Category: Pandemic

  • MIL-OSI Russia: IMF Executive Board Completes the Third Reviews under the Precautionary and Liquidity Line and the Arrangement Under the Resilience and Sustainability Facility with Jamaica

    Source: IMF – News in Russian

    August 30, 2024

    • The IMF Executive Board concluded today the third reviews under Jamaica’s Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF). The PLL continues to be treated as precautionary and the completion of the reviews allow for an immediate disbursement of SDR191.45 million (US$258million) under the RSF.
    • Jamaica’s response to recent shocks has strengthened the credibility of policy frameworks, supporting an economic environment characterized by sustained growth, declining debt, low inflation, and a strengthened external position.
    • Jamaica has continued to implement an ambitious reform agenda that strengthened the fiscal and financial policy frameworks and the climate policy agenda to make the economy more resilient to climate change.

    Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the third reviews of the Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF) arrangement on a lapse-of-time basis.[1] The PLL and the RSF were approved in March 2023, with access of SDR 727.51 million and SDR 574.35 million respectively. The completion of third reviews makes available the remaining SDR191.45 million (about US$258 million) under the RSF and SDR 727.51 million (about US$980 million) under the PLL. The authorities continue to treat the PLL as precautionary.

    The response to recent shocks has strengthened the credibility of Jamaica’s fiscal and monetary policy frameworks. In FY 2023/24, Jamaica’s economy is estimated to have grown at about 2 percent with tourism above pre-pandemic levels and a continued recovery in mining. Unemployment has fallen and the economy is in a strong cyclical position. Inflation has returned to the Bank of Jamaica’s target band and the external position has strengthened with a current account surplus, rising FDI, and ample international reserves—which at end-March 2024 reached about US$5.2 billion, the highest level in Jamaica’s history.

    Going forward, GDP growth is expected to converge to potential and inflation to return to the mid-point of the target band. The external position is expected to remain strong. Guided by the authorities’ Medium-Term Fiscal Framework (MTFF), public debt is expected to fall below 60 percent of GDP by FY2027/28. Risks to the outlook are arising from potential global economic and financial shocks and natural disasters, which are mitigated by strong policy frameworks, the authorities’ excellent track record managing shocks, and their commitment to reforms. The impact of Hurricane Beryl raises downside risks to growth and upside risks to inflation in the near term.

    The PLL has supported the authorities’ efforts to enhance financial supervision, the crisis resolution and AML/CFT frameworks, and data adequacy. Program performance has remained strong, and Jamaica continues to meet the PLL qualification criteria. All structural benchmarks were met and the BOJ overperformed on the indicative target on net international reserves. The indicative target on the fiscal balance—with a smaller than expected surplus—was marginally missed with a negligible impact on the debt consolidation plan. The authorities have made progress with the action plan to improve data, including on the fiscal and external sectors.

    The RSF has supported Jamaica’s ambitious agenda to make the economy more resilient to climate change, including reforms to accelerate the transition to renewables, increase resilience to climate change, enhance the climate focus in policy frameworks, strengthen the management of climate risks by financial institutions, and create an enabling environment for green financial instruments. All RSF reform measures were met, comprising the analysis of climate-related fiscal risks, incentives for renewable energy, reporting requirements of climate risks for financial institutions, and a framework for green-bond issuance. These efforts have the potential to catalyze climate financing going forward.

    [1] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Brian Walker

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/08/29/pr24314-jamaica-imf-exec-board-completes-3rd-rev-pll-arr-rsf

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  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Vanuatu

    Source: IMF – News in Russian

    September 3, 2024

    Washington, DC: On August 28, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Vanuatu.

    As Vanuatu was recovering from the natural disasters of 2023 and prolonged disturbance from the pandemic, the voluntary liquidation of Air Vanuatu in May 2024 created a major shock to the economy with substantial implications for growth and confidence. The loss of air connectivity has significant direct effects on economic activity through the decline in tourism and services, and on domestic and international labor mobility and cargo networks. Adverse developments in the Economic Citizenship Program (ECP) are also creating significant impairments to fiscal revenue and financial integrity.

    Assuming a resumption of international air connectivity by 2024Q3 and domestic connections to be restored gradually by end-2024, real GDP growth is expected to slow to 0.9 percent y/y in 2024 and recover to 1½ percent y/y in 2025 (from an estimated 2.2 percent y/y in 2023). Limited fiscal revenue and high costs associated with the airline liquidation are expected to exacerbate the deficit and reduce the government’s fiscal space. Consequently, capital spending will likely decline as expenditures are reprioritized, affecting medium- and long-term growth. Although foreign reserves will remain above the RBV’s benchmark, they are forecast to decline due to lower tourism earnings and remittances.

    While the loss of connectivity may produce price shocks, inflation, which peaked in 2023, will continue to decelerate as internal and external price pressures ease, supported by reduced demand from tourism and investment. Risks to the outlook remain tilted to the downside, including a worse-than-expected resolution of Air Vanuatu’s liquidation, political instability, geopolitical tensions, China’s slowdown, and severe natural disasters.

    Executive Board Assessment[2]

    Executive Directors agreed with the thrust of the staff appraisal. They noted the significant economic shock created by the voluntary liquidation of Air Vanuatu just as the economy was recovering from the multiple natural disasters of 2023. With real GDP growth expected to decelerate markedly in 2024, and the balance of risks tilted to the downside, Directors called for urgent measures to address the immediate risks to growth and stability, and then to rebuild buffers and tackle structural issues with accelerated policy reforms.

    Directors agreed that in the near term targeted and strategic support is needed to help stabilize the economy. Starting in 2025, they called for urgent fiscal consolidation to reduce sustainability concerns, including re‑establishing and adhering to the fiscal anchor. Against the backdrop of the voluntary liquidation of Air Vanuatu, as well as declining Economic Citizenship Program (ECP) proceeds, Directors also highlighted the structural revenue weakness in Vanuatu and supported calls to strengthen public finances. They emphasized the importance of stronger revenue mobilization, expenditure rationalization, efficiency enhancements for spending, and a strong adherence to the principles of responsible public financial management.

    Directors agreed that monetary policy remains appropriately accommodative, but fiscal dominance needs to be reduced. While recognizing that the exchange rate has acted as a buffer, they noted that it requires close monitoring, and welcomed the authorities’ efforts to review the currency basket.

    Directors stressed the importance of addressing bank asset quality concerns and enhancing safeguards against financial vulnerabilities, including through upgrading regulatory, supervisory, and monitoring practices. They also agreed that improving governance and reducing vulnerabilities to corruption should remain a priority. In this context, Directors emphasized the crucial importance of enhancing anti‑corruption frameworks and the transparency and supervision of SOEs, including through ensuring an expedited approval of the Commercial Government Business Enterprises Act.

    Directors commended the authorities’ efforts to adapt to climate impacts and build resilience against future disasters and called for these efforts to be accelerated. They agreed that investing in quality education and skills training and improving the ease of doing business are crucial to addressing labor and skills shortages in Vanuatu.

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Randa Elnagar

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/03/pr24315-vanuatu-imf-exec-board-concludes-2024-art-iv-consult

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    MIL OSI Russia News

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with the Republic of Latvia

    Source: IMF – News in Russian

    September 5, 2024

    Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with the Republic of Latvia and endorsed the staff appraisal on a lapse-of-time basis without a meeting.

    The Latvian economy contracted with significant disinflation. After the post-pandemic recovery, growth contracted by 0.3 percent in 2023, due to tighter financial conditions and weak external demand. Headline inflation declined to 0.0 percent y/y in May 2024. However, core inflation still stood at 3.1 percent in April 2024. The financial sector has so far been resilient although risks are elevated. Fiscal performance in 2023 was stronger than expected, reflecting revenue buoyancy linked to inflation and expenditure under-execution. The current account deficit narrowed to 4 percent of GDP in 2023 from 4.8 percent in 2022, due to import contraction and lower energy prices. Russia’s war in Ukraine and the related geoeconomic fragmentation are adding to structural challenges amid multiple transitions, notably, climate change and energy, and aging and labor shortages. The economic consequences of Russia’s war in Ukraine continue to depress private investment and productivity, thus compromising further Latvia’s lagging income convergence.

    Amid high uncertainty, the outlook is for higher growth and the balance of risks is tilted to the downside. Real GDP growth is projected to increase to 1.7 and 2.4 percent in 2024 and 2025, respectively, underpinned by a recovery in private consumption, higher public investment, and stronger external demand. Growth in the medium-term is projected to continue at an average of around 2.5 percent, supported by public investment and reforms. Inflation is expected to continue to moderate. Headline inflation (annual average) is projected to decline to 2.0 percent in 2024. Meanwhile, core inflation (annual average) is projected to slow to 3.3 percent in 2024, reflecting persistent services inflation. Downside risks dominate, including risk to competitiveness associated with recent high wage growth, rising geopolitical tensions and deeper geoeconomic fragmentation, and weaker external demand.

    Executive Board Assessment[2]

    Latvia’s economy has encountered severe headwinds. The Latvian economy contracted with significant disinflation against the backdrop of geopolitical headwinds. Notably, Russia’s war in Ukraine and the related geoeconomic fragmentation are adding to long-standing challenges to productivity, investment, and labor supply, amid multiple transitions around climate change and energy, aging and labor shortages, and rising defense costs.

    Amid high uncertainty, growth is projected to rebound, but risks are tilted to the downside. Real GDP growth is projected to increase in 2024 and 2025, largely driven by a rebound in private consumption, higher public investment, and stronger external demand. The main risks stem from rising geopolitical tensions and deeper geoeconomic fragmentation, credit risks related to variable-rate loans, and weaker-than-expected external demand. Risks to competitiveness can also arise given recent high wage growth. Over the medium-term, delays in public investment and structural reforms could weigh on potential growth.

    Considering the improving outlook, staff recommends a less expansionary, neutral fiscal stance for 2024 and a tighter fiscal stance in 2025. Proactively identifying spending efficiency and better targeting social support, while protecting the most vulnerable, would help. Staff commends the authorities for the targeting of energy support measures. In 2025, the fiscal stance should be tighter to build buffers for future spending needs. Policy options to achieve this include reducing tax exemptions, raising revenue from property taxation, strengthening tax enforcement, and improving investment spending efficiency. Fiscal policy should remain flexible and evolve if risks materialize.

    Although Latvia has some fiscal space, structural fiscal measures are needed to provide buffers for medium to long term spending pressures. Over the medium term, options for fiscal consolidation include (i) broadening the bases of corporate income tax (CIT) and personal income tax (PIT), including by reducing the shadow economy; (ii) broadening the base of property taxes; (iii) reducing tax exemptions and fossil fuel subsidies, and (iv) rationalizing spending on goods and services. Given this scaling-up of public investment amid high uncertainty and cost overrun, enhanced public investment management is warranted to mitigate fiscal risks. The mission welcomes the healthcare reform aimed to generate efficiency gains, while mitigating risks and supporting solidarity. Staff also welcomes the government’s pension reform efforts and recommends linking the retirement age to life expectancy. Latvia should swiftly implement the NRRP. 

    Although the financial sector has so far been resilient, continued monitoring of macrofinancial vulnerabilities and spillovers is warranted. The banking sector remained well capitalized and liquid, with a low NPL ratio. However, given heightened risks, continued monitoring of financial sector vulnerabilities is important. Notably, regular risk-based monitoring of banks’ asset quality and liquidity should continue, supported by tailored stress tests. Any households’ financial distress related to variable-interest-rate mortgage loans should be addressed through the consumer bankruptcy framework, supplemented by the social protection system for the most vulnerable. The new untargeted interest subsidy scheme for variable-interest-rate mortgages should not be renewed at its expiration in 2024. The authorities should refrain from further initiatives to increase taxation on bank profits given their adverse impact on bank capital and financial stability. Staff welcomes the continued efforts to mitigate cybersecurity risk.

    While the current macroprudential policy stance is broadly appropriate, the recent adjustment to the borrower-based measures for energy-efficient housing loans should be reconsidered. The overall policy stance strikes the right balance between maintaining financial stability and the need to extend credit to the economy. However, borrower-based macroprudential measures should be relaxed only when their presence is overly stringent from the financial stability perspective.

    Latvia has made significant progress in strengthening its AML/CFT frameworks and governance reforms. Staff commends the authorities’ effort to pursue AML/CFT reforms and supports the authorities’ priorities to prepare for the 6th round of MONEYVAL evaluation. Staff welcomes the authorities’ reforms to digitalize the procurement system and the continued implementation of Latvia’s anti-corruption plan and national strategy.

    Structural reforms should be accelerated to enhance productivity and resilience. Accelerating corporate reforms could boost investment and productivity by improving capital allocation and access to finance. Given the aging population and skill mismatch, Latvia should continue to address reforms to boost high-skilled labor supply which will enhance investment in productivity. Efforts should focus on promoting training and internal labor mobility toward priority sectors (green and transition, digitalization, health). Further streamlining product and service markets regulations could boost competition, innovation, and productivity. Staff welcomes the ongoing overhaul of the administrative procedures and their digitalization. Implementing measures to promote digital transformation of the economy could help reduce labor shortages and support productivity. Regarding the green and energy transition, more vigorous climate policy is needed. Staff encourages the authorities to expedite the adoption of the climate law and the National Energy and Climate Plan (NECP). The authorities should aim to achieve a robust balance between fiscal support, carbon pricing or taxation, and norms while addressing distributional concerns. Staff welcomes the ongoing work on climate adaptation. Latvia should continue to enhance energy security, and boost investment in clean energy and connection.

    Table 1. Latvia: Selected Economic Indicators, 2019–25

     

    2019

    2020

    2021

    2022

    2023

    2024

    2025

               

    Proj.

    National Accounts

        (Percentage change, unless otherwise indicated)

    Real GDP

    0.6

    -3.5

    6.7

    3.0

    -0.3

    1.7

    2.4

    Private consumption

    0.0

    -4.3

    7.3

    7.2

    -1.3

    2.4

    2.3

    Public consumption

    5.6

    2.1

    3.5

    2.8

    7.0

    2.3

    2.2

    Gross capital formation

    0.7

    -10.0

    24.9

    -3.6

    5.1

    2.6

    2.7

    Gross fixed capital formation

    1.5

    -2.2

    7.2

    0.6

    8.2

    3.1

    3.1

    Exports of goods and services

    1.3

    0.4

    9.0

    10.3

    -5.9

    3.0

    2.6

    Imports of goods and services

    2.2

    -1.1

    15.1

    11.1

    -2.8

    3.0

    2.5

    Nominal GDP (billions of euros)

    30.6

    30.1

    33.3

    38.4

    40.3

    42.4

    44.8

    GDP per capita (thousands of euros)

    15.9

    15.8

    17.6

    20.5

    21.4

    22.5

    23.9

    Savings and Investment

                 

    Gross national saving (percent of GDP)

    22.2

    24.3

    21.1

    20.3

    19.0

    19.1

    18.9

    Gross capital formation (percent of GDP)

    22.8

    21.4

    25.0

    25.0

    23.0

    22.8

    22.5

    Private (percent of GDP)

    18.9

    17.2

    21.2

    21.7

    19.4

    18.7

    18.6

    HICP Inflation

                 

    Headline, period average

    2.7

    0.1

    3.2

    17.2

    9.1

    2.0

    2.4

    Headline, end-period

    2.1

    -0.5

    7.9

    20.7

    0.9

    3.9

    1.6

    Core, period average

    2.7

    1.1

    2.0

    11.3

    9.8

    3.3

    3.1

    Core, end-period

    1.9

    0.9

    4.7

    15.2

    4.0

    3.7

    2.8

    Labor Market

                 

    Unemployment rate (LFS; period average, percent)

    6.3

    8.1

    7.6

    6.9

    6.5

    6.5

    6.5

    Nominal wage growth

    7.2

    6.2

    11.7

    7.5

    11.9

    8.5

    7.0

    Consolidated General Government 1/

    (Percent of GDP, unless otherwise indicated)

    Total revenue

    37.3

    37.7

    37.6

    37.2

    38.5

    38.6

    38.7

    Total expenditure

    37.7

    41.4

    43.2

    40.9

    42.0

    42.0

    41.4

    Basic fiscal balance

    -0.4

    -3.7

    -5.5

    -3.7

    -3.5

    -3.4

    -2.7

    ESA fiscal balance

    -0.5

    -4.4

    -7.2

    -4.6

    -2.2

    -2.9

    -2.7

    General government gross debt

    36.7

    42.7

    44.4

    41.8

    43.6

    44.7

    44.8

    Money and Credit

    Credit to private sector (annual percentage change)

    -2.3

    -4.4

    11.9

    7.1

    5.1

    Broad money (annual percentage change)

    8.0

    13.1

    9.2

    5.1

    2.7

    Balance of Payments

                 

    Current account balance

    -0.6

    2.9

    -3.9

    -4.8

    -4.0

    -3.7

    -3.5

    Trade balance (goods)

    -8.6

    -5.1

    -8.3

    -10.7

    -9.3

    -8.8

    -8.8

    Gross external debt

    117.1

    122.1

    110.5

    102.3

    98.5

    94.9

    86.6

    Net external debt 2/

    18.1

    13.6

    10.3

    8.1

    7.5

    10.7

    13.5

    Exchange Rates

                 

    U.S. dollar per euro (period average)

    1.12

    1.14

    1.18

    1.05

    1.08

    REER (period average; CPI based, 2005=100)

    123.0

    124.5

    125.0

    129.7

    136.8

    Terms of trade (annual percentage change)

    0.9

    1.8

    -1.6

    -0.6

    3.6

    -0.1

    0.9

    Sources: Latvian authorities; Eurostat; and IMF staff calculations.

    1/ National definition. Includes economy-wide EU grants in revenue and expenditure.

    2/ Gross external debt minus gross external assets.

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Boris Balabanov

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/05/pr-24319-latvia-imf-executive-board-concludes-2024-article-iv-consultation

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  • MIL-OSI Germany: Current monetary policy topics | Speech at the Commerzbank AG event “Geldpolitik in Zeiten der Inflation”

    Source: Deutsche Bundesbank in English

    Check against delivery.
    1 Words of welcome
    Ladies and gentlemen,
    I hope you have recharged your batteries after the summer and a holiday break, despite the eventful days we can look back on. Perhaps you are still relishing the sporting highlights you experienced from the comfort of your own armchair: the thrill of watching the Olympic Games and the Paralympics on TV at home.
    A “sports programme” of a somewhat different variety now awaits us: a broad repertoire of topics to cover in a short allotted speaking time. Let’s begin by discussing three questions that are always of crucial importance: Where is economy activity heading? Where is inflation heading? And where is monetary policy heading? These will be followed by three topics specific to monetary policy: balance sheet reduction, the changed operational framework for monetary policy, and monetary and fiscal policy interactions.
    2 Economic activity
    Let’s kick off with the economic situation as well as the outlook for the economy. German economic output shrank by 0.1% in the second quarter of this year, after expanding slightly at the beginning of the year. The main drags on activity were weak investment and the construction sector, but exports and private consumption contracted somewhat as well.
    Increased financing costs continued to squeeze investment activity, thus crimping domestic demand for industrial goods and construction work. Private investment also faced headwinds stemming from the intense uncertainty surrounding economic policy. On top of that, there was a countereffect in construction activity following the mild weather conditions in the first quarter. Moreover, industry in Germany is still feeling the pinch of weak foreign demand. Capacity utilisation in industry is now significantly below average, and that, too, is depressing investment.
    All these factors combined mean the domestic economy has been treading water since the start of Russia’s war of aggression against Ukraine more than two years ago. Stagnation might be more or less on the cards for full-year 2024 as well if the latest forecasts by economic research institutes are anything to go by.
    Hopes that industrial activity might pick up in the second half of the year have dimmed considerably according to the sentiment indicators observed in recent months. And consumer restraint is looking more stubborn than our Bundesbank experts were expecting when we published our Forecast for Germany in June. For all this, though, it is still true to say that sharply rising wages, easing inflation and robust labour market developments are opening up more and more scope for spending. Households could leverage that scope to gradually step up their consumption. Looking ahead to next year, the economic research institutes are expecting to see tentative economic growth of between ½ and 1%. The Bundesbank will be publishing its new Forecast for Germany in December.
    Ladies and gentlemen, one point I have stressed on multiple occasions in the past is that we should not talk our country down as a business location. That is not to say, of course, that we should not pinpoint weaknesses and resolutely tackle problems. An overly pessimistic mindset can be damaging. But what can also be damaging is viewing a situation through rose-tinted spectacles or blindly trusting that everything will somehow fix itself of its own accord. There is no doubt that Germany is not seeing as much investment as we would like. And industry is struggling with a difficult competitive environment. Barriers need to be dismantled here.
    At this point, allow me to make a passing remark in light of recent events: if businesses are to get to grips with – and finance – their future challenges, we will need banks that are strong and robust. In any possible mergers, what matters is that the institution that comes about as a result is one that fits that bill in the best possible way.
    As far as the topic of barriers is concerned, I do not wish to go beyond my allotted time. Allow me, then, to run through just some of the initiatives that could boost the attractiveness of a business location: cutting as much red tape as possible, and speeding up administrative procedures like approval processes. As for greening the economy, policymakers should ensure greater planning security. Digital infrastructure and education, in particular, are in need of improvement. In addition, politicians should act to boost the labour supply because staff shortages are bound to worsen further as demographic change makes itself felt.
    Headlines claiming that Germany is a millstone around the neck of the euro area[1] make for unpleasant reading. But the simple fact is that when the largest Member State’s economy is weak, the average across the bloc will be depressed as a result. The euro area economy as a whole has gained some traction in the first two quarters of this year (recording quarter-on-quarter growth rates of 0.3% and 0.2%, respectively). In their latest projections, ECB staff are forecasting modest economic growth of 0.8% in full-year 2024, rising slightly to 1.3% next year.
    The outlook is uncertain, particularly given what remains a tense geopolitical environment. Neither in Ukraine nor in the Middle East has the situation eased. The outcome of the presidential election in the United States is another source of economic uncertainty. Last week’s TV debate gave us a taste of what is to come.Europe might end up losing out if, say, the United States adopts a more protectionist trade policy, takes government action to support the country as a business location, or turns its back on multilateral cooperation (on issues such as climate action, NATO and the WTO).
    There’s good news as well, though: the labour market in the euro area is as robust as ever, as unemployment hit an all-time low of 6.4% in July. Germany’s economy hasn’t recovered yet, so its labour market hasn’t improved, but nor did it deteriorate significantly. Because firms in Germany have largely refrained from scaling back their workforces during the ongoing spell of economic weakness, they see little need overall for new hires. Even if they are certainly finding it difficult to fill vacancies in some areas.
    An analysis by the ECB has found that labour hoarding – that is, keeping staff in reserve – is still above pre-pandemic levels in the euro area. Because profit margins were high at times, firms were able to hoard staff to a greater extent or for longer than usual when the situation or outlook deteriorated, the ECB noted.[2]
    If profit margins now start to normalise, they will probably reduce the scope for firms to undertake labour hoarding. In addition, labour hoarding suggests that there will be fewer hires than usual as the economy recovers. Instead, productivity is more likely to rise. The new projections include an increase in euro area labour productivity of around 1% in both 2025 and 2026, following stagnation in the current year and a decline of just under 1% last year. Taken in isolation, this would dampen unit labour costs and thus inflation.
    3 Inflation
    This brings us to question number two concerning the outlook for prices. On this point, the focus is not only on the weak productivity growth observed so far, but also on the strong wage growth at the current juncture. For Germany, the latest wage deals have increased pay levels significantly. And relatively high wage settlements look set to be reached in the forthcoming pay negotiations as well. Understandably, the trade unions are looking to achieve lasting compensation for the real wage losses accumulated over the past three years.
    Because inflation compensation bonuses will only be exempt from taxes and social contributions until the end of this year, the trade unions are now stepping up their demands for permanent wage increases. The still high willingness to strike and persistent widespread shortage of labour suggest that wage growth will remain comparatively strong. The longer-term outlook, too, indicates that labour scarcity in Germany wil
    l remain a key factor driving robust wage growth and thus high inflation in the domestic economy.
    In the euro area, growth in negotiated wages slowed significantly in the second quarter. However, this was due in part to a one-off effect in Germany (owing to inflation compensation bonuses paid out in the previous year but absent this year). The persistent labour market tightness in the euro area means that a quick let-up in wage dynamics is unlikely.
    With wage pressures easing only slowly, the disinflation process is proving to be slow and arduous. Right now, inflation is not yet where we on the ECB Governing Council want it to be. Headline euro area inflation stood at 2.2% in August, down from 2.6% one month earlier. That significant decline mainly came about due to energy prices. Whilst it is true that German inflation – as measured by the Harmonised Index of Consumer Prices – has reached 2.0%, I’m afraid to say that, for the time being, that level is probably not yet here to stay. Services inflation in the euro area is still worryingly high, coming in at 4.1% at last count. Core inflation has eased only marginally, dropping to 2.8%.
    According to the latest ECB staff projections, euro area price inflation will be back at the 2% mark at the end of 2025. The journey there remains uncertain and include a few bends. For instance, inflation rates are expected to edge somewhat higher again towards the end of this year due to energy prices being in decline in the fourth quarter of last year.
    Overall, though, we have made huge advances towards safeguarding price stability. As the disinflation process plays out, inflation expectations have also receded the way we want them to, and the risk of higher inflation expectations has diminished in the view of markets and surveyed experts. This would suggest that inflation expectations are well anchored. It is now up to us on the ECB Governing Council to prove our staying power. If we achieve that, we will soon make it over the finishing line.
    4 Monetary policy
    The third question I asked at the beginning has basically been answered: the phase of steep tightening was followed by nine months of unchanged key interest rates, after which the ECB Governing Council subsequently loosened the reins somewhat in June and now again in September.
    We don’t know yet how things will unfold, but it is certain that key interest rates will not go back down as quickly and sharply as they went up! The intervals between the potential moves may vary depending on the incoming data, as monetary policy must remain tight enough for long enough to ensure that the inflation rate returns to the 2% target over the medium term. Assumptions to that effect about key interest rates also form the basis for the ECB’s projections.
    Ladies and gentlemen, public opinions on the best time for an interest rate move vary. This is due, not least, to the fact that the risks cannot be clearly quantified and that monetary policy time lags are impossible to measure with certainty. It is important for me to see inflation stable at the 2% target as soon as possible. To get there, we will not pre-commit to any path in our decisions going forward. Instead, we will continue to examine incoming data with an open mind. We are not flying on autopilot when it comes to interest rate policy.
    4.1 Reducing the balance sheet
    I will now turn to the three topics specific to monetary policy. The key interest rates are the central lever with which to adjust the monetary policy stance. In addition, gradual balance sheet reduction also influences the direction of monetary policy. This is because the length of the balance sheet is ultimately driven by previous accommodative non-standard measures.
    Banks’ repayment of loans under the longer-term refinancing operations has thus far been the primary contributory factor towards reducing the Eurosystem’s total assets. Remaining outstanding funds borrowed under targeted longer-term refinancing operations (TLTROs) are now only relatively small (around €76 billion). Next week will be the penultimate maturity date, and in December of this year the last repayments of funds borrowed under TLTROs will be made.
    Moreover, the Eurosystem’s large bond holdings are gradually declining, by an average of €25 to €30 billion per month (since July 2023), through the discontinuation of reinvestments under the APP, the largest such purchase programme. Since July of this year, reinvestments under the pandemic emergency purchase programme (PEPP) have been reduced by an average of €7.5 billion per month and will also be fully discontinued at the end of 2024.
    The process of significantly shrinking current total assets of just under €6,500 billion is not done just yet. So far, the markets have taken the Eurosystem’s balance sheet reduction (starting from a peak of over €8,800 billion) in their stride. I am confident about the future, too.
    On the ECB Governing Council, I am one of those who has been advocating for reducing the Eurosystem’s footprint in financial markets. This process will take time. It is closely linked to how monetary policy is implemented and passed through to the financial markets. That is why I now wish to briefly address, as the second of my three topics specific to monetary policy, the changes to the operational framework for implementing monetary policy adopted in mid-March.
    4.2 Changes to the operational framework for implementing monetary policy
    You might be thinking: what a dry, hard-to-digest topic, and right after lunch to boot! However, addressing these seemingly annoying details is worth the time and effort. This is because the new operational framework for implementing monetary policy will determine how central bank liquidity is provided to banks in the future and how short-term money market rates will evolve going forward.
    With excess liquidity in the banking system declining, but still high for the time being, little will change at first: we will continue to regularly lend central bank liquidity to banks at the quantities demanded and a fixed interest rate, with a wide range of bonds and other claims being eligible collateral for these loans. The reserve ratio for determining banks’ non-remunerated compulsory deposits with the Eurosystem remains unchanged at 1%.
    On this very day, the gap between the main refinancing operations rate and the deposit facility rate narrowed from 50 to 15 basis points. This operational adjustment will incentivise bidding in the weekly tenders. Short-term money market rates are therefore likely to continue to evolve in the vicinity of the deposit facility rate, given limited fluctuations. In the process, we will observe the compatibility of our operational framework with market principles.[3]
    The ECB Governing Council also agreed to introduce, at a later stage, new structural longer-term refinancing operations and a structural portfolio of securities. These transactions are intended to make a contribution to covering the banking sector’s structural liquidity needs. But that is a way off yet. That’s because, as already mentioned, banks’ excess liquidity and Eurosystem bond holdings are still very sizeable.
    We will now gain experience and gather insights. A review of the key parameters of the operational framework is scheduled for 2026. However, adjustments can be made earlier if necessary.
    4.3 Monetary and fiscal policy interactions
    My third topic specific to monetary policy, monetary and fiscal policy interactions, is a perennial theme. Generally, the combination of the two policy areas determines how accommodative or restrictive the overall effect on the economy is.
    In some times of crisis, such as during the coronavirus pandemic, monetary and fiscal policy can work together in the pursuit of their respective objectives. In times of high inflation, however, there may be potential for conflict. At the very least, fiscal policy should not undermine a restrictive monetary policy in the fight against inflation, but rather support it as much as possible.This year and next, the euro area fiscal stance is likely to have a roughly neutral effect, i.e. not generate any additional inflationary pressure. However, the expiry of crisis support measures is the reason why the deficit ratio is expected to decline. Seen from this perspective, fiscal policy is not restrictive.
    The ECB projects that the euro area debt ratio will remain close to 90%. In some Member States, government debt is worryingly high, with no signs of a trend reversal happening any time soon. Monetary policy should ignore this. This is because the Member States will have to be able to deal with the interest rate level that is warranted from a monetary policy perspective. Governments ought to brace themselves for higher interest rate levels.
    The new EU fiscal rules entered into force at the end of April. However, it is not yet clear what concrete requirements for fiscal consolidation will follow. In July, the existence of excessive deficits was established for seven countries, including the euro area countries France, Italy, Belgium, Slovakia and Malta. It will be crucial to implement the new rules in such a way that high debt ratios actually fall. This would require setting ambitious targets, and governments would then have to comply with them more ambitiously than in the past.
    Setting priorities will remain the key fiscal policy challenge at any rate And this will not get any easier if additional expenditure, for example for climate action, defence or in view of demographic pressures, is moved higher on the priority list.
    This is true even in Germany, where the debt ratio is no longer far from the 60% limit. In this case, it may indeed make sense to expand the fiscal scope somewhat by means of a moderate reform of the debt brake just as long as Germany complies with the European debt rules. The Bundesbank has put forward proposals to achieve that goal.
    5 Concluding remarks
    Ladies and gentlemen,
    After three questions and three topics, I would like to end with a triad. Democracy, freedom and openness are core values on which our society, our daily coexistence, and our prosperity are based. We are living in challenging times. This is exemplified by the elections in France and three eastern German federal states as well as, this coming November, in the United States. For the future, it remains to be hoped that we can maintain democracy, freedom and openness as a secure basis.
    Thank you for your attention.

    Footnotes:
    Konjunktur: Wirtschaft in Euro-Zone wächst – jedoch nicht in Deutschland (wiwo.de), Wirtschaft in Euro-Zone wächst trotz Bremsklotz Deutschland 0,2 Prozent (msn.com)
    European Central Bank, Higher profit margins have helped firms hoard labour, Economic Bulletin, Issue 4/2024, pp. 54‑58.
    See Nagel, J., Reflections on the Eurosystem’s new operational framework | Deutsche Bundesbank, speech at the Konstanz Seminar on Monetary Theory and Monetary Policy, 16 May 2024.

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  • MIL-OSI Reportage: BNZ brings back the branch experience

    Source: BNZ statements

    Bank of New Zealand (BNZ) today announced all of its branches across New Zealand will open at least five days a week by April 2025, in response to growing customer demand for more face-to-face interactions.

    Anna Flower, BNZ Executive Personal and Business Banking, says BNZ’s focus is on being available for our customers when they need us.

    “In recent years, we saw a massive shift in customer demand towards online and call centre services, which was accelerated hugely during the pandemic. We adapted quickly at that time by moving our bankers to where our customers needed us most, which saw us reduce the number of days many of our branches were open,” says Flower.

    “Post-Covid, customer preferences have continued to evolve, and in those moments that matter, such as starting a business, dealing with a bereavement, or buying a home, we’ve heard from our communities and our personal and business customers that they want more opportunities to talk to us face-to-face.

    “For those significant moments, we understand it’s the personal touch that counts. That’s why we’re bringing back 5 day a week opening to give customers access to our bankers’ expertise when and where they need us.

    “This means where there’s a BNZ branch near you, the doors will be open 9.30am until 4.00pm, a minimum of 5 days a week,” says Flower.

    The first BNZ branches to transition to opening five days a week are:

    • Feilding
    • Matamata
    • Oamaru
    • Te Awamutu
    • Thames
    • Te Puke
    • Wānaka

    The remaining branches will move to full week-day operating hours by April 2025.

    The post BNZ brings back the branch experience appeared first on BNZ Debrief.

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  • MIL-OSI Russia: IMF Executive Board Concludes the 2024 Article IV Consultation with Uganda

    Source: IMF – News in Russian

    September 9, 2024

    • Uganda has navigated the post pandemic recovery well due to sound macroeconomic policies. The economic recovery is strengthening with low inflation, favorable agricultural production, and strong industrial and services activity.
    • Uganda should continue its efforts to create fiscal space through revenue mobilization and better expenditure discipline, vigilant monetary policy, and exchange rate flexibility, using future oil revenue to address growth impediments and improve social development while advancing governance reform and financial inclusion.

    Washington DC: On September 6, the Executive Board of the International Monetary Fund (IMF) concluded the 2024 Article IV Consultation[1] with Uganda.

    Uganda has navigated the post-pandemic recovery well due to sound macroeconomic policies. The economic recovery is strengthening with low inflation, favorable agricultural production, and strong industrial and services activity. Growth is estimated at 6 percent in FY23/24, up from 5.3 percent in FY22/23. Headline inflation has increased to 3.9 percent by June 2024, driven by rising energy prices and core inflation, though the latter remains below the Bank of Uganda’s (BoU) target of 5 percent.

    Elevated current account deficit and limited capital inflows have weighed on Uganda’s international reserves. Despite strong coffee and gold exports, the current deficit remains high due to rising oil project-related imports. Tight global financial conditions and reduced external project and budget support have driven down gross international reserves, covering only 2.9 months of imports at the end of 2024 (excluding oil-project related imports).

    The overall fiscal deficit continued to decline in FY23/24 but was less than planned due to revenue underperformance and higher current spending, while development spending fell short of expectations, worsening expenditure composition.

    Looking ahead, growth is expected to strengthen, boosted by the start of oil production, which will make lasting improvement in the fiscal and current account balances. Inflation is expected to rise near the BoU’s target of 5 percent in FY24/25. Risks are mostly on the downside, including continued fallout from the Anti-Homosexuality Act, which complicates the already tight external financing conditions, potential delays in oil production, and climate-related shocks. Upside risks to inflation come from commodity price volatility, weather conditions, and exchange rate depreciation pressures stemming from limited capital inflows.

    The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Uganda:

    “Executive Directors agreed with the thrust of the staff appraisal. They welcomed Uganda’s robust post‑pandemic recovery underpinned by sound macroeconomic policies and the favorable medium‑term outlook due to the anticipated start of oil production. At the same time, they noted pressures on international reserves amid tight global financial conditions, as well as the elevated debt servicing costs accompanied by a shortfall in the country’s development spending. Directors also highlighted the significant downside risks, including from the continued fallout from the “Anti‑Homosexuality Act”, which could exacerbate already tight external financing conditions, potential delays in oil production, sluggish reform implementation, and climate‑related shocks. Against this background, they encouraged continued reforms, including those envisaged under the expired ECF arrangement, to rebuild fiscal and external buffers and boost inclusive and sustainable growth, supported by technical assistance from the Fund and other partners as needed.

    “Directors encouraged strong efforts to create durable fiscal space, emphasizing the need to address significant spending demands in human capital, infrastructure, and climate resilience. They recommended continued revenue‑based fiscal consolidation, improved expenditure discipline, and a prudent fiscal management framework to ensure effective use of oil revenues once production begins.

    “Directors commended the Bank of Uganda’s commitment to price stability and agreed with its tight monetary policy stance to anchor inflation expectations. They advised keeping monetary policy data dependent and emphasized the importance of continued exchange rate flexibility to help build up buffers and improve competitiveness. Directors called for continued efforts to enhance monetary transmission and central bank independence, including through full implementation of the 2021 Safeguards Assessment recommendations.

    “While recognizing the resilience of Uganda’s financial system, Directors called for vigilant monitoring of the rapid increase in the sovereign‑bank nexus and significant cross‑border exposure of the nonfinancial corporate sector, alongside multifaceted efforts to enhance financial inclusion.

    “Directors stressed that accelerating structural reforms is crucial for achieving inclusive, sustainable, and private sector‑led growth. They supported further efforts to strengthen enforcement of the anti‑corruption framework, address remaining shortcomings in AML/CFT, enhance fiscal transparency, introduce regulatory reforms to support businesses, and implement an ambitious climate resilience agenda drawing on the recommendations of the C‑PIMA.

    The next Article IV consultation with Uganda will be held on the standard 12‑month cycle.”

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Tatiana Mossot

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/09/pr24322-Uganda-imf-exec-board-concludes-2024-aiv-consult

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  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Dominican Republic

    Source: IMF – News in Russian

    September 10, 2024

    Washington, DC: On September 10, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with the Dominican Republic and considered and endorsed the staff appraisal without a meeting.[2]

    A track record of sound policies and institutional policy frameworks has helped the Dominican Republic achieve robust and resilient economic growth and low inflation over the last two decades. Effective policies contributed to a growth moderation that appropriately supported inflation’s rapid and sustained return to its target last year and then aided the recovery, while close monitoring of the financial sector supported macro-financial stability. Planned enhancements to policy frameworks and deepening structural reforms—in particular, comprehensive fiscal and electricity reforms—have the potential to further support stability, competitiveness, and inclusive growth.

    Following a strong post-pandemic recovery, economic growth slowed to 2.4 percent in 2023 due to tighter global and domestic financial conditions, weak export demand, and transient domestic factors, largely climate related. The growth slowdown, alongside lower commodity prices, drove inflation’s faster-than-expected convergence to its target range (4±1 percent). In response, the Central Bank of The Dominican Republic (BCRD) cautiously and appropriately reduced its key policy rate, allowing for greater exchange rate flexibility while increasing foreign exchange interventions to smooth daily exchange volatility. Fiscal policy was also prudently adjusted to support the economy. The current account deficit in 2023 narrowed markedly to 3.6 percent of GDP and was fully financed by foreign direct investment (FDI) flows. The financial sector weathered the period of tight monetary policy and slower growth and is adequately capitalized and profitable.

    Supported by sound policies and macroeconomic fundamentals, the outlook is favorable despite elevated, mostly global, uncertainty. For 2024 and over the medium term, real GDP growth is projected around its long-term trend of 5 percent, with inflation around its 4 percent target. The current account deficit is projected to gradually narrow to less than 3 percent of GDP and continue being fully financed by FDI. Near-term risks to the outlook—including tighter global financial conditions, geopolitical tensions, and volatile commodity prices—have moderated since last year but remain elevated and tilted to the downside. Over the medium-term risks are more balanced and include upside risks if key domestic reforms are implemented successfully.

    Executive Board Assessment

    In concluding the 2024 Article IV Consultation with the Dominican Republic, Executive Directors endorsed staff’s appraisal, as follows:

    A track record of sound policies and institutional policy frameworks has helped the Dominican Republic achieve robust and resilient economic growth and low inflation over the last two decades. Effective policies contributed to a growth moderation that appropriately supported inflation’s rapid and sustained return to its target in 2023. The authorities provided timely policy support to aid the recovery while monitoring closely the financial sector. The external position improved significantly in 2023 and was broadly in line with fundamentals and desirable policies.

    The outlook is favorable despite elevated—mostly global—uncertainty. Real GDP growth is projected around its long-term trend of 5 percent in 2024 and thereafter, with inflation around its (4±1 percent) target. The current account deficit, expected to be fully financed by FDI, is projected to gradually narrow over the medium term. Downside risks dominate in the near‑term term—including tighter for longer monetary policy in the U.S., intensification of regional conflicts, or extreme local weather events—but are broadly balanced over the medium term, including upside risks if reforms are successfully implemented. Existing buffers, further contingency planning, and agile sound policy making can help face adverse shocks.

    In the near term, policy priorities should remain focused on maintaining macroeconomic and financial stability, including further flexibility of the exchange rate. Monetary policy normalization can continue, given remaining economic slack and that inflation is firmly within the target range. Efforts to expedite the recapitalization of the central bank to reinforce its autonomy should remain a priority. Endeavors should continue to deepen the FX market, expand the use of hedging mechanisms and limit FXIs to large shocks that lead to destabilizing changes in hedging and financing premia to support further exchange rate flexibility, and therefore further enhance the effectiveness of the inflation targeting framework. While international reserves are broadly adequate based on traditional metrics, further reserve accumulation is necessary to increase buffers to deal with future shocks.

    Fiscal policy should remain focused on rebuilding buffers and critical spending needs. The fiscal responsibility law and its planned implementation are welcomed and are important steps to better anchor medium-term policies and further secure debt sustainability. The authorities’ planned gradual fiscal consolidation, consistent with this law, is appropriate to place debt on a firmly downward path and build fiscal buffers. An integral fiscal reform that durably raises revenues—through elimination of tax exemptions and expansion of the tax base—and improves spending efficiency—especially by reducing electricity sector subsidies and untargeted transfers—is imperative. This can provide space for needed development spending (including disaster-resilient infrastructure) to promote inclusive growth.

    The financial sector remains resilient and well capitalized, and efforts to bring the regulatory framework up to the latest international standards should continue. The sector weathered well the period of high interest rates and slower growth in 2023. Stress tests show that the banking sector can absorb a range of shocks. Continued close monitoring to contain any build‑up of vulnerabilities remains warranted amid higher for longer interest rates and past increases to credit growth. The modernization of the financial and prudential regulatory framework, alongside the expansion of the macroprudential toolkit, and closing regulatory/supervisory gaps (including for savings and loans cooperatives) will further increase financial sector resilience.

    Ongoing efforts to improve public institutions and the business climate are essential to maintaining the strong investment and growth trajectory. The fiscal policy framework, and spending and revenue efficiency can be further enhanced by continued improvements to public financial management and further strengthening of revenue administration. Reforms to education and the labor market, alongside further improvements to social outcomes and implementation of climate adaptation and mitigation policies will be critical to support inclusive and resilient growth and continue to reduce vulnerabilities. The authorities should continue in their efforts to fully implement the Electricity Pact.

    Dominican Republic: Selected Economic Indicators

    Population (millions, 2023)                                                     10.7

    GDP per capita (2023, U.S. dollars)                         11,372

    Quota                                     477.4 million SDRs / 0.10% of total

    Poverty (2021, share of population)                            23.9

    Main exports                                             tourism, gold, tobacco

    Unemployment rate (2023, percent)                             5.3

    Key export markets                                          U.S., Canada, Haiti

    Adult literacy rate (percent, 2022)                               95.5

    Projection

    2019

    2020

    2021

    2022

    2023

    2024

    2025

    Output

    (Annual percentage change, unless otherwise stated) 

    Real GDP

    5.1

    -6.7

    12.3

    4.9

    2.4

    5.1

    5.0

    Nominal GDP (RD$ billion)

    4,562

    4,457

    5,393

    6,261

    6,820

    7,453

    8,149

    Nominal GDP (US$ billion)

    89.0

    78.9

    94.5

    113.9

    121.8

    Output gap (in percent of potential output)

    -0.5

    -6.3

    -1.9

    -0.8

    -1.7

    -0.8

    -0.5

    Prices

     

     

     

     

     

     

     

    Consumer price inflation (end of period)

    3.7

    5.6

    8.5

    7.8

    3.6

    3.7

    4.0

    Exchange Rate

    Exchange rate (RD$/US$ – period average) 1/

    51.2

    56.5

    57.1

    55.0

    56.0

    Exchange rate (RD$/US$ – eop) 1/

    52.9

    58.2

    57.3

    56.2

    58.0

    Real effective exchange rate (eop, – depreciation) 1/

    -3.2

    -8.1

    6.5

    6.3

    -1.9

    -2.9

    0.0

    Government Finances

    (In percent of GDP) 

    Consolidated public sector debt 2/

    53.3

    71.1

    62.2

    58.8

    59.3

    58.4

    57.4

    Consolidated public sector overall balance 2/

    -3.3

    -9.0

    -3.7

    -3.6

    -4.0

    -4.0

    -3.8

    Consolidated public sector primary balance

    0.5

    -4.2

    0.7

    0.0

    0.4

    0.7

    0.7

    NFPS balance

    -2.3

    -7.6

    -2.5

    -2.7

    -3.1

    -3.1

    -3.1

     Central government balance

    -3.5

    -7.9

    -2.9

    -3.2

    -3.3

    -3.1

    -3.1

    Revenues and grants

    14.4

    14.2

    15.6

    15.3

    15.7

    16.3

    15.2

    Primary spending

    15.1

    18.9

    15.4

    15.7

    15.8

    15.9

    14.8

    Interest expenditure

    2.7

    3.2

    3.1

    2.8

    3.1

    3.4

    3.5

    Rest of NFPS

    1.1

    0.3

    0.4

    0.6

    0.2

    0.0

    0.0

    Financial Sector

    (Annual percentage change; unless otherwise stated) 

    Broad money (M3)

    11.7

    21.2

    13.4

    6.3

    14.3

    11.5

    10.7

    Credit to the private sector

    11.8

    5.3

    11.6

    16.6

    19.6

    15.8

    11.5

    Net domestic assets of the banking system

    8.6

    2.5

    11.5

    9.7

    13.1

    13.5

    10.1

    Policy interest rate (in percent) 1/

    4.5

    3.0

    3.5

    8.5

    7.0

        Average bank deposit rate (1-year; in percent) 1/

    6.7

    3.1

    2.3

    9.9

    8.6

        Average bank lending rate (1-year; in percent) 1/

    12.4

    9.9

    9.2

    13.5

    13.6

    Balance of Payments

    (In percent of GDP) 

    Current account

    -1.3

    -1.7

    -2.8

    -5.8

    -3.6

    -3.4

    -3.4

    Goods, net

    -10.2

    -8.6

    -12.5

    -15.1

    -13.0

    -12.9

    -12.7

    Services, net

    5.7

    1.8

    3.9

    4.8

    6.0

    6.6

    6.5

    Income, net

    3.2

    5.2

    5.7

    4.5

    3.5

    2.9

    2.7

    Capital account

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    Financial account 3/

    3.6

    5.3

    5.7

    6.7

    5.1

    3.5

    4.3

    Foreign direct investment, net

    3.4

    3.2

    3.4

    3.6

    3.6

    3.5

    3.5

    Portfolio investment, net

    2.4

    7.1

    2.2

    2.9

    2.0

    1.5

    1.3

    Financial derivatives, net

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    Other investment, net

    -2.3

    -5.1

    0.1

    0.2

    -0.5

    -1.5

    -0.5

    Change in reserves (-increase)

    -1.3

    -2.5

    -2.4

    -1.3

    -0.9

    -0.2

    -0.9

    GIR (in millions of US dollars)

    8,782

    10,752

    12,943

    14,441

    15,464

    15,660

    16,883

    Total external debt (in percent of GDP)

    41.9

    56.3

    48.6

    40.5

    43.3

    43.5

    42.5

     of which: Consolidated public sector

    27.3

    40.3

    35.6

    33.2

    33.9

    32.9

    32.2

     

    Sources: National authorities; World Bank; and IMF staff calculations.

    1/ Latest available.

    2/ The consolidated public sector includes the budgetary central government (CG); the rest of the Non-Financial Public Sector, i.e., extra-budgetary central government institutions (decentralized and autonomous institutions), social security funds, local governments and non-financial public companies; and the quasi-fiscal central bank debt. With the dissolution of the state electricity holding company (CDEEE) in 2022, the deficit of CDEEE from 2019 was transferred to the CG.

    3/ Excluding reserves. 

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Meera Louis

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/10/pr24323-dominican-republic-imf-exec-board-concludes-2024-aiv-consult

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  • MIL-OSI Russia: Harnessing the Power of Integration: A Path to Prosperity in Central Asia

    Source: IMF – News in Russian

    September 11, 2024

    Distinguished guests, I am delighted to be here in Bishkek on my first visit to the Kyrgyz Republic, in the heart of Central Asia.

    This region has been at the crossroads of civilizations for millennia. It is a mosaic of a rich cultural heritage, diverse peoples, and natural endowments that include spectacular mountains, lakes, rivers, and a rich biodiversity. It is also located very favorably at the crossroads of Asia and Europe. Needless to say, it is quite truly a unique region!

    As we gather here today to discuss the economic possibilities for the Caucasus and Central Asia (CCA) region, we all recognize that the world is changing rapidly, and this is a pivotal moment.

    It reminds me of another time of momentous opportunity, when the region gained independence in the 1990s. Since then, the CCA countries have made remarkable progress by unleashing their first wave of market- oriented reforms, generating higher growth and improving living standards.

    But new and unprecedented challenges have emerged. The Covid-19 pandemic and its aftermath are only just in our rear-view mirrors, as the region confronts emerging challenges from climate change to regional conflicts. The global economy has also shifted with geoeconomic fragmentation emerging as a key risk.

    The theme of my remarks today is simple: in this changing world, raising living standards in the CCA region requires bold, concerted action.

    We must strengthen stability and resilience, promote regional integration, and launch a new wave of reforms. This is how we can unleash the full economic potential of the region and its vibrant young populations, accelerate growth, create jobs and open-up opportunities for generations to come.

    Building on Macroeconomic Stability

    It is important to remind ourselves of the global context as we consider what is needed to propel the region to the next level of economic growth and prosperity.

    The world economy has shown remarkable resilience in the face of the pandemic, the war in Ukraine, and an inflation surge. Global growth bottomed out at 2.3 percent in 2022 and is expected to rebound to 3.2 percent in 2024 and 3.3 percent in 2025. Initial fears of recession and uncontrolled wage-price spirals fortunately did not materialize and there is less economic scarring from the pandemic than anticipated.

    However, medium-term growth projections remain below historical averages. Persistence of inflation in parts of the world, geopolitical conflicts, and the gaps in structural reforms needed to promote efficient resource allocation remain critical challenges. Global inflation is projected to decline to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to inflation targets before emerging market and developing economies.

    The risks to the outlook are still considerable. Notably, geopolitical tensions and regional conflicts pose downside risks, potentially causing new price spikes. Other risks include rising trade protectionism, increasing inequality, and financial market volatility. At the same time, the fact that this year saw the hottest day on record for the planet serves as a stark reminder of daunting challenges due to climate change.

    Policymakers in the CCA region deserve full credit for navigating their economies through these turbulent times and maintaining macroeconomic stability. Rapid COVID virus containment, decisive policy actions, and robust international support have led to a swift recovery, with the region growing at 4.9 percent in 2023.

    Inflation fell in most CCA countries, including in the Kyrgyz Republic, amid exchange rate appreciations and a decline in commodity prices. Inflation remained more persistent in Kazakhstan and Uzbekistan due to strong domestic demand, elevated inflation expectations, and energy price reforms in Kazakhstan.

    In the April Regional Economic Outlook, we projected a growth slowdown to 3.9 percent in 2024, but inflows of income, capital, and migrants from Russia, and rerouting of trade though the region have again boosted growth to impressive high single digits so far this year in oil importing CCA economies, including the Kyrgyz Republic. In Kazakhstan, on the other hand, growth is expected to slow to 3.1 percent in 2024 before picking up to 5.6 percent in 2025 as production increases from the Tengiz oil fields.

    Over the medium term, growth in the region is expected to moderate to under 4 percent and inflation stabilize in mid-single digits. Escalation of the war in Ukraine and the Gaza conflict, however, could cause commodity price volatility and a reversal of the recent trade patterns.

    Achieving macroeconomic stability is just a beginning. It is not sufficient to meet the aspirations of current and future generations.

    Now is the time for us to come together and take bold steps to unleash a new wave of reforms that will durably raise growth, create more jobs, and improve living standards. This requires reforms to increase productivity, strengthen resilience to shocks, and expand markets.

    While this is ambitious, it is within our reach as long as there is consensus to move ahead on this path. The current favorable macroeconomic conditions offer a promising window of opportunity because, as our research shows, structural reforms yield greater growth dividends during economic expansions.

    From Stability to Prosperity

    Historically, this region has been a vital link between Europe and Asia, serving as a conduit for trade, culture, and innovation.

    Today, regional integration can once again harness this potential. It can facilitate the freer movement of goods, services, capital, and people, increase market size and economic efficiency, and promote inclusive prosperity.

    Moreover, deepening ties within the region and global markets can foster stability and peace. Regional integration is therefore not just an opportunity, but an economic necessity.

    Reducing nontariff trade barriers, boosting infrastructure investment, and enhancing regulatory quality could increase trade by up to 17 percent on average in the CCA region, as our research shows. They can also improve market access and foster diversification.

    Transportation networks, such as roads, railways, and ports are essential to facilitate cross-border trade. The planned construction of the China-Kyrgyzstan-Uzbekistan railway is an illustration of cross-country cooperation to improve connectivity between the East and the West, supporting the region’s ambition to regain its historical role. 

    You have abundant renewable energy resources in the region, including hydro, solar and wind power. Enhanced energy cooperation will help develop regional energy markets, ensure security, and create export opportunities. Collaborative projects, such as Kambarata-1, can help diversify the energy mix and reduce dependency on fossil fuels. Critically, it can also improve water availability for neighboring countries.

    Both of these investments—the railway and Kambarata-1—hold enormous potential for regional development and connectivity. Collective effort in mobilizing expertise and financing is essential for full realization of this potential while sustaining macroeconomic stability that has been a hallmark of the region’s recent achievements.

    This brings me to the importance of regional cooperation in addressing the risks of climate change, which requires immediate and resolute actions from all of us.

    A Path to a Low-Carbon Future

    The CCA region is highly vulnerable to climate change. Temperatures are rising fast, and droughts and floods have become more frequent and severe, causing immense damage to crops, infrastructure and livelihoods. We estimate that unabated climate change could cause a loss of annual output of nearly 6.5 percent in the region by 2060.

    The good news is that these losses could be substantially reduced by joint actions to cut emissions, adapt to climate change, and manage the risks of transition to a low-carbon economy.

    The region must collaborate to promote green technologies, improve energy efficiency, and manage natural resources sustainably. Scaling back energy subsidies and introducing carbon-pricing mechanisms can contribute to global mitigation efforts. In this respect, the Kyrgyz Republic’s commitment to raising electricity tariffs and gradually eliminating energy subsidies is a shining example.

    Such decisive measures can enhance resilience to climate change and create higher-paying jobs–green jobs that pay 7 percent more on average.

    Reforms for Enhanced Growth and Stability

    To fully realize the benefits of regional integration, structural reforms are essential. Our research finds that such reforms could lift output by 5-7 percent in the next 4 to 6 years.

    Let me highlight a few key areas where structural reforms can help achieve this boost:

    A vibrant private sector is the engine of growth. Strengthening governance, property rights and the rule of law, and reducing the state footprint in the economy by simplifying regulations, fostering competition, and combating corruption will build confidence and attract private investment.

    Importantly, we find that governance reforms yield the highest growth dividends and amplify the positive impacts of other reforms. The implication is clear: governance reforms should be prioritized and accompanied by other reforms.

    Prudent management of state-owned enterprises (SOEs) is also critical. While some SOEs serve essential public-policy objectives and should remain in public hands, it is crucial that they operate efficiently and do not crowd out the private sector.

    In most cases, however, the private sector is more efficient in delivering goods and services and creating jobs. Therefore, privatization of non-essential SOEs can lead to more dynamic and competitive markets, enhancing growth and resilience.

    Investments in education, health, and digital infrastructure are vital to boost productivity. The full potential of the region’s young and dynamic population can only be unleashed through high quality education and healthcare.

    Enhancing digital infrastructure also offers vast opportunities for productivity growth, especially in a region with young people eager to embrace new technologies.

    As the CCA starts to reap the benefits of these reforms, it is equally important to ensure that growth benefits all segments of society, and the vulnerable are shielded from the impacts of energy subsidy reforms and climate change. Well-targeted social assistance is essential for reducing poverty and inequality.

    Benefits work best when they incentivize work and are targeted and timely to support adversely affected households during economic downturns but scale back when the recovery takes hold. Empowering women and promoting gender equality can unlock significant economic potential and contribute to more inclusive growth.

    IMF’s Commitment to CCA Stability and Growth

    The IMF has been a steadfast partner of the CCA region since its initial days of independence. We provide policy advice, financing, and technical assistance to help our members in the region stabilize their economies, develop sustainable growth, and reduce poverty.

    The IMF stands by all its member countries in both prosperous and challenging times. For example, our assistance during the COVID-19 pandemic helped our membership weather the crisis and lay the groundwork for recovery.

    To better support our member in the CCA, the IMF established the Caucasus, Central Asia, and Mongolia Regional Capacity Development Center. This center provides technical assistance and training to help countries in the region build stronger institutions and implement sound economic policies. It also represents our long-term commitment to the region’s development.

    Conclusion

    Let me conclude. Since its early days of independence, the CCA region has shown tremendous perseverance in laying the foundation of a prosperous, peaceful society.

    Today, you are confronting new global challenges that test the resilience and adaptability of your economies. Embracing continued market-oriented reforms is the most effective strategy to strengthen your economies. Now is the time to forge ahead with bold spirits.

    The IMF will continue to support your efforts, working in partnership for the benefit of all people in this region and beyond.

    Thank you.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Angham Al Shami

    Phone: +1 202 623-7100 Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/11/sp09112024-harnessing-power-integration-path-prosperity-central-asia-dmd-bo-li

    MIL OSI

    MIL OSI Russia News

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation Discussions with the Kingdom of the Netherlands—Curaçao and Sint Maarten

    Source: IMF – News in Russian

    September 17, 2024

    Washington, DC: On September 10, 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation discussions[1] with the Kingdom of the Netherlands—Curaçao and Sint Maarten and endorsed the staff appraisal without a meeting on a lapse-of-time basis[2]. These consultation discussions form part of the Article IV consultation with the Kingdom of the Netherlands.

    Context. Curaçao and Sint Maarten have continued to experience a vigorous post-pandemic recovery underpinned by strong stayover tourism, which is outperforming Caribbean peers. Headline inflation has declined rapidly led by international oil price developments, notwithstanding a recent uptick, while core inflation remains elevated. In both countries, current account deficits improved markedly from pandemic years but remain high. Fiscal positions remained strong and in compliance with the fiscal rule. The landspakket, the structural reform package agreed with the Netherlands in 2020, continues to guide both countries’ reform agenda.

    Curaçao outlook. Growth is expected to accelerate in 2024 before gradually converging to its potential over the medium term. Stayover tourism supported by fiscal expansion is projected to drive economic growth at a robust 4.5 percent in 2024 due to new airlifts and further expansion in hotel capacity. Growth is then expected to moderate to reach 1.5 percent over the medium term, given subpar investment and productivity growth coupled with sustained population decline and beginning saturation in tourism flows, assuming no further reforms and diversification. Headline inflation is projected to decline mildly to 3.2 percent in 2024 from 3.5 percent in 2023, but to continue falling towards its steady state of around 2 percent by 2027 reflecting international price developments. Fiscal balances would be guided by the fiscal rule and debt would continue to decline, while surpluses narrow as investments return and social spending pressures mount. The current account deficit is expected to improve in the medium term but would remain elevated.

    Sint Maarten outlook. Growth is expected to moderate in the medium term as tourism recovery and the reconstruction taper off. Growth is expected to be 2.7 percent in 2024 and 3 percent in 2025, supported by a delayed recovery in cruise passengers towards pre-pandemic levels. However, the near-term outlook is threatened by the electricity load shedding (since June) and political instability. From 2026 onwards, growth is expected to gradually converge towards 1.8 percent as the stimulus from the reconstruction peters out, and tourism growth becomes constrained by the island’s carrying capacity and ailing infrastructure. Inflation is expected to remain broadly contained while remaining vulnerable to international price developments. Over the medium term, the government will continue to comply with the golden fiscal rule and capacity constraints will continue to weigh on public investment.

    Monetary Union. Monetary policy is appropriately targeted towards maintaining the peg. Efforts to absorb excess liquidity should continue while closely monitoring developments in core inflation driven by tourism-related services. The financial sector is sound and risks to financial stability have substantially diminished as the CBCS advances its reform agenda. Banks are highly liquid and adequately capitalized and systemic risks are contained. Building on the CBCS’s strong progress in strengthening supervisory and regulatory capacity, and the recent resolution agreement for ENNIA, staff welcomes CBCS’s continued efforts in its reform agenda, including financial stability and crisis management.

    Executive Board Assessment[3]

    Curaçao

    Curaçao’s economy successfully embraced the pivot towards tourism-led growth, giving rise to a strong near-term outlook. After losing key traditional industries, Curaçao quickly and successfully leveraged its tourism potential to grow, attract new hotels, and create jobs. While this is serving the economy well in the near term – growth is projected to accelerate to 4½ in 2024 – structural shifts have started to emerge, including a low-skilled, informal recovery of the labor market amidst low investment in non-tourist sectors. Growth is expected to moderate over the medium term given saturation in tourism flows, sustained population decline, and subpar investment. Notwithstanding the economy’s recent overperformance, inflation declined significantly and only reversed some of its gains recently on the back of higher international oil prices and unfavorable base effects. Inflation is expected to gradually converge towards its steady state rate of around 2 percent. Fiscal policy remains guided by the fiscal rule, albeit past surpluses are expected to unwind, allowing for the reversal of pandemic wage cuts and a return of public investments. The current account markedly improved thanks to lower oil prices but the deficit remains elevated.

    Risks to the outlook are broadly balanced. Growth slowdown in major economies could negatively impact tourism receipts, while positive surprises could boost foreign demand. Domestically, a successful expansion of renewable energy and faster-than-expected development of hotel capacity and yachting marinas would boost growth, while delays in public investment and more persistent core inflation could dent tourist experience and competitiveness.

    Efforts to safeguard recently created fiscal space are welcome. Overall surpluses in 2022 and 2023 helped reduce debt and granted access to favorable financing terms from the Netherlands. Safeguarding this space and avoiding procyclical impetus is warranted, including through more gradual unwinding of pandemic wage cuts in 2024, prudent liquidity management to repay a bullet loan in 2025, and general efforts to strengthen tax administration, review procurement and domestic arrears management, and streamline transfers to public entities. Ensuing room for maneuver could be used for priority investments, including for climate adaptation, guided by a medium-term fiscal framework steering towards the island’s debt anchor.

    Healthcare and pension reforms are needed to lock in a sustainable expenditure path and mitigate medium-term fiscal risks. Growing health and old-age pension deficits, exacerbated by an aging population, pose risks to the sustainability of public finances. Recent initiatives to incentivize the use of generics and raise the pension age are commendable, and more needs to be done to put the system on a sustainable path. Staff sees a broad range of efficiency gains in health spending, including lowering pharmaceuticals and laboratory costs and enhancing primary care’s gatekeeping role. Reforms on the revenue side, including broadening the contributor base and increasing co-payments, are politically more difficult.

    Sustaining the positive growth momentum in the medium term requires investments in capital and labor and resolving existing growth bottlenecks. First, moving up the value chain with high-end resorts and complementary recreational activities would help sustain valuable income growth from tourism but requires scaling up investments in infrastructure and deregulating the transportation sector. Second, further investments in electricity grid and energy storage, as well as a revised pricing strategy, are needed to accompany the ongoing energy transition and reap its vast benefits, including lower fuel imports, emissions, and electricity prices. The envisaged floating offshore wind park for hydrogen production would be a game changer for the island. Boosting public investment to achieve these objectives, however, requires ramping up capacity in planning and execution. Third, to further stimulate growth and offset the sustained population decline, formal labor markets and skills would need to be strengthened. And fourth, continued improvements in the business climate in line with the landspakket’s economic reform pillar could help overcome decade-low productivity growth.

    Important strides in reducing ML/FT vulnerabilities are welcome and could be built upon. The draft online gaming law, implementation of risk-based supervision, and a new law to address EU grey listing and enable automatic information exchange represent important strides in enhancing Curaçao’s defenses against ML/FT and related reputational risks. Curaçao can further improve upon these important accomplishments, including by passing and implementing the aforementioned legislations in a timely manner and enhancing coordination and monitoring across relevant agencies.

    Sint Maarten

    Near-term growth is strongly anchored but preserving the positive momentum hinges on investments to revamp an ailing infrastructure and improve tourism’s value added. The economic recovery is well underway, underpinned by tourism recovery and the reconstruction. GDP is expected to surpass its pre-Irma level in 2025. However, without investments to upgrade an ailing infrastructure, growth will falter as the island approaches its maximum carrying capacity. Strategies should continue to focus on enhancing tourist’s experience, differentiating from other Caribbean destinations, and improving tourism’s value added.

    A comprehensive strategy is required to durably resolve the electricity crisis. Mobile electricity generators have been leased and efforts to replace old engines are underway. Once the immediate crisis is resolved, efforts should be devoted towards developing a detailed masterplan for the energy transition with targets, projects, costing, timeline, and a comprehensive assessment of ancillary investments. The Trust Fund could receive a new mandate, beyond 2028, to operate as a public investment agency in charge of planning, securing the financing, and implementing plans for the energy transition.

    Revenue mobilization efforts are essential to ensure fiscal sustainability. Plans to lower tax rates, to make the country more competitive with neighboring islands, should be avoided as this would reduce government’s revenues and endanger fiscal sustainability. Instead, additional revenues are required to satisfy the fiscal rule, service loans with the Netherlands, raise public wages to attract and retain talent, increase transfers to cover public health costs, and clear public arrears with the SZV. Envisaged reforms to enhance the tax administration and to digitize and interface government systems should be complemented with plans to i) tax casinos’ profits, turnover, and winnings; ii) enforce the lodging tax on short-term rentals, and income and profit tax on the proceeds from such rentals; iii) update the price of land leases; and iv) institute a tourist levy at the airport.

    Without reforms, the healthcare and pensions funds are unsustainable. Health premiums and government transfers are insufficient to cover health costs, which are being cross-financed with pension savings. With unchanged policies, given population aging and rising administrative costs, both health and pensions funds will run deficits by 2027, and the SZV would deplete its liquid assets by 2027. By 2030, the government would need to transfer about 4 percent of GDP per year to sustain the system. Reforms are urgently needed to contain health costs including: i) introducing the General Health Insurance, ii) rationalizing benefits, iii) extending the use of generics, iv) optimizing referrals, v) strengthening preventing care, and vi) adopting out-of-pocket payments. Given the rapid pace of population aging, additional measures such as increasing the contribution rates and linking the retirement age to life expectancy, should also be considered.

    Strengthening the implementation of AML/CFT measures is necessary to increase effectiveness of the AML/CFT regime. Laws for an effective AML/CFT framework were approved but their implementation is lagging. UBO registration is yet to begin, while the investigation and prosecution of suspicious activities is lacking. Granting the FIU full independence to investigate and prosecute cases, and increasing its budget for recruitment and operations could strengthen the AML/CFT framework.

     

    The Monetary Union of Curaçao and Sint Maarten

    The current account deficit is expected to improve in the medium term but would remain elevated, while international reserves are expected to remain broadly stable. Large CADs in both countries are expected to improve and remain well-financed, leading to a stable and broadly adequate level of international reserves over the medium term. Curaçao’s external position is assessed to be weaker than implied by fundamentals and desired policy settings due to an elevated CAD and sustained appreciation of the real effective exchange rate, while that of Sint Maarten is considered in line with fundamentals and desired policy settings.

    Monetary policy is appropriately targeted towards maintaining the peg. In line with global monetary policy tightening, the CBCS increased its benchmark rate during 2022-23 and has kept it unchanged since September 2023. Efforts to absorb excess liquidity should continue while closely monitoring developments in core inflation driven by tourism-related services. Even though credit growth declined further and reached negative territory in real terms amidst monetary tightening, the transmission mechanism of monetary policy remains weak. Structural factors include the absence of interbank and government securities markets. The continued increase in mortgages, the only credit component to display growth, was accompanied by a broadly stable loan-to-value ratio on aggregate, albeit more granular data is needed to monitor potential vulnerabilities. Further acceleration in mortgage credit could warrant introducing a macro prudential limit below the currently by banks self-imposed ratio.

    The financial sector is sound and risks to financial stability have substantially diminished as the CBCS advances its reform agenda. Banks are highly liquid and adequately capitalized and systemic risks are contained. Near-term risks to financial stability have substantially diminished with the agreement for a controlled wind-down of ENNIA and the start of the restructuring process, as well as the CBCS’s continued improvements in supervision, regulation, and governance. Staff welcomes CBCS’s initiatives to establish a financial stability committee, further refine stress-testing, and enhance crisis management capacities, including lender of last resort and a deposit insurance scheme.

    Table 1. Curaçao: Selected Economic and Financial Indicators, 2020–25

    (Percent of GDP unless otherwise indicated)

     

    2020

    2021

    2022

    2023

    2024

    2025

    Prel.

    Prel.

    Prel.

    Prel.

    Proj.

    Real Economy

    Real GDP (percent change)

    -18.0

    4.2

    7.9

    4.2

    4.5

    3.5

    CPI (12-month average, percent change)

    2.2

    3.8

    7.4

    3.5

    3.2

    2.4

    CPI (end of period, percent change)

    2.2

    4.8

    8.4

    3.1

    3.2

    2.4

    GDP deflator (percent change)

    2.2

    3.8

    4.0

    3.5

    3.2

    2.4

    Unemployment rate (percent) 1/

    13.1

    13.5

    7.2

    7.0

    6.9

    6.6

    Central Government Finances 2/

    Net operating (current) balance

    -15.0

    -10.6

    0.7

    0.6

    0.0

    0.5

    Primary balance

    -13.2

    -8.8

    2.0

    2.5

    2.0

    1.9

    Overall balance

    -14.5

    -10.0

    1.0

    1.3

    0.1

    0.5

    Central government debt 3/

    87.1

    90.3

    81.6

    70.8

    65.4

    61.1

    General Government Finances 2, 4/

    Overall balance

    -15.7

    -10.4

    0.3

    0.9

    -0.3

    -0.1

    Balance of Payments

    Current account

    -27.2

    -18.6

    -26.8

    -19.7

    -17.9

    -16.5

    Goods trade balance

    -37.0

    -41.6

    -47.9

    -38.3

    -40.4

    -39.9

       Exports of goods

    10.7

    12.5

    18.0

    16.9

    16.5

    16.2

       Imports of goods

    47.7

    54.1

    65.9

    55.2

    56.9

    56.1

    Service balance

    9.6

    21.7

    20.5

    18.4

    22.6

    23.7

       Exports of services

    29.3

    37.2

    48.6

    46.6

    50.3

    51.3

       Imports of services

    19.7

    15.6

    28.1

    28.2

    27.7

    27.6

    External debt

    197.3

    194.8

    180.9

    177.1

    169.1

    164.0

    Memorandum Items

    Nominal GDP (millions of U.S. dollars)

    2,534

    2,740

    3,075

    3,318

    3,578

    3,789

    Per capita GDP (U.S. dollars)

    16,492

    18,135

    20,648

    22,160

    23,775

    25,065

    Credit to non-government sectors (percent change)

    0.1

    -9.7

    3.2

    2.5

    Sources: The Curaçao authorities and IMF staff estimates and projections.

    1/ Staff understands that the unemployment rate of 7.0 percent published in the 2023 Census data is not comparable to the historically published unemployment rates from the labor force survey by the Curacao Bureau of Statistics. As such, staff estimated the unemployment rate and overall labor force for the period of 2012 to 2022. Staff understands that the Curacao Bureau of Statistics intends to revise the historical series in the near future.

    2/ Defined as balance sheet liabilities of the central government except equities. Includes central government liabilities to the social security funds.

    3/ Budgetary central government consolidated with the social security fund (SVB).

    4/ The latest available datapoint is as of 2018. Values for 2019-2023 are IMF staff estimates based on BOP flow data.

     

     

    Table 2. Sint Maarten: Selected Economic Indicators 2020–25

    (Percent of GDP unless otherwise indicated)

     

    2020

    2021

    2022

    2023

    2024

    2025

    Est.

    Est.

    Est.

    Est.

    Proj.

    Real Economy

     

       

    Real GDP (percent change) 1/

    -20.4

    7.1

    13.9

    3.5

    2.7

    3.0

    CPI (12-month average, percent change)

    0.7

    2.8

    3.6

    2.1

    2.5

    2.3

    Unemployment rate (percent) 2/

    16.9

    10.8

    9.9

    8.6

    8.5

    8.2

       

    Government Finances

     

       

    Primary balance excl. Trust Fund operations 3/

    -8.7

    -5.4

    -0.6

    1.5

    0.9

    0.9

    Current balance (Authorities’ definition) 4/

    -9.6

    -6.3

    -1.5

    0.5

    -0.1

    0.0

    Overall balance excl. TF operations

    -9.3

    -5.9

    -1.1

    1.0

    0.2

    0.2

    Central government debt 5/

    56.1

    55.3

    49.3

    49.0

    46.2

    44.1

       

    Balance of Payments

     

       

    Current account

    -25.5

    -24.6

    -3.9

    -7.5

    -7.8

    -3.0

    Goods trade balance

    -40.7

    -49.8

    -59.2

    -59.3

    -62.4

    -60.5

       Exports of goods

    11.8

    11.4

    14.1

    14.8

    13.1

    11.2

       Imports of goods

    52.4

    61.2

    73.2

    74.1

    75.5

    71.7

    Service balance

    20.2

    33.1

    62.8

    60.3

    62.6

    65.2

       Exports of services

    34.4

    51.0

    78.7

    81.4

    81.5

    83.9

       Imports of services

    14.3

    17.9

    15.9

    21.1

    18.9

    18.7

    External debt 6/

    274.3

    253.7

    213.6

    206.3

    200.8

    194.0

       

    Memorandum Items

       

    Nominal GDP (millions of U.S. dollars)

    1,141

    1,268

    1,479

    1,563

    1,645

    1,733

    Per capita GDP (U.S. dollars)

    26,796

    29,646

    34,437

    36,088

    37,570

    39,160

    Credit to non-gov. sectors (percent change)

    2.4

    1.3

    4.5

    1.0

               

       Sources:

               

       1/ Central Bank of Curacao and Sint Maarten and IMF staff estimates.

               

       2/ The size of the 2022 labor force reported by the 2023 Census was adjusted to ensure consistency with the reported total population.

       3/ Excludes Trust Fund (TF) grants and TF-financed special projects.

     

       4/ Revenue excl. grants minus interest income, current expenditure and depreciation of fixed assets.

     

       5/ The stock of debt in 2018 is based on financial statements. Values in subsequent years are staff’s estimates and are higher than the values under authorities’ definition in quarterly fiscal reports.

       6/ The latest available datapoint is as of 2018. Values for 2019-2022 are IMF staff estimates based on BOP flow data.

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] The Executive Board takes decisions under its lapse-of-time-procedure when the Board agrees that a proposal can be considered without convening formal discussions.

    [3] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Reah Sy

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/17/pr-24330-curacao-and-sint-maarten-imf-board-concludes-2024-article-iv-consultation-discussions

    MIL OSI

    MIL OSI Russia News

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Bhutan

    Source: IMF – News in Russian

    September 19, 2024

    Washington, DC: On September 9, 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Bhutan[1].

    During the past decade Bhutan adeptly balanced economic growth and poverty reduction with environmental sustainability. Sustained growth increased incomes, lifting living conditions and eliminating extreme monetary poverty by 2022. Bhutan has a long history of leading environmental conservation and climate change action and is committed to remaining carbon neutral. While the pandemic hindered economic development, strong policies limited its health impact.

    Growth remained subdued during 2023. Large-scale emigration and policies to curb imports hindered a more robust recovery. Inflation accelerated in the second half of 2023, driven by wage increases in the public sector. The current account deficit (CAD) widened to around 30 percent of GDP driven by a large investment in crypto assets mining and the slow recovery in tourism. The fiscal deficit narrowed but remained high and non-hydro debt nearly doubled from pre-pandemic levels.

    Boosted by hydro-power projects and grant-financed capital investment, growth is projected to accelerate over the medium term, averaging 6.3 percent of GDP, but to remain volatile. A gradual easing of inflation towards 4 percent is expected as the impact of wage increase subside. The CAD is expected to narrow, supported by higher electricity exports due to the commissioning of new hydropower plants, a continued recovery in tourism, and crypto assets exports. Securing diverse sources of growth that provide quality employment opportunities while preserving Bhutan’s commitment to environmental sustainability remains a key medium‑term challenge.

    Uncertainty remains elevated with the balance of risks tilted to the downside. Domestic risks include slippages on implementation of the goods and services tax, delays in hydropower projects, and fiscal risks from the materialization of contingent liabilities in the financial sector. External risks include volatile commodity prices—particularly of fuel—and a global slowdown that could hinder non-hydro exports. Bhutan is vulnerable to climate change, given the importance of hydroelectricity and agriculture. Crypto mining entails significant upside and downside risks given their price volatility. Overall, the large external debt and persistent CADs—while supporting growth-enhancing investments and financed by development partners—are nonetheless a source of vulnerability. On the upside, the pursuit of stronger‑than-envisaged fiscal consolidation would accelerate the pace at which fiscal and external buffers are rebuilt.

    Executive Board Assessment[2]

    Executive Directors agreed with the thrust of the staff appraisal. They commended Bhutan’s significant reduction in poverty and inequality during the last decade. Directors welcomed that growth is expected to accelerate over the medium term, boosted by a large hydroproject, higher capital spending, and the slowdown of emigration. Noting downside risks to the outlook, they underscored that tighter fiscal and monetary policies are needed to support the peg, reduce domestic and external imbalances, and rebuild buffers; while carefully managing potential risks stemming from crypto assets operations is also needed. Directors called for structural reforms to foster high-quality jobs in the private sector and diversify the economy, and commended the authorities’ commitment to ecological conservation and climate change action. They noted that continued support from the Fund’s capacity development is important.

    Directors stressed that a gradual and sustained fiscal consolidation, based on revenue mobilization and spending restraint, is essential to rebuild buffers and preserve debt sustainability. They welcomed the authorities’ commitment to a timely implementation of the Goods and Services Tax and to undertaking additional tax and revenue administration measures to achieve the planned fiscal consolidation. Directors recommended strengthening public financial management, public investment management, and domestic debt management.

    Directors underscored that monetary policy needs to be tightened in tandem with fiscal policy to ease balance-of-payment pressures and rebuild reserves. They stressed the need for a well-functioning domestic liquidity management framework to support the monetary policy operation function. Directors encouraged the authorities to phase out existing exchange restrictions once conditions allow. They noted the need to address remaining financial sector vulnerabilities, particularly given the expiration of COVID-related support measures. In this context, they welcomed the new guidelines and regulations to address credit quality and the progress in moving toward risk-based supervision. Directors recommended further enhancing the AML/CFT framework. 

    Directors called for structural reforms to diversify the economy and foster the creation of private sector jobs for high-skilled workers. They recommended improving the business environment, strengthening human capital accumulation, and improving active labor market policies. Directors welcomed efforts toward a new FDI policy, which relaxes some restrictions, including access to foreign currency, local employment requirements, and caps on foreign ownership. They also welcomed the improvements in data quality and called for further progress in this area.

    Directors stressed the need to further strengthen public sector governance, including the Royal Monetary Authority’s (RMA) governance framework and independence as well as the transparency in the operations of state-owned enterprises. Noting the need to mitigate the potential risks stemming from crypto asset operations, they welcomed RMA’s efforts to strengthen its reserve management strategy and the forthcoming audited financial statements of crypto-mining operations.

    Bhutan: Selected Economic Indicators, 2018/19-2028/29

    2018/19

    2019/20

    2020/21

    2021/22

    2022/23

    2023/24

    2024/25

    2025/26

    2026/27

    2027/28

    2028/29

    Act.

    Act.

    Act.

    Act.

     

    Projections

                       

     

    (In percent of GDP, unless otherwise indicated)

    National Accounts

                   

    Nominal GDP (in millions of ngultrums) 1/

    184,660

    187,378

    193,386

    216,239

     

    237,322

    261,026

    292,837

    325,812

    357,677

    393,607

    438,906

    Real GDP growth (percent change) 1/

    4.6

    -2.5

    -3.3

    4.8

     

    5.0

    5.2

    7.2

    6.4

    5.2

    5.6

    7.2

     

    Prices

    Consumer prices (EoP; percent change)

    2.8

    4.5

    7.4

    6.5

    3.9

    4.8

    4.7

    4.4

    4.0

    4.0

    4.0

    Consumer prices (avg; percent change)

    2.8

    3.0

    8.2

    5.9

    4.6

    4.6

    4.7

    4.5

    4.2

    4.0

    4.0

    GDP deflator (percent change)

    2.2

    4.0

    6.7

    6.7

    4.5

    4.6

    4.6

    4.6

    4.4

    4.2

    4.1

     

    General Government Accounts

    Total revenue and grants

    22.8

    29.1

    30.9

    25.1

    24.2

    24.2

    28.1

    31.5

    30.1

    28.2

    27.3

    Domestic revenue

    18.8

    19.3

    18.5

    18.1

    18.9

    20.3

    19.3

    20.7

    20.7

    20.8

    22.4

    Tax revenue

    14.7

    12.2

    10.7

    12.0

    13.3

    13.4

    14.0

    14.4

    14.8

    14.8

    15.2

    Non-tax revenue

    4.1

    7.2

    7.9

    6.1

    5.6

    6.9

    5.4

    6.3

    5.9

    6.0

    7.3

    Foreign grants

    5.5

    8.5

    7.5

    6.2

    6.0

    3.9

    8.8

    10.8

    9.4

    7.4

    4.9

    Internal and other receipts

    -1.6

    1.3

    4.9

    0.9

    -0.7

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    Total expenditure 2/

    24.2

    30.9

    36.6

    32.1

    29.0

    28.8

    32.5

    34.2

    33.4

    32.1

    32.2

    Current expenditure

    15.0

    19.0

    22.5

    15.9

    14.9

    17.1

    17.0

    17.8

    18.7

    18.8

    19.4

    Capital expenditure

    8.8

    11.8

    14.3

    16.1

    14.2

    11.8

    15.5

    16.4

    14.8

    13.3

    12.8

    Primary expenditure 2/

    23.4

    30.5

    35.7

    30.6

    27.3

    27.2

    30.5

    31.4

    29.9

    28.3

    27.7

    Primary balance

    -0.6

    -1.4

    -4.8

    -5.5

    -3.1

    -3.0

    -2.4

    0.1

    0.2

    -0.1

    -0.4

    Overall balance

    -1.5

    -1.8

    -5.8

    -7.0

    -4.8

    -4.6

    -4.4

    -2.7

    -3.3

    -3.9

    -4.8

    General government debt 3/

    100

    115

    123

    117

    116

    114

    109

    123

    122

    119

    130

    Domestic

    3

    1

    9

    11

    13

    14

    15

    12

    11

    13

    13

    External

    97

    114

    114

    106

    103

    100

    94

    111

    111

    106

    117

                       

    Monetary Sector

     

                 

    Broad money (M2) growth (percent change)

    5.6

    19.3

    24.4

    9.4

    9.8

    12.6

    13.2

    12.3

    13.0

    12.2

    11.5

    Private credit growth (percent change)

    20.5

    13.3

    6.5

    10.8

    19.3

    9.1

    11.2

    11.1

    11.5

    10.0

    10.2

    Balance of Payments

    Current account balance

    -19.2

    -14.8

    -11.2

    -28.1

    -34.4

    -17.7

    -32.1

    -20.5

    -12.5

    -17.1

    -14.1

    Goods balance

    -15.3

    -12.1

    -6.4

    -21.1

    -25.7

    -12.9

    -26.9

    -15.0

    -6.1

    -10.1

    -8.8

    Hydropower exports

    6.0

    12.1

    13.5

    11.0

    8.7

    6.3

    8.2

    9.5

    9.1

    10.4

    11.9

    Non-hydropower exports

    17.3

    13.0

    13.9

    15.8

    14.9

    15.7

    15.9

    15.8

    17.1

    18.1

    18.8

    Imports of goods

    38.6

    37.1

    33.9

    47.9

     

    49.2

    40.2

    55.6

    52.4

    45.6

    42.1

    42.2

    Services balance

    -1.9

    -3.5

    -4.4

    -6.5

     

    -6.7

    -3.7

    -2.8

    -3.6

    -3.8

    -3.6

    -3.0

    Primary balance

    -8.4

    -5.7

    -5.7

    -5.5

    -5.0

    -5.6

    -4.5

    -4.2

    -4.6

    -4.9

    -4.8

    Secondary balance

    6.5

    6.6

    5.4

    5.1

    2.9

    4.5

    2.1

    2.2

    2.0

    1.6

    2.5

    Capital account balance

    8.0

    7.1

    3.8

    3.6

    4.1

    3.1

    8.2

    9.8

    8.6

    6.6

    2.9

    Financial account balance

    -4.5

    -15.1

    -9.1

    -8.2

    -10.7

    -15.9

    -24.0

    -20.2

    -19.2

    -13.6

    -13.6

    Net errors and emissions

    10.4

    5.4

    -4.8

    1.2

    11.8

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    Overall balance

    3.7

    12.9

    -3.0

    -15.1

    -7.8

    1.2

    0.1

    9.4

    15.3

    3.2

    2.5

    Gross official reserves (in USD millions)

    1065

    1344

    1332

    840

    574

    606

    604

    969

    1616.3

    1758.9

    1878.7

    (In months of imports)

    12.4

    17.5

    17.9

    7.6

    4.8

    5.8

    3.7

    5.7

    10.0

    10.8

    10.3

    (In months of goods and services imports)

    10.1

    14.2

    15.6

    6.6

    3.9

    4.6

    3.2

    4.8

    8.1

    8.6

    8.4

     

    Memorandum Items

    Hydropower exports growth rate 4/

    -1.2

    105.6

    15.8

    -9.4

    -13.2

    -20.7

    46.2

    30.4

    4.5

    26.1

    27.3

    Non-hydropower exports growth rate 4/

    13.7

    -24.1

    11.0

    26.8

    3.2

    16.2

    13.5

    10.7

    18.8

    16.5

    16.0

    Hydropower good imports 4/

    -15.3

    -3.5

    -21.2

    -11.6

    14.9

    50.8

    18.4

    61.1

    14.0

    3.3

    -19.1

    Non-hydropower good imports 4/

    10.3

    -2.3

    -4.3

    63.8

    12.7

    -13.0

    58.1

    1.5

    -6.1

    1.4

    15.2

    Population in million (eop)

    0.7

    0.7

    0.8

    0.8

    0.8

    0.8

    0.8

    0.8

    0.8

    0.8

    0.8

    External financing gap in US million

    0

    0

    0

    0

    0

    0

    0

     

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the

    views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation

    of any qualifiers used in summing up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Pemba Sherpa

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/19/pr-24336-bhutan-imf-concludes-2024-article-iv-consultation

    MIL OSI

    MIL OSI Russia News

  • MIL-OSI: Draganfly Receives Military Purchase Order for its Commander 3XL to be used for logistics within various branches of the U.S. Department of Defense

    Source: GlobeNewswire (MIL-OSI)

    Commander 3XL to be used as a primary transport vehicle for the TB2 Aerospace DROPS UAV Cargo POD for autonomous tactical resupply

    Saskatoon Sask, Sept. 24, 2024 (GLOBE NEWSWIRE) — Draganfly Inc. (NASDAQ: DPRO) (CSE: DPRO) (FSE: 3U8A) (“Draganfly” or the “Company”), an award-winning, industry-leading drone solutions and systems developer, is pleased to announce that it has received a purchase order from TB2 Aerospace (TB2) for Commander 3XL Drones to be deployed with TB2 Drone Recharging Operational Payload System Pods (DROPS) within the DoD for various mission types. This order represents the beginning of the deployment and scaling of the DROPs system in conjunction with the Draganfly line of drones.

    The Commander 3XL will be utilized to carry out various logistics missions. The Commander 3XL is well suited as a transport vehicle, as is the entire Draganfly drone product line for TB2 Aerospace’s smart logistics PODs, as Draganfly Drones are interoperable, providing operators a variety of aircraft size, payload capacity and weight configurations that utilize common communication, counter electronic warfare options, mission planning software, accessories, payloads and more. TB2 Aerospace and Draganfly have collaborated to integrate TB2’s DROPS Pods on Draganfly’s drones, positioning Draganfly as a primary transport vehicle for TB2 Aerospace deployments within the DoD.

    “We are honored to be doing this exciting work with TB2 and to have been selected for this important work in the military logistics sector,” said Cameron Chell, CEO of Draganfly. “Draganfly thrives at working to provide exceptional capabilities by integrating our line of drones, experience, and technology stack into mission profiles and use cases with our commercial and military partners—and doing it within time frames and at costs that few others can.”

    “We chose Draganfly to be our launch and developmental partner as they have a fantastic series of UAVs,” said Hank Scott, CEO of TB2. “Their aircraft are very stable, easy to fly and set up, and we were impressed by the commonality between their three UAVs. Common controllers, batteries, motors, and parts mean that the DoD can train a Warfighter to operate three different-sized UAVs with a simple, standardized training package. The commonality and interchangeable components will reduce DoD operational and training costs, and standardize the supply chain. Adding the DROPS system will make each of their UAVs a Multi-Mission Payload capable system too. It’s a win-win.”

    About Draganfly

    Draganfly Inc. (NASDAQ: DPRO; CSE: DPRO; FSE: 3U8A) is the creator of quality, cutting-edge drone solutions, software, and AI systems that revolutionize how organizations can do business and serve their stakeholders. Recognized as being at the forefront of technology for over 24 years, Draganfly is an award-winning industry leader serving the public safety, agriculture, industrial inspections, security, mapping, and surveying markets. Draganfly is a company driven by passion, ingenuity, and the need to provide efficient solutions and first-class services to its customers around the world with the goal of saving time, money, and lives.

    For more information on Draganfly, please visit us at www.draganfly.com. For additional investor information, visit:

    Media Contact Email: media@draganfly.com

    Company Contact Email: info@draganfly.com

    About TB2

    TB2 Aerospace from Golden, Colorado, USA is the developer the Drone Recharging Operational Payload System. This system enables a UAV to turn into a Multi-Mission Payload System capable of autonomously capturing, delivering, and recovering Cargo Pod and other payloads such as Weapons Systems and Ground Sensors without the need to place a Warfighter in harm’s way.

    Forward-Looking Statements

    This release contains certain “forward looking statements” and certain “forward-looking ‎‎‎‎information” as ‎‎‎‎defined under applicable securities laws. Forward-looking statements ‎‎‎‎and information can ‎‎‎‎generally be identified by the use of forward-looking terminology such as ‎‎‎‎‎“may”, “will”, “expect”, “intend”, ‎‎‎‎‎“estimate”, “anticipate”, “believe”, “continue”, “plans” or similar ‎‎‎‎terminology. Forward-looking statements ‎‎‎‎and information are based on forecasts of future ‎‎‎‎results, estimates of amounts not yet determinable and ‎‎‎‎assumptions that, while believed by ‎‎‎‎management to be reasonable, are inherently subject to significant ‎‎‎‎business, economic and ‎‎‎‎competitive uncertainties and contingencies. Forward-looking statements ‎‎‎‎include, but are not ‎‎‎‎limited to, statements with respect to the purchase order positioning Draganfly as a primary transport vehicle for TB2 Aerospace deployments within the DoD. Forward-‎‎‎‎looking statements and information are subject to various ‎known ‎‎and unknown risks and ‎‎‎‎‎uncertainties, many of which are beyond the ability of the Company to ‎control or ‎‎predict, that ‎‎‎‎may cause ‎the Company’s actual results, performance or achievements to be ‎materially ‎‎different ‎‎‎‎from those ‎expressed or implied thereby, and are developed based on assumptions ‎about ‎‎such ‎‎‎‎risks, uncertainties ‎and other factors set out here in, including but not limited to: the potential ‎‎‎‎‎‎‎impact of epidemics, ‎pandemics or other public health crises, including the ‎COVID-19 pandemic, on the Company’s business, operations and financial ‎‎‎‎condition; the ‎‎‎successful integration of ‎technology; the inherent risks involved in the general ‎‎‎‎securities markets; ‎‎‎uncertainties relating to the ‎availability and costs of financing needed in the ‎‎‎‎future; the inherent ‎‎‎uncertainty of cost estimates; the ‎potential for unexpected costs and ‎‎‎‎expenses, currency ‎‎‎fluctuations; regulatory restrictions; and liability, ‎competition, loss of key ‎‎‎‎employees and other related risks ‎‎‎and uncertainties disclosed under the ‎heading “Risk Factors“ ‎‎‎‎in the Company’s most recent filings filed ‎‎‎with securities regulators in Canada on ‎the SEDAR ‎‎‎‎website at www.sedar.com and with the United States Securities and Exchange Commission (the “SEC”) on EDGAR through the SEC’s website at www.sec.gov. The Company undertakes ‎‎‎no obligation to update forward-‎looking ‎‎‎‎information except as required by applicable law. Such forward-‎‎‎looking information represents ‎‎‎‎‎managements’ best judgment based on information currently available. ‎‎‎No forward-looking ‎‎‎‎statement ‎can be guaranteed and actual future results may vary materially. ‎‎‎Accordingly, readers ‎‎‎‎are advised not to ‎place undue reliance on forward-looking statements or ‎‎‎information.‎

    The MIL Network

  • MIL-OSI Germany: „We’ve ridden out the big wave of inflation” | Interview with F.A.Z.

    Source: Deutsche Bundesbank in English

    The interview was conducted by Christian Siedenbiedel.Translation: Deutsche Bundesbank
    Mr Nagel, is this terrible wave of inflation finally over?
    Yes, I believe this wave of inflation is coming to an end. In its initial phase, it was very challenging, or, as you put it, “terrible”. However, we in the euro area are now well on the way to sustainably achieving our inflation target of 2 %. Based on the Eurosystem projection from June, we should hit this target at the end of 2025. In Germany, the inflation rate of 2 % in August, as measured by the Harmonised Index of Consumer Prices, was a little deceptive, if only for purely technical reasons: the year-on-year rate, that is, compared with August 2023, was more favourable than in other months. We’ll be seeing somewhat higher rates again soon. But I think that we’re past the worst of it: we’ve ridden out the big wave.
    Is it still possible that inflation could get out of hand?
    I wouldn’t say so. Provided that we don’t see any more unexpected major shocks, like Russia’s invasion of Ukraine in February 2022, for example, then inflation should continue to trend towards 2 %. Nevertheless, we shouldn’t celebrate prematurely and start patting ourselves on the back. We haven’t quite hit our target yet. We must remain vigilant and be wary of the risks on the way back to stable prices – that is our job as a central bank.
    How seriously should we be taking the repeated upside surprises to services inflation?
    We are taking the higher inflation for services seriously. After all, services make up nearly half of the basket of consumer goods – that’s a lot. In Germany, the prices for services are still rising by around 4 % each year. Strong growth in wages is especially contributing to this. And we are expecting wage settlements in Germany to remain relatively high over the remaining course of 2024 as well. In annual terms, negotiated wages are likely to rise by around 6 %. While there is some fluctuation in the monthly figures, wage pressures in Germany will remain high overall for the time being.
    Given this state of affairs, do you think the ECB should risk lowering interest rates for a second time in September?
    On the ECB Governing Council, we have stressed that we will not pre-commit to any particular path of interest rates and that we will follow a data-dependent approach to our decisions. Following the interest rate reduction in June, it was a wise move to then wait and see in July and not cut rates any further. For this reason, I will really only be making up my mind at next week’s ECB Governing Council meeting, when I will have a full overview of all the data. As before, we are not flying on autopilot. But I’ll say one thing: I think inflation is making good progress.
    When interest rates were first cut in June, only the Governor of the Oesterreichische Nationalbank, Robert Holzmann, voted against the reduction. After all, the ECB had just been forced to adjust its inflation projections upward. Did you not have any concerns in cutting interest rates?
    No, I had no concerns in June. From my perspective, the interest rate step was justified by the data. They did not cast any doubt on the general direction of travel, that is, the decline in the inflation rate over a longer period of time. And our monetary policy is still tight, even after the cut in interest rates. However, I do, of course, respect the decision of my colleague Robert Holzmann.
    During his time as President, your predecessor Jens Weidmann was often the one who took on the role of the most hawkish member of the ECB Governing Council, the most strident advocate of tight monetary policy. How do you view your role on the Governing Council?
    Comparing two completely different situations is always difficult, and it should be up to others to evaluate my work. Our decisions on the Governing Council are reached as a team – one that strives to make responsible monetary policy for the euro area. I wish to seek out solutions together with my colleagues on the ECB Governing Council, which is why I focus more on the team as a whole than on individuals. I think we have done well on this score over the past two years: we have succeeded in bringing inflation down in a challenging environment.
    There are economists who fear that inflation could settle at a level noticeably above the ECB’s target of 2 % in the medium term. Do you think that the risk of there being structurally higher inflation in future can be completely ruled out?
    In this context, we must clearly distinguish between two things. First, there is the question of whether we are going to see stronger price pressures in the future. That’s something I can’t rule out. We are keeping close tabs on how certain developments are impacting on inflation – these include geopolitical developments, the green transformation and demographic developments. Some academics expect these developments to lead to pressure towards higher inflation rates. A different question altogether is whether inflation will be higher over the long term because of this. And I will be quite clear on this matter: that’s something monetary policymakers hold sway over. Our mandate is price stability.
    Would you then say that the ECB is partly to blame for inflation getting out of hand in recent years?
    I wouldn’t use the word blame in this context – I consider that to be the wrong category. Hindsight is always 20/20. What is certainly true is that at the end of 2021 – before I joined the ECB Governing Council – it was already foreseeable that the inflation rate would rise, and the ECB continued its asset purchases. In January 2022, prior to Russia’s invasion of Ukraine, we already had an inflation rate of 5 %, which was probably due in part to the coronavirus pandemic. As part of the ECB strategy review that has just begun, we will have to examine the role monetary policy measures, such as asset purchases, played during the low inflation period.
    Was it a sticking point that the ECB had committed to tapering asset purchases first before starting to raise interest rates? The economist Markus Brunnermeier mentioned this recently in a discussion with you. As a result, the central bank was unable to respond quickly enough with the interest rate hikes that inflation would have required …
    Back then, it was important to gradually ready financial markets for this reversal. This happened through a series of announcements starting from December 2021. If you look at developments in financial markets, then I’d say that the markets understood this communication and were prepared. The ECB thus succeeded in keeping the negative side effects often associated with changes in monetary policy relatively manageable.
    In your role as Bundesbank President, how do you view the economic situation in Germany at present. Is it being talked down?
    We are navigating an economic situation characterised by strong headwinds. Recent business communications make it clear that certain sectors are under pressure and need to take countermeasures. But I am very much against talking the situation down, because that stimulates exactly those developments that are being lamented.
    What do you mean by headwinds?
    As a large export economy, Germany is particularly hard hit by the geoeconomic changes happening at the moment. Let me give an example: we export especially large amounts to China, meaning that any slowdown in the economy there impacts us particularly hard. The uncertainty that we are seeing among consumers and firms is a factor as well. As a result, investment in machinery, equipment and vehicles fell by 4.1 % between the first and second quarter. Overall, economic output contracted by 0.1 % in the second quarter. That should serve as a wake-up call. We need to put growth front and centre, and that means investment needs to become a more attractive option again.
    So where might impetus to boost growth come from?
    I think the Federal Government’s growth initiative is on the right
    track: getting rid of bracket creep for taxpayers, cutting bureaucratic red tape, making improvements to depreciation on investments, but also bringing in measures to strengthen incentives to work. These are all sound steps. But, with the summer break over now, they actually need to be put into practice. Words have to be followed up with deeds. It is particularly important that politicians give a clear indication of where things are headed. If there is a dependable setting, firms will start investing more again. The debt brake could also stand to undergo moderate reform, in my view. The Bundesbank has put forward some proposals that would create a little more leeway, provided that Germany keeps to the EU’s rules on debt. But now it’s up to politicians to take action.
    How concerned are you by what has happened in Thuringia and Saxony?
    I find it very unsettling. Democracy, freedom, openness, including to people from other countries – these are core values. When these are being called into question, we at the Bundesbank cannot just look on dispassionately, either; we need to take a clear stand. A central bank also has a responsibility to society in this regard. And, as you know, we at the Bundesbank have just had renowned historians probe the history of central banking in Germany between 1924 and 1970. I worry when I read about calls for Germany to exit the European Union or leave the monetary union. That sort of thing jeopardises Germany’s position as a business location; it undermines European cohesion. And it’s harmful to our prosperity.
    The Bundesbank itself is in the midst of profound change. The plan for the new Central Office in Frankfurt was pared back, there are to be no new high-rises, and eight out of 31 branches are set to be closed. Where do things stand – is more on the way?
    Well, that’s already a fair amount that we have planned. This is about making the Bundesbank fit for the future. But it’s also about the Bundesbank’s duty to uphold cost-efficiency. Together with our staff representation committees, we have agreed to let staff work up to 60 % of their hours from home. That has allowed us to significantly downsize our construction plans for Frankfurt. In terms of office space, we can even do without new builds entirely. And we will be designing our future open-plan workspaces in a manner befitting a modern institution. We need to reduce the number of branches because of the trend decline in the use of cash. But the closures will be planned with a long lead time and carried out in a socially responsible way. And we will make sure that the cash supply throughout Germany remains fully intact at all times in future.
    So what do the Bundesbank’s staff have to say when they find out they will no longer have their own office in future under these plans?
    When the employees first set eyes on their new office environment, there’s bound to be plenty who say it is really great. Despite the success of working from home, it has also taught us how important it is to engage with others. This is tremendously helpful in fulfilling the Bundesbank’s tasks, and that often works better in open-plan workspaces than behind closed doors. It will of course still be possible to go into a quiet space for a while when concentrated individual work is required.
    You have also announced your intention to use AI to a greater extent, for example in inflation forecasts. Have there been any successes yet in this regard?
    Yes, we are already trialling quite a few things on this front, for example in the area of short-term inflation forecasting. For very complex problems, in particular – which we at the Bundesbank are often confronted with – AI delivers an initial assessment very quickly. We are also already using it to prepare for our meetings. However, for us it is important that AI remains just a tool. People continue to bear responsibility. We remain in the driving seat.
    The ECB is currently reviewing its monetary policy strategy again. What would you consider to be important here?
    One thing we need to do is to reflect on the past: what was good about the non-standard monetary policy measures, and what was bad? A critical look in the rear-view mirror is important in order to check our use of instruments going forward. Are we well equipped in this context? What topics will be relevant in future?
    Would you also want to talk about the inflation target of 2 %?
    A review of the inflation target is not on our agenda. We have fared very well with our inflation target of 2 %, also of late. I see no reason to change the target in the current situation.
    There was much debate at the time – especially in Germany – about the ECB’s multi-trillion euro asset purchases. Some central bank staff even resigned over the matter. What is your view of this now, after a few years of experience and the realisation of high operating losses at the Bundesbank?
    Obviously I would also rather announce profits, and indeed we did have profits over many years. Now, however, we will have to deal with a few years of losses – and we will manage. This is, incidentally, a topic that we communicated at a very early stage. After all, when monetary policymakers purchase assets on a large scale, it is clear that rising interest rates will impact the central bank balance sheet. And this is indeed what has happened. We had to raise interest rates sharply. As the largest central bank in the Eurosystem, the Bundesbank has to shoulder the greatest burden. In the current year, we could potentially see a magnitude similar to that of 2023. Since we have virtually exhausted our risk provisions, we will have to make use of loss carryforwards in the coming years. Nevertheless, an important aspect for me is that the Bundesbank will return to profitability in future. The Bundesbank’s balance sheet is sound as we have large revaluation reserves. For this reason, there is no need for anyone to worry – the Bundesbank does not need any additional capital.
    And what’s your takeaway for the asset purchases? Should this instrument be abolished?
    One should certainly exercise caution with regard to substantial asset purchases at the zero lower bound. When it comes to safeguarding price stability, it should remain an exceptional instrument for exceptional circumstances. I hope that such exceptional circumstances do not occur again in the foreseeable future. I at least don’t see any signs of this happening. The substantial monetary policy asset purchases were associated with numerous side effects in financial markets. In the strategy review I am calling for a clear delineation of asset purchases at the zero lower bound – we mustn’t overuse this instrument.
    © FAZ. All rights reserved.

    MIL OSI

    MIL OSI German News

  • MIL-OSI Video: UK Lords committee calls for major overhaul of public inquiries

    Source: United Kingdom UK House of Lords (video statements)

    Overhaul inquiries to make them more efficient and effective, says House of Lords committee in new report.

    Public inquiries are set up to consider incidents of major public concern, such as the Grenfell Tower fire, the Post Office Horizon scandal and the Covid-19 pandemic.

    The Statutory Inquiries Committee has been considering the way these inquiries work. In its new report it found inefficiencies leading to delays and unnecessary costs. It calls on the government to conduct a major overhaul, including supporting an independent body responsible for following up on recommendations and ensuring that those accepted by the government are implemented.

    Find out more and read the report in full https://ukparliament.shorthandstories.com/statutory-inquiries-lords-report/index.html?utm_source=youtube&utm_medium=social&utm_campaign=statutory-inquiries-report&utm_content=lords-youtube-channel

    #HouseOfLords #PublicInquiries

    Catch-up on House of Lords business:

    Watch live events: https://parliamentlive.tv/Lords
    Read the latest news: https://www.parliament.uk/lords/

    Stay up to date with the House of Lords on social media:

    • Twitter: https://twitter.com/UKHouseofLords
    • Instagram: https://www.instagram.com/UKHouseofLords/
    • Facebook: https://www.facebook.com/UKHouseofLords
    • Flickr: https://flickr.com/photos/ukhouseoflords/albums
    • LinkedIn: https://www.linkedin.com/company/the-house-of-lords
    • Threads: https://www.threads.net/@UKHouseOfLords

    #HouseOfLords #UKParliament

    https://www.youtube.com/watch?v=Qn3m8XQISfg

    MIL OSI Video

  • MIL-OSI: TowneBank and Village Bank and Trust Financial Corp. Announce Agreement to Merge

    Source: GlobeNewswire (MIL-OSI)

    SUFFOLK, Va. and MIDLOTHIAN, Va., Sept. 24, 2024 (GLOBE NEWSWIRE) — Hampton Roads based TowneBank (NASDAQ: TOWN) and Village Bank and Trust Financial Corp. (NASDAQCM: VBFC) (“Village”), the parent company of Village Bank, today announced the signing of a definitive agreement and plan of reorganization pursuant to which TowneBank will acquire Village and Village Bank. The proposed transaction will enhance TowneBank’s continued and growing presence in the Richmond MSA while providing opportunity for diverse revenue synergies with Towne Financial Services Group and strategic capital deployment.

    “Our TowneBank family is humbled and excited to partner with Village Bank and its team members,” said G. Robert Aston, Jr., Executive Chairman of TowneBank. “We believe our partnership can bring additional products and expanded services to the clients of Village Bank while meaningfully enhancing our Richmond presence, which is core to our franchise and future growth.”

    “We’re excited to partner with TowneBank,” said Jay Hendricks, President and Chief Executive Officer of Village. “This merger is not just a business decision but a strategic move to enhance the value we deliver to our customers. This partnership will give us the ability to continue to meet our customers’ banking needs with greater resources and products while providing increased opportunities for our employees.” 

    Based on financials reported as of June 30, 2024, the combined companies would have total assets of $17.8 billion, loans of $12.1 billion and deposits of $14.9 billion. Under the terms of the agreement, shareholders of Village will receive $80.25 per share in cash for each share of Village outstanding common stock. This corresponds to an aggregate transaction value of approximately $120.0 million, based on Village common stock currently outstanding.

    TowneBank expects the transaction to be approximately 6% accretive to earnings per share with fully phased-in cost savings on a GAAP basis.

    In consideration of the transaction, extensive due diligence was performed by the management teams of TowneBank and Village. The definitive agreement was approved by the boards of directors of TowneBank and Village. The transaction is expected to close in the first half of 2025 and is subject to customary conditions, including regulatory approval, as well as the approval of Village’s shareholders.

    Piper Sandler & Co. served as the financial advisor and Troutman Pepper Hamilton Sanders LLP served as legal counsel to TowneBank in the transaction. Janney Montgomery Scott served as the financial advisor and Williams Mullen served as legal counsel to Village in the transaction.

    About TowneBank:
    Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a focus of serving others and enriching lives. Dedicated to a culture of caring, Towne values all employees and members by embracing their diverse talents, perspectives, and experiences.

    Today, the bank operates over 50 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. TowneBank offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. TowneBank has grown its capabilities beyond banking to provide expertise through its controlled divisions and subsidiaries that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $17.1 billion as of June 30, 2024, TowneBank is one of the largest banks headquartered in Virginia.

    About Village Bank and Trust Financial Corp.
    Headquartered in Midlothian, Virginia, Village Bank and Trust Financial Corp. is the holding company for Village Bank. Village Bank was founded in 1999 and operates nine branch offices serving the greater Richmond Metropolitan area and Williamsburg, Virginia. Village Bank and Trust Financial Corp. had total assets of $747.7 million as of June 30, 2024. Additional information is available at the company’s website, http://www.villagebank.com.

    Media contact:
    G. Robert Aston, Jr., Executive Chairman, TowneBank, 757-638-6780
    William I. Foster III, Chief Executive Officer, TowneBank, 757-417-6482
    James E. Hendricks Jr., Chief Executive Officer, Village Bank and Trust Financial Corp., 804-419-1253

    Investor contact:
    William B. Littreal, Chief Financial Officer, TowneBank, 757-638-6813
    Deborah M. Golding, Vice President, Village Bank and Trust Financial Corp., 804-897-3900

    Cautionary Note Regarding Forward-Looking Statements
    This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the beliefs, expectations, or opinions of TowneBank and Village and their respective management teams regarding future events, many of which, by their nature, are inherently uncertain and beyond the control of TowneBank and Village. Forward-looking statements may be identified by the use of such words as: “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional terms, such as “will,” “would,” “should,” “could,” “may,” “likely,” “probably,” or “possibly.” These statements may address issues that involve significant risks, uncertainties, estimates, and assumptions made by management, including statements about (i) the benefits of the transaction, including future financial and operating results, cost savings, enhancement to revenue and accretion to reported earnings that may be realized from the transaction and (ii) TowneBank’s and Village’s plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts. In addition, these forward-looking statements are subject to various risks, uncertainties, estimates and assumptions with respect to future business strategies and decisions that are subject to change and difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Although TowneBank’s and Village’s respective management teams believe that estimates and assumptions on which forward-looking statements are based are reasonable, such estimates and assumptions are inherently uncertain. As a result, actual results may differ materially from the anticipated results discussed in these forward-looking statements because of possible uncertainties.

    The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the business of Village and Village Bank may not be successfully integrated into TowneBank, or such integration may take longer, be more difficult, time-consuming or costly to accomplish than expected; (2) the expected growth opportunities or cost savings from the transaction may not be fully realized or may take longer to realize than expected; (3) deposit attrition, operating costs, customer losses and business disruption following the transaction, including adverse effects on relationships with employees and customers, may be greater than expected; (4) the regulatory approvals required for the transaction may not be obtained on the proposed terms or on the anticipated schedule; (5) the shareholders of Village may fail to approve the transaction; (6) economic, legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which TowneBank and Village are engaged; (7) competitive pressures in the banking industry that may increase significantly; (8) changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; (9) an unforeseen outflow of cash or deposits or an inability to access the capital markets, which could jeopardize TowneBank’s or Village’s overall liquidity or capitalization; (10) changes in the creditworthiness of customers and the possible impairment of the collectability of loans; (11) insufficiency of TowneBank’s or Village’s allowance for credit losses due to market conditions, inflation, changing interest rates or other factors; (12) adverse developments in the financial industry generally, such as the recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; (13) general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; (14) weather-related or natural disasters, acts of war or terrorism, or public health events (such as the COVID-19 pandemic); (15) changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect TowneBank’s or Village’s businesses; (16) cybersecurity threats or attacks, whether directed at us or at vendors or other third parties with which we interact, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; (17) competitors may have greater financial resources and develop products that enable them to compete more successfully; (18) changes in business conditions; (19) changes in the securities market; and (20) changes in the local economies with regard to TowneBank’s and Village’s respective market areas.

    Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in TowneBank’s reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Federal Deposit Corporation (“FDIC”) and Village’s reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the U.S. Securities and Exchange Commission (“SEC”). TowneBank and Village undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

    Additional Information
    This press release does not constitute a solicitation of any vote or approval. Village will deliver a definitive proxy statement to its shareholders seeking approval of the transaction and related matters. In addition, each of TowneBank and Village may file other relevant documents concerning the proposed transaction with the FDIC and SEC.

    Investors, TowneBank shareholders and Village shareholders are strongly urged to read the definitive proxy statement regarding the proposed transaction when it becomes available and other relevant documents filed with the FDIC and SEC, as well as any amendments or supplements to those documents, because they will contain important information about TowneBank, Village and the proposed transaction. Free copies of the definitive proxy statement, as well as other filings containing information about Village, may be obtained after their filing at the SEC’s website (http://www.sec.gov). In addition, free copies of the definitive proxy statement, when available, also may be obtained by directing a request by telephone or mail to Village Bank and Trust Financial Corp., 13319 Midlothian Turnpike, Midlothian, Virginia 23113, Attention: Investor Relations (telephone: (804) 897-3900), or by accessing Village’s website at https://www.villagebank.com under “About Us Investor Relations.” The documents described above also may be obtained by directing a request by telephone or mail to TowneBank, 6001 Harbour View Boulevard, Suffolk, Virginia 23425, Attention: Investor Relations (telephone: (757) 638-6794), or by accessing TowneBank’s website at https://townebank.com under “Investor Relations.” The information on TowneBank’s and Village’s websites is not, and shall not be deemed to be, a part of this presentation or incorporated into other filings either company makes with the FDIC or SEC.

    TowneBank, Village, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Village in connection with the proposed transaction. Information about the directors and executive officers of Village and other persons who may be deemed participants in the solicitation, including their interests in the transaction, will be included in the proxy statement when it becomes available. Information about TowneBank’s directors and executive officers can be found in TowneBank’s definitive proxy statement in connection with its 2024 annual meeting of shareholders, filed with the FDIC on April 11, 2024. Additional information about Village’s directors and executive officers can be found in Village’s definitive proxy statement in connection with its 2024 annual meeting of shareholders filed with the SEC on April 9, 2024. Free copies of each document may be obtained as described in the preceding paragraph.

    The MIL Network

  • MIL-OSI Global: Sri Lanka’s new leftist president marks departure from political family rule

    Source: The Conversation – UK – By Amalendu Misra, Professor of International Politics, Lancaster University

    Sri Lanka has sworn in 55-year-old leftist politician Anura Kumara Dissanayake as its new president. There was no clear winner after the first round of votes from Saturday’s election had been counted. But Dissanayake, who is commonly known by his initials AKD, emerged victorious after a count of the second-choice votes.

    His election is something of a watershed. It was the first time since Sri Lanka gained independence in 1948 that the presidential race was decided by a second round of counting after either of the top two candidates failed to win the mandatory 50% of the vote. And it was also the only time that voters have elected a candidate who does not belong to the country’s traditional ruling elite.

    Sri Lanka has long been held in the tight grip of a handful of powerful political families. The Rajapaksa dynasty, for example, had dominated Sri Lankan politics for well over two decades before mass protests over a severe economic crisis unseated the country’s leader, Gotabaya Rajapaksa, in 2022.

    AKD’s campaign rhetoric centred largely around corruption as the key culprit in the economic woes facing the country. Previous governments have been linked not only to corruption, but also to human rights abuses and the military’s encroachment on the civilian space. Persuaded by his logic of openness and transformation, voters saw AKD as an opportunity to change Sri Lanka’s stale political system.

    Following his election, AKD declared in characteristic Marxian mode: “This victory belongs to all of us.” Assuaging the demands of the masses for change will be a priority.

    Voters have chosen a new president for the first time since mass protests unseated Sri Lanka’s leader in 2022.
    Color Collector / Shutterstock

    AKD comes from a strong leftwing ideological background. He leads a political outfit called the Janatha Vimukti Peramuna (JVP), which is by no means a heavyweight party. It has only three members in the country’s 225-member parliament, and does not come with an attractive pedigree.

    The JVP is seen in Sri Lanka as a fringe reactionary party due to its involvement in violent insurrections and targeted assassinations that left thousands dead in the 1980s. Given Sri Lanka’s fractious ethno-nationalist politics, how the JVP and its new national leader carry the masses forward on a national regeneration project would be anybody’s guess.

    But AKD has shown himself to be aware of the underlying tensions in the country and, since becoming the JVP’s leader in 2008, has apologised for the party’s past violence. In his swearing-in speech, AKD declared: “We need to establish a new clean political culture … We will do the utmost to win back the people’s respect and trust in the political system.”

    The road ahead

    There are several critical challenges that AKD needs to face head on – the most important of which concerns the country’s failing economy. After all, it was acute economic hardship that drove the citizenry to vote for political change.

    In the past, a substantial portion of whatever Sri Lanka managed to procure through its two main sources of income, tourism and remittances sent home by citizens living abroad, went towards settling its external debts. However, these earnings were hit badly by the pandemic and the country’s economic woes spiralled out of control.

    The rate of inflation soared and dwindling reserves of foreign currency resulted in acute shortages of essential goods and services. Then, in May 2022, Sri Lanka defaulted on its foreign debt for the first time in its history.

    This scenario quickly led to a national emergency. Faced with the most devastating economic crisis since independence, a countrywide uprising (colloquially known as the aragalaya) ousted Gotabaya Rajapaksa from office.

    The removal of Rajapaksa secured an uneasy peace, and things have since tentatively improved on the economic front. Ranil Wickremesinghe took over as the interim president in 2022 and his administration managed to secure a loan worth US$3 billion (£2.2 billion) from the International Monetary Fund.

    The economy now appears to be on a slow path of recovery. It is expected to grow in 2024 for the first time in three years, supported by a narrower trade deficit and growing remittances.

    Sri Lanka’s interim president, Ranil Wickremesinghe, has congratulated Dissanayake on winning the election.
    Ruwan Walpola / Shutterstock

    AKD is aware of the enormity of the burden he carries. As he admitted while accepting the role of president: “I have said before that I am not a magician – I am an ordinary citizen. There are things I know and don’t know. My aim is to gather those with the knowledge and skills to help lift this country.”

    His pro-working class and anti-political elite campaigning without doubt made AKD popular among youth, and helped him secure victory. But his ideology may well be at odds with the foreign lenders who have kept the economy afloat for past two decades.

    Sri Lanka’s new president faces a precarious balancing act to satisfy both a population high on hopes of populist subsidies and the demands of external lenders to tighten the country’s belts.

    Amalendu Misra is a recipient of British Academy and Nuffield Foundation Fellowships.

    ref. Sri Lanka’s new leftist president marks departure from political family rule – https://theconversation.com/sri-lankas-new-leftist-president-marks-departure-from-political-family-rule-239631

    MIL OSI – Global Reports

  • MIL-OSI Europe: Press Conference “Towards World Youth Day Seoul 2027”

    Source: The Holy See

    Intervention of Cardinal Kevin J. Farrell
    Intervention of Archbishop Peter Soon-Taick Chung, O.C.D
    Intervention of Bishop Paul Kyung Sang Lee
    Intervention of Miss Gabriela Su-Ji Kim

    At 11.30 this morning, a press conference, “Towards World Youth Day Seoul 2027” was livestreamed from the Holy See Press Office.
    The speakers were: His Eminence Cardinal Kevin J. Farrell, prefect of the Dicastery for the Laity, Family and Life, Archbishop Peter Soon-Taick Chung, O.C.D., of Seoul, president of the Local Organizing Committee (LOC) for Seoul 2027, Bishop Paul Kyung Sang Lee, general coordinator of World Youth Day Seoul 2027, and Miss Gabriela Su-Ji Kim, a young Korean.
    The following were also present in the hall and available to the press: Dr. Gleison De Paula Souza, secretary of the Dicastery for the Laity, Family and Life, the Reverend Fr. Franco Galdino, coordinator of the Youth Office of the Dicastery for the Laity, Family and Life, and the Reverend Fr. Peter Yang, executive secretary of the Local Organizing Committee of Seoul 2027.
    The following are their interventions:

    Intervention of Cardinal Kevin J. Farrell
    Good morning everyone and thank you for being here today!
    The Holy Father has chosen the city of Seoul, Korea, as the venue for the next World Youth Day in 2027. For the latest WYD which was held in Lisbon, Portugal, young people went on pilgrimage to the western border of Europe, and now they are being asked to set out for the Far East as ‘a marvellous sign of the universality of the Church and our dream of unity’, in the words of the Holy Father.[1]

    The Church in Asia and Korea
    After World Youth Day in Manila in 1995, it is coming to Asia again, the ‘cradle of the world’s major religions’, with its ‘intricate mosaic of its many cultures, languages, beliefs and traditions, which comprise such a substantial part of the history and heritage of the human family’ as St John Paul II said in his Apostolic Exhortation Ecclesia in Asia.[2]
    Every World Youth Day is a golden opportunity for the local Church hosting it to celebrate its distinct culture and faith together with other Churches. In Korea, Catholics make up 11% of the population. Although a minority, the Church is full of vitality and initiatives of all kinds. It is enriched by the heroic witness of so many martyrs, and it continues to radiate, very strongly, a light of faith and hope that reaches all believers in every part of the world.
    So what are the opportunities presented by World Youth Day in Seoul? First of all, like every WYD, it is an opportunity for all young people to rediscover the beauty of Christian life, and to bring to the ordinary circumstances of daily life a renewed desire to be disciples of Jesus and faithful to his Gospel. The rediscovery of Christian life, then, can be fertile ground for the blossoming of many vocations, to marriage or to the priesthood and consecrated life. All of this will have great benefits for the Church in Korea, for the Asian continent, and for the Church globally.
    Secondly, Asia is very receptive to the coexistence of cultures, to dialogue and to complementarity. This will be of great help to young pilgrims on their path of learning to become messengers of peace in a world so torn by conflict and confrontation.
    Thirdly, the dynamic Asian context will help young people to think about the dialogue between faith and modernity. They live in a world where they are confronted by challenges of global scope. These include a loss of meaning and purpose felt in some societies, the digital revolution, the climate crisis, economic inequalities, etc. The big questions that these challenges raise will stimulate young people to make their personal contribution so that contemporary culture may be permeated and transformed by the Gospel, with its power, light and freshness.

    The theme of the journey from Lisbon to Seoul: 2023-2027
    As you know, every year young people are invited to celebrate World Youth Day in their local Churches on the Solemnity of Christ the King. Last week, the Holy Father’s Message for the 39th WYD to be celebrated on 24 November was published, ‘Those who hope in the Lord will run and not be weary’ (cf. Is 40:31). This theme marks the stages of an inner pilgrimage that began with the invitation made in Lisbon to arise and set out (cf. WYD Lisbon 2023).
    For the Jubilee Year of 2025, young people are called to be pilgrims of hope in Rome and, over the next two years, they will be guided along a path that will culminate in World Youth Day in Seoul 2027. The two themes for this path are included in the documentation you have received that has just been published. The theme chosen by the Holy Father for the 40th WYD is: ‘You also are my witnesses, because you have been with me’ (John 15:27); the theme chosen by the Holy Father for the 41st WYD is: ‘Take courage! I have overcome the world’ (John 16:33).
    That last theme — I will repeat it, ‘Take courage! I have overcome the world!’ (John 16:33) — will therefore be the theme of the 41stWYD in Seoul in 2027.
    Both themes are taken from the Gospel of John. They belong to what is known as Jesus’ ‘farewell discourse’ (cf. John 13-17), when he prepares his disciples to experience the mystery of his passion and death, in the certainty of his resurrection. The two themes focus, therefore, on witnessing and on the courage that stems from Jesus’ paschal victory.

    The traditional handing over of the WYD Cross and Icon: 24 November 2024
    As is customary after every international WYD, the young people of Lisbon will hand over the symbols of WYD to the young people of Seoul: the Youth Cross and the icon of Mary Salus populi romani. This is an evocative ‘passing of the baton’ that will mark the beginning of the Korean Church’s spiritual preparation for World Youth Day. I am announcing that this handover will take place on 24 November, the Solemnity of Christ King of the Universe, during Holy Mass in St Peter’s Basilica.
    The Youth Cross, also known as the WYD Cross, is always a pilgrim cross. Young Koreans will carry it everywhere — in the cities, in the countryside, among the suffering, the imprisoned and the poor — to bring closeness and consolation to all. However, it is also a jubilee cross because it was entrusted by St John Paul II to young people at the end of the Holy Year of Redemption in 1984. This aspect takes on special significance this year because of the approaching Jubilee. St John Paul II entrusted it to young people with these words: ‘Carry it throughout the world as a symbol of Christ’s love for humanity, and announce to everyone that only in the death and resurrection of Christ can we find salvation and redemption.’[3]
    The Cross will be taken by young people to Asia, accompanied by the icon of Mary Salus populi romani, a sign of Mary’s maternal affection and of the Church’s own maternal concern for all humanity.
    Our hope is that many young people, even those who have never participated in a WYD, will walk a path over the next three years — above all an interior one –, and come to meet each other in Asia together with the Successor of Peter, and may they all bear courageous witness to Christ together.
    _________________________
    [1]  Angelus, Apostolic journey of Pope Francis to Portugal on the occasion of the 37th World Youth Day, Parque Tejo
    (Lisbon), Sunday, 6 August 2023.
    [2]  John Paul II, Post-synodal exhortation, Ecclesia in Asia, no. 6.
    [3]  John Paul II, To young people when entrusting them with the Cross of the Holy Year of Redemption, Sunday 22 April 1984.

    Intervention of Archbishop Peter Soon-Taick Chung, O.C.D
    I extend my heartfelt gratitude to the Holy Father for proclaiming the theme scripture for World Youth Day Seoul 2027.
    In the coming year, young people from around the globe will gather in Rome to celebrate a jubilee year as pilgrims of hope who “hope in the Lord and will run without growing weary.”
    This jubilee seeks to renew the young people’s hearts in Christ as they embrace the Pope’s invitation, carrying the newly declared motto with them on their pilgrimage to Seoul, resting on the eastern edge of Asia.
    The Korean Catholic Church stands as a testament to the voluntary and dynamic faith of its first believers, who embraced the seeds of the Gospel without the assistance of missionaries, guided by the Holy Spirit. In 2027, numerous young people from all over the world will gather to meet the young believers of Korea, who have inherited the steadfast faith of their ancestors. Together, they will rekindle a passionate zeal for faith.
    During times of persecution, the early Korean faithful sent earnest letters to the Pope, fervently requesting missionaries to preserve their gifted faith and to unite with the universal Church. This appeal moved Pope Gregory XVI to establish the Vicariate Apostolic of Chosun, thereby dispatching missionaries and enabling the faith to flourish despite persecution. Just as he did with the early Korean Church, the Pope has once again embraced our Church’s request, inviting young people from all over the world to join the WYD pilgrimage by attending the WYD Seoul 2027.
    The pilgrimage of WYD Seoul 2027 will be more than just a large gathering. It will be a meaningful journey where young people, united with Jesus Christ, reflect on and discuss the modern challenges and injustices they face. It will be a grand celebration, allowing everyone to experience the vibrant and energetic culture created by Korean youth. It will also be an opportunity to immerse in and share the dynamic and passionate culture that Korea’s youth have created. Furthermore, through this celebration, Korean young people will gain the invaluable chance to exchange and engage with the concerns and passions of their peers.
    Through this collective journey, WYD pilgrims will become “courageous missionaries,” inspired to live out the joy of the Gospel they have found. The Church, united through this period, will listen carefully to the young voices and accompany the youth throughout the pilgrimage. I pledge my utmost commitment to ensuring that the youth from around the world may experience the profound joy of being the integral members of the Church. To young people around the world, we warmly invite you to join us for World Youth Day Seoul 2027!
    Thank you.

    Intervention of Bishop Paul Kyung Sang Lee
    First and foremost, I extend my heartfelt gratitude to our Holy Father for providing the theme scripture that resonates deeply with the circumstances faced by the Catholic Church of Korea and the challenges confronting today’s youth.
    Korea stands in a unique context distinct from previous World Youth Day hosts, characterized by the harmonious coexistence of diverse religious traditions. Within this environment, the Catholic Church of Korea has steadfastly embodied the Christian virtues of “forgiveness” and “sharing,” fostering these values in society while coexisting peacefully with other faiths. Amid the persistent reality as a “divided nation,” the Church has diligently worked to resolve the conflicts inherent in this division over the past seven decades, seeking peace and unity for the Korean people. The emergence of K-Catholic and K-faith among our youth is a testament to these sustained efforts. Our young people and young faithful remain open to interreligious dialogue and aspire towards harmonious and peaceful coexistence.
    Preparations for the World Youth Day, aimed at sharing our spiritual heritage with the youth worldwide, have already begun in earnest. Following the selection of the host city last year, the Local Organizing Committee was inaugurated in December, alongside the formation of a preliminary research team of young individuals dedicated to spreading the spirituality of World Youth Day. Starting from February 2024, we launched a campaign dedicated to offering a billion Rosaries. This summer, we held a talk concert (at the front yard of Myeongdong Cathedral) fostering genuine conversations among young people and celebrated the Kick-off Ceremony of the World Youth Day Seoul 2027.
    From this autumn, we will host Youth Masses and Youth Encounters in 19 deaneries across our diocese. In May of the coming year, we will host a diocesan-wide youth festival. Obviously open to all young people so practically it will be nationwide festival. More importantly, Seoul LOC is always collaborating with Doc of Bishops Conferences of Korea.
    Through the Mystery of Life Awards, we encourage young scholars devoted to Christian spirituality to participate and share their scholarly contributions with the universal Church and the global community. As we approach the Jubilee Year, we expect to bring approximately 1,000 young pilgrims to participate in the Jubilee of Youth. It is our fervent hope that through this pilgrimage, they will come to discern the empowering force of hope bestowed by faith and experience a profound personal encounter with Christ within the universal Church.
    The logo for WYD Seoul 2027, capturing the vision and aspirations of this momentous event, centered around the theme, “Take courage, I have overcome the world” (John 16:33), chosen by the Holy Father. Central to the logo is a cross; the red and blue colors symbolize Christ’s triumphant victory over the world. The left element, reaching upward, signifies God in Heaven, while the right element, pointing downward, symbolizes Earth, illustrating the fulfillment of God’s will on Earth through their unity.
    Inspired by traditional Korean art, the overall design employs brushstroke techniques unique to Korean painting and subtly incorporates the Hangul characters representing “Seoul.” At the same time, the logo captures the vibrant energy of youth and skillfully incorporates the letters WYD into its composition.
    Additionally, the red on one side of the cross symbolizes the blood of the martyrs, harmonizing with the empowering theme, “Take courage.” The blue represents the vitality of youth and symbolizes God’s calling. Together, these colors echo the Taegeuk pattern on the Korean flag.
    Finally, the yellow color that shines behind the cross represents the Christ, who is the “Light of the World.” Christ has overcome the world. He shines upon our Church like the sun rising from the East. And He guides the Church towards unity.
    Through this diverse symbolism, the logo for the WYD Seoul 2027 integrates the multiple meanings of martyrdom, youth, Seoul, WYD, and the cross, celebrating the glory of victory achieved through the Holy Spirit. It heralds the call to the young people of Korea and the world to proclaim the faith of the martyrs to the world of our time.
    Beyond the symbolism of the logo, we are dedicated to ensuring that the fruits of World Youth Day lead to genuine growth and renewal within the Church. We will undertake this journey, moving forward step by step with unwavering trust in the Lord and with courageous resolve.
    Thank you.

    Intervention of Miss Gabriela Su-Ji Kim
    Youth Leadership and opportunities for evangelization
    Hello, my name is Kim Suji Gabriella and I am here to share my passion for youth leadership and the role I hope World Youth Day will have in rekindling our faith. First, I would like to express my gratitude to the Holy Father, who invited everyone to Korea for the next World Youth Day in Seoul, as well as to all those who are working to prepare for this event. My journey in serving youth began as a catechist for middle and high school students in my parish. After experiencing WYD Krakow in 2016, I had the honor of attending the Synod Journeying with Young People in Rome in 2017 as a Korean delegate. This precious experience of meeting and interacting with the Pope and fellow young people has fueled my commitment to serve in the Church.
    The COVID-19 pandemic that swept the world prevented many from attending church. As the dark days stretched on, many young people drifted away from the faith, and community dissolved. Now that we can gather once more, we face the challenge of a scattered flock, struggling to pass on the experience of faith. However, I am confident that WYD Seoul 2027 will provide a crucial opportunity to rekindle the flames of faith, not only in Korea but also around the world.
    We have been invited to embark on a journey to live the spirit of the Synod. With a joyful “Yes,” we will join with young people from around the world. Through WYD Seoul 2027, we will forge a path of unity, hope, courage, and passion, welcoming people from all walks of life, not just Catholic believers, to walk together in harmony. I trust that our Lord Jesus Christ will walk with us on this pilgrimage to the “Far East” and beyond and I am hopeful that all of you in this room will accompany us as well. Thank you.

    MIL OSI Europe News

  • MIL-OSI: Northeast Bank Announces Significant Loan Purchase Volume

    Source: GlobeNewswire (MIL-OSI)

    PORTLAND, Maine, Sept. 24, 2024 (GLOBE NEWSWIRE) —  Northeast Bank (the “Bank”) (NASDAQ: NBN) announced today that since June 30, 2024, the Bank has purchased primarily commercial real estate loans in the amount of unpaid principal balance of $805 million. Because the purchases closed primarily late in the quarter, there will be minimal impact on earnings for the first fiscal quarter of 2025. The Bank has funded and intends to fund the purchase of these loans primarily relying on brokered deposits and Federal Home Loan Bank advances.

    Discussing the purchases, Rick Wayne, Chief Executive Officer said, “We are very pleased with this quarter’s purchased loan activity, which represents the second largest quarterly loan purchase volume in the Bank’s history. We have developed a reputation in the loan purchase market as a strong and reliable counterparty. Our experienced, professional, and dedicated team allows us to take advantage of the opportunities that have been and are available to the Bank.”

    About Northeast Bank
    Northeast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We offer personal and business banking services to the Maine market via seven branches. Our National Lending Division purchases and originates commercial loans on a nationwide basis. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found at www.northeastbank.com.

    Forward-Looking Statements

    Statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Federal Deposit Insurance Corporation (the “FDIC”), in our annual reports to our shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters. Although the Bank believes that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Bank’s control. The Bank’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in general business and economic conditions on a national basis and in the local markets in which the Bank operates, including changes which adversely affect borrowers’ ability to service and repay loans; changes in customer behavior due to political, business and economic conditions, including inflation and concerns about liquidity; turbulence in the capital and debt markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balances and mix of loans and deposits; changes in interest rates and real estate values; changes in loan collectability and increases in defaults and charge-off rates; decreases in the value of securities and other assets, adequacy of credit loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; changing government regulation; competitive pressures from other financial institutions; changes in legislation or regulation and accounting principles, policies and guidelines; cybersecurity incidents, fraud, natural disasters, and future pandemics; the risk that the Bank may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Bank’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Bank’s Annual Report on Form 10-K and updated by our Quarterly Reports on Form 10-Q and other filings submitted to the FDIC. These statements speak only as of the date of this release and the Bank does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.

    For More Information:

    Richard Cohen, Chief Financial Officer
    Northeast Bank, 27 Pearl Street, Portland, ME 04101
    207.786.3245 ext. 3249
    www.northeastbank.com

    The MIL Network

  • MIL-OSI USA News: FACT SHEET: Biden-⁠ Harris Administration Accomplishments at the United  Nations

    Source: The White House

    Since his first day in office, President Biden has been committed to restoring American leadership at the United Nations. Our world today faces many challenges that no one country can or should confront alone. But when the United States shows up and leads at the UN, we can rally global action to tackle problems that affect us all. That is why the Biden-Harris Administration has worked tirelessly at the UN to advance American values, safeguard human rights for all, and address conflict and instability. Alongside our allies and partners from around the world, we have worked with UN agencies to tackle the climate crisis, shape our digital future, and fight poverty and disease.

    At a time of increasing geopolitical challenges and growing global needs, strong and effective American leadership at the UN is more critical than ever. The Biden-Harris Administration has worked to strengthen American leverage at the United Nations, uphold the UN Charter, and keep human rights at the core of the organization. Without robust American engagement, our competitor nations would gain leverage to advance their interests and values at our expense.

    The Biden-Harris Administration has also been committed to reforming and adapting the UN to the needs of the 21st century. For example, President Biden announced a new U.S. openness to expanding the membership of the UN Security Council, including permanent seats for Africa and Latin America. The UN is not a perfect organization, but given the scale of today’s challenges, the world needs global institutions that are more inclusive and effective.

    Over nearly four years, the Biden-Harris Administration’s leadership at the UN has delivered results for the American people. At the UN, we have:

    Responded to Threats to International Peace and Security

    • After Russia’s 2022 full-scale invasion of Ukraine, we worked at the UN to build support for Ukraine’s sovereignty and hold Russia to account. We rallied 141 countries in the UN General Assembly to condemn Russia’s violations of international law. We used UN Security Council debates to shine a spotlight on Russia’s illegal war and atrocities. We pressed the UN General Assembly to kick Russia off the UN Human Rights Council. We isolated Russia by denying it senior UN appointments and preventing its election to UN bodies.
    • Responding to the security situation in Haiti, we partnered with Ecuador to obtain UN Security Council authorization of a new Kenyan-led Multinational Security Support mission.
    • Working with African partners, we secured a UN Security Council decision to create in December 2023 a new mechanism to largely fund future African Union-led Peace Support Operations from the UN-assessed budget.
    • Following the horrific October 7 Hamas terrorist attacks on Israel, we defended at the UN Security Council Israel’s right to defend itself and demanded the release of hostages. Also in the Security Council, we called for increased humanitarian assistance to Gaza and established a new UN mechanism to improve aid coordination. In July 2024, we secured Security Council endorsement of President Biden’s plan for a ceasefire and hostage release deal.
    • As the Sudan conflict worsened, we mobilized action in the UN Security Council, including the adoption of a resolution in June 2024 demanding an end to the siege of El Fasher.
    • Responding to concerns that Russia intended to deploy nuclear weapons in space, we and Japan proposed a UN Security Council resolution calling on countries not to develop such weapons.
    • In 2022, we partnered with Ireland at the UN Security Council to reform, expand and strengthen humanitarian exemptions for UN sanctions.
    • Working with the United Kingdom, we secured adoption of the first-ever UN Security Council resolution condemning the February 2021 military coup in Burma.

    Protected and Upheld Universal Human Rights

    • We rejoined the UN Human Rights Council in 2021, enabling the United States to once again lead multilateral efforts to hold accountable human rights violators worldwide.
    • We issued a standing invitation to all UN thematic human rights monitors to visit the United States and assess our human rights record at home. In contrast to authoritarian governments, this invitation showed that a confident democracy is willing to have its record scrutinized and receive advice on strengthening rights protections for its citizens.
    • We pressed for the release of a landmark report from the Office of the UN High Commissioner for Human Rights on human rights violations against Uighurs in China.
    • We worked in the UN Human Rights Council to establish a new Special Rapporteur on Human Rights in Russia to examine Moscow’s crackdown on dissent at home and a Commission of Inquiry on violations and abuses in Russia’s war against Ukraine.
    • We restored American leadership at the UN in defending the human rights of LGBTQI+ individuals around the world. This included participating in high-level meetings of the Core Group of countries advocating for LGBTQI+ rights, including a September 23 meeting where the First Lady represented the United States. We also secured the renewal of the mandate of the UN’s Independent Expert on Sexual Orientation and Gender Identity and urged the UN to release its first-ever organization-wide strategy on LGBTQI+ rights, co-sponsoring the first-ever Human Rights Council resolution on the rights of intersex persons, and convening the second-ever informal UN Security Council meeting on the rights of LGBTQI+ individuals.
    • We spotlighted egregious human rights violations by North Korea, including by organizing the first briefing of the UN Security Council on North Korea human rights since 2017.
    • We helped establish mechanisms through the UN Human Rights Council to investigate human rights violations and abuses in Ethiopia, Sudan, and Nicaragua.
    • We worked at the UN to advance the global fight against antisemitism, including to ensure 36 countries and four multilateral organizations joined the U.S.-led Global Guidelines for Countering Antisemitism. In 2023, we convened a UN meeting on antisemitism with Second Gentleman Doug Emhoff and, in 2022, a roundtable at UNESCO.  
    • We advanced the UN’s work to promote racial equality, including by championing the inaugural session of the Permanent Forum on People of African Descent. We co-sponsored a UN General Assembly resolution designating July 25 as International Day of Women and Girls of African Descent.
    • We engaged seriously with the human rights treaty body process, including through periodic reports about our domestic human rights record to the Human Rights Committee and the Committee on the Elimination of Racial Discrimination.
    • Reaffirming support for the UN Declaration of the Rights of Indigenous Peoples, we pressed for enhanced participation of Indigenous Peoples throughout the UN system. In 2022, Ambassador (ret.) Keith Harper, the first-ever Senate confirmed U.S. ambassador from a federally-recognized tribe, was elected to the UN’s Permanent Forum on Indigenous issues.  
    • We supported efforts in the UN General Assembly to advance discussion of a proposed convention on the prevention and punishment of crimes against humanity.  
    • After assuming the presidency of the UN Convention against Corruption (UNCAC), we hosted the UNCAC conference in Atlanta, Georgia in 2023, with approximately 2,600 delegates, including an unprecedented 1,000 from civil society.

    Advanced Gender Equity and Equality

    • We restored American leadership in pressing at the UN for the rights of women and girls, advancing their inclusion in societies, and supporting strong language in UN resolutions and at the Commission on the Status of Women on sexual and reproductive rights.
    • The January 2021 Presidential Memorandum on Protecting Women’s Health at Home and Abroad restored life-saving funding to the UN Population Fund (UNFPA).
    • We announced that the United States will contribute for the first time to the UNICEF–UNFPA Global Program to End Child Marriage.
    • Following the Iranian regime’s killing of Mahsa Amini and crackdown on protestors, we helped establish a new UN Fact-Finding Mission to investigate human rights abuses. We spearheaded efforts to remove Iran from the Commission on the Status of Women.
    • In 2024, we reaffirmed the U.S. commitment to the 1994 International Conference on Population and Development Program of Action.
    • We launched the Global Partnership for Action on Gender-Based Online Harassment and Abuse, which included actions at the UN to address online safety for women and girls.

    Shaped Our Digital Future, Promoted Labor Rights, and Tackled Synthetic Drugs

    • We sponsored the first-ever UN General Assembly resolution outlining principles for the responsible use of artificial intelligence (AI). This landmark resolution helped define a global consensus on safe, secure and trustworthy AI systems for advancing sustainable development.
    • We hosted events at the UN on misuses of new technologies, such as countries using commercial spyware to surveil dissidents and journalists.
    • We worked at the International Labor Organization (ILO) to empower workers worldwide and joined the ILO’s Equal Pay International Coalition to share best practices to close the gender wage gap.
    • At the first Summit for Democracy in 2021, we announced the Multilateral Partnership for Organizing, Worker Empowerment and Rights (M-POWER), an initiative working with governments, trade unions, labor support, civil society organizations, and philanthropy to uphold and promote workers’ trade union rights around the world.
    • In coordination with the UN Office of Drugs and Crime (UNODC), we launched and hosted at the UN high-level meetings of the Global Coalition to Address Synthetic Drug Threats and secured adoption of a UN General Assembly resolution to enhance international action to fight such drugs.

    Strengthened Global Health Cooperation, Advanced Sustainable Development, and Bolstered Climate Action

    • We redoubled efforts to support implementation of the UN’s Sustainable Development Goals, launching a U.S. Strategy on Global Development to accelerate progress and mobilizing $150 billion of U.S. funding and billions more from the private sector, philanthropic, and other donor resources.
    • In 2021, we reversed the previous administration’s decision to withdraw from the World Health Organization (WHO), enabling the United States to shape the WHO’s work on global health and reform. With the WHO, we led the global response to the COVID-19 pandemic by launching the COVID-19 Global Action Plan and donating nearly 700 million vaccine doses to 117 countries.
    • We hosted the Global Fund to Fight AIDS, Tuberculosis and Malaria’s 7th Replenishment in 2022, resulting in more than 75 governments, foundations, and corporations delivering pledges totaling a record $15.67 billion.
    • We worked at the UN to advance universal health coverage, continue the fight against tuberculosis and mpox, and combat global antimicrobial resistance (AMR), including to push countries for commitments on AMR that are bold, aspirational, and implementable.
    • We focused attention at the UN on addressing global food insecurity, repeatedly using the U.S. presidency of the UN Security Council to focus on the nexus between food security and conflict. We hosted at the UN ministerial-level meetings to generate new commitments to expand agricultural capacity and respond to famine with over 100 partner countries.
    • U.S. Representative to the UN Ambassador Thomas-Greenfield and Secretary of the Interior Deb Haaland co-led the U.S. delegation to the 2023 UN Water Conference, where they announced more than $49 billion towards water security both at home and abroad.
    • In 2024, Secretary Haaland co-led the U.S. delegation to the Fourth International Conference on Small Island Developing States (SIDS4), where we announced new efforts to enhance our partnerships with SIDS.
    • After rejoining the Paris Agreement, we galvanized efforts at the UN to combat climate change, raising global climate ambition through countries’ enhanced national contributions, accelerated action to reduce pollution and greenhouse gas emissions, forward-leaning decisions at annual UN Climate Change Conferences, and major initiatives for ocean-climate action catalyzed by the annual Our Ocean Conference.
    • Former Special Presidential Envoy for Climate John Kerry and Senior Advisor for International Climate Policy John Podesta have helped lead an all-out effort, including critical agreements at the UN Climate Change Conference COPs 26 and 28 to partner with countries to accelerate climate efforts worldwide and reduce global emissions sufficiently to limit warming to 1.5° Celsius. 
    • We advanced efforts within the International Civil Aviation Organization, the International Maritime Organization, and other multilateral organizations to reduce greenhouse gas pollution from the aviation, shipping, and other sectors.

    Strengthened American Presence at the United Nations

    • After a five-year absence, we rejoined the UN Education, Scientific, and Cultural Organization (UNESCO). This allowed us to partner with UNESCO to combat the scourge of antisemitism, support global Holocaust education, promote journalist safety, safeguard Ukrainian cultural heritage, bolster ethical uses of AI, and advance science education for girls in Africa.
    • We led robust campaigns resulting in the election of U.S. citizens to key UN positions, including Doreen Bogdan-Martin as Secretary-General of the International Telecommunication Union (ITU), Amy Pope as Director-General of the International Organization for Migration (IOM), and Sarah Cleveland as Judge on the International Court of Justice (ICJ).
    • We supported the appointments of highly qualified Americans to lead UN agencies, such as Ambassador Cathy Russell as Executive Director of UNICEF, Ambassador Cindy McCain as Executive Director of the World Food Program, and Ian Saunders as Secretary-General of the World Customs Organization.
    • Co-chairing the UN Accessibility Steering Committee, we worked to make UN headquarters in New York more accessible for all delegates, including construction of a 24/7 entrance for wheelchair users and the installation of a lift so everyone can address the General Assembly from behind the official rostrum.

    ###

    MIL OSI USA News

  • MIL-OSI USA: Bowman, Recent Views on Monetary Policy and the Economic Outlook

    Source: US State of New York Federal Reserve

    Good morning. I would like to thank the Kentucky Bankers Association for the invitation to join you today for your annual convention.1 I appreciate the opportunity to share my views on the U.S. economy and monetary policy before we engage on community banking issues and other matters affecting the banking industry.
    In light of last week’s Federal Open Market Committee (FOMC) meeting, I will begin my remarks by providing some perspective on my vote and will then share my current views on the economy and monetary policy.
    Update on the Most Recent FOMC MeetingIn order to address high inflation, for more than two years, the FOMC increased and held the federal funds rate at a restrictive level. At our September meeting, the FOMC voted to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent and to continue reducing the Federal Reserve’s securities holdings.
    As the post-meeting statement noted, I dissented from the FOMC’s decision, preferring instead to lower the target range for the federal funds rate by 1/4 percentage point to 5 to 5‑1/4 percent. Last Friday, once our FOMC participant communications blackout period concluded, the Board of Governors released my statement explaining the decision to depart from the majority of the voting members. I agreed with the Committee’s assessment that, given the progress we have seen since the middle of 2023 on both lowering inflation and cooling the labor market, it was appropriate to reflect this progress by recalibrating the level of the federal funds rate and begin the process of moving toward a more neutral stance of policy. As my statement notes, I preferred a smaller initial cut in the policy rate while the U.S. economy remains strong and inflation remains a concern, despite recent progress.
    Economic Conditions and OutlookIn recent months, we have seen some further progress on slowing the pace of inflation, with monthly readings lower than the elevated pace seen in the first three months of the year. The 12-month measure of core personal consumption expenditures (PCE) inflation, which provides a broader perspective than the more volatile higher-frequency readings, has moved down since April, although it came in at 2.6 percent in July, again remaining well above our 2 percent goal. In addition, the latest consumer and producer price index reports suggest that 12‑month core PCE inflation in August was likely a touch above the July reading. The persistently high core inflation largely reflects pressures on housing prices, perhaps due in part to low inventories of affordable housing. The progress in lowering inflation since April is a welcome development, but core inflation is still uncomfortably above the Committee’s 2 percent goal.
    Prices remain much higher than before the pandemic, which continues to weigh on consumer sentiment. Higher prices have an outsized effect on lower- and moderate-income households, as these households devote a significantly larger share of income to food, energy, and housing. Prices for these spending categories have far outpaced overall inflation over the past few years.
    Economic growth moderated earlier this year after coming in stronger last year. Private domestic final purchases (PDFP) growth has been solid and slowed much less than gross domestic product (GDP), as the slowdown in GDP growth was partly driven by volatile categories including net exports, suggesting that underlying economic growth was stronger than GDP indicated. PDFP has continued to increase at a solid pace so far in the third quarter, despite some further weakening in housing activity, as retail sales have shown further robust gains in July and August.
    Although personal consumption has remained resilient, consumers appear to be pulling back on discretionary items and expenses, as evidenced in part by a decline in restaurant spending since late last year. Low- and moderate-income consumers no longer have extra savings to support this type of spending, and we have seen loan delinquency rates normalize from historically low levels during the pandemic.
    The most recent labor market report shows that payroll employment gains have slowed appreciably to a pace moderately above 100,000 per month over the three months ending in August. The unemployment rate edged down to 4.2 percent in August from 4.3 percent in July. While unemployment is notably higher than a year ago, it is still at a historically low level and below my and the Congressional Budget Office’s estimates of full employment.
    The labor market has loosened from the extremely tight conditions of the past few years. The ratio of job vacancies to unemployed workers has declined further to a touch below the historically elevated pre-pandemic level—a sign that the number of available workers and the number of available jobs have come into better balance. But there are still more available jobs than available workers, a condition that before 2018 has only occurred twice for a prolonged period since World War II, further signaling ongoing labor market strength despite the reported data.
    Although wage growth has slowed further in recent months, it remains indicative of a tight labor market. At just under 4 percent, as measured by both the employment cost index and average hourly earnings, wage gains are still above the pace consistent with our inflation goal given trend productivity growth.
    The rise in the unemployment rate this year largely reflects weaker hiring, as job seekers entering or re-entering the labor force are taking longer to find work, while layoffs remain low. In addition to some cooling in labor demand, there are other factors likely contributing the increased unemployment. A mismatch between the skills of the new workers and available jobs could further raise unemployment, suggesting that higher unemployment has been partly driven by the stronger supply of workers. It is also likely that some temporary factors contributed to the recent rise in the unemployment rate, as unemployment among working age teenagers sharply increased in August.
    Preference for a More Measured Recalibration of PolicyThe U.S. economy remains strong and core inflation remains uncomfortably above our 2 percent target. In light of these economic conditions, a few further considerations supported the case for a more measured approach in beginning the process to recalibrate our policy stance to remove restriction and move toward a more neutral setting.
    First, I was concerned that reducing the target range for the federal funds rate by 1/2 percentage point could be interpreted as a signal that the Committee sees some fragility or greater downside risks to the economy. In the current economic environment, with no clear signs of material weakening or fragility, in my view, beginning the rate-cutting cycle with a 1/4 percentage point move would have better reinforced the strength in economic conditions, while also confidently recognizing progress toward our goals. In my mind, a more measured approach would have avoided the risk of unintentionally signaling concerns about underlying economic conditions.
    Second, I was also concerned that reducing the policy rate by 1/2 percentage point could have led market participants to expect that the Committee would lower the target range by that same pace at future meetings until the policy rate approaches a neutral level. If this expectation had materialized, we could have seen an unwarranted decline in longer-term interest rates and broader financial conditions could become overly accommodative. This outcome could work against the Committee’s goal of returning inflation to our 2 percent target.
    I am pleased that Chair Powell directly addressed both of these concerns during the press conference following last week’s FOMC meeting.
    Third, there continues to be a considerable amount of pent-up demand and cash on the sidelines ready to be deployed as the path of interest rates moves down. Bringing the policy rate down too quickly carries the risk of unleashing that pent-up demand. A more measured approach wo
    uld also avoid unnecessarily stoking demand and potentially reigniting inflationary pressures.
    Finally, in dialing back our restrictive stance of policy, we also need to be mindful of what the end point is likely to be. My estimate of the neutral rate is much higher than it was before the pandemic. Therefore, I think we are much closer to neutral than would have been the case under pre-pandemic conditions, and I did not see the peak stance of policy as restrictive to the same extent that my colleagues may have. With a higher estimate of neutral, for any given pace of rate reductions, we would arrive at our destination sooner.
    Ongoing Risks to the OutlookTurning to the risks to achieving our dual mandate, I continue to see greater risks to price stability, especially while the labor market continues to be near estimates of full employment. Although the labor market data have been showing signs of cooling in recent months, still-elevated wage growth, solid consumer spending, and resilient GDP growth are not consistent with a material economic weakening or fragility. My contacts also continue to mention that they are not planning layoffs and continue to have difficulty hiring. Therefore, I am taking less signal from the recent labor market data until there are clear trends indicating that both spending growth and the labor market have materially weakened. I suspect the recent immigration flows have and will continue to affect labor markets in ways that we do not yet fully understand and cannot yet accurately measure. In light of the dissonance created by conflicting economic signals, measurement challenges, and data revisions, I remain cautious about taking signal from only a limited set of real-time data releases.
    In my view, the upside risks to inflation remain prominent. Global supply chains continue to be susceptible to labor strikes and increased geopolitical tensions, which could result in inflationary effects on food, energy, and other commodity markets. Expansionary fiscal spending could also lead to inflationary risks, as could an increased demand for housing given the long-standing limited supply, especially of affordable housing. While it has not been my baseline outlook, I cannot rule out the risk that progress on inflation could continue to stall.
    Although it is important to recognize that there has been meaningful progress on lowering inflation, while core inflation remains around or above 2.5 percent, I see the risk that the Committee’s larger policy action could be interpreted as a premature declaration of victory on our price-stability mandate. Accomplishing our mission of returning to low and stable inflation at our 2 percent goal is necessary to foster a strong labor market and an economy that works for everyone in the longer term.
    In light of these considerations, I believe that, by moving at a measured pace toward a more neutral policy stance, we will be better positioned to achieve further progress in bringing inflation down to our 2 percent target, while closely watching the evolution of labor market conditions.
    The Path ForwardDespite my dissent at the recent FOMC meeting, I respect and appreciate that my FOMC colleagues preferred to begin the reduction in the federal funds rate with a larger initial cut in the target range for the policy rate. I remain committed to working together with my colleagues to ensure that monetary policy is appropriately positioned to achieve our goals of attaining maximum employment and returning inflation to our 2 percent target.
    I will continue to monitor the incoming data and information as I assess the appropriate path of monetary policy, and I will remain cautious in my approach to adjusting the stance of policy going forward. It is important to note that monetary policy is not on a preset course. My colleagues and I will make our decisions at each FOMC meeting based on the incoming data and the implications for and risks to the outlook guided by the Fed’s dual-mandate goals of maximum employment and stable prices. We need to ensure that the public understands clearly how current and expected deviations of inflation and employment from our mandated goals inform our policy decisions.
    By the time of our next meeting in November, we will have received updated reports on inflation, employment, and economic activity. We may also have a better understanding of how developments in longer-term interest rates and broader financial conditions might influence the economic outlook.
    During the intermeeting period, I will continue to visit with a broad range of contacts to discuss economic conditions as I assess the appropriateness of our monetary policy stance. As I noted earlier, I continue to view inflation as a concern. In light of the upside risks that I just described, it remains necessary to pay close attention to the price-stability side of our mandate while being attentive to the risks of a material weakening in the labor market. My view continues to be that restoring price stability is essential for achieving maximum employment over the longer run. However, should the data evolve in a way that points to a material weakening in the labor market, I would support taking action and adjust monetary policy as needed while taking into account our inflation mandate.
    Closing ThoughtsIn closing, thank you again for welcoming me here today. It is a pleasure to join you and to have the opportunity to discuss my views on the economy and monetary policy. And given the recent FOMC meeting decision and my dissent, I appreciate being able to provide a more detailed explanation of the reasoning that led me to dissent in favor of a smaller reduction in the policy rate at last week’s FOMC meeting.
    I look forward to answering your questions and to engaging with your members on bank regulatory and supervisory matters.

    1. The views expressed here are my own and not necessarily those of my colleagues on the Federal Open Market Committee or the Board of Governors. Return to text

    MIL OSI USA News

  • MIL-OSI USA: A Catalyst: Statement on Qatalyst Partners LP

    Source: Securities and Exchange Commission

    Over the last several years, off-channel communications cases have become more prevalent on the Commission’s enforcement docket. We have struggled with these cases. While we supported many of them initially, it was not without deep reservations. Recently, we have objected to the penalties and undertakings in most of these cases. Today’s case against Qatalyst Partners LP[1] illustrates and confirms the reason for our reservations: it does not appear that firms have an achievable path to compliance. Accordingly, we voted no on Qatalyst Partners LP, and urge our colleagues to reconsider our current approach to the off-channel communications issue.

    Recordkeeping by regulated entities is important. The Commission needs to be able to enforce its rules. To do that, it needs access to records about firms’ activities. Firms that are serious about complying with our rules also need access to records about their business activities. If business is being conducted using communications means that are outside of the reach of firm compliance personnel and Commission staff, both will be hampered in their ability to foster compliance with the rules. The off-channel communications cases arise from a legitimate concern that the compliance efforts both of firm compliance personnel and of Commission staff are impeded by improper recordkeeping practices. As the Commission’s Order in the first of these cases stated:

    The federal securities laws impose recordkeeping requirements on broker-dealers to ensure that they responsibly discharge their crucial role in our markets. The Commission has long said that compliance with these requirements is essential to investor protection and the Commission’s efforts to further its mandate of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.

    [2]

    That first case involved a “widespread failure to implement” recordkeeping policies that “was not hidden within the firm,” “was firm-wide, and involved employees at all levels of authority,” and “impacted the Commission’s ability to carry out its regulatory functions and investigate potential violations of the federal securities laws across these investigations.”

    Many other cases have followed. The use of off-channel communications—text messages, smartphone chat applications like WhatsApp, and personal email outside firm-approved systems—is prevalent across the securities industry. We have an industry-wide problem that we will not solve through enforcement.

    Today’s action against Qatalyst illustrates why we cannot enforce our way to compliance. Under the standard applied in this case, even well-intentioned firms could find themselves in the Commission’s enforcement queue time and again. Qatalyst has been working to address the off-channel issue for at least sixteen years. The Commission’s Order outlines some of the firm’s efforts:

    As early as 2008, Qatalyst personnel were advised that the use of unapproved electronic communications methods, including on their personal devices, was not permitted, and they should not use personal email, chats or text messaging applications for business purposes, or forward work-related communications to unapproved applications on their personal devices. Qatalyst reinforced its policies at least annually with regular, mandatory training and reinforcement from compliance and senior management. Qatalyst personnel were specifically advised not to list personal phone numbers in email signatures.

    Then, “beginning in March 2017, Qatalyst provided its personnel with a compliant text-messaging process that could retain business communications” and “instructed its personnel to use only this process to communicate about Qatalyst’s broker-dealer business by text message.” “Beginning in 2020, Qatalyst required all personnel to have a firm-issued device on which to conduct Qatalyst business, and encouraged personnel to use firm-issued devices when communicating with both business and personal contacts.” Further updates to capture Slack and LinkedIn messages came in 2020 and 2022. Qatalyst trained its employees, monitored communications sent through firm-approved communication methods, and disciplined employees who violated the firm’s policies. Even with all that, Qatalyst violated the recordkeeping requirements: “Qatalyst collected data from a sampling of broker-dealer personnel and found that . . . several broker-dealer personnel, including at senior levels, had engaged in off-channel communications that concerned the broker-dealer’s business as such.” At the end of the day, despite Qatalyst’s compliance efforts, the Commission’s order states that:

    Qatalyst . . . failed to implement a system reasonably expected to determine whether all personnel, including supervisors, were following Qatalyst’s policies and procedures. While permitting personnel to use approved communications methods, including on personal phones, for business communications, Qatalyst failed to implement sufficient monitoring to ensure that its recordkeeping and communications policies and procedures were always being followed.” (Emphasis added.)

    This statement sounds to us like one that equates reasonableness with perfection. If we assess reasonableness based on whether policies and procedures always are being followed, firms will never escape our enforcement net. People are not perfect and so compliance will not be perfect—even at a firm that tries as hard as Qatalyst. Firing up our enforcement machinery every couple years to haul the industry in for headline-making penalties will not make people perfect, so firms will continue to discover violations of firm policies. We cannot enforce to perfection, but there is a way to achieve better compliance.

    This case should serve as a catalyst for the Commission. We need to work with the industry and other interested members of the public to develop a pragmatic and privacy-respecting approach that enables firms and the Commission to have the records they need for compliance, examination, and enforcement at a reasonable cost in both financial and privacy terms. As we have this conversation, we ought to bear several points in mind:

    • The existing recordkeeping rules are a product of simpler times. The ways in which people communicate have multiplied, and the percentage of communications that are written has risen so firms have more avenues to monitor. Paper documents have given way to e-mail, which has given way to text messages, which have given way to app-based chats. This technological progression poses unique challenges and opportunities in terms of recordkeeping.
      • How can we modernize the recordkeeping rules to deal with the recordkeeping challenges of the new technology and accompanying shifts in the communication habits of people?  How do we identify and take advantage of aspects of these changes that facilitate recordkeeping?
    • Oral conversations that would not have been captured by recordkeeping rules in the past are now written conversations that are captured. One needs only observe a couple teenagers sitting in a room together who are texting one another rather than talking to each other to realize that texts have taken the place of what would have been oral communications in the past. This shift of communication from verbal to written intensified during the pandemic when colleagues that used to sit next to one another retreated to their own homes.
      • Should we revisit the recordkeeping rules so that they do not capture the modern-day equivalent of oral chatter?
    • Client service imperatives drive how firms communicate with their clients. A client of an investment adviser who is also her neighbor wants to be able to send her a WhatsApp message when she needs advice on her investment portfolio, just as she does when she wants advice on her garden. Firms have made a lot of progress on developing tools that allow their employees to capture the business-related messages for recordkeeping purposes.
      • How can we help firms as they think about seamless ways to accommodate client communication preferences and still meet recordkeeping obligations?
      • Issuing firm phones is an expensive option. What are best practices for firms that do not have the budget to issue phones or whose employees prefer not to have a work phone?
    • Firms and their employees have questions about what types of communications are covered by the rules. Certain messages are clearly covered by the rules, but others are not so clear. The lack of clarity stems in part—but not entirely—from the different scope of the recordkeeping rules for various types of firms.[3]
      • What can the Commission do to provide clarity on the requirements under the existing rules?
      • Is the scope of the current rules appropriate?
      • Once we settle on the scope, how can firms effectively train their employees about what needs to be preserved for recordkeeping purposes?
    • Ensuring that employees abide by firm policies implicates privacy concerns. A firm can write excellent policies and procedures that prohibit the use of off-channel communications but ensuring that everybody complies with them is difficult. We see this in enforcement cases like Qatalyst, where the firm had a great set of policies and procedures, but some employees did not comply. Any firm surveillance system has to achieve record retention without subjecting employees’ personal means of communication to constant surveillance. Doing so is offensive to employees’ privacy and may have legal implications in some jurisdictions. Firms have developed ways, such as monitoring on-channel communications for indications that other communications are happening off-channel and only then looking at employees’ personal phones and emails. Firms also have disciplined employees found to be in violation of the policies, which sends a message that such conduct is not tolerated.
      • What are best practices for training employees and ensuring compliance with off-channel communications policies and procedures?
      • What are best practices for monitoring compliance with off-channel communication prohibitions?
      • How do the securities recordkeeping rules interact with other laws, such as employment or privacy laws?
    • Input from compliance personnel is essential. To develop workable, effective policies, we need to hear from the people who write, implement, and oversee these policies. This issue would be a perfect one to put in front of a Chief Compliance Officer Advisory committee. Compliance personnel understand the importance of maintaining good records, the difficulty of doing so, and have real-world experience in weighing the sometimes-conflicting interests of firms, clients, and employees.
      • What would an effective Chief Compliance Officer Advisory Committee look like?

    The issues laid out above are only a few of the many that deserve discussion outside of the enforcement context. We look forward to working with our colleagues at the Commission and interested members of the public on a more productive path forward.


    [3] See, e.g., Exchange Act Rule 15Ba1-8, 17 C.F.R. § 240.15Ba1-8 (recordkeeping requirements for municipal advisers); Exchange Act Rule 17a-4, 17 C.F.R. § 240.17a-4 (recordkeeping requirements for exchanges, brokers, and dealers); Exchange Act Rule 17g-2, 17 C.F.R. § 240.17g-2 (recordkeeping requirements for nationally recognized statistical rating organizations); Investment Advisers Act Rule 204-2, 17 C.F.R. § 275.204-2 (recordkeeping requirements for investment advisers); Investment Company Act Rule 31a-1 through 4, 17 C.F.R. § 270.31a-1 through 4 (recordkeeping requirements for certain investment companies).

    MIL OSI USA News

  • MIL-OSI Asia-Pac: Speech by FS at business luncheon Hong Kong-Spain: Partnering for Success (English only) (with photos)

    Source: Hong Kong Government special administrative region

         Following is the speech by the Financial Secretary, Mr Paul Chan, at business luncheon Hong Kong-Spain: Partnering for Success in Madrid, Spain, today (September 24, Madrid time): Dr Peter Lam (Chairman of the Hong Kong Trade Development Council), Ms Jarillo (Deputy Director General for Asia, Europe and Oceania, Ministry of Economy, Trade and Enterprise of Spain, Ms Laura Jarillo), distinguished guests, ladies and gentlemen,      Good afternoon. I’m delighted to be here, in Madrid, the dynamic capital and financial heart of Spain, a city renowned for its world-class museums and fine dining and wine, not to mention the best football club in Europe, if not the world. What more can a visitor ask for?     Well, I can tell you that this speaker, and the young and energetic innovation and technology delegation here with me, are pleased to be here, with you, to talk about how Spanish and Hong Kong business can partner for success long-term, mutually rewarding success.Hong Kong, connecting Spain and Asia     Ladies and gentlemen, like Spain, Hong Kong is back in business after the challenges of the COVID pandemic, back creating opportunity for a world of business. Spain, included of course.     Hong Kong has long been recognised as one of the best connected cities in the world. Half the global population is no more than a five-hour flight away from us.     Before the pandemic, Hong Kong International Airport operated 1 100 flights a day, covering 220 destinations. Today, passenger throughput is rebounding, reaching over 80 per cent of pre-pandemic levels on peak days, with full resumption expected by year’s end.     As for cargo, our airport has been the busiest in the world for 13 of the last 14 years.     This strategic connectivity is enhanced by Hong Kong’s institutional advantages, reinforcing our role as a “super connector” in Asia.     The unique “one country, two systems” arrangement makes this possible.     As part of China, Hong Kong enjoys convenient and sometimes priority access to the vast Mainland market, particularly the Guangdong-Hong Kong-Macao Greater Bay Area, a city cluster comprising Hong Kong, Macao and nine Mainland cities in Guangdong province.      The Greater Bay Area’s collective population counts more than 87 million, with a GDP exceeding 1.8 trillion euros, surpassing that of Australia and the Republic of Korea.     And, on a purchasing power parity basis, the per capita GDP of the Greater Bay Area is US$40,000, 75 per cent of Spain’s. (Note: HK’s is US$71,500)     Hong Kong, let me add, is the most international city in China, thanks to the “two systems” that distinguish us.     We are the only jurisdiction in China practising the common law system, our judiciary exercising its powers independently. Information, capital, goods and people flow freely in and out of our city. Our taxes are low and simple, with a currency pegged to the US dollar. Our regulatory systems and professional services align with the best international standards.     Our commitment to the rule of law is exemplified by the Rule of Law Index, produced by the World Justice Project. In the latest Index, Hong Kong ranked 23rd and Spain 24th, both ahead of the United States.     Hong Kong’s enduring strengths will continue to thrive, as our country is committed to the “one country, two systems” principle for the long term. This commitment has been reiterated by President Xi Jinping on multiple occasions, and reaffirmed at various high-level state and party meetings in Beijing.     Last year, China and Spain celebrated the 50th anniversary of diplomatic ties. And those ties continue to grow. Earlier this month, Prime Minister Sanchez was in Beijing, his second trip to the Chinese capital in two years.     As political and economic ties between our two countries strengthen, Hong Kong is proud to play a pivotal role in fostering more two-way investments, and more economic, innovation and cultural exchanges.Financial Services     One obvious area where we can contribute is financial services.      Hong Kong, after all, is an international financial centre – number three worldwide, behind only New York and London, according to the latest Global Financial Centres Index, released today.     We have a robust fund-raising market. Our stock market’s total capitalisation stands at 3.7 trillion euros, while assets managed by private equity and venture capital exceed 200 billion euros. Hong Kong is the leading biotech fund-raising hub in Asia, too.     A defining feature of our capital market are the “Connect Schemes” with the Mainland. Under the schemes, Mainland investors can buy stock, bonds, ETFs and derivatives directly from Hong Kong, while foreign investors can buy similar financial products on the Mainland through Hong Kong. In short, Spanish companies looking to list or issue bonds in Hong Kong can tap the capital from both the Mainland and international markets.     Hong Kong is also the world’s offshore renminbi hub. As the use of renminbi as a trade and reserve currency increases, businesses will naturally look for renminbi-denominated investment and risk-management tools. Hong Kong handles approximately 80 per cent of global offshore renminbi transactions, offering a wide range of investment and risk-management products.     Then there’s green and sustainable finance. We have long been Asia’s leader in green finance, issuing, on average, more than 55 billion euros in green and sustainable debt a year over the past three years.     Our green standards align with the best international practices. To take an example, the Hong Kong Taxonomy for Sustainable Finance, released in May, is highly compatible with the European Union’s Taxonomy for Sustainable Activities.     For green projects looking for funding, Hong Kong is simply Asia’s premier destination.Innovation and Technology     No less important is our commitment to rise as a global innovation and technology hub, together with the Greater Bay Area.     We have what it takes to realise that ambition. Hong Kong is home to five global top 100 universities, and our two medical schools are among the world’s top 40.     We also support 29 labs and research and development centres in collaboration with prestigious universities around the world.      Our start-up system is thriving, offering a variety of innovative products in fintech, green tech, biotech, supply-chain management, big-data analytics and more. And 20 per cent of our 4 200 start-ups were founded by overseas entrepreneurs.     Many of them are based in our two main innovation flagships: Science and Technology Park and Cyberport. And you will soon hear more from senior executives from these institutions, Albert and Eric. Let me add that our delegation members, many of them founders and CEOs of start-ups, are eager to talk to you, to explore business opportunities together.     Hong Kong boasts a full-spectrum financing market, including banks, private equity funds, venture-capital funds and a well-developed stock and bond market. These provide abundant financial support for tech companies local and global, at different stages of growth.     Greater Bay Area cities, let me add, each offers distinct strengths in innovation and technology; from basic research to technological application, commercialisation, and advanced manufacturing.      This year, the World Intellectual Property Organization’s Global Innovation Index ranked the Shenzhen-Hong Kong-Guangzhou cluster second, globally, for the fifth consecutive year.     Now, allow me now to highlight a few I&T areas where Hong Kong and the Greater Bay Area offer singular advantages, starting with artificial intelligence.      Crucial to AI are algorithms, supercomputing power, data and application scenarios, all of which Hong Kong is blessed with. We serve as a convergence point for Mainland and international data. We are also investing in the necessary i
    nfrastructure, including a supercomputer centre. Hong Kong and the Greater Bay Area provide many different application scenarios for AI. Many AI companies, let me add, are choosing Hong Kong to develop their large language models and to go global.     Biotechnology is also a priority. And we are planning to conduct clinical trials for the Greater Bay Area. We are also working on a “primary evaluation system” that will allow medicine and medical devices approved in Hong Kong to be widely used in the Greater Bay Area, the Asian region and around the world.     Then there’s the Northern Metropolis, a 300-square kilometre area in Hong Kong bordering Shenzhen. The Northern Metropolis is destined to rise as an innovation and technology hub, a vast bridgehead for Hong Kong’s co-operation with other Greater Bay Area cities.     Ladies and gentlemen, that just touches on the opportunities Hong Kong is actively pursuing. But let me say that we’re particularly focused on four areas: AI, biotech, fintech and new energy and new materials. We are bringing in strategic companies to help us develop those sectors. Since the end of 2022, we have attracted over 100 tech companies to Hong Kong. Together, they will invest about 6 billion euros and create more than 15 000 jobs in our city.      We are equally keen on attracting talent. Since the launch of the new talent admission schemes and updating existing ones, to date, we’ve received some 360 000 applications under our various talent admission schemes. About 226 000 applications have been approved, and 150 000 professionals have already arrived in Hong Kong, I’m pleased to say.Concluding remarks     Ladies and gentlemen, Hong Kong offers boundless opportunities for Spanish companies – as a gateway to the Chinese Mainland and throughout Asia, and as a hub for financial services and I&T.     My thanks to the Hong Kong Trade Development Council for hosting today’s luncheon, and to our Spanish partners, including CEOC, ICEX and the Spanish Chamber of Commerce, for make this welcome gathering possible.     I am happy now to take your questions, to hear your thoughts and ideas on how our two economies and peoples can deepen our co-operation, creating far-reaching opportunities that benefit us all.     Thank you.

    MIL OSI Asia Pacific News

  • MIL-OSI USA: Governor Hochul Discusses Youth Mental Health at Summit

    Source: US State of New York

    Earlier today, Governor Kathy Hochul participated in a Concordia Summit Fireside Chat on Youth Mental Health in New York City.

    VIDEO: The event is available to stream on YouTube here and TV quality video is available here (h.264, mp4).

    AUDIO: The Governor’s remarks are available in audio form here.

    PHOTOS: The Governor’s Flickr page will post photos of the event here.

    A rush transcript of the Governor’s remarks is available below:

    Penny Abeywardena: Good afternoon. So, we’re going to talk about something that really should be on the top of minds for all of us, and that is the many aspects of phones and schools to explore today. And there is no one better to reflect on this than our mom-Governor, Governor Hochul.

    So there are two massive clusters of changing norms colliding over this past decade. Parents driven a lot by anxiety and concerns have been buying smartphones for their kids. How do I keep my kids safe in school? With mental health challenges and bullying, how can I make sure my kid is okay during the day?

    And then, can I ensure my kid is keeping up with the technology? And then let’s not forget that the smartphone and video game and social media industries have focused on maximizing and monetizing screen time. So now these trends are complex and interdependent, but there is leadership that is going to help address this. And so it is a pleasure to be in conversation with Governor Hochul on this.

    Now, I want to know what your aha moment is, and I do think this is a moment to reflect on personal experience. We were just talking backstage, I have an eight-year-old in the public school system here in New York City. This became a big issue over the last few weeks. And I was properly shocked because he’s eight. And so this is something that quite honestly all of us need to be thinking about. And so, Governor Hochul, through your personal experiences or insights, can you tell us what influenced you to really focus on this issue from a legislative perspective?

    Governor Hochul: Thank you, Penny, and for Concordia for elevating this issue. I was here last year talking about climate change, and I’m always happy to talk about that. I can give you the speech I gave a few hours ago. But this is something a year ago I would not have thought we’d be talking about here. But I am so happy that this has finally taken hold because as a mom, a parent, you are hardwired to protect your children. Full stop. You wake up in the morning, start thinking about them when they’re little, late at night when they’re out with their friends you don’t sleep until they’re back home. That’s how we are. And as the Governor of New York, my number one job also has to be to protect all New Yorkers.

    So, you asked what my aha moment was. About a year and a half ago, I started convening mental health roundtables because we knew we were starting to see the signs that young people in particular had not fully emerged from the pandemic. They are still stressed out. The statistics on suicide, especially for teenage girls contemplating suicide, the depression, the anxiety, it was off the charts. So, I started having meetings and gathering kids and talking all over the state, and there was one not that long ago where the young woman – we started talking about the impact of social media and how it really takes hold of them. They’re held captive to these algorithms that are designed to bombard them with information that they will like because it’s taking personal information about them and turning it around and pulling them in deeper and deeper.

    And I said to this young woman – she was telling me how “I’m getting bullied during the day and all these social media and everybody’s doing this and I’m missing out and I have FOMO,” I said, “What do you want us to do?” She goes, “You have to save us from ourselves.” And that was my aha moment, when I realized it’s hard for parents to say you’re going to be the only teenager in the school without a cell phone, it’s hard for the school district to take it on and say, “We’re going to be the heavies,” teachers have enough on their plates, they don’t have to be the enforcers. And I realized this calls for government intervention, and I’m not afraid to take on the fights, especially when we’re fighting for our kids’ mental health.

    That was when I said, “Let’s find out what we can do to control these social media companies,” and we can talk about our nation-leading legislation, but also I’m right now developing a policy that’s going to say, “Bell to bell, full school day, phones should not be in the hands of children because they’re being denied the chance to learn, the teachers are frustrated that they’re not paying attention anymore, but also it has taken them to negative places, and it’s horrible for their mental health.”

    Penny Abeywardena: It really is. And different levels at different ages and grades, the impact is even more optimized, right?” Now, it would be great if you could talk about the significance of the first-in-the-nation law you signed to combat addictive social media feeds. And I will say, I hope many of you realize this, Instagram changed their policy last week, and I’m assuming it’s because they’re seeing the serious movement that’s coming from around the country, led by –

    Governor Hochul: Well, that’s true. In the era of – waiting for industries to self-regulate in the best interest of consumers is probably never going to happen. So, I’m not holding my breath. We encourage the tech companies, social media companies to work with us. Obviously, you’re always threatened by lawsuits. And I said, first I have a lot of lawyers, I can hire any lawyer in the state I want so bring it on. But I’d rather not. I said, “Why don’t you get out of the courtroom and come into my conference room and help devise solutions, because you know what you’re doing. You know exactly what you’re doing. You design these algorithms that’ll capture all this personal data about any age, a 10-year-old, 12-year-old, 15-year-old,” and they’re using it to structure messaging around your interests.

    We worked with them, they resisted, they built a campaign against us, they spent a lot of money. And I was able to work with our Attorney General, Tish James, here in New York, and legislators, and work with a coalition of parents and Common Sense Media, and formed a coalition where we were able to fight back. And our legislation – which we encourage every other state to adopt, I hear California’s looking at this now – it basically says a couple of things: one, is you cannot collect private data about anyone under the age of 18. You can’t collect it, you can’t sell it. You cannot monetize our children’s mental health any longer, you’re barred from that. Secondly, you are forbidden, barred from being able to target young people with algorithms designed based on their tastes.

    Now, a young person is not prohibited from going to your sites. They can talk, they can go to all kinds of chat rooms, they can talk to their friends, they can do whatever they want. But you cannot target them. And that was a heavy lift for them, and it’s a heavy lift to get through in legislation, but we did it. I just signed it into law a few months ago, and I’m really proud of it.

    We’re working on the regulations, but I always think about the fact that they told us, “Well, we have no capacity to identify who’s under the age of 18. This is an impossibility.” It’s like, “You’re tech companies, you can do anything, figure it out.” And somehow, magically, Instagram announced last week, they figured it out.

    I have immense faith in their ability to solve problems even if it’s against their self-interest.

    Penny Abeywardena: And that’s really bringing everybody to the table. When we think about the efficacy of what you’ve been able to do, it really came down to really strategic collaborations. Can you talk about how you worked not only with parents and teachers, but unions? We talked about authorities and the police; I’d just be curious how everybody’s playing a part in all of this?

    Governor Hochul: That’s a great question because you can’t go into these battles alone, right? You have to have allies as you march into war. And here’s what we needed to have. First of all, many parents on their own have said they know how bad it is. They’ve seen their children, especially if they were able to get a cell phone at age 12, 13, 14, they turn into a different person. First of all, they lose the capacity over time to have real, genuine social interactions. They don’t make eye contact. They don’t talk to other students. In school, the cafeteria is silent. They’re silent when they’re in the schoolyard. They’re silent in the halls. And the school districts that – on their own – were courageous enough to ban them said they now hear children laughing, talking, even arguing, they’re communicating more.

    And it was stopped. It was a dead silence. It was so unnatural. So, I had to get teachers on board, that was the easiest one. 72 percent of teachers across this country say that they are tired of the distractions and their inability to communicate with students or make connections in a way that are positive relationships.

    This is, outside a parent, the most influential person in their lives is a teacher. And the teacher is trying to do the best they can, and they’re being thwarted. They’re not learning, but they’re also not making connections.

    They’re stunted in their growth. They’re not turning into young adults eventually, over time, and ultimately adults. And we needed teachers on board, principals on board, school districts on board, and I said in all my – I did roundtables all over the state with all these parties at the table. I said, “I’ll be the heavy, just blame me, say, ‘that mean Governor made us do this,’ I mean I’ll take that on.” Because as a mom, I know how important this is and it would have helped me enormously to tell my kids, “I would have let you have the cell phones in school, but hey, it’s the law, I can’t let you do that. I still love you and I’d let you do anything else.”

    It’s about relationships, the ability to say no, which I have no trouble saying to my kids, but some do. But I also need law enforcement, and this is interesting, because my kids were in middle school during Columbine, the very high-profile mass shooting, and you still say the word ‘Columbine,’ I get chills because I know what it did to my sense of security. And we have so many other cases since then, I just spoke about Uvalde at another forum.

    So I thought, I have to think about how this affects parents’ sense of security when they say goodbye to their most precious little child, whether it’s kindergarten or 12th grade. I talked to law enforcement, what they said was so striking. If there is a crisis on campus or in the schoolyard, in the school, a mass shooting, worst case scenario, the last thing you want children to be doing, the last thing, is looking at their cell phone, texting mom and dad, sending messages, maybe videoing because they want to be the one who captures this. First of all, you’re telegraphing where you are, okay? You’ll hear this. Also, the police said to me the place their attention has to be is not on their smartphone, it has to be on the front of the classroom where the teacher is going to lead them to safety.

    When I heard that, it was like the clouds parted. I said, that’s the argument for parents. They need to hear that. So we’re not through yet. I’ve proposed this and loosely I said I’m going to be developing a policy. I will be working with these same groups I just mentioned. Everybody to let them understand how important this is and it’s also when I think about employers in my state, I want to be able to let them know that when young people emerge from their educational process, they’ll be fully functioning adults who have social interaction skills, who’ll be able to have the creative collisions and talk to someone else, a colleague, and work in teams and strategize together and really be more productive instead of someone who’s, again, their existence for a number of years has just been with the virtual world.

    And I can’t control what happens after school. Like my nieces are on all night long. I said, who are they talking to all night long? Isn’t anybody sleeping? And so they’re not, because they’re talking to kids on the other side of the world, literally. So we also say no notifications, and parents have the ability to turn it off. Sorry, kids, you can’t have it on from midnight until 6 a.m. I think Instagram actually said 10 p.m. to 7 a.m., which I thought was extraordinary. So parents are being empowered. So now we have to educate the parents. This is what it looks like, this is how you handle it, and when your teenager gets, tries to get around it, this is how you undo what they did. We have to help the parents get through this as well, but ultimately, imagine a world where this never happened. We’re not dealing with these high rates of depression and anxiety in young people and the bullying that goes on in schools.

    One mom said her husband has to leave work every day to be there at the end of the day when the child comes home from school because he gets picked on so badly on his own cell phone, watching it all day long, people are saying that he’s about to commit suicide and they want to keep an eye on him.

    If that doesn’t hit you as a parent – what is happening? But a world where we say, no cell phones, we just go back to the way it was when we were younger.

    Penny Abeywardena: Yeah.

    Governor Hochul: And if you need to – forget your lunch or you need to figure out how you’re getting home at the end of the day, guess what? There’s phones in the office. It’s a radical idea. Go down the hall, talk to your counselor, talk to your principal, can I use the phone?

    Penny Abeywardena: Talk to someone.

    Governor Hochul: And maybe forget your lunch and you go hungry; you won’t do it the next day. That’s called learning about life, right? Consequences. So it’s, that’s how I was raised. I don’t know. Maybe I’m old school, but I want to save our kids. It’s this important. I have to work on this intensely to at least save our state’s kids and hopefully other states will follow. And a number have, there have been other states that have done it.

    Penny Abeywardena: I was curious what kind of advice you would give to other state lawmakers because we talk about these coalitions as groups, but they’re important constituents who vote. So they’re concerned about making parents angry and losing that support. And I’d be curious what strategies and ideas you would offer to other state lawmakers to take this on.

    Governor Hochul: Just looking at it globally, the easiest thing in the world is to do nothing. Just wait for someone else. “It’s too hard.” Believe me, there’s a lot of challenges in New York to be a lot easier to pass on to somebody else. And that has happened. And I’m the cleanup Governor. I have a lot of work to do to try and invest, we never invested in mental health in the state.

    For example, never, no one ever talked about mental health as if it was an issue at all. I invested a billion dollars in my first budgets and said, we have to deal with everything from the lack of training for more professionals to be in the field to school-based clinics, so we can treat the kids right in schools if they have challenges to the homeless on the subways, more beds in hospitals. We looked at it holistically and we’re making real progress. So my advice to them is just show some profiles and courage once in a while. Shock everybody. Do something that’s a little bit difficult on the front end, but we’re in the world to make a difference.

    And these positions are positions of great authority, but they also hold a lot of responsibility for us. If you’re not making a difference every single day when you’re in a position like I am, then just stay in bed. I mean just don’t even bother because your job is to make a difference. Find problems – the easy problems my brilliant staff will solve, the hardest ones are on my desk and that’s what a Governor is supposed to do. It’s just, and if you’re not going to fight for kids, who are you wanting to fight for? That’s a statement about your values.

    Penny Abeywardena: And building on that. So there’s a middle ground, right? There are these bags you can have in school, so the kids get their phones, they get to show up at school with their phones, but then put them in. We had an interesting conversation backstage, and I was wondering if you can share, you know, our kids are smart.

    Governor Hochul: Yeah, kids are very smart. There are a few school districts in New York, Schoharie School District, up near the Capitol. They went full board, they did it a couple years ago, they said it was hard, there was a lot of resistance, parents said no, teachers didn’t want to be enforcers, and now they’re so glad they didn’t. And people now, and they had signs in front lawns, protesting taking cell phones away from kids.

    Give me a break. So I know it’s coming. I know it’s coming. But, these, so they have these bags, and there’s all sorts of ways to do this, but there’s these bags that are magnetic. Teacher watches the children put them in the bag at the beginning of the school. Only the teacher can unlock it so at the end of the school day they’ll get their phone back.

    No one’s going to steal it. It’s safe. Some kids are showing up at school, the teachers told me, with two cell phones. They lock one up in front of the teacher. Okay, kids have burner phones now? Okay, or what parent is buying their kid two cell phones? Okay? And then they use the other one all day.

    The other thing I think is important for parents to know. One of the teachers, she said, “We have to deal with the integrity issues.” I said, “What’s that mean?” It’s a nice way of saying they’re cheating. The whole world, all the answers are sitting there on their lap, and they’re not learning because they don’t have to. Or they run off to the lavatory with their phone, even the schools that ban it but let you have it during lunchtime or during breaks. They’re looking up information that they’re never going to learn properly from. And people say they’re not going to learn how to use technology. What do you think they’re doing the second they get home?

    They have all night long they’re doing that. I can’t control that. That’s up to parents. The last thing I’ll say on this is – parents, watch what you’re doing too. Kids learn from you. If you won’t put down the cell phone at the dinner table, or when you’re talking to them after dinner, by the time they’re mid-teenagers, they don’t even want to see you, so work on them before that. I believe I speak from experience. But show the kids they matter. Go to one of your meetings and leave your cell phone on your desk. The world will not fall apart. Somehow, we got to this age of 2024, surprisingly, throughout most of history, without being able to be connected and scrolling while your boss is talking to you, or while your colleagues are trying to present something. Just show basic respect to each other. Let’s not forget those skills. Respect each other, put down the phone.

    Penny Abeywardena: Put down, and that they’re paying attention to you and what you’re doing. I want to, we’re about to run out of time, but you mentioned, can we just talk about the investment that you made in mental health and other educational initiatives. Can you just share some of the programs and initiatives you have coming up that essentially reinforce this legislative –

    Governor Hochul: Yes. Again, one of the most significant things we’re doing is the mental health services in schools. Yeah. And so we’ve had to ensure that we’re funding workforce training for a whole new generation of more people going into the mental health professions, because I can open up a clinic in every single school. I could never staff it. I have to work with the unions and the training programs and put money behind this and training in hospitals. And so part of ours is creating a whole new generation of more healthcare workers, especially focused in this area. So that’s one big area, but I would say this, we also just need services, wraparound services from the get-go. My job is to make sure that our children emerge with healthy minds and not needing a lifetime of mental health services because we didn’t do our jobs when we had them in school.

    Penny Abeywardena: That is a perfect conclusion. Thank you so much, Governor Hochul.

    MIL OSI USA News

  • MIL-OSI Global: On the US-Mexico border, the records of Trump and Harris reflect the national mood of less immigration, not more

    Source: The Conversation – USA – By William McCorkle, Assistant Professor of Education, College of Charleston

    Migrants at a shelter in Tijuana, Mexico, watch the first presidential debate between Kamala Harris and Donald Trump on Sept. 10, 2024. Carlos Moreno/NurPhoto/Getty Image

    In late July 2024, Democratic presidential nominee Kamala Harris released a campaign ad about the U.S.-Mexico border that resembled something out of the Republican playbook.

    In the ad, Harris said as president she would increase Border Patrol agents, stop human traffickers and prosecute transnational gangs – some of the very things that Republican contender Donald Trump has also promised to do if elected.

    Considered by her campaign strategists to be a good political move, Harris’ shift to the right reflects the more anti-immigrant direction the U.S. population has taken over the past few years. According to a July 2024 Gallup Poll, 55% of Americans wanted increased limits on immigration, marking the first time in nearly two decades that a majority of Americans supported such curbs.

    These anti-immigrant attitudes are partially due to exaggerated claims from conservative politicians and right-wing pundits that management of the U.S.-Mexico border is a disaster and the government is endangering public safety by allowing violent criminals to cross into the U.S.

    Worse, during the presidential debate on Sept. 10, 2024, Republican presidential nominee Donald Trump falsely accused Haitian immigrants in Springfield, Ohio, of eating dogs and cats.

    As someone who has worked extensively with asylum-seekers at the border since 2019, I see clear differences between Harris and Trump on the issue of immigration.

    While in office, Trump instituted restrictive immigration policies at the border, which all but halted asylum. He also was behind the controversial child separation policy in 2018 and sought to end the Deferred Action for Childhood Arrivals, or DACA, the Obama-era federal program that prevents hundreds of thousands of undocumented immigrants who came to the U.S. as children from being deported.

    Though Harris’ record on immigration is not as extensive as Trump’s, she has shown as U.S. senator and vice president a willingness to be more restrictive on the border while continuing to support a pathway to citizenship for “Dreamers” and undocumented migrants who are married to U.S. citizens.

    Trump’s extremist rhetoric and policies

    Given that border security has become his signature issue, Trump may take even more draconian measures than he did during his first term in office, including restricting the asylum system further and deporting as many as 20 million undocumented immigrants.

    Perhaps Trump’s most controversial action during his first term was his child separation policy in 2018, which led to over 5,000 children being taken from their parents after being apprehended at the border. This action led to nationwide protests and international condemnation. As of May 2024, about 1,400 children remained separated from their families.

    Undaunted, Trump pursued other restrictive policies.

    Trump signed an executive order in 2019 and launched the Migrant Protection Protocols, better known as the Remain in Mexico policy. This order required asylum-seekers arriving at the U.S. border to be returned to Mexico while their claims were being processed. This program stayed in effect until the end of Trump’s presidency in 2020 and led to 81,000 expulsions.

    Trump also used Title 42 restrictions during the COVID-19 pandemic to quickly expel migrants without visas to contain the pandemic with no exceptions. In the first seven months, almost 200,000 migrants were expelled.

    Former U.S. President Donald Trump speaks in Arizona about immigration on Aug. 22, 2024.
    Olivier Touron/AFP/Getty Images

    Notably, the use of violent rhetoric against migrants increased dramatically during Trump’s emergence as the GOP leader. In his first term, Trump and his officials discussed shooting migrants crossing the border in the leg. Texas Gov. Greg Abbott, one of his key allies, said the reason officials there do not shoot migrants is because they would be charged by the federal government.

    Trump has also promised he would be willing to use the U.S. military in Mexico to combat drug cartels.

    Harris’ balancing act

    As a U.S. senator in 2019, Harris voted against an anti-sanctuary city amendment that would have allowed local police to cooperate with federal immigration officials and potentially deport immigrants living in the U.S. illegally.

    She was also the initial sponsor of legislation that would limit U.S. Immigration and Customs Enforcement actions against those caring for unaccompanied minors. But as attorney general of California, Harris did support turning over to immigration authorities minors living in the U.S. illegally who had committed crimes.

    As vice president, Harris has appeared to support a more restrictive approach similar to that of Biden‘s June 4, 2024, executive order that limited the number of asylum-seekers allowed to cross the border.

    She also supports the CBP One app system that was created by the Biden administration in early 2023.

    Under that process, individuals seeking asylum are given an opportunity to meet with an immigration official but often have to wait for months in dangerous conditions in Mexico.

    U.S. Vice President Kamala Harris holds a virtual meeting with immigrant rights leaders on July 22, 2021.
    Win McNamee/Getty Images

    Harris has also consistently spoken out on the need to support DACA. The Biden administration expanded health care coverage in 2024 for DACA recipients, giving them access to insurance through the Affordable Care Act, better known as Obamacare.

    If elected, Harris likely would extend another of Biden’s 2024 executive orders that created a legal pathway to citizenship for immigrants who don’t have legal authorization to be in the U.S. but are married to U.S. citizens.

    In stark contrast, Trump has already criticized the policy and said he would end it if elected.

    The Biden-Harris administration also had a nuanced record on the border and deportations. They have deported almost the same number of immigrants living in the U.S. without legal authorization as Trump did.

    The Texas National Guard conducts an operation to prevent migrants from building a camp along the U.S.-Mexico border in April 2024.
    David Peinado/Anadolu via Getty Images

    As of June 2024, the number of deportations since the start of the Biden administration in January 2021 was already at 4.4 million. At the same time, these higher numbers reflect the fact that more people are coming to the border due to increased chances of entering.

    During the first three years of Biden’s presidency, over 1 million migrants at the border were granted temporary humanitarian parole, which allows them to stay in the U.S. while waiting for their asylum hearing.

    The reality of immigration

    Immigration has been largely portrayed as either a clear and present threat by Republicans or as an act of compassion by Democrats.

    In the increasingly anti-immigrant environment, however, you’ll rarely hear that the increased immigration under the Biden-Harris administration has been a significant factor in U.S. economic growth.

    Indeed, many economists also have argued that working-class immigrants coming from across the border have helped reduce inflation. Its my belief that the U.S. is in need of more migrants, not fewer, and hard-line stances and policies damage our society and economy.

    While Trump’s hard-line stance against immigrants both at the border and within the country is well known, Harris’ record shows a more balanced approach that has offered support for at least some immigrants who are living in the U.S. illegally – and for those seeking asylum.

    William McCorkle does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

    ref. On the US-Mexico border, the records of Trump and Harris reflect the national mood of less immigration, not more – https://theconversation.com/on-the-us-mexico-border-the-records-of-trump-and-harris-reflect-the-national-mood-of-less-immigration-not-more-237269

    MIL OSI – Global Reports

  • MIL-OSI USA: Congressman Schweikert Introduces Legislation That Would Save Taxpayers Almost $80 Billion Across a Decade

    Source: United States House of Representatives – Congressman David Schweikert (AZ-06)

    WASHINGTON, D.C. — Today, Congressman David Schweikert, alongside Congressmen Jared Golden (D-ME), Mike Kelly (R-PA), and Glenn Grothman (R-WI), introduced the Employee Retention Tax Credit Repeal Act, bipartisan legislation that would disallow the processing of Employee Retention Tax Credit (ERTC) claims filed after January 31, 2024; dramatically increase penalties on those defrauding the government; and aid the Internal Revenue Service (IRS) in getting out the door honest, low-risk returns from small businesses. The original design of the ERTC was to help Main Street retain employees during the pandemic. However, legitimate returns from small businesses desperately needing support were crowded out by perverse promoters looking to take advantage of an emergency program, landing ERTC on the IRS’s “Dirty Dozen” list in 2023.

    Earlier this summer, IRS Commissioner Danny Werfel asked for Congress’ “help with this situation” and assist Treasury to “address fraud and error.” The ERTC Repeal Act would enable the return to fiscal sanity and end a program riddled with fraud that could cost up to seven times more—up to $550 billion—than initially estimated if allowed to continue. By eliminating the ERTC program, this bill would save taxpayers an estimated $79 billion over ten years.  

    We’ve all heard from the number of small businesses in our district waiting for their claims to be processed,” said Rep. David Schweikert (AZ-01). “A 1.4 million return backlog still exists, and moving the deadline up, rather than waiting until April 2025, will enable the IRS to go after the bad actors seeking to take advantage of taxpayers while approving legitimate claims faster and delivering long-overdue refunds to small businesses. Congress would be perpetuating a moral hazard if this level of fraud were allowed to go unpunished. It’s past time fiscal responsibility prevails, and we act on behalf of future generations who will be shouldered with a more than $35 trillion national debt.”

    This tax credit was an emergency response to protect workers and small businesses during the pandemic. Today, bad actors are abusing the program to pad their bottom lines at Americans’ expense,” Congressman Jared Golden (ME-02) said. “It’s past time we end this program — the conditions that made it necessary are over, and it’s a ripe target for tax cheats. Taking it off the books will protect taxpayers from fraud.

    Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said“Although the COVID public health and economic emergency has ended, our national debt and fiscal challenges continue to mount. We thank Representatives Schweikert (R-AZ) and Golden (D-ME) for introducing the House version of legislation to repeal the Employee Retention Tax Credit (ERTC), which is rife with fraud and has significantly overshot the original cost estimate, increasing the national debt. Given that the economy has recovered from the pandemic, it’s clear that this tax credit has outlived its purpose. We encourage Congress to pass this bipartisan, bicameral bill without delay and save $80 billion as a first step toward putting our country back on a fiscally sustainable path.”

    Background of the Employee Retention Tax Credit Repeal Act:

    • The Employee Retention Tax Credit (ERTC)—created by the CARES Act and furthered expanded by the Consolidated Appropriations Act of 2021 and the American Rescue Plan—is a refundable credit available to qualifying businesses who paid wages to employees during the COVID-19 pandemic. In October 2021, the IRS issued a notice warning employers of “third parties promoting improper Employee Retention claims.” These “promoters” often use aggressive and deceptive marketing tactics to convince businesses to allow them to file ERTC claims on their behalf. Fraud within the program became so prevalent that it then earned a place on the “Dirty Dozen” list of schemes and scams that make taxpayers vulnerable to personal and financial risk in March of 2023.

    The ERTC Repeal Act would bring forward the sunset date of the ERTC and disallow the processing of ERTC claims filed after January 31, 2024. Additionally, this bill would:

    • Increase penalties for promoters from $1,000 to $10,000 for individuals and $200,000 for business promoters;
    • Impose a $1,000 penalty for failure to comply with due diligence requirements; and
    • Extend the statute of limitations period on assessments to six years.

    Full bill text can be found here.

    ###

    Congressman David Schweikert serves on the Ways and Means Committee and is the current Chairman of the Oversight Subcommittee. He is also the Vice Chairman on the bicameral Joint Economic Committee, chairs the Congressional Valley Fever Task Force, and is the Republican Co-Chair of the Blockchain Caucus, Telehealth Caucus, Singapore Caucus, and the Caucus on Access to Capital and Credit.

    Back to News

    MIL OSI USA News

  • MIL-OSI United Nations: Deputy Secretary-General’s remarks at the High-Level Event Commemorating the African Union’s Year of Education [as prepared for delivery]

    Source: United Nations secretary general

    Excellencies, Distinguished guests, Dear Colleagues,

    It is a pleasure to be here with you all to commemorate the African Union’s Year of Education.

    As the world emerged from the COVID-19 pandemic and the massive disruption it caused, we were faced with an exacerbated education crisis. A crisis of exclusion, of quality and of relevance. A crisis made worse by stagnating investments by national governments, as well as the international community.

    It was in this context that the Secretary-General called for the Transforming Education Summit.

    The Summit was a landmark moment that was borne out of a realization that the education of yesterday was simply not up to task to respond to the needs of today and of tomorrow.

    It succeeded in elevating education on the global agenda, in mobilizing greater commitment to deliver SDG4 at the country-level and in expanding the global movement for a reimagined education.

    The Summit led to several important initiatives, calls to action and national statements of commitment by over 140 countries, more than 40 of which are from Africa. It led to the creation of the SG’s High-Level Panel on Teachers, which earlier this year produced specific, actionable recommendations on transforming teaching as well as the teaching profession. I hope that we are all heeding these recommendations, as we devise policies and draft legislation.

    Importantly, it also led to the African Union’s declaration of 2024 as its year of education. A truly momentous decision. It represents a significant opportunity to highlight the importance of education within the framework of the Sustainable Development Goals as well as Agenda 2063.

    This is important because when it comes to investing in education, our continent offers significant returns. African youth are poised to expand our continents and the world’s economic productivity. Within the next ten years, every third new entrant into the global workforce will be African.

    At the same time the proliferation of digital technologies, like Artificial Intelligence, offers an opportunity to leapfrog the many constraints we face when pursuing the traditional pathways of development.

    Investing in education now will help achieve broader development goals.

    Despite progress in the last two decades in increasing access to education in the region, there is still a lot to do. Close to 100 million children are out of school in Sub-Saharan Africa. Primary school completion rates are below 70%, which drops to 50% for girls. Africa needs an additional 15 million teachers in the classroom to achieve SDG targets by 2030.

    As you continue your journey, the UN system – UNESCO, UNICEF, UNECA, the RC system – stands poised to support you, through technical support as well as programme funding. This support will focus on digital transformation, entrepreneurship and jobs, inclusion and equity, and data and accountability, along with the traditional models of multilateral support which are focused on classrooms and curricula.

    Excellencies, ,

    Today, exactly two years after the Transforming Education Summit, we stand at an important inflection point.

    With our new Pact of the Future, you have renewed your commitment to the Goals including SDG4. With this rejuvenated focus on the SDGs we will proceed to the Global Education Meeting next month in Brazil; on to Financing for Development in Madrid (FFD4) and then the World Summit for Social Development in Qatar (WSSD2). As we do this, we must not lose sight of the work of actually delivering change.

    While we must keep pushing education to the forefront of the global stage through our advocacy, our efforts must also be aimed at delivering effective education policy changes at the regional, national and sub-national level.

    We must take concrete actions on the ground for a prosperous and growing Africa. We must transform and tailor teaching, curricula, and classrooms to the needs of young people and the demands of the modern world. We must harness technology, where possible to leapfrog the constraints that we may face in delivering the traditional model of education.

    Excellencies,

    In simple terms, we must deliver on education today, so a new generation of entrepreneurs, innovators and leaders can emerge in the years to come.

    I look forward to hearing about your discussions and follow-up actions as you move forward on the journey to transform education. Your motivation to face the crisis in education in meaningful and concrete ways is a source of hope for all of us.

    Thank you.

    MIL OSI United Nations News

  • MIL-OSI Global: Sri Lankans throw out old guard in election upset: What nation’s new Marxist-leaning leader means for economy, IMF loans

    Source: The Conversation – USA – By Vidhura S. Tennekoon, Assistant Professor of Economics, Indiana University

    Anura Kumara Dissanayake’s celebrates his vote. Tharaka Basnayaka/NurPhoto via Getty Images

    Sri Lankans voted for a new direction in leadership on Sept. 22, 2024, electing a leftist anti-poverty campaigner as president of the South Asian nation.

    The ascent of Anura Kumara Dissanayake marks a break with the past and from the establishment parties and politicians blamed for taking the country to the brink of economic collapse in 2022.

    Dissanayake characterized the victory as a “fresh start” for Sri Lanka – but he will nonetheless need to address the economic baggage left by his predecessors and the impact of an International Monetary Fund loan that came with painful austerity demands. The Conversation turned to Vidhura S. Tennekoon, an expert on Sri Lanka’s economy at Indiana University, to explain the task facing the new president – and how Dissanayake intends to tackle it.

    What do we know about Sri Lanka’s new president?

    Anura Kumara Dissanayake leads both the National People’s Power alliance, or NPP, and the Janatha Vimukthi Peramuna, or JVP. Rooted in Marxist ideology, the JVP was founded in the 1960s with the aim of seizing power through a socialist revolution. But after two failed armed uprisings in 1971 and 1987-89 – which resulted in the loss of tens of thousands of lives – the party shifted toward democratic politics and has remained so for over three decades.

    Until this election, the JVP remained a minor third party in Sri Lanka’s political landscape, while power alternated between the alliances led by the two traditional political parties – the United National Party and the Sri Lanka Freedom Party – or their descendant parties.

    In 2019, under Dissanayake’s leadership, the NPP was formed as a socialist alliance with several other organizations. While the JVP continues to adhere to Marxist principles, the NPP adopted a center-left, social democratic platform – aiming to attract broader public support.

    Despite these efforts, Dissanayake garnered only 3% of the vote in the 2019 presidential election.

    But the political landscape shifted dramatically during the economic crisis of 2022. Many Sri Lankans, frustrated with the two traditional parties that had governed the country for over seven decades, turned to the NPP, seeing it as a credible alternative.

    The party’s anti-corruption stance, in particular, resonated strongly because many people blamed political corruption for the economic collapse.

    It helped deliver 42% of the vote to Dissanayake.

    While a significant achievement, it also marks a historic first for Sri Lanka — Dissanayake is the first president to be elected without majority support; the remaining 58% of votes were split between candidates from the two traditional parties.

    His immediate challenge will be to secure a parliamentary majority in the upcoming elections, a crucial step for his administration to govern effectively.

    What kind of economy is Dissanayake inheriting?

    Two and a half years ago, Sri Lanka experienced the worst economic crisis in its history. With foreign reserves nearly depleted, the country struggled to pay its bills, leading to severe shortages of essential goods. People waited in long lines for cooking gas and fuel, while regular blackouts became part of daily life. The Sri Lankan rupee plummeted to a record low, driving inflation to 70%. The economy was contracting, and the country defaulted on its international sovereign bonds for the first time.

    This sparked a massive protest movement that ultimately forced President Gotabaya Rajapaksa to resign. In July 2022, Parliament appointed Ranil Wickremesinghe to complete the remainder of Rajapaksa’s term.

    Sri Lankans protest near the official residence of then-President Gotabaya Rajapaksa on May 28, 2022.
    Tharaka Basnayaka/NurPhoto via Getty Images

    In the two years that followed, Sri Lanka’s economy made an unexpectedly rapid recovery under Wickremesinghe’s leadership. After securing an agreement with the International Monetary Fund, the currency stabilized, the central bank rebuilt foreign reserves, and inflation fell to single digits. By the first half of 2024, the economy had grown by 5%.

    The government successfully restructured its domestic debt, followed by a restructuring of its bilateral debt – that is, government-to-government loans, mostly from China but also from India and Western counties, including the United States. Just days before the election, an agreement was reached with international bondholders to restructure the remaining sovereign debt.

    Despite these achievements, Wickremesinghe was overtaken in the presidential race by both Dissanayake and opposition leader Sajith Premadasa. Wickremesinghe’s unpopularity stemmed largely from the harsh austerity measures implemented under the IMF-backed stabilization program.

    Dissanayake now inherits an economy that, while more stable, remains vulnerable. He will have limited room to maneuver away from the carefully planned economic path laid out by his predecessor, even as voters expect him to fulfill popular demands.

    How does Dissanayake plan to improve Sri Lanka’s economy?

    As a leader from a Marxist party, Dissanayake will likely pursue policies to reflect collective decisions made by the politburos and central committees of the NPP and JVP, rather than his individual views. He advocates for an economic system where activities are coordinated through a central government plan, emphasizing the importance of “economic democracy.”

    His party believes prosperity should be measured not just by economic growth but by the overall quality of life. They argue that people need more than just basic necessities — they require secure housing, food, health care, education, access to technology and leisure.

    Dissanayake’s long-term vision is to transform Sri Lanka into a production-based economy, focusing on sectors like manufacturing, agriculture and information technology rather than service industries. One of the key policies is to promote local production of all viable food products to reduce reliance on imports. To support these activities, the NPP plans to establish a development bank. Additionally, they NPP proposes increasing government spending on education and health care, in line with Sri Lanka’s tradition of providing free, universal access to both.

    Where does this leave the IMF loans?

    Historically, Dissanayake’s party has been critical of the IMF and its policy recommendations. Given the severity of Sri Lanka’s economic crisis, Dissanayake has acknowledged the need to stay within the IMF program for now. But he has vowed to renegotiate with the IMF to make the program more “people-friendly.” Dissanayake’s proposals include raising the personal income tax exemption threshold to double its current level and removing taxes on essential goods. Dissanayake’s party also plans adding jobs to the public sector, despite the ongoing effort to reduce the government workforce to manage the deficit.

    Dissanayake’s populist policies, aimed at attracting mass support during the campaign, will inevitably strain government revenues while increasing expenses. However, the IMF program requires Sri Lanka to maintain a primary budget surplus of at least 2.3% of gross domestic product to ensure debt sustainability. Dissanayake has promised not to jeopardize the country’s economic stability by deviating from this target. His strategy is to improve the efficiency of tax collection, which he believes will generate enough revenue to fund his policies.

    Additionally, his party has criticized the deal struck by Wickremesinghe’s government with international lenders, calling it unfavorable to the country. Dissanayake has promised to seek better terms. However, since these agreements are already in place, it remains uncertain whether the new government will attempt to renegotiate them.

    Vidhura Tennekoon was a former employee of the Central Bank of Sri Lanka.

    ref. Sri Lankans throw out old guard in election upset: What nation’s new Marxist-leaning leader means for economy, IMF loans – https://theconversation.com/sri-lankans-throw-out-old-guard-in-election-upset-what-nations-new-marxist-leaning-leader-means-for-economy-imf-loans-239649

    MIL OSI – Global Reports

  • MIL-OSI USA: Romney, Hassan, Warner, Ernst Introduce Bipartisan Legislation to Fight Pandemic Relief Fraud

    US Senate News:

    Source: United States Senator Mitt Romney (R-UT)

    WASHINGTON—U.S. Senator Mitt Romney (R-UT), Ranking Member of the Senate Committee on Homeland Security & Governmental Affairs (HSGAC) Emerging Threats and Spending Oversight Subcommittee, Senator Maggie Hassan (D-NH), Subcommittee Chair, Senator Mark Warner (D-VA), and Joni Ernst (R-IA) today introduced the COVID Spending Transparency Act of 2024, bipartisan legislation that would extend the term of the Treasury Department’s Special Inspector General for Pandemic Recovery (SIGPR)—currently scheduled to sunset at the end of March 2025—for another five years.

    SIGPR was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 to oversee spending of government funds in response to the COVID-19 pandemic. Several federal inspectors general, including SIGPR, have collectively uncovered waste, fraud, and abuse in the pandemic assistance loan programs amounting to hundreds of billions of dollars. SIGPR currently has 42 open cases, with 28 of those cases amounting to more than $499 million in CARES Act funding

    “The CARES Act was critically important for the country at a critical time, but it’s become clear that the oversight of funds tied to the CARES Act and other COVID relief legislation is still needed,” Senator Romney said. “It would be unwise to let the Special Inspector General for Pandemic Recovery expire when there is still work to be done to recover federal funds. Our legislation would extend this important office for five years in order to continue to give the inspector general the tools needed to continue rooting out waste, fraud, and abuse in our federal programs from the COVID pandemic.”

    “The CARES Act provided critical funds to help save lives, support families, and keep small businesses afloat during the pandemic — but we know that some bad actors took advantage of it. We need to keep working to recover fraudulently obtained or used CARES Act federal funding,” said Senator Hassan. “The Special Inspector General for Pandemic Recovery plays a crucial role in overseeing these funds, and we must extend the position so that it can continue to combat waste, fraud, and abuse.”

    “The CARES Act provided crucial support to businesses during the COVID pandemic, but it also opened the door for potential misuse. This legislation would ensure that those receiving COVID relief funds are using them appropriately,” Senator Warner said. “It’s crucial the Special Inspector General for Pandemic Recovery continues their important work, and has the resources to do so.”

    “With hundreds of billions of dollars of waste and fraud, it is evident that the screening process for pandemic swindlers had more holes than Swiss cheese. We need to give the Special Inspector General for Pandemic Recovery the time, resources, and jurisdiction to track down every last cent of COVID fraud,” said Senator Ernst.

    Background:

    In November 2023, Senators Romney and Hassan led a HSGAC Emerging Threats and Spending Oversight Subcommittee hearing examining federal COVID-era spending. During the hearing, Romney advocated for extending SIGPR past its expiration date of March 28, 2025.

    The CARES Act created the Main Street Lending Program, which offered loans to small and medium-sized businesses. The Main Street Lending Program issued loans for small and medium-sized businesses and set up a payment plan of 15% in the third and fourth years, with a majority of payment of 70% due in the fifth year. The expiration of SIGPR coincides with the maturing of loans under the Treasury Department’s Main Street Lending Program.

    To date, SIGPR has recovered over $60 million in taxpayer funds, which surpasses its budget appropriated by Congress. SIGPR’s investigations have resulted in 53 federal indictments, 44 arrests, 16 guilty pleas, with 3 additional guilty pleas filed with the court, and 4 sentencings which have generated $11.2 million in seizure or forfeiture orders, $11.9 million in court ordered restitution, and a $350,000 civil settlement.

    Text of the bill can be found here.

    MIL OSI USA News

  • MIL-OSI USA: Senators Markey, Warren Send Letter to IRS Commissioner, Urging Action on Payment of Employee Retention Tax Credits

    US Senate News:

    Source: United States Senator for Massachusetts Ed Markey

    Letter Text (PDF)

    Washington (September 23, 2024) – Senator Edward J. Markey (D-Mass.), a senior member of the Senate Small Business and Entrepreneurship Committee, and Senator Elizabeth Warren (D-Mass.) today sent a letter to Internal Revenue Service (IRS) Commissioner Daniel Werfel urging the IRS to expedite payment of Employee Retention Tax Credit (ERC) claims, prioritizing low-risk claims from taxpayers experiencing financial hardship. After the onset of the COVID-19 pandemic, the ERC was an important lifeline that kept workers employed during the difficult economic downturn.

    The lawmakers wrote, “On September 14, 2023, the IRS imposed a moratorium on processing new claims. On August 8, 2024, the agency announced that, going forward, it would start processing claims filed between September 14, 2023, and January 31, 2024. It also disclosed that it had identified 50,000 valid ERC claims, would expedite those payments, and would pay another large block of low-risk claims this fall. Although we support the agency’s effort to prevent improper payments, both the slow pace of review and the moratorium have caused significant delays and hardship for those with legitimate claims. During the moratorium, the IRS backlog doubled to around 1.4 million claims. The long delay and backlog have put many nonprofits and businesses in jeopardy of shutting down before the IRS even considers their ERC claim.”

    The lawmakers continued, “The agency’s recent announcements are a positive step towards providing the relief Congress intended for taxpayer employers. But there are a significant number of claims that the IRS has identified as low risk, which the IRS is not currently processing. This means that many claimants likely will have to wait several more months to receive the benefit to which they are entitled. We believe that, as soon as possible, the IRS should approve and pay low-risk ERC claims from struggling nonprofits and small businesses. Immediately approving and paying low-risk ERC claims would greatly benefit the hundreds of thousands who are still operating in a challenging economic environment.”

    MIL OSI USA News

  • MIL-OSI Australia: Lower recent petrol prices welcome after prices moved higher in the June quarter

    Source: Australian Competition and Consumer Commission

    Average retail petrol prices were higher in the June quarter but have since reduced, according to the ACCC’s latest quarterly petrol monitoring report.

    In the June quarter 2024, average retail petrol prices across the five largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth) were 196.5 cents per litre (cpl). This was an increase of 3.3 cpl from the March quarter 2024 (193.2 cpl). 

    Click to enlarge

    “The lower prices since the end of the quarter have provided some relief to many motorists around the country,” ACCC Commissioner Anna Brakey said.

    Average retail petrol prices across the five largest cities decreased in July and August 2024, following lower international refined petrol benchmark prices. On a monthly basis, average retail petrol prices across the five largest cities were 193.6 cpl in June 2024, and decreased by around 10 cpl to 183.7 cpl in August 2024.

    The following chart shows 7-day rolling average retail petrol prices across the five largest cities from July 2022 to August 2024.

    Seven-day rolling average retail petrol prices across the 5 largest cities in nominal terms

    Source: ACCC calculations based on data from FUELtrac and Informed Sources. 
    Notes: The grey shaded area in the chart represents the June quarter 2024. 
    The blue shaded area in the chart represents July and August 2024. 
    A 7-day rolling average price is the average of the current day’s price and prices on the 6 previous day.
     

    Among the five largest cities in the June quarter 2024, average petrol prices increased the most in Sydney (by 5.7 cpl), with average Adelaide prices decreasing by 0.7 cpl, while Brisbane’s average retail petrol prices were the highest of the five largest cities (204.8 cpl).

    Quarterly average retail petrol prices increased in Canberra, Hobart and Darwin. Average prices in Darwin were the third lowest among all eight capital cities, behind Adelaide and Perth. Quarterly average prices in Canberra were 205.1 cpl, the highest among the eight capital cities.

    The ACCC’s latest report also gives results for the financial year 2023-24. Annual average retail petrol prices across the five largest cities were 195.1 cpl in 2023-24. This was the highest on record in nominal terms and the highest in 10 years in real (inflation adjusted) terms. After adjusting for inflation, annual average prices in 2013-14 were 196.6 cpl.

    The ACCC encourages motorists to make the most of fuel price apps and websites

    In August 2024, the ACCC released a report on fuel price apps and websites and petrol price cycles in Australia, illustrating the benefits of using one of the many free fuel price apps and websites to shop around for lower fuel prices. There are more than 40 free to use fuel price apps and websites available.

    “In the current economic climate, making savings is important to many motorists. It can always be worth using a fuel price app or website to quickly check for a lower priced retailer near you before filling up,” Ms Brakey said.

    The following chart shows a range of average petrol prices by major brand in Brisbane during a petrol price cycle in the June quarter 2024. The chart also shows the levels of terminal gate prices (or indicative wholesale prices), represented by the grey shaded area.

    “There is often a range of petrol prices available across retail sites and using a fuel price app or website to find a lower priced site can result in large savings,” Ms Brakey said.

    From April to early June 2024 in Brisbane, the range of retail petrol prices between the highest and lowest priced brands was around 19 cpl on average. The range varied from as high as 42 cpl (when retail prices were increasing in the cycle) to around 9 cpl (when prices were decreasing).

    Daily average retail regular unleaded petrol prices by major brand and daily average terminal gate prices (lagged 7 days) in Brisbane

    Source: ACCC calculations based on data from the Queensland Government open data portal – Fuel price reporting 2024. 
    Notes: The grey shaded area in the chart represents average terminal gate prices in Brisbane (lagged by 7 days). 
    Retail prices are averaged across sites on a brand basis using data from the Queensland Government fuel price transparency scheme. Major retail brand means a retail brand with at least 7 retail sites under one brand that sold regular unleaded petrol. The ‘Independent’ category represents a collection of other branded and unbranded sites. Daily average retail prices are calculated from price observations at 6 hour intervals.
     

    Observing petrol price cycles in the five largest cities can also be a useful way for motorists to save on petrol. The ACCC web page – Petrol price cycles in major cities – includes up to date price charts, buying tips, and information on petrol price cycles in Sydney, Melbourne, Brisbane, Adelaide and Perth. 

    “We know that because of longer petrol price cycles, motorists in Sydney, Melbourne and Brisbane can’t always wait for the price cycle to reach the next low point,” Ms Brakey said.

    “Where possible though, taking advantage of the low points of the cycle, and topping up or filling up before prices increase, can save money.”  

    Retail petrol price components

    The following chart shows changes in the components of average retail petrol prices in the five largest cities between the March quarter 2024 and the June quarter 2024.

    The largest components include the international price of refined petrol (Mogas 95) and excise and wholesale goods and services tax. The Australian/US dollar exchange rate can impact retail prices because international refined petrol is bought and sold in US dollars in global markets – although in the June quarter the exchange rate was relatively stable and had minimal impact on changes in average Mogas 95 prices in Australian dollar terms. 

    Other components include wholesale costs and margins (including international shipping costs and other import costs, and wholesale costs and margins) and retail costs and margins (represented by gross indicative retail differences).

    Changes in the components of average retail petrol prices across the 5 largest cities – cents per litre (cpl)

    Source: ACCC calculations based on data from Informed Sources, Argus Media, Ampol, bp, Mobil, Viva Energy, FuelWatch, the Reserve Bank of Australia and the Australian Taxation Office. 
    Notes: cents per litre change from the previous quarter. 
    The excise and wholesale goods and services tax component in this chart (65.9 cpl) is different to the excise and goods and services tax (wholesale and retail) component in the bowser, shown in the ‘June quarter 2024 – Petrol snapshot’. This is because a small amount of retail goods and services tax (1.6 cpl) is included in the gross indicative retail differences component in the above chart, for consistency in reporting gross indicative retail difference figures throughout this report. 
    Total excise and goods and services tax was 67.5 cpl in the June quarter 2024, an increase of 0.6 cpl from the previous quarter.

    Gross indicative retail differences increased to slightly above pre-pandemic levels 

    Average gross indicative retail differences across the five largest cities (in aggregate) were 17.2 cpl in the June quarter 2024. This was 1.8 cpl higher than the previous quarter (15.4 cpl). Gross indicative retail differences are a broad indicator of gross retail margins (including both retail operating costs and profits).

    In the 2023-24 financial year, annual average gross indicative retail differences across the five largest cities were 16.3 cpl, slightly higher than pre-pandemic levels on a real terms (inflation-adjusted) basis. 

    The level of gross indicative retail differences is not uniform across each of the five largest cities. In the June quarter 2024, quarterly gross indicative retail differences were lowest in Adelaide (9.2 cpl) and highest in Brisbane (25.6 cpl). In 2023–24, annual average gross indicative retail differences were lowest in Perth (10.7 cpl) and highest in Brisbane (22.0 cpl).

    The ACCC will continue to closely monitor the levels of gross indicative retail differences, including the differences between cities.

    Quarterly average regional retail petrol prices were marginally higher than prices across the five largest cities

    The ACCC monitors fuel prices in all capital cities and over 190 regional locations across Australia. In the June quarter 2024, average regional retail petrol prices (regional prices) were 197.4 cpl, an increase of 3.7 cpl from the March quarter 2024. 

    Regional prices were 0.9 cpl higher than average retail petrol prices across the five largest cities (196.5 cpl).

    Diesel prices were lower in many capital cities

    Quarterly average retail diesel prices across the five largest cities were 194.5 cpl in the June quarter 2024, a decrease of 1.2 cpl from the March quarter 2024 (195.7 cpl).

    Quarterly average retail diesel prices decreased in each of the capital cities except Canberra, where prices increased by 0.8 cpl. Retail diesel prices generally followed lower international diesel benchmark prices, which accounted for the largest component of retail diesel prices.

    Petrol sales continue to remain below pre-pandemic levels 

    The volumes of regular unleaded petrol sales reduced by 2.8 per cent in the June quarter (to 2,196 million litres) and continue to remain below pre-pandemic levels.

    “As consumers are increasingly switching from combustion engine vehicles to hybrid and electric vehicles, demand for fuel has reduced. Other factors would also be influencing demand such as working from home arrangements, vehicles becoming more fuel efficient, and changes in driving habits quite possibly due to cost of living pressures,” Ms Brakey said.

    Note to editors

    ‘Petrol’ means regular unleaded petrol unless otherwise specified.

    Singapore Mogas 95 Unleaded (Mogas 95) is the relevant international benchmark for the wholesale price of petrol in Australia. Singapore Gasoil with 10 parts per million sulphur content (Gasoil 10 ppm) is the international benchmark for the wholesale price of diesel.

    Background

    The ACCC has been monitoring retail prices in all capital cities and over 190 regional locations across Australia since 2007.

    On 14 December 2022, the Treasurer issued a new direction to the ACCC to monitor the prices, costs and profits relating to the supply of petroleum products in the petroleum industry in Australia and produce a report every quarter for a further three years.

    MIL OSI News

  • MIL-OSI Australia: Local north west firefighters awarded National Emergency Medals

    Source: Victoria Country Fire Authority

    Deputy Chief Officer Bill Johnstone AFSM, Chief Officer Jason Heffernan, Kyabram recipients Ashley Corrin, Wayne Peterson, Amana Roberts, Jodie Elvey, Brooke Giddings, Renae Flemming, CFA Board Member Peter Shaw AFSM

    140 local volunteer firefighters and CFA staff members have been honoured with National Emergency Medals for their efforts in the 2019-2020 Australian bushfire crisis.

    The National Emergency Medal is part of Australia’s Honours and Awards system and recognises significant or sustained service to others in a nationally significant Australian emergency.

    At ceremonies across two weekends, on Sunday, 15 September and Friday, 20 September, from across the Campaspe, Gannawarra and Loddon catchments became the latest of more than 5,500 CFA members to receive the honour for the 2019-2020 fires.

    CFA Board Member Peter Shaw AFSM presented the medals and said they were an important recognition of the valiant efforts of CFA members.

    “The National Emergency Medal is a formal recognition that Australia appreciates the efforts and contributions of CFA members during the 2019-2020 bushfire crisis,” Peter said.

    “It is a great honour to receive this medal and I hope it goes a small way to thanking our members for their service.”

    CFA Chief Officer Jason Heffernan spoke of his pride for the CFA members’ efforts.

    “The 2019/2020 fires devastated East Gippsland and the North East of Victoria,” Jason said.

    “But from that crisis arose the most remarkable human spirit of generosity and ‘lending a hand’.

    “Our medal recipients have exemplified that spirit, and I am extremely proud of all of them.

    “Whether they joined a firefighting strike team, worked in an Incident Control Centre or provided other assistance to affected communities – every contribution was valuable made a real difference.”

    Darrell Phillips, recipient and Captain of Echuca Village, said it was an honour to be formally recognised.

    “The 2019-2020 bushfires marked the beginning of a series of challenging events. In a short time, we faced fires, the COVID-19 pandemic, and then floods,” Darrell said.

    “Those fires remain etched in my memory.

    “As a recipient of the National Emergency Medal, I know this recognition wouldn’t have been possible without the incredible team effort of our volunteers and families.”

    • DCO Bill Johnstone, Chief Officer Jason Heffernan, Rochester Captain Luke Warren, Cade Kindness, Vaughan Thomas, Brent Sweeney, Board Member Peter Shaw AFSM. Front row: Heidi Warren, Hayley Ettershank, Tania Barkby, Raymond Liddicoat
    • DCO Bill Johnstone, Chief Officer Jason Heffernan, Christian Barkby , Board Member Peter Shaw AFSM
    Submitted by CFA media

    MIL OSI News