Charting the Global Economy: Stubborn Inflation Giving Fed Pause



























Vince Golle and Molly Smith
Sat, March 16, 2024 

(Bloomberg) -- Fresh US data showing persistent inflation so far this year and limited signs of a weakening job market underscore a Federal Reserve in no rush to start lowering interest rates.

Industrial production figures illustrated a euro area economy that’s merely limping along. In Japan, speculation intensified for the first rate hike in more than a decade after the country’s largest labor union secured big wage deals.

The world of geopolitics continued to evolve, including Ukrainian drone attacks on Russian oil refineries, declining foreign investment in China and US concerns about Beijing’s subsidies for shipbuilders.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, geopolitics and markets:

World

Ukrainian drone attacks halted three oil refineries deep within Russian territory in an assault President Vladimir Putin said was aimed at disrupting his presidential election later this week. An aerial strike on Wednesday caused a blaze at one of the country’s biggest crude-processing facilities, Rosneft PJSC’s Ryazan plant near Moscow. Since the start of this year, Ukraine has used drones to target important Russian oil facilities from the Black Sea to the Baltic Sea.

US President Joe Biden pledged to look into a petition from a group of unions asking his administration to review China’s subsidies for shipbuilders, as tensions between the world’s two largest economies simmer on trade and key supply chains during a critical American election year. Shipbuilding is emerging as the latest battleground in the US-China trade war.

Georgia and Ukraine cut rates, while Angola raised them. After holding rates steady last week, the European Central Bank presented a new framework for how it implements monetary policy, preserving the current system of steering interest rates while giving lenders more of a say over how much cash they need to operate.

US

The latest data on inflation and unemployment filings gave Fed officials more reasons to hold off on cutting interest rates, even as retail sales suggested a slowdown in consumer spending. Key components from the latest consumer and producer price reports that inform the personal consumption expenditures price index — the Fed’s preferred inflation metric — suggest the February PCE will come in strong again when released later this month.


The Biden administration is offering a $2.26 billion loan to help Lithium Americas Corp. develop a Nevada lithium deposit that’s the country’s largest. Demand for lithium, which also is used for grid storage and weapons, is projected to exceed current production by 2030. About 65% of the critical mineral is processed in China.

Europe

Euro-area industrial production slumped at the start of the year, raising the prospect that the economy as a whole is struggling to grow in the first quarter.

The UK economy rebounded in January, registering modest growth after falling into a technical recession in the second half of last year. Gross domestic product rose 0.2%, bolstered by services and construction, after a 0.1% decline in December

Asia

Japan’s largest union group announced stronger-than-expected annual wage deals, a result that will fuel already intense speculation that the central bank will next week raise interest rates for the first time since 2007. The central bank has long pursued a goal of achieving sustainable 2% inflation. A key component of that goal is setting in motion a virtuous cycle in which wage growth feeds into demand-led price gains.

India’s inflation was little changed in February, staying above the central bank’s target and giving policymakers reason to remain cautious. India’s strong economic growth last quarter is another reason for policymakers to stay on guard.

South Korea’s direct investment flows into China last year fell by the most in data going back more than three decades in a sign of weakening economic ties between the two countries. The re-orientation of South Korea’s investment away from China comes amid a change in the breakdown of its export markets. China is close to being overtaken by the US as the biggest destination for South Korean exports.

The Philippines is counting on the US and its allies to play a crucial role in its plans to explore energy resources in the disputed South China Sea, according to Manila’s envoy to Washington. The Philippines is exploring several options in its quest to tap the resource-rich South China Sea, waters that China claims almost in its entirety. The body of water is estimated to hold significant quantities of oil and gas

Emerging Markets

President Luiz Inacio Lula da Silva’s plan to help Brazilians escape the record amounts of debt they amassed during the pandemic remains well short of its targets as it approaches its March 31 expiration, denting his efforts to unleash consumer spending and boost growth in Latin America’s largest economy.

Argentina’s monthly inflation slowed for a second consecutive time as the impact of December’s large peso devaluation fades and President Javier Milei’s austerity measures push the economy into recession. The night before the release, the central bank announced a surprise rate cut to 80% from 100% as policymakers said they see monthly inflation cooling.

--With assistance from Philip Aldrick, Andrew Atkinson, Jan Bratanic, Andreo Calonzo, Sam Kim, James Mayger, Ari Natter, Yoshiaki Nohara, Anup Roy, Augusta Saraiva, Zoe Schneeweiss, Manolo Serapio Jr., Manuela Tobias, Sylvia Westall, Josh Xiao and Erica Yokoyama.

Fed, BOJ to Lead a Week of Rate Decisions for Half the World

Craig Stirling
Sun, March 17, 2024

(Bloomberg) -- Investors may glean more on the Federal Reserve’s resolve to ease and how close Japan is to finally exiting negative interest rates as central banks set policy for almost half the global economy.

The coming week features the world’s biggest agglomeration of decisions for 2024 to date, including judgments on the cost of borrowing for six of the 10 most-traded currencies. The collective outcome may underscore how monetary officials’ perception of inflation risks is diverging noticeably.

That would reflect how a global consumer-price shock in the wake of the pandemic, further exacerbated by Russia’s war in Ukraine, has transitioned asymmetrically, with some economies facing stronger domestic price pressures than others.

In turn, the world now features a patchwork of different policy dynamics, in contrast to the largely synchronized response that central banks previously engineered.

Most consequential will be the Fed’s decision on Wednesday, which may reveal whether still-robust economic data are giving Washington officials cause to dial back intentions to cut rates — or whether their outlook for three reductions this year remains on track.

The Bank of Japan’s announcement on Tuesday is also pivotal. The prospect that it’s moving toward finally raising borrowing costs and effectively calling an end to a generation-long period of feeble price growth points to how tectonic plates are shifting in another key member of the global financial system.

In Europe, meanwhile, central banks from the UK to Switzerland might inch toward reducing borrowing costs, while all four with decisions in Latin America in the coming week are poised to either begin or extend easing cycles.

Click here for what happened last week, and below is a look at the monetary highlights anticipated over the next five days.

Monday

Pakistan will be Monday’s main rate event. With a team of International Monetary Fund officials visiting this weekend for talks over the troubled economy’s loan program, most forecasters in a Bloomberg survey reckon the central bank will keep its rate unchanged at 22%.


A minority does anticipate a cut, though, with predictions of its size ranging from a quarter point to a full percentage point.

Tuesday

The BOJ’s decision will be among the most closely watched in decades, as officials decide whether to end the world’s last negative rate now, or wait until April.

The meeting comes days after the nation’s largest umbrella group for unions announced that annual pay negotiations resulted in the biggest increases in more than 30 years, sending a signal to authorities that their long-sought-after virtuous cycle of strong wages fueling demand-led inflation may be emerging.

The raises outpaced inflation in a positive sign for households that have seen real wages fall every month for almost two years. Economists are divided on whether the central bank will move Tuesday or not.

“We think it will judge that it’s too early to tighten,” Taro Kimura, senior Japan economist at Bloomberg Economics, said in a report. “To be sure, there is a significant risk to our call.”

The same day, the Reserve Bank of Australia will probably hold its cash rate at 4.35% after weaker-than-expected inflation in January. Investors will focus on whether the institution keeps its hawkish tone or hints at a pivot a few months out.

And later in Morocco, with inflation having slowed to 2.3% in January, the central bank may opt to keep its rate steady at the 3% level it reached a year ago.

Wednesday

A trio of decisions in Europe and Asia might pique investors’ interest before the day’s main events. Firstly, Indonesia’s central bank is seen keeping rates on hold.

Over in Europe, Iceland may begin easing with a quarter-point cut from 9.25% — the highest level in Western Europe — according to lender Islandsbanki hf. Slowing inflation and a long-term pay deal may provide officials with reassurance against a potential wage-price spiral.

The Czech central bank is poised to act more aggressively, with most economists anticipating a half-point reduction and one predicting a bigger move.

Attention then shifts across the Atlantic, where the Fed is widely expected to hold rates steady for a fifth consecutive meeting, and to continue to project three quarter-point rate cuts in 2024, even as inflation has proven stickier than expected the past two months.

After raising their benchmark federal funds rate more than five percentage points starting in March 2022, the Federal Open Market Committee has held borrowing costs at a two-decade high since July.

Against the backdrop of strong job growth and a jump in prices in January and February, officials have repeatedly emphasized they’re in no rush to ease.

Most economists surveyed by Bloomberg News expect the policymakers to pencil in three cuts for 2024, with the first move coming in June, in line with markets’ current pricing, though more than a third expect a hawkish surprise of fewer reductions.

Chair Jerome Powell told Congress this month that the central bank is getting close to the confidence it needs to start lowering rates, saying they were “not far” from that when considering the strength of inflation.

For later in the day, Brazil’s central bank has telegraphed that a sixth straight half-point cut is on tap, which would take the key rate down to 10.75%.

The institution’s board, led by President Roberto Campos Neto, may shorten the horizon on current guidance, which signals cuts of “the same magnitude in the next meetings” after three straight above-forecast inflation prints.

Economists see a year-end rate of 9%, but the policy path from there remains less clear as neither the central bank nor analysts see consumer prices back to target before 2027.

Thursday

Three decisions will reveal how parts of Western Europe have reached a crossroads in monetary policy.

Firstly, the Swiss National Bank is anticipated by most economists to stay on hold, though two respondents in Bloomberg’s survey predict that officials will cut rates, opting not to wait for bigger counterparts to start their own easing cycles.

Shortly after that, Norges Bank is also expected to keep borrowing costs on hold, with investors focusing on potential changes in its outlook for when reductions might start. Most economists still see the pivot to easing in Norway no earlier than in the third quarter, even as inflation has been cooling faster than anticipated.

Bank of England policymakers will have fresh inflation data on Wednesday and the latest purchasing manager surveys on Thursday to consider before their decision, which is seen likely to keep rates unchanged again.

With consumer-price growth slowing but likely to still come in well above the 2% target, the UK central bank is in no rush to move toward easing for now.

Observers are likely to focus on the vote count from officials on the Monetary Policy Committee, with another three-way split possible between those wanting no change and others favoring either a cut or a hike.

“Having dropped its tightening bias at its February meeting, we don’t think the MPC will be minded to alter its guidance,” Dan Hanson and Ana Andrade of Bloomberg Economics wrote in a report. “A bigger shift in tone is likely to come in May.”

Investors will also closely watch Turkey’s rate decision after February’s inflation numbers came in higher than expected. Several banks, including JPMorgan, say monetary officials will probably raise the key rate beyond its current level of 45%, though most doubt that will happen until after this month’s local elections.

The focus will again shift to Latin America later in the day. In Mexico, officials may finally pull the trigger on a long-awaited cut — likely a quarter point — and by doing so join major peers across the region in easing monetary policy.

Banco de Mexico, led by Governor Victoria Rodriguez, has kept borrowing costs at a record-high 11.25% since last March while consumer prices have embarked on a protracted and bumpy path downward.

In one of Latin America’s smaller economies, Banco Central del Paraguay will likely cut its key rate for an eighth time since August, from the current 6.25%, after inflation slowed to 2.9% last month.

Friday

The Bank of Russia’s first post-election rate decision is likely to keep borrowing costs unchanged for a second straight time, following last month’s hold at 16%. With inflation at 7.7% — well above its 4% target — the central bank has said it sees room to begin lowering borrowing costs only in the second half of the year.

Later on, Colombia’s central bank is all but certain to cut the current 12.75% rate for a third straight meeting — and may opt to go bigger after consecutive quarter-point reductions.

Policymakers led by Governor Leonardo Villar do have room for maneuver: inflation has slowed for 11 months and Colombia’s economy is operating well short of potential.

Economic Data

The coming week will also feature some key data releases:

China’s monthly batch of numbers may show growth in retail sales and industrial output slowed in the first two months of 2024, while property investment may have dropped 8% on year.


US statistics on the schedule include housing starts and PMI numbers.


Canada, Japan, South Africa and the UK will all release inflation data.


Euro-zone reports due include PMI surveys and consumer confidence.


Germany’s ZEW and Ifo indicators will provide a snapshot of the potential recovery of Europe’s biggest economy.


Singapore, Malaysia, New Zealand, Japan and South Korea publish trade data.

--With assistance from Brian Fowler, Piotr Skolimowski, Robert Jameson, Monique Vanek, Paul Wallace, Kira Zavyalova, Steve Matthews and Ott Ummelas.

Most Read from Bloomberg Businessweek

Starbucks Investors Approve CEO Pay Package That Drops DEI Reference


Daniela Sirtori-Cortina and Jeff Green
Sat, March 16, 2024 



(Bloomberg) -- Starbucks Corp. shareholders approved a plan to drop a bonus tied to DEI goals for its executives and replace it with a more general workforce target while also shifting more compensation to financial performance.

The new structure, approved at an annual meeting on March 13, nixes a specific goal from the 2023 compensation package that tied 7.5% of executives’ bonuses to an undisclosed goal related to diversity, equity and inclusion.

The new plan was approved by 92% of shareholders, the company said in a filing Friday. The vote is non-binding, but companies tend to make changes in compensation if the plans fail or get significant opposition. The coffee chain first said it would include ESG-related targets in executive compensation in October 2020.

Starbucks’s equality, social and governance goals will be part of a longer-term incentive program that makes up about 25% of bonuses that no longer mentions DEI, referring instead to “talent.” The portion of the bonus paid for hitting financial targets rose to 75%, from 70%.

In an earlier regulatory filing, the company said it opted to “modify the talent metric to include a broader spectrum of the workforce and provide for different representation improvement targets in connection with this change.” It said it made the change after meetings with shareholders.

Starbucks retains inclusion and diversity goals within its overall compensation structure, a spokesperson said in a statement. US goals to achieve racial and ethic diversity of at least 30% at all corporate levels and at least 40% across manufacturing and retail roles by 2025 are also still in place, the company said.

Conservative activists have been targeting executive compensation that rewards leaders for meeting DEI goals because they contend that such incentives might encourage illegal hiring behavior to meet company diversity targets. It’s part of a broader backlash against corporate diversity programs after the US Supreme Court ruled that affirmative action in college enrollment is illegal.

Strive Asset Management, an anti-activism fund company co-founded by former Republican presidential hopeful Vivek Ramaswamy, sent a letter to Southwest Airlines Co. in August warning it to end its executive compensation incentives for environmental and social goals. The group has also met privately with about a dozen large companies on the issue, according to Justin Danhof, Strive’s head of corporate governance, declining to name the companies.

Strive plans to release a detailed report later this year, after the proxy season ends, he said in an interview, adding Strive voted against compensation plans and the chair of compensation committees “at every company where there was ESG/DEI in the compensation plan.”

The Conference Board found that about 76% of S&P 500 companies had DEI/ESG incentives in their compensation plan in 2023, an increase from about 67% in 2021. Those goals can include a mixture of climate and diversity goals, the study found.

Starbucks’s switch to “talent” avoids the term DEI, which has been “weaponized” by the opposition, while still making it clear the company is seeking to broaden the pool of applicants, according to Charles Tharp, a professor who teaches executive compensation at Boston University’s Questrom School of Business.

Companies use compensation plans to highlight issues they believe are important to investors, employees, customers, and the general public, Tharp said. He added that opposition to the incentives, such as a letter last year from 13 state attorneys general questioning the legality of certain companies’ DEI plans, will definitely spark caution going forward.

“What I hope is we don’t go to what I would call diversity hushing, where people don’t want to talk about what they’re doing,” Tharp said.

--With assistance from Saijel Kishan and Clara Hudson.

Why auto insurance costs are rising at the fastest rate in 47 years

Pras Subramanian
·Senior Reporter
Updated Sat, March 16, 2024

As car prices moderate from a pandemic-era surge, insurance has pushed the cost of car ownership to the brink for many Americans.

New data out this week showed auto insurance costs rose 20.6% from the prior year in February, matching January's increase as the most since December 1976, when costs rose 22.4% over the prior year.

On an annual basis, motor vehicle insurance costs rose 17.4% in 2023, the most since a 28.7% increase in 1976, according to data from the BLS.

The sticker shock hitting many American drivers is being driven by a rise in accidents, the severity of accidents, and geographical factors combining to create a perfect storm and push costs higher.

Read more: Tips for getting cheap car insurance

'Severity' and bodily injury claims on the rise

The most alarming factor driving insurance costs higher is more severe claims.

"In general, the numbers of crashes, injuries, and fatalities are up, and inflation has made the cost of repairs more expensive," AAA spokesperson Robert Sinclair told Yahoo Finance.

Sinclair said motorists developed "bad habits" on the road during pandemic lockdowns, contributing to current behavior. For example, as the New York Times reported earlier this year, researchers in Nevada discovered that during the pandemic, motorists were speeding more (and driving through intersections), seat belt use was down, and intoxicated driving arrests were up to near historic highs.

Sinclair also pointed to NHTSA data, which found that in 2021, at the height of the pandemic, road fatalities increased by 10.5% to their highest level since 2005, even while most Americans stayed at home. The NHTSA said it was the highest percentage increase it had ever seen. The agency found that fatalities in 2022 only decreased by 0.3% as compared to 2021.

Insurance tech firm Insurify found that auto insurance premium hikes were "largely due to the skyrocketing price of auto parts and the increasing number and severity of claims." And while increases may moderate, analysts still believe further premium hikes are on the horizon.

"While the magnitude of rate increases is likely to ease somewhat, after several years of double-digit increases, some lingering claim cost inflation and adverse claim severity and frequency will likely lead to a 'higher for longer' auto rate environment,” CFRA analyst Cathy Seifert told Yahoo Finance.

Not surprisingly, severe accidents leave insurance companies with rising loss ratios, or a share of premiums collected that insurers paid out in claims.

"Broadly speaking, severity in [the] auto [business] is running mid- to high-single digits — think closer to mid in the vehicle severity, think closer to high in bodily injury — and so that's sort of where trends are running today," Travelers (TRV) personal insurance president Michael Klein said during the insurance giant's latest earnings call in January.

"We've seen a bit of a mix shift towards more bodily injury claims, which is one of the things that has us keeping our severity trend estimates at that sort of elevated level," Klein added.

In response, Travelers increased premiums, especially for customers renewing their policies. In the fourth quarter, its renewal premium price change was a whopping 16.7% in its auto business, contributing more than $2 billion of additional premium into the segment compared to the same quarter last year.

GEICO, the cost-conscious insurer owned by Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B), also felt the effects of those rising severity claims.

The second-largest auto insurer in America behind only State Farm, GEICO was hit by six consecutive quarters of underwriting losses beginning at the height of the pandemic. The company has since responded with more aggressive policy writing, trimmed marketing budgets, and higher premiums.

GEICO eventually earned $3.64 billion before taxes from underwriting in 2023, but the trend of higher severity of claims remains.

Shareholders pose for a picture with a Geico mascot at the Berkshire Hathaway annual shareholder's meeting on April 30, 2022, in Omaha, Neb. (Scott Olson/Getty Images) (Scott Olson via Getty Images)

"Average claims severities continued to rise in 2023 due to higher auto repair parts prices, labor costs, and medical inflation," the insurer said in parent Berkshire Hathaway's 2023 annual report, despite the frequency of claims coming down for property and auto claims.

GEICO said, "Average claims severities in 2023 were higher for all coverages, including property damage (14-16% range), collision (4-6% range), and bodily injury (5-7% range)." GEICO also sought rate increases in numerous states in 2022 and 2023 in response to accelerating claims costs.

On the flip side, insurer Progressive (PGR) noted in its latest earnings report that the severity and frequency of claims were coming down, suggesting some relief for the insurer's bottom line and perhaps consumer wallets.

"Severity seemed to moderate a little bit [in Q4], and so we're hoping that it's a little bit benign," Progressive CEO Tricia Griffith said in Progressive's fourth quarter earnings call. "When you look at last year, we were affected by fixing cars, and that seems to be a little bit calmer."

Complex repairs, rising labor costs

As bodily injury and property damage costs rise, so too have the incidence of more complex repairs and the need for more expensive mechanics to get them done.

New vehicle prices have risen over 20% since 2019, leading to an increase in the cost of parts. Additionally, newer cars contain more technology, such as sensors and control modules built into bumpers and exterior panels, which makes a simple fender bender a potential several-thousand-dollar repair.

And like almost all industries since the pandemic, the cost of labor has risen dramatically as well.

"Within auto repair, most of our expenses are human beings, and as minimum wage laws come into effect, that pushes the cost of labor up," a general manager at a major Southern California-based auto dealer told Yahoo Finance.

An auto mechanic walks under a vehicle being repaired from a lift at Gates Automotive Service on Jan. 13, 2022, in Louisville, Ky. (Jon Cherry/Getty Images) (Jon Cherry via Getty Images)

A lack of supply of technicians that handle the most complex repairs has also pushed costs higher. "To give you some perspective, I have transmission technicians and diesel technicians that make $200,000 a year," the general manager said.

The number of workers employed in the motor vehicles and parts industry fell more than overall employment during the pandemic, dropping almost 40% from peak to trough. And while employment in this industry has since surpassed pre-pandemic levels, it took until August 2022 to recover.

Another issue for dealers and the service business is the rise of electric cars.

While the rate of service for EVs is lower, EVs have a "much higher magnitude" of costs, the general manager said, when it comes to body or structural repairs. EVs also tend to require a more advanced tech solution, requiring even more specialized technicians in an even shorter supply.

Read more: Are electric cars more expensive to insure?

Griffith, Progressive's CEO, for her part noted that garage labor fees were still rising, saying the company's auto parts inflation was "nearing zero," but that auto services inflation was still rising by "mid-single digits."
Weather catastrophes 'are not going away'

Where you live also plays a big factor in what you pay to insure your vehicle: Severe weather in states like Florida, Louisiana, and South Carolina has drivers paying premium costs that exceed the national average.

In Louisiana, auto insurance costs are the highest in the nation on a per-capita basis, with 4.7% of the median household's income going towards car insurance, Insurify noted.

In Florida, what Insurify called "rampant" insurance fraud, along with natural disasters, pushed premiums up to nearly $3,000 a year on average.

"The average full-coverage insurance rate in Florida is $243 per month, influenced by severe weather events that strain the state’s insurers," Insurify's report said. "In 2022, Hurricane Ian caused $109.5 billion worth of damage in Florida, making it the costliest hurricane in the state's history, according to NOAA."

Insurers and policyholders did get a respite in 2023 with a relatively calm hurricane season, but there's no expectation that a repeat will happen in the years ahead.

"While 2023 results benefited from the lack of a record-breaking catastrophe (like Hurricane Ian), catastrophes and volatile and outsized weather patterns are not going away," CFRA's Seifert said.


Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

Nippon Steel Defends US STEEL Deal After Biden Comes Out Against Bid

Joe Deaux and Shoko Oda
Fri, March 15, 2024 



(Bloomberg) -- Nippon Steel Corp. said it’s determined to complete its $14.1 billion acquisition of United States Steel Corp., even after President Joe Biden stated the company should stay in US hands.

In the wake of Biden’s comments, Japan’s largest steelmaker repeated its previous offer of an additional $1.4 billion in investment and a promise of no layoffs or plant closures, according to a statement on Friday.

While Biden stopped short of saying he would block the takeover, his statement on Thursday marked a rare presidential intervention in a transaction that outside an election year would have drawn less political scrutiny. Nippon Steel is doubling down on its bid for its iconic US rival just as opposition from the White House threatens to become insurmountable to getting the deal done.

The US also risks upsetting relations with a key ally. Japanese Prime Minister Fumio Kishida is due to hold a summit with Biden in Washington on April 10, where security cooperation will be on the agenda, but the US Steel issue is set to cloud the meeting.

“US domestic politics is defining what should be up to two private companies to decide,” said Shihoko Goto, director of the Asia Program at the Wilson Center in Washington DC. “The US Steel/Nippon Steel debate is also driving a harmful wedge between otherwise solid partner nations,” she wrote in a post on X, the social media site formerly known as Twitter.

Another Bidder

In the wings is the possibility of another bid for US Steel from Cleveland-Cliffs Inc. Earlier on Thursday, Chief Executive Officer Lourenco Goncalves said he’d consider making an offer — with union support — albeit at a significantly lower price than Nippon Steel’s proposal. US Steel rejected an earlier bid from Cleveland-Cliffs.

Nippon Steel’s shares fell slightly in Tokyo after an initial advance following its statement.

But a plunge in US Steel’s shares shows that investors are increasingly concerned about the future of the Japanese deal. The stock slumped as much as 11% on Thursday to $36.38, but pared losses after Goncalves’ comments, closing at $38.26. Its shares have dropped 18% in two days and are trading sharply below Nippon Steel’s offer of $55 per share.

Despite its storied history, US Steel’s role in the economy has diminished over several decades, a period during which producers in Asia have risen to dominate the global steel market. And while Nippon Steel’s proposed acquisition targets a historic business name, a takeover in the US commodities industry by a company based in a friendly country is hardly unusual.

Biden’s comments have also shone a fresh light on the influential position held by the United Steelworkers union and its leader, David McCall. Biden called McCall Thursday morning, reiterating that “he has the steelworkers’ back,” the White House said in a statement. For its part, the union welcomed Biden’s call for US Steel to remain domestically owned and operated, saying that the president’s comments should “end the debate,” according to a statement on Thursday.

Nippon Steel initially said in its statement on Friday that there would be no layoffs or plant closures until at least September 2026. That date was deleted in an updated statement later in the day so that the wording is “more appropriate,” according to a spokesperson.

Standalone Company

The political opposition to the deal means it’s increasingly likely that US Steel will end up as a standalone company, according to a note from Wolfe Research. Another possibility is that “a deal still goes through but after the election and likely with concessions to the union,” it said.

Finding a compromise with the union could give Nippon Steel a chance of success, said Takeshi Irisawa, analyst at Tachibana Securities Co. That would help give Biden the cover he would need to walk back his comments on American ownership.

Japan’s top government spokesman, Yoshimasa Hayashi, said at a briefing on Friday that the government is aware of the president’s statement on US Steel but wouldn’t comment on individual companies.

“In any case, the US-Japan alliance is stronger than ever,” said Hayashi. “Japan and the US will continue to work together on the realization of sustainable and inclusive growth and the maintenance and strengthening of a rules-based free and open economic order in the Indo-Pacific.”

Others were less sanguine.

“This throws sand in the wheels of U.S.-Japan economic cooperation,” Mireya Solis, director of the Center for Asia Policy Studies at Brookings Institution, posted on X. “Who will believe us when we appeal to the spirit of ‘friend-shoring’?”

--With assistance from Ryotaro Nakamaru, Jon Herskovitz, Yoshiaki Nohara and Isabel Reynolds.

(Includes an update of Nippon Steel’s comment in second paragraph)

Uber, Lyft to stop operations in Minneapolis over minimum wage law

Reuters
Fri, March 15, 2024 


(Reuters) - Uber Technologies and Lyft said on Friday they will stop operations in Minneapolis starting May 1 after the city's council paved the path for rideshare drivers to be paid a minimum wage.

The council voted 10-3 to override Mayor Jacob Frey's veto, ensuring rideshare drivers in the city are paid $15.57 an hour.

"We are disappointed the Council chose to ignore the data and kick Uber out of the Twin Cities, putting 10,000 people out of work and leaving many stranded," Uber said.

Meanwhile, smaller rival Lyft, calling the bill "deeply-flawed", said it hopes to return to Minneapolis as it advocates for a statewide solution in Minnesota.

This comes after rideshare and delivery drivers staged a protest on Valentine's Day this year demanding fair pay and working conditions.

The New York Attorney General's office said in November that Uber will pay $290 million and Lyft will pay $38 million to resolve a multi-year investigation into the companies, calling it the largest wage theft settlement in her office's history.

A study by the Minnesota state's Department of Labor and Industry published last week said the companies are unlikely to hike prices to levels that would significantly reduce consumer demand and commissions, adding that such an outcome was unlikely.

(Reporting by Akash Sriram in Bengaluru; Editing by Maju Samuel)

Kentucky GOP moves to criminalize interference with legislature after transgender protests

BRUCE SCHREINER
Fri, March 15, 2024 



Supporters of Senate bill 150, known as the Transgender Health Bill gather in the Rotunda of the Kentucky State Capitol as protesters look on from the balcony on March 29, 2023, in Frankfort, Ky. Protests at Kentucky's Capitol can seem as commonplace — and noisy — as basketball pep rallies when the Republican-led legislature is considering bills that stir the emotions of activists opposing them. (AP Photo/Timothy D. Easley, File)

FRANKFORT, Ky. (AP) — Kentucky’s Republican-supermajority legislature is taking steps to criminalize disruptive protests inside the Capitol, raising concerns among advocates that their right to challenge authority will be chilled.

Before big votes on polarizing issues, throngs of protesters have waved signs and shouted out synchronized chants at the foot of the steps that lawmakers climb to reach the House or Senate chambers, creating a din that echoes throughout the ornate statehouse. Activists sometimes pack committee rooms in the Capitol Annex or crowd the galleries to monitor floor debates.

Teachers, union members and abortion-rights supporters have staged massive demonstrations, but it was a protest against anti-transgender legislation — which resulted in the arrests of some demonstrators on criminal trespassing charges last year — that prompted the Kentucky House this week to approve new criminal offenses for interfering with legislative proceedings. The bill is now pending in the Senate.

Republican state Rep. John Blanton considers protesting to be “as American as apple pie,” and “part of the foundation of who we are and I’m fully supportive of that.” But he said there should be consequences when demonstrators “cross the line” and become disruptive.

“The purpose of House Bill 626 is to ensure that the General Assembly has an opportunity to legislate without interference from people who wish to prevent us from doing our work on behalf of our constituents,” Blanton said.

Other state legislatures also have criminalized disruptions. Georgia has a law, challenged in court, making a third such offense a felony. Until 2020 in Kansas, people who wanted to stage an event at the statehouse, including a protest, had to have a legislative sponsor and permit, and handheld signs were banned. The rules were relaxed after a lawsuit, allowing handheld signs as long as people don't attach them to a wall or railing. A permit or sponsor isn't needed unless someone wants to reserve a specific space like a committee room.

Under the Kentucky bill, “disorderly or disruptive conduct” intended to disrupt or prevent lawmakers from doing business would be a misdemeanor for a first offense and a felony for repeat offenses. The offenses also include impeding a lawmaker or aide from entering a legislative room or refusing to leave a legislative facility with the intent to prevent lawmakers from doing business.

Activists worry it could chill their rights to challenge authority.

“When lawmakers are willfully stripping away civil rights, what other avenues do Kentuckians have but to protest their actions?” said Chris Hartman, executive director of the Fairness Campaign, a Kentucky-based LGBTQ+ advocacy group that led opposition to the anti-transgender bill.

ACLU of Kentucky legal director Corey Shapiro said he's concerned that "people could be arrested for simply expressing their opinions to legislators.”

Lawmakers can generally criminalize actions impeding their orderly business, provided that “reasonable alternative avenues of speech” are available, said University of Kentucky constitutional law professor Joshua Douglas.

“My concern with the bill is that it does not define ‘disorderly or disruptive conduct,’ so it could be seen as too vague under the First Amendment,” Douglas said. “Laws that limit speech must be written very precisely so it is clear what speech conduct is prohibited for a good enough governmental purpose.”

Twenty years ago, when Democrats still controlled the House, hundreds of hymn-singing protesters exhorted lawmakers to support a constitutional amendment barring same-sex marriages, which voters then approved overwhelmingly.

Now the backlash is against Republican bills. Teachers thronged the Capitol a few years ago to protest pension legislation and other measures they considered to be anti-public education. Abortion-rights supporters spoke out, to no avail, as GOP lawmakers passed anti-abortion laws, culminating in the state's near-total ban.

Tensions boiled over last year when the House overrode Democratic Gov. Andy Beshear's veto of the bill banning access to gender-affirming health care for young transgender people. As prolonged chants rang out from the gallery, nearly 20 protesters were removed and charged with third-degree criminal trespassing.

“There were many of you that had your buttons to push last year that wanted to speak, that had your voices for your constituents silenced,” Blanton said to his House colleagues on Monday. “Because we just had to move on and take the vote, it got so out of control. So they were trying to impede our process.”

Blanton, a retired state police major, said the proposed new criminal offenses would be a better fit than trespassing statutes, since the Capitol is a public place. Of the 19 people arrested last year, only one has gone to trial, and was ordered to pay a $1 fine along with court costs. Four others pleaded guilty and the other cases are pending, according to the Lexington Herald-Leader.

As for how law enforcement officers would interpret a demonstrator's intent when enforcing the measure, their first response would be to observe and, if they can identify people being disruptive, ask them to leave, Blanton said.

“They’re not just going to go up there and randomly start arresting people,” Blanton said. “We’ve never seen that happen here.”

Such reassurances haven't eased the activists' concerns. “From my personal experience, state troopers are nothing but antsy when it comes to protesters,” Hartman said.

___

Associated Press Writers Jeff Amy in Atlanta and John Hanna in Topeka, Kansas, contributed to this report.

Officials surprised after ancient lake in Death Valley re-emerges: 'This is an extremely rare event'

Doric Sam
Mon, March 18, 2024 

Heavy precipitation from Hurricane Hilary led to the reemergence of a famed ancient lake in Southern California last year, and officials are blown away by how long the lake has persisted.

Park ranger Abby Wines explained to ABC News last month that the legendary Badwater Basin at Death Valley National Park began filling up with water when the tropical storm brought several rounds of extreme rain to the area. The area has seen more precipitation after Hilary and the lake has yet to evaporate, remaining in place much longer than initially expected with no timetable for when it will be gone.

Death Valley is the driest place in North America, typically seeing just two inches of rain per year, and that amount was exceeded in a single day on Aug. 20. ABC News noted that records show nearly five inches of rain came to the region within the past six months.

At a full 282 feet below sea level, Badwater Basin is at the lowest elevation in North America. The basin is devoid of obvious life and endorheic, meaning that water only flows into it and not out of it.

The last time the lake filled up was 2005, but Wines said it only took a week after it formed to dry up and hadn't formed again for nearly 18 years because of the evaporation rate in the desert. Satellite images showed the lake went from having no water on July 5 to being flooded with water from August through February.

"You might think with no drain to the sea, that Death Valley would always have a lake," Wines said. "But this is an extremely rare event. Normally the amount of water flowing in is much less than the evaporation rate."

At 6 miles long, 3 miles wide and 1 foot deep, the lake is deep enough to kayak in, which Wines called a "rare opportunity." Visitors to the park enjoyed the beautiful reflections of the surrounding mountain peaks in the water in the basin.

Similarly, Hurricane Hilary raised the level of Lake Mead to its highest point in 2023. Lake conservation is crucial for maintaining biodiversity, preserving food and water supplies, and combating the effects of our planet's overheating. For example, Mono Lake in California was restored from the brink of destruction because of water being diverted to Los Angeles and now has a thriving, unique ecosystem and serves as a beacon of hope for other conservation efforts.

The Panama Canal Averts a Crisis for Now— But at a Cost to Drinking Water

Peter Millard, Michael McDonald and Eric Roston
Fri, March 15, 2024 





(Bloomberg) -- The Panama Canal has avoided the worst of a shipping crunch that threatened to upend the global economy — but at a cost to marine life and the Latin American country’s supplies of drinking water.

After imposing strict limits on vessel traffic last year as drought left water levels languishing, the Panama Canal Authority is increasing the number of ships that can cross. Thanks to conservation measures, water levels fell just over a foot for the year through March 12, compared with three feet during the same period of 2023.

Those measures, though, come with side effects. The canal recycles water from locks that vessels pass through, instead of simply flushing it into the ocean. This reused water gets saltier, and some of it infiltrates Lake Gatún, an artificial lake that forms part of the channel and is also Panama’s largest source of potable supply.

The Panama Canal’s challenges highlight how combating climate change carries inevitable tradeoffs. As policymakers take action to limit the effects of global warming, there can be unintended consequences for the environment and the economy. And time is of the essence: Drought is already altering the world’s trade flows, creating chokepoints last year on the Mississippi River in the US and the Rhine in Europe.

This year, Panama has had roughly two-thirds of its normal rainfall, said Fred Ogden, a former University of Wyoming civil engineering professor who has done extensive work in the country. Upgrades to the canal have made the situation worse, because new locks opened in 2016 to accommodate bigger ships require more water.

Climate change means “things are changing at a pace that is basically surprising everyone,” Ogden said. The canal expansion has “increased the likelihood of drought restrictions. When you throw a drought on top of that — oh my gosh. What a mess.”

Read More: Fixing the Panama Canal Hinges on Expensive and Divisive Gamble


The Panama Canal’s low water levels and efforts to conserve what’s left have made Lake Gatún more salty. Salinity is at the highest since 2020, when the Smithsonian Tropical Research Institute began collecting data, and still growing, said Steve Paton, the director of the institute’s physical monitoring program.

The lake’s salinity shot up after the new set of locks was inaugurated in 2016. Up until that point it was 0.05 parts per thousand, and with the increased trade flows it quickly rose and reached 0.35 parts per thousand four years ago. It’s now nearing that level again and will probably hit or surpass it before the rainy season starts, Paton said.

The canal authority’s chief hydrologist, Erick Córdoba, said during an interview in November that finding new sources of freshwater will be critical to ensuring Panama can meet growing demand from the population, shippers and local industry. One plan is to create a new reservoir at a river valley near Lake Gatún to supply additional water. The canal is also looking to invest in more rainwater collection to help reduce salinity in the lake, he said.

Under normal circumstances, the Panama Canal handles about 3% of the world’s maritime trade volumes and 46% of containers moving from Northeast Asia to the US East Coast. Bottlenecks at the canal can ripple throughout the global economy, particularly as attacks by Houthis in the Red Sea add to shipping disruptions.

Last year, the El Niño weather pattern led to one of the driest years on record for the Panama Canal and forced it to slash transit. But El Niño is now fading, which means the rainy season should hit in late April or May, allowing the canal to ease shipping limits. The authority will allow 27 vessels a day to transit by late March, up from the current 24 but still well below the pre-drought capacity of 38.

“The forced reduction” in vessels “is having the desired effect of lowering total water consumption,” said Jorge Luis Quijano, a consultant and former chief executive officer of the canal authority. “However, it is difficult to predict if these favorable changes in weather will be enough to guarantee returning to 38 transits per day sometime later this year or next.”

Quijano said the canal could possibly increase to 30 or 32 vessels a day after the dry season ends, and then progressively raise the limit further if rainfall is favorable. In a statement on March 11, the canal authority said it’s monitoring water levels and will announce any further changes in a timely manner. It didn’t respond to additional requests for comment.

Other observers are more optimistic. Volumes could return to normal in three to five months, said Julia Junnan Zhao, principal data scientist at Dun and Bradstreet, a global data and analytics provider.

Any increase in vessels through the canal will come as a relief to shippers, some of whom paid millions of dollars to jump the queue while others took longer, costlier routes around Africa or South America.

In the meantime, the threats to drinking water and marine life remain. The canal authority’s strategy of recycling water could prompt marine species to start traveling between the Pacific and the Atlantic, disrupt coastal environments and even decimate fish stocks that communities along the Pacific and Caribbean rely on for food and tourism, Paton said.

Lionfish are an example of what can go wrong with invasive species. They are suspected to have escaped from aquariums along the US East Coast during floods and storms, and now threaten native fish populations in the Gulf of Mexico and the Caribbean. A new saltwater corridor could wreak similar havoc on both sides of Panama.

Signs of that shift are already emerging. As rising salinity reduces the barrier between the oceans, researchers are seeing an increasing number of marine species in Lake Gatún, Paton said.

It’s an example of the risks policymakers are grappling with as they confront the impact of climate change on freshwater supplies. Drought plagued regions all over the world last year, including the Americas, Africa and the Mediterranean.

The parched conditions have “given a big wake-up call to a lot of people,” Ogden said. “The future does not look bright for the consistency of water resources that we’ve been able to rely on up until now.”

India’s ‘Silicon Valley’ is running dry as residents urged to take fewer showers and use disposable cutlery

Rhea Mogul, Meenketan Jha and Sania Farooqui, CNN
Fri, March 15, 2024 

The water tanker arrives once every two weeks, its 1,000 liters expected to serve hundreds of people in this suburb of India’s most high-tech metropolis, where women carrying empty buckets come clamoring to quench their thirst.

The sight is not unusual says Susheela, a resident of the suburb of Bandepalya, who goes by one name and needs the water for her family of four. “Sometimes fights break out, there is a lot of arguing,” she said. “But what do we do? We need water. We are desperate.”

Susheela’s taps – like millions of others – in the southern city of Bengaluru have run dry and the borewells that supply water to her household are empty.

The tech hub, known as India’s “Silicon Valley” and home to giant multinationals like Infosys and Wipro, requires about 2 billion liters (528 million gallons) of water for its nearly 14 million residents every day. But those numbers dwindled to alarming levels, falling about 50% over the past week, according to the chairman of the city’s water supply and sewage board, V. Ram Prasat Manohar.

Residents have been advised to use water sparingly – encouraged to bathe on alternate days, use disposable cutlery, and limit washing clothes and utensils.

It’s a crisis that has been described as dire by those who live in Bengaluru – and experts warn it is only going to get worse as mercury levels climb in the lead up to summer.

“I have been warning about this for over a decade,” said climate scientist T.V. Ramachandra, from the Centre for Ecological Sciences. “It’s a culmination of unplanned urban growth, rapid deforestation and the ongoing climate crisis – and everyone is paying the price.”
From India’s garden city to dried up lakes

For decades, Bengaluru – also known as Bangalore – had a reputation for its wide network of man-made lakes that provided water to the city’s residents. The abundance of greenery and surrounding forests, boosted by its 900-meter (nearly 3,000 feet) elevation and pleasant climate, earned it the moniker “India’s garden city.”

But since the early 1990s, Bengaluru has undergone rapid urbanization, as its transformation into a major tech center resulted in exponential growth. Developers cut down the forests and built around its lakes as the city of about 4 million exploded to house more than three times that.

As layers of tarmac swept through the city, Bengaluru lost its ability to absorb water, Ramachandra said.

“Today 83% of Bangalore is covered in concrete,” he added. “There is no vegetation. There is no way that groundwater recharging can happen further to go to the underlying layers. This is a big problem.”

Rapid urbanization and the decline of waterbodies could also worsen the impact of the climate crisis, contributing to a rise in the city’s temperatures, Ramachandra warned.

The gardens of Karnataka Raj Bhavan, the residence of the state governor, in 2018. Bengaluru was once known as "India's Garden City." - Arijit Sen/Hindustan Times/Getty Images

More than 70% of the city’s water comes from the Cauvery River, a major waterway that flows through southern Karnataka state, of which Bengaluru is the capital.

But as the city expanded, authorities didn’t have enough time to extend its network of water pipes into the new neighborhoods, with these areas relying on groundwater extracted by borewells.

A weak monsoon last year depleted groundwater levels, causing a water shortage for the city’s huge population.

But for about 4 million of them who rely on the borewells and live mostly on the outskirts of the city, the situation is much worse. Some 7,000 of the city’s 16,000-odd borewells have run dry, according to Bengaluru’s Deputy Chief Minister D.K. Shivakumar – and experts say the focus should be on helping them.

“For the 11 million people (dependent on the Cauvery River), there’s a bit of scarcity but not too much of a crisis,” said civil engineer and Bengaluru-based water researcher Vishwanathan, who goes by one name.

“For the other three and a half million people who are completely dependent on groundwater, there is a crisis because groundwater is going dry.”

A cow walks across the arid Nallurahalli lake at Whitefield in Bengaluru on March 10, 2024. - Idrees Mohammed/AFP/Getty Images
‘Pushing families to the limit’

Residents from Bandepalya, a low-income community suburb in the city’s south, line up with buckets from 9 a.m., waiting for the water tanker to arrive.

Private tankers commissioned by the government distribute water to neighborhoods when river and groundwater levels run low, charging residents for the service and hiking prices when demand rises.

About four hours later, as the afternoon arrives in Bandepalya, so too does the tanker.

Scenes of chaos and anxiety follow as they hustle to fill their buckets and bring them home. Women try to fill two large buckets each to carry to their homes nearby. One woman begins to hit the vessel to check its water levels.

The tanker is emptied within minutes.

“We get water once in 15 days and have to buy water on a daily basis,” said resident Kumkum, who also goes by one name, from her home, adding that she is using bottled water to wash her children’s faces in the mornings.

Kumkum’s youngest child has fallen sick with a high fever because of the crisis.

“All these drums are empty and haven’t had water in them in days,” she said as she pointed to the empty buckets in her home. “We can’t wash our clothes or our utensils. We will catch rainwater just for our chores during the monsoon.”

People line up to collect drinking water during the ongoing crisis in Bengaluru on March 14, 2024. - Idress Mohammed/AFP/Getty Images

Authorities capped the price of such deliveries commissioned by the government at 1,200 rupees ($14) per tanker, but residents say they are struggling financially.

Susheela, the resident with the family of four, said people in Bandepalya typically earn between 6,000 – 8,000 rupees ($70 – 95) a month, and many of them have no choice but to now spend half their income buying water from the tankers.

“We are hardly bathing, using water so scarcely. But we are all struggling,” she said.

Geeta Menon, a social worker who works with low-income communities in Bengaluru said the crisis could give rise to diseases and illness as hygiene levels drop.

“Children are defecating on the streets as there’s no water at home, they’re going thirsty, people are unable to cook,” she said. “This is not just a short-term problem, but will have long-term repercussions if it continues.”

CNN has contacted Bengaluru’s Water Supply and Sewage Board but is yet to receive a response.
No one spared

While the city’s poorest are bearing the brunt of Bengaluru’s water crisis, it hasn’t spared the upper middle class either.

Management from many housing societies send daily updates to its residents, warning them of shortages and urging them to be careful with their water usage.

One apartment complex has sent a notice to its residents saying they must reduce their water usage by 50%.

“Water situation is very alarming!” the notice, seen by CNN, said. “We are hardly receiving any water through from Cauvery supply. We are fully dependable on borewell water. Out of the 11 borewells only 5 are operating. We have absolutely no way of knowing when these wells will get dry. There won’t be any notice period when it happens.”

The shortage has also forced garment factories to slow production while doubling restaurant water bills, according to Reuters. Managers at some global firms are letting some employees skip meetings to collect water from the tankers, it added.

The crisis has meanwhile turned into a political blame game, weeks before a national election, with India’s ruling Bharatiya Janata Party (BJP) protesting the state’s Congress-led government for its alleged mismanagement of the situation.

The main opposition Congress has claimed the BJP has not done enough at a federal level to help financially with the crisis.

Activists and BJP members hold empty water pots during a protest against the state government over the severe water crisis, in Bengaluru on March 12, 2024. - Idress Mohammed/AFP/Getty Images

Yet, for the city’s residents, the tit-for-tat arguments mean little as they experience the worst of the shortages.

For Maher Taj, a mother of seven, the past few weeks have been unbearable.

“We have cut down how many times we use the bathrooms and take turns to bathe,” she said.

“Our children are using the washrooms in their school and my husband is going at his workplace. I have reduced water usage in all aspects of life. It’s pushing my family to the limit.”

UNRWA chief says Israel blocks him from Gaza

Reuters
Updated Mon, March 18, 2024 



CAIRO (Reuters) -Israel denied the head of the U.N. Palestinian refugee agency (UNRWA) entry to the Gaza Strip on Monday, UNRWA and Egypt said, calling it an unprecedented move at a time of massive need.

Philippe Lazzarini, whose organisation has been in crisis since Israel accused 12 of its staff of taking part in Hamas' Oct. 7 attack on Israel, said he meant to go to the Gaza city of Rafah but was informed: "my entry into Rafah is declined".

Speaking with him at a Cairo news conference, Egyptian foreign minister Sameh Shoukry said: "You were declined by the Israeli government, refused the entry which is an unprecedented move for (a) representative at this high position".

The Israeli prime minister's office and foreign ministry did not immediately respond to a request for comment.

UNRWA is by far the largest relief body in Gaza, where the depth of the humanitarian crisis was underlined on Monday when a U.N.-backed report warned of imminent famine in the north.

"On the day new data is out on famine in #GAZA, the Israeli Authorities deny my entry to Gaza," Lazzarini wrote on X, adding that his visit was intended to improve humanitarian operations.

"This man-made starvation under our watch is a stain on our collective humanity."

Israel's ground and air offensive has laid waste to the Gaza Strip over the last five months, killing more than 31,000 people, according to health authorities in Hamas-run Gaza.

The offensive was triggered when Hamas fighters stormed into Israel in an attack that killed 1,200 people and resulted in another 253 being taken hostage, according to Israeli tallies.

FUNDING CRISIS

Israel alleged in January that 12 of UNRWA's 13,000 staff in Gaza took part in the Oct. 7 attack. The Israeli accusations led 16 countries including the United States to pause $450 million in funding, throwing UNRWA operations into crisis.

UNRWA fired some staff members, saying it acted in order to protect the agency's ability to deliver humanitarian assistance, and an independent internal U.N. investigation was launched.

Australia is one of several states which subsequently resumed funding. Its foreign minister said last week that Australia had consulted with UNRWA and other donors and was satisfied the agency was not a terrorist organisation.

UNRWA has condemned the Oct. 7 attacks, saying the Israeli allegations against the agency - if true - are a betrayal of U.N. values and of the people UNRWA serves.

UNRWA communications director Juliette Touma told Reuters Lazzarini had visited the Gaza Strip four times during the war, and numerous occasions before that.

"We were ready to leave this morning on an Egyptian plane from Cairo to El Arish," Touma said.

Lazzarini has previously warned of a campaign to end UNRWA operations. Israeli Prime Minister Benjamin Netanyahu has said UNRWA must be shut down.

In Cairo, the UNRWA head warned of a "race against the clock" to reverse the spread of hunger and avert famine. With political will, Gaza could be "flooded" with food via land crossings, he added.

He also said that more than 150 of UNRWA's facilities in Gaza have been hit, damaged or completely destroyed.

"We also know that a number of staff that have been arrested have gone through very tough investigation, ill-treatment and humiliation," Lazzarini said.

(Reporting by Sarah El Safty, Nayera Abdallah, Clauda Tanios, Tom Perry in Beirut, James Mackenzie and Emily Rose in Jerusalem; Writing by Tom Perry; Editing by William Maclean and Andrew Cawthorne)

UN agency chief says Israel blocked him from entering Gaza

AFP
Mon, March 18, 2024 

UNRWA Commissioner General Philippe Lazzarini said there is 'man-made starvation' in Gaza

 (Fabrice COFFRINI)

The head of the UN agency for Palestinian refugees said Monday Israel had blocked him from entering the war-torn and besieged Gaza Strip where the United Nations has warned of impending famine.

Israel responded that UNRWA chief Philippe Lazzarini had not followed proper procedure.

Lazzarini, who last month said Israel "aimed at destroying UNRWA," said he had "intended to go into Rafah today, but was informed my entry had been declined." He spoke in a Cairo joint press conference with Egypt's Foreign Minister Sameh Shoukry.

Israel in January accused several of UNRWA'S roughly 13,000 Gaza employees of being involved in the October 7 attack by Hamas militants on Israel.

Lazzarini wrote on X, formerly Twitter, that he had been denied entry by "Israeli authorities".

COGAT, an Israeli defence ministry body governing civilian affairs in the occupied Palestinian territories, said on X that Lazzarini had not followed "the necessary coordination processes and channels" when requesting entry into Gaza.

"This is another attempt by UNRWA to blame Israel for their own mistakes," it said of the UN agency at the centre of efforts to provide humanitarian relief in Gaza.

Farhan Haq, deputy spokesman for UN Secretary-General Antonio Guterres, said "all UN officials, including Mr Lazzarini and his colleagues in UNRWA, should have access to do the vital humanitarian work they do."

Guterres "certainly wants Mr Lazzarini to have access throughout the areas in which UNRWA operates", Haq told reporters.

The Israeli accusation against some UNRWA employees led multiple donor nations including the United States to suspend funding although some have since resumed or increased it including Spain, Canada and Australia.

Israeli government spokesman Avi Hyman earlier Monday reiterated what he called Israel's position, that "UNRWA is a front for Hamas".

Lazzarini has said that Israel provided no evidence against his former employees accused over the October 7 attack.

Shoukry expressed Cairo's "complete support" for the agency and criticised "unilateral actions to restrict UNRWA funding due to baseless accusations".

The Hamas attack of October 7 resulted in about 1,160 deaths in Israel, most of them civilians, according to an AFP tally based on official Israeli figures.

Israel's retaliatory campaign in Hamas-controlled Gaza has killed at least 31,726 people, mostly women and children, according to the territory's health ministry.

- 'Man-made starvation' -

Among the dead are 168 UNRWA employees, according to the agency's latest figures.

Lazzarini on Monday said the UN has paid a "massive price in Gaza".

"More than 150 of our facilities have been completely destroyed in the Gaza Strip," he said.

"And a number of our staff were arrested and endured ill-treatment and humiliation during investigation."

In more than five months of war and siege, the humanitarian situation in Gaza has deteriorated to what the UN has repeatedly warned is an imminent famine.

"This is man-made starvation," Lazzarini said.

The Gaza health ministry has in recent weeks recorded at least 27 deaths from malnutrition and dehydration, most of them children.

The UN said Monday that half of the territory's 2.4 million people are experiencing "catastrophic hunger and starvation".

Humanitarian aid operations have intensified in recent weeks, including airdrops and efforts for a maritime humanitarian corridor from Cyprus, but UN and other aid agencies warn that these are insufficient to meet the desperate needs in Gaza.

Israeli Foreign Minister Israel Katz, writing on X Monday, accused UNRWA of "collaboration" with Hamas and said "Israel allows extensive humanitarian aid into Gaza by land, air, and sea for anyone willing to help."

bam-bha/sbh/ami/it

Dossier reveals information used to explain UN agency's deep ties to Hamas in Gaza

Peter Aitken
Sun, March 17, 2024 

United Nations headquarters and flag juxtaposed with a picture of an Israeli woman kidnapped by Hamas terrorists.

FIRST ON FOX – Fox News Digital obtained a dossier that the Israeli government is said to have used to explain its concerns to the U.S. and other nations about its actions toward a controversial United Nations agency and its relationship with Hamas.

The United Nations Relief and Works Agency for Palestine Refugees in the Near East (known simply as UNRWA) lost hundreds of millions of dollars from donors after allegations surfaced that at least a dozen employees had ties to and assisted Hamas during the Oct. 7 attack on Israel.

The United States and several allies in January froze funding to UNRWA, and the agency fired the 12 employees named in the allegations. Since those initial allegations, the number has risen to potentially hundreds of employees with ties to Hamas.

The dossier reviewed by Fox News Digital includes an updated claim that the number of UNRWA employees directly involved in the Oct. 7 attack has risen to at least 15, with at least three suspected of being involved in the kidnapping of the hostages. This information, presented to ally nations by the Israeli government, allegedly prompted the countries to cut funding to the agency – an act that the majority have not reversed as of this week.

The information includes allegations that around 17% of UNRWA teachers (out of a total 8,300) and around 20% of UNRWA school principals and deputy principals (out of a total 500) are members of Hamas. Ties to the group extend to UNRWA workers in positions related to relief and humanitarian aid, with about 10% of the 151 relief workers, and members of UNRWA’s health services.

READ ON THE FOX NEWS APP

From 2009 to 2024, a little under $4 billion in taxpayer dollars was given to the humanitarian relief organization, according to a Fox News Digital review.

The most serious allegations claim that Hamas has representatives in the UNRWA staff union and influences it, and lines of communication exist at the district level between UNRWA’s district managers and Hamas. According to the information, "due to the scope of UNRWA's activity in the [Gaza Strip]," Hamas prioritizes its connection with UNRWA, stressing that "in steady state and in contingency state, the Hamas regime coordinates activities with UNRWA."

Satellite images reviewed by Fox News Digital show two boys' schools – the Maghazi Prep B Boys School and the Zaitun Prep A Boys School – that allegedly have Hamas tunnels underneath them. Both cases had resulted in UNRWA condemning potential violations of neutrality, but as of 2023 the tunnels remained open. Israel also identified several schools that stood next to rocket and mortar launch sites throughout the Gaza Strip.

GAZA STRIP RECEIVES NEARLY 200 TONS OF FOOD AND SUPPLIES, UN DESRIBES ‘HUGE OBSTACLES’ TO GETTING RELIEF

Israel has alleged logistical support and exploitation of UNRWA’s immunity, support through supplies and aid, sale of equipment that UNRWA imported to Hamas and the Palestinian Islamic Jihad (PIJ) weapons manufacturing units.

"Furthermore, Hamas assists UNRWA in securing the humanitarian aid that is introduced to the [Gaza Strip]," the dossier explains. "Hamas’ operatives coordinate the aid transfer for UNRWA via Hamas’ tactical network, and have operatives of the Military Wing escort and secure the convoys. UNRWA complies with Hamas’ demands in other areas, as well, such as transferring fuel and additional equipment."

The dossier also included excerpts from textbooks used in the agency’s school curriculum that allegedly include glorification of martyrdom and antisemitic tropes. Maps provided to children in their textbooks show a singular land where Israel and the Palestinian territories exist but labeled as a singular Palestine.

Israel has argued that such content violates UNRWA’s neutrality policy, which the agency on its website describes as an understanding that "humanitarian actors must not take sides in hostilities or engage in controversies of a political, racial, religious or ideological nature."

One excerpt included a math problem which used "the number of martyrs" in the first and second intifadas (meaning rebellion or uprising) and decrees on Allah’s wishes for "hypocrites in fighting against infidels" and honoring martyrs "from among the believers."

More than 1,200 Israelis were killed, more than 6,900 civilians are estimated to have been injured, and hundreds more were taken hostage when Hamas launched a surprise attack in southern Israel on Oct. 7, 2023.

"UNRWA, and the United Nations writ-large, have acted swiftly and decisively in the matter of the allegations brought against UNRWA employees, fully cooperating with Israeli authorities, issuing a public disclosure of the allegations and immediately terminating the named employees," William Deere, senior congressional adviser to the Washington, D.C., office of UNRWA told Fox News Digital.

An UNRWA tent camp in Khan Yunis, Gaza, on Nov. 27, 2023.

Deere also claimed that the Israeli government had provided no information beyond the names of the dozen employees and that UNRWA only learned of further accusations of greater numbers of agency employees with ties to Hamas from international media reports and later from a press briefing by an Israeli official.

U.S. intelligence in February said it was likely some employees of UNRWA participated in the attack, but it also said it could not verify Israeli allegations of wider links between the agency and UNRWA, according to The Wall Street Journal. Citing the assessment, Deere noted "the reality of Hamas' control in Gaza means that while UNRWA may have to interact at a technical level with the group to deliver humanitarian relief, but that that doesn't mean that the agency is collaborating with the militant group."

Unlike the U.S. and several other countries, the United Nations has yet to recognize Hamas as a terrorist organization.

A plane drops humanitarian aid around to Al-Shati refugee camp and Jamal Abdel Nasser Street in Gaza City on March 9, 2024.

"Another section of [the] report notes what it says is Israel's long-standing dislike of UNRWA and how Israeli bias serves to mischaracterize much of their assessments on UNRWA, resulting in distortions," Deere said.

"Israeli intelligence agencies said they concluded that 10% of all UNRWA workers had some kind of affiliation, usually political, with Hamas," the Wall Street Journal reported. "A far smaller number had ties to the militant wings of Hamas and another group, Palestinian Islamic Jihad. UNRWA employs around 12,000 people in Gaza."

Deere said the investigation team from the U.N. Office of Internal Oversight Services (OIOS) had commenced an investigation into the employees and potential ties, but insisted that the Israeli government must assist the investigation. An interim report provided to U.N. Secretary-General António Guterres provided information that led to Canada reversing its decision to cut funding to the agency.

Another, independent review carried out by former French Foreign Minister Catherine Colonna commenced following the allegations against the UNRWA employees, specifically citing concerns that UNRWA was not maintaining its neutrality policy. The group will issue an interim report on March 20, 2024, with a completed report expected exactly one month later.

A State Department spokesperson told Fox News Digital that the department is focused on the U.N.'s investigation "to make sure that this is fully and thoroughly investigated, that there’s clear accountability, and that as necessary, measures are put in place so that this doesn’t happen again, assuming the allegations are fully borne out."

"We welcome the decision by the U.N. to conduct an investigation and a ‘comprehensive and independent’ review of UNRWA, as well as Secretary General Guterres’ pledge to take decisive action to respond, should the allegations prove accurate," the spokesperson added.

A man walks in front of the UNRWA building in Gaza City on Jan. 30, 2023.

Australia, the European Commission and Sweden also resumed funding for UNRWA in recent weeks: Australian Minister for Foreign Affairs Penny Wong told reporters "the best available current advice from agencies and the Australian government lawyers is that UNRWA is not a terrorist organization," arguing that it remains paramount to ensure "the integrity of UNRWA’s operations," rebuild confidence in the organization and ensure aid flows to Gaza.

Wong also pledged an additional $2.6 million to UNICEF to provide urgent services in Gaza, and a C17 Globemaster plane will also deliver defense force parachutes to help with the U.S.-led airdropping of humanitarian supplies into the enclave, which is on the brink of famine, according to the United Nations.

Survivors and family members of slain victims of the Oct. 7 terrorist attack have initiated a lawsuit against UNRWA USA and UNRWA this week, arguing the two groups are "[i]nextricably [l]inked" in supporting Hamas."

"501(c)(3) nonprofit organizations generally do good work. They feed the hungry, help the poor, and house the homeless. But on some very rare occasions, a 501(c)(3) nonprofit organization finances an international terrorist plot that kills over 1,200 innocent people," the lawsuit says. "This case involves one of those rare occasions."

Fox News Digital's Danielle Wallace, Lawrence Richardson, Brianna Herlihy and The Associated Press contributed to this report.