besides dramatically lowering the standard corporate tax rate, the reforms offer a one-time break on cash being held overseas.

Apple plans to take advantage of that provision to bring back more than $250 billion in offshore cash, generating a tax bill of roughly $38 billion.

The Cupertino, California, company says it will announce the location of a second campus devoted to customer support later this year.

 
…

Голова правління національної акціонерної компанії «Нафтогаз України» Андрій Коболєв не вважає, що зобов’язання закупівлі газу в «Газпрому» є «негативним аспектом».

«З цього року буде необхідно вибирати мінімальні обсяги (закупівлі газу в «Газпрому», визначені Стокгольмським арбітражем – ред.). Ми в «Нафтогазі» не маємо підстав вважати негативним аспектом зобов’язання «Газпрому» продати нам 5 мільярдів кубометрів газу за ціною, нижчою за європейську. Це позитивний аспект як з точки зору НАК, так і кінцевих споживачів», – сказав Коболєв.

Він додав, що «Нафтогаз України» продовжить закупівлі газу в Європі.

22 грудня 2017 року «Нафтогаз» повідомив, що Стокгольмський арбітраж відхилив вимоги російської компанії «Газпром» до «Нафтогазу України» щодо принципу «бери або плати» на суму 56 мільярдів доларів за 2009-2017 роки. Як заявляли в українській компанії, «Нафтогаз» також домігся зменшення майбутніх обов’язкових річних обсягів закупівлі газу в «Газпрому» більш ніж у 10 разів відповідно до фактичних потреб в імпорті газу.

Водночас у російському «Газпромі» заявили, що Стокгольмський арбітраж зобов’язав компанію «Нафтогаз України» сплатити два мільярди доларів простроченої заборгованості й щорічно відбирати й оплачувати 5 мільярдів кубометрів газу.

31 травня 2017 року «Нафтогаз України» заявив, що отримав окреме рішення Стокгольмського арбітражу у провадженні проти «Газпрому» за контрактом на постачання газу. За повідомленням компанії, Стокгольмський арбітраж задовольнив вимогу «Нафтогазу» щодо перегляду ціни в контракті на постачання газу з «Газпромом» із урахуванням ринкових умов, а також скасував вимоги російського монополіста за умовою «бери або плати» і повністю скасував заборону на реекспорт Україною газу. За принципом «бери або плати», прописаним у контракті 2009 року, Україна мала щороку купувати 52 мільярди кубометрів газу або, навіть не купуючи, оплачувати його вартість.

У «Газпромі» ж тоді заявили, що принцип «бери або плати» не скасований, але не пояснили цю позицію.

2014 року компанія «Нафтогаз України» звернулася до Стокгольмського арбітражу з вимогою про перегляд контракту щодо ціни газу з російським «Газпромом» а також окремо про перегляд контракту на транзит газу і про компенсації у зв’язку з недостатніми обсягами прокачування. «Газпром», у свою чергу, подав до Стокгольмського арбітражного суду три позови проти «Нафтогазу».
…

In a modest apartment near a Caracas slum, nutrition professor Nancy Silva and four aids spread rich, dark Venezuelan cocoa on a stone counter to make chocolate bars to be sold in local shops that cater to the crisis-hit country’s dwindling elite.

Like some 20 recently launched Venezuelan businesses, Silva uses the country’s aromatic cocoa to make gourmet bars of the kind that can fetch more than $10 each in upscale shops in Paris or Tokyo.

The oil-rich but recession-devastated nation’s Byzantine bureaucracy makes large-scale exports nearly impossible for small businesses.

As a result, most of her bars are sold locally for less than one U.S. dollar – well out of reach of millions of Venezuelans who earn less than that in a week, but reasonably priced for the well-heeled of an increasingly two-tiered economy.

But entrepreneurs who have launched new Venezuelan chocolatiers in recent years say producing gourmet bars allows them to make a living amid the collapse of a socialist economic system – and dream of exports as a golden opportunity down the road.

“Our real oil is cocoa,” said Silva, owner of the chocolatier Kirikire that in 2014 won an award from the prestigious Salon du Chocolat fair in Paris. “In Europe, they’re snatching up these bars.”

Silva faces constant operational challenges due to hyperinflation and Soviet-style product shortages. But these are offset by steady access to high-quality aromatic cocoa from a cocoa farm in eastern Venezuela owned by her family.

Her bars are sold in high-end Caracas grocery stores, delis and liquor stores, where everything from staple products to luxury goods are amply available to the well-heeled – in contrast to the long lines and bare shelves of most shops.

Silva is now focused on getting her chocolate to France, where she once sold a single kilo of her chocolate for the equivalent of 80 euros ($96), which is today the equivalent of five years of minimum wage salary in Venezuela.

Standing in her way are a range of permits such as customs authorizations and sanitary inspections that take months in Venezuela’s notoriously inefficient bureaucracy.

The Information Ministry did not respond to a request for comment.

Venezuela was the world’s leading cocoa producer at the end of the 18th century when it was still a Spanish colony, according to Jose Franceschi, who has written books about cocoa and whose great-grandfather founded the Venezuela’s gourmet Franceschi chocolate brand.

But the cocoa trade was overshadowed by the rise of the oil industry in the early 20th century. Critics say it was further weakened by state takeovers under late President Hugo Chavez, who boosted state involvement in the economy as part of promises to create a society of equals.

But since the crash of oil markets, Venezuela has become a sharply divided society where oil engineers and public hospital doctors rarely make as much as $50 a month while a small group citizens with access to even modest amounts of hard currency can afford fine dining and gourmet products.

Bean to Bar

Output of 16,000 tons per year is less than 1 percent of the global total, and less than 10 percent of the production of regional heavyweights Brazil and Ecuador.

Many gourmet bars made in the United States now prominently advertise the use of Venezuelan cocoa but generally mix in other less-desirable cocoas. Bars made in Venezuela, in contrast, are made with 100 percent local cocoa.

This gives the new Venezuelan chocolatiers a leg up as they tap into the global ‘bean-to-bar’ movement, in which chocolate makers oversee the entire process of turning cocoa fruit into sellable treats.

On the second floor of an old mansion in Caracas, economist and chef Giovanni Conversi has been making specialty chocolate for two years under the name Mantuano.

Sprinkled with sea salt or aromatic fruits from the Amazon, the chocolate bars are a hit in London, Miami and Panama City in specialty chocolate stores or shops that specialize in Latin American food.

He and four assistants produce 9,000 bars a month in Caracas. He has opened a factory in Argentina that buys cocoa from small-scale producers like Yoffre Echarri, who two decades ago inherited his grandfather’s plantation in the beach town of Caruao.

He opens the fruit to remove the beans and the accompanying sweet white pulp, which has a strong aroma of tropical fruit and then ferments the mixture in plastic bags buried underground.

That process retains more aroma than the traditional method of fermenting in wooden boxes.

He sells the beans to Venezuelan chocolatiers for less than $1 per kilo, about half the international price.

“Clients can’t get enough. Those who three months ago were asking for five kilos now call for 50,” said Echarri.

Many small chocolatiers only manage to get products to foreign markets by carrying them in suitcases on commercial flights, though well-established brands such as El Rey have formal export operations to the United States and Europe.

In Japan, El Rey is represented by the food division Japanese trading house Mitsubishi. Mitsubishi did not immediately respond to a request for comment.

Still, some 1,700 people have recently studied artisanal chocolate at the Simon Bolivar University.

“Everyone wants to give it a shot,” said Rosa Spinosa, the head of the program created two years ago.

($1 = 0.8363 euros)
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El Salvador is discussing a deal with Qatar under which Salvadoran migrants facing the loss of their right to stay in the United States could live and work temporarily in the Middle Eastern country, the government of the Central American nation said on Tuesday.

Last week, U.S. President Donald Trump’s administration said that as of September 2019, it would eliminate the temporary protected status, or TPS, that allows some 200,000 Salvadorans to live in the United States without fear of deportation.

Presidential communications chief Eugenio Chicas said El Salvador was in talks to see how Salvadorans could be employed in Qatar, a wealthy country of some 2.6 million people that is scheduled to host the soccer World Cup in 2022.

“The kingdom of Qatar … has held out the possibility of an agreement with El Salvador whereby Salvadoran workers could be brought across in phases (to Qatar),” Chicas told reporters.

After an unspecified period, the Salvadorans would return home, Chicas added, without saying how many workers the program could encompass.

El Salvador’s foreign minister, Hugo Martinez, is in Qatar until Friday and said in a statement that Salvadorans could work in engineering, aircraft maintenance, construction and agriculture.

Martinez also noted that Qatar had offered to provide health services to the Central American country, which is struggling with a weak economy and gang violence.
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Car dealerships in Mexico City have kicked off the new year offering “clearance sales” and free insurance as 2017 models collect dust on their lots, a reminder that consumer nerves over high interest rates could slow the economy ahead of elections.

The first drop in auto sales in eight years is the most visible sign that the great Mexican shopper, the heart and soul of Latin America’s second-largest economy, is feeling the pinch of inflation at a 16½-year high and a battered peso.

A government decision to scrap fuel subsidies last year has made running a car more expensive, while the central bank’s battle with inflation has put car loans out of reach for many.

“If I’m going to buy a new car and then not be able to fill it up with gasoline, then it’s better to sit tight,” said Jaime Asrael, as he window-shopped outside a Chevrolet dealership in the central Guerrero neighborhood of the capital.

Beyond cars, consumer confidence is slipping more broadly. The consumer confidence index declined to 88.4 in December from 88.8 the previous month, the statistics agency said last week.

​Ruling party in trouble

This has worried government officials who are trying to persuade voters to re-elect the ruling Institutional Revolutionary Party (PRI) in July. Experts doubt increased public spending in the campaign will be enough to boost confidence much in Mexico, where private consumption accounts for a whopping two-thirds of gross domestic product.

Leftist opposition candidate Andres Manuel Lopez Obrador has enjoyed a double-digit poll lead over his ruling-party rival in recent surveys.

“It certainly helps his case. The fact that we’ve seen this jump in inflation squeezing real incomes, that all [goes] into the mix,” said Neil Shearing, chief emerging markets economist at Capital Economics.

A blow such as an eventual collapse of talks to renegotiate the North American Free Trade Agreement could make more consumers snap their wallets shut.

“I wouldn’t be surprised if we see a more significant deceleration of private consumption” considering inflation’s impact on wages, tighter credit conditions, and NAFTA and election concerns, said Goldman Sachs economist Alberto Ramos.

“Instead of going on vacation for two weeks, they go one week. Instead of buying the automobile this year, they wait a little bit to see how things go. … That is serious in the sense that private consumption has been so far the main engine of growth,” said Ramos.

Domestic car sales in 2017 fell 4.6 percent from a year earlier, according to data from the Mexican Auto Industry Association. It was the first drop in annual auto sales since the global financial crisis of 2008-09.

​Inflation blamed

“Inflation is what hit us the most. And most people want to buy with credit, and financial institutions and banks weren’t able to cover the market,” said Jose Luis Salas, general manager at Grupo Surman, which runs 13 General Motors dealerships in the country.

“That’s what caused the drop in new car sales,” he added. 

Wider retail sales slowed to growth of 7.7 percent through November, not far above the 2017 inflation rate of 6.77 percent and below the average growth of some 10 percent the prior two years.

For years, stable prices compensated for Mexico’s sluggish economic growth, so accelerating inflation has caused outrage.

Sporadic looting broke out this month after reports that gasoline and food prices were about to be hiked, and angry posts filled social media, echoing unrest last year after the government liberalized fuel prices.

The central bank in November revised downward its 2017 economic growth forecast, blaming the NAFTA talks, the impact of storms and two major earthquakes in September, and a drop in domestic oil production to the lowest in more than 20 years.

It forecast economic growth of 1.8 percent to 2.3 percent in 2017 and 2 to 3 percent in 2018.

The bank, which in December hiked its key rate to a consumption-sapping, nearly nine-year high of 7.25 percent, said it expected a “nascent deceleration” in consumer spending. It is widely expected to raise rates again in February, according to bets in the interest rate swap market.
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