AFP

The IMF announced Thursday a conditional agreement to provide Lebanon with $3 billion in aid to help it emerge from a severe economic crisis, following months of negotiations.

The country has been battered by triple-digit inflation, soaring poverty rates and the collapse of its currency since a 2020 debt default.

Officials in Beirut applauded the announcement as it will open the door to additional financial support from foreign donors.

But experts reiterated doubts over the willingness of Lebanon’s political elite, widely blamed for endemic corruption, to implement the reforms needed to resuscitate the economy.

The deal is “a visa stamp for donor countries to begin co-operating with Lebanon and to put Lebanon back on the global finance map”, Prime Minister Najib Mikati told reporters on an upbeat note after the International Monetary Fund announcement of the “staff-level agreement”.

Saudi Arabia, a key financial backer, announced Thursday it was sending an ambassador to Lebanon for the first time since a row broke out five months ago over the Riyadh-led military intervention in Yemen. 

Fellow oil-rich Gulf state Kuwait, which sided with Riyadh in the row, also announced that its ambassador would return “in response to appeals of moderate national forces” in Lebanon.

Ernesto Ramirez Rigo, who led the IMF mission to Lebanon, said that once approved by the global crisis lender’s board, the 46-month financing programme will “support the authorities’ reform strategy to restore growth and financial sustainability”.

However, approval is contingent on “timely implementation of all prior actions and confirmation of international partners’ financial support”, he said in a statement.

Rigo blamed “many years of unsustainable macroeconomic policies” for the crisis in Lebanon that came to a head in 2020 when it defaulted on its sovereign debt for the first time in its history.

The Lebanese pound has lost about 90 percent of its value on the black market and four out of five Lebanese now live below the poverty line, according to the United Nations.

The situation has been exacerbated by soaring inflation, the Covid-19 pandemic and the devastating August 2020 explosion at Beirut port.

“Lebanon is facing an unprecedented crisis, which has led to a dramatic economic contraction and a large increase in poverty, unemployment, and emigration,” Rigo said, adding that the programme will support increased social spending.

– ‘Highly unlikely’ – 

The aid would be released under the global lender’s “Extended Fund Facility” but only after parliament in Beirut approves a 2022 budget and a new bank secrecy law to fight corruption.

It also will require cabinet approval of a debt restructuring plan, Rigo said.

The cabinet must likewise approve a bank restructuring strategy.

A former vice governor of Lebanon’s central bank, Nasser Saidi, said he had doubts that such reforms would ever materialise.

“This is good news if the set of Monetary-Fiscal-Governance-Structural reforms including banking sector restructuring are implemented. Highly unlikely!” he wrote on Twitter.

In a joint statement with President Michel Aoun, Mikati said the IMF deal would help “to revive Lebanon and put it on the path of recovery and solutions”.

Cabinet and parliament must approve the agreement and the reforms demanded by the IMF before the deal goes through.

For more than two years, the ruling elite has been unable to lift the country out of crisis, as it is beset by political horsetrading between rival factions that have repeatedly left Lebanon without a government.

Financial analyst Henri Chaoul dismissed the IMF agreement as a “non-event”.

“The prior actions will never be done. We are light years away,” he told AFP.

“We have 30 years of track record with a perfect-fit regression line.”

Walmart will lift starting pay for truckers to as much as $110,000 a year in the retail giant’s latest move to recruit and retain logistics staff in the tight US labor market.

The new salary level compares with current pay averaging $87,500 for first-year drivers and is roughly twice the average $56,491 annual pay for a long-haul driver, according to data cited by Walmart.

Whether a new driver can make the full $110,000 depends on factors such as miles driven and location, a Walmart spokesman said.

The aim is to make working as a driver for the company a “destination job,” Walmart supply chain executives Fernando Cortes and Karisa Sprague said in a blog post. 

“The investments in pay and training build on multiple recent driver bonuses and improved schedules that enable drivers to spend more time at home,” they said. “Once drivers are on board, this is a job many leave only for retirement.”

Walmart, which currently has 12,000 drivers in its fleet, is looking to add another 5,000 in 2022.

The company has also established an internal training program where staff from other parts of Walmart can train for 12 weeks and earn a commercial driver’s license. The goal is to bring on 400 to 800 drivers through the program by the end of the company’s 2023 fiscal year, a spokesman said.

The hiring push comes amid a period of significant revenue growth for Walmart and other big-box chains throughout the coronavirus pandemic, a period also characterized by port backlogs and supply chain snarls.

The crunch in drivers has prompted some larger trucking companies to argue for lowering the national driving age, a policy opposed by independent truckers who have called for more parking capacity, less unpaid waiting time and other improvements in working conditions to improve employee retention.

Tesla welcomed throngs of  electric car lovers to Texas Thursday for a huge party inaugurating a “gigafactory” the size of 100 professional soccer fields.

Online buzz has swelled ever since Tesla’s colorful but controversial founder and chief executive Elon Musk tweeted word of the event, with reports of perhaps as many as 15,000 guests taking part in the official plant opening in the state capital Austin.

Tesla owners posted plans for cross country road trips, while others urged the uninvited to just show up and find a way inside.

As Thursday arrived, Musk tweeted images and video of preparations including a kaleidescope-like walkway leading into a plant given a nightclub look with red and blue lights.

Tesla electric cars were on a stage backed by a giant “Giga Texas” sign made of neon lights. The festivities would not start until the evening, Musk tweeted.

The company has remained mum about details of the extravaganza, but rumors abound, including reports of an open bar and concert at Tesla’s 74-acre home in Texas.

Tesla fans have posted drone footage and other video showing sightings of what could be new vehicle models on display at the event.

“I got a golden ticket!” Luke Metger, president of a Texas environmental organization, tweeted on the eve of the party, attaching a screen-shot of his invite to the Cyber Rodeo – Giga Texas gala.

But will Texas be Musk’s land of promise?

– Farewell Silicon Valley –

The move to a US state known for conservative Republican politics is seen by some as Musk stepping away from the liberal Silicon Valley culture in which he made his fortune.

The South African-born serial entrepreneur is now ranked the world’s richest man. He founded Tesla in Silicon Valley in 2003, but shifted its headquarters to Texas late last year.

Musk has clashed with California regulators, particularly when health precautions mandated at the height of the pandemic closed Tesla’s Fremont plant.

California is also investigating whether discrimination took place at Tesla’s plant there.

It remains to be seen how Musk will navigate conservative policies in Texas, such as the state’s restrictive new abortion law and limits on seeking health services for transgender children.

Part of the Texas allure is a lack of corporate or personal income taxes. Tesla received more than $60 million in tax breaks to build the factory, which is expected to employ 10,000 people over time.

While Musk has spoken of a desire for a shift away from climate-wrecking fossil fuels, Texas is known for oil rigs and gas-guzzling cars and trucks.

“I think he is having a bit of an identity crisis and forgotten who his customer is, and it is going to come back to bite him,” tech analyst Rob Enderle said of Musk.

“He is drifting to the right; what he doesn’t seem to remember is that most of the people who buy electric cars are the liberals.”

– Cybertruck –

Giga Texas has been in operation since late last year. It is the fifth and largest gigafactory cranking out battery packs and vehicles for Tesla.

Since starting with a car plant in Silicon Valley, Tesla has gone global with mega-factories in Berlin and Shanghai as well as in US states New York and Nevada.

The Austin plant will produce Model 3 and Y cars and eventually a Cybertruck pickup and a semi for hauling cargo trailers set to go into production next year, according to Edmunds analyst Jessica Caldwell.

Tesla demand is outstripping supply to the point that some Model Y and 3 cars are being delivered months late in some parts of the world, according to Wedbush analyst Dan Ives.

“The solution is mainly in Austin and Berlin,” Ives said.

Gigafactory Berlin officially opened last month.

Tesla wants to ramp up production by some 50 percent annually, and should easily top that goal this year, Musk said recently.

He has delivered more than a million vehicles during the past 12 months despite production constraints caused by a global chip shortage plaguing many industries.

US Treasury Secretary Janet Yellen on Thursday called for increased oversight of cryptocurrencies, after President Joe Biden last month green-lit work on creating a digital American dollar.

Digital currencies such as bitcoin and ethereum have seen explosive growth in recent years, even as American officials have expressed concerns over whether the assets are properly regulated, or could be used for criminal activity.

In a speech at American University in Washington, Yellen said better regulations on such assets would protect consumers while still allowing for innovation.

“As banks and other traditional financial firms become more involved in digital asset markets, regulatory frameworks will need to appropriately reflect the risks of these new activities,” Yellen said.

“And new types of intermediaries, such as digital asset exchanges and other digital native intermediaries, should be subject to appropriate forms of oversight.”

Biden’s order last month put the United States among the more than 100 countries that are exploring or have launched pilot programs with their own central bank digital currency, including China’s digital yuan, although Yellen said issuing such a currency is likely to “require years of development, not months.” 

Washington has also looked to expand taxation of cryptocurrencies, with the $1 trillion national infrastructure overhaul that Congress passed last year including provisions to expand reporting requirements for digital assets.

Governments worldwide have fretted that cryptocurrencies are being used to fund illicit activities.

On Tuesday, Germany shut down Russian-language illegal darknet marketplace Hydra, the largest such network in the world, and seized bitcoin worth $25 million.

The US Treasury sanctioned that site and Garantex, an exchange for virtual currencies that it said was used for collecting ransomware payments.

Yellen warned that “‘financial innovation’ of the past has too often not benefited working families, and has sometimes exacerbated inequality,” and added that the department is working with Congress to regulate stablecoins, which are cryptocurrencies backed by reserves.

Yellen called for “tech neutral” regulations on digital assets that are intended to protect consumers and businesses without hampering the technology behind them.

“In many cases, regulators have authorities they can use to promote these objectives and Treasury supports those efforts,” Yellen said.

“To the extent there are gaps, we will make policy recommendations, including assessment of potential regulatory actions and legislative changes.”

The IMF announced Thursday that after months of negotiations it reached a staff-level agreement to provide Lebanon with $3 billion in aid to help it emerge from a severe economic crisis.

The country has been battered by triple digit inflation, soaring poverty rates, and the collapse of its currency since a 2020 debt default, and officials in Beirut applauded the announcement as it will open the door to additional financial support. 

The deal is “a visa stamp for donor countries to begin co-operating with Lebanon and to put Lebanon back on the global finance map,” Prime Minister Najib Mikati told reporters after the IMF announcement.

Ernesto Ramirez Rigo, who led the IMF mission to Lebanon, said that once approved by the global crisis lender’s board, the 46-month financing program will “support the authorities’ reform strategy to restore growth and financial sustainability.”

However, approval is contingent on “timely implementation of all prior actions and confirmation of international partners’ financial support,” he said in a statement.

Rigo blamed “many years of unsustainable macroeconomic policies” for the crisis that came to a head in 2020 when Lebanon defaulted on its sovereign debt for the first time in its history.

The Lebanese pound has lost about 90 percent of its value on the black market and four out of five Lebanese now live below the poverty line, according to the United Nations.

The situation has been exacerbated by soaring inflation, the Covid-19 pandemic and the war in Ukraine, as well as the August 2020 port of Beirut explosion.

“Lebanon is facing an unprecedented crisis, which has led to a dramatic economic contraction and a large increase in poverty, unemployment, and emigration,” Rigo said, who stressed that the program will support increased social spending.

– ‘In Lebanon’s best interest’ – 

The aid would be released under the global lender’s Extended Fund Facility but only after the parliament in Beirut approves a 2022 budget and a new bank secrecy law to fight corruption.

It also will require cabinet approval of a debt restructuring plan, with “sufficient creditor participation to restore debt sustainability and close financing gaps,” Rigo said.

Officials “expressed their strong commitment to carry out this reform program and sustain decisive implementation during the upcoming parliamentary and Presidential elections,” Rigo said.

Mikati agreed that “these reforms are in Lebanon’s best interest,” and said they will be fully implemented.

In a joint statement with President Michel Aoun, he said the IMF deal will help “to revive Lebanon and put it on the path of recovery and solutions.”

Kenya’s finance minister on Thursday unveiled a $28 billion budget aimed at helping the economy recover after the Covid-19 pandemic threw hundreds of thousands of people out of work.

The financial roadmap for the 2022/2023 fiscal year, announced just four months before the country goes to the polls, also pumps billions into outgoing President Uhuru Kenyatta’s so-called legacy projects and major infrastructure — much of it funded by China.

“We have outlined policies in this budget that are geared towards returning the economy back on a more sustainable growth path for improved livelihoods,” Treasury Cabinet Secretary Ukur Yatani told parliament.

He said the East African powerhouse’s economy was set to grow by six percent in the current calendar year, down from 7.6 percent last year but a marked improvement on the 0.3 percent contraction in 2020 — the first in three decades.

The 3.3 trillion shilling ($28 billion, 26 billion euro) budget illustrates the fine line the government is walking between trying to improve people’s livelihoods but also boost its own coffers by increasing taxes.

Yatani forecast a budget deficit of 6.2 percent of gross domestic product (GDP), down from 7.5 percent in the previous fiscal year.

If the budget is approved by parliament, the government will also splash out 146 billion shillings on Kenyatta’s legacy schemes under his so-called Big Four Agenda, which focuses on food security, affordable housing, affordable healthcare and manufacturing.

It is also planning to spend billions of dollars on infrastructure projects such as an expressway aimed at easing the capital Nairobi’s notoriously congested roads and the expansion of the nation’s railway network.

Kenya was battered by the coronavirus pandemic, which slashed income from the vital tourist sector, although agriculture — the backbone of the economy — proved more resilient.

US and European stocks retreated Thursday after minutes from central banks showed US policymakers ready to aggressively wind back easy-money policies while their eurozone counterparts disagreed over their own way forward.

Meanwhile, oil prices continued to slide following heavy losses on Wednesday that had been triggered by concerns about weaker demand because of economic slowdown, with Brent crude falling below $100 per barrel.

A surge of Covid cases in major consumer China has raised concerns about demand, as has the surge in prices following the Russian invasion of Ukraine and Western sanctions.

On Wall Street all three major stock indices were lower in late morning trading, with Dow dropping 0.7 percent.

In Europe, London and Frankfurt ended the day down 0.5 percent, while Paris shed 0.6 percent.

Minutes showed the Fed in March opted to raise US borrowing costs rates by a quarter percentage point, mindful of “greater near-term uncertainty associated with Russia’s invasion of Ukraine”.

But some policymakers had favoured lifting rates even higher, by half a percentage point, to rein in decades-high inflation which is threatening to derail the economic recovery.

“Last night’s Fed minutes have recommitted the central bank to its path of tightening policy, leaving equities vulnerable in the short term after the bounce from the March lows,” said Chris Beauchamp, chief market analyst at online trading platform IG.

– Inflation fight –

At their own meeting last month, European Central Bank policymakers disagreed on how to respond to runaway inflation and economic uncertainty caused by Russia’s invasion of Ukraine, minutes indicated Thursday.

“A large number of members held the view that the current high level of inflation and its persistence called for immediate further steps towards monetary policy normalisation,” the minutes read.

The ECB’s governing council played it safe at the March meeting, agreeing to wind down monthly bond purchases at an accelerated pace in the second quarter, while keeping the end date of the stimulus scheme flexible.

An interest rate hike would follow “some time” after the end of the bond-buying scheme, it said.

But the minutes revealed that some governors wanted to go further to combat inflation, as the war in Ukraine further pushes up prices for energy, food and raw materials.

The prospect of rates rising at a quicker pace over the coming months has added to a wave of uncertainty across trading floors.

Central banks across the world are under fierce pressure to tackle runaway inflation, which has soared further on a Ukraine-driven spike in commodities like gas, oil and wheat.

March was the first Fed hike since it slashed US rates to zero when the Covid-19 pandemic broke out two years ago.

Although current US data points to a healthy economy, commentators warn of possible hard times ahead.

“While the economy continues to grow, there is a clear lack of bullish momentum in this market at the moment,” said IG’s Beauchamp.

– Key figures around 1530 GMT –

New York – Dow: DOWN 0.7 percent at 34,240.39 points

EURO STOXX 50: DOWN 0.6 percent at 3,802.10

London – FTSE 100: DOWN 0.5 percent at 7,551.81 (close)

Frankfurt – DAX: UP DOWN 0.5 percent at 14,078.15 (close)

Paris – CAC 40: DOWN 0.6 percent at 6,461.68 (close)

Tokyo – Nikkei 225: DOWN 1.7 percent at 26,888.57 (close)

Hong Kong – Hang Seng Index: DOWN 1.2 percent at 21,808.98 (close)

Shanghai – Composite: DOWN 1.4 percent at 3,236.70 (close)

Brent North Sea crude: DOWN 2.3 percent at $98.73 per barrel

West Texas Intermediate: DOWN 2.1 percent at $94.23 per barrel

Euro/dollar: UP at $1.0903 from $1.0896 late Wednesday

Pound/dollar: DOWN at $1.3063 from $1.3069

Euro/pound: UP at 83.46 pence from 83.37 pence

Dollar/yen: UP at 123.87 yen from 123.80 yen

burs-rl/cdw