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  • Africa likely to lose 20 million jobs due to pandemic: AU study

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    Mon, 2020-04-06 04:23

    JOHANNESBURG: About 20 million jobs are at risk in Africa as the continent’s economies are projected to shrink this year due to the impact of the coronavirus pandemic, according an African Union (AU) study.
    So far, Africa accounts for just a fraction of total cases of the disease which has infected more than one million people worldwide, according to a Reuters tally.
    But African economies are already facing an impending global economic downturn, plummeting oil and commodity prices and an imploding tourism sector.
    Before the onset of the pandemic, continent-wide gross domestic product (GDP) growth had been projected by the African Development Bank to reach 3.4 percent this year.
    However, in both scenarios modeled by the AU study — titled “Impact of the coronavirus on the Africa economy” — GDP will now shrink.
    Under what the AU researchers deemed their realistic scenario, Africa’s economy will shrink 0.8 percent, while the pessimistic scenario said there would be a 1.1 percent dip.
    Up to 15 percent for foreign direct investment could disappear. The impact on employment will be dramatic.
    “Nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction on the continent if the situation continues,” the analysis said.
    African governments could lose up to 20 to 30 percent of their fiscal revenue, estimated at 500 billion in 2019, it found.
    Exports and imports are meanwhile projected to drop at least 35 percent from 2019 levels, incurring a loss in the value of trade of around $270 billion. This at a time when the fight against the virus’ spread will lead to an increase in public spending of at least $130 billion.
    Africa’s oil producers, which have seen the value of their crude exports plunge in past weeks, will be among the worst hit.
    Sub-Saharan Africa’s biggest oil producers Nigeria and Angola alone could lose $65 billion in income. African oil exporters are expected to see their budget deficits double this year while their economies shrink 3 percent on average.
    African tourist destinations will also suffer.

    HIGHLIGHTS

    • Africa’s economy could shrink up to 1.1 percent this year.

    • Trade could fall 35 percent from 2019 levels.

    • Oil producers, tourist destinations seen hardest hit by the pandemic.

    Africa has in recent years been among the fastest growing regions in the world for tourism. But with borders now closed to prevent the disease’s spread and entire airlines grounded, the sector has been almost entirely shut down.
    Countries where tourism constitutes a large part of GDP will see their economies contract by an average of 3.3 percent this year. However, Africa’s major tourism spots Seychelles, Cape Verde, Mauritius and Gambia will shrink at least 7 percent.
    “Under the average scenario, the tourism and travel sector in Africa could lose at least $50 billion due to the covid-19 pandemic and at least 2 million direct and indirect jobs,” the AU study said.
    Remittances from Africans living abroad — the continent’s largest financial inflow over the past decade — are unlikely to cushion the blow.
    “With economic activity in the doldrums in many advanced and emerging market countries, remittances to Africa could experience significant declines,” the analysis found.

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    How one SV factory keeps running during virus outbreakChaos and scrambling in the US oil patch as prices plummet

    Posted: by Arab News

  • Chaos and scrambling in the US oil patch as prices plummet

    Author: 
    Mon, 2020-04-06 04:16

    NEW YORK: In Montana, a father and son running a small oil business are cutting their salaries in half. In New Mexico, an oil truck driver who supports his family just went a week without pay. And in Alaska, lawmakers have had to dip into the state’s savings as oil revenue dries up.
    The global economic crisis caused by the coronavirus pandemic has devastated the oil industry in the US, which pumps more crude than any other country. In the first quarter, the price of US crude fell harder than at any point in history, plunging 66 percent to around $20 a barrel.
    A generation ago, a drop in oil prices would have largely been celebrated in the US, translating into cheaper gas for consumers. But today, those depressed prices carry negative economic implications, particularly in states that have become dependent on oil to keep their budgets balanced and residents employed.
    “It’s just a nightmare down here,” said Lee Levinson, owner of LPD Energy, an oil and gas producer in Tulsa, Oklahoma. “Should these low oil prices last for any substantial period of time, it’s going to be hard for anyone to survive.”
    Crude prices recovered some ground, trading at around $28 a barrel Friday.
    On Friday, President Donald Trump met with oil executives but there were no announcements, and prices remain well below what most US producers need to stay afloat.
    Among the latest casualties is Whiting Petroleum, an oil producer in the Bakken shale formation with about 500 employees that filed for bankruptcy protection Wednesday.
    Schlumberger, one of the largest oilfield services companies, slashed its capital spending by 30 percent and is expecting to cut staff and pay in North America. And Halliburton, another major oilfield services provider, furloughed 3,500 of its Houston employees, ordering workers into a one-week-on, one-week-off schedule.
    “You will see a tremendous loss of jobs in this industry,” said Patrick Montalban, owner of Montalban Oil and Gas, based in Montana, who along with his son is slashing his salary in half and plans to cut the his remaining employees’ salaries by 25 percent and end their health insurance benefits.
    The impact is far-reaching. In Alaska, lawmakers recently passed a budget that sharply draws down a savings account that had been built up over the years when oil prices were higher. In New Mexico, where a third of the state’s revenue comes from petroleum, the governor slashed infrastructure spending and will likely cut more in a special legislative session.
    In Texas, which produces about 40 percent of the country’s oil and employs more than 361,000 people, the picture is especially bleak. Three weeks ago, Bobby Whitacre, vice president of Impala Transport in Plano, Texas, was looking to hire a well site supervisor for $200 a day with paid time off. Now he’s had to lay off many of his workers.
    “It’s dead. It’s dead as can be,” he said.
    While many industries paralyzed by the coronavirus pandemic received help from a recent $2 trillion congressional relief package, the energy sector was largely left out. The American Petroleum Institute, the oil industry’s main lobbying group, has maintained its free market philosophy, saying it does not want direct financial assistance from government. But the group did ask the federal government to relax environmental rules.
    Some smaller producers would welcome financial relief.

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    UAE supports Saudi call for oil talks, joint effort needed by allOil prices fall sharply as OPEC+ meeting delayed, stocks jump on virus slowdown

    Posted: by Arab News

  • How one SV factory keeps running during virus outbreak

    Mon, 2020-04-06 04:06

    SAN FRANCISCO: The managers at Green Circuits — a small Silicon Valley electronics factory — thought they would have to close when the San Francisco Bay Area directed non-essential businesses to shut almost three weeks ago.

    But messages soon flowed in from customers telling them their parts were needed for things like medical and defense equipment. One customer is now rushing to build ventilators that might use printed circuit boards made by Green Circuits.
    What happened next is occurring, in some form, at factories across the United States. While some, including sprawling auto assembly plants, have halted production lines and laid off or furloughed workers, those that make goods deemed essential are scrambling to keep moving and struggling to keep frightened workers on the job.
    “The defense customers were the first to let us know” that they had to keep producing, said Joseph O’Neil, the company’s chief executive officer. They said “meet our delivery dates, or we will show up to help you do it,” he added.
    His first move was to redesign the plant’s work schedule. The company, owned by the Dallas-based private equity firm Evolve Capital, always had the first and second shifts overlap for a half-hour. That allowed workers arriving in the afternoon to confer with colleagues as they handed off duties.
    But O’Neil said they realized that would risk their whole workforce getting quarantined for 14 days, if someone got infected by the coronavirus and spent time at the factory as part of this larger group.
    The solution was to create three separate teams of 40 workers each. The first shift now ends at 2 p.m., and then there’s an hour when the workspaces, tools, and breakrooms are sanitized. The third team does not work at all, but rather is held in reserve and available to jump in if an illness hampers one of the two other teams of workers.
    Within days, an even bigger problem emerged and continues to dog the factory: Workers balked at coming to the job, fearful that spending hours on the production line with coworkers might expose them and their families to the virus.
    O’Neil said the governor of California jolted his workforce when he broadened the shelter-at-home order to the entire state. That day, March 19, a few dozen elected to stay at home and requested a move to furloughed status.

    SPEEDREAD

    ● The company began calling workers, pleading with them to keep going, and created a website — in English, Spanish, Korean and Vietnamese — to communicate updates on the safety measures they were putting in place and the essential nature of their work. The company assigned one worker on each shift to do nothing but move through the factory, cleaning surfaces.

    ● About half of their customers are close enough to the factory that they were accustomed to dropping off and picking up goods, often without warning.

    ● Now, customers must only use shipping services, such as FedEx, and a ‘two-gate system’ and use a video doorbell to talk to someone inside the factory. After the delivery driver leaves the goods, a worker comes out and wipes down the boxes before bringing them in to the factory.

    “This put in jeopardy our ability to meet our ongoing commitments to essential efforts,” O’Neil wrote in an email as he was sorting through how to respond.
    The company began calling workers, pleading with them to keep going, and created a website — in English, Spanish, Korean and Vietnamese — to communicate updates on the safety measures they were putting in place and the essential nature of their work. The company assigned one worker on each shift to do nothing but move through the factory, cleaning surfaces.
    They were able to coax most of the workers back to the job, said O’Neil. But anxiety continued to grow.
    A supervisor who runs the plant’s receiving dock sent O’Neil an email on March 23, complaining that his team meets at least 6 people every day. Who knows “what they have been exposed to,” he wrote, adding that his loading dock workers were the “most vulnerable” compared with other departments in the plant.
    About half of their customers are close enough to the factory that they were accustomed to dropping off and picking up goods, often without warning.


    A worker disinfects a work bench with a bleach mixture at the end of a shift at Green Circuits. (Reuters)

    Now, customers must only use shipping services, such as FedEx, and a “two-gate system” and use a video doorbell to talk to someone inside the factory. After the delivery driver leaves the goods, a worker comes out and wipes down the boxes before bringing them in to the factory.
    The company is also evaluating a plan to use the ultimate retention tool: Money. The proposal, not yet approved by the owners of the company, is to give workers an additional $2 an hour through April — which would be paid in December if the worker is still on staff. O’Neil said they would likely extend this for at least an additional two months — which could add up to a $1,000 bonus for each employee in December.
    “This has been a weird, unique — and hopefully once-in-a-lifetime experience,” said O’Neil. “This is the stuff business schools will teach in the future.”

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    Oil prices fall sharply as OPEC+ meeting delayed, stocks jump on virus slowdownUAE supports Saudi call for oil talks, joint effort needed by all

    Posted: by Arab News

  • Oil prices fall sharply as OPEC+ meeting delayed, stocks jump on virus slowdown

    Author: 
    AFP
    ID: 
    1586134042145347300
    Mon, 2020-04-06 05:39

    SYDNEY: Oil prices skidded on Monday after Saudi-Russian negotiations to cut output were delayed, keeping oversupply concerns alive, while stocks jumped as investors were encouraged by a slowdown in coronavirus-related deaths and new cases.
    In currency markets, sterling fell after British Prime Minister was admitted to hospital following persistent coronavirus symptoms as the pandemic rapidly spreads.
    Brent crude fell as much as $3 in early Asian trading after Saudi Arabia and Russia postponed a meeting over a potential pact to cut production to Thursday.
    Analysts said the news could lead to some sell-off in currency markets too.
    Also weighing on the pound were fears other senior government officials who were in the same briefing as Prime Minister Boris Johnson could be affected by the virus, said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto, Canada.
    The pound fell 0.4% in early trade on Monday in a knee-jerk reaction and was last down 0.3% at $1.2222.
    “It is stating the obvious to say the viral outbreak and the containment measures to fight it are central to market action,” said Michael McCarthy, chief market strategist at CMC Markets.
    Indeed, equity investors looked at the positives with major European nations including France and Italy reporting lower fatality rates.
    US stock futures jumped more than 1.5% in early Asian trading on Monday after US President Donald Trump expressed hope the country was seeing a “levelling off” of the coronavirus crisis.
    The gains came despite New York Governor Andrew Cuomo cautioning that it was not yet clear whether the crisis in the state had reached a plateau. Investors took solace from the fact that COVID-19 cases appeared to be reaching a peak in Europe with Italy seeing the number of patients in intensive care falling for the second consecutive day.
    In Asia, Australia’s benchmark index added 0.5%, Japan’s Nikkei was up 0.2% while South Korea’s KOSPI index climbed 1.4%.
    That left MSCI’s broadest index of Asian shares outside of Japan up 0.1%. China markets were closed for a public holiday.
    “Focus in markets will now turn to the path out of lockdown and to what extent containment measures can be lifted without risking a second wave of infections,” National Australia Bank analyst Tapas Strickland wrote in a note.
    “Key to a strong rebound in China will be the ongoing lifting of containment measures with Wuhan – the epicenter of the outbreak – set to lift containment measures on April 8.”
    Strickland, however, noted many in China were still subject to social distancing and isolation restrictions to prevent a resurgence in infections.
    The pandemic has claimed more than 64,000 deaths as it further exploded in the United States and the death toll climbed in Spain and Italy, according to a Reuters tally.
    Concerns about heavy damage to the global economy have pushed investors into the perceived safety of government bonds where yields are at or near all-time lows.
    Elsewhere in currencies, the dollar was up a touch against the yen at 108.58.. The euro was barely moved at $1.0803 while the risk sensitive Australian dollar was up 0.2% at $0.6004.
    In commodities, Brent crude futures slipped 6.2%, or $2.13, to $31.98 a barrel while US crude dived 7.4%, or $2.12, to $26.12.
    Spot gold was down 0.2% at $1,612.9 an ounce.

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    UAE supports Saudi call for oil talks, joint effort needed by allOil row rumbles on as crisis talks are postponed

    Posted: by Arab News

  • UAE to boost strategic stockpile, says vice president

    Mon, 2020-04-06 04:26

    DUBAI: The United Arab Emirates will reinforce its stockpile of strategic goods and will waive residency visa fines for the rest of the year in response to the coronavirus outbreak, its vice president said on Sunday.

    Tweeting after a Cabinet meeting, Sheikh Mohammed bin Rashid Al-Maktoum, who is also the UAE prime minister and ruler of Dubai, said authorities had directed factories to support the health sector’s needs in the country, which has recorded 1,505 infections and 10 deaths.
    Dubai imposed a two-week lockdown on Saturday night, tightening an overnight curfew that the whole of the UAE has been under for 10 days. Daily new cases have increased recently as testing has been stepped up.
    The UAE central bank also announced new measures on Sunday to guarantee liquidity in the banking system, boosting its stimulus package to a total of $70 billion from a previously announced $27 billion.
    Meanwhile in neighboring Kuwait, the governor of the central bank said the country’s banks can continue to distribute dividends for 2019 and it is early to ask them to suspend dividends for 2020.

    FASTFACT

    • Tweeting after a Cabinet meeting, Sheikh Mohammed bin Rashid Al-Maktoum, who is also the UAE prime minister and ruler of Dubai, said authorities had directed factories to support the health sector’s needs in the country, which has recorded 1,505 infections and 10 deaths.

    • In neighboring Kuwait, the governor of the central bank said the country’s banks can continue to distribute dividends for 2019 and it is early to ask them to suspend dividends for 2020.

    “The exchange rate system is excellent and there is no fear for the Kuwaiti dinar,” said Mohammad Al-Hashel, adding that banks’ average capital adequacy ratio was above 18 percent. The minimum ratio has been reduced to 10.5 percent, the governor said.
    Last week, the Central Bank of Kuwait (CBK) announced a stimulus package to support vital sectors and small and medium enterprises amid the fallout from the coronavirus epidemic.
    The measures will raise banks’ lending by 5 billion dinars ($16 billion), the Kuwait Banking Association said last week.
    Hashel said banks had agreed to refrain from liquidating collateral assets like real estate or stocks, unless customers ask for it, “to avoid any serious decline in the markets.”
    Banks should not be “very strict” in refraining from lending, he said.
    He added monetary policy measures taken so far were adequate, but the central bank was ready to act again if necessary.

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    UAE supports Saudi call for oil talks, joint effort needed by allAfrica likely to lose 20 million jobs due to pandemic: AU study

    Posted: by Arab News

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