Malaysia’s new government to scrutinize past economic policies under the now ousted Najib Razak administration is prompting analysts to warn of a slide in investment and growth in one of Southeast Asia’s top economies.

The new leadership has appointed a group of prominent citizens, an eminent persons group, to come up with a new policy agenda within the next 100 days that will, among other things, review mega investment projects that have been key drivers of economic growth.

The new government has also established a special task force as corruption allegations over the abuse of funds in a sovereign wealth fund set up by Najib, and ordered a review of political representation on Malaysia’s largest government investment firms, including the main sovereign and pension funds.

Leading the eminent persons group is a former finance minister, Daim Zainuddin, and it includes a former central bank governor, Zeti Akhtar Aziz, a former president the Malaysian energy giant, Petronas, an economist and a leading businessman.

Gareth Leather, senior Asia economist for Capital Economics, an economic research group in London, says a key issue is whether Malaysia’s new government will remain united in the face of moves toward economic reforms.

“[The coalition] when it was formed was very much a coalition against Najib rather than anything pro-reform. So the first real test they have got is to see if there is enough cohesion within that coalition to push through [economic] reforms,” Leather told VOA.

A key campaign promise by new Prime Minister Mahathir Mohamad’s Pakatan Harapan — or Alliance of Hope — was to abolish a value added, goods and services tax.

While the tax, known as GST, was unpopular among voters, analysts say the revenue enabled the government to diversify its tax base from an over-reliance on corporate tax and the oil industry.

Immediately after the vote, financial markets reacted nervously to the scrapping of the tax and questions of the impact the measure would have on the government’s budget. Contributions from the GST have reached $10.6 billion.

Malaysian Finance Ministry officials have not said when the tax would be abolished, and analysts predicted a tough road ahead for the plan.

“To raise as much money as the GST while getting rid of the GST is going to be quite difficult. I don’t think that they can really go ahead and form a U-turn a d decide to keep it — so it’s going to be quite tricky managing it for them,” Leather said.

Analysts say financial markets are also closely watching steps in the new investigations centered on former leader Najib, accused of siphoning off billions of dollars from the 1MDB wealth fund. He firmly denies the charges. The U.S. Department of Justice alleges some $4.5 billion was misappropriated from the 1MDB, originally set up by Najib.

At least six countries, including the U.S., Singapore and Switzerland, are investigating the allegations of corruption. The new government has vowed to undertake fresh investigations into the case. Last weekend Malaysian immigration authorities refused Najib and his family the right to leave the country pending the investigations.

Unlike abolishing the sales tax, Leather predicts the corruption investigations will have a positive effect on the economy.

“Hopefully what it will do is it will bring to light a lot of the problems, institutional problems that have been holding Malaysia’s economy back over the past few years. It would have been shocking had Najib been able to steal this election,” he said.

But observers say a review of the multi-billion dollar mega projects, especially those undertaken by China, may have a major impact. The Chinese have invested more than $3.38 billion in Malaysia — and China is the leading foreign investor ahead of the U.S., Japan and Singapore. Chinese investments include manufacturing, real estate and sovereign wealth fund bonds.

China has also supported rail infrastructure in Malaysia that is linked to the One Belt One Road, a Beijing initiative that envisions building a network extending throughout Asia.

Analysts say there is a risk that investment — a key driver of growth — may fall sharply over the next two years.

Economic growth, with quarterly figures due this week, has been expanding at between 5.5 percent and 6 percent over the past year, aided by exports and foreign investment.

During the election campaign, Mahathir rallied against Chinese investment and promised a detailed review of projects involving foreign countries.

Pavida Pananond, a professor of international business at Bangkok’s Thammasat University, also predicts that Malaysia faces key economic challenges, especially after more than 60 years of government led by the monolithic United Malay National Organization coalition.

Pavida, in emailed comments to VOA, said it “remains to be seen how much political power can be remained from [the] economic sphere” after such a length of time.

“While the intention to scrutinize major projects and to investigate corruption should be well received, major changes will not come easily as the Malaysian economy and business have long been dominated by government linked or government supported corporations and entities,” she said.

On a positive note, she added, “the euphoric excitement toward changes, equality and transparency, should be welcome, as they bode well for what is needed in the new era of efficiency — and innovation-driven economy that Malaysia aspired to achieve.”

 
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Most U.S. insurance companies have not adapted their strategies to address the dangers of climate change, making them likely to raise rates or deny coverage in high-risk areas, said a study released Tuesday.

With predictions of an above-average Atlantic hurricane season approaching, thousands of people could be unable to afford insurance protection or lose it altogether, said the Canadian research study published in the British Journal of Management.

Scientific consensus holds that climate change increases the intensity and frequency of extreme weather, from hurricanes to flooding. Last year, three record hurricanes struck the Gulf of Mexico and the Caribbean, causing billions of dollars’ worth of damage.

Yet insurance and reinsurance companies overwhelmingly continue to treat storms as “anomalous rather than correlated to climate change,” the study said.

“Insurers that ignore climate change will not put away enough money to cover their claims. To recoup those losses, they’ll have to raise rates or pull coverage from high-risk areas,” said lead author Jason Thistlethwaite, an assistant professor of environment and business at the University of Waterloo.

They will face whopping payouts associated with disasters, he said.

So long, coverage

“When this shift happens, thousands of people will lose coverage or it will be unaffordable,” he said.

Insured losses hit an all-time high between 2004 and 2014, according to a 2015 analysis by reinsurer Swiss Re.

Insurance companies use reinsurance to minimize their risk. 

But in 2015, only 3 percent out of a sample of 178 U.S. property insurers and reinsurers were taking into account climate change in corporate governance, underwriting and investment, the study found.

However, the number of companies factoring in climate change in at least one area of operation doubled to about three dozen from 2012 to 2015, it said.

With storm-related payouts soaring, insurance companies may go out of business or lose investors, Thistlethwaite said.

A shrinking insurance market will drive up costs to consumers, he said.

The researchers analyzed insurers in California, Connecticut, Minnesota, New York, Washington and New Mexico.

Less than a month away, the Atlantic hurricane season has been predicted to be “above average” by Colorado State University meteorologists. The season runs from June 1 to November 30.
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Mexico’s central bank said Tuesday that it was creating a cybersecurity unit, following a hack on a domestic payments system at the end of April that affected Mexican banks.

The central bank said in a notice in the government’s daily gazette that the new unit would design and issue guidelines on information security for the country’s banks, which are supervised by the central bank.

Central bank Governor Alejandro Diaz de Leon Carrillo said Monday that the country had seen an unprecedented attack on payment system connections and that he hoped that measures being taken would stop future incidents.

The attack on Mexican banks is similar to one of the biggest-ever known cyber heists, when thieves stole $81 million from Bangladesh’s central bank in 2016, said Fermin Gonzalez, head of forensic services at PricewaterhouseCoopers in Mexico.

“Perhaps, some financial institutions perceived the attacks in Bangladesh as something very distant,” he said, adding that some Mexican banks may not have invested in sufficient security measures.

“But criminals look for vulnerability and once they see it they are going to exploit it.”

The central bank has not identified which banks were hit by the cyberattack or detailed how much thieves were able to wire out to bogus accounts in other banks.

A source close to the government’s investigation said more than 300 million had been siphoned out of banks, but it was not clear how much had subsequently been taken out in cash withdrawals.

Bank Grupo Financiero Banorte said Tuesday it does not expect the attack to hit financial results.
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U.S. lawmakers on Tuesday rejected any plan by President Donald Trump to ease restrictions on China’s ZTE Corp, calling the telecommunications firm a security threat and vowing not to abandon legislation clamping down on the company.

Trump on Monday had defended his decision to revisit penalties on ZTE for flouting U.S. sanctions on trade with Iran, in part by saying it was reflective of the larger trade deal the United States is negotiating with China.

“I hope the administration does not move forward on this supposed deal I keep reading about,” Republican Senator Marco Rubio said. Bilateral talks between the world’s two biggest economies resume in Washington this week.

The Wall Street Journal has reported Beijing would back away from threats to slap tariffs on U.S. farm goods in exchange for easing the ban on selling components to ZTE.

“They are basically conducting an all-out assault to steal what we’ve already developed and use it as the baseline for their development so they can supplant us as the leader in the most important technologies of the 21st century,” Rubio said at a Foreign Relations Committee hearing on Asia policy.

Trump had taken to Twitter on Sunday with a pledge to help the company, which has suspended its main operations, because the penalties had cost too many jobs in China. It was a departure for a president who often touts “America First” policies.

The Commerce Department in April found ZTE had violated a 2017 settlement created after the company violated sanctions on Iran and North Korea, and banned U.S. companies from providing exports to ZTE for seven years.

U.S. companies are estimated to provide 25 percent to 30 percent of components used in ZTE’s equipment, which includes smartphones and gear to build telecommunications networks.

Cybersnooping?

The suggestion outraged members of Congress who have been pressing for more restrictions on ZTE. Some U.S. lawmakers have alleged equipment made by ZTE and other Chinese companies could pose a cyber security threat.

​”Who makes unilateral concessions on the eve of talks after you’ve spent all this time trying to say, correctly in my view, that the Chinese have ripped off our technology?” Senator Ron Wyden, the senior Democrat on the Senate Finance Committee, which oversees trade policy, told Reuters.

Wyden, who is also on the Intelligence Committee, was one of 32 Senate Democrats who signed a letter on Tuesday accusing Trump of putting China’s interests ahead of U.S. jobs and national security.

The company has denied wrongdoing.

Republican Representative Mac Thornberry, chairman of the House Armed Services Committee, said at a Bloomberg event on Tuesday he did not expect lawmakers would seek to remove a ban on ZTE technology from a must-pass annual defense policy bill making its way through Congress.

“I confess I don’t fully understand the administration’s take on this at this point,” Thornberry said. “It is not a question to me of economics, it is a question of security.”

Another Republican, Senator John Kennedy, defended Trump, saying the president’s approach is part of a larger set of negotiations with China.

“He didn’t get up one day and go, ‘I think I’ll change my mind on ZTE.’ I think it’s part of a larger issue, and part of a larger set of negotiations,” Kennedy told reporters.
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Mexico’s economy minister said that he saw diminishing chances for a new North American Free Trade Agreement ahead of a Thursday deadline to present a deal that could be signed by the current U.S. Congress.

U.S. House Speaker Paul Ryan has said that the Republican-controlled Congress would need to be notified of a new NAFTA deal by Thursday to give lawmakers a chance of approving it before a newly elected Congress takes over in January.

“It is not easy. We do not think we will have it by Thursday,” Mexican Economy Minister Ildefonso Guajardo told broadcaster Televisa on Tuesday.

But Canadian Prime Minister Justin Trudeau struck a more upbeat tone, telling reporters in Calgary a few hours later, “There is very much an eminently achievable outcome … and we are very close.”

“We are going to continue to remain optimistic,” said Trudeau. He met with U.S. President Donald Trump on Monday and discussed the possibility of bringing NAFTA talks to a “prompt conclusion.”

Negotiators from the United States, Mexico and Canada have been in intense talks since last month to try to reach a deal before U.S. congressional elections in November. Mexico’s presidential vote on July 1 also complicates the process.

“We will keep negotiating, and in the moment that we have a good negotiation, we can close the deal … independent of which Congress (the current or new) that will vote on it,” said Guajardo.

Mexico’s peso sank to its weakest level in over a year on Tuesday, and the country’s benchmark stock index fell about 1 percent to its lowest since early April.

Guajardo said the talks could be concluded before or just after the July 1 vote.

Leftist Andres Manuel Lopez Obrador is leading polls to win the presidential race, and his pick for economy minister, Graciela Marquez, said last month his administration would be willing to accept a deal struck before the election.

If that is not possible, she said it would be better to complete the negotiation after the next government takes office at the start of December. Guajardo said the next government’s team would need to be involved in any talks after July 1.

Guajardo said negotiators were getting close to reaching a deal on rules for the auto  sector under NAFTA.

However, talks still faced the hurdles of U.S. demands for a sunset clause that would allow NAFTA to expire if it is not renegotiated every five years, and the elimination of settlement panels for trade disputes.

More flexibility was needed for a deal, Guajardo said. Kenneth Smith, the chief Mexican negotiator at the talks, said that for Mexico there were no deadlines.

Irrespective of the Thursday deadline mentioned by Ryan,there was still time to ratify anew NAFTA this year, Smith told broadcaster Enfoque Noticias.

Hanging over the talks is Trump’s threat to impose steel and aluminum tariffs on its trade partners. Mexico and Canada have been spared so far, although the latest exemption for them will run out at the end of May.

Smith said his government would retaliate with equivalent measures “immediately” if tariffs or quotas were imposed.
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Україна протягом наступних п’яти років отримає 125 мільйонів доларів від Агентства США з міжнародного розвитку (USAID) для допомоги Донбасу та навколишнім регіонам, які постраждали від збройного конфлікту, повідомляє прес-служба організації.

«Мета цієї допомоги – сприяти усуненню впливу кремлівської агресії, яка чинить розбрат, та подоланню наслідків збройного конфлікту, що нині триває у регіоні», – заявив керівник бюро USAID у справах країни Європи та Євразії Брок Бірман під час прес-конференції у Слов’янську Донецької області.

Згідно з повідомленням, гроші мають бути використані на підтримку подальшої стабілізації регіону, підвищення стійкості місцевої економіки, прискорення соціально-економічного зростання та тіснішого згуртування Донбасу й навколишніх територій.

Збройний конфлікт на Донбасі триває від 2014 року після російської анексії Криму. Україна і Захід звинувачують Росію у збройній підтримці сепаратистів. Кремль відкидає ці звинувачення і заявляє, що на Донбасі можуть перебувати лише російські «добровольці». За даними ООН, за час конфлікту загинули понад 10 тисяч людей.
…

People nixing vacations to Hawaii’s Big island has cost the tourism industry millions of dollars as the top attraction, Kilauea volcano, keeps spewing lava.

Cancellations from May through July have hit at least $5 million, said Ross Birch, executive director of the island’s tourism board.

The booking pace for hotels and other activities, such as tours for lava viewing, zip lines and glass bottom boats have fallen 50 percent. A handful of cruise ships have also decided not to come into port even in Kona on the west side of the island, about 80 miles (129 kilometers) away from the volcano.

This is the “first leak we’re seeing out of the bucket,” Birch said.

Tourism is one of Hawaii’s biggest industries and a big part of the local economy. The Big Island topped other islands in the archipelago pulling in $2.5 billion in revenue last year. 

On Monday, another fissure spewing lava and unhealthy gas opened up, and a crack in the Earth that emerged a day earlier was sending molten rock on a slow run for the ocean, officials said.

The National Weather Service has warned residents of “light ashfall” throughout the day in Kau, the island’s southernmost district, after a burst of volcanic emissions around 9 a.m. 

Nearly 20 fissures have opened since the Kilauea volcano started erupting 12 days ago, and officials warn it may soon blow its top with a massive steam eruption that would shoot boulders and ash miles into the sky. 

A fissure that opened Sunday led authorities to order 10 people to flee their homes, Hawaii County Managing Director Wil Okabe said. Overall, nearly 2,000 people have been told to evacuate since May 3, and lava has destroyed more than two dozen homes. 

The U.S. Geological Survey’s Hawaiian Volcano Observatory said the flow from the crack that emerged Sunday was heading on a path that would take it to the ocean, about 2 miles (3 kilometers) away. No homes or roads were threatened by the flow.

Lava on Sunday spread across hundreds of yards of private land and loud explosions rocked the neighborhood not far from the Leilani Estates subdivision, where more than a dozen other active vents opened over the past week.

Nearby resident Richard Schott, 34, watched from a police checkpoint as the eruption churned just over a ridgeline and behind some trees.

“I’ve actually seen rocks fly over the tree line, and I can feel it in my body,” Schott said. “It’s like a nuclear reaction or something.”

Few fissures, ground deformation and abundant volcanic gases indicate eruptions on the eastern flank of Kilauea are likely to persist, the Hawaiian Volcano Observatory said.

“The appearance of the fissures in the past couple of days does not change the overall picture or concern,” Geological Survey scientist Steve Brantley said.

Christian and Maritza Ricks, who moved to the area from California in April, stopped at the side of the road to watch and listen to the latest eruption.

“I guess it’s just part of living on the island,” Ricks said.

He said he wasn’t really afraid of the destruction happening around him. 

“In a way, it’s kind of exciting to see what’s going on and be this close to it,” Christian Ricks said.

The Hawaiian Volcano Observatory reported a fissure opened Saturday just east of the Puna Geothermal Venture energy conversion plant, where steam and hot liquid are brought up through underground wells and the steam feeds a turbine generator to produce electricity. 

As a precaution, plant workers last week removed 50,000 gallons (189,265 liters) of a flammable liquid stored at the site.
…

Uber Technologies’ growth has slowed as a series of scandals has allowed the ride-hailing company’s chief U.S. competitor, Lyft, to grab more market share, digital research firm eMarketer said in a report on Monday.

The research firm has lowered its forecasts for Uber’s growth for the next several years. It projects 48 million U.S. adults will use Uber at least once this year, up 18 percent from last year but well off eMarketer’s earlier forecast of more than 51 million.

EMarketer based its analysis on data from Uber and Lyft, such as trip numbers and app downloads, as well as customer surveys from researchers at JP Morgan and other firms.

Series of scandals

The report quantifies the effect of a series of scandals at Uber last year, which included an internal probe of sexual harassment and workplace behavior; a U.S. Department of Justice investigation into whether Uber managers violated U.S. laws against bribery of foreign officials; a lawsuit by Alphabet alleging trade secrets theft that Uber settled for $245 million; and the departure of Uber’s chief executive officer, who was pushed out by investors concerned about the growing list of problems.

Uber did not respond to a request for comment.

Meanwhile, Lyft has grown quickly, adding more than 160 cities last year, benefiting from Uber’s tarnished image and as a later entry into markets where people are already familiar with ride-hailing services, eMarketer said. On Monday, Lyft said it has 35 percent of the national ride-hailing market, and in 16 U.S. markets its share exceeds 40 percent.

“Uber’s brand image took an even bigger hit than expected as it grappled with a series of scandals and PR disasters in 2017,” said Shelleen Shum, eMarketer’s forecasting director. “Lyft, which had been rapidly expanding its coverage, seized on the opportunity to brand itself as a more socially conscious alternative.”

Lowered forecast

The research firm said it has lowered its forecast for Uber’s growth every year through 2021, reflecting the company’s competitive disadvantage after last year’s problems. EMarketer’s previous projections pegged the number of Uber users in 2017 at about 44 million, but the actual number ended up being fewer than 41 million.

Even so, Uber remains the dominant U.S. ride-hailing company. At the end of this year it will have about 77 percent of the market, down from 90 percent in 2016, while Lyft will have 48 percent, up from nearly 29 percent, according to eMarketer.

EMarketer’s projections for 2022 show Uber with nearly 74 percent of customers and Lyft with 59 percent of ride-hailing customers. Some people use both services.

Lyft operates in roughly the same number of U.S. cities as Uber, as well as in Toronto. Uber operates across the globe, although it has retreated from Southeast Asia, Russia and China after losing billions of dollars competing with local rivals.
…

U.S. President Donald Trump urged for a quick conclusion to a renegotiated North American Free Trade Agreement during a phone call Monday with Canadian Prime Minister Justin Trudeau. 

The White House said Trump “underscored the importance” of quickly reaching a deal, while Trudeau’s office said the two spoke of the “possibility of bringing the negotiations to a prompt conclusion.”

The talks have come under increased pressure to quickly produce a deal after U.S. House Speaker Paul Ryan said this week he would need to be notified of a new agreement by May 17 to give the current Congress a chance to pass it this year.

Canada, the United States and Mexico are renegotiating their 24-year-old free trade pact in a process triggered by the Trump administration. Trump has been highly critical of the 1994 deal, blaming it for the loss of millions of manufacturing jobs that hurt the U.S. economy.

He has repeatedly threatened to leave the pact if a satisfactory updated agreement is not reached.

U.S. Commerce Secretary Wilbur Ross said on Monday that none of the contentious issues the three countries have been discussing appear to have been resolved. Ross, who is not directly involved in the NAFTA talks, told reporters in Washington Monday that the big issues are still a “work in progress.”

Last week, the latest round of NAFTA talks ended in Washington without any major breakthroughs on how to renegotiate the deal. Those talks were the first to involve all three of the top officials in the negotiations — U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo.
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Президент США Дональд Трамп заявив 13 травня, що він сам і голова Китаю Сі Цзіньпін працюють над тим, щоб китайська телекомунікаційна компанія ZTE «могла повернутися в бізнес швидко».

«Китайський голова Сі і я співпрацюємо, щоб велика китайська телефонна компанія ZTE могла повернутися в бізнес швидко. Занадто багато робочих місць у Китаї втрачено. Міністерство торгівлі отримало вказівку вирішити це питання!» – написав Трамп у мережі Twitter.

Минулого тижня китайська технологічна компанія призупинила основну діяльність, після того як міністерство торгівлі США заборонило американським компаніям здійснювати поставки для ZTE.

Компанія ZTE є одним із найбільших постачальників телекомунікаційного обладнання в світі і покладається на поставки від таких американських компаній, як Qualcomm і Intel, а також використовує програмне забезпечення Google.

Претензії американських регуляторів до ZTE виникли через імовірне постачання продукції цієї компанії до Північної Кореї та Ірану.
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Президент київського футбольного клубу «Динамо» Ігор Суркіс спростував інформацію про те, що клуб може бути проданий іншим власникам.

«Ці чутки розповсюджуються спеціально, щоб дестабілізувати обстановку. Так, ніхто не приховує, що сьогодні важка фінансова ситуація , але не тільки у «Динамо», а в країні, в цілому. Зараз важче, ніж було кілька років тому, але нічого страшного, ми впораємося. Клуб буде функціонувати», – цитує агентство «Інтерфакс» офіційний сайт клубу.

Ігор Суркіс, виступаючи у неділю після покладання квітів до пам’ятника тренера Валерія Лобановського, заявив, що зараз влилося багато молодих гравців у команду, він переконаний, що з часом вдасться створити боєздатну команду, яка буде домагатися серйозних результатів.

«Футбол не буває без поразок, але також він не буває і без перемог. А з приводу того, що я маю продати клуб або віддати його комусь, це вирішувати не тим людям, які нічого не вклали в футбол і нічого для нього не зробили. Запевняю вас, «Динамо» Київ було, є і буде», – заявив Суркіс.

Раніше з’явилася інформація про те, що за останні півроку потенційні покупці кілька разів виходили на керівництво «Динамо».

«Щодо того, що Ярославський (екс-власник футбольного клубу «Металіст») або китайці, або хтось інший хоче купити «Динамо», то це не обговорюється, так як воно не продається», – цитує віце-президента УЄФА Григорія Суркіса, брата президента клубу «Динамо» Київ прес-служба київського клубу.

 
…

U.S. President Donald Trump said Sunday that he is trying to find a way to let giant Chinese technology firm ZTE “to get back into business, fast” after the U.S. had barred the company from using American components.

“Too many jobs in China lost,” Trump said in a Twitter comment days after ZTE announced it had ceased “major operating activities” because of the cutoff of U.S.-made parts that provide a quarter or more of the parts needed to build its wireless stations, optical fiber networks and smartphones.

Trump has often complained about China stealing U.S. jobs, but said he is working with Chinese President Xi Jinping to ease the economic fallout at ZTE and had ordered the U.S. Commerce Department “to get it done!”

ZTE halted manufacturing at its Shenzhen factory after the Commerce Department blocked access to American-made components until 2025, contending that ZTE had failed to punish its workers for violating U.S. trade controls against North Korea and Iran.

The U.S. fined ZTE $1.2 billion last year but said last month the company had failed to live up to the agreement and lied about punishing the employees believed to be involved in skirting the sanctions, instead paying them bonuses.

ZTE, with 75,000 employees and business in more than 160 countries, is the No. 4 smartphone vendor in the U.S. When the U.S. sanctions were announced in April, ZTE said it had worked to improve its compliance with the trade bans and sent the U.S. commerce agency information to support its request to end the U.S. export ban.

Trump’s move to help the Chinese technology firm could signal a thaw in trade relations between the world’s two biggest economies, the U.S. and No. 2 China.

The U.S. leader has proposed tariffs on as much as $150 billion in Chinese imports, and Beijing has responded in kind. The two countries have held trade talks during the tariff standoff, but there has been no immediate resolution to call off the tariff hikes.
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