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Antetokounmpo drops 30 points as Bucks rout Warriors, 128-111

GIANNIS ANTETOKOUNMPO — REUTERS

GIANNIS Antetokounmpo scored a game-high 30 points and led a parade to the free-throw line as the Milwaukee Bucks blitzed the visiting Golden State Warriors 128-111 on Tuesday night in a nationally televised game that was marred by eight technical fouls.

Mr. Antetokounmpo went 11 for 17 at the line and his teammates made all 15 of their foul shots as the Bucks ran up a 26-15 advantage in free-throw points over a Warriors team that saw four players and coach Steve Kerr pick up technicals.

Stephen Curry had a team-high 20 points — and one of the “T’s” — in 27 minutes for Golden State, which was opening its longest trip of the season, a six-game stretch.

Using 10 early 3-pointers, the Warriors managed to hang within 58-52 after a Jordan Poole layup with 1:21 remaining in the first half.

But the Bucks got baskets from Mr. Antetokounmpo, Wesley Matthews and Bobby Portis to finish the period on a six-point run to double their advantage, then got another hoop from Antetokounmpo and a 3-pointer from Khris Middleton to open the third quarter and complete an 11-0 run bridging the intermission to open a 69-52 advantage.

The Warriors never got much closer, opting instead to rest key players late for the second night of a back-to-back in Indiana on Wednesday.

Mr. Antetokounmpo’s 15th 30-point outing of the season came despite just 9-for-26 shooting from the field and 1-for-6 accuracy from beyond the arc. He even got nailed with a technical after a second 10-second violation at the free-throw line.

Mr. Antetokounmpo completed a double-double with a game-high 12 rebounds, while Portis did the same wit. The Bucks, who had won four in a row before the debacle at Houston, shot 54.9 percent overall, well better than Golden State (40.0).

Mr. Poole, a former Milwaukee prep standout, chipped in with 18 points for the Warriors, who were coming off a home win over the Boston Celtics. Jonathan Kuminga finished with 19 points, Donte DiVincenzo 16 and Klay Thompson 14.

Kevon Looney, another of Golden State’s Milwaukee natives, grabbed a team-high eight rebounds to go with five points. — Reuters

Croatia’s semifinal exit fails to overshadow glittering achievements in football’s biggest stage

DOHA — Croatia’s run to the semifinals of a second consecutive World Cup was nothing short of remarkable for the small Balkan nation and even Tuesday’s 3-0 defeat by Argentina does not overshadow their achievements on football’s biggest stage.

Reaching the last four in Russia and Qatar was barely conceivable six years ago. Croatia were a team in near disarray, their fans were fighting each other at Euro 2016 and the leadership of the Croatian FA faced corruption allegations.

The appointment of Ante Cacic, a former TV repairman, as head coach had only fanned the flames of discontent.

Fast forward to Qatar, where Croatia entered the tournament as 2018 runners-up with an ageing squad led by 37-year-old Luka Modric and with Zlatko Dalic, who replaced Cacic before the 2018 tournament, at the helm.

Coming through their group with a win over Canada and draws against Belgium and surprise semi-finalists Morocco, conceding only one goal along the way, the Croats showed they were again a force to be reckoned with.

No longer the explosive attacking team of 2018 that stunned England in the semifinals before losing to France in the final, Croatia have matured into a well-oiled machine where each player knows what needs to be done to get the result.

Their midfield of Mateo Kovacic, Marcelo Brozovic and Modric looked so solid that team mate Josip Juranovic said it was “safer than having money in the bank,” while 20-year-old defender Josko Gvardiol pulled the strings at the back.

JAPAN SHOUTOUT
Croatia got past Japan in a shootout in the Round of 16 before delivering one of the shocks of the tournament by eliminating five-times champions Brazil in the same manner.

In another display of mental toughness, Croatia had conceded an extra-time goal to Brazil’s Neymar but dug their way out of trouble by scoring an 117th minute equalizer through Bruno Petkovic.

Before Tuesday’s 3-0 loss to Lionel Messi’s Argentina, Croatia had needed penalties or extra time in five of six knockout matches at the 2018 and 2022 World Cups.

WON ALL SHOOTOUTS
They won all four of their penalty shootouts.

“I have nothing to blame the boys for, now we have to raise our heads and get ready for the (third place) game that awaits us,” Mr. Dalic said.

“If someone had offered us this before the tournament, we would have accepted it. We are really proud.”

Few will question Croatia’s commitment in the match to decide third place in Qatar. Their opponents will be known after defending champions France face Morocco in the other semifinal later of Wednesday. — Reuters

Was Trump or Brexit the bigger mistake? The answer is clear

FREEPIK

IN THE POSTWAR ERA, two referendums have been held in Britain. Both asked the British people to answer a simple question about a complicated issue. In 1975, the question was whether Britain should join the European Economic Community (EEC). Roughly two out of three voters said yes. In 2016, it was whether Britain should stay in the European Union (EU). Just under 52% voted no.

Even fervent advocates of Britain’s break from the EU are now hard-pressed to name one result of Brexit that has made Britain a better place. Former Bank of England governor Mark Carney has noted that whereas in 2016 Britain’s economy was 90% the size of Germany’s, it’s now only 70% as big. For many people, including business owners and farmers, Brexit has been a disaster. Polls indicate that 56% of the British people think Brexit was a mistake.

Similarly, an increasing number of Americans take the view that electing an ignorant, huckstering, celebrity-obsessed narcissist as president of the United States — in the same year as Brexit — was unwise. The midterm elections show that Donald Trump’s brand has been tarnished and that his grip on the Republican Party might be slipping.

Yet, while Brexit and the election of Trump caused severe shocks to both Britain and the US, it looks like the damage of Brexit will be worse and last longer. That should be a reminder that referendums are a terrible way to resolve big issues.

Trump’s four years were bad enough, to be sure. He coarsened political discourse, inflamed already severe divisions in the US, and lied so shamelessly that trust in politicians has been seriously eroded. Also, by refusing to abide by the results of a presidential election and whipping up popular rage against the institutions on which any democracy rests, including an independent judiciary and free press, he undermined trust not only in politicians but in the democratic system itself.

Still, the election of a bad candidate to the highest office is not unheard of, and a robust liberal democracy can survive blundering, even crooked leaders. Whatever one thinks of President Joe Biden, he has restored some calm in the body politic. The worry among liberal Americans that the end of US democracy was at hand is not as acute as it was just a year ago. US allies are also a little less nervous about the world’s most powerful democracy.

Even though Trump’s appointees have tilted the Supreme Court in a radical rightwing direction that seems out of step with most Americans, the main democratic institutions have survived the shock of his presidency. And as long as he does not return for another term in 2024, much of the damage he did can probably be undone.

The same thing cannot be said about Brexit. That Britain opted not only to leave the EU but also the single European market will continue to hurt the British economy for years to come. The promise that this setback will be more than compensated by terrific new trade deals with the US, Japan, and other countries far away from Europe is proving to be a pipe dream. As a result, most people in Britain will be worse off and the country will continue to lag behind its neighbors for the foreseeable future.

The former prime minister, Harold Macmillan, once claimed that postwar, post-imperial Britain could only remain a significant power inside Europe, rather than in “splendid isolation,” in the phrase used by 19th century chauvinists. That is why he wanted his country to join the EEC in 1961. While Britain only managed this in 1973 because of obstruction by French leader Charles de Gaulle, Macmillan turned out to be correct. Despite frequent frictions with Brussels, Britain played a major role inside Europe as a staunchly democratic power which finely balanced the statism of France and the naive federalist dreams of Germany.

The 2016 referendum destroyed that balance and has doomed Britain to be a much less significant power. That is the problem with referendums. Unlike elections with unfortunate results, they cannot be easily undone. The British people were asked an unfair question. To stay or to leave was an absurd choice. People were not asked under what conditions Britain should leave, what kind of country they wanted as a result, and what the future relationship with the EU should be.

When Winston Churchill suggested holding a referendum in Britain in 1945 to decide whether to extend his wartime coalition government, Labor Party leader Clement Attlee refused. The idea of a referendum was “just not British” in his view. In fact, he said, it was “an instrument of Nazism.”

Margaret Thatcher, who adored Churchill, and whose own politics were a challenge to everything the socialist Attlee had stood for, called referendums “a device of dictators and demagogues.”

They were both right.

BLOOMBERG OPINION

All about chips

CHRIS RIED-UNSPLASH

As neophyte newspaper reporters about 30 years ago, BusinessWorld editors Raul and Letty Locsin would often remind us about the difference between “Dog bites man” and “Man bites dog” stories. The former was nothing to write home about, they said, but the latter was what made newspaper headlines. The extraordinary, after all, always piques people’s interest.

And this is precisely what happened when I chanced upon the headline of a Hong Kong newspaper, The Standard, a couple of weeks back that read, “Woman caught smuggling semiconductor chips into China in fake ‘baby bump’.” That someone actually attempted to smuggle something into China is unusual, as the norm is usually the other way around.

Quoting the Bloomberg news service, The Standard reported that Chinese Customs officials caught a woman “smuggling semiconductors inside a pregnancy prosthetic,” particularly 202 processors and nine smartphones. Customs said she was stopped while crossing into Zhuhai, China from Macau on Nov. 25.

Apparently, semiconductor chip smuggling into China has been going on for some time. The report noted that “an underground market for semiconductors has sprung up in China since 2020, when a global shortage of chips started disrupting supplies of everything from smartphones to vehicles.” Smuggling cases are also the result of the “move by the US to impose sweeping curbs on exports of high-end semiconductors and chip-making equipment to China, partly to stop them being used for military purposes.”

A report in the South China Morning Post in July 2021 noted that “Hong Kong drivers [have been caught] trying to smuggle computer chips into mainland China via the Hong Kong-Zhuhai-Macau Bridge.” One driver was arrested with 256 Intel central processing units (CPUs) taped his chest and calves, while another 52 chips were confiscated in a separate smuggling attempt 10 days later.

Being the manufacturing hub of the world, where many global companies have chosen to locate large-scale production facilities, I was always under the impression that China was practically self-sufficient in all production inputs, including semiconductor chips. Apparently, this is not the case. When it comes to electronics, one report notes that China accounts for only about a quarter of world production of semiconductor chips.

However, as it accounts for a big bulk of the electronics assembly worldwide, China requires a significant volume of chips annually and imports additional requirements from Taiwan, Korea, and the US. Demand currently outstrips supply, and China’s access to better technology for chip production has likewise been limited by geopolitics, thus impacting its drive for self-sufficiency.

The chip shortage started after the COVID-19 pandemic hit in 2020 because of production shortfalls and supply chain issues. However, things seem to be looking up. As JP Morgan Research noted in a paper, “More chips will become available in the second half of 2022 and the shortage is nearing the end… However, available chips may not be the right type to satisfy all demand.”

And this is where problems may continue. Almost all industries make use of semiconductor chips now, and not just makers of computers or smartphones. Consumer durables like electric appliances mostly have some form of electronic circuitry, while most cars have electronic boxes or control units that contain computer chips.

Volkswagen, for one, says JP Morgan Research, believes that semiconductor supply is unlikely to meet auto industry demand until 2024. And with global car makers like Toyota and Lexus already limiting the production for lack of semiconductor chips, probably several other industries will just have to wait a little longer for supply to catch up with demand.

“Currently, capacity is being freed up due to weakness in some end markets, particularly PCs, smartphones, and consumer electronics, where sales have been falling since March 2022. Foundries in Taiwan are beginning to reallocate some of this capacity to the automobile and industrial end markets, which lost out to other sectors during the COVID-19 pandemic. However, autos generally require older chips, which are fundamentally different to those used in PCs and smartphones,” read the Aug. 11 report by JP Morgan Research.

In this regard, one cannot help but wonder if the next world war will result from a fight not for fossil fuel but for raw materials and technology for the production of semiconductor chips and batteries. The global need for oil is slowly but surely being mitigated by developments in renewable energy and battery technology, and the drive towards electric mobility.

A recent paper by the Center for Strategic and International Studies (CSIS) can probably shed some light on emerging developments in the chips front. Written by Gregory Allen, CSIS Director for its AI Governance Project and Senior Fellow of its Strategic Technologies Program, the paper looked into the recent actions by the US government with respect to its relations with China in connection with the production and sales of computer chips and artificial intelligence (AI) technology.

While high-end chips used in AI technology are not exactly the same type of chips used in commercial applications, any US move to deny China access to high-end technology for chip production may impact China’s ability to produce its own chips. That is, if China cannot scale technology and production fast enough on its own to produce what it needs. Moreover, the US can have some sway over chip producers like Korea and Taiwan, both US allies, in supplying chips to China.

CSIS’ Allen wrote, “The United States does not want China to have advanced AI computing and supercomputing facilities, so it has blocked them from purchasing the best AI chips, which are all American. It does not want China designing its own AI chips, so it has blocked China from using the best chip design software (which is all American) to design high-end chips, and it has blocked chip manufacturing facilities worldwide from accepting entity-listed Chinese chip design firms (as well as any Chinese chip company building high-end chips) as customers. Finally, the United States does not want China to have its own advanced chip manufacturing facilities, so it has blocked them from purchasing the necessary equipment, much of which is irreplaceably American.”

He added, “In weaponizing its dominant chokepoint positions in the global semiconductor value chain, the United States is exercising technological and geopolitical power on an incredible scale.”

However, Allen also pointed out challenges in pursuing the US policy, including the fact that “export restrictions apply to US-owned entities operating in China,” but do not prevent “international subsidiaries of Chinese corporations from smuggling chips into China in violation of US export controls.”

Moreover, he noted that while US export controls pose challenges to “China’s production of an indigenous supply chain” for chips, such controls “focus on advanced chips at high technology nodes.” Moving forward, he said, “China may now focus on gaining market leverage over older semiconductor technologies. Legacy semiconductor designs made with older technology nodes (>28 nm) still play an important role in the global economy.”

Semiconductor chip diplomacy by the US will play a significant role in this regard, Allen noted. China is now the 3rd biggest producer of chips after Korea and Taiwan. Can the US convince Korea and Taiwan, as well as producers in Japan and Europe, to support its export controls? South Korea, for one, while a US ally, has “invested significantly in Chinese semiconductor manufacturing operations.”

He added, “The United States needs to ensure that all of its allies are rowing in the same direction when it comes to keeping China’s semiconductor industry down… Turning these unilateral export controls into multilateral ones will be a major challenge. Expect this to be a key White House diplomatic priority for discussions with Europe, Japan, Taiwan, and South Korea going forward.”

One can only imagine how China is going to react to all these developments.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

SWF means Stewardship of Wealth Fund

FABIAN BLANK-UNSPLASH

Various civil society groups, professional and business associations, credible economists and non-economists, bankers, members of other sectors like agriculture and labor, and practicing academics, among others, have weighed in on the Maharlika Wealth Fund (MWF), also referred to as a sovereign wealth fund (SWF). While the intensity of discourse has not quite approached the vigor and duration of the debates triggered by landmark legislation like the Comprehensive Agrarian Reform Program (CARP) in 1987 or the termination of the 1947 Military Bases Agreement, there are enough substantive and informed insights that have been thrown into the marketplace of ideas to merit some other aspects of the proposal to create the MWF change.

These informed comments basically revolve around the questions: What problem is the proposed MWF supposed to solve? How much thought has been put into this concept? Doesn’t the country have more serious problems that need more attention? Problems like the dip in our foreign currency reserves and providing basic services that a State is expected to provide in its contract with taxpayers — education, healthcare, nutrition, food security? What about the huge national debt and fiscal deficit? Haven’t there been precedents during the Martial Law regime where government corporations like the National Development Corp. (NDC) invested in extractive and processing industries aimed at the export market? What were the results of these investments which are the same types of projects that the MWF is said to be targeting? What happened to these investments?

Among these investments was the Philippine Associated Smelting and Refining Corp. (PASAR), which was then to be the country’s only copper smelter and refinery. Its sulfuric waste was to be used in the manufacture of phosphate fertilizer by the adjacent Philippine Phosphate Fertilizer Corp. (PhilPhos) in Leyte. Both enterprises ended up with the Asset Privatization Trust (APT) as auctioned government assets, with former Finance Undersecretary Romeo Bernardo successfully serving as chief auctioneer.

The Philnico Nickel Processing Plant was another big ticket of the NDC, whose investment activities are eerily similar to the planned MWF. Government investment strategists had intended Philnico to be a major nickel and cobalt producer. Philnico resumed operations after it was auctioned off by the APT.

Proceeds of the sale of these privatized assets augmented the budget for CARP implementation.

Proponents of the MWF could very well perform a true service to the country by going over the history and results of these projects and learning from all these forays into these types of investments at a time of dire national need for basic services. The results of that analysis should be very instructive.

Various statements are being circulated in mainstream and social media platforms. Signatories to the statement simply called “Statement on the Maharlika Fund” include, among others, former Cabinet Secretaries Solita Monsod, Cielito Habito, Dante Canlas, Emmanuel Esguerra, Ernesto Pernia, Alberto Aldaba Lim, former Bangko Sentral Deputy Governor Diwa Guinigundo, former Finance Undersecretary Milwida Guevara, and Professor Emeriti and Professors from leading universities, namely, Edita Tan, Maria Serena Diokno, Michael Alba, Mario Lamberte, Mary Racelis, Cristina Montiel and Luis Dumlao. The signatories asked that the “Executive and Congress to scrap the Maharlika Wealth Fund bill or House Bill (HB) 6398.”

The signatories asserted that the MWF is a warped version of what an SWF should be. Sovereign wealth funds usually solve a problem of excess. Some examples of excess revenues include a situation of consistent large budget surpluses, windfall revenues from booming extractive industries, and excess foreign currency reserves from enduring balance of payments surpluses, which are invested abroad to help stem currency overvaluation.

“But the Philippines do not enjoy excess. Instead, the country has a heightened fiscal deficit, so-so export performance, and has not enabled the major commodity exports to better foreign currency reserves.

“Furthermore, the MWF’s stated intention to ‘create jobs, promote trade and investment, strengthen connectivity, expand infrastructure, achieve energy and food security’ can be achieved more effectively through other established measures.

“The administration’s goal of promoting infrastructure spending can be more efficiently facilitated through actual appropriations, concessional lending or public-private partnerships (PPP).”

In a separate statement, economist, professor emeritus, and national scientist Raul Fabella said, according to a Dec. 10 report in @philbizwatcher, that “no amount of tweaking could repair” the Maharlika Wealth Fund bill “because its flaws were fundamental: The moral hazard arising from unnecessary state intervention and the unjustified economic backdrop.”

Fabella stated that “at the heart of the bill was the consolidation of resources under one umbrella which would be wielded by a group of people who did not own them.” Fabella, continues, “Positive returns for Maharlika placements will mean hefty private returns (bonuses) for this select group, but negative returns will be socialized that is, charged to the nation.”

Fabella’s comment raises moral issues and reminds us of the Parable of the Steward. The steward was appointed to a position of trust. The steward then proceeded to protect his interest by negotiating side deals with people who owed his master sums of money. The asset did not belong to the steward, it was entrusted to him for safekeeping. Essentially, a SWF, and all government funds, and the budget, in the hands of government officials and under their control are funds kept in trust and to be utilized with utmost transparency, exercising principles of good governance. Fabella’s comments strike at the heart of stewardship.

The complexity of society’s needs and the sharp fluctuations in the political and economic situation that are in turn fueled by convertible and flexible values and loyalties, make sound stewardship and accountability necessary ingredients for governance. If one were to go farther and consider the spiritual context of stewardship, religious instruction will state that all goods belong to the creator and we are allowed to use them for good and to account for their use.

At the end of the day, the bottom line or the primordial concern with respect to the MWF is one’s record of stewardship and governance.

 

Philip Ella Juico’s areas of interest include the protection and promotion of democracy, free markets, sustainable development, social responsibility and sports as a tool for social development. He obtained his doctorate in business at De La Salle University. Dr. Juico served as secretary of Agrarian Reform during the Corazon C. Aquino administration.

Not according to plan

JOSE ALJOVIN-UNSPLASH
JOSE ALJOVIN-UNSPLASH

NOT ALL SOLUTIONS to problems work according to plan. (Of course, you must first define the problem properly.) The “Law of Unintended Consequences” in economics states that the most carefully studied policies and plans, when implemented, can have unexpected outcomes. And this phenomenon is not limited to economic matters.

The introduction of toads in Australia as an ecologically sound solution to eliminate insects that harmed crops, without resorting to toxic pesticides. However, this approach resulted in the toads multiplying and developing into a worse environmental nuisance than the insects they ate. One pest just replaced another.

There is another case of harmful predators at one time in British India — the plague of cobras. The government decided to stamp out the snakes with a bounty system of buying cobra skins in exchange for cash. What happened? The bounty system became so successful as a cash generator for the natives that cobra farms started to sprout up. When the government discovered that the cobra had become a cash crop, they discontinued the bounty system, forcing the erstwhile snake farmers to abandon their cobra farms and let the snakes loose. This effort to curb the snake population with cash rewards for their elimination had the unintended effect of worsening the cobra scourge.

In history, the Treaty of Versailles imposed punitive reparations on Germany after it lost World War I. The policy of rendering the defeated country unable to wage war due to the economic burden of the reparations had the unintended effect of arousing a feeling of betrayal and shame on the Germans. This gave rise to the obscure Bavarian politician Adolf Hitler preaching against the humiliation and raising the prospect of a second war.

Because plans have unexpected twists and turns, could they be tested first on a small scale to see how they would work?

Companies make use of the pilot project. For a restaurant trying to attract the fastidiously healthy crowd of vegans, the shift needs to be taken in small steps. Will the consumers like a vegetarian menu? Why not try out a promo on avocado on toast and fruit platters? It’s best to add new items rather than replace the roasted pork belly that may be the top seller in the restaurant.

When banks first introduced ATMs, they installed them in a few branches to allow the customers to test the technology as a convenient alternative to lining up to withdraw cash from the teller. We take for granted the current proliferation of ATMs and the habit of remembering our PINs for withdrawals. And the tellers don’t have to remember the names of our children.

Management changes, like promotions, reorganizations, reassignments, and even early retirements can be fed to the grapevine intentionally. The coffee server is allowed to eavesdrop while serving cream tarts. This informal method of testing the impact of changes is known as “socializing” an issue. Surprise is supposed to be eliminated and the probable reaction prepared for. But does a negative reaction (like faint screams) really change management plans? Hardly.

Norman Mailer in his book on astronauts, A Fire on the Moon (1970), muses that dreams too are a form of simulation. When we dream of losing somebody we love, we feel the pain such a loss would bring, thereby preparing us for such a future shock.

There is too the unintended consequence of greater scrutiny of one’s private life that good fortune and high visibility can bring. The media hunger for new spins in a historic sports achievement or cabinet appointment makes them dig deeper into personal histories including romantic liaisons and dubious business deals.

Intrusive media rationalize their undue interest in a new celebrity’s private life with the declaration that he is now subject to public scrutiny. The voyeuristic public has the “right to gnaw.” So, news interest tends to cover gossip and the dark side of a previously unknown personality now on the spotlight.

Still, we cannot prepare for all the possible consequences of our decisions. We can only accept them and change course if necessary. And even that directional change will have its own consequences. We can try to develop resilience for whatever comes our way.

Not all unintended consequences anyway are unpleasant. The favorable outcomes we can even claim credit for… as all part of the plan.

 

Tony Samson is chairman and CEO of TOUCH xda

ar.samson@yahoo.com

‘Tough times’: Warnings sound over China’s ‘zero-COVID’ exit

A WOMAN walks across the street during morning rush hour in Chaoyang District, Beijing, China Nov. 21, 2022. — REUTERS

BEIJING — A week after China began dismantling its tough ‘zero-COVID’ controls, the World Health Organization (WHO) warned of “very tough” times ahead and state media reported some seriously ill patients at hospitals in Beijing, raising fears of a wave of infections.

China last Wednesday announced sweeping changes to testing and quarantine rules, aligning with a world that has largely reopened, after historic protests against mass lockdowns that caused mental strain for millions but kept the virus in check.

The elation that met those changes has quickly faded amid mounting signs that China may pay a price for shielding a population that lacks “herd immunity” and has low vaccination rates among the elderly.

“It’s always very difficult for any country coming out of a situation where you’ve had very, very tight controls,” WHO spokesperson Margaret Harris told a press briefing in Geneva on Tuesday, adding that China faced a “very tough and difficult time.”

The WHO typically refrains from commenting on individual countries’ policies, although agency Director General Tedros Adhanom Ghebreyesus did say in May that China’s previous COVID regime was not sustainable.

Official COVID case counts in China have been trending lower in recent weeks, but that has coincided with a drop in testing and is increasingly at odds with the situation on the ground.

There were 50 severe and critical cases in hospitals in Beijing, most of whom have underlying health conditions, state news agency Xinhua reported late Tuesday. Such numbers are small considering China’s 1.4 billion population, but there are growing fears that this was just the start of the next wave.

China has not reported any COVID-related deaths since Dec. 3, before the country started the loosening of curbs.

“This is the price we pay for being freer,” a 26-year-old surnamed Liu who works in marketing told Reuters on the streets of the capital.

“Now it is essential that we improve our awareness in self-protection. I think now the risk depends on individuals,” she added, requesting anonymity.

Long queues outside fever clinics, buildings attached to hospitals that screen for infectious diseases in mainland China, have been a common sight in Beijing and other cities in recent days.

In Shanghai, China’s most populous city, at least seven schools have said they will stop in-person teaching due to COVID cases, with classes going online, according to parents and notices seen by Reuters.

Infections are expected to spread across the country in coming weeks, as some people who have not been able to travel return to hometowns and villages.

State media reports on Wednesday said daily traffic flows at the main railway station in the tech hub of Hangzhou had more than doubled to 128,000 as young people headed home.

The mass movement of people will peak going into the Lunar New Year holidays which start on Jan. 22, after restrictions on domestic travel for the previous three years.

The National Health Commission said it would roll out the second COVID-19 vaccine booster shots for high-risk groups and elderly people over 60 years old.

It also said it would stop reporting new asymptomatic COVID-19 infections as many no longer participate in testing.

In the three years since the pandemic erupted in the central Chinese city of Wuhan, China’s has reported just 5,235 COVID-related deaths — a tiny fraction of its population, and extremely low by global standards.

U-TURNS
Top Chinese health officials have downplayed the threat of the disease and pushed the idea of self-care in recent weeks, a dramatic U-turn from previous messages that the virus had to be eliminated.

But amid growing concern about the virus spread, Chinese leaders have reportedly delayed a key economic policy meeting, which had been set to map out much-needed stimulus for the world’s second largest economy.

A Bloomberg News report on Tuesday night, citing people familiar with the matter, said the meeting had been delayed and there was no timetable for rescheduling.

Policy insiders and business analysts said the leadership was expected to map out further stimulus steps and discuss growth targets in the annual three-day session.

Economists estimate that China’s growth has slowed to around 3% this year, far below the official target of around 5.5%, marking one of the worst performances in almost half a century.

The International Monetary Fund warned in November of a possible downgrade to China’s gross domestic product or GDP. Its chief Kristalina Georgieva said that was now “very likely” after a recent COVID-19 surge, AFP news agency reported on Tuesday.

China’s yuan, on track for its worst year since 1994, when China unified the official and market exchange rates, eased against the dollar on Wednesday with traders also citing worries about a fresh surge of infections. — Reuters

How a secret software change allowed FTX to use client money

FTX.COM

IN MID-2020, FTX’s chief engineer made a secret change to the cryptocurrency exchange’s software.

He tweaked the code to exempt Alameda Research, a hedge fund owned by FTX founder Sam Bankman-Fried, from a feature on the trading platform that would have automatically sold off Alameda’s assets if it was losing too much borrowed money.

In a note explaining the change, the engineer, Nishad Singh, emphasized that FTX should never sell Alameda’s positions. “Be extra careful not to liquidate,” Mr. Singh wrote in the comment in the platform’s code, which it showed he helped author. Reuters reviewed the code base, which has not been previously reported.

The exemption allowed Alameda to keep borrowing funds from FTX irrespective of the value of the collateral securing those loans. That tweak in the code got the attention of the US Securities and Exchange Commission (SEC), which charged Mr. Bankman-Fried with fraud on Tuesday. The SEC said the tweak meant Alameda had a “virtually unlimited line of credit.” Furthermore, the billions of dollars that FTX secretly lent to Alameda over the next two years didn’t come from its own reserves, but rather were other FTX customers’ deposits, the SEC said.

The SEC and a spokesperson for Mr. Bankman-Fried declined to comment for this story. Mr. Singh did not respond to several requests for comment.

The regulator, which called the exchange “a house of cards,” alleged Mr. Bankman-Fried concealed that FTX diverted customer funds to Alameda in order to make undisclosed venture investments, luxury real estate purchases, and political donations. US prosecutors and the Commodity Futures Trading Commission also filed separate criminal and civil charges, respectively.

The complaints — along with previously unreported FTX documents seen by Reuters and three people familiar with the crypto exchange — provide new insights into how Mr. Bankman-Fried dipped into customer funds and spent billions more than FTX was making without the knowledge of investors, its customers and most employees.

Police in the Bahamas, where FTX was based, arrested Mr. Bankman-Fried on Monday evening, capping a stunning fall from grace for the 30-year-old former billionaire. His company collapsed in November after users rushed to withdraw deposits and investors shunned his requests for more financing. FTX declared bankruptcy on Nov. 11 and Mr. Bankman-Fried resigned as chief executive.

Mr. Bankman-Fried has apologized to customers, but said he didn’t personally think he had any criminal liability.

The auto-liquidation exemption written into FTX code allowed Alameda to continually increase its line of credit until it “grew to tens of billions of dollars and effectively became limitless,” the SEC complaint said. It was one of two ways that Mr. Bankman-Fried diverted customer funds to Alameda.

The other was a mechanism whereby FTX customers deposited over $8 billion in traditional currency into bank accounts secretly controlled by Alameda. These deposits were reflected in an internal account on FTX that was not tied to Alameda, which concealed its liability, the complaint said.

‘SAFE, TESTED AND CONSERVATIVE’
As Mr. Bankman-Fried grew FTX into one of the world’s largest crypto exchanges, consumer protection was a central tenet of his pitch for crypto regulation in the United States. Mr. Bankman-Fried stressed this theme in countless statements to customers, investors, regulators and lawmakers. FTX’s auto-liquidation software would protect everyone, he explained.

In congressional testimony on May 12, he called FTX’s software “safe, tested and conservative.”

“By quickly unwinding the riskiest, most undercollateralized positions, the risk engine prevents build-up of credit risk that could otherwise cascade beyond the platform, resulting in contagion,” Mr. Bankman-Fried testified.

He did not tell lawmakers about the software change to exempt Alameda. Indeed, he told investors that Alameda received no preferential treatment from FTX, the SEC complaint said.

Mr. Bankman-Fried had directed subordinates to update the software in mid-2020 to enable Alameda to maintain a negative balance on its account, the SEC complaint said. No other customer account at Alameda was allowed to do so, the complaint added. This would allow Alameda to keep borrowing more FTX funds without the need to provide more collateral.

In software tweaks made in August 2020, Alameda was designated as the “Primary Market Maker” or “PMM,” according to a Reuters review of its codebase. Market makers are dealers who enable trading in an asset by standing ready to buy and sell it. 

To explain the change, Mr. Singh, the chief engineer, inserted a comment into the code: “Alameda would be liquidating, prevented.” He included a warning “not to liquidate the PMM.”

Only Mr. Singh, Mr. Bankman-Fried and a few other top FTX and Alameda executives knew about the exemption in the code, according to three former executives briefed on the matter. A digital dashboard used by staff to track FTX customer assets and liabilities was programmed so it would not take into account that Alameda had withdrawn the client funds, according to two of the people and a screenshot of the portal that Reuters has previously reported.

Mr. Bankman-Fried’s house of cards “began to crumble” in May 2022, the SEC complaint said.

As the value of crypto tokens plummeted that month, several of Alameda’s lenders demanded repayment. Since Alameda didn’t have the funds to meet these requests, Mr. Bankman-Fried directed Alameda to tap its “line of credit” with FTX to obtain billions of dollars in financing, the complaint said.

Ultimately, when FTX customers dashed to withdraw their money this November, spooked by media reports about the company’s financial health, many discovered that their funds were no longer there. — Reuters

Ukraine’s latest need: 50 million LED light bulbs to ease power shortfalls

WIKIPEDIA

WHILE Kyiv’s allies pledged more than $1 billion in aid on Tuesday, they also promised energy-efficient LED bulbs to ease power shortfalls and help Ukraine get through freezing winter months as Russia pounds the country’s infrastructure.

They made the pledge at a global meeting, hosted by France, to discuss what could be offered between now and March to maintain water, food, energy, health and transport during Ukraine’s typically frigid winter.

The European Commission said it would provide up to 30 million light-emitting diode (LED) bulbs after Ukraine’s President Volodymyr Zelensky said that 50 million such bulbs would significantly reduce the power shortfall in the country.

LED bulbs use on average 75% less energy than traditional bulbs and last up to 10 times longer.

“I hope that other partners will follow us,” European Commission President Ursula von der Leyen told the conference.

She added that energy savings from a full deployment of 50 million LED bulbs to Ukrainian homes would amount to one gigawatt of electricity, equivalent to the annual production of a nuclear power plant.

Russia has been pounding Ukraine’s energy infrastructure since October, destroying or damaging half of it.

Ukraine’s Economy Minister Yulia Svyridenko said a free program for people to exchange LED bulbs will be introduced soon, ultimately helping to reduce power consumption by 7-10% at peak times.

“One hand, we are increasing energy production and distribution,” Ms. Svyridenko said in a statement. “And on the other hand, we are implementing energy efficiency measures that can help us survive the winter and reduce energy consumption.” — Reuters

Christmas always finds its way

Coca-Cola™ celebrates the unstoppable force of bringing families together in this year’s holiday campaign

Holidays are indeed coming, and Coca-Cola is celebrating the moment with the launch of its new campaign, “Christmas Always Finds Its Way” which celebrates the unstoppable, magical force of Christmas in navigating all obstacles to bring people together.

In 2021, Coca-Cola launched Real Magic®, its new global brand platform and philosophy that invites everyone, everywhere to celebrate the magic of humanity. Central to the philosophy is the belief that we find magic when we come together and share experiences.

In this year’s multi-channel, digital, and experiential campaign, Coca-Cola is set to create a series of memorable and distinct moments across the Philippines, designed to celebrate and create that festive magic across the country, while observing the special role that gatherings, meals, and traditions play in bringing families, friends, and communities together. After all, Coca-Cola has always been part of every Filipino celebration.

“December is the peak of holiday celebrations in the Philippines, when families and loved ones come together to share stories, exchange laughter, and bond over meals and drinks,” said Cesar Gangoso, East Region Frontline Marketing Director of Coca-Cola ASEAN and South Pacific. “We are delighted to hear stories of Filipinos who always celebrate Christmas with a bottle or two of Coca-Cola, so with this year’s campaign, we want to better enrich the festivities through a series of activities in the Philippines that can bring a truly magical experience.”

The campaign starts with a film, “Just Like Mama Used to Make,” directed by German filmmakers Dorian and Daniel and created by Grey Global. The film tells the heart-warming story of how a son’s memory of his mother is kept close through the preparation of a treasured family recipe, continuing to bring his family and new generations together for moments of magic at Christmas.

“The long association of Coca-Cola with Christmas is something we treasure and, this year, we’re back with a new campaign that we hope people all over the world will love,” shared Selman Careaga, president of Coca-Cola trademark. “It celebrates families and friends, past and present, as well as those shared recipes, memories, and traditions that bind generations together over the Christmas meal.”

In wider plans to mark the festive season, the brand’s iconic Caravans will return. For almost three decades, since they first lit up the small screen in a TV ad in the mid-1990s, Coca-Cola has built its Caravans truck asset as a powerful and tangible icon of Christmas across the globe. This year, Coca-Cola Caravans are back, and the brand will be curating a truly magical, festive experience centered around sharing meals with an ice-cold Coca-Cola drink. Reimagined as ‘The Coca-Cola Care-A-Van’ in the Philippines, Coca-Cola aims to takeover over forty food fests in different parts of the country, with the goal of bringing communities around the Philippines together for festive cheer.

The first Coca-Cola Care-A-Van Community Takeover was in Pasig City’s Greenfield District on December 3, 2022. With a jolly Santa Claus holding a bottle of Coca-Cola painted on its body, the iconic truck welcomed guests and served as a photo wall for taking festive photos. Food tents surrounding the venue also provided meals and Coca-Cola products to be enjoyed during the program. A dynamic performance by Coke Studio artist and rising P-Pop group ALAMAT, raffle draws, games, and other activities also contributed to the lively atmosphere.

Coca-Cola continues to not only refresh people with delicious drinks, but to also refresh communities. In partnership with the Ronald McDonald House of Charities Philippines, the Coca-Cola Care-A-Van Community Takeover will make a stop at Sitio Pintor, Rizal to host a Christmas party and give away meals and Coca-Cola products to 100 underserved families—bringing the spirit of Christmas to whoever needs it.

Lastly, the digital experience will continue as Coca-Cola launches “Call from Santa” web platform that will be available on iOS, Android, Win, and Mac. Filipinos can also access the platform by scanning a QR code in select Coca-Cola bottles. Anyone who wishes to send a surprise to their loved ones can request a personalized video message from Santa. With the Philippines being one of the largest diasporas globally, the platform is a welcome initiative, especially for those who are out of the country.

“We all know how special Christmas is to Filipinos, but we also recognize that there are many out there who can’t be home during the holiday season due to various circumstances or obligations, even as they yearn to be among their loved ones to celebrate a Christmas meal,” said Tony del Rosario, President of Coca-Cola Philippines and Vice President for the East Franchise Operations of Coca-Cola ASEAN and South Pacific. “Since they cannot be with their family and friends, we at Coca-Cola want to find a way to help them enjoy Christmas and experience the magic of the season.”

Indeed, Christmas this year will still be festive, especially for those with impossible journeys, as Coca-Cola helps find ways to bring Filipinos together and remind us that the festivities lie in the moments we share with our loved ones.

To learn more about Coca-Cola, visit us at coca-cola.com.ph or follow us on Facebook, Instagram, YouTube, and Twitter.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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New Zealand forecasts recession next year but a narrower budget deficit

Image via Anup Shah/Flickr/CC BY-SA 2.0

WELLINGTON — New Zealand’s government on Wednesday forecast the country would enter a recession in 2023, even as the budget remained on target to move into surplus for the 2024/25 financial year.

Spending constraints and the forecast recession will add to challenges facing Prime Minister Jacinda Ardern’s Labour party as it approaches a general election next year.

The economy will shrink in the second, third and fourth quarters of 2023, according to Wednesday’s economic and fiscal update from the Treasury.

The Reserve Bank of New Zealand is even more pessimistic than the Treasury, having forecast a year-long recession beginning in the second quarter of next year, a result of steep interest rate rises it has implemented to control inflation.

“2023 is a challenging year for many New Zealand households,” Finance Minister Grant Robertson told a press conference after issuing the regular mid-financial-year update.

Getting back to surplus would demand tough budgetary choices, he said in a statement.

Ministries would be told to find money within existing budgets for new initiatives next year, Robertson said.

In May, the government announced heavy spending on infrastructure, including new schools, and on the health system, which got more funding for drugs and facilities.

Opposition parties have criticized Labour’s spending as contributing to inflation, which is running at just below three-decade highs.

Robertson said a careful approach to the budget was needed if the country wanted to get inflation down.

Nonetheless, the fiscal outlook has already improved. The government predicted a budget deficit of NZ$3.63 billion ($2.34 billion), or 0.9% of gross domestic product (GDP), for the financial year ending June 2023. That was narrower than the NZ$6.6 billion forecast in the budget issued in May.

Public finances would produce another deficit in 2023/24 but shift to a surplus of NZ$1.6 billion in 2024/25, according to the Treasury’s update document.

It forecast that net debt under an old method of calculation would peak at 41.8% of GDP in 2023/24, compared with the May forecast for a peak in 2023/24 at 41.2% of GDP.

Westpac economists said in a note that the relatively benign fiscal outlook hinted at some wiggle room for government spending. “For now, though, the Government is keeping its powder dry,” the note added.

The government said it would extend transport subsidies, with the expiry of a cut on petrol excise duty deferred to February and half-price public transport remaining until March.

Despite economic weakness, inflation will not return to the government’s target band of 1% to 3% until December 2024, according to the Treasury’s update. In the third quarter of 2022, consumer prices were 7.2% higher than a year earlier. — Reuters

Uncertain conditions await Bankman-Fried at Bahamas detention center

Sam Bankman-Fried, founder and former chief executive officer of now-bankrupt crypto exchange FTX. — WIKIMEDIA COMMONS

Prisoners faced rodents and a lack of toilets in the Bahamas detention center where Sam Bankman-Fried will be held, according to a 2021 US State Department report, though local authorities says conditions have since improved.

The 30-year-old Mr. Bankman-Fried arrived at a Bahamas court on Tuesday for his first in-person public appearance since the spectacular collapse of cryptocurrency exchange he founded.

He did not waive a hearing on his extradition to the United States to face charges of misappropriating funds and violating campaign laws, apparently in hopes of obtaining bail, but was instead remanded to the Bahamas Department of Correctional Services until Feb. 8 by Chief Magistrate JoyAnn Ferguson-Pratt.

Bahamian Commissioner of Correctional Services Doan Cleare said preparations were being made for him to be housed in the medical department. That would mean he will be in a sick bay that can hold about five people, Cleare said.

“He will be in sick bay for orientation purposes and then we will determine where best to place him,” Mr. Cleare said in a telephone interview on Tuesday.

The US State Department in a 2021 report described conditions at the facility, also known as Fox Hill Prison, as “harsh,” citing overcrowding, rodent infestation and prisoners relying on buckets as toilets.

Mr. Cleare said on Tuesday that prison conditions have greatly improved thanks to a renovation program that has built new cells.

“The facilities, most of them have been renovated,” Mr. Cleare said. “We have one more to go and we don’t have any issues with rodents.”

Larry Levine, the founder of Wall Street Prison Consultants, which advises those convicted of white collar crimes on how to get into better prisons, said that Mr. Bankman-Fried should not fight extradition.

“There is no advantage to him staying, he’ll be sent to the US eventually anyway,” Levine said.

US prosecutors on Tuesday accused Mr. Bankman-Fried, the founder and former CEO of crypto currency exchange FTX, of fraud and violating campaign finance laws, saying he made illegal campaign contributions to Democrats and Republicans with “stolen customer money.”

Mark S. Cohen, Bankman-Fried’s lawyer, said in a statement that his client was considering all of his legal options.

Mr. Bankman-Fried has apologized to customers and acknowledged oversight failings at FTX, but said he does not personally think he has any criminal liability. — Reuters

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