World

Dark clouds over China's economy as zero-Covid, global slowdown bite

A slew of lacklustre indicators for October show strict and enduring Covid curbs as well as a global slowdown are dragging on China’s economy, analysts told AFP, with prospects looking increasingly grim for 2023.

The world’s second-largest economy reported its first decline in exports since the early days of the pandemic last month, while factory activity and gate prices also fell.

The ultra-wealthy have seen their fortunes shrink, too, with the Hurun China Rich List this week recording its sharpest drop in the number of individuals worth at least five billion yuan ($690 million) since the 1990s.

Multiple analysts pointed to slumps abroad as a key factor behind the falling exports, long a major driver of growth for the Chinese economy.

“Monetary conditions are tightening quickly in other countries, while inflation continues to stay elevated amidst high energy costs,” Erin Xin, Greater China economist at HSBC, said in a note, pointing to a sharp decline in global demand for exports of discretionary items like clothing and electronics.

“With global demand slowing, the domestic economy will need to pick up the slack.”

And those falling exports will have a knock-on effect on manufacturing as well as the job market, Iris Pang, chief economist for Greater China at ING, explained.

Weakening demand risks “lower inflation and even deflation,” she said.

– Zero-Covid blues –

Deepening the pain is Beijing’s insistence on maintaining its strict policy of snap lockdowns and travel curbs whenever Covid cases arise — leaving businesses reeling from sudden disruptions and consumers reluctant to spend.

Economic powerhouses including Shanghai, Shenzhen and Beijing have been hit by either protracted lockdowns or restrictions limiting retail, construction and logistics this year as outbreaks of the more infectious Omicron variant spread across the country.

An area accounting for more than 12 percent of China’s gross domestic product is now under some form of Covid restriction, according to calculations by Nomura China economists on Monday.

China’s National Health Commission vowed Saturday to “unswervingly” stick to zero-Covid, dashing a major stock market rally on the back of unsubstantiated rumours that Beijing would imminently loosen its strict virus policy. 

And the man who oversaw a gruelling two-month lockdown of Shanghai, Li Qiang, was last month elevated by President Xi Jinping to the Communist leadership’s number two position.

“Given policymakers have invested so much political capital in the great zero-Covid campaign, it’s quite unlikely for them to abruptly declare the end of zero-Covid any time soon,” Macquarie economists Larry Hu and Yuxiao Zhang said.

“China’s economy has two major headwinds this year: zero-Covid and property.”

Property and construction account for around a quarter of China’s GDP, but crippling debts have forced multiple developers to default on loans this year, while buyers furious over unfinished homes have turned to mortgage strikes.

– Headwinds –

Chinese leaders have set out an annual economic growth target of about 5.5 percent, but many observers think the country will struggle to hit the target, despite announcing a better-than-expected 3.9 percent expansion in the third quarter.

Some are hopeful the situation could improve — despite the headwinds. 

Economists at HSBC said in a note that they “remain constructive on China” and predict more than five percent growth next year.

This will come, they argued, from a combination of the low base this year as well as “China further fine-tuning and gradually relaxing some Covid-19 restrictions in 2023, the housing market stabilising, and continued policy support”.

But others expect grim trends to continue, with Macquarie analysts telling AFP that “due to the softening global economy” they expect China exports to decline by five percent in 2023.

“For China at this moment, the deflation risk is much higher than the inflation risk,” they wrote, predicting “more easing ahead”, including cuts to the ratio of cash banks are required to hold as reserves.

Republican 'red wave' hopes fizzle in US midterm vote

Republican hopes for a sweeping rebuke of President Joe Biden in congressional elections failed to materialize with both parties picking up seats following a campaign fought against a backdrop of stubbornly high inflation and fears for US democracy.

Republicans needed one seat to wrest control of the evenly-divided Senate but by early Wednesday the only one to change party hands went to the Democrats, with John Fetterman, a burly champion of progressive economic policies, triumphing in Pennsylvania.

In the House of Representatives, early results suggested Republicans were on track to wrest control from Democrats — but only by a handful of seats, a far cry from their predictions.

Top Republican Kevin McCarthy — who hopes to be the lower chamber’s next speaker — struck an upbeat note as he addressed supporters in the early hours, telling them: “It is clear that we are going to take the House back.”

But Senator Lindsey Graham, a top Trump ally, bluntly conceded to NBC that the election is “definitely not a Republican wave, that’s for darn sure.”

With Biden’s favorability ratings hovering in the low 40s and Republicans pounding him over inflation and crime, many pundits had predicted a drubbing that would have raised new questions on whether America’s oldest-ever president, who turns 80 this month, should run again.

The president’s party has traditionally lost seats in midterm elections — and all eyes have been on a handful of Senate races including in Georgia, Nevada, Arizona and Wisconsin. 

In Pennsylvania — one of the election’s highest-profile races — Fetterman limited campaign appearances as he recovered from a stroke that impeded his speech but he still edged out Mehmet Oz, a celebrity doctor endorsed by Donald Trump.

“This campaign has always been about fighting for everyone who’s ever been got knocked down that ever got back up,” the two-meter (six-foot-eight) Fetterman, clad in his trademark hoodie, told a rally in Pittsburgh.

– Florida swings right –

On a night of close contests, one of the most decisive wins was for rising Republican star Ron DeSantis, who won by a crushing margin in Florida, cementing his status as a top potential White House candidate in 2024.

DeSantis, who has made a name in Florida by railing against Covid mitigation measures and transgender rights, was projected to have won by up to 20 points against a folksy former governor, four years after squeaking by in his longtime swing state.

“We will never, ever surrender to the woke mob,” DeSantis told a victory rally, using a derisive term for social justice campaigners.

“Florida is where woke goes to die,” he said.

But if the 44-year-old views his victory as a mandate for the White House in 2024, he will likely face a stiff challenge from another Florida resident — former president Trump, who has teased an “exciting” announcement on November 15.

Among other races, Maura Healey will make history as the first openly lesbian governor in the United States and in New York, where recent polls gave Democrats a scare, Governor Kathy Hochul fended off a Republican challenge.

– Trump again alleges fraud –

Trump, who is facing criminal probes over taking top secret documents from the White House and trying to overturn the 2020 election, returned to his playbook of airing unsubstantiated claims of fraud.

In Arizona, Trump and his chosen candidate for governor, Kari Lake, alleged irregularities after problems with voting machines.

Officials in the most populous county of Maricopa said about 20 percent of the 223 polling stations experienced difficulties related to printers but that no one was denied the right to vote.

Biden has warned that Republicans pose a dire threat to democracy with more than half their candidates repeating Trump’s debunked claims of cheating in the 2020 election.

In the runup to the vote, an intruder espousing far-right beliefs broke into the San Francisco home of House Speaker Nancy Pelosi and bludgeoned her husband with a hammer. 

In his closing pitch, Biden vowed that Democrats would defend pensions, health care and the freedom to have an abortion, after a Supreme Court transformed by Trump rescinded the right to choose.

Voting in Phoenix, Kenneth Bellows, a 32-year-old law student, said runaway inflation is “hurting Americans who are just trying to get by.”

“We don’t need any of the crazy woke rhetoric that’s going on right now. What we really need is focusing on everyday kitchen-table politics, to make sure taxes are low,” he said.

But at a restaurant serving up soul food in Pittsburgh, Lasaine Latimore, 77, said Democrats were best placed to help people.

“I just want my medical insurance and more money for dental and glasses,” she said.

A Republican victory could scuttle Biden’s legislative agenda, with Congress scuttling his ambitions on climate change and scrutinizing the billions of US dollars to help Ukraine fight Russia.

Hackers leak Australian health records on dark web

Hackers have followed through on a threat to leak sensitive medical records stolen from a major Australian health company that counts the country’s prime minister among nearly 10 million customers.

Medibank told investors that a “sample” selection of customer data was posted on a “dark web forum” on Wednesday after it refused to pay a ransom demand.

The data included names, birth dates, passport numbers and information on medical claims for hundreds of customers who were separated into “naughty” and “nice” lists. 

Some on the “naughty” list had numeric codes that appeared to link them to drug addiction, alcohol abuse and HIV infection. 

For example, one record carried an entry that read: “p_diag: F122”. 

F122 corresponds with “cannabis dependence” under the International Classification of Diseases, published by the World Health Organization. 

Medibank is Australia’s largest private health insurer and the hack is likely to include some of the country’s most influential and wealthy individuals.

Prime Minister Anthony Albanese said he himself was a Medibank customer and that the attack was a “wake-up call” for corporate Australia.

– Potential Russian link –

The perpetrator of the hack has not yet been publicly identified. 

But the Australian Federal Police’s Justine Gough said it was the work of a “criminal or criminal groups” that could be operating outside the country.

Sanjay Jha, chief scientist at the University of New South Wales’s Institute for Cyber Security, said it was difficult to attribute any attack to a single group.

However, he told AFP it carried some of the hallmarks associated with a Russian hacker group called REvil — which has previously targeted everything from Brazilian meat company JBS to Lady Gaga.

“The pattern matches the behaviour in parts. So that is why there is a serious indication it could be them selling the data,” Jha said.

A defunct REvil website has been redirecting traffic to the dark web forum where the Medibank data was leaked.

REvil — an amalgam of ransomware and evil — was the subject of a US$10 million reward from US authorities before being reportedly dismantled by Russia this year. 

JBS Foods, one of the largest beef producers in the world, paid REvil a ransom of US$11 million in 2021.

Jha said the hackers could now look to sell the sensitive data to blackmailers and other scammers.

– ‘Scumbags’ and ‘crooks’ –

The hackers also uploaded what they said were a series of messages sent to Medibank in the days before the leak. 

“We will do everything in our power to inflict as much damage as possible for you, both financial and reputational,” one message from the hackers read. 

Hundreds of millions of US dollars have been wiped off Medibank’s market value, with the company’s share price down more than 20 percent since October, when news of the leak first emerged.

Troy Hunt, a cyber security expert working for Microsoft, wrote on Twitter that the breach was “about as bad as we feared it would get”. 

The Medibank hack followed an attack on telecom company Optus in September that exposed the personal information of some nine million Australians.

Jha said the enormous Medibank and Optus data breaches could make it easier to carry out cyber attacks on different systems in the future. 

“A lot of credentials have been stolen in recent months,” he said. “That makes the job of attackers easier — they can go and try other systems with millions of credentials.” 

Australia’s assistant treasurer Stephen Jones said the perpetrators were “scumbags” and “crooks”.

“We shouldn’t be giving in to these fraudsters,” he told local media.

As Medibank tried to contain the leak, it was also staring down the barrel of a potentially costly class action lawsuit.

Hackers leak Australian health records on dark web

Hackers have followed through on a threat to leak sensitive medical records stolen from a major Australian health company that counts the country’s prime minister among nearly 10 million customers.

Medibank told investors that a “sample” selection of customer data was posted on a “dark web forum” on Wednesday after it refused to pay a ransom demand.

The data included names, birth dates, passport numbers and information on medical claims for hundreds of customers who were separated into “naughty” and “nice” lists. 

Some on the “naughty” list had numeric codes that appeared to link them to drug addiction, alcohol abuse and HIV infection. 

For example, one record carried an entry that read: “p_diag: F122”. 

F122 corresponds with “cannabis dependence” under the International Classification of Diseases, published by the World Health Organization. 

Medibank is Australia’s largest private health insurer and the hack is likely to include some of the country’s most influential and wealthy individuals.

Prime Minister Anthony Albanese said he himself was a Medibank customer and that the attack was a “wake-up call” for corporate Australia.

– Potential Russian link –

The perpetrator of the hack has not yet been publicly identified. 

But the Australian Federal Police’s Justine Gough said it was the work of a “criminal or criminal groups” that could be operating outside the country.

Sanjay Jha, chief scientist at the University of New South Wales’s Institute for Cyber Security, said it was difficult to attribute any attack to a single group.

However, he told AFP it carried some of the hallmarks associated with a Russian hacker group called REvil — which has previously targeted everything from Brazilian meat company JBS to Lady Gaga.

“The pattern matches the behaviour in parts. So that is why there is a serious indication it could be them selling the data,” Jha said.

A defunct REvil website has been redirecting traffic to the dark web forum where the Medibank data was leaked.

REvil — an amalgam of ransomware and evil — was the subject of a US$10 million reward from US authorities before being reportedly dismantled by Russia this year. 

JBS Foods, one of the largest beef producers in the world, paid REvil a ransom of US$11 million in 2021.

Jha said the hackers could now look to sell the sensitive data to blackmailers and other scammers.

– ‘Scumbags’ and ‘crooks’ –

The hackers also uploaded what they said were a series of messages sent to Medibank in the days before the leak. 

“We will do everything in our power to inflict as much damage as possible for you, both financial and reputational,” one message from the hackers read. 

Hundreds of millions of US dollars have been wiped off Medibank’s market value, with the company’s share price down more than 20 percent since October, when news of the leak first emerged.

Troy Hunt, a cyber security expert working for Microsoft, wrote on Twitter that the breach was “about as bad as we feared it would get”. 

The Medibank hack followed an attack on telecom company Optus in September that exposed the personal information of some nine million Australians.

Jha said the enormous Medibank and Optus data breaches could make it easier to carry out cyber attacks on different systems in the future. 

“A lot of credentials have been stolen in recent months,” he said. “That makes the job of attackers easier — they can go and try other systems with millions of credentials.” 

Australia’s assistant treasurer Stephen Jones said the perpetrators were “scumbags” and “crooks”.

“We shouldn’t be giving in to these fraudsters,” he told local media.

As Medibank tried to contain the leak, it was also staring down the barrel of a potentially costly class action lawsuit.

Australian sentenced to 129 years in Philippine child sex abuse case

An Australian man has been sentenced to 129 years in a Philippine jail as part of a child sexual abuse case involving victims as young as 18 months, a prosecutor said Wednesday.

It was the second conviction for Peter Gerard Scully, who is already serving a life sentence for an initial batch of charges involving the rape and trafficking of girls.

The Philippines has become a global hotspot for child sex exploitation, helped by poverty, English fluency and high internet connectivity in the country, experts warn.

“I hope this sends a very strong message to all abusers, all human traffickers, that crime really does not pay,” Merlynn Barola-Uy, a regional prosecutor in the southern city of Cagayan de Oro, told AFP. 

A Cagayan de Oro court handed down the sentence on November 3 after Scully and his three co-accused entered into a plea bargaining agreement.

They had been charged with 60 offences, including trafficking, child pornography, child abuse and rape.

Scully’s girlfriend, Lovely Margallo, was sentenced to 126 years in jail. Two others were given sentences of more than nine years.

Victims and their families have accepted the terms of the agreement and consider it a “sweet victory”, according to a statement posted on the regional prosecution office’s Facebook page. 

“They all want to put closure to this dark phase of their lives and move on,” the statement reads.

– ‘Big victory’ –

Victims included an 18-month-old baby girl and a child whose body was found buried under the floor of a house rented by Scully, Barola-Uy said.

“This is a big victory, not only for us prosecutors in the Department of Justice, but more importantly this is a big victory for the victim-survivors,” she said.

Barola-Uy said the youngest victim was now in grade two at school while others were adults.

Scully was arrested in 2015 in Malaybalay, another southern Philippine city, after fleeing from Australia in 2011. 

He had come to the Philippines to escape fraud charges in his home country.

He then set up a cybersex business, filming teenage girls from impoverished families as he had sex with them or used sex toys, investigators said previously.

The videos were allegedly sold to customers in Germany, the United States and Brazil.

Barola-Uy said Scully and his girlfriend meted out “extreme kinds of abuses” to their seven victims. 

“They were very graphic, they were very brutal,” she said.

Most of the people who pay to view these types of sex videos are abroad, with potentially thousands of children being abused, often with their parents’ consent, authorities say.

The United Nations Children’s Fund said in 2021 that the Philippines is one of the top global sources of child sex abuse materials.

Little respite for Ukrainian artillery fighters near Bakhmut

From the woods at the edge of Bakhmut, a besieged Ukrainian city in the Donbas region, a soldier shouts: “Postril!”

The signal — meaning “fire!” in Ukrainian — sends a huge orange fireball spitting from a 130mm field gun and blows away the surrounding vegetation.

In highly choreographed movements, five soldiers quickly remove the smoking hot empty cartridge and replace it, allowing for another “Postril!”.

These soldiers are part of the Ukrainian army’s 93rd brigade. Their targets are the Russian positions across the Bakhmut frontline.

Fighting has raged for four months around this eastern city, which is still held by Ukrainian troops but surrounded by Moscow’s forces.

“We are covering our infantry and chasing out the enemy’s artillery units. Right now, we are working a lot more than usual,” said artilleryman Dmytro, 25.

After the war started, his unit was given M-46 Soviet field guns, also called M1954 for the year they were introduced during a parade in Moscow’s Red Square. 

The massive weapon weighs about eight tons (16,000 pounds), with a gun tube of about eight metres (26 feet) and a 37-kilometre (22-mile) range. 

– ‘Welcome to hell’ –

“We came here because that’s where the enemy is pushing the most,” said Dmytro, pearls of sweat rolling down his face. “It seems that they slowed down since we started shooting.”

“There are times where we start shooting at 5:00 am and stay here through the whole night… We have two artillery units and we swap every day and a half,” he explained. 

After three consecutive shots, the unit pauses for a moment in the sun.

The mix of professionals and mobilised men drink coffee and smoke cigarettes around a fire. 

Some sport patches saying “welcome to hell” or “we are Ukraine” on their camouflage combat gear.

This close to the frontline, the noise of mortar and artillery shells is nearly constant and there is little time for anything more than brief periods of respite.

“Shooting non-stop for half an hour is tiring,” Dmytro said.

“We will rest when the war is over.” 

– ‘Adrenaline’ –

For Dmytro, the hardest part is unloading shells from the trucks, “especially when we get 50-60 boxes”.

When it comes to shooting, “adrenaline makes everything easier” the soldier said.

His unit receives new coordinates of a Russian position they need to strike, so the sergeants jump up from their brief break and run towards their half-hidden field gun. 

“Ready!” shouts Oleksandr, the unit’s observer. 

They remove the camouflage cover and re-load the M-46. 

One soldier gives the coordinates to the shooter, who triggers the control system. 

The long tube rises, aims about thirty kilometres away and fires. 

After the shot, there is no need for the brigade to leave, unlike units that operate on shorter ranges closer to the front.

“We were never spotted by the Russians,” said Oleksandr, visibly satisfied.

Dmytro says he avoids thinking about being a target for enemy artillery. 

“We only think about the best way to reach our target and after that, we just sit and wait for the next target,” he said. 

As for fighting with an old Soviet weapon, the brigade makes the best of it. 

“Clearly, usually, anyone wants the most modern weapon,” said Oleksandr.

But another member of the unit, smiling as he looks at the M-46, said: “But this baby makes us happy!”

US livid as basketball star Griner said moved to Russia penal colony

Russia is moving detained US basketball star Brittney Griner to a penal colony, her lawyers said Wednesday, drawing a sharp rebuke from the White House.

Griner, convicted for possession of a small quantity of cannabis oil, was transferred out of a detention center on November 4, her legal team said.

She “is now on her way to a penal colony,” lawyers Maria Blagovolina and Alexander Boykov said in a statement.

They said that Russia generally sends notifications of transforming prisoners by mail, taking up to two weeks.

“We do not have any information on her exact current location or her final destination,” they said.

Griner’s case has drawn outrage in the United States, with Secretary of State Antony Blinken reaching out to Russia to propose a deal to free her despite soaring tensions over Moscow’s invasion of Ukraine.

White House Press Secretary Karine Jean-Pierre reiterated that the United States had put forward a “substantial offer” to Russia to resolve her case.

“Every minute that Brittney Griner must endure wrongful detention in Russia is a minute too long,” Jean-Pierre said in a statement.

“As the administration continues to work tirelessly to secure her release, the president has directed the administration to prevail on her Russian captors to improve her treatment and the conditions she may be forced to endure in a penal colony.”

Griner, a two-time Olympic basketball gold medalist and Women’s NBA champion, had been in Russia to play for the professional Yekaterinburg team during her off-season from the Phoenix Mercury Women’s National Basketball Association side.

She said the cannabis in vape cartridges was to treat pain from her sporting injuries, but Russia does not allow medical marijuana use.

Reports have suggested that Griner and another American jailed in Russia, Paul Whelan — a retired US Marine arrested in December 2018 and accused of spying — could be traded for Viktor Bout, a famed Russian arms trafficker serving 25 years in prison on a 2012 conviction.

Moldova facing dark winter as energy crisis bites

A silence hangs over Ion Ignat’s normally noisy factory in Chetrosu, Moldova, with his 50 workers fretting about their future.

“Normally, all the machines are running. Now all is dead silent,” said the owner of the plant that makes bricks and concrete products about a half an hour’s drive from the capital Chisinau. 

The 60-year-old decided to halt production early last month for the first time since 1992 when spiralling energy prices made it too expensive to fire the kilns and run the machinery.

Ignat hopes to restart production soon if oil and gas prices fall.

In the meantime like many others in this impoverished nation nestled between Romania and Ukraine, he is preparing for a hard winter.

Faced with being starved of the Russian gas it has depended on for decades, the coming months will be crucial for this country of 2.6 million people with a Soviet past and European ambitions.

European Commission president Ursula von der Leyen will visit later this week to discuss how the bloc can help Moldova, which became an EU candidate in the wake of the Russian invasion of Ukraine.

– Running out of power –

Its pro-European and Harvard-educated president, Maia Sandu, has warned her country risks running out of gas and electricity this winter, with gas prices rising 600 percent in the last year.

“It’s a daily challenge to supply the country with energy. A family is paying 70 to 75 percent of its incomes on (gas and electricity) bills,” President Sandu said in a recent address to parliament in neighbouring Romania.

Moldova — where inflation was 33.9 percent year-on-year in September — is almost entirely dependent on Russian gas.

But Russian energy giant Gazprom is reducing deliveries by half in November, according to Chisinau.

As for electricity, Ukraine used to supply 30 percent of its needs. But Russian strikes on energy infrastructure there led to Kyiv to stop all exports to Moldova.

The remaining 70 percent of the country’s power normally comes from a thermal power station in Transnistria, a small breakaway region where Russian troops are stationed, which also cut deliveries to Chisinau.

EU member Romania said last month it would start selling electricity to its neighbour at a reduced price because of the difficulties created by the war in Ukraine.

The Moldovan government has also urged towns to turn off street lights and households to limit consumption, with businesses asked to change their hours to work at off-peak times. 

One of those who has heeded the call is Sergei Litra, the owner of Moldova’s first craft brewery. His employees now work in two shifts outside peak hours, one running from 11 pm to five in the morning. 

“Everything depends on when the war in Ukraine will end. This war made everybody understand that we need energy independence,” the 36-year-old told AFP, adding that he was considering buying solar panels.

– ‘Blackmail’ – 

Sandu — a former World Bank economist elected in 2020 — said Moldova’s dependence on Russian gas is a “vulnerability (that) generates political blackmail”.

In a polarised nation often seen as split between Russia and the West, Sandu is worried that the current economic turmoil could lead to social unrest.

On October 26, the US Treasury imposed sanctions on a former Moldovan official and several other figures to counter Russia’s “persistent malign influence campaigns and systemic corruption in Moldova.”

Back at the brick factory, Ignat said the “next six months will be decisive” for his country.

“We have one foot in Russia and one in the EU. But if we’re going to be brave and dignified we’ll have both feet in Europe and we’ll get rid of the blackmail of the past 30 years,” he told AFP.

To the government’s anger, street lights have been turned back on in the capital after the mayor decided the blackout was a safety hazard that didn’t save enough energy.

“I felt deep sadness seeing Chisinau plunged into darkness,” said pharmacist Liliana Damaschin, 54, who had returned to Moldova from her job in Italy for a holiday. “I am very worried about my country.” 

Republican 'red wave' hopes fizzle in US midterm vote

President Joe Biden’s agenda hung in the balance early Wednesday as a predicted Republican wave failed to materialize in congressional elections fought against a backdrop of stubbornly high inflation and fears for US democracy.

Tuesday’s election saw a clearer verdict in races for states’ governors with rising Republican star Ron DeSantis winning by a crushing margin in Florida, cementing his status as a top potential White House candidate in 2024.

Democrats suffered disappointment in Ohio as writer J.D. Vance, a Trump-endorsed chronicler of working-class white life, won a Senate seat that was already in Republican hands.

But in House races, one Ohio Republican conceded defeat to a Democrat and two Democratic congresswomen in Virginia seen as at risk survived challenges, although a third seat in the eastern state flipped.

The election is “definitely not a Republican wave, that’s for darn sure,” Senator Lindsey Graham, a top Trump ally, told NBC News.

Senator Ted Cruz, who had previously forecast a “red tsunami,” still predicted Republicans would win both chambers but said, “It hasn’t been as big of a wave as I’d hoped it would be.”

The president’s party has traditionally lost seats in midterm elections, with Republicans roaring back after the first two years of both Barack Obama and Bill Clinton.

With Biden’s favorability ratings hovering in the low 40s and Republicans pounding him over inflation and crime, many pundits predicted major losses — which would raise new questions on whether America’s oldest-ever president, who turns 80 this month, should run again.

All eyes are on a handful of Senate races including in Georgia, Pennsylvania, Nevada, Arizona and Wisconsin, with a single seat enough to swing control of the Senate — now evenly divided and controlled by Democrats only through the tie-breaking vote of Vice President Kamala Harris.

– Florida swings right –

On a night of close contests, one of the most decisive wins was for DeSantis, who has made a name in Florida by railing against Covid mitigation measures and transgender rights. 

He was projected to have won by up to 20 points against a folksy former governor, four years after squeaking by in his longtime swing state.

“We will never, ever surrender to the woke mob,” DeSantis told a victory rally, using a derisive term for social justice campaigners.

“Florida is where woke goes to die,” he said.

But if the 44-year-old views his victory as a mandate for the White House in 2024, he will likely face a stiff challenge from another Florida resident — Donald Trump.

The former president went to the polls teasing an announcement next week of a potential new White House run, telling reporters that November 15 “will be a very exciting day for a lot of people.”

“I think if he runs, he could hurt himself very badly,” Trump separately told Fox News, of DeSantis.

Among other gubernatorial races, two solidly Democratic states, Massachusetts and Maryland, elected Democrats to succeed popular moderate Republican incumbents.

In Massachusetts, Maura Healey will make history as the first openly lesbian governor in the United States.

And in New York, where recent polls gave Democrats a scare, Governor Kathy Hochul fended off a Republican challenge.

– Trump again alleges fraud –

Trump, who is facing criminal probes over taking top secret documents from the White House and trying to overturn the 2020 election, has returned to his playbook of airing unsubstantiated claims of fraud.

In Arizona, expected to be one of the closest states, Trump and his chosen candidate for governor, Kari Lake, alleged irregularities after problems with voting machines.

“When we win, and I think we will within hours — we will turn this around, no more incompetency,” Lake — whose Democratic rival took an early lead — told supporters gathered at a luxury ranch in the Phoenix suburbs.

Officials in surrounding Maricopa County said about 20 percent of the 223 polling stations experienced difficulties related to printers but that no one was denied the right to vote.

Biden has warned that Republicans pose a dire threat to democracy with more than half their candidates repeating Trump’s debunked claims of cheating in the 2020 election.

In the runup to the vote, an intruder espousing far-right beliefs broke into the San Francisco home of House Speaker Nancy Pelosi and bludgeoned her husband with a hammer. 

In his closing pitch, Biden vowed that Democrats would defend pensions, health care and the freedom to have an abortion, after a Supreme Court transformed by Trump rescinded the right to choose.

Voting in Phoenix, Kenneth Bellows, a 32-year-old law student, said runaway inflation is “hurting Americans who are just trying to get by.”

“We don’t need any of the crazy woke rhetoric that’s going on right now. What we really need is focusing on everyday kitchen-table politics, to make sure taxes are low,” he said.

But at a restaurant serving up soul food in Pittsburgh, Lasaine Latimore, 77, said Democrats were best placed to help people.

“I just want my medical insurance and more money for dental and glasses,” she said.

If both the House and Senate flip, Biden’s legislative agenda would be paralyzed as Republicans launch aggressive investigations and oppose his spending plans.

That would raise questions over everything from climate policies, which the president will be laying out at the COP27 conference in Egypt this week, to Ukraine, where some Republicans are reluctant to maintain the current rate of US military support.

Turbulence ahead: Airline on the block in Sri Lanka reforms

Dozens of state-owned Sri Lankan companies employing tens of thousands of people could be restructured or closed as part of an IMF bailout of the bankrupt country, with the country’s airline top of the list for reform.

With nearly 6,000 staff, SriLankan Airlines is the biggest and most expensive of the cash-haemorrhaging, sclerotic companies that have drained the budget and compounded the worst financial crisis in national history.

According to treasury figures, the carrier was losing $4.50 for every dollar it earned at the start of this year. It has not turned a profit since 2008, when its chief executive was sacked for offending the country’s then-leader.

“Even those who have never stepped into a Sri Lankan aircraft are paying to subsidise the airline,” government spokesman Manusha Nanayakkara told reporters this month. 

“We can’t continue like this.”

Sri Lanka defaulted on its $51 billion foreign debt in April and is now neck-deep in the arduous process of renegotiating its obligations with creditors.

Its 22 million people suffered through months of food and fuel shortages, and at the peak of the crisis, a furious mob stormed government buildings and chased Sri Lanka’s former president into exile. 

The International Monetary Fund (IMF) has given preliminary approval to a $2.9 billion bailout, and the government hopes to be able to access the first tranche by the end of the year.

Terms of the deal have yet to be released, but IMF cash is usually conditional on painful reforms, such as tax hikes, removing consumer subsidies, and privatising or closing underperforming state firms.

The country has more than 300 state enterprises, ranging from nut farms to fuel retailers, and the top 52 firms lost nearly $2.4 billion between January and April — around $140 million a week.

SriLankan Airline’s future is the most urgent priority, and the government last month instructed the finance ministry to begin its restructuring, ideally by attracting outside investment.

But finding a company willing to pour money into the airline will be immensely challenging, analysts say, given its history of interference, mismanagement and turbulent partnerships.

– ‘It’s even more difficult now’ –

In 1998, Emirates bought a minority stake in the carrier and took over its management. 

It stayed in the black for most of the next decade, although one of its most profitable years was — ironically — 2001, when the Tamil Tigers separatist movement attacked the country’s main international airport. 

Several of the airline’s planes were destroyed in the July attack, but insurance payouts and the removal of excess capacity offset a downturn in ticket sales. 

But the partnership was terminated and the chief executive sacked by then-president Mahinda Rajapaksa in 2008 after the carrier refused to bump fare-paying passengers to make room for members of his family returning from a jaunt in London. 

The leader packed SriLankan’s management with relatives and loyalists, several of whom now face corruption charges, and the airline has bled cash since.

Rajapaksa even started a rival state-owned airline named after himself, a colossal failure that was eventually merged into SriLankan — along with its accumulated losses.

Authorities tried to sell a 49 percent stake in SriLankan back in 2017 when the island nation’s tourism market was booming, but even then private equity firm TPG eventually withdrew its bid after deciding it was not a viable operation.

Airlines are “generally not that attractive” to investors, Singapore-based aviation analyst Brendan Sobie told AFP, “particularly airlines that are government owned and have a lot of legacy issues, have a lot of debt, like SriLankan does”.

“There’s not many foreign airlines, particularly in this post-Covid environment, that are even looking or considering buying stakes in airlines overseas,” he added, and the track record for strategic investments in the sector was “very bad”.

“It’s very difficult,” he said.

– ‘We are a bankrupt country’ –

SriLankan chairman Ashok Pathirage acknowledges the airline’s current balance sheet is not an attractive proposition.

“If you try to privatise the whole thing, people will come and ask the government to take half of the debt,” Pathirage told AFP. 

But he said SriLankan could settle about half of its liabilities by splitting off and selling profitable business arms, including its virtual monopoly on catering and ground handling at Colombo airport.

Trade union leaders and employees support a restructuring along those lines, on the condition that no jobs are cut.

“The airline is losing money not because of the staff, but expensive leases and poor financial structures,” a cabin crew member, who requested anonymity, told AFP.

But selling off the airline’s profitable divisions would leave the rump operations generating even bigger losses for the government.

Former state finance minister Eran Wickramaratne told AFP that if authorities could not find an investor, the airline should be grounded permanently before it could burden the public further.

“We are a bankrupt country,” he said. “We have not been able to service our debt and that reality has struck home.”

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