KEAN SVAY, KANDAL PROVINCE, Cambodia — Five years ago, Lun Sam Ath took out a $12,000 loan to build a new wooden house and repay a previous loan that she had used to buy a motorbike.

The 45-year-old mother of five owed $200 a month to Amret, one of the country’s largest microfinance institutions (MFI), which she figured she could repay with help from her older daughter’s earnings from a garment factory job. But then her husband contracted hepatitis, and treatment was costly.

After her husband died, Lun Sam Ath, who made about $180 a month in a garment factory, fell behind on payments. So, she decided to sell their house — along with a 10-by-20-meter plot of land. But with Cambodia experiencing a post-COVID real estate slump, it remains unsold.

The MFI credit officers seeking repayment started pressuring Lun Sam Ath.

“They would come to my home with several people, three to five motorbikes, and also bring the village chief with them,” she said during a recent interview with VOA Khmer.

She couldn’t handle the stress and shame. Last June she abandoned her home and rented a room for $40 a month, living with her three younger children, ages 9 to 14.

In February, she moved to the capital, Phnom Penh, where she sells face masks on the street. She screens phone calls “since I am afraid the bank agents will call me” she said. “They [the MFI] can take my land and sell it now to pay off the loan.”

Lun Sam Ath’s loan was one of nearly 2 million outstanding microfinance loans in Cambodia as of the end of 2023, according to the Cambodia Microfinance Association (CMA). Cambodia’s population is about 16.5 million, and researchers say the ratio of microfinance loans per person is the world’s highest.

The MFI sector was once hailed as a key tool for lifting Cambodians out of poverty by injecting capital into small businesses or farms unsuitable for traditional loans. Instead, thousands of Cambodians found themselves in a debt trap, taking out increasingly burdensome loans to pay back other loans, and taking increasingly extreme measures to escape the cycle of indebtedness. Substantial research conducted in Cambodia and in other developing nations found that while microloans helped many, especially women, the small loans have also made lives, like Lun Sam Ath’s, worse.

Advocates say the MFIs in Cambodia frequently fail to clearly explain the risks of these loans to borrowers, who are often financially illiterate and use their land as collateral.

Two local rights groups, Licadho and Equitable Cambodia, released a report, Debt Threats: A Quantitative Study of Microloan Borrowers in Cambodia, based on a survey of 717 households in Kampong Speu province, which is about 50 kilometers from Phnom Penh.

“Widespread over-indebtedness has led to significant numbers of serious human rights abuses,” the study said.

It found 6.1% of households had sold land to repay a debt, while about 3% of households had a child drop out of school specifically due to a loan, often to start working to help repayment.

The study, released in August, also found a spike in people increasing their borrowing to repay other loans. In 2012, 3.45% of loans went to repaying existing loans, which increased to 34.8% of loans in 2022.

Am Sam Ath, operations director at Licadho, called for urgent intervention from MFIs and the government to protect borrowers. But he said loan officers employed by MFIs were often perpetuating the problem.

Rather than approving loans for income-generating activities, these institutions were issuing loans for house repairs, medical expenses or repaying other loans.

And Cambodia is seeing increasing reports of credit officers resorting to intimidation or other unscrupulous tactics to compel borrowers to repay their debt, Am Sam Ath told VOA Khmer in January.

That month, the CMA released a study touting the “transformative impact” of microfinance loans.

Kaing Tongngy, a spokesperson for the association, said there were more than 2 million borrowers across the country, “so it is unavoidable that some clients were unable to pay.”

The CMA impact study, conducted by development research agency M-CRIL, found that 31% of the 3,200 microfinance borrowers surveyed experienced substantial economic benefit and life improvements, while 36% reported some improvement over the past five years.

And while nearly 6% of borrowers had reported selling some land over the past five years, 20% reported purchases of some land, according to the CMA report.

Licadho’s Am Sam Ath said the CMA study “focused mostly on positive work of MFIs, but little on negatives.” He and other like-minded advocates want to see “solutions and improvements in the sector.”

The growth of MFIs has been staggering. Starting with about 50,000 clients and a total loan portfolio of more than $3 million in 1995, the microfinance sector provided loans to 2.1 million households with a portfolio of $9.4 billion by the end of 2022, according to the CMA. That accounts for more than 30% of Cambodia’s estimated GDP of $29.96 billion.

MFIs often tout the relatively high repayment rates as proof of the industry’s health. The National Bank of Cambodia in 2022 reported a sectorwide non-performing loan rate of just 2.5%. But researchers from Cambodia and Singapore said an obsession with “portfolio quality” was masking the true cost to individual borrowers.

“These indicators hide how people are juggling debt from informal lenders to repay their loans. Consequently, claims about the social impact of microfinance are based on a flawed understanding of household borrowing practices,” said their report, released last year with a grant from the National University of Singapore.

“Lenders not only fail to measure the impact of their services, but they also have a conflict of interest in reporting on the abuses that their services have caused. So long as repayment rates are considered an indicator of success, then the risks associated with juggling debt are likely to increase,” it added.

According to a report by the National Bank of Cambodia, its officials have imposed fines or taken other administrative actions against MFIs that fail to follow existing regulations.

Cambodia’s microfinance industry is being investigated by the International Finance Corporation’s (IFC) watchdog’s Compliance Advisor Ombudsman (CAO), because of the reports of forced land sales and other human rights violations from advocacy organizations.

CAO is reviewing six of Cambodia’s top IFC-funded microfinance institutions including Amret, which issued Lun Sam Ath’s loan. It declined to comment on her case in an email to VOA on March 16.
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Ouagadougou, Burkina Faso — In the suburbs of Burkina Faso’s capital Ouagadougou, lucrative strawberry farming is supplanting traditional crops like cabbage and lettuce and has become a top export to neighboring countries.

Prized as “red gold” in the Sahel, strawberry crops brought in some $3.3 million from 2019 to 2020, according to agricultural support program PAPEA.

In their January to April season, strawberries “take the place of other crops,” Yiwendenda Tiemtore, a farmer in the working-class Boulmiougou district on the city outskirts, told AFP.

Tiemtore has been busy harvesting the red fruit since dawn, before temperatures rise to 40 degrees Celsius.

He harvests about 25 to 30 kilograms of Burkina’s popular strawberry varieties, “selva” and “camarosa,” every three days, watering his plots from wells.

Cultivating strawberries, which thrive on ample sunlight and water, might come as a surprise in this semi-arid West African country.

But Burkina Faso leads the region’s strawberry production, growing about 2,000 tons a year.

Despite being prized by local customers, more than half is exported to neighboring countries.

“We receive orders from abroad, particularly from Ivory Coast, Niger and Ghana,” said market gardener Madi Compaore, who specializes in strawberries and trains local growers.

“Demand is constantly rising and the prices are good.”

In season, strawberries tend to be sold at a higher price than other fruit and vegetables, fetching $5 per kilogram.

Production has remained strong despite insecurity in the country, including from jihadi violence and the repercussions of two coups in 2022.

As well as in Ouagadougou, strawberry production is prominent in Bobo-Dioulasso — Burkina’s second city — even though “the sector’s not very well organized” there, Compaore said.

Since the 1970s

“You might think it’s an oddity to grow strawberries in a Sahelian country like Burkina Faso, but it’s been a fixture since the 1970s,” Compaore added.

The practice began when a French expatriate introduced a few plants to his garden in the country. Now more and more people are growing them.

“It’s our red gold. It’s one of the most profitable crops for both growers and sellers,” he explained.

Seller Jacqueline Taonsa has no hesitation in swapping from apples and bananas to strawberries in season.

“With the heat, it’s hard to keep strawberries fresh for long,” said Taonsa, who cycles around Ouagadougou neighborhoods balancing a salad bowl on her head.

“So, we take quantities that can be sold quickly during the day,” she explained. That usually amounts to about 5 or 6 kilograms.

Adissa Tiemtore used to be a full-time fruit and vegetable seller.

She has mainly switched to selling woven loincloths now but takes up her strawberry business again in season because of the lucrative margins, as high as “200-300%.”

“I start strawberry selling again when they’re in season to make a bit of money and satisfy my former customers, who continue to ask for them,” she said.

“We go round the different growers depending on what day they’re harvesting. That way we get enough to sell every day during the three fruit-producing months,” she said.

The end of April spells the end of the bonanza. “We go back to our other activities, and we wait for next season,” Tiemtore said. 
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TAIPEI, TAIWAN — The United States and China have agreed to hold talks and create two economic groups focused on a wide range of issues — including addressing American complaints about China’s economic model, growth in domestic and global economies and efforts against money laundering — according to a statement released Saturday by the U.S. Treasury Department.

The agreement comes on the second day of an official visit to China by U.S. Treasury Secretary Janet Yellen, during which she has urged Chinese leaders to change their domestic manufacturing policies.

The two sides are set to hold “intensive exchanges” on cultivating more balanced economic growth and combating money laundering.

Yellen said the efforts would establish a structure for Beijing and Washington to exchange views and address Chinese industrial overcapacity, its ability to supply more product than is demanded.

“I think the Chinese realize how concerned we are about the implications of their industrial strategy for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete,” she told journalists after the announcement Saturday.

Yellen was en route to Beijing after beginning her five-day visit in the southern city of Guangzhou, which is a key manufacturing and export center for China.

While the issue of China’s industrial overcapacity will not be resolved instantly, Yellen said Chinese officials understand it’s an “important issue” for Americans, adding that her exchanges with Chinese Vice Premier He Lifeng will facilitate a discussion around macroeconomic imbalances and their connection to overcapacity.

China’s state-run Xinhua news agency reported Chinese officials “comprehensively responded” to the issue of industrial overcapacity raised by the Americans. “Both sides agreed to continue to maintain communication,” an official readout said.

The announcement came a day after Yellen urged Beijing to reform its trade practices and create “a healthy economic relationship” with the U.S. It also follows Chinese state media’s warning that Washington may consider rolling out more protectionist policies to shield U.S. companies.”

Some analysts say the announcement reflects Yellen’s effort to push forward on collaboration in areas the U.S. and China agreed on during U.S. President Joe Biden and Chinese leader Xi Jinping’s San Francisco summit last November.

“When Xi met Biden in November, they agreed to set up working groups, so Yellen is continuing to push that forward with the meeting,” Dexter Roberts, director of China affairs at the University of Montana’s Mansfield Center, told VOA by phone.

While he called the announcement a positive development, Roberts said he does not think Beijing and Washington will reach agreement on contentious trade issues during Yellen’s trip.

“There could be temporary things like China easing off on subsidizing electric vehicles a bit, but it’s unclear how either side is going to change what’s happening in a way that allows the tension over trade to lessen,” he said.

Beijing’s displeasure

While Washington highlighted threats posed by China’s industrial overcapacity, Beijing focused on its concerns about U.S. export controls on Chinese companies during the meeting between Yellen and He.

“The Chinese side expressed serious concerns over Washington’s restrictive economic and trade measures against China,” read the Chinese readout published by Xinhua.

Some experts say the United States and China could make progress on U.S. export restrictions on Chinese companies.

“Some U.S. businesses are calling for the government to remove some of the export restrictions, especially for chips [integrated circuits],” Victor Shih, director of the 21st Century China Center at the University of California in San Diego, told VOA by phone.

Since China is either already making, or is on the cusp of making, some of the computer chips on the sanctions list, Shih said he thinks restricting U.S. companies from selling some of the chips to China will only hurt American interests. “It’s really not hurting China that much,” he said.

In addition to U.S. controls on exports to Chinese entities, Shih said the other big topic Chinese officials are likely to raise in meetings with Yellen is potential tariffs Washington may impose on Chinese products.

“Since China is the largest exporter in the world, it’s not in its interest for there to be a lot of tariffs around the world, especially for major importers like the U.S.,” he said, adding that talking to Washington about lowering tariffs and not enacting new ones will be an important agenda item for Beijing.

While she has not explicitly promised to impose new sanctions on Chinese products, Yellen said she would not rule out the possibility of adopting more measures to safeguard the American supply chain for electric vehicles, batteries or solar panels from heavily subsidized Chinese green energy products.

During a phone call Tuesday with Biden, Xi warned that if the United States is “adamant on containing China’s high-tech development and depriving China of its legitimate right to development, China is not going to sit back and watch.”

Bilateral communication

Despite persistent differences over contentious trade issues, Yellen and He underscored the importance for China and the U.S. to “properly respond to key concerns of the other side” to build a more cooperative economic relationship.

“It also remains crucial for the two largest economies to seek progress on global challenges like climate change and debt distress in emerging markets in developing countries, and to closely communicate on issues of concern such as overcapacity and national security-related economic actions,” Yellen said Friday.

Based on Yellen and He’s comments and signals from the Biden-Xi call Tuesday, some analysts say the U.S. and China will continue to put guard rails around the bilateral relationship to prevent it from further deteriorating.

“The two sides have come to the realization that they will have to live together, perhaps uncomfortably at times,” said Zhiqun Zhu, an expert on Chinese foreign policy at Bucknell University.

While the relationship will remain highly competitive, Zhu said he thinks Beijing and Washington will “stay engaged and seek cooperation in areas of common interest.”

“Maintaining stability is the priority for both Xi and Biden now,” he said.

Yellen is scheduled to have meetings with other senior officials Sunday and Monday in Beijing.
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Nairobi, Kenya — American firms are losing out on business and contracts in Kenya because top government officials demand bribes, the U.S. trade office said in a report released last week, warning that corruption will hurt foreign investment.

According to the Office of the U.S. Trade Representative, American businesses are finding it hard to secure Kenyan government contracts meant to develop the East African nation because senior government officials seek a bribe before awarding such jobs.

The 2024 National Trade Estimate Report on Foreign Trade Barriers said that the contracts are going mainly to foreign firms willing to pay the bribes.

This level of corruption, say the authors of the report, will cause Kenya to lose future investment from businesses and countries that shun or punish corrupt activities.

Cleophas Malala, secretary general of Kenya’s ruling party, acknowledged that Kenya’s procurement and payment system has been a problem but said President William Ruto and the government are working to solve the problem.

“We know it’s a challenge to us, but the president is keen on fighting corruption. You’ve seen how hard he has been. He moved very swiftly when the KEMSA saga came up,” Malala said, referring to a corruption scandal last year involving a $28 million contract that led to the dismissal of the top officials at Kenya’s Medical Supplies Authority.

“He has been steadfast in ensuring that any public officer who gets involved in corrupt activities languishes his position and faces the rule of law,” Malala said. “As a political party, we’ve said time and again that we are not going to defend anybody.”

According to a survey by Kenya’s Ethics and Anti-Corruption Commission, the country’s interior, health and transport ministries are the most corrupt. The survey showed that the size of the average bribe doubled in 2023.

Kenyan activist Boniface Mwangi told VOA that American businesses are simply being asked to follow what has become a standard procedure in Kenya.

“Kenyans pay bribes every day, not because they want to, but because they are forced to,” Mwangi said. “If you want to apply for an ID, you need to pay a bribe. You go to the police, you tell them to investigate a crime, you pay a bribe. You want to ask for a passport, you pay for a bribe. We are a bribe nation.

“One of the reasons the Chinese succeed in this country very well in doing business is because they are able to pay to play,” he said, adding, “The Americans are not told to do something that is not common. They’ve been asked to do what’s been the norm in this country. … Corruption is a way of life in our country.”

Last year, the Ethics and Anti-Corruption Commission said the lack of transparency, accountability and public participation in some government projects creates a breeding ground for corruption.

That aligns with the U.S. trade office report, which said American firms complained of excessive complexity and inefficiency in the procurement process for contracts.

Malala said the government is working to change some of the procurement laws to help fight corruption and allow investors to compete fairly.

“We would want to ensure that all our investors get justice when it comes to the procurement system,” he said.

Kenya finished low on the Transparency International corruption rankings for 2023, ranking 126th out of 180 countries measured for perception and prevalence of corruption.
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«На 15 тисяч мешканців прикордонних громад Чернігівщини, які зазнають постійних ударів із Росії, терористи випустили 15 тисяч снарядів за минулий рік»
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WASHINGTON — America’s employers delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes that the economy can vanquish inflation without succumbing to a recession in the face of high interest rates. 

Last month’s job growth was up from a revised 270,000 in February and was far above the 200,000 economists had forecast. By any measure, it amounted to a strong month of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes. With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand. 

Friday’s report from the Labor Department also showed that the unemployment rate dipped to 3.8% from 3.9% in February. That rate has now come in below 4% for 26 straight months, the longest such streak since the 1960s. 

Normally, a blockbuster bounty of new jobs would fan worries that the additional spending from those new workers could accelerate inflation. But the March jobs report showed that wage growth was mild last month, which might allay any such fears. Average hourly wages were up 4.1% from a year earlier, the smallest year-over-year increase since mid-2021. But hourly pay rose 0.3% from February to March after increasing 0.2% the month before. 

The economy is sure to weigh on Americans’ minds as the November presidential vote nears and they assess President Joe Biden’s reelection bid. Many people still feel squeezed by the inflation surge that erupted in the spring of 2021. Eleven rate increases by the Fed have helped send inflation tumbling from its peak over the past year and a half. But average prices are still about 18% higher than they were in February 2021 — a fact for which Biden might pay a political price. 

The Fed’s policymakers are tracking the state of the economy, the job market and inflation to determine when to begin cutting interest rates from their multidecade highs — a move eagerly awaited by Wall Street traders, businesses, homebuyers and people in need of cars, household appliances and other major purchases that are typically financed. Rate cuts by the Fed would likely lead, over time, to lower borrowing rates across the economy. 

The central bank’s policymakers started raising rates two years ago to try to tame inflation, which by mid-2022 was running at a four-decade high. Those rate hikes — 11 of them from March 2022 through July 2023 — helped drastically slow inflation. Consumer prices were up 3.2% in February from a year earlier, far below a year-over-year peak of 9.1% in June 2022. 

Yet the sharply higher borrowing costs for individuals and companies that resulted from the Fed’s rate hikes were widely expected to trigger a recession, with waves of layoffs and a painful rise in unemployment. Yet to the surprise of just about everyone, the economy has kept growing steadily and employers have kept hiring at a healthy pace. Layoffs remain low. 

Some economists believe that a rise in productivity — the amount of output that workers produce per hour — made it easier for companies to hire, raise pay and post bigger profits without having to raise prices. In addition, an influx of immigrants into the job market is believed to have addressed labor shortages and slowed upward pressure on wage growth. This helped allow inflation to cool even as the economy kept growing. 

In the meantime, the Fed has signaled that it expects to cut rates three times this year. But it is awaiting more inflation data to gain further confidence that annual price increases are heading toward its 2% target. Some economists have begun to question whether the Fed will need to cut rates anytime soon considering the consistently durable U.S. economy.
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