Players warm-up to strict quarantine at Australian Open

January 20, 2021 | 5:51 pm

MELBOURNE — Australian Open boss Craig Tiley said most players supported being locked down in hard quarantine with the local government reporting three new cases of COVID-19 linked to participants of the Grand Slam on Tuesday.

Victoria health officials said two previous cases have been classified as prior infections taking the total positive cases associated with the tournament to seven.

“The new positive cases linked to the Australian Open involve two players and one non-playing participant,” said a statement from the health department.

Tiley said athletes who tested positive were not considered contagious and were still at their regular accommodation.

More than 70 players and their entourage are confined to their hotel rooms for 14 days and unable to train for the Feb. 8-21 Australian Open after passengers on three charter flights returned positive tests for the novel coronavirus.

The two cases reclassified would, however, not change the status of the players yet and they will continue to serve the rest of their strict isolation.

Some players have complained about the conditions, and men’s world number one Novak Djokovic suggested governing body Tennis Australia to ease quarantine restrictions, drawing a backlash from Australians.

Victorian premier Daniel Andrews said no changes would be made and the measures were essential to contain the virus.

Detailing the quarantine measures on a media conference call, Tiley said one of the seven infected people associated with the Grand Slam was a flight attendant.

“For the 1,270 (that arrived), having six positives is a low percentage so that’s a percentage to manage,” Tiley said, refuting some players’ claims that they were not made aware of the protocols before travelling to Australia.

Tiley said he had a call with 500 players to address concerns and the “vast majority” had been supportive of Australia’s strict protocols.

“The vast majority, most of them have been fantastic and been supportive,” Tiley earlier told the Nine Network, adding that the negative reactions came from “initial shock” due to the strict measures.

“(They) know that this is the contribution that they have to make in order to get the privilege of when they do come out to compete for A$80 million ($61.46 million) in prize money.

“So we will turn the corner on those few that don’t have the right approach to this. But the rest have been really good.”

TOKYO BOOST
Tiley hoped a successful Australian Open can provide a boost for organisers of the Tokyo Olympics later in 2021.

“I hope it gives the Olympic Games confidence that it can be done,” he said about the quadrennial multi-sport event, which was postponed in 2020 to this year.

“I think we can provide a lot of intelligence; if we pull this off I’m a lot more confident that the Olympic Games will be able to happen too.”

Tiley, however, conceded that the 72 players in hard quarantine were at a disadvantage to rivals who arrived on other flights and can train up to five hours a day.

“Yes, it’s not an even playing field as far as preparation goes, but we’re going to play our part to try to even it up as much as possible,” he said.

Tiley ruled out shortening the Australian Open or any change of schedule or format but said organisers were considering pushing back the warm-up events by a few days.

Players are scheduled to play leadup events at Melbourne Park from Jan. 31 at the conclusion of their isolation.

TA found support from former world number one Victoria Azarenka, who urged her fellow players to “accept and adapt” to the health regulations in Melbourne and show empathy towards the local community.

Former French Open champion Albert Costa said it was not easy for the players to be stuck in their rooms ahead of a major, but they have no option but to stay strong and get through it.

“I think that at least the Australian Open are making the effort to give the opportunity to the players to compete,” Spaniard Costa, who is the tournament director for the Davis Cup Finals, told Reuters.

Costa’s compatriot Roberto Bautista Agut, however, described the situation as being in a “jail but with WiFi” only to apologize later.

“I thank all the people who are making playing tennis again possible,” Bautista Agut, ranked 13^th in the world, said in an Instagram post. — Reuters

Biden to assume US presidency amid deep division, pandemic

January 20, 2021 | 5:41 pm

Democratic U.S. presidential nominee and former Vice President Joe Biden smiles as he pulls off his face mask to speak about the results of the 2020 U.S. presidential election during an appearance with in Wilmington, Delaware, U.S., November 4, 2020. — REUTERS/KEVIN LAMARQU

WASHINGTON — Democrat Joe Biden will be sworn in as the 46^th president of the United States on Wednesday, assuming the helm of a country beset by deep political divides and battered by a raging coronavirus pandemic.

Mr. Biden, 78, will become the oldest US president in history at a scaled-back ceremony in Washington that has been largely stripped of its usual pomp and circumstance, due both to the coronavirus as well as security concerns following the Jan. 6 assault on the US Capitol by supporters of outgoing President Donald Trump.

With only a small number of attendees present, the Democrat will take the oath of office before US Chief Justice John Roberts just after noon (1700 GMT), placing his hand on an heirloom Bible that has been in the Biden family for more than a century.

His running mate, Kamala Harris, the daughter of immigrants from Jamaica and India, will become the first Black person, first woman and first Asian American to serve as vice president after she is sworn in by US Supreme Court Justice Sonia Sotomayor, the court’s first Latina member.

The ceremony will unfold in front of a heavily fortified US Capitol, where a mob of Trump supporters stormed the building two weeks ago, enraged by his false claims that November’s election was stolen with millions of fraudulent votes. The violence prompted the Democratic-controled US House of Representatives to impeach Mr. Trump last week for an unprecedented second time.

Thousands of National Guard troops were called into the city after the siege, which left five people dead and briefly forced lawmakers into hiding. Instead of a throng of supporters, the National Mall will be covered by nearly 200,000 flags and 56 pillars of light meant to represent people from US states and territories.

Mr. Biden, who has vowed to “restore the soul of America,” will call for American unity at a time of crisis in his inaugural address, according to advisers.

In an early sign of his plan to reach across the political aisle, Mr. Biden has invited top congressional leaders, including House Republican leader Kevin McCarthy and Senate Republican leader Mitch McConnell, to join him at church on Wednesday morning.

In a break with more than a century and a half of political tradition, Mr. Trump plans to depart the White House ahead of the inauguration, declining to meet with his successor and affirm the peaceful transfer of power.

Vice President Mike Pence, former US Presidents George W. Bush, Barack Obama and Bill Clinton, and both McCarthy and McConnell are all expected to attend Mr. Biden’s inauguration ceremony.

Mr. Trump, who has grown increasingly isolated in the waning days of his tenure, has still not formally conceded the Nov. 3 election. He will hold a sendoff event at Joint Air Force Base Andrews in the morning, although top Republicans, including Mr. Pence, are not expected to attend.

GRIM MILESTONES
For Mr. Biden, who long harbored presidential ambitions, the inauguration is the zenith of a five-decade career in public service that included more than three decades in the US Senate and two terms as vice president under former President Barack Obama.

But he will confront a set of overlapping crises that would challenge even someone of his political experience.

The novel coronavirus reached a pair of grim milestones on Mr. Trump’s final full day in office on Tuesday, reaching 400,000 US deaths and 24 million infections — the highest of any country. Millions of Americans are out of work because of pandemic-related shutdowns and restrictions.

Mr. Biden has vowed to bring the full weight of the federal government to bear on the crisis, including a more robust testing and tracing program and a massive vaccination drive. His top priority is a $1.9 trillion plan that would enhance jobless benefits and provide direct cash payments to households. It will require approval from a deeply divided Congress, where Democrats will hold slim advantages in both the House and Senate.

He also plans a series of executive orders on his first day in the White House, including rolling back Mr. Trump’s ban on travelers and immigrants from some Muslim-majority countries, rejoining the Paris climate accord and issuing a mask mandate for federal property.

Although Mr. Biden has laid out an ambitious agenda for his first 100 days, including delivering 100 million COVID-19 vaccinations, the Senate could be consumed by Trump’s upcoming impeachment trial, which will move ahead even though he has left office.

The trial could serve as an early test of Mr. Biden’s promise to foster a renewed sense of bipartisanship in Washington. — Reuters

N.Korea bans K-dramas, use of South Korean slang

January 20, 2021 | 5:38 pm

SEOUL — North Korea is imposing stiff fines or prison for anyone caught enjoying South Korean entertainment or copying the way South Koreans speak as leader Kim Jong Un steps up a war on outside influences and calls for better homegrown entertainment.

A sweeping new “anti-reactionary thought” law was imposed late last year, and this week new details were reported by Daily NK, a Seoul-based website that reports from sources inside North Korea.

Measures include fines for parents whose children violate the bans, up to 15 years in a prison camp for those caught with media from South Korea, and punishments for the production or distribution of pornography, the use of unregistered televisions, radios, computers, foreign cellphones or other electronic devices, Daily NK reported on Monday, citing explanatory material for the law, which it had obtained.

Rimjin-gang, a Japan-based magazine that also cultivates sources in North Korea, reported this month that the new law bans speaking or writing in South Korean styles.

In what it said were written remarks by Mr. Kim, the leader has criticized the common practice in the South of using terms such as oppa (older brother) and dong-saeng (younger sister, brother) to refer to non-relatives, the site reported.

Reuters was unable to independently verify the reports.

Anyone caught importing banned material from South Korea faces a life sentence, while those caught importing large amounts of content from the United States or Japan could face death, Daily NK said.

The new law appeared to increase some penalties while tightening restrictions in the government’s long-running war on outside information, said Sokeel Park, of Liberty in North Korea, which supports defectors.

The emphasis on South Korean material and the intangible elements like accents highlights how worried the government is about the creeping influence of the wealthier, democratic South, he said.

“It all plays into this very longstanding sensitivity to young people especially being led astray and detaching from the glorious socialist revolution by being distracted with this very fancy but corrupt influence,” Mr. Park said.

The limited yet expanding access to information, including via border trade with China, has hastened subtle change in a country that only allows state media focused on building the prestige of leader Mr. Kim, said Tae Yong-ho, the first North Korean defector to be elected as a South Korean lawmaker.

“In daytime, the population is shouting ‘long live Kim Jong Un,’ but at night they all watch South Korean dramas and movies,” Mr. Tae said in an interview at the Reuters Next conference on Jan. 11.

At the same time, Mr. Kim vowed at a recent congress of the ruling party to expand wireless networks — which are heavily walled off from the outside — and to upgrade broadcasting to better serve viewers.

“It is needed to readjust the wire broadcasting and TV broadcasting systems, put the relevant technology on a higher level and provide full conditions for the people in all parts of the country from cities to remote mountain villages to enjoy better cultural and emotional life,” Mr. Kim said in remarks to the gathering. — Reuters

Jack Ma makes first live appearance since October in online meet

January 20, 2021 | 5:33 pm

SHANGHAI — Alibaba Group founder Jack Ma met 100 rural teachers in China via a live video meeting on Wednesday morning, in the businessman’s first appearance since October, triggering a sharp jump in the Hong Kong listed shares of the e-commerce giant.

Social media speculation over the whereabouts of China’s highest-profile entrepreneur swirled this month after news reports that he missed the final episode of a TV show featuring him as a judge, amid a regulatory clampdown by Beijing on his sprawling business empire.

Ma had not appeared in public since Oct. 24, where he blasted China’s regulatory system in a speech at a Shanghai forum that set him on a collision course with officials, leading to suspension of a $37-billion intial public offering (IPO) of Alibaba’s financial affiliate Ant Group.

Tianmu News, a news portal under Zhejiang Online, which is backed by the provincial Zhejiang government, first reported that Mr. Ma had met with the teachers via a live video conference on Wednesday.

The Jack Ma Foundation said that Mr. Ma participated in the online ceremony of the annual Rural Teacher Initiative event on Wednesday. Alibaba Group also confirmed that Jack Ma attended the online event.

Alibaba’s Hong Kong-listed shares jumped more than 6% after the reports of his reappearance, compared with a 0.64% rise in the Hang Seng index (HSI).

Mr. Ma’s public appearance comes as Alibaba plans to raise at least $5 billion through the sale of a US dollar-denominated bond this month. Reuters reported the bond proceeds could reach $8 billion, which the e-commerce leader was likely to use for general corporate expenditure.

Alibaba is also the target of an antitrust investigation launched last month by Chinese authorities, who have in recent months accelerated a crackdown on anticompetitive behavior in China’s booming internet space.

In the 50-second video, Mr. Ma, dressed in a navy pullover, spoke directly to the camera from a room with grey marble walls and a striped carpet. It was not clear from the video or the Tianmu News article where he was speaking from.

He addressed teachers receiving the Jack Ma Rural Teachers Award, who in previous years would have attended a ceremony organized by the Jack Ma Foundation in the Chinese seaside city of Sanya.

“We cannot meet in Sanya due to the epidemic,” he said in the speech, which did not discuss his whereabouts. “When the epidemic is over, we must find time to make up for everyone’s trip to Sanya, and then we will meet again!”

Xie Pu, founder of Chinese tech website Techie Crab, said the media and public had over-interpreted Mr. Ma’s move to lay low and that his step away from the public spotlight should not have been seen as a problem for Alibaba.

“We shouldn’t over-interpret his reappearance into public view this time, said Xie Pu, founder of Chinese tech website Techie Crab. “Alibaba still has a good governance structure — there are partners and a board of directors.” — Reuters

‘Act big’ now to save economy, worry about debt later, Yellen says in Treasury testimony

January 20, 2021 | 5:09 pm

WASHINGTON — Janet L. Yellen, US President-elect Joseph R. Biden’s nominee for Treasury Secretary, urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

In more than three hours of confirmation hearing testimony, the former Federal Reserve chair laid out a vision of a more muscular Treasury that would act aggressively to reduce economic inequality, fight climate change, and counter China’s unfair trade and subsidy practices.

Taxes on corporations and the wealthy will eventually need to rise to help finance Mr. Biden’s ambitious plans for investing in infrastructure, research and development, and for worker training to improve the US economy’s competitiveness, she told members of the Senate Finance Committee.

But that would only come after reining in the coronavirus pandemic, which has killed over 400,000 in the United States, and the economic devastation it brought.

Ms. Yellen, who spoke by video link, said her task as Treasury chief will be to help Americans endure the final months of the pandemic as the population is vaccinated, and rebuild the economy to make it more competitive and create more prosperity and more jobs.

“Without further action we risk a longer, more painful recession now and longer-term scarring of the economy later,” she said.

Ms. Yellen said pandemic relief would take priority over tax increases, but corporations and the wealthy, which both benefited from 2017 Republican tax cuts “need to pay their fair share.”

She raised eyebrows of some senators and Wall Street when she said that Treasury would consider the possibility of taxing unrealized capital gains—through a “mark-to-market” mechanism—as well as other approaches to boost revenues.

DEBT BURDEN
She also that the value of the dollar should be determined by markets, a break from departing President Donald J. Trump’s desire for a weaker US currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Wall Street stocks rose on Tuesday in reaction to Ms. Yellen’s call for a hefty stimulus package, as well as to positive bank earnings updates. Oil prices also rose, while Treasury yields fell slightly on her comments that parts of the 2017 tax reform should be repealed.

Mr. Biden, who will be sworn into office on Wednesday, outlined a $1.9 trillion stimulus package proposal last week, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the virus under control.

Asked what outlays would provide the biggest “bang for the buck,” Ms. Yellen said spending on public health and widespread vaccinations was the first step. Extended unemployment and nutrition aid, better known as food stamps, should be next, she said.

“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” Ms. Yellen said.

She said even though the amount of debt relative to the economy has risen, the interest burden—the amount the Treasury pays to service its debt—has not, due to lower interest rates. She said she will watch that metric closely as the economy recovers.

NEW CLIMATE POST AT TREASURY
Ms. Yellen also called climate change an “existential threat” to the US economy and said she would appoint a senior official at Treasury to oversee the issue and assess systemic risks it poses to the financial system.

She added investment in clean technologies and electric vehicles was needed to cut carbon emissions, keep the US economy competitive and provide good jobs for American workers.

Ms. Yellen said China was the most important strategic competitor of the United States and underscored the determination of the Biden administration to crack down on what she called China’s “abusive, unfair and illegal practices.”

Asked whether China had committed “genocide” in its treatment of Muslim Uighurs as the Trump administration declared in a last-minute proclamation, Ms. Yellen said China is “guilty of horrendous human rights abuses, yes.”

Mr. Biden’s transition team urged the Senate to move swiftly to confirm Ms. Yellen. Democratic Senator Ron Wyden, who will lead the Finance Committee after Mr. Biden’s inauguration on Wednesday, said he would push for a confirmation vote on Thursday. Republican Senator Mike Crapo said he would work towards an “expeditious” confirmation for Ms. Yellen.

She also received the endorsement of all former Treasury secretaries, from George Schultz to Jack Lew, who urged senators in a letter to swiftly confirm Ms. Yellen’s nomination to avoid “setting back recovery efforts.” A spokeswoman for Treasury Secretary Steven Mnuchin, who steps down on Wednesday, did not respond to a request for comment. — David Lawder and Andrea Shalal/Reuters

Climate risks jostle with pandemic as fractured world struggles to respond, WEF says

January 20, 2021 | 4:02 pm

Over the coming decade, the next major problem the world faces after COVID-19 remains climate change, said the World Economic Forum. Image of a flooded town in Isabela, Philippines, via PHILSTAR/MICHAEL VARCAS

LONDON — Failure to stem climate change poses as serious a global risk as the coronavirus disease 2019 (COVID-19) pandemic, in both the scale of impact and level of threat, top business and other leaders warned on Tuesday.

In addition, worsening political polarization, inequality, and loss of social cohesion could undermine recovery from the pandemic and action to tackle global warming, they said.

Those pressures “will bring long-term consequences”, noted Borge Brende, president of the World Economic Forum (WEF), which released its annual global risk survey on Tuesday.

“Even if you see some light at the end of the tunnel (with the pandemic), there are still huge risks connected to the polarized and fractured world,” he told an online event just two weeks after armed protesters stormed the US Capitol.

The WEF survey of business, political, and other global leaders found that COVID-19, a jobs crisis, and extreme weather are expected to be the most serious risks facing the world in the next two years, followed by cybersecurity threats and digital inequality.

The top risks for the next 5–10 years included state collapse, the failure of social security systems, technology advances—such as biological tools that could be used to alter pathogens or planetary geoengineering to curb climate change—and environmental stresses like biodiversity loss.

The findings show a clear need for a new economic model that is more inclusive, greener, and offers better social safety nets, said Saadia Zahidi, a managing director at the WEF.

Over the coming decade, the next major problem the world faces after COVID-19 remains climate change, she noted.

“There is no vaccine for this,” she said. “There are only the actions today we can take to build more sustainable economies.”

The global economy is seeing one of its biggest peacetime slumps as a result of the novel coronavirus, with 150 million people expected to fall into extreme poverty—the first rise in two decades, Mr. Brende said.

About $12 trillion in announced pandemic stimulus spending around the globe—the most since World War II—aims to halt the economic slide, he said.

But it is unlikely to make a lasting difference unless the money is spent on building future resilience, including through measures to develop green, low-carbon economies and broaden digital access, he added.

Peter Giger, chief risk officer for Zurich Insurance Group and a contributor to the report, said improving resilience to both expected and unexpected threats would require rethinking economies optimized for maximum profit in stable conditions.

The current approach is “very short-sighted,” suggesting investments in more robust systems would easily pay for themselves, he said.

“It’s always cheaper to build the dam than pay for the flood,” he said.

Carolina Klint, who focuses on risks in Europe for global insurance broker Marsh, said companies needed to overcome fears that spending on resilience was inefficient or too expensive.

“2020 left us with a renewed appreciation of risk”—and how threats once thought unlikely or distant can quickly become an immediate problem, she noted.

The next big global challenge “won’t be a pandemic—it will be something else.” she warned. — Laurie Goering/Reuters

As WHO fumes at Western drugmakers, China fills void on vaccines

January 20, 2021 | 3:22 pm

The World Health Organization’s struggles have opened the door for China to start ramping up its vaccine diplomacy, with Foreign Minister Wang Yi pledging last week to hand out more than a million doses during a swing through Southeast Asia.

For months, the World Health Organization (WHO) has called on countries to come together to ensure a fair distribution of coronavirus disease 2019 (COVID-19) vaccines among rich and poor nations. Now it’s starting to lose patience.

On Monday, WHO Director-General Tedros Adhanom Ghebreyesus said drug manufacturers had prioritized regulatory approval in rich countries, where profits are highest, rather than submitting full dossiers to get the greenlight from the global health body. He said that could delay distribution through COVAX, a WHO-backed initiative that aims to supply vaccines to poorer countries.

“The world is on the brink of a catastrophic moral failure,” Mr. Tedros said. “Even as they speak the language of equitable access, some countries and companies continue to prioritize bilateral deals—going around COVAX, driving up prices, and attempting to jump to the front of the queue. This is wrong.”

The WHO’s struggles have opened the door for China to start ramping up its vaccine diplomacy, with Foreign Minister Wang Yi pledging last week to hand out more than a million doses during a swing through Southeast Asia. That amounted to a geopolitical win just before the inauguration of President-elect Joseph R. Biden, Jr., who has vowed to put the US back in the WHO following Donald J. Trump’s withdrawal from the organization last year.

“China’s ‘mask diplomacy’ in 2020 is being followed in 2021 by ‘vaccine diplomacy,’” said Ian Storey, a senior fellow at the ISEAS-Yusof Ishak Institute. “The aims remain the same: to win friends and influence countries in Southeast Asia and bury the memory that the pandemic started in China a year ago.”

Antony Blinken, Mr. Biden’s pick for secretary of state, told lawmakers on Tuesday the US is preparing to join COVAX and look at “how we can help make sure the vaccine is equitably distributed.” Mr. Biden officially takes over on Wednesday in the US.

China’s vaccines have received some high-profile endorsements, with Indonesian President Joko Widodo receiving the Sinovac Biotech Ltd. shot on live television last week in the world’s fourth-most populous nation despite inconsistent efficacy data. Brazil also began distributing six million Sinovac doses on Monday—an about-face for President Jair Bolsonaro, who had been an outspoken critic of Chinese vaccines last year.

Cambodian Prime Minister Hun Sen, who last month said his country wouldn’t use any vaccines that weren’t approved by the WHO, last week reversed course and accepted one million vaccine doses from China. He cited widespread use in places like Indonesia, Egypt, and China, noting that Mr. Wang had received the vaccine and is still “in good health and can travel places.”

“For the need to defend our nation and protect our people from this deadly epidemic, we can no longer wait,” Hun Sen said in a message published in a cabinet newsletter on Friday. “We are reversing what I said last time about accepting only vaccines recognized by the World Health Organization.”

Because they lack regulatory bodies with the capacity to scrutinize scientific data, many developing countries have traditionally relied on the WHO’s list of approved vaccines to know which shots they can permit for local vaccination drives.

At the end of 2020, the Pfizer Inc.-BioNTech SE vaccine was the first, and so far only, shot to receive emergency validation from the WHO since the outbreak began a year ago. With no low-income countries producing their own vaccines, richer nations have secured 85% of Pfizer’s vaccine and all of Moderna Inc.’s, according to London-based research firm Airfinity Ltd.

While China has pledged to support the WHO’s efforts, its vaccines are not among those procured by COVAX. A spokesperson for Sinovac said the company has begun submitting data to the WHO for a pre-qualification of its coronavirus vaccine, known as CoronaVac. A group of WHO inspectors has also traveled to China and will inspect its production facilities after completing quarantine, the spokesperson said.

COVAX still plans to distribute two billion doses around the world by the end of this year, with enough to protect 3% of the population in all participating countries by July, according to an emailed response to questions. The facility has said it will consider procuring any candidate vaccine that meets global standards set by the WHO.

Among the 11 candidates that it can tap for distribution, two—Moderna Inc.’s shot and the one developed by AstraZeneca Plc and the University of Oxford—are ready for rollout and are being administered in countries like the US and UK. It’s unclear why COVAX has not yet started distributing those vaccines as well.

Mr. Tedros’s statements castigating companies for prioritizing rich countries where they can make the most profit indicates that the global health body sees the delay as stemming from the companies.

AstraZeneca said on Dec. 30 that it was seeking the WHO’s greenlight, known as the body’s Emergency Use Listing, “for an accelerated pathway to vaccine availability in low and middle-income countries.” A company spokesperson did not immediately respond to a request for comment on what stage the process is at.

COVAX’s rollout could begin “as early as February pending favorable regulatory outcomes and the readiness of health systems and national regulatory systems in individual participating economies,” said Iryna Mazur, a spokesperson at Gavi, the Vaccine Alliance, which is co-leading COVAX.

Thailand bought two million doses from Sinovac, and China promised to donate a total of 800,000 doses to the Philippines and Myanmar during Mr. Wang’s diplomatic push last week.

During a visit to Manila, Mr. Wang drew praise from Philippine officials after committing to completing China-funded infrastructure projects including a $400 million bridge and a $940 million cargo railway project.

Philippine President Rodrigo R. Duterte this week chided a group of senators who scrutinized the government’s plans to buy Sinovac, after previously threatening to terminate a Visiting Forces Agreement with the US if it failed to deliver at least 20 million vaccines immediately. “No vaccine, no stay here,” Mr. Duterte said last month of the military deal—a threat he has made before without following through on.

“Coronavirus vaccines have clearly become a political football in the increasing US-China cold war,” said Paul Chambers of Naresuan University’s Center of Asean Community Studies, who has researched geopolitics in Southeast Asia for about two decades. “The daunting delay in the launching of COVAX is exactly the opportunity that China is using to initiate and expand its supply of Sinovac to developing countries.” — Bloomberg

Incheon dethrones HK as Asia’s busiest airport

January 20, 2021 | 12:52 pm

Hong Kong no longer has the busiest airport for international traffic in Asia after the coronavirus pandemic wiped out travel, leaving South Korea’s Incheon International Airport in top spot, albeit with drastically fewer numbers than previous years.

Hong Kong International Airport handled 8.84 million passengers in 2020, an 88% plunge from the previous year. That sent it down two spots to third, below Seoul’s Incheon and Singapore’s Changi Airport in second. Incheon processed 11.96 million passengers last year, leaving it on top of the pile for the first time ever. Changi handled 11.8 million.

All three airports handled more than 60 million passengers in 2019, but the pandemic has hit them hard as it scorched demand for travel. Hong Kong and Singapore were affected more than most as they don’t have a domestic market to cater to, while transit traffic also slowed due to restrictions on movement. On top of that, for Hong Kong, visitor numbers slowed in the second half of 2019 as anti-government protests gripped the city.

Elsewhere, London Heathrow is no longer the busiest airport in Europe after passenger numbers dropped 73% last year, leaving it trailing Istanbul and Paris Charles de Gaulle.

Singapore and Hong Kong agreed to start a travel corridor last year, but that was put on hold because of an increase in Covid-19 cases. Singapore Airlines Ltd. this week started trials of a pre-departure testing service for passengers. — Bloomberg

BusinessWorld Insights: Inspiring Courage: Leading during Uncertain Times

January 20, 2021 | 9:10 am

According to Bain & Company, the coronavirus disease (COVID-19) pandemic has forced senior managers to change their routines and flex new leadership muscles.

Join BusinessWorld Insights with the topic, “Inspiring Courage: Leading during Uncertain Times”, with speakers KPMG in the Philippines Vice-Chair, COO and Head of Advisory Atty. Emmanuel Bonoan, SM Supermalls President Steven Tan, Golden Arches Development Corporation President and CEO Kenneth Yang; and moderator BusinessWorld Editor-in-Chief Wilfredo Reyes as they discuss the values and strategies that must be put forward by executive leaders during times of adversity.

#BUSINESSWORLDINSIGHTS Leadership Series is presented by InLife; with the support of Management Association of the Philippines, British Chamber of Commerce of the Philippines, Bank Marketing Association of the Philippines, Philippine Chamber of Commerce and Industry, and The Philippine STAR. #LeadershipInTheCSuite

Infrastructure spending down in Nov.

January 20, 2021 | 12:34 am

Infrastructure spending dropped for the fifth straight month in November amid the pandemic. — PHILIPPINE STAR/MICHAEL VARCAS

By Beatrice M. Laforga, Reporter

STATE SPENDING on infrastructure dropped for the fifth straight month in November as lockdown restrictions continued to hamper construction work.

At the same time, a think tank said the government should ramp up spending this year to drive the Philippine economy’s recovery.

Data from the Department of Budget and Management (DBM) showed infrastructure and other capital outlays declined by 50% to P40.3 billion in November from P80.9 billion a year ago.

Infrastructure spending in November was also 29.4% smaller than the P57 billion spent in October, marking the fifth straight month of year-on-year decline since June when it posted a 44.5% annual growth.

“Infrastructure and other capital outlays were down to P40.3 billion due to the various delays caused by the imposition of community quarantine measures to contain the further spread of the COVID-19 virus in early 2020, as well as the one-time expense in 2019 for the building constructions of the Land Transportation Office (LTO) and the Land Transportation Franchising and Regulatory Board (LTFRB),” the DBM said in a report on Tuesday.

In the 11-month period, infrastructure spending was still down by 22% year on year to P548.8 billion, which was attributed to the disruptions caused by the pandemic and the budget cuts implemented earlier in the year. To recall, the government realigned funds of some infrastructure projects to support its rescue programs under Republic Act 11494 or the “Bayanihan to Heal as One Act.”

Including the capital transfers to local government units and other equities, overall capital outlays reached P727.9 billion during the period, 14% down year on year. This accounted for 88% of the P825-billion infrastructure spending target for the full year.

The Budget department expects line departments to have caught up on spending in December, particularly the government’s biggest infrastructure agencies, the Department of Public Works and Highways (DPWH) and Department of Transportation (DoTr).

“Disbursements are expected to recover from the substantial underspending recorded as of end-September 2020 (7.2% below the program for the period), and close at P4.233 trillion,” it said.

RAMP-UP SPENDING
In a note on Tuesday, ANZ Research said the government will have to maintain a supportive fiscal policy over the next two years to support a growth trajectory.

While it has enough fiscal space to fund its ballooning deficits, the economic think tank said the Philippine government needs to address underspending, especially for infrastructure, to realize the potential gains of its ever-increasing budget.

“In some ways, the shortfall in realized spending has been characteristic of the Philippine economy. This is particularly the case with infrastructure spending. Between 2010 and 2015, realized capital spending fell short of planned levels by around 24%. We note that the shortfall of 24% is higher than other economies in the region,” ANZ Research said in a note titled “The Philippines’ 2021 budget: delivery needs to buck up.”

Overall state spending reached P4.205 trillion at the end of 2020, up 11% year on year but fell short of its P4.23 trillion target by 0.66%, according to preliminary data presented by the Finance department on Jan. 12.

“The shortfall primarily reflects the limitations of institutional capacity to implement public infrastructure programs, in our view,” the think tank said.

This year, the government has a P4.5-trillion budget, of which P1.1 trillion will go to fund infrastructure projects.

“With these shortcomings in the background and the slow pace of economic recovery, it is imperative that fiscal delivery improves this year. Fast delivery and full utilization of budgeted amount will be critical in realizing complete pass-through of fiscal multiplier this year,” ANZ Research said.

Bicameral panel approves stricter ‘dirty money’ rules

January 20, 2021 | 12:33 am

By Charmaine A. Tadalan, Reporter

THE BICAMERAL Conference Committee on Tuesday approved the bill strengthening the anti-money laundering law, although a key amendment pushed by Malacañang was not included in the final version.

The panel on Tuesday reconciled House Bill No. 7904 and Senate Bill (SB) No. 1945 which amends Republic Act No. 9160 or the Anti-Money Laundering Act (AMLA) of 2001, to comply with the recommendations of the Financial Action Task Force (FATF) to avoid being gray-listed.

The bills had included tax crime as a predicate offense to money laundering. However, the House contingent agreed to adopt the Senate’s proposal to set the tax crime threshold to excess of P25 million, Quirino Rep. Junie E. Cua, chairman of the House Banks and Financial Intermediaries Committee, said by telephone.

Under the House version, the threshold for tax crimes was set at P20 million, which was backed by President Rodrigo R. Duterte in the Dec. 15 notice certifying SB 1945 as urgent. The Senate did not use the said certification due to certain conditions imposed by Malacañang.

The bicameral panel also agreed to require the submission of reports on all real-estate transactions involving an excess of P7.5 million to the Anti-Money Laundering Council (AMLC).

Both bills originally proposed P5 million, much higher than the initial proposal of P1 million. The real-estate industry had earlier opposed the P1-million cap, saying this will affect investments.

“Inadjust namin ng konti to make sure na hindi maging burden sa industry (We adjusted it a bit to make sure it will not be a burden to the industry),” Mr. Cua said.

‘NOT A DEAL BREAKER’
AMLC Executive Director Mel Georgie B. Racela said they are satisfied with the approved version, noting the increase in the tax crime threshold should not be seen as a “deal breaker.”

“The raising of the threshold for tax crimes from P20 million to P25 million should not be a deal breaker because the FATF is looking at ‘serious tax crimes’ to be included as predicate crimes,” he said in a phone message.

“If the P25-million threshold is what Congress thinks as what constitutes serious tax crimes, then we will respect their position.”

He added while the bicameral panel raised the single transactions cap for real estate brokers and developers, the sector’s inclusion among the covered persons is “great news.”

“The P7.5-million single cash transaction is merely a bonus because there are other equally important obligations that the sector will have to fulfill just like the other covered persons such as banks, money changers and remittance companies to name a few, namely the conduct of KYC (know your customer), suspicious transaction reporting and record keeping obligations,” Mr. Racela said.

POGOS INCLUDED
The measure will also now include Philippine offshore gaming operators (POGOs) and their service providers among the covered persons.

Moreover, the bicameral panel retained the House provision granting the AMLC investigative powers available to other law enforcement agencies as well as subpoena powers. The House bill also allowed the AMLC to conduct search and seizure.

“May powers na ganu’n pero kailangan consistent with the provision of the Constitution na dadaan sa korte (The powers are included but it should be consistent with the Constitutional provision that it will go through the courts),” Mr. Cua said.

Mr. Cua said the AMLC will also be authorized to implement targeted financial sanctions in relation to the proliferation of weapons of mass destruction and its financing.

The FATF has given the Philippine government until Feb. 1 to enact and implement the changes to the AMLA, in accordance with its standards against money laundering and terrorist financing. The initial deadline was originally set in October 2020, but was extended due to the coronavirus pandemic.

“I think this agreement, this meeting of minds will ensure that we are not gray listed,” Mr. Cua also said.

Mr. Cua said the bill will likely be ratified by the House on Wednesday.

Senator Grace S. Poe-Llamanzares also confirmed the approval during Tuesday’s session. “They adopted a lot of the versions of the Senate. We had a few issues we had to resolve and we made a very good and just compromise,” she told senators.

Failure to enact and implement the AMLA amendments puts the Philippines at risk of being gray-listed. Ms. Poe-Llamazares said Filipino nationals and businesses abroad may be subjected to enhanced due diligence, resulting in additional cost, higher interest rates and processing fees.

The Philippines was removed from the FATF’s gray list in February 2005, five years after its inclusion in 2000.

Bill proposing paid pandemic leave hurdles committee level

January 20, 2021 | 12:32 am

The Health department on Tuesday reported 1,357 new coronavirus disease 2019 infections, bringing the total to 504,084. — PHILIPPINE STAR/MICHAEL VARCAS

THE HOUSE Committee on Labor and Employment approved in principle the bill that will grant paid leave to workers who contracted the coronavirus disease 2019 (COVID-19) and those placed on floating status during the pandemic.

The draft committee report was approved by the panel, subject to amendments, 1-PACMAN Rep. Enrico A. Pineda said during Tuesday’s hearing.

In its last version, the draft committee report on the proposed “Paid Pandemic Leave Law,” seeks to provide a 14-day paid leave to workers who contracted COVID-19 and other emerging infectious diseases.

Also covered are workers who are suspected to have contracted COVID-19 or were exposed to a COVID-19 patient.

A pandemic leave of up to 60 days will be granted to those who were rendered involuntarily out of work or were placed under a floating status.

The coronavirus pandemic that prompted the government to impose a lockdown since mid-March last year led to the displacement of Filipino workers.

The Philippine Statistics Authority (PSA) reported the number of umemployed stood at 7.3 million in April 2020. This declined to 3.8 million in October 2020.

The initial version proposed to grant pay equivalent to the worker’s basic pay including benefits and other additional compensation, but lawmakers resolved to instead grant the basic pay.

“Everybody’s affected here, not only employees, even employers. Ang tinitingnan lang natin dito ’yung employees eh,” Baguio Rep. Mark O. Go said during the hearing. “Look at both and I think considering this is an additional leave the concept of basic pay will be more reasonable.”

The bill will be applied to the private sector, including establishments under the Philippine Economic Zone Authority.

Upon approval, the panel referred the bill to the Appropriations Committee to settle the provision that will source the funding for the measure from the annual budget of the Department of Labor and Employment. The initial version proposed to use available funds from the Social Security System.

Failure to comply with the law will subject employers to a fine of between P20,000 to P200,000. — Charmaine A. Tadalan

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