More uncertainty?

June 8, 2022 | 5:48 pm

It is clear that the bypassing of the confirmations of interim Commission on Elections (Comelec) Chairman Saidamen Balt Pangarungan and Comelec Commissioner George Garcia by the Commission on Appointments (CA) were politically motivated.

This was the response of former Senate President and Minority Floor Leader Franklin M. Drilon, when asked about the probable reasons for the bypassing of the confirmation of the two competent gentlemen from Comelec. We interacted with them during their short tenure at Comelec and we noted their forthrightness and approachability. A third commissioner, Aimee Torrefranca-Neri was also bypassed.

It is, however, perfectly clear and understandable that political appointments like Comelec chairman and Commissioners become…. well, political. It is important that the President of the Republic will have, at the very least, some access or influence, and with politics at its worst, control over his/her appointees in an independent Constitutional agency that manages and administers elections.

The bypassing of the confirmation of Pangarungan and Garcia was achieved simply by the House contingent of the CA not showing up. Their absence prevented the achievement of a quorum. There was therefore no basis for conducting further business.

One ally of Ferdinand Marcos, Jr. however said that it was only right to bypass the confirmation of the three remaining unconfirmed commissioners to give the incoming president “leeway” to get people of his choice and confidence. On the surface, one can say, there is nothing wrong with that, for as long as the power to appoint is used judiciously. Stakeholders have a fair idea of what Comelec needs to do to gain the trust of the people. Civil society groups know what expertise the poll body needs for it to address shortcomings that compromise transparency and being a truly rule-based agency.

The bypassing of the confirmation of Pangarungan and Garcia, further stresses the point that Marcos Jr., although an ally of Rodrigo Duterte and Sara Duterte, will make decisions to achieve his own objectives.

What are Marcos Jr.’s primordial objectives? He said it himself in a campaign interview: “to protect himself” and, most likely, his family, his family’s resources, his father’s legacy. And appointing his own people at the Comelec is ultimately in support of that objective.

Marcos Jr.’s oathtaking at the National Museum is also part of the fulfillment of that objective of promoting, protecting, and defending the legacy of Marcos Sr., whatever that may be in his and his millions of supporters’ eyes. It must be noted that the National Museum was the old Congress. Marcos Sr. started his political career as congressman of the second district of Ilocos Norte from 1949 to 1959 in that same building — which he locked up on Sept. 23, 1972 when he declared Martial Law. Marcos Sr. launched his presidential ambitions from the Senate after being elected Senator in 1959. By 1961, he wanted to be President and had attempted to wrest the Liberal Party nomination for President from then Vice-President Diosdado Macapagal. Marcos Jr. is merely retracing the footsteps of his father.

The formation of Marcos Jr.’s Cabinet, particularly with respect to the economic team, could also be said to follow the same path as Marcos Sr. Marcos Sr. appointed technocrat-academicians-corporate executives like Cesar Virata, Jr., Placido Mapa, Gerry Sicat, Jaime Laya, Vicente Paterno, Rafael Salas, and Alejandro Melchor, to name a few.

Marcos Jr. has recently announced the appointment of a number of Cabinet members who will form the economic team. All members of the economic team have spent time at the University of the Philippines (UP) School of Economics: former National Economic and Development Authority (NEDA) Director-General and Planning Secretary Felipe Medalla; Dr. Arsenio Balisacan, also a former NEDA Director-General and Planning Secretary; Benjamin Diokno, soon to vacate his position as Bangko Sentral ng Pilipinas Governor; and Alfredo Pascual, former President of the University of the Philippines, Secretary of the Department of Trade and Industry.

The scuttlebutt is that Marcos Jr. and his inner circle were in a bit of a panic mode to publicly announce his team of economic managers in light of the negative impact his then-forthcoming victory was having on the international financial market. JP Morgan had quickly downgraded the credit rating of the Philippines. There was a feeling of foreboding and general unease with what appeared to be a clear victory for a candidate who still had to reveal his plans. After all, it is not easy to erase the memories of Martial Law, despite the organized and well-funded efforts at historical revisionism and falsification. In addition, candidate Marcos Jr. snubbed all the Comelec-organized and sanctioned presidential debates, obviously in order to avoid embarrassing questions about Martial Law, his academic credentials, work record as an elected public official, and details of his program of “Unity.” In short, there was a black hole that remained unfilled and that was creating damaging uncertainty.

What made naming his economic team more urgent was that a congressional proclamation of his victory was imminent and to be proclaimed without names and faces of the economic team would further aggravate the uncertainty.

Speaking of uncertainty during this period, one reflects on veteran journalist Vergel Santos’ comment on “incoming press secretary Trixie Angeles’ announcement that she will accredit bloggers to cover Ferdinand Marcos Jr.’s presidency. The idea is dangerous. It tends to legitimize the false impression that bloggers are journalists, and as such, part of the institution that the democratic constitution assigns as the people’s watchdog on government — the press.”

Santos is emphatic, “Blogging is not journalism, not even in the loosest sense. It’s a cheap, individualistic, free-wheeling operation. One need not train for it, and anyone can go into it. It’s not unlike going on a soapbox and shooting one’s mouth off. Journalism, on the other hand, is both a profession and a trade, governed by both ethical and moral standards and rules of practice. Journalists are trained in certain disciplines and skills, and their works go through layer upon layer of specialist vetting — for truthfulness, not to mention technicalities of craft and law — before being put out there for all the public to see.”

Santos further emphasizes his point with a metaphor: “For a graphic distinction: Journalism is a piloted train; blogging is a runaway one.”

Santos ends with both a piece of advice and a warning: “Legit journalists must rethink their journalism. The new landscape does not favor them.”

More uncertainty?

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.

Consuming passion

June 8, 2022 | 5:48 pm

image-from-rawpixel-id-654519-jpeg — RAWPIXEL.COM

THE MOST AMAZING phenomena in the previously waged campaigns (they seem such a long time ago) were the pink rallies: a joyous combination of a Woodstock rock concert, street party, town fiesta, religious revival, creative initiative, comic relief, and peace march. They became a numbers contest, this one bigger than the previous, with drone shots of tightly packed bodies computed per square meter of available space as of a certain time (without counting joiners and leavers throughout).

The rallies epitomized the volunteer spirit of attendance in big numbers, with free food, medic support, toilet facilities, and bottled water provided by various anonymous donors and, yes, no cash incentives in envelopes handed out: “hindi kami bayad.” And best of all, the rallyists cleaned up after themselves.

It seemed like the road to victory. And maybe it was.

Should that be the end of a stirring demonstration of volunteerism and generosity of spirit that had brought out the best of our bayanihan culture and its passion to do good? This celebration of kinship, unity for the nation, and cheering for a cause cannot be wasted.

While the daily announcements of appointments to the cabinet garner instant media attention, and, yes, much genuine support, there is little fanfare attending anyone relegated to the private sector — Sir, you’re already part of it.

The bayanihan spirit so recently rediscovered can be rechanneled.

The GDP which economists track quarterly for growth to gauge the health of the economy and the country is made up of 65% consumption. The other two components in “C+I+G” are Investments and Government spending (Build, Build, Build). Consumption is driven by the private sector and occasionally boosted by individuals working in the public sector, with unexplained purchasing power for expensive watches and cars — I was surprised to see a Porsche parked in my garage.

An individual with an explainable source of income for which proper taxes are paid also contributes to the rise in GDP through the passion to consume (buy, buy, buy). This is sometimes called “retail therapy.” Economists in their dry language refer to it as a “propensity to consume.” This is defined as “the proportion of total income or of an increase in income that consumers tend to spend on goods and services rather than save.” Thus does the propensity to consume eat into the propensity to save.

For the post-pandemic economy (referring to COVID, and not any political outcome) there is a more relaxed protocol after the lockdown regimes.

When people are allowed out of the house to, yes, get back to the office, the propensity to consume rises. Those with still enough purchasing power (and restored representation expenses) can treat clients in dining out. (Please remove your mask when eating.)

Maybe, with the new set of bureaucrats driving regulation and the public sector, there is a new round of law firms and powerbrokers to get acquainted with. The changing of the guard at the political level spills over to the private sector. Mergers and acquisitions are just a higher form of consumption, if only for the meetings with the consumption of alcohol and roasted duck these will generate.

Other more normal consumer behaviors follow, like buying clothes to adjust to the WFH waistlines. While some continue to hang on to their pajamas and leisure wear so useful for virtual meetings, more offices and clients are moving to Face-to-Face (FTF) meetings where lower wear needs to be employed.

Domestic travel too will rise, when one no longer needs to deal with checkpoints and pre-registration of local visits. Even foreign travel gets into the GDP with the purchase of airline tickets and maxing out of credit cards.

Consumption is also bumped up by inflation, as in the case of fuel where the same number of liters cost more than a month before. (Sometimes, they are adjusted downwards too.) Inflation affects other necessities like food, utilities, and transportation.

So, can the consuming passion of the rallies be leveraged into the propensity to consume to boost GDP? Will the bayanihan fervor translate into the desire to make the country succeed even with another leader?

Is there really a choice between changing the country for the better… or changing to a better country? Some have already made that decision. Hopefully for most, it’s the first option they decide on. Anyway, it is more fun in the Philippines, with more surprises… some of them pleasant.

Tony Samson is chairman and CEO of TOUCH xda

ar.samson@yahoo.com

Hong Kong is still most expensive city for expats

June 8, 2022 | 5:39 pm

HONG KONG is the world’s most expensive city to live in as an expat for the second year in a row, according to a new study. New York and Geneva took second and third place in the rankings.

Higher prices and a stronger currency over the past year kept the Asian city at the top of the tree, according to ECA International, which carried out its research in March this year. London and Tokyo round out the top five.

Soaring rental costs were part of the reason London and New York took their positions in the top five, with rent in those cities rising 20% and 12% respectively.

Elsewhere in the Cost of Living report, Singapore stayed in 13^th place despite significant rises in rent, petrol prices and utilities. Those were offset by the Singapore dollar weakening against other regional currencies during the latter part of the survey period, ECA said. Japanese cities all fell down the ranks as the yen weakened, while Chinese cities rose — with Shanghai and Guangzhou taking 8^th and 9^th positions respectively — on a stronger yuan.

Here are some more of the survey’s findings:

Petrol prices climbed on average 37% compared to a year earlier across all cities, while Beirut recorded a 1,128% increase.

Turkey’s Ankara is the cheapest city in the world for expats, after falling five spots to 207^th place

War in Ukraine saw cooking oil prices rise an average of 25% last year across cities in the ranking.

Tehran’s fuel prices were cheapest, with a liter of petrol costing just $0.09.

A cup of coffee at $5.21, a liter of petrol at $3.04 and a kilo of tomatoes at $11.51 were just a few of the prices that took Hong Kong to the top of the list.

“Although Hong Kong has been impacted by rising global inflation less than other regional and global locations in the past year, it nonetheless remains the most expensive location in the world,” a press release quoted ECA International’s Regional Director for Asia, Lee Quane, as saying.

“It has been the strength of the Hong Kong dollar, which is pegged to the US dollar, in the past year which has enabled it to maintain its position as the most expensive location worldwide as other currencies have weakened.”

ECA International analyzes the cost of consumer goods and services in more than 490 locations worldwide, while accommodation data is also factored in, comparing rental costs in areas typically inhabited by expatriate staff in over 410 locations worldwide. The latest report ranks 207 cities in 120 countries. — Bloomberg

HERE are the world’s top 20 most expensive places for expats (with the March 2021 ranking in parentheses):

Hong Kong (2021 ranking: 1)
New York, US (4)
Geneva, Switzerland (3)
London, UK (5)
Tokyo, Japan (2)
Tel Aviv, Israel (7)
Zurich, Switzerland (6)
Shanghai, China (9)
Guangzhou, China (10)
Seoul, South Korea (8)
San Francisco, US (15)
Shenzhen, China (12)
Singapore (13)
Beijing, China (16)
Jerusalem, Israel (18)
Bern, Switzerland (17)
Yokohama, Japan (11)
Copenhagen, Denmark (14)
Oslo, Norway (19)
Taipei, Taiwan (21)

S.Korea, US, Japan lambast N.Korea missile tests, urge return to talks

June 8, 2022 | 5:38 pm

SEOUL — North Korea’s recent missile tests were “serious, unlawful” provocations, senior officials from South Korea, the United States and Japan said on Wednesday, urging Pyongyang to return to dialogue and accept offers of coronavirus disease 2019 (COVID-19) aid.

South Korea Vice Foreign Minister Cho Hyun-dong, US Deputy Secretary of State Wendy Sherman and Japanese Vice Foreign Minister Takeo Mori made the comments as they gathered in Seoul, three days after North Korea conducted the latest in a series of missile tests.

The three-way meeting of the countries’ No. 2 diplomats, the first such gathering since November and the first since South Korea’s President Yoon Suk-yeol took office in May, highlighted the urgency and gravity of North Korea’s intensifying weapons tests.

Mori’s visit also marked such trip by the Japanese vice foreign minister since late 2017 amid strained bilateral ties over issues including Japan’s occupation of the Korean peninsula and war-time labor.

Seoul and Washington officials have said North Korea is ready for what would be its first nuclear test since 2017, which Sherman has said would trigger a strong and clear response.

The trio urged Pyongyang to abide by international sanctions and immediately cease actions that “escalate tensions or destabilize the region,” a joint statement said.

They also pledged to ramp up trilateral security cooperation to curb the North’s threats, with Sherman reaffirming the US defense commitments, including extended deterrence.

“They stressed that a path to serious and sustained dialogue remains open and urged the DPRK to return to negotiations, while also expressing their hope that the DPRK will respond positively to international offers of assistance to fight against COVID-19,” the statement said, referring to North Korea by its the initials of its official name, the Democratic People’s Republic of Korea.

North Korea has carried out at least 18 rounds of weapons tests this year, underscoring its evolving nuclear and missile arsenals.

In its latest test, North Korea fired eight short-range ballistic missiles, likely its largest single launch, a day after South Korea and the United States ended joint military drills involving an American aircraft carrier.

The allies launched eight surface-to-surface missiles on Monday in their own show of force responding to the North’s test.

South Korea’s President Yoon Suk-yeol, who took office in May, and US President Joseph R. Biden vowed at their recent summit to deploy more US strategic military assets as part of efforts to bolster the extended deterrence.

North Korea has been grappling with its first confirmed coronavirus outbreak since last month. It has reported more than 4.2 million patients with fever symptoms among its 25 million population, but never confirmed how many tested positive for the virus, lacking in test kits and medical supplies.

Seoul and Washington said they had respectively offered COVID aid but Pyongyang did not respond, even as the World Health Organization warned of a worsening COVID-19 situation there.

“The United States remains prepared to meet the DPRK without preconditions and we iterate again, we have no possible intent toward the DPRK,” Sherman told a joint news conference. — Reuters

Novavax COVID shot, aimed at vaccine skeptics, overwhelmingly backed by FDA panel

June 8, 2022 | 5:37 pm

ADVISERS to the U.S. Food and Drug Administration on Tuesday voted overwhelmingly to recommend that the agency authorize Novavax Inc’s COVID-19 vaccine for use in adults, which the drugmaker hopes can become the shot of choice among some American vaccine skeptics.

The panel of outside vaccine experts voted 21-0 with one abstention in favor of the vaccine for those 18 and older after discussing whether the shot’s benefits outweigh risks, including rare occurrences of heart inflammation that may be associated with the vaccine.

If the FDA follows the recommendation and authorizes the shot, it will be the fourth COVID vaccine available for use in adults in the United States. The FDA has approved previous COVID shots within days of panel votes, with distribution quickly following.

The timeline for Novavax is not clear.

Novavax Chief Commercial Officer John Trizzino said the agency is still reviewing documents detailing its manufacturing processes submitted last week.

“We hopefully expect to have product in the U.S. in our warehouse by the end of June,” he said in an interview, adding that the company plans to ship millions of doses made by its partner, the Serum Institute of India, soon after authorization.

Novavax’s shot, which is already available in over 40 countries, is a more traditional type of vaccine employing technology that has been used for decades to combat diseases like influenza.

Maryland-based Novavax is hoping to gain a foothold within the roughly 27 million U.S. adults who are yet to be vaccinated, particularly those who do not want to receive a vaccine like the Pfizer PFE.N/BioNTech or Moderna Inc shots based on groundbreaking messenger RNA (mRNA) technology.

“We do have a problem with vaccine uptake that is very serious in the United States,” FDA official Peter Marks told the panel.

“Anything we can do to get people more comfortable to be able to accept these potentially life-saving medical products is something that we feel we are compelled to do,” he added.

However, that demand has not materialized in Europe, where Novavax also said it could drive up vaccination among the hesitant.

Around 12.6 million doses of the vaccine have been distributed in the European Union, but only around 220,000 doses of the two-shot inoculation have been administered there since it was launched in December.

A Department of Health and Human Services (HHS) spokesperson noted that supply is likely to be limited in the near term.

Before shots can be administered, the FDA must authorize the vaccine and the Centers for Disease Control and Prevention (CDC) needs to green light its use.

HHS said in a statement on Monday that it is coordinating with Novavax “to receive a limited quantity of vaccine and will make that vaccine available to the American public” once those steps are complete. A CDC panel may consider the Novavax shots late next week.

Novavax filed for U.S. authorization in late January, almost a year behind its original plan, following development and manufacturing problems. — Reuters

Canada issues monkeypox-related travel notice, warns of potential delays returning home

June 8, 2022 | 5:37 pm

Canada-Flag — PRAVEEN KUMAR NANDAGIRI-UNSPLASH

OTTAWA — Canada issued a monkeypox-related travel notice on Tuesday, advising travelers to over two dozen countries, including Australia, Britain and the United States, to take precautions and warned of potential delays returning home if they fell ill.

In a level 2 notice – one grade below a call to avoid non-essential travel – the Public Health Agency of Canada said travelers may be subject to procedures to limit the spread of monkeypox, such as isolation, should they become infected.

“You may have limited access to timely and appropriate health care should you become ill, and may experience delays in returning home,” the agency said on Twitter.

Around 30 countries where monkeypox is not endemic have reported outbreaks of the viral disease, with more than 911 confirmed or suspected cases mostly in Europe.

Canada has confirmed 81 cases of the disease, most of which were recorded in its second-most populous province of Quebec.

Monkeypox, which spreads through close contact and was first found in monkeys, mostly occurs in west and central Africa and only very occasionally spreads elsewhere. — Reuters

‘No shortcuts’ to regulating banking innovations — fintech experts

June 8, 2022 | 4:11 pm

online-payment — STOCK PHOTO | Image by Katemangostar from Freepik

A “significant wave of innovation” in banking supported by cloud technology — including digital currencies, open banking, and blockchain disintermediation — needs to be accompanied by regulation, according to a Financial Industry Editors’ Forum organized by IBM on June 1.

“When dealing with traditional banks, if you’re not licensed and regulated, you won’t have meaningful relationships,” said Calvin Shen, managing director of Hex Trust, a digital asset custodial firm in Singapore. “In addition to security, there’s the compliance question … These are the things to think about beyond tech. There are no shortcuts.”

While central bank digital currencies (CBDCs) and cryptocurrencies both live on the blockchain, they are not the same: CBDCs are centralized, cryptocurrencies are not.

“The difference is that it’s [a CBDC] backed by the sovereign. That’s a very big difference,” said Mr. Shen. “The fundamental question — beyond being legal, and being compliant — is security.”

This April, the Bangko Sentral ng Pilipinas (BSP) said that it would test the use of CBDC for large-value financial transactions among selected financial institutions.

OPEN BANKING
Traditional banks are investing in open banking, a system that allows access and control of consumer banking and financial accounts to third-party applications.

While open banking has the potential to lower costs and improve customer service, it also increases the risk to consumers as more of their data is shared.

“When open banking occurs, security issues emerge,” said Kunacillan Nallappan, vice president of Asia Pacific, China, and Japan for F5 Networks, a Seattle-based cloud and security application service provider.

“How do we protect customer data? API security is top of mind. Banks want customers to access products through them, because this opens up new channels of revenue.”

(API, or application programming interface, is software that allows two applications to talk to each other.)

In January, the BSP launched its framework for open finance.

NEOBANK COLLABORATIONS
Mr. Nallappan also pointed out how open banking has yielded collaborations between banks and third-party providers like neobanks, or internet-only financial services firms.

“Because consumers trust [traditional banks], they go through them to consume third-party services,” he said.

Established banks can coexist with neobanks, according to Juan Madera, IBM Consulting’s leader for the ASEAN financial services sector: “The cost of customer acquisition [for the latter] is high even though the technology cost is low.”

“The most successful neobanks are those that already have a large, strong customer base, and then created a bank from that,” he said.

DEFI
Decentralized finance (DeFi) presents opportunities for the Philippine market, said Mr. Madera.

“It makes some of the underlying business processes more efficient and more cost-effective, like, for example, cross-border payments,” he said. “It’s also a question of needs … If you have a geographically dispersed and underbanked population, technology can bridge the gap.”

By 2023, the BSP aims to onboard 70% of Filipino adults into the financial system and convert 50% of payments into digital. It said 53% of adults had a basic deposit or an e-money account as of the first quarter of 2021. — Patricia B. Mirasol

Quantum computing solves what classical computing can’t

June 8, 2022 | 2:53 pm

By Patricia Mirasol, Reporter

What’s the next big thing in technology after artificial intelligence and the cloud? The nascent field of quantum computing.

The aforementioned technology, which uses quantum mechanics to perform certain kinds of computation more efficiently than a regular computer, boosts speeds over a trillion times faster than an ordinary laptop.

Real-life applications encompass improvements in fraud detection and healthcare therapeutics, according to Scott Crowder, vice-president of IBM Quantum Adoption and chief technology officer of IBM Systems.

“One of the things quantum computing has proven to be better at is pulling patterns out of data…” he said at IBM’s Think event in Singapore. “For certain types of applications like fraud detection, having a small percentage improvement equals a lot of money for financial institutions. The same could be true for healthcare, and in determining whether something is going to be therapeutically good for you based on factors such as your age and DNA [deoxyribonucleic] profile.”

A second area of interest is in simulating nature — as in chemical reactions, added Mr. Crowder.

“There’s a lot of interest right now in electric vehicles and cleaner energy. Understanding better the chemistry underneath that, we can better predict what types of chemistries to explore,” he told the attendees of a June 2 media roundtable discussion. “It’s the same with corrosion [in planes and ships], and in understanding how better to build materials against it.”

CONSIDERATIONS
Inasmuch as the technology can be parlayed for multiple uses, there are factors to be considered for its adoption. One is the fact that quantum states called qubits are fragile and sensitive to the environment. In order to keep quantum computers stable, these need to be kept in an environment with minimal noise and at very low temperatures.

Another is that quantum computing solves problems that lend themselves to quantum computing.

Because quantum computing is a different way of processing information, “I wouldn’t say it’s more powerful [than classical computing]. It’s just powerful for particular kinds of math in a very different way,” Mr. Crowder said, explaining that a quantum computer won’t enable people to e-mail a billion times faster. What it can do, he said, is come up with a quantum algorithm that can explore a particular state space and then “clap it back down to a small number of bits.”

“The value comes from those particular kinds of problems it can solve,” he added.

INTEREST
Despite these, investments in the technology to harness its potential have been gathering speed.

Singapore, for one, announced on May 31 a S$23.5 million investment to spur its quantum technology capabilities in solving challenges like cyber threats.

The country’s deputy prime minister Heng Swee Keat also announced on the same day the launch of the National Quantum Computing Hub, which will pool expertise and resources from the Center for Quantum Technologies and other institutions, and the National Quantum Fabless Foundry, which will develop the components needed to build quantum computers and devices.

Other quantum computing initiatives around Asia include Japan’s plan to have its first homegrown quantum computer ready for use by March 2023 — “to keep up with the fierce global race for technological dominance,” per Nikkei Asia — as well as China’s 14^th Five-Year Plan, which incorporates quantum information technology among other frontier fields.

IBM-specific initiatives, meanwhile, include the establishment of the IBM Quantum Computing Data Center at Yonsei University, Korea. The technology corporation also has a Quantum Network, which studies the technology’s practical applications across industries, and which encompasses member companies like Cleveland Clinic in the United States and Archer Minerals in Australia.

“Quantum computing is kind of like sci-fi come to life,” Mr. Crowder said. “The reason why people are so excited about it is because when you add a qubit to a quantum processor, you double the number of states within a single operation by a factor two… that adds up really quickly. Two to the n gets to be a big number very, very fast.”

Biden envoy to visit Marshall Islands as U.S. concerns grow about China’s Pacific push

June 8, 2022 | 2:25 pm

WASHINGTON – President Joe Biden‘s special envoy for talks with three tiny but strategically important Pacific island nations will lead a delegation to the Marshall Islands next week amid growing US worries about China’s efforts to expand its influence in the region.

Joseph Yun, a veteran diplomat appointed by Biden in March, told Reuters he and his team would be in the Marshall Islands from June 14-16.

A spokesperson for the US State Department said Yun would hold talks on the Compact of Free Association (COFA) that governs US economic assistance for the Republic of the Marshall Islands (RMI), which is due to expire next year.

The United States has similar agreements with the Federated States of Micronesia (FSM) and Palau, which expire in 2023 and 2024, respectively, and Yun is also responsible for those negotiations.

“We welcome the opportunity for in-person meetings with the RMI negotiating team and look forward to productive talks,” the State Department spokesperson said.

The Pacific islands have emerged as a key front in Washington’s strategic competition with China, which has stepped up diplomatic efforts to woo countries in the region.

Mr. Biden and New Zealand’s Prime Minister Jacinda Ardern aired shared concerns last week about China’s bid to expand its influence in the Pacific and a senior US official said they discussed the need for in-person engagement with Pacific island leaders. Read full story

They also expressed concern about a recent security agreement between China and the Solomon Islands. [nL3N2XJ0FO]

Last week, a virtual meeting of 10 Pacific foreign ministers hosted by Chinese Foreign Minister Wang Yi in Fiji agreed to defer consideration of a Chinese proposal for a sweeping trade and security pact.

Samoa’s leader said subsequently the pact needed to be discussed at a regional meeting before any decisions are made. Read full story

Talks to renew the US COFA agreements with the Marshall Islands, FSM and Palau began during the Trump administration but languished before Yun’s appointment, raising concerns that Washington could lose its battle for influence with Beijing.

Key issues for the Marshall Islands include remuneration for the legacy of massive US nuclear testing there, the presence of US military bases and climate-change mitigation. Read full story

One source familiar with the plans said the talks would be held at the US Army Garrison – Kwajalein Atoll, site of a crucial US missile testing facility, and were a sign that Yun’s appointment had injected greater momentum into the Biden administration’s engagement with Pacific Island countries.

Yun had already conducted meetings or virtual discussions with the leaders of the three countries, and held virtual talks with the negotiating team from FSM, the source said, but the Marshall Islands trip would mark the first in-person negotiations since they were largely stalled in December 2020.

The source said Wang’s recent visit to the region had created a sense of urgency among US officials.

“I think it focused a lot more attention from people who weren’t very involved,” the person said, adding that Pentagon personnel were getting more involved in the COFA process.

The United States conducted 67 nuclear weapons tests in the Marshall Islands from 1946 to 1958 and islanders are still plagued by the health and environmental effects as a result.

The tests included the “Castle Bravo” at Bikini Atoll in 1954 – the largest US bomb ever tested and 1,000 times more powerful than the one that destroyed Hiroshima in 1945. – Reuters

Australian regulator sues Airbnb for allegedly misleading customers on pricing

June 8, 2022 | 2:21 pm

Australia’s competition regulator on Wednesday said it had initiated proceedings against Airbnb Inc ABNB.O in the country’s Federal Court for allegedly misleading consumers on pricing for accommodation in the country.

Between January, 2018 and August, 2021, the U.S.-based vacation rental company misled consumers in Australia by displaying prices for accommodation using only the ‘$’ sign, without clarifying that the prices were in U.S. dollars and not in the local currency, the Australian Competition & Consumer Commission (ACCC) said in a statement.

Airbnb did not immediately respond to a Reuters request for comment.

ACCC said it is seeking pecuniary penalties and orders to compensate people who were misled about pricing, among others.

The regulator added that when Airbnb received complaints on pricing, they told customers that prices were displayed in U.S. dollars because the user had selected that currency, which was often not the case.

“Airbnb‘s misleading conduct meant that consumers were deprived of the opportunity to make an informed choice about whether, and at what price, to book their holiday accommodation on the Airbnb platform,” ACCC Chair Gina Cass-Gottlieb said.

“In addition to paying higher prices than expected, some consumers who were charged in U.S. dollars also found themselves further out of pocket through currency conversion fees charged by their credit card provider.” – Reuters

S.Korea’s robust response to N.Korea seen aiding Japan’s military push

June 8, 2022 | 2:11 pm

SEOUL – South Korea’s tougher stance towards the North under its new conservative president will be welcomed by Tokyo as Japan seeks to boost its military capabilities amid rising tensions on the Korean Peninsula and more broadly in the region, analysts say.

South Korea and the United States this week fired missiles and staged a joint show of air strength in response to a barrage of short-range ballistic missiles launched by North Korea on Sunday. Read full story

It marked the second time South Korean President Yoon Suk-yeol has taken such a direct response since taking office in May with a pledge to respond more forcefully if North Korean leader Kim Jong Un ignores warnings about military provocations and offers of dialogue.

“The escalation of tension on the Korean peninsula, North Korea’s actions and our response to that as we saw has to be something that puts a smile on Japan’s face,” said Kim Dong-yub of Kyungnam University in Seoul.

Signs North Korea is preparing for another nuclear test and a resumption of joint South Korea-U.S. military drills help Japan justify its pursuit of becoming a normal military state, said Kim, a former South Korean Navy officer.

For decades, Japan has stuck to a policy of keeping defense spending within 1% of gross domestic product, countering concerns about any revival of the militarism that led the country into World War Two.

During U.S. President Joe Biden’s visit to Tokyo last month, however, Japanese Prime Minister Fumio Kishida emphasized Tokyo’s readiness to take a more robust defense posture, something Washington has long welcomed to counter an increasingly assertive and militarily capable China.

Japan this week said it wanted drastically increase defense spending “within the next five years”. Read full stor

“The Yoon government’s stronger response to North Korean provocations will find support in Japan, not only as an effort to deter the Kim regime, but also as part of defending a regional order already under stress from China,” said Leif-Eric Easley, an international studies professor at Ewha University in Seoul.

In an update to Japan’s national security strategy due by year end, Kishida’s administration is expected to commit Japan to acquiring missiles and other equipment to allow it to strike enemy bases, a capability critics say puts Japan beyond the bounds of a pacifist constitution that forbids it to wage war.

‘CHERRY ON TOP’

The shift in Seoul’s posture comes as Japan and South Korea look to reset relations that have been hampered by disputes stemming from wartime past and Japan’s colonization of the Korean Peninsula.

Yoon has said he hoped to meet Kishida soon, and work with him to improve ties. Read full story

Corey Wallace, a Japanese politics and security expert at Kanagawa University, said while Japan is winning public support with its stronger defense policy, better relations with Seoul were a bonus.

“The Ukraine situation has galvanized public support for defense spending in ways the threat of China never did. Tokyo sees a window of opportunity to push on a door that was somewhat closed before,” Wallace said.

“Improved relations with Seoul is a cherry on top.”

About 72% of Japanese support stronger military defense, a poll of 1,060 respondents by Nippon Television Network and Yomiuri Newspaper on June 5 showed, and more than half wanted Japan to boost defense spending. Other recent surveys said most also expect better relations with South Korea under Yoon.

A stronger combined defense posture between South Korea and the United States towards North Korea will also help Japan focus more on keeping China in check, experts say.

“In theory, Japan could then dedicate more of its military resources and new spending to enhance its military presence in its southwest maritime domain instead to check China,” Wallace said.

“However, giving Japan that level of comfort would require years of positive Seoul-Tokyo relations.” – Reuters

World Bank slashes global growth forecast to 2.9%, warns of ‘stagflation’ risk

June 8, 2022 | 10:29 am

WASHINGTON – The World Bank on Tuesday slashed its global growth forecast by nearly a third to 2.9% for 2022, warning that Russia’s invasion of Ukraine has compounded the damage from the COVID-19 pandemic, and many countries now faced recession.The war in Ukraine had magnified the slowdown in the global economy, which was now entering what could become “a protracted period of feeble growth and elevated inflation,” the World Bank said in its Global Economic Prospects report, warning that the outlook could still grow worse.In a news conference, World Bank President David Malpass said global growth could fall to 2.1% in 2022 and 1.5% in 2023, driving per capita growth close to zero, if downside risks materialized.Malpass said global growth was being hammered by the war, fresh COVID lockdowns in China, supply-chain disruptions and the rising risk of stagflation — a period of weak growth and high inflation last seen in the 1970s.“The danger of stagflation is considerable today,” Malpass wrote in the foreword to the report. “Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer.”Between 2021 and 2024, the pace of global growth is projected to slow by 2.7 percentage points, Malpass said, more than twice the deceleration seen between 1976 and 1979.The report warned that interest rate increases required to control inflation at the end of the 1970s were so steep that they touched off a global recession in 1982, and a string of financial crises in emerging market and developing economies.Ayhan Kose, director of the World Bank unit that prepares the forecast, told reporters there was “a real threat” that faster than expected tightening of financial conditions could push some countries into the kind of debt crisis seen in the 1980s.While there were similarities to conditions back then, there were also important differences, including the strength of the U.S. dollar and generally lower oil prices, as well as generally strong balance sheets at major financial institutions.To reduce the risks, Malpass said, policymakers should work to coordinate aid for Ukraine, boost production of food and energy, and avoid export and import restrictions that could lead to further spikes in oil and food prices.He also called for efforts to step up debt relief, warning that some middle-income countries were potentially at risk; strengthen efforts to contain COVID; and speed the transition to a low-carbon economy.The bank forecast a slump in global growth to 2.9% in 2022 from 5.7 percent in 2021, a drop of 1.2 percentage points from its January forecast, and said growth was likely to hover near that level in 2023 and 2024.It said global inflation should moderate next year but would likely remain above targets in many economies.Growth in advanced economies was projected to decelerate sharply to 2.6% in 2022 and 2.2% in 2023 after hitting 5.1% in 2021.U.S. growth was seen dropping to 2.5% in 2022, down from 5.7% in 2021, with the euro zone to see growth of 2.5% after 5.4%.Emerging market and developing economies were seen achieving growth of just 3.4% in 2022, down from 6.6% in 2021, and well below the annual average of 4.8% seen in 2011-2019.China’s economy was seen expanding by just 4.3% in 2022 after growth of 8.1% in 2021.Negative spillovers from the war in Ukraine would more than offset any near-term boost reaped by commodity exporters from higher energy prices, with 2022 growth forecasts revised down in nearly 70% of emerging markets and developing economies.The regional European and Central Asian economy, which does not include Western Europe, was expected to contract by 2.9% after growth of 6.5% in 2021, rebounding slightly to growth of 1.5% in 2023. Ukraine’s economy was expected to contract by 45.1% and Russia’s by 8.9%.Growth was expected to decelerate sharply in Latin America and the Caribbean, reaching just 2.5% this year and slowing further to 1.9% in 2023, the bank said.The Middle East and North Africa would benefit from rising oil prices, with growth seen reaching 5.3% in 2022 before slowing to 3.6% in 2023, while South Asia would see growth of 6.8% this year and 5.8% in 2023.Sub-Saharan Africa’s growth was expect to slow somewhat to 3.7% in 2022 from 4.2% in 2021, the bank said. — Reuters

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