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Author: Echobiz

IMF Confirms Increasing Egypt’s Bailout Loan To $8 Billion

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CAIRO — The executive board of the International Monetary Fund confirmed a deal with Egypt to increase its bailout loan from $3 billion to $8 billion, in a move that is meant to shore up the Arab country’s economy, which is hit by a staggering shortage of foreign currency and soaring inflation.

In a statement late Friday, the board said its decision would enable Egypt to immediately receive about $820 million as part of the deal, which was announced earlier this month.

The deal was achieved after Egypt agreed with the IMF on a reform plan that is centered on floating the local currency, reducing public investment and allowing the private sector to become the engine of growth, the statement said.

Egypt has already floated the pound and sharply increased the main interest rate.

Commercial banks are now trading the U.S. currency at more than 47 pounds, up from about 31 pounds. The measures are meant to combat ballooning inflation and attract foreign investment.

The Egyptian economy has been hit hard by years of government austerity, the coronavirus pandemic, the fallout from Russia’s full-scale invasion of Ukraine and, most recently, the Israel-Hamas war in Gaza. The Houthi attacks on shipping routes in the Red Sea have slashed Suez Canal revenues, which is a major source of foreign currency. The attacks forced traffic away from the canal and around the tip of Africa.

“Egypt is facing significant macroeconomic challenges that have become more complex to manage given the spillovers from the recent conflict in Gaza and Israel. The disruptions in the Red Sea are also reducing Suez Canal receipts, which are an important source of foreign exchange inflows and fiscal revenue,” said IMF Managing Director Kristalina Georgieva.

The IMF said such external shocks, combined with delayed reforms, have hurt economic activity. Growth slowed to 3.8% in the fiscal year 2022-23 due to weak confidence and foreign currency shortages and is projected to slow further, to 3%, in the fiscal year 2023-24 before recovering to about 4.5% in 2024-25, the IMF statement said.

The annual inflation rate was 36% in February, but is expected to ease over the medium term, the IMF said.

The currency devaluation and interest rate increase have inflicted further pain on Egyptians already struggling with skyrocketing prices over the past years. Nearly 30% of Egyptians live in poverty, according to official figures.

Finance Minister Mohamed Maait said the confirmation by the IMF executive board “reflects the importance of the correcting measures” taken by the government.

Egypt also this month signed a deal with the European Union that includes a 7.4 billion-euro ($8 billion) aid package for the most populous Arab country over three years.

To quickly inject much-needed funds into Egypt’s staggering economy, the EU intends to fast-track 1 billion euros ($1.1 billion) of the package, using an urgent funding procedure that bypasses parliamentary oversight and other safeguards, according to European Commission President Ursula von der Leyen.

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West African Project Helps Women Farmers Claim Their Rights, Land

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ZIGUINCHOR, Senegal — Mariama Sonko’s voice resounded through the circle of 40 women farmers sitting in the shade of a cashew tree. They scribbled notes, brows furrowed in concentration as her lecture was punctuated by the thud of falling fruit.

This quiet village in Senegal is the headquarters of a 115,000-strong rural women’s rights movement in West Africa, We Are the Solution. Sonko, its president, is training female farmers from cultures where women are often excluded from ownership of the land they work so closely.

Across Senegal, women farmers make up 70% of the agricultural workforce and produce 80% of the crops but have little access to land, education and finance compared to men, the United Nations says.

“We work from dawn until dusk, but with all that we do, what do we get out of it?” Sonko asked.

She believes that when rural women are given land, responsibilities and resources, it has a ripple effect through communities. Her movement is training women farmers who traditionally have no access to education, explaining their rights and financing women-led agricultural projects.

Across West Africa, women usually don’t own land because it is expected that when they marry, they leave the community. But when they move to their husbands’ homes, they are not given land because they are not related by blood.

Sonko grew up watching her mother struggle after her father died, with young children to support.

“If she had land, she could have supported us,” she recalled, her normally booming voice now tender. Instead, Sonko had to marry young, abandon her studies and leave her ancestral home.

After moving to her husband’s town at age 19, Sonko and several other women convinced a landowner to rent to them a small plot of land in return for part of their harvest. They planted fruit trees and started a market garden. Five years later, when the trees were full of papayas and grapefruit, the owner kicked them off.

The experience marked Sonko.

“This made me fight so that women can have the space to thrive and manage their rights,” she said. When she later got a job with a women’s charity funded by Catholic Relief Services, coordinating micro-loans for rural women, that work began.

“Women farmers are invisible,” said Laure Tall, research director at Agricultural and Rural Prospect Initiative, a Senegalese rural think tank. That’s even though women work on farms two to four hours longer than men on an average day.

But when women earn money, they reinvest it in their community, health and children’s education, Tall said. Men spend some on household expenses but can choose to spend the rest how they please. Sonko listed common examples like finding a new wife, drinking and buying fertilizer and pesticides for crops that make money instead of providing food.

With encouragement from her husband, who died in 1997, Sonko chose to invest in other women. Her training center now employs more than 20 people, with support from small philanthropic organizations such as Agroecology Fund and CLIMA Fund.

In a recent week, Sonko and her team trained over 100 women from three countries, Senegal, Guinea-Bissau and Gambia, in agroforestry – growing trees and crops together as a measure of protection from extreme weather – and micro gardening, growing food in tiny spaces when there is little access to land.

One trainee, Binta Diatta, said We Are the Solution bought irrigation equipment, seeds, and fencing — an investment of $4,000 — and helped the women of her town access land for a market garden, one of more than 50 financed by the organization.

When Diatta started to earn money, she said, she spent it on food, clothes and her children’s schooling. Her efforts were noticed.

“Next season, all the men accompanied us to the market garden because they saw it as valuable,” she said, recalling how they came simply to witness it.

Now another challenge has emerged affecting women and men alike: climate change.

In Senegal and the surrounding region, temperatures are rising 50% more than the global average, according to the Intergovernmental Panel on Climate Change, and the UN Environment Program says rainfall could drop by 38% in the coming decades.

Where Sonko lives, the rainy season has become shorter and less predictable. Saltwater is invading her rice paddies bordering the tidal estuary and mangroves, caused by rising sea levels. In some cases, yield losses are so acute that farmers abandon their rice fields.

But adapting to a heating planet has proven to be a strength for women since they adopt climate innovations much faster than men, said Ena Derenoncourt, an investment specialist for women-led farming projects at agricultural research agency AICCRA.

“They have no choice because they are the most vulnerable and affected by climate change,” Derenoncourt said. “They are the most motivated to find solutions.”

On a recent day, Sonko gathered 30 prominent women rice growers to document hundreds of local rice varieties. She bellowed out the names of rice – some hundreds of years old, named after prominent women farmers, passed from generation to generation – and the women echoed with what they call it in their villages.

This preservation of indigenous rice varieties is not only key to adapting to climate change but also about emphasizing the status of women as the traditional guardians of seeds.

“Seeds are wholly feminine and give value to women in their communities,” Sonko said. “That’s why we’re working on them, to give them more confidence and responsibility in agriculture.”

The knowledge of hundreds of seeds and how they respond to different growing conditions has been vital in giving women a more influential role in communities.

Sonko claimed to have a seed for every condition including too rainy, too dry and even those more resistant to salt for the mangroves.

Last year, she produced 2 tons of rice on her half-hectare plot with none of the synthetic pesticides or fertilizer that are heavily subsidized in Senegal. The yield was more than double that of plots with full use of chemical products in a 2017 U.N. Food and Agriculture Organization project in the same region.

“Our seeds are resilient,” Sonko said, sifting through rice-filled clay pots designed to preserve seeds for decades. “Conventional seeds do not resist climate change and are very demanding. They need fertilizer and pesticides.”

The cultural intimacy between female farmers, their seeds and the land means they are more likely to shun chemicals harming the soil, said Charles Katy, an expert on indigenous wisdom in Senegal who is helping to document Sonko’s rice varieties.

He noted the organic fertilizer that Sonko made from manure, and the biopesticides made from ginger, garlic and chili.

One of Sonko’s trainees, Sounkarou Kébé, recounted her experiments against parasites in her tomato plot. Instead of using manufactured insecticides, she tried using a tree bark traditionally used in Senegal’s Casamance region to treat intestinal problems in humans caused by parasites.

A week later, all the disease was gone, Kébé said.

As dusk approached at the training center, insects hummed in the background and Sonko prepared for another training session. “There’s too much demand,” she said. She is now trying to set up seven other farming centers across southern Senegal.

Glancing back at the circle of women studying in the fading light, she said: “My great fight in the movement is to make humanity understand the importance of women.”

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Chinese President Xi Meets With US Executives as Investment Wanes

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BEIJING — China’s President Xi Jinping met American business leaders at the Great Hall of the People in Beijing on Wednesday, as the government tries to woo back foreign investors and international firms seeking reassurance about the impact of new regulations. 

Beijing wants to boost growth of the world’s second-largest economy after foreign direct investment shrank 8% in 2023 amid heightened investor concern over an anti-espionage law, exit bans, and raids on consultancies and due diligence firms. 

Xi’s increasing focus on national security has left many companies uncertain where they might step over the line, even as Chinese leaders make public overtures toward foreign investors. 

“China’s development has gone through all sorts of difficulties and challenges to get to where it is today,” Xi said, according to state media. 

“In the past, [China] did not collapse because of a ‘China collapse theory,’ and it will also not peak now because of a ‘China peak theory,'” he said. 

Stephen Schwarzman, co-founder and CEO of private equity firm Blackstone, Raj Subramaniam, head of American delivery giant FedEx, and Cristiano Amon, the boss of chips manufacturer Qualcomm, were part of the around 20-strong all-male U.S. contingent.  

The audience with Xi — organized by the National Committee on U.S.-China Relations, the U.S.-China Business Council and the Asia Society think tank — lasted around 90 minutes, according to a person with direct knowledge of the matter. 

The source, who declined to be named as they were not authorized to speak to the media, had no immediate comment on what was discussed. The National Committee on U.S.-China Relations and Asia Society did not immediately respond to requests for comment on the meeting. 

A statement from U.S.-China Business Council said the participants “stressed the importance of rebalancing China’s economy by increasing consumption there and encouraging the government to further address longstanding concerns with cross border data flows, government procurement, intellectual property rights, and improved regulatory transparency and predictability.” 

The U.S. and China are gradually resuming engagements after relations between the two economic superpowers sank to their lowest in years due to clashes over trade policies, the future of democratically ruled Taiwan and territorial claims in the South China Sea. 

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Iran’s Currency Hits Record Low

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Tehran — Iran’s currency fell to a record low on Sunday, plunging to 613,500 to the dollar, as its people celebrated the Persian New Year. 

On Sunday, people were trying to exchange rials for foreign currency at Tehran’s main hub of exchange shops in Ferdowsi Street, but most were closed due to the Nowruz holidays, which are run from March 20 to April 2. 

Mohsen, a 32-year-old employee at one of the exchange shops, said the holiday was contributing to the low prices, “The price is not real, the demand for purchasing dollars is very high, but there are just a few exchange shops open.” He and other Iranians spoke on condition their last names not be used, because of potential repercussions for speaking to foreign media about the country’s economic struggles. 

The two-week holiday is an opportunity to travel abroad, driving demand for U.S. dollars and Euros. 

Mojtaba, a 49-year-old father, was shocked: “The rial fell 5% compared to the last six days, while the whole country is on vacation!” 

Niloufar, 28-year-old wife and her husband Behzad, 30, said that they’d booked a weeklong tour of Turkey at a discount rate, but were now looking at spending as much as full-price tour. 

The exchange rate strongly affects other markets, including housing and rentals. 

The price was 590,000 to the dollar on March 18, the last workday before the holiday. 

Many Iranians have seen their life savings evaporate as the local currency has depreciated. Today, it’s worth about one-twentieth as much as it was in 2015, when Iran signed a nuclear accord with world powers. 

Since then, it’s fallen from 32,000 rials to the dollar to the hundreds of thousands. In February 2023, it briefly reached a nadir of 600,000 reals to the dollar, and since then has not risen above 439,000. 

The government’s Statistics Center put the country’s inflation rate for Feb. 2024 at 42.5%, while Central Bank said it was more than 46%. There is no explanation for the discrepancy. 

Iran’s relations with the west have been at exceptional lows since then-U.S. President Donald Trump abandoned a deal that called for the country to end its nuclear program in return for access to frozen funds and other benefits. President Joe Biden said he was willing to re-enter a nuclear deal with Iran, but formal talks to try to find a roadmap to restart the deal collapsed in August 2022. In the meantime, tensions in the Middle East have increased significantly, making nuclear diplomacy with Iran more complicated. Iran has further angered Western countries by supplying armed drones to Russia that have been used in its invasion of Ukraine. 

Dire economic conditions have contributed to widespread anger at the government in the past, but have also forced many Iranians to focus on putting food on the table rather than engaging in high-risk political activism amid a fierce crackdown on dissent. 

The rial’s record low came less than a month after a parliamentary election that saw the lowest turnout since the 1979 Islamic Revolution, whose results were dominated by hard-line politicians. 

Hard-liners have controlled the parliament for the past two decades — with chants of “Death to America” often heard during its sessions.

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