After many false starts, plans to resurrect a railway in Pakistan’s teeming metropolis of Karachi are moving ahead with the help of Chinese cash. Not everyone is happy.

The Chinese-funded $2 billion project to revive Karachi Circular Railways (KRC), nearly two decades since it was shut down, has been touted as a way to ease pollution and chronic congestion in the port city of 20 million people.

It is also viewed with suspicion by Pakistanis who have built homes and businesses along the 43-km route connecting Karachi’s sprawling suburbs with the industrial and commercial areas of the megacity.

In April, a push to remove shanty towns near the rubbish-strewn railway track was met with violence as residents clashed with police and set fire to machinery used for demolishing homes.

Officials say nearly 5,000 houses and 7,650 other encroaching structures have been erected along the route of the old KRC, which closed in 1999 after 29 years of shunting passengers across the sweltering city.

Three-wheel auto-rickshaws and mini-buses, often cramped and with no air conditioning, have filled the transport gap on Karachi’s streets despite grumbling from commuters.

Work on the new KRC is scheduled to begin later this year, with financing from the $57 billion China-Pakistan Economic Corridor (CPEC) project, part of Beijing’s wider Belt and Road initiative to build trade routes from Asia to Europe and Africa. Beijing’s cash is building motorways and power plants to alleviate Pakistan’s energy shortages, but Karachiites hope it could also modernize their city at a time when traffic appears to be spiraling out of control.

“Let’s hope under CPEC, KCR is revived and people will get an alternate to miserably public transport,” said Manzoor Ahmed Razi, chairman of the Railway Workers Union.
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Brazilian prosecutors plan to investigate last year’s controversial sale of the Argentine subsidiary of Petrobras, Brazil’s state-controlled oil company, a lawyer representing some Petrobras shareholders said on Wednesday.

Petrobras, formally known as Petroleo Brasileiro SA , sold its 67.2 percent stake in Petrobras Argentina SA for $892 million to Pampa Energia SA, Argentina’s largest power company.

The sale has already drawn scrutiny from Brazil’s Congress and a federal audit court, and lawyer Felipe Caldeira said prosecutors were now looking into it as part of Brazil’s sweeping “Car Wash” anti-corruption investigation.

Caldeira, representing a group of minority Petrobras shareholders, told Reuters he spoke on Tuesday to prosecutors on a task force in Curitiba leading the Car Wash probe and gave them information on the sale.

“They are very interested and will investigate this,” said Caldeira, who filed a civil case in a Rio de Janeiro court in May alleging that the sale fetched a below-market price and was harmful to the interests of minority shareholders.

Federal prosecutors in Curitiba said the task force had not met with Caldeira but said that any relevant information about the case would be studied.

Petrobras bought the Argentine unit from energy conglomerate Perez Companc in 2002 for $1 billion, plus $2 billion in debt.

The sale 14 years later for much less sparked controversy in Brazil and led lawmakers to call on Petrobras and Pampa executives, and lawyer Caldeira, to testify before a committee hearing on Wednesday.

The controversy has grown since, Aldemir Bendine, chief executive officer of Petrobras at the time of the sale, was jailed last month on suspicion he received bribes from construction conglomerate Odebrecht in a political graft scandal that has led to the arrest of dozens of executives and politicians.

Pampa’s executive vice president and legal director Diego Salaverri told the committee the sale was transparent and competitive and his company made the best offer that was a “fair” price in a depressed market.

Oil prices had dropped drastically from $100 to $30 and a climate of uncertainty prevailed in Argentina, which had currency controls and a ban on remittances, he said.

Petrobras’ legal manager for acquisitions and divestment, Claudia Zacour, told the committee the sale of Petrobras Argentina was part of the Brazilian oil company’s divestment plan to reduce debt and focus on core activities.

The net positive result for Petrobras of owning and selling the Argentine unit was $1.6 billion when taking into account intercompany loans, the sale of some of its assets and the distribution of dividends, Zacour said.

Brazil’s federal audit court has said it was investigating the sale of Petrobras Argentina at the request of a senator but has not concluded its findings.

In response to Caldeira’s lawsuit, a federal judge in Rio de Janeiro sent Argentine authorities a request that the chairman of Pampa Energia, Marcos Marcelo Mindlin, testify in the case.

With a majority stake, Pampa SA, Mindlin’s holding company, continued its takeover of Petrobras Argentina in November by acquiring 11.85 percent held by the Argentine state pension system ANSES.

The transaction is being investigated by Argentine judge Claudio Bonadio, who ordered the search and seizure of documents from government offices in May in a case brought by center-left lawmaker Victoria Donda.

“The fund’s shares were sold very cheap, and we want to know why, because thousands of pensioners lost money,” Donda told Reuters in Brasilia, where she traveled to attend Wednesday’s hearing.
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Scorched by a 10-month drought that has killed crops and reduced residents to buying trucked-in water, Adigama’s young people are voting with their feet.

At least 150 youth have left this agricultural village 170 kilometers northwest of Sri Lanka’s capital since the drought began, looking for jobs in the country’s cities, or overseas, village officials say.

Few are expected to come back, even when the rains end.

“If they get the lowest-paying job overseas, or in a garment factory, they will not return,” Sisira Kumara, the main government administrative officer in the village of 416 families, said as he walked through a dried and long-abandoned maize plot. “They will work at construction sites or as office helpers — anything they can get their hands on.”

W.M. Suranga, 23, who left his family’s withering rice paddy six months ago for Colombo, said working for low wages in the city is preferable to struggling with no rain at home.

“At least I am sure of a paycheck at the end of the month. This uncertainly of depending on the rains is too much of a risk,” he said.

As Sri Lanka struggles with its worst drought in 40 years, farmers in the hardest-hit areas are migrating for work — with some wondering whether farming remains a viable career as climate change brings more frequent extreme weather.

“There is no income here. All the crops have failed in the last four seasons,” Kumara said.

Little to harvest for a year

Paddy rice and vegetables are usually the main source of income in Adigama. But since the last big rains in July 2016, there has been little to no harvest.

Older villagers like Rajakaruna Amaradasa, 55, say that at their age they don’t have the option of looking outside the village for a new life.

After four decades of harvesting rice and herding cattle, he abandoned his paddy fields earlier this year when his harvest failed, and now spends his days moving his cattle around, looking for scarce water.

“It will take us another two to three harvests to recover our losses and pay off any debt. Even then it all depends on the rain,” Amaradasa said.

With average rains, Amaradasa said he used to make between 30,000 and 40,000 rupees a month ($200-$260). Now his income has fallen to a third of that, he said.

Sri Lanka’s drought, which by mid-August had affected 19 of the island’s 25 districts, has particularly devastated arid regions that lie outside the country’s wet western plains and mountains.

A joint report by the World Food Program and the U.N. Food and Agriculture Organization, released in mid-June, classified the drought as worst in 40 years.

It predicted rice production this year in Sri Lanka would be almost 40 percent less than last year, and 35 percent lower than the five-year average. That amounts to the lowest harvest since 2004, it said.

Climate change

It also warned that Sri Lanka “is highly susceptible to climate change, and therefore the frequency of the weather hazards will likely increase as the earth warms.”

The impact on Sri Lanka’s economy is also likely to be substantial, with more than a quarter of the country’s labor force working in agriculture, a sector that contributes 8 percent of gross domestic product, the report said.

The situation is worst in villages like Adigama that rely almost entirely on rain to grow crops.

Suranga, the Adigama youth now working in Colombo, said he has no plans to return home. Instead he dreams of traveling to the Middle East as a construction worker.

“What is the guarantee there will be no more droughts or floods?” he asked. “When my father was my age, maybe the rains were much more predictable. Now only a fool will bet on the rains.”
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U.S. President Donald Trump continues to face a barrage of criticism for his contention that both white supremacists and counterprotesters were to blame for the deadly violence that erupted last weekend in Charlottesville, Virginia.

On Wednesday, the president announced that he had dissolved two business advisory committees made up of top American corporate executives, after at least seven CEOs announced they were resigning from the councils because of his remarks.

Trump said that “rather than putting pressure on the businesspeople … I am ending both. Thank you all!” A day ago, Trump had branded those quitting the panels as “grandstanders” and said they could be easily replaced with more corporate chieftains.

In announcing her resignation from Trump’s manufacturing jobs initiative before he disbanded it, Campbell’s Soup CEO Denise Morrison said, “Racism and murder are unequivocally reprehensible and are not morally equivalent to anything else that happened in Charlottestville. I believe the president should have been — and still needs to be — unambiguous on that point.”

U.S. Secretary of State Rex Tillerson told reporters in Washington, D.C., that he condemns the “hate and violence” displayed on Saturday in Charlottesville, adding, “There is just simply no place for that in our public discourse.”

U.S. Attorney General Jeff Sessions, speaking at an event in Miami, Florida, said, “In no way can we accept [or] apologize for racism, bigotry, hatred, violence, and those kind of things that too often arise in our country.”

Also Wednesday, two former U.S. presidents, George H.W. Bush and his son George W. Bush, the last two Republicans elected to the White House before Trump, said in a joint statement, “America must always reject racial bigotry, anti-Semitism, and hatred in all forms.”

The two former presidents added, “As we pray for Charlottesville, we are reminded of the fundamental truths recorded by that city’s most prominent citizen in the Declaration of Independence: we are all created equal and endowed by our Creator with unalienable rights,” a reference to Thomas Jefferson, one of the country’s Founding Fathers. “We know these truths to be everlasting because we have seen the decency and greatness of our country.”

President Trump’s remarks have been roundly criticized by a broad range of U.S. leaders, including top Republican party officials and business executives.  U.S. military commanders spoke out against racism following the death in Charlottesville.

As the violence unfolded last Saturday, Trump initially blamed it on “many sides.” By Monday, he condemned the neo-Nazis, white supremacists and the racist Ku Klux Klan for their role in the unrest.

But on Tuesday, at a news conference in his Trump Tower skyscraper in New York, Trump reverted to his initial assessment of the violence that killed one woman and wounded 19 others when a Nazi sympathizer drove a car into a crowd of counterprotesters.

“I think there’s blame on both sides,” Trump said. “You look at both sides. I think there’s blame on both sides. And I have no doubt about it.” He said there were “fine people” among the white nationalists and counterprotesters at the rally 160 kilometers southwest of Washington.

David Duke, the one-time Imperial Wizard of the Ku Klux Klan, immediately praised Trump’s remarks, saying, “Thank you President Trump for your honesty & courage to tell the truth about Charlottesville & condemn the leftist terrorists.”

U.S., global reaction

But key Republicans took immediate offense at Trump’s contention there was equivalency in who was to blame for the hours of street violence, as demonstrators squared off with makeshift clubs, engaged in fist fights, and fired bursts of chemical irritants at each other.

The leader of the Republican-controlled House of Representatives, Speaker Paul Ryan, said, “We must be clear. White supremacy is repulsive. This bigotry is counter to all this country stands for. There can be no moral ambiguity.”

Senator Marco Rubio, defeated last year by Trump for the Republican presidential nomination, said, “Mr. President, you can’t allow #WhiteSupremacists to share only part of blame.”

Ohio Governor John Kasich, who also lost to Trump in 2016, said, “The president of the United States needs to condemn these kind of hate groups. This is about the fact that now these folks are apparently going to go other places and they think that they had some sort of a victory.

“There is no moral equivalency between the KKK, the neo-Nazis, and anybody else,” Kasich said. “Anybody else is not the issue. These folks went there to disrupt.”

The Senate Democratic leader, Senator Charles Schumer, said, “When David Duke and white supremacists cheer your remarks, you’re doing it very, very wrong. Great and good American presidents seek to unite, not divide. Donald Trump’s remarks clearly show he is not one of them.”

Trump’s remarks also drew a rebuke from an ally, British Prime Minister Theresa May.

May said, “I see no equivalence between those who propound fascist views and those who oppose them. I think it is important for all those in positions of responsibility to condemn far-right views wherever we hear them.”

Earlier this week, the German government of Chancellor Angela Merkel condemned the white nationalists at the rally. Her spokesman, Steffen Seibert, said “there was outrageous racism, anti-Semitism and hate in its most despicable form to be seen, and whenever it comes to such speech or such images it is repugnant.”

He said the rally was “completely contrary to what the chancellor and the German government works for politically, and we are in solidarity with those who stand peacefully against such aggressive extreme-right opinions.”
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President Donald Trump is renewing his attacks on e-commerce giant Amazon, and he says the company is “doing great damage to tax paying retailers.”

Trump tweets that “towns, cities and states throughout the U.S. are being hurt — many jobs being lost!”

The president has often criticized the company and CEO Jeff Bezos, who also owns The Washington Post.

Many traditional retailers are closing stores and blaming Amazon for a shift to buying goods online. But the company has been hiring thousands of warehouse workers on the spot at job fairs across the country. Amazon has announced goal of adding 100,000 full-time workers by the middle of next year.

 
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The impact of the latest round of U.N. sanctions leveled against North Korea could be greater than the projected $1 billion cut in its export revenue if fully implemented, a high-profile North Korean defector told VOA’s Korean Service, and this would deal a significant financial blow to a regime intent on advancing its nuclear and missile programs.

“The new U.N. restrictions are perhaps the strongest sanctions ever imposed on Pyongyang because they demand a complete shutoff of markets for its most lucrative exports,” said Ri Jong Ho, who previously served various high-level roles in central agencies of the ruling Workers’ Party of Korea, overseeing the country’s overall production and trade and replenishing the Kim regime’s foreign currency reserves. “They certainly could threaten the Kim Jong Un regime’s lifeline.”

In response to North Korea’s two tests of intercontinental ballistic missiles in July, the U.N. Security Council unanimously passed another round of sanctions earlier this month — the seventh since the regime’s first nuclear weapons test in 2006. Many experts in Washington welcomed the measure, calling it the biggest diplomatic victory of the Trump administration, which has been seeking to build international pressure on North Korea.

“I think the latest U.N. resolution is yet another good, incremental step toward increasing pressure on North Korea,” said Bruce Klingner with the Heritage Foundation Asian Study Center. “Each U.N. resolution is better than its predecessor and each one is the strongest in history against North Korea.”

The sanctions call for, among other things, a total ban on the North’s principal exports, including coal, iron, iron ore, lead, lead ore and seafood. The goal is to slash a third of the regime’s annual revenue, which total about $3 billion by U.N. estimates in the August 5 resolution drafted by the United States.

Garment production

Ri said North Korea’s annual export earnings are in fact significantly lower averaging about $2 billion in recent years. Pyongyang’s garment production, which on the record brings up to $1 billion, actually yields $100 million at best, he said, covering only labor and costs incurred in maintaining production facilities and equipment.

Garment processing not included in the U.N. sanctions has been one of the country’s biggest exports, with many firms, particularly based in China, taking advantage of low-cost labor available in the North to produce various kinds of clothing. Suppliers often send fabrics and other raw materials to North Korean factories where garments are assembled and exported with a “Made in China” label.

From 2014 until 2016, Pyongyang exported some 15 to 22 million tons of coal and 2.5 million tons of iron ore per year, worth roughly $1.1 billion and $200 million respectively, Ri said, adding lead and lead ore exports in the same period averaged about $100 million and seafood sales $300 million a year.

If countries — including China, which accounts for nearly 90 percent of North Korean trade — “thoroughly implement the recent ban on these principal exports, addressing all the potential loopholes, the North may face up to $1.7 billion a year in losses — or more than 80 percent — not just a third — of its annual export revenue,” Ri said. “This is a country whose economy is heavily reliant on its exports of natural resources — a major source of hard currency for the regime — and banning its coal, iron and iron ore, lead and lead ore, and seafood exports is tantamount to a total blockade on all trade.”

Natural resources exports

The effects of sanctions aren’t limited to these key exports, Ri said. Prohibiting North Korea’s exports of natural resources would cut off its supply of foreign currency, with an anticipated resulting drop in imports of strategic goods including fuel, food and fertilizers as well as various other raw materials and equipment necessary to keep production and construction activities going, said Ri.

“In that case,” he added, “the North Korean regime will inevitably experience financial strains, which would put a damper on its pursuits” such as building a nuclear-tipped missile that can strike the U.S mainland.

The new sanctions omit crude-oil supplies from Russia and China, which Ri said would be a crippling measure for the regime, one that Pyongyang’s traditional allies would not want to take. But because the current sanctions are expected to further diminish North Korea’s limited holdings of hard currency, the regime would be unable to purchase as much oil as it did before.

In an earlier interview with VOA, Ri said North Korea imports up to 200,000 to 300,000 tons of diesel from Russia and some 50,000 to 100,000 tons of gasoline from China every year. China also supplies the North with roughly 500,000 tons of crude oil by pipeline, all of which though goes toward Kim’s massive military, all of which is free of charge.

Ri added the sanctions could also result in an increase of the already rampant smuggling activities across China’s border and a fierce competition for survival within North Korea.

For three decades, Ri worked in “Office 39,” which the U.S. Treasury Department once described as a North Korean government branch that engages “in illicit economic activities and managing slush funds and generating revenues for the leadership.” His last posting was in Dalian, China, as the head of the Korea Daehung Trading Corporation.

Ri defected to South Korea in October 2014, and came to the United States in March 2016.

Jenny Lee contributed to this report which originated with VOA’s Korean service (www.voakorea.com ).
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The United States, Mexico and Canada are opening negotiations Wednesday to reform the North American Free Trade Agreement, a 1994 trade deal that was a major target in U.S. President Donald Trump’s run for office.

Trump has called NAFTA “the worst trade deal in history,” and one that has unfairly swollen the U.S. trade deficit with Mexico while allowing manufacturing jobs to migrate there.

Addressing the imbalance is a key U.S. goal in the talks, along with seeking to do away with a dispute mechanism the three countries use to resolve disagreements.

Negotiators will use multiple sessions to try to come up with reforms, with the aim of finishing their work before the end of the year. If the process stretches into 2018, there are concerns it could be complicated by a presidential election in Mexico and U.S. congressional elections.

Mexico and Canada

Canadian Foreign Affairs Minister Chrystia Freeland said ahead of the talks, “We are looking forward to a productive, constructive conversation.”

She spoke alongside Mexican Economy Secretary Ildefonso Guajardo Villarreal before a meeting in Washington Tuesday.

“I have always said that the negotiators cannot be unoptimistic, has to be realistic with a positive approach,” Villarreal said.

A U.S. trade official who spoke to reporters on the condition of anonymity said the U.S. is seeking a “more balanced, reciprocal trade agreement that supports high-paying jobs for Americans and grows the U.S. economy.”

Vow to cause no harm 

Gary Hufbauer, an economist with the Washington-based Peterson Institute for International Economics told VOA that renegotiating NAFTA will not bring back U.S. manufacturing jobs.

“Most economists don’t think that’s possible, but obviously the president does and he’s the president,” Hufbauer told VOA.

He said the topics under discussion will be ones such as state-owned enterprises, digital commerce, labor and environment. He also said U.S. negotiators have promised to work in a way that will “cause no harm.”

“What that means is that if they’re doing anything which causes Mexico or Canada to limit for example U.S. agricultural exports, which are quite substantial to both countries, that would be harm. And that would be harm to red states. So that’s a line they don’t want to cross,” Hufbauer said.
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Negotiators from Canada, Mexico and the United States will kick off an ambitious first round of trade talks Wednesday as the countries try to fast-track a deal to modernize the North American Free Trade Agreement by early next year. The key issues facing negotiators include:

RULES OF ORIGIN: NAFTA says that in order for a good to be traded duty-free within the three countries, it must contain a certain percentage of North American content, which differs for various products. The rule of origin is most contentious in the auto industry; cars must contain at least 62.5 percent American, Canadian or Mexican content. The United States wants to increase the content threshold for NAFTA goods in a bid to return manufacturing jobs to the United States, and the auto industry has conceded that the rules should be updated to account for auto components that did not exist when the original deal was signed. Canada has said it is prepared to discuss some strengthening of rule of origin in the auto sector, but that any change must apply equally to all three countries. Mexico is willing to look at strengthening rules, but warns that going too far will make the region less competitive.

DISPUTE RESOLUTION: The United States has sought to ditch the so-called Chapter 19 tool, under which binational panels hear complaints about illegal subsidies and dumping and then issue binding decisions. The United States has frequently lost such cases since NAFTA came into effect in 1994, and the mechanism has hindered it from pursing anti-dumping and anti-subsidy cases against Canadian and Mexican companies. Washington also argues that Chapter 19 infringes on the sovereignty of its domestic laws. Canada has said Chapter 19 can be updated, but said a dispute settlement mechanism is its “redline” and must be part of any updated NAFTA. Mexico also says dispute settlement mechanisms are a vital part of the deal to give investors security.

SUPPLY MANAGEMENT: Quotas are a feature of NAFTA in several agricultural commodities including dairy and sugar, but Washington is seeking to eliminate non-tariff barriers to U.S. agricultural exports. Most notably, U.S. President Donald Trump has called Canada’s restrictions on dairy imports a “disgrace.” Although dairy was excluded from the original 1994 deal, the United States is seeking to eliminate nontariff barriers to its agricultural exports.

CURRENCY MANIPULATION: The United States is seeking a provision to deter currency manipulation. While Washington wants a mechanism to ensure the NAFTA countries avoid tinkering with exchange rates to gain a competitive advantage, neither Canada nor Mexico is on the U.S. Treasury’s currency manipulation watchlist. Critics say the U.S. demand is an attempt to get currency manipulation into a global trade agreement to establish a precedent with other trading partners, including China.

GOVERNMENT PROCUREMENT: The United States is pushing for national, state and local governments in Canada and Mexico to open up their tender processes to U.S.-made products but at the same time is defending existing “Buy American” procurement laws. The Buy American provisions have blocked the use of Canadian steel to build U.S. bridges, and Canada is pushing for a freer market for government procurement. Mexico says it expects government procurement, already included in NAFTA, to be part of the renegotiation.

INVESTOR-STATE DISPUTE SETTLEMENT: The United States has proposed minor tweaking of the NAFTA Chapter 11 provisions, which are designed to ensure firms that invest abroad receive “fair and equitable” treatment by foreign governments. As with Chapter 19, opponents of the provisions argue they infringe on sovereignty, which benefits multinational corporations. Canada wants to update the mechanism to allow governments to regulate in the interest of the environment or labor, as in the Comprehensive Economic and Trade Agreement that Canada recently negotiated with the European Union.
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