US Business

The world’s authoritarian regimes are persecuting their opponents living abroad more vigorously than ever before and some get away with murder, literally.

A blatant example of the impunity some governments enjoy is Saudi Arabia’s de-facto ruler, Crown Prince Mohammed bin Salman, whose country US President Joe Biden labelled a “pariah” over the 2018 murder and dismemberment of Saudi journalist Jamal Khashoggi.  

Yet in June, Saudi made up with Turkey — where the murder happened — and Biden decided to include the kingdom on a tour of the Middle East.

Experts say transnational repression of opposition figures is nothing new, but since digital technologies have allowed dissidents to needle authoritarian regimes from across borders more easily, they have stoked the wrath of strongmen like rarely before.

“The threat perception of dictators or these repressive regimes has increased,” said Marcus Michaelson, a researcher on authoritarianism at the Vrije Universiteit in Brussels.

According to US watchdog Freedom House, there were at least 735 direct, physical incidents of transnational repression between 2014 and 2021, carried out by 36 governments, notably those of China, Turkey, Russia, Saudi Arabia, Iran and Rwanda. 

Four regimes joined the list in 2021, including Belarus, which diverted an aircraft to arrest an opposition figure.

– ‘Harassment to murder’ –

Spectacular acts like the poisoning of former Russian intelligence agent Sergei Skripal in Britain in 2018, or the killing in 2019 in Berlin of Georgian Chechen Zelimkhan Khangoshvili — attributed to Russia — get the world’s attention, but much of the repression happens under the radar.

“The range of tactics goes from harassment to murder,” said Katia Roux at Amnesty International France.

Turkish journalist Can Dundar, who runs a website and a radio station aimed at Turkey and the Turkish diaspora from exile in Germany, has become a target for the secret apparatus of President Recep Tayyip Erdogan. 

“In the first year we found a Turkish camera crew (…) recording our office and giving all the details of our office, including our address and our daily work schedule, at what time we are there, at what time we are getting out etc, and showing it as the ‘headquarters of the traitors’ making plans against Turkey,” he told AFP.

Turkish intelligence “is very active, especially in Germany and France,” he said, recalling the attack by three men on a Turkish journalist in Berlin in July 2021 who warned him to stop writing about certain topics.

Pakistani journalist Taha Siddiqui, who fled to France after a kidnapping attempt he blamed on his home country’s security services, said he still didn’t actually feel safe in exile, only “safer”.

In 2020 a Pakistani intelligence officer told Siddiqui’s parents that “if Taha thinks he’s safe in Paris, he is mistaken. We can reach anyone anywhere”.

The threat came the same year as the suspicious deaths of a Pakistani journalist in Sweden, and of a Pakistani human rights activist in Canada, and a year before a British court convicted a man for conspiring to murder a Pakistani blogger in Dutch exile.

“They have made me paranoid, suspicious, scared, even in exile,” said Siddiqui, who has opened “The Dissident Club” in Paris, a bar dedicated to discussion, exhibitions and screenings.

Digital technologies give repressive regimes a whole new toolkit to sidestep the political cost or diplomatic risk that can come with physical action against dissidents, with “almost no consequences”, said Michaelson.

They have a “commercial market for surveillance technologies” at their disposal, such as the Israeli-made spy software Pegasus, which are cost-effective, he said.

“So they don’t need to invest a lot of manpower or send agents to spy on dissidents abroad,” he said.

A telling example is Egyptian opposition figure Ayman Nour, a friend of Khashoggi, and exiled in Turkey.

Citizen Lab, a body for research into technology, human rights and security, said it found two sets of spyware on Nour’s mobile phone — Pegasus and Predator — operated by two different governments. 

– ‘You have to stop’ –

Calling spying “a form or organised crime”, Nour said he always thought of his phone as “a radio that anybody can listen to”.

Amnesty International has identified 11 government clients for Pegasus which allows “the surveillance of anybody in a completely invisible and untraceable way”, said Roux.

Activists in China defending the rights of the Uyghur minority, against which western countries say China is committing “genocide”, often find that digital threats precede physical violence, said Michaelson.

Meiirbek Sailanbek, a member of China’s Kazakh community, said he uninstalled all Chinese apps from his phone when he moved to neighbouring Kazakhstan, and deleted the numbers of his brother and sister who still live in Xinjiang, the Uyghur autonomous region in northwest China.

When the Kazakhstan authorities arrested the head of the Atajurt NGO — which Sailanbek had joined writing social posts under a pseudonym — he fled the country, settling in Paris.

But Kazakhstan’s authorities identified him, and since then the Chinese government is threatening his brother and sister with prison if he continues his activism.

“Meiirbek, your sister and brother are in danger, you have to stop,” said a message forwarded to him by his mother.

Sailanbek faces arrest if he returns to China or Kazakhstan, but he considers Turkey, Pakistan, Arab nations and Russia to be off-limits too because he believes they would give in to Chinese pressure to hand him over.

US retail sales shot up one percent in June amid the ongoing surge in prices, according to new data Friday that spelled more bad news for the Federal Reserve as it struggles to rein in rampant inflation.

The data showed that after pausing in May, American consumers last month were still eating out and buying furniture and cars, even amid the fastest inflation in more than four decades. 

That poses a challenge for the US central bank, which has been hoping to see more decisive signs that its aggressive interest rate hikes were starting to take the economy off the boil and tamp down high prices.

After total sales dipped 0.1 percent in May, they recovered with a vengeance last month and climbed to $680.6 billion, the Commerce Department said.

Record gas prices at the pump in June were a major factor, boosting sales at gasoline stations 3.6 percent in the month, and posting an eye-watering 49.1 percent surge over the past year, the report said.

But the data showed increases were widespread, and sales were still up 0.7 percent even when gasoline is removed from the calculation.

The Fed started raising the benchmark borrowing rate in March, and last month increased it by 0.75 percentage point, the biggest hike in nearly 30 years. But talk has now shifted to the possibility of a massive, full-point increase later this month.

Fed Governor Christopher Waller on Thursday said he could favor the mega step — which would be the biggest such move in four decades — if there were no signs of cooling in the retail sales data and the new home sales report due out in two weeks.

– Mega rate hike in play –

The Fed’s policy-setting Federal Open Market Committee is due to meet July 26-27 to debate the next move in its war on inflation.

Kathy Bostjancic of Oxford Economics said “Today’s strong report keeps the Fed in an aggressive policy tightening mode — the debate at the July FOMC meeting will be between a 75bps or 100bps rate hike.”

But she noted that, when adjusted for inflation — the report does not take into account rising prices — spending on goods appears to be slowing in the second quarter “but not contracting.”

“While consumer sentiment is very downbeat, it doesn’t mean they will stop spending,” she said, although they will shift spending more to necessities.

The report showed auto sales rose 0.9 percent in June, after a 3.4 percent drop in May, while furniture stores and restaurants saw sales rise one percent or more, and online sales gained 2.2 percent.

Grocery stores saw a 0.6 percent rise, slower than in the prior month.

Clothing and building and gardening stores were among the few categories posting declines, the data showed.

Neil Saunders, Managing Director of GlobalData, called it “quite remarkable that the consumer has not retrenched more” amid surging prices.

But he noted that “consumers did not buy more stuff in June – they bought less product but paid more for it. This is not a comfortable position.”

Stocks rose Friday after the latest data showed that US consumers continue to spend more in the latest signal of the strength of the economy despite high inflation and rising interest rates.

Better-than-expected results from Citigroup also helped allay somewhat concerns about what waits in store for investors as companies begin to report their next quarterly results.

The euro held above $1.00, having sunk below parity this week on fears Russia would cut off Europe’s gas supplies in retaliation for Ukraine war sanctions, pushing the region into recession.

Oil prices rebounded having slumped Thursday on renewed fears of a global recession that would dent demand for energy.

Wall Street opened higher on a better-than-expected 1.0 percent rise in retail sales in June.

While not adjusted for inflation, sales were still up 0.7 percent even when gasoline was removed from the calculation, according to the Commerce Department data.

“The key takeaway from the report is that it was strong enough to keep concerns about weakening consumer spending at bay for the time being,” said analysts at Briefing.com.

Markets took a major knock this week from news that US inflation zoomed to a 40-year high of 9.1 percent in June on energy costs.

After rate hikes by several countries this week, investors now expect the Federal Reserve to lift rates later this month by 75 basis points as officials battle decades-high inflation, though some observers suggest a one-percentage-point move could even be on the cards.

While experts warn that raising US rates risks hammering the economy, the Fed has made it clear the number-one priority is bringing down prices.

The retail sales figures join other data showing that the US economy is holding up relatively well so far despite high inflation and rising interest rates.

Meanwhile, Citigroup’s net profits fell by 25 percent to $4.5 billion, yet earnings per share easily beat expectations. The banking group took in more revenue and benefited from rising interest rates.

Citigroup shares jumped 6.0 percent as trading got underway in New York.

Wall Street stumbled Thursday with sentiment weighed down by disappointing reports from JPMorgan Chase & Co. and Morgan Stanley.

Those compounded worries that company profits would be hit by the fallout from a number of issues including rocketing consumer prices, monetary policy tightening and the war in Ukraine.

European stocks were higher in afternoon trading.

In Asia, Hong Kong and mainland Chinese equity markets led losses after data showed China’s economy grew just 0.4 percent in the second quarter, battered by Covid lockdowns in major cities including Shanghai and Beijing.

The reading was well off the 1.6-percent growth predicted by analysts in an AFP survey.

Elsewhere, traders are keeping tabs on US President Joe Biden’s visit to the Middle East as he tries to persuade Saudi Arabia to bring down high oil prices by pumping more crude.

– Key figures at around 1330 GMT –

London – FTSE 100: UP 1.4 percent at 7,138.46 points

Frankfurt – DAX: UP 2.2 percent at 12,793.69

Paris – CAC 40: UP 1.2 percent at 5,986.08

EURO STOXX 50: UP 1.7 percent at 3,455.59

New York – Dow: UP 1.5 percent at 31,081.84

Tokyo – Nikkei 225: UP 0.5 percent at 26,788.47 (close)

Hong Kong – Hang Seng Index: DOWN 2.2 percent at 20,297.72 (close)

Shanghai – Composite: DOWN 1.6 percent at 3,228.06 (close)

Euro/dollar: UP at $1.0062 from $1.0022 Thursday

Pound/dollar: UP at $1.1836 from $1.1826 

Euro/pound: UP at 85.04 pence from 84.72 pence

Dollar/yen: DOWN at 138.74 yen from 138.93 yen

West Texas Intermediate: UP 2.6 percent at $98.26 per barrel

Brent North Sea crude: UP 2.9 percent at $102.00 per barrel

burs-rl/bp

Western finance chiefs condemned Moscow’s invasion of Ukraine at G20 talks in Indonesia Friday, accusing Russia of sending a “shockwave” through the world economy and its technocrats of complicity in the war’s alleged atrocities.

The two-day meeting on the island of Bali began under the shadow of a Russian military assault that has roiled markets, spiked food prices and stoked breakneck inflation, a week after Moscow’s top diplomat walked out of talks with the forum’s foreign ministers.

“Russia is solely responsible for negative spillovers to the global economy,” US Treasury Secretary Janet Yellen told the Russian delegation in the opening session, according to a US official, who spoke on condition of anonymity.  

“Russia’s officials should recognise that they are adding to the horrific consequences of this war through their continued support of the Putin regime. You share responsibility for the innocent lives lost,” Yellen added, according to the official.

The official did not comment on whether the Russian delegation responded. Russian officials did not immediately respond to an AFP request for comment. 

Russia calls its invasion of Ukraine a “special military operation” and blames subsequent Western sanctions for blocked food shipments and rising energy prices.

“Russia tried to say that the world economic situation had nothing to do with the war,” a French delegation source told AFP.

Australian Treasurer Jim Chalmers condemned Russia’s “immoral transgression” against Ukraine, saying that Moscow must take the blame for the impacts on the global economy caused by the war.

“Russia’s unjust actions have had terrible human cost but they’ve also increased global uncertainty,” Chalmers said, according to a transcript. “Russia must take full responsibility.”

Canadian Finance Minister Chrystia Freeland told Russia’s delegation they were responsible for “war crimes” in Ukraine because of their support for the invasion, a Canadian official said. 

“It is not only generals who commit war crimes, it is the economic technocrats who allow the war to happen and to continue,” said Freeland, according to the official.

Both Russian Finance Minister Anton Siluanov and Ukrainian Finance Minister Serhiy Marchenko participated virtually in the meeting. 

Moscow sent Russian Deputy Finance Minister Timur Maksimov to attend the talks in person. He was in the room as Western officials expressed their condemnation, according to a source present at the talks.

Host and G20 chair Indonesia warned the finance chiefs that failure to tackle energy and food crises would be catastrophic.

In her opening remarks, Indonesian Finance Minister Sri Mulyani Indrawati called on ministers to work together with a spirit of “cooperation” because “the world is watching” for solutions.

“The cost of our failure is more than we can afford,” she told delegates. “The humanitarian consequences for the world and for many low-income countries would be catastrophic.”

– ‘Weaponising’ food –

The meeting has largely focused on the food and energy crises that are weighing on an already brittle global recovery from the Covid-19 pandemic.

“(Russian President Vladimir) Putin’s actions including the destruction of agricultural facilities, theft of grain and farm equipment, and effective blockade of Black Sea ports amounts to using food as a weapon of war,” Yellen said in an afternoon seminar.

In another session, she said Russia’s “unjustified war” has sent a “shockwave” through the global economy. 

Indrawati said members had “identified the urgent need for the G20 to take concrete steps” to address food insecurity and to help countries in need.

Yellen has pressed G20 allies for a price cap on Russian oil to choke off Putin’s war chest and pressure Moscow to end its invasion while bringing down energy costs.

In April, the US treasury secretary led a multinational walkout of finance officials as Russian delegates spoke at a G20 meeting in Washington, but there was no such action on Friday.

There is unlikely to be a final communique issued when talks end on Saturday because of the disagreements with Russia.

– ‘Act together’ – 

G20 chair Indonesia -– which pursues a neutral foreign policy –- refrained from disinviting Russia despite Western pressure.

Chinese Finance Minister Liu Kun, Britain’s new Finance Minister Nadhim Zahawi and European Central Bank President Christine Lagarde attended the meeting virtually. 

World Bank chief executive David Malpass did not attend, while International Monetary Fund chief Kristalina Georgieva appeared in person after saying Wednesday that the global economic outlook had “darkened significantly” because of Moscow’s invasion.

The meeting is a prelude to the leaders’ summit on the Indonesian island in November that was meant to focus on the global recovery from the Covid-19 pandemic.

Other issues being tackled by the ministers included digital financial inclusion –- with more than a billion of the world’s population still without access to a bank account -– and the deadline for an international tax rules overhaul.

European equities rose Friday as traders awaited the latest US bank results at the end of yet another volatile week for markets.

The euro held above $1, having sunk below parity this week on fears Russia would cut off Europe’s gas supplies in retaliation for Ukraine war sanctions, pushing the region into recession.

Oil prices rebounded having slumped Thursday on renewed fears of a global recession that would dend demand for energy.

Hong Kong and Shanghai stocks slid as weak Chinese second-quarter GDP compounded anxiety about a fragile global recovery.

Later Friday, investors will digest earnings from financial big-hitters Citigroup and Wells Fargo, with Bank of America and Goldman Sachs due Monday.

– ‘Bruising week’ –

“The firmer tone across Europe is… ahead of major US earnings, after what has been another bruising week for risk assets,” City Index analyst Fawad Razaqzada told AFP.

Global equities had mostly fallen Thursday as fresh evidence of runaway global inflation ramped up expectations of more aggressive rate hikes by central banks, while disappointing earnings revived recession fears.

Wall Street stumbled Thursday with sentiment weighed by the disappointing reports from JPMorgan Chase & Co. and Morgan Stanley.

That compounded worries that companies’ profits would be hit by the fallout from a number of issues including rocketing consumer prices, monetary policy tightening and the war in Ukraine.

Markets took a major knock this week from news that US inflation zoomed to a 40-year high of 9.1 percent in June on energy costs.

After rate hikes by several countries this week, investors now expect the Federal Reserve to lift rates this month by 75 basis points as officials battle decades-high inflation, though some observers suggest a one-percentage-point move could even be on the cards.

While experts warn that raising US rates risks hammering the economy, the Fed has made it clear its number-one priority is bringing down prices.

This has sent the dollar racing ahead, particularly as the European Central Bank has yet to lift interest rates — leaving it well behind the Fed.

In Asia, Hong Kong and mainland Chinese equity markets led losses after data showed China’s economy grew just 0.4 percent in the second quarter as it was battered by Covid lockdowns in major cities including Shanghai and Beijing.

The reading was well off the 1.6-percent growth predicted by analysts in an AFP survey.

Elsewhere, traders are keeping tabs on US President Joe Biden’s visit to the Middle East as he tries to persuade Saudi Arabia to bring down high oil prices by pumping more crude.

– Key figures at around 1110 GMT –

London – FTSE 100: UP 0.6 percent at 7,082.73 points

Frankfurt – DAX: UP 1.3 percent at 12,682.56

Paris – CAC 40: UP 0.3 percent at 5,936.38

EURO STOXX 50: UP 0.8 percent at 3,423.92

Tokyo – Nikkei 225: UP 0.5 percent at 26,788.47 (close)

Hong Kong – Hang Seng Index: DOWN 2.2 percent at 20,297.72 (close)

Shanghai – Composite: DOWN 1.6 percent at 3,228.06 (close)

New York – Dow: DOWN 0.5 percent at 30,630.17 (close)

Euro/dollar: UP at $1.0038 from $1.0022 Thursday

Pound/dollar: UP at $1.1828 from $1.1826 

Euro/pound: DOWN at 84.86 pence from 84.72 pence

Dollar/yen: UP at 139.28 yen from 138.93 yen

West Texas Intermediate: UP 0.1 percent at $95.88 per barrel

Brent North Sea crude: UP 0.7 percent at $99.79 per barrel

The European Commission is expected next week to ask EU countries to reduce heating and cooling of public buildings and offices to cut demand for gas, according to a document seen by AFP.

In order to better withstand the drastic fall in Russian gas supplies, which could be cut off altogether, the commission is expected to urge governments across the 27-nation bloc to set limits on the amount of energy used by public buildings, offices, commercial properties and outdoor terraces.

For optimal energy use, it will recommend the rules require that public buildings be heated to no more than 19 degrees Celsius (66 degrees Fahrenheit) and cooled by air conditioning units set no lower than 25°C (77°F°).

“Energy saved during the summer is energy that can be used in winter,” the commission points out in the document.

Energy experts say lowering the thermostat by one degree could cut a building’s heating bill by about 10 percent. Air conditioning units generally struggle and fail to cool a room below 20°C so they waste energy trying. 

The recommendation is part of a series of measures Brussels is investigating to cut the European Union’s gas consumption by 25 to 60 billion cubic metres (880 to 2,120 billion cubic feet) per year. 

The EU imported around 140 bcm of gas by pipeline from Russia last year, according to the International Energy Agency.

“Acting now could reduce the impact of a sudden supply disruption by one third,” says the document, which is due to be published on July 20 and could be modified in the interim.

It calculates that 11 billion cubic metres of gas could be directly saved from reducing excessive heating and cooling, and between four and 40 bcm via reduced electricity demand. Another 10-11 bcm could be saved from use by industries, which have already slowed production due to soaring prices.

The document urges EU governments, where this is “technically feasible and enforceable” to introduce binding limits on heating and cooling in “public buildings, offices, commercial buildings (in particular large buildings) … and open spaces like outdoor terraces”. 

“The role of public authorities in leading by example and as an important gas consumer -– 30 percent of the energy consumption — is key in this regard,” the document states.

The commission says that during the “gas winter” — October to March — “large savings can be achieved by deploying alternative heat sources for district heating, heat pumps in households” and energy saving campaigns urging the public to turn their thermostats down by one degree Celsius this winter.

Such “protected” energy customers — under EU legislation that means households, district heating that cannot switch to other fuels and certain essential social services — represent 37 percent of total EU gas consumption. 

Simulations show these customers would be the last to be seriously affected by large-scale Russian gas disruptions, the commission says.

It is therefore concentrating most of its efforts on power stations and industry, which use huge amounts of gas.

“Abrupt cuts could damage specific branches of those industries which have little room to switch to other fuels — because gas is being used as feedstock for industrial processes –- or to reduce production without heavy damage,” the commission warns.

“It would be significantly less costly to moderately reduce natural gas demand for a longer period of time, starting earlier, than having to drastically curtail demand suddenly and without proper preparation,” it explains.

By way of encouragement, Brussels urges EU governments to set up “auction systems”, perhaps involving several countries, to compensate industrial consumers who agree to reduce their gas consumption.

If there is a total cut in Russian gas supply from July onwards, EU states might only be able to replenish 65-71 percent of their gas reserves before winter, the commission said, quoting forecasts by European gas transmission system operators (ENTSOG).

The commission’s energy saving proposals are due to be discussed by EU energy ministers at a meeting in Brussels on July 26.