Aurelia Butler

GENEVA (Reuters) – Pakistan and the United Nations are holding a major conference in Geneva on Monday aimed at marshalling support to rebuild the country after devastating floods in what is expected to be a major test case for who pays for climate disasters.Record monsoon rains and melting glaciers last September displaced some 8 million people and killed at least 1,700 in a catastrophe blamed on climate change. Most of the waters have now receded but the reconstruction work, estimated at around $16.3 billion, to rebuild millions of homes and thousands of kilometres of roads and railway is just beginning and millions more people may slide into poverty.Islamabad, whose delegation is led by Prime Minister Shehbaz Sharif, will present a recovery “framework” at the conference where United Nations Secretary General Antonio Guterres and French President Emmanuel Macron are also due to speak.Guterres, who visited Pakistan in September, has previously described the destruction in the country as “climate carnage”.”This is a pivotal moment for the global community to stand with Pakistan and to commit to a resilient and inclusive recovery from these devastating floods,” said Knut Ostby, United Nations’ Development Programme’s Pakistan Representative.Additional funding is crucial to Pakistan amid growing concerns about its ability to pay for imports such as energy and food and to meet sovereign debt obligations abroad.However, it is far from clear where the reconstruction money will come from, especially given difficulties raising funds for the emergency humanitarian phase of the response which is around half funded, according to U.N. data.At the COP27 meeting in Egypt in November, Pakistan was at the forefront of efforts that led to the establishment of a “loss and damage” fund to cover climate-related destruction for countries that have contributed less to global warming than wealthy ones.However, it is not yet known if Pakistan, with a $350 billion economy, will be eligible to tap into that future funding.Organisers say around 250 people are expected at the event including high-level government officials, private donors and international financial institutions.Pakistan’s ambassador to the UN in Geneva, Khalil Hashmi, said Islamabad was willing to pay for about half of the bill but hoped for support from donors for the rest. “We will be mobilising international support through various means,” he said. “We look forward to working with our partners.”An International Monetary Fund(IMF) delegation will meet Pakistan’s finance minister on the sidelines of the conference, a spokesperson of the lender said on Sunday, as Pakistan struggles to restart its bailout programme.The IMF is yet to approve the release of $1.1 billion originally due to be disbursed in November last year, leaving Pakistan with only enough foreign exchange reserves to cover one month’s imports. More

ISLAMABAD (Reuters) – An International Monetary Fund (IMF) delegation will meet Pakistan’s finance minister on the sidelines of a conference in Geneva beginning on Jan. 9, a spokesperson of the lender said on Sunday, as Pakistan struggles to restart its bailout programme. The lender is yet to approve the release of $1.1 billion originally due to be disbursed in November last year, leaving Pakistan with only enough foreign exchange reserves to cover one month’s imports.”The IMF delegation is expected to meet with Finance Minister (Ishaq) Dar on the sidelines of the Geneva conference to discuss outstanding issues and the path forward,” a spokesperson of the IMF said in a message to Reuters. The conference in Geneva, co-hosted by Prime Minister Shehbaz Sharif and United Nations Secretary General Antonio Guterres, will look to gather international support for the country in the aftermath of devastating floods last year. The floods killed at least 1,700 people and caused billions of dollars of damage to critical infrastructure.A plan laying out a timeline and the financing of the rebuilding effort has been a sticking point in talks to clear the ninth review that will release $1.1 billion in IMF funds and unlock other international funding too. Dar has been critical of the IMF lately, publicly saying that the lender was acting “abnormally” in its dealings with Pakistan, which entered the $7 billion bailout programme in 2019. The IMF spokesperson also said its Managing Director Kristalina Georgieva had a “constructive call” with Sharif regarding the Geneva conference and supported Pakistan’s efforts to rebuild. More

Mexico is resisting pressure from the EU to sign off on a trade deal that was agreed four years ago, arguing legal changes recently proposed by Brussels will slow down the approval process.EU trade commissioner Valdis Dombrovskis said Mexican officials “are taking their time” after Brussels made some amendments that mirror a structure used in an accord between the EU and Chile finalised last month. Brussels hopes the tweaks should smooth the deal’s ratification, but Mexico City fears they could mean the treaty requires separate stages of approval.“In recent weeks we proposed a possible solution on the legal architecture of this modernised global agreement to Mexico,” Dombrovskis said.“We think it’s a good solution, which also takes into account some of Mexico’s concerns,” he added. “We are currently waiting for Mexico’s final response on this. We’re ready to move forward with the agreement as soon as we get that reply.”Mexico is seen as a potentially leading exporter of machinery, appliances and mineral products to the EU as Brussels seeks to reduce its reliance on China. Héctor Vasconcelos, president of Mexico’s Senate foreign relations committee and a close adviser to populist leftwing president Andrés Manuel López Obrador, denied Mexico was holding up the trade agreement, saying: “We are ready to ratify this at any moment because we consider this matter [the trade deal] closed.”“Mexico’s position is that it is not necessary to separate the agreement into parts. It must be approved as [initially] agreed upon by the commissions negotiating the agreement,” he said, adding that the changes could lead to a renegotiation of the deal being required.Mexico wants provisions on issues such as labour rights, environmental safeguards and modernised investment protection to apply as soon as the trade deal to cut tariffs takes effect, but the EU favours delaying them. This is because national parliaments must vote in favour of them as well as the European parliament. National governments can approve trade-only deals.The EU has struggled to complete full trade accords since its Comprehensive Economic and Trade Agreement (Ceta) with Canada in 2016. That deal still awaits ratification by 10 of the 27 member states who oppose investment protection chapters giving companies the right to seek redress from governments, although part of the accord is being applied provisionally. So Brussels has pushed for “split” deals so tariffs can be cut even if national parliaments oppose the wider provisions. Brussels still hopes it can sign a single agreement with Mexico City and allow the trade part to apply while the more complicated chapters await ratification by national parliaments — as used in the Chile model. The Chile deal could be signed by this autumn, Dombrovskis said last month.

The EU was Mexico’s biggest export market after the US in 2021. It imported €23.4bn of goods from Mexico, with exports totalling €37.7bn. In 2020 EU companies had investment worth €176bn worth in the country. Mexico is also poised to benefit from “nearshoring” as companies shift production from China to the Americas. A report last year from the Inter-American Development Bank estimated that exports could rise by $78bn a year from Latin America and the Caribbean due to the relocation of operations over the near and medium term.Dombrovskis said the EU wanted to diversify trade and use deals to avoid “strategic dependencies” on countries such as it did with gas from Russia.“Following Russia’s aggression against Ukraine and China’s ambiguous stance in this regard there is clearly some reassessment of our China policy,” he said, adding that Brussels would “continue to engage with China but without naivety and [by] properly managing the risks”.The former Latvian prime minister, among the most liberal European commissioners, also backed greater scrutiny of Chinese investment in new green technologies in Europe such as vehicle battery plants. “It requires assessment,” he said adding: “There are reasons why we have an FDI screening mechanism in place.” More

George grins broadly as he sips his pint of Guinness in a cosy Dublin pub, basking in the famous warmth of the land of céad míle fáilte (100,000 welcomes). As one of a fast-rising number of Chinese citizens investing in Ireland in exchange for residency, he has every reason to feel at home.George, who asked not to give his real name, has invested €1mn in Ireland and said China’s uncertain economic outlook has spurred wealthy individuals like him to look for additional residency options abroad. “I’m worried about the future in China,” he said.Ireland’s decade-old immigrant investor programme (IIP) soared in popularity in 2022, with the number of would-be investors from China more than tripling to 785 in the nine months to September, from 243 in the whole of 2021. Applications from all countries hit a record 812, nearly twice the annual record set in 2019. Since the scheme began in 2012, Chinese investors, including those from Hong Kong, have accounted for more than 90 per cent of successful applicants and €1.18bn has been invested in total.At past Chinese Communist party’s national congresses, “the keyword has been ‘economic growth’. But the buzzword of the 20th Congress [in October] was “struggle.” said the head of an Irish-based fund, focused on the hospitality sector, in which George has invested €1mn. The fund chief executive asked not to be identified.“The middle class and above worry what that means for them, for their wealth, career and family,” he added.Ireland has become an increasingly alluring choice in part because of problems with similar schemes elsewhere. Brexit made the UK a less attractive option even before London in February halted its own immigrant investor programme over security concerns, and the US scheme was also on hold for months. “We’ve seen a huge jump [in IIP investments in Ireland] since 2017,” said Niamh Walsh, who runs TDL Horizons, which focuses on hotel and tourism property sales, in County Donegal, and who has worked with IIP clients. “My gut is that this is because of Brexit.”Other factors such as education and the country’s friendly reputation made the English-speaking EU member state a coveted choice for investors such as George. Nearly three years of harsh coronavirus curbs — only relaxed in December — were another factor in wealthy Chinese seeking overseas residency. “You can definitely draw a correlation there,” said James Hartshorn, chief executive and co-founder of Bartra Wealth Advisors, a leading IIP fund, whose portfolio includes social housing and nursing homes.Many countries have schemes offering residency or even passports in exchange for investment, but Ireland’s success has been to make IIP investment “a tool to channel investment into areas of the economy that really need it”, said Hartshorn.“Because of the cost of capital, interest rate rises and the cost of goods going up [which could slow investment in those sectors] . . . the programme is more important now than it was,” he said.Applicants have four routes available: they can invest €1mn into an Irish enterprise, invest €1mn in an approved investment fund or invest €2mn in a stock-exchange listed real estate investment trust — all for a minimum of three years. Or they can donate €500,000 — or €400,000 if applications are made jointly by five people — to an arts, sports, culture or education project.Peter Fitzpatrick, a member of Ireland’s Dáil parliament from County Louth and a former Gaelic footballer, has raised almost €15mn from Chinese IIP investors to build the first Gaelic games stadium in his county in 60 years.“We got an agent who had contacts in Asia and got 37 applicants willing to invest €400,000,” he said. “We probably could have raised the money [without IIP] but not as quickly. It’s a dream come true.” Ireland has become an increasingly alluring choice for investors in part because of problems with similar schemes elsewhere © Gareth McCormack/Alamy Both George, who has been managing his environmental monitoring business in China remotely, and Helen, a lawyer who also asked not to use her real name and who invested €500,000 to the same fund, say education was a big motivation. George has a son in high school and Helen has one at university in Ireland.Walsh said “a huge benefit” was that investors only have to spend one day a year in Ireland. They do not lose residency in their home countries. However, the IIP programme does not grant investors the right to a passport.Investors need to maintain the investment for at least three years. After that they can sell their investment and keep residency status, but have no further obligation to invest, said the hospitality-focused fund chief executive.Although Chinese demand is driving IIP, applications from the US have also increased. “It has surprised everyone,” said Hartshorn. “The main reason I have heard is to do with the political situation in the US. [Former president Donald] Trump rattled a lot of people, there’s polarisation and concern about where things are going. There are huge historical connections between Ireland and the US so it allows Americans to get back to their roots,” he said.The number of US applicants, usually about five or fewer since the IIP was launched, has more than doubled to 11 so far last year. The programme has seen 31 successful US applicants since 2012 and 1,511 from China, with a sizeable number of investors also from Vietnam, Saudi Arabia and South Africa. Chinese investors, coming from a country with no Google, no Facebook and news largely from official sources, “really appreciate the freedom” that Ireland offers, said the hospitality-focused fund chief executive. But whether it can continue to attract the same volume of wealthy applicants depends on “where China goes from here” economically and politically.He added: “Ireland used to be “a hidden secret in Europe . . . now it has been discovered.” More

TOKYO (Reuters) -Japanese Prime Minister Fumio Kishida said on Sunday the government and the central bank must discuss their relationship with each other in guiding economic policy, when a new Bank of Japan (BOJ) governor is chosen in April.Asked what kind of person he would choose as next BOJ governor, Kishida said it will be someone “best suited for the job” when incumbent Haruhiko Kuroda’s term ends in April.”The government and the BOJ must work closely together, but also each play its own role” in achieving price stability and higher wage growth, Kishida told a television programme.”Under the new BOJ governor, we must discuss the relationship between the government and the BOJ,” said Kishida, who has authority to choose the next central bank head.Markets are rife with speculation the BOJ could move further to phase out Kuroda’s massive stimulus by tweaking its yield control policy under a new central bank governor.”In guiding monetary policy, policymakers must have a view on the outlook for the economy. There needs to be careful communication and dialogue with markets,” Kishida said, when asked whether the BOJ needs to tweak it ultra-loose policy. More

India’s central bank governor has said he is concerned by growing debt distress among regional trade partners and alert to possible risks to his country’s economy from a global slowdown.Shaktikanta Das said in an interview with the Financial Times that he was optimistic about India’s growth and financial stability despite the deteriorating global economic outlook. The IMF expects recession to affect one-third of the global economy this year, it said recently.Analysts forecast that India will be a bright spot but the Reserve Bank of India governor said there was “no room for complacency”.“Net-net, India is far better placed than almost all other countries,” he said. However, “the global challenges are building up,” he added, saying they “will have their spillovers and will have their impact on India”. Of India’s regional neighbours, Das said: “We are quite concerned about the debt distress in all these countries because we have a lot of trade relations with these countries. It’s a matter which we are looking at with a lot of interest.”Das declined to specify which countries he meant but Sri Lanka last year became Asia’s first country in decades to default. Meanwhile Pakistan, India’s nuclear-armed western neighbour and traditional foe, is down to $5.6bn of foreign exchange reserves, equivalent to about one month’s imports.Bangladesh’s export-led economy has been hit by slower demand, rising fuel prices and power cuts, leading its government last year to seek IMF help.Regional power India, by contrast, was one of the world’s fastest-growing large economies over the past year.Das attributed India’s resilience partly to Narendra Modi’s government’s “calibrated, prudent” fiscal response to the Covid-19 pandemic and partly to the RBI’s monetary policy response, which was time-limited and targeted to specific sectors. India’s substantial foreign exchange reserves boosted international investor confidence, he said. India’s relatively conservative approach to Covid-19 stimulus spending had helped to keep a lid on inflation, Das said. Although the RBI forecasts India’s inflation for the current fiscal year will be 6.7 per cent — above the 4-6 per cent band that the RBI targets — it is lower than in many other leading economies.Many economists expect New Delhi to increase spending in next month’s annual budget, ahead of 2024’s general election. But Das said he had “no reason to doubt” the government’s commitment to curbing its fiscal deficit.India’s foreign exchange reserves, which peaked at $642bn in 2021, have fallen to about $563bn after spending to stabilise the rupee and revaluation because of the strengthening dollar.Das described this as a “very comfortable level”, equivalent to nine months of India’s projected imports and 92 per cent of its external debt.He rejected the idea that India “burnt up” reserves during 2022.“You buy an umbrella to use it when it rains,” he said. “You can’t keep your umbrella inside the cupboard and say it will get spoiled.”Das denied that the central bank’s currency interventions were to defend the rupee, arguing that he aimed for orderly depreciation. “We don’t have any specific exchange rate in mind,” he said.Since Russia invaded Ukraine India has felt pressure from higher food and energy prices, which have prompted it to pivot away from traditional oil suppliers and towards discounted Russian crude, as well as accelerating New Delhi’s drive to promote the rupee in international trade.Das said that the bank had now approved rupee accounts for six to seven countries, declining to name them, which will allow them to settle trades in India’s local currency rather than dollars, the typical international currency of exchange. “They will be able to save dollars — countries in the south Asian region in particular — and also outside the south Asian region for whom foreign exchange reserves in dollars is a matter of concern,” Das said. The RBI governor was scathing about cryptocurrencies, arguing that the RBI had helped to shield investors from the recent meltdown in the sector by advising the government against regulating — and therefore legitimising — digital assets. “This is precisely what we were saying: that this will collapse sooner or later because it has absolutely no underlying value,” Das said. “It is a purely speculative product,” he added. “Somebody has to also tell what public good it serves.” More

SHANGHAI (Reuters) -China on Saturday marked the first day of “chun yun”, the 40-day period of Lunar New Year travel known pre-pandemic as the world’s largest annual migration of people, bracing for a huge increase in travellers and the spread of COVID-19 infections. This Lunar New Year public holiday, which officially runs from Jan. 21, will be the first since 2020 without domestic travel restrictions.Over the last month China has seen the dramatic dismantling of its “zero-COVID” regime following historic protests against a policy that included frequent testing, restricted movement, mass lockdowns and heavy damage to the world’s No.2 economy.Investors are hoping that the reopening will eventually reinvigorate a $17-trillion economy suffering its lowest growth in nearly half a century.But the abrupt changes have exposed many of China’s 1.4 billion population to the virus for the first time, triggering a wave of infections that is overwhelming some hospitals, emptying pharmacy shelves of medicines and causing long lines to form at crematoriums. The Ministry of Transport said on Friday that it expects more than 2 billion passengers to take trips over the next 40 days, an increase of 99.5% year-on-year and reaching 70.3% of trip numbers in 2019. There was mixed reaction online to that news, with some comments hailing the freedom to return to hometowns and celebrate the Lunar New Year with family for the first time in years. Many others, however, said they would not travel this year, with worry of infecting elderly relatives a common theme.”I dare not go back to my hometown, for fear of bringing the poison back,” said one such comment on the Twitter-like Weibo (NASDAQ:WB).There are widespread concerns that the great migration of workers in cities to their hometowns will cause a surge in infections in smaller towns and rural areas that are less well-equipped with ICU beds and ventilators to deal with them.Authorities say they are boosting grassroots medical services, opening more rural fever clinics and instituting a “green channel” for high risk patients, especially elderly people with underlying health conditions, to be transferred from villages directly to higher level hospitals. “China’s rural areas are wide, the population is large, and the per capita medical resources are relatively insufficient,” National Health Commission spokesman Mi Feng said on Saturday.”It’s necessary to provide convenient services, accelerate vaccination for the elderly in rural areas and the construction of grassroots lines of defense.”INFECTION PEAK REACHEDSome analysts are now saying the current wave of infections may have already peaked. Ernan Cui, an analyst at Gavekal Dragonomics in Beijing, cited several online surveys as indicating that rural areas were already more widely exposed to COVID infections than initially thought, with an infection peak already reached in most regions, noting there was “not much difference between urban and rural areas.”On Sunday China will reopen its border with Hong Kong and will also end a requirement for travellers coming from abroad to quarantine. That effectively opens the door for many Chinese to travel abroad for the first time since borders slammed shut nearly three years ago, without fear of having to quarantine on their return.Jillian Xin, who has three children and who lives in Hong Kong, said she was “incredibly excited” about the border opening, especially as it means seeing family in Beijing more easily. “For us, the border opening means my kids can finally meet their grandparents for the first time since the pandemic began,” she said. “Two of our children have never been able to see their grandpa, so we cannot wait for them to meet.”China’s surge in cases has caused concern internationally and more than a dozen countries are now demanding COVID tests from travellers from China. The World Health Organisation said on Wednesday that China’s COVID data underrepresents the number of hospitalisations and deaths from the disease.Chinese officials and state media have defended the handling of the outbreak, playing down the severity of the surge and denouncing foreign travel requirements for its residents.On Saturday in Hong Kong, people who had made appointments had to queue for about 90 minutes at a centre for PCR tests needed for travel to countries including mainland China. TREATMENT TO THE FOREFor much of the pandemic, China poured resources into a vast PCR testing program to track and trace COVID-19 cases, but the focus is now shifting to vaccines and treatment. In Shanghai, for example, the city government on Friday announced an end to free PCR tests for residents from Jan. 8. A circular published by four government ministries Saturday signalled a reallocation of financial resources to treatment, outlining a plan for public finances to subsidise 60% of treatment costs until March 31.Meanwhile, sources told Reuters that China is in talks with Pfizer Inc (NYSE:PFE) to secure a licence that will allow domestic drugmakers to manufacture and distribute a generic version of the U.S. firm’s COVID antiviral drug Paxlovid in China.Many Chinese have been attempting to buy the drug abroad and have it shipped to China. On the vaccine front, China’s CanSino Biologics Inc announced it has begun trial production for its COVID mRNA booster vaccine, known as CS-2034.China has relied on nine domestically-developed vaccines approved for use, including inactivated vaccines, but none have been adapted to target the highly-transmissible Omicron variant and its offshoots currently in circulation.The overall vaccination rate in the country is above 90%, but the rate for adults who have had booster shots drops to 57.9%, and to 42.3% for people aged 80 and older, according to government data released last month.China reported three new COVID deaths in the mainland for Friday, bringing its official virus death toll since the pandemic began to 5,267, one of the lowest in the world. International health experts believe Beijing’s narrow definition of COVID deaths does not reflect a true toll, and some predict more than a million deaths this year. More