Major International Business Headlines Brief::: 29 May 2021

Sat May 29 10:09:44 CAT 2021

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Major International Business Headlines Brief::: 29 May 2021

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ü  Hospitality 'struggling to fill thousands of jobs'

ü  Biden budget: President sets out $6tn spending plan

ü  British exports worth billions have faced EU tariffs since Brexit

ü  French oil giant Total rebrands in shift to renewables

ü  Pent-up demand, shortages fuel U.S. inflation

ü  3M wins U.S. trial alleging cover-up of earplug design

ü  Colonial Pipeline says temporary network disruption resolved

ü  Money is cheap, let's spend it - White House $6 trillion budget message

ü  Amazon pressed for racial equity review after strong vote tally

ü  Electric-vehicle firm Rivian could seek $70 bln valuation in IPO- Bloomberg News

ü  Mexican president says Constellation will build new beer factory

ü  Africa: U.S. Push for a Global Clean Energy Transition Can Start in Africa

ü  Uganda, DR Congo Sign 223km Roads Deal

ü  First 137 Business Mentors and 20 Startups to Graduate under the Young Africa Works in Ethiopia Program

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Hospitality 'struggling to fill thousands of jobs'

Hospitality venues are struggling to fill thousands of job vacancies, according to an industry body.

Waiting staff and chefs are in particular demand as Covid-19 restrictions continue to ease, UK Hospitality said.

It called on the government to stick to its plan to lift all Covid restrictions in England on 21 June.

The government said it was "doing everything we can to support hospitality".

The sector has been has been hit hard by the pandemic, and is also facing shortages due to Brexit, the trade body said.

>From last week pubs, restaurants and cafes were able to serve customers indoors in England, Scotland and Wales, while restrictions in Northern Ireland were relaxed this week.

But even before those restrictions lifted, hospitality venues were struggling to find staff.

Restaurants struggle to find staff ahead of reopening

UK Hospitality said there was currently a shortfall of about 188,000 workers, with the shortage of front-of-house staff and chefs being "particularly acute".

Under the government's roadmap out of lockdown, all coronavirus restrictions in England could be lifted on 21 June. But in recent days ministers, including Boris Johnson, have warned that could be delayed by an increase in the number of cases of the Indian variant.

'Stick to the roadmap'

UK Hospitality said that uncertainty was one factor in people not going for restaurant jobs.

"The government must restore confidence in the hospitality sector so that it is again seen as a stable employer and provider of fulfilling careers," said Kate Nicholls, the chief executive of UK Hospitality.

"To facilitate this, it must stick to the re-opening roadmap, lifting all restrictions from 21 June. This will restore consumer confidence and give a strong signal to workers that hospitality will bounce back strongly."

Many hospitality businesses have struggled during the pandemic despite extensive government support, including rates holidays and the furlough scheme.

Many hospitality staff have been laid off during the pandemic.

Brexit has also contributed to staff shortages, especially in city centre venues, as EU workers returned to their home countries, a UK Hospitality spokesperson said.

Overseas workers also returned home at the beginning of the pandemic, and many have not returned due to travel restrictions.

UK Hospitality urged the government to encourage UK-based workers to join the sector.

It also asked for the government to renew its list of shortage occupations and consider a visa scheme for workers who would not qualify under the points-based system.

Training focus

The government is working with the sector to understand the impact on job shortages due to Brexit and the Covid pandemic, a government spokesperson said.

Employers should focus on training the domestic workforce, the spokesperson said, rather than relying on labour from abroad.

The immigration system attracts the "best and brightest talent", the government added.

"We are doing everything we can to support hospitality to recover following the reopening of indoor venues in England earlier this month.

"Our dedicated work coaches are supporting people into work, including in hospitality, and through the Kickstart Scheme we're offering generous incentives to employers to recruit, with hundreds of young people starting work every day."-BBC

Biden budget: President sets out $6tn spending plan

US President Joe Biden has released his first annual budget - a $6tn (£4.2tn) spending plan that includes steep tax increases for wealthier Americans.

The bumper proposal would include huge new social programmes and investment in the fight against climate change.

But it needs approval from Congress, where Republican Senator Lindsey Graham condemned it as "insanely expensive".

Under the plan, debt would reach 117% of GDP by 2031, surpassing levels during World War Two.

That would be in spite of at least $3tn in proposed tax increases on corporations, capital gains and the top income tax bracket.

Former President Donald Trump, a Republican, also ran up the deficit each year he was in office, and his final annual spending proposal had a price tag of $4.8tn.

The Biden budget includes a $1.5tn request for operating expenditures for the Pentagon and other government departments. It also incorporates two plans he has previously publicised: his $2.3tn jobs plan and a $1.8tn families plan.

Mr Biden, a Democrat, said his budget "invests directly in the American people and will strengthen our nation's economy and improve our long-run fiscal health".

What's in the plan?

The White House says the proposal will help grow the economy from the bottom up and middle out.

Biden unveils 'once in a generation' spending plan

This budget promises:

·         More than $800bn for the fight against climate change, including investments in clean energy

·         $200bn to provide free pre-school places for all three and four-year-olds

·         $109bn for two years of free community college for all Americans

·         $225bn for a national paid family and medical leave programme - bringing the US in line with comparable wealthy nations

·         $115bn for roads and bridges and $160bn for public transit and railways

·         $100bn to improve access to broadband internet for every American household

The budget also has a noticeable absence: the Hyde Amendment, a federal provision that says taxpayer money cannot fund abortions in US states except in cases of rape and incest.

Mr Biden is the first president in decades to exclude the abortion coverage ban, a move that has already been applauded by progressives. He supported the amendment for years before changing course during last year's presidential campaign.

But the president's plan faces an uphill battle in the Senate, where several centrist members of his own party could side with Republicans in supporting the Hyde Amendment.

What about inflation and the deficit?

Top White House economic adviser Cecelia Rouse acknowledged the economy was now seeing inflation spikes, but projected it would settle down to an annual rate of around 2% over time.

Some economists, including Larry Summers, who advised Presidents Barack Obama and Bill Clinton, have warned such massive government spending could drive up inflation, forcing the Federal Reserve to raise interest rates, which would in turn raise the risk of a recession.

The Biden budget projects an additional $14.5tn would be added to US debt over the next decade.

But the White House estimates the plan would be completely paid for within 15 years as tax increases eat away at the deficit.

Critics, however, are sceptical about projected happy endings long after Mr Biden leaves office.

Chart showing US debt over time

Republicans have expressed alarm at the record spending.

Senate minority leader Mitch McConnell on Friday called the plan a "socialist daydream".

Senator Jerry Moran of Kansas said it would "saddle future generations with burdensome levels of debt".

The era of big government is back - that is, if Joe Biden has his way.

Back in 1996, Bill Clinton famously said that big government was a thing of the past, as the Democratic president acquiesced to Republican efforts in Congress to slash welfare benefits and other federal funding.

In the two decades since, following the September 11 attacks, the Great Recession and a global pandemic, American support for government activism has returned - and Biden, long considered a political centrist, is proposing a budget that reflects that.

There are no massive new government proposals in Biden's budget - no publicly run health insurance or free college for all - but his administration incorporates the president's current legislative agenda and boosts spending for numerous social programmes, with a focus on health and education.

The Biden plan anticipates massive deficits - over $1tn annually - which will prompt condemnation from fiscal hawks on the left and right. And Republicans will pick apart specific spending items.

Presidential budgets are blueprints, however, and seldom resemble what Congress ultimately approves. What Biden's proposal says is that he wants to keep the government spending spigots wide open - and that he thinks the American people will have his back.

Will it pass?

Congress has until the end of September to enact new spending bills. If they fail to pass a new budget, the government could partially shut down.

Mr Biden's Democrats have a narrow majority in the House, and a meagre one-seat advantage over Republicans in the 100-seat Senate.

Unlike most other bills, budget measures can be passed with just 51 votes instead of the 60 typically required meaning he might be able to sign some of his plans into law without Republican support.

Republicans have already criticised Mr Biden for the size of his spending - including the $1.9tn spent on coronavirus relief earlier this year.

media captionHas Biden unified the country? Watch as Americans weigh in.

And ensuring all Democrats are on board won't be easy either. While Democrats are broadly in support of his spending initiatives, there are sure to be sticking points.

Mr Biden's increase in military spending, for example, may cause issues among the more progressive members of his party.-BBC

British exports worth billions have faced EU tariffs since Brexit

British exports worth billions of pounds have faced tariffs on trade with the EU since Brexit, according to an analysis of official EU statistics.

Despite the tariff-free deal agreed with the EU, a study by the University of Sussex found up to £3.5bn of British exports had taxes applied.

That accounts for about 10% of British goods exports to the EU.

Some firms paid due to the complexity of claiming zero tariffs, or said they planned to reclaim the fees later.

For exporters, maintaining zero tariffs under the post-Brexit deal is not automatic: it needs to be claimed on customs declarations that from January have had to accompany every export to the European Union.

An analysis for the BBC, by the University of Sussex's Trade Policy Observatory, used European customs data from these declarations.

The figures indicated that between £2.5bn and £3.5bn of British exports faced a tariff in the first three months of 2021.

The European Commission confirmed that according to data collected by its customs authorities, €2.5bn of eligible UK exports did not use the zero-tariff agreement.

"Tariff-free trade is only tariff-free if firms not only meet the rules of origin criteria, but also can deal with the necessary bureaucracy and paperwork," said Prof Michael Gasiorek, trade expert at the University of Sussex.

"What this analysis shows is that in the first quarter, around 27% of trade that could have entered tariff-free did not do so.

"In some sectors and for some firms, this will no doubt improve, but it reflects the reality that leaving the EU has imposed real costs on firms, with long-term implications for trade and production."

The data covers all British exports to the EU in January and February, and some reporting nations in March.

Individual businesses and groups told the BBC of instances where millions of pounds in tariffs had been paid.

Most put this down to complex arrangements for claiming zero tariffs, difficulties over the re-export to the EU of goods processed in Britain, and an expectation that some of these fees could eventually be recovered. Some of the world's biggest multinationals have paid seven-figure tariff bills.

Rare vehicles

A classic car repairer, The Classic Car Mechanic, showed tariff bills of hundreds of pounds for car parts for rare vehicles sent to Hungary, which could not be valued, and so were hit with a tariff by French customs.

"We've had to pay a tariff, even though we've got a zero tariff," said the boss of the business, Simon Spurrell.

"It's the same with all the other shipments, all UK origin parts, but they dispute it and they hold it up.

"We feel that we have no fight left in us, we have to then, as a small organisation just say, well, we'll cut our losses, and just pay the duty."

The Trade Policy Observatory has tried to quantify the effect of extra trade barriers with the EU on different sectors.

Although exports began to recover from a massive drop in January, over the quarter, the Observatory calculated that, of the worst affected sectors, textiles saw exports fall 63%, food suffered a 36% drop, and the automotive industry saw exports down 20%.

Other advanced manufacturing industries have not been affected, according to the analysis, which seeks to isolate the impact of post-Brexit barriers from the impact of the pandemic.

A government spokesperson said: "The vast majority of traders have adjusted well to our new trading relationship with the EU.

"HMRC continues to work closely with exporters to ensure they correctly apply rules of origin requirements and are aware of their right to refunds.

"The unprecedented zero-tariff zero-quota deal we secured with the EU allows businesses to trade smoothly, while we can now regulate in a way that suits the UK economy and our businesses - doing things in a more innovative and effective way, without being bound by EU rules."

The analysis also showed that in the early months of the deal, there were some marked differences between EU nations in the extent of use of the free-trade deal for imports of British goods.

Data for what is known as "preference utilisation" of British exports to Germany shows rates well below half in January and February at 42% and 44% respectively. The trade deal has been used more, according to the data, for exports to France, reaching 77% in March.

Preference utilisation rates (PURs) measure the extent to which tariff preferences provided by a particular trade agreement are being used by imports and exports of either side.

European Commission sources stressed that overall use of the deal was in line with the first months of other free-trade deals and that it would take some time to assess the impact.

UK government ministers told Parliament last month that they would be releasing their equivalent data for EU exports into Great Britain shortly.--BBC

French oil giant Total rebrands in shift to renewables

Oil and gas giant Total will be rebranded as TotalEnergies as it shifts some of its focus towards renewable energy sources.

Shareholders voted overwhelmingly in favour of the move and approved the firm's environmental goals.

"We want to become a sort of green energy major," said chief executive Patrick Pouyanné.

Big energy firms are coming under increasing pressure to adjust to a lower-carbon world.

On Wednesday, a small hedge fund investor succeeded in ousting two board members at Exxon in the US, in a bid to alter the firm's direction on climate change.

And a court in the Netherlands ordered Royal Dutch Shell to cut its emissions more quickly than the Anglo-Dutch oil firm had planned.

Total, the world's fourth-largest privately-owned oil and gas producer, is aiming to reach carbon neutrality by 2050, in part by investing in more solar and wind power projects.

While several small investors opposed the company's plans at the annual general meeting, arguing they did not go far enough, the resolution was passed with more than 90% of the vote.

European energy firms have moved more quickly than their US counterparts to begin the transition away from fossil fuels, said Mike Coffin, senior analyst in oil and gas at financial think tank Carbon Tracker.

"Total we see in the upper tier, ranking alongside BP, but below Eni," he said. "They don't fulfil all our hallmarks of Paris [climate treaty] compliance, but above Shell and certainly above the North American companies."

In February, announcing the planned rebranding, Mr Pouyanné said the new name would symbolise Total's "new commitment to be a leader in a world with more energies and fewer emissions".

He said the company would have to go through "a genuine transformation" to meet its net zero target by 2050.

Climate targets

The International Energy Agency surprised the energy market this month with a report suggesting fossil fuel production needed to slow down much more quickly than firms were planning for.

The IEA said there could be no new investment in fossil fuel projects after this year, if the world wanted to reach net zero carbon emissions by the middle of the century.

Carbon Tracker says global energy firms and state-owned producers have fossil fuel reserves on their books that will have to be left unexploited, if the world is to have any chance of meeting its carbon emissions targets.

Hedge funds, as well as large investors like Blackrock and pension funds, were beginning to recognise that failing to adjust plans in the light of climate targets represented a financial risk to companies they invest in, Mr Coffin said.

"From an environmental perspective, we want these fossil fuels to stay in the ground - they're unburnable carbon," he said.

"From an investment perspective, you don't want to sanction them because you're wasting your capital. You won't see the historic returns we've seen from oil and gas because of the slowdown in demand."--BBC

Pent-up demand, shortages fuel U.S. inflation

U.S. consumer prices surged in April, with a measure of underlying inflation blowing past the Federal Reserve’s 2% target and posting its largest annual gain since 1992, because of pent-up demand and supply constraints as the economy reopens.

The strong inflation readings reported by the Commerce Department on Friday had been widely anticipated as the pandemic's grip eases, thanks to vaccinations, and will have no impact on monetary policy. Fed Chair Jerome Powell has repeatedly stated that higher inflation will be transitory.

The U.S. central bank slashed its benchmark overnight interest rate to near zero last year and is pumping money into the economy through monthly bond purchases. It has signaled it could tolerate higher inflation for some time to offset years in which inflation was lodged below its target, a flexible average.

The supply constraints largely reflect a shift in demand towards goods and away from services during the pandemic. A reversal is underway, with Americans flying to vacation destinations and staying at hotels among other activities. Year-on-year inflation is also accelerating as last spring's weak readings drop from the calculation.

"Many goods are in short supply amid very strong demand and supply chain disruptions, and some services prices are up sharply as consumers start to go out again," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. "Shortages of labor in some industries are also contributing to higher prices. But many of these factors will prove transitory, and inflation will slow in the second half of 2021."

Consumer prices as measured by the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, increased 0.7% last month amid strong gains in both goods and services. That was the biggest rise in the so-called core PCE price index since October 2001 and followed a 0.4% gain in March.

In the 12 months through April, the core PCE price index vaulted 3.1%, the most since July 1992, after rising 1.9% in March. Economists polled by Reuters had forecast the core PCE price index rising 0.6% in April and surging 2.9% year-on-year.

The core PCE price index is the Fed's preferred inflation gauge.

Stocks on Wall Street were trading higher, though gains were capped by the rising price pressures. The dollar rose against a basket of currencies. U.S. Treasury prices were higher.

"Inflation is up, but real yields are still low," said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia. "This is basically the transitory sweet spot."

INCOME PLUNGES

Some economists are not convinced that higher inflation will be temporary.

A survey from the University of Michigan on Friday showed consumers' one-year inflation expectations shot up to 4.6% in May from 3.4% in April, hurting household sentiment. Their five-year inflation expectations rose to 3.0% from 2.7% last month.

"Concerns about the future can cause households to become more conservative in their spending," said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania. "The Fed is guessing that the rise in inflation will be temporary, and it better be correct."

Though consumer spending moderated last month as the boost to incomes from stimulus checks faded, households have accumulated at least $2.3 trillion in excess savings during the pandemic, which should underpin demand. Wages are also rising as companies seek to attract labor to increase production.

Generous unemployment benefits funded by the government, problems with child care and fears of contracting the virus, even with vaccines widely accessible, as well as pandemic-related retirements have left companies scrambling for labor.

That is despite nearly 10 million Americans being officially unemployed. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.5% last month. Data for March was revised higher to show spending surging 4.7% instead of 4.2% as previously reported.

The rise in spending was in line with expectations. Spending was held back by a 0.6% drop in outlays on goods. Though purchases of long-lasting goods such as motor vehicles rose 0.5%, spending on nondurable goods tumbled 1.3%. Outlays on services increased 1.1%, led by spending on recreation, hotel accommodation and at restaurants.

When adjusted for inflation, consumer spending slipped 0.1% after jumping 4.1% in March. Despite last month's dip in the so-called real consumer spending, March's solid increase put consumption on a higher growth trajectory in the second quarter.

Personal income plunged 13.1% after surging 20.9% in March. With spending exceeding income, the saving rate dropped to a still-high 14.9% from 27.7% in March. Wages increased 1.0% for a second straight month.

Consumer spending powered ahead at a 11.3% annualized rate in the first quarter, contributing to the economy's 6.4% growth pace. Most economists expect double-digit growth this quarter, which would position the economy to achieve growth of at least 7% this year, which would be the fastest since 1984. The economy contracted 3.5% in 2020, its worst performance in 74 years.

Growth prospects for the second quarter were bolstered by another report from the Commerce Department showing the goods trade deficit narrowed 7.3% to $85.2 billion in April, with exports rising and imports declining.

But inventory at retailers fell 1.6%, pulled down by a 7.0% plunge in automobile stocks as the sector struggles with a global semiconductor shortage.

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3M wins U.S. trial alleging cover-up of earplug design

3M Co (MMM.N) won a court case on Friday in which it was accused of covering up design defects in earplugs used by the military, following a recent loss in a similar case among nearly 230,000 claims against the company.

The Florida trial is the second to address allegations 3M hid design flaws, fudged test results and failed to instruct the military in proper use of the earplugs, which were used by the army between 2007 and 2013.

The two decisions are in "bellwether" cases, where the parties select a set of cases from the thousands that are pending to test the strength and weaknesses of the claims. The next such trial begins on June 7.

3M said it will continue to defend itself in upcoming trials, adding that its "Combat Arms Earplug Version 2 product is and has always been safe and effective to use".

Plaintiffs' attorneys Bryan Aylstock and Christopher Seeger said in a statement, "We continue to believe that the evidence overwhelmingly demonstrates that 3M knew their CAEv2 earplugs were defective, yet allowed our servicemembers who relied on them for hearing protection to suffer from preventable hearing loss and tinnitus."

In April, three veterans who had accused the company of covering up design defects in its earplugs were awarded $2.1 million each in punitive damages and a total of $830,500 in compensatory damages for their medical expenses, lost earnings and pain and suffering. read more

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Colonial Pipeline says temporary network disruption resolved

Colonial Pipeline, the largest fuel pipeline in the United States, on Friday said it had resolved a temporary network disruption, just weeks after a ransomware attack crippled fuel delivery for several days in the southeast region.

Colonial earlier on Friday experienced a network issue, the company said, but restored service to its network. The issue was not associated with malware, the company said.

The company had earlier said shippers were having problems entering and updating nominations for deliveries.

The "system functionality has returned to normal," the company said.

The reason for the network issues was not immediately clear.

Colonial's shipping nomination system is operated by a third party, privately-held Transport4, or T4, which handles similar logistics for other pipeline companies.

T4 on Friday said its application was working for all customers and carriers. It did not comment on Colonial's current network issue and said that data between T4 and Colonial was transacting normally.

Friday's network problems are the second occurrence of such issues since the attack earlier in the month. Colonial is the largest fuel system in the United States, accounting for millions of barrels of daily deliveries to the U.S. East Coast and Southeast.

Shortly after Colonial restored operations from the hack, it suffered a brief network outage that prevented customers from planning upcoming shipments on the line. At the time, Colonial said the disruption was caused by efforts by the company to harden its system, and was not the result of a reinfection of its network.

The southeast United States is still recovering from the six-day line outage from earlier this month and the supply issues it caused in the region. Around 6,000 gas stations were still without fuel this week, according to tracking firm GasBuddy, down from a peak of more than 16,000.

Almost 40% of gas stations in the capital, Washington, were without supplies on Thursday, GasBuddy said. More than 20% of stations in North Carolina, Georgia and South Carolina were also empty.

The hack also boosted gasoline prices earlier than expected this year. Heading into Memorial Day weekend, the traditional start of the summer driving season, U.S. motorists are seeing the highest gasoline prices in seven years. read more

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Money is cheap, let's spend it - White House $6 trillion budget message

The White House on Friday sent Congress a $6 trillion budget plan that would ramp up spending on infrastructure, education and combating climate change, arguing it makes good fiscal sense to invest now, when the cost of borrowing is cheap, and reduce deficits later.

The first comprehensive budget offered by Democratic President Joe Biden faces strong opposition from Republican lawmakers, who want to tamp down U.S. government spending and reject his plans to hike taxes on the rich and big corporations.

Biden's plan for fiscal year 2022 calls for $6.01 trillion in spending and $4.17 trillion in revenues, a 36.6% increase from 2019 outlays, before the coronavirus pandemic bumped up spending. It projects a $1.84 trillion deficit, a sharp decrease from the past two years because of the COVID-19 pandemic, but up from 2019's $984 billion.

The blueprint builds on a partial "skinny budget" the White House released last month that mapped out $1.5 trillion in discretionary spending. read more

The plan drew praise from Democrats, including House Speaker Nancy Pelosi, and criticism from Republicans - who blasted the proposed higher debt levels - and some progressive groups, who said it should have scaled back military spending.

Senate Budget Committee Chairman Bernie Sanders called Biden's budget "the most significant agenda for working families in the modern history of our country," and said it would create millions of good-paying jobs, while reducing poverty.

Senate Majority Leader Mitch McConnell heaped scorn on the plan, and warned Democrats to "move beyond the socialist daydream and the go-it-alone partisanship."

"President Biden’s proposal would drown American families in debt, deficits, and inflation," McConnell said in a tweet.

PAID FOR IN 15 YEARS

White House officials said Biden's $4 trillion plans to address historic U.S. inequality, climate chance and provide four more years of free public education would be completely paid for in 15 years, with tax increases starting to chip away at deficits after 2030.

Cecilia Rouse, the chair of Biden's Council of Economic Advisers, says Biden's plan is front loaded and that the administration was willing to live with budget deficits amid low-interest rates to make significant investments in the nation's economy. She projected a drop in deficits by over $2 trillion in the following years.

"That is a sharp departure from unpaid tax cuts under the prior administration that seriously worsened our long-term fiscal problem," she said. "The most important test of our fiscal health is real interest payments on the debt. That’s what tells us whether debt is burdening our economy and crowding out other investments."

While rates on U.S. Treasury securities have climbed off record lows seen at the height of the coronavirus crisis last year, the government's borrowing costs are still the lowest they have been in years.

Rouse said the economy was seeing short-term inflation spikes, fueled by the sharp growth in the economy, but projected it settling down to an annual rate of around 2% over time.

Increased investment would boost U.S. economic growth, with the current conservative White House forecast calling for 2% gross domestic product growth in 2031, compared with the Federal Reserve's estimate of 1.8%.

Biden's first full spending outline since taking office in January serves as the fiscal blueprint for his political priorities, and is likely to kick off months of difficult negotiations with Congress, which needs to approve most of the spending.

Republicans' opposition is growing to much of Biden's push to spend more to revamp the U.S. economy, as they argue it could fuel inflation and tamp down corporate competitiveness.

Biden has tussled with Republicans over the price of his initiatives, recovery from the pandemic and improvement of roads and bridges. No Republicans voted for his $1.9 trillion stimulus bill, but some touted its benefits later, drawing some chiding from the president. read more

U.S. Treasury Secretary Janet Yellen said on Thursday that the budget would push U.S. debt above the size of the U.S. economy but would not contribute to inflationary pressures. read more

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Amazon pressed for racial equity review after strong vote tally

Amazon.com Inc should review how it is addressing racial justice and equity after a shareholder proposal on the topic won strong backing, New York state’s top pension official said on Friday.

A filing on Friday showed 44% of votes cast supported a call for a review of the company's impact on equity, diversity and other areas proposed by New York State Comptroller Thomas DiNapoli at Amazon's annual meeting on May 26, a high total for such a measure.

DiNapoli said the measure would have received a majority but for the 14% stake held by CEO Jeff Bezos, a sign of investor dissatisfaction at the leading online retailer.

"Shareholders sent a loud message to Amazon that they want the company to do more to address racial diversity, equity and inclusion. It's time for Amazon to listen to its investors," DiNapoli said in an emailed-statement.

Amazon had previously said the measure did not win a majority but it did not give the voting breakdown.

An Amazon representative said the company has "initiated numerous programs to assess and address racial justice considerations across key aspects of our operations that we believe fully address the objectives of this proposal.”

The call for the racial equity audit received the highest level of support among 11 shareholder proposals at Wednesday's meeting.

Another, calling for Amazon to consider adding an hourly worker to its board of directors received support from 17% of votes cast, the filing showed.

Proposals with such low levels of support are rarely adopted, although the figure was about twice what similar calls for workers-on-boards have received at other companies in recent years.

The measure, which received a rare endorsement from Institutional Shareholder Services, was closely watched at the annual meeting after a union organizing effort at the company failed in April.

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Electric-vehicle firm Rivian could seek $70 bln valuation in IPO- Bloomberg News

Electric-truck startup Rivian Automotive Inc could target a valuation of about $70 billion in its potential public listing later this year, Bloomberg news reported on Friday.

Amazon.com Inc (AMZN.O) and Ford Motor Co (F.N)-backed Rivian had a valuation of $27.6 billion, Reuters reported in January, after a $2.65-billion investment round led by T. Rowe Price.

Rivian is working with advisers including Goldman Sachs Group Inc, JPMorgan Chase & Co., and Morgan Stanley on an initial public offering, Bloomberg news reported, citing people familiar with the matter.

The news outlet in February reported the company could seek a valuation of about $50 billion. read more

Rivian, JPMorgan Chase andMorgan Stanley declined to comment on Bloomberg News' Friday report, andGoldman Sachs did not respond to Reuters' request for comment.

Rivian, which aims to compete with Tesla Inc (TSLA.O), targets to start production of an electric-pickup and SUV this year.

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Mexican president says Constellation will build new beer factory

Mexico's president said on Friday that U.S. brewer Constellation Brands(STZ.N) will build a new brewery somewhere in the southeastern part of the country, following a deal he said his government has reached with the company.

President Andres Manuel Lopez Obrador made the announcement during his regular morning news conference, but did not offer further details on the project.

Constellation did not immediately respond to a request for comment on the president's remarks.

Last year, a previous plan by Constellation to build a brewery in the northern city of Mexicali, near the border with the United States, was rejected in a local public referendum.

On Friday, the president touted plentiful water supplies in Mexico's southeast, which was a major sticking point when the project was slated for the arid north.

Constellation brews several brands of Mexican beer, including Corona and Pacifico, exclusively for the U.S. market, which was one factor that made the original border location attractive logistically.

In April, local media reported that Constellation told its shareholders it was searching for a new site in Mexico but did not specify possible locations.

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Africa: U.S. Push for a Global Clean Energy Transition Can Start in Africa

Katie Auth is policy director at the Energy for Growth Hub and former deputy coordinator of Power Africa at USAID. Todd Moss is executive director at the Hub and a former deputy assistant secretary of State for African Affairs. Rose Mutiso is research director at the Hub and former senior fellow at the Department of Energy and at the U.S. Senate.

The new U.S. Climate Finance Plan aims to double contributions to climate funding for developing countries. A renewed emphasis on emerging economies is good news for the climate, but in presenting support as "protecting the world's poorest" and helping "communities in need," the plan reflects old thinking.

Climate finance is not charity to help the vulnerable or an incentive to reduce emissions. It is a rare opportunity to drive innovation and job creation across the world's poorest economies. Portraying developing countries merely as victims in need of protection shortchanges both them and the window climate policy provides to recast international development, reframe climate justice, and advance U.S. diplomatic, development, and national security goals--particularly on the African continent.

Africa is home to the world's youngest and fastest growing population, which is increasingly urban and digitally connected. Countries across sub-Saharan Africa need to build economies prosperous and diversified enough to create 12-15 million new jobs each year, and cope with worsening climate impacts. The future of U.S. relations with the continent--and its ability to effectively help address security, migration, and economic challenges there--depend largely on whether it can help catalyze ambitious energy transitions to meet dynamic and evolving needs. China, Russia, and other strategic competitors have already caught on.

Fortunately, the United States has a ready response: Power Africa. The multiagency initiative has bipartisan support and an eight-year track record. But a transformative impact requires taking Power Africa to the next level.

To date, U.S. support for African energy has been most successful in catalyzing new (mostly) renewable generation and supporting off-grid solar companies in (mostly) rural areas. Both of these are valuable. But simply doing more of the same will not deliver a prosperous climate-resilient future. Many countries, hindered by limited grid systems, can now generate more power than their systems can absorb. And while off-grid solutions provide great value to certain populations, economy-wide job creation requires far larger-scale systems that can power cities, industry, and digital infrastructure.

The Biden administration should strengthen Power Africa and similar programs in Asia and Latin America to meet the climate challenge and support U.S. foreign policy objectives.

First, development capital must be focused in the countries where it will have the greatest effect. The U.S. International Development Finance Corporation (DFC), a new agency with a $60 billion war chest, is Power Africa's main source of capital. The DFC's current strategy aims to put at least 60% of all projects in low- and lower-middle income countries or in fragile states, and at least $10 billion in the global energy sector by 2025. The DFC could also commit to specific targets in the African energy sector, where additionality and impact are especially high. A development-forward, risk-tolerant approach will ensure that climate finance drives investment not just in more advanced markets like Kenya, Ghana, and South Africa, but in economies where raising capital is hardest--like Niger, Liberia, or Malawi.

Second, in many low-income regions, climate resilience poses the most immediate and severe threat to lives and livelihoods. The U.S. Climate Finance Plan pledges to triple adaptation finance by 2024, but its impact will ultimately depend on whether funds are truly "new and additional." Resilience programs should consider energy itself as a tool for adaptation. Rising temperatures, for example, require air conditioning and cold storage that depend on abundant reliable electricity. The International Energy Agency expects residential cooling demand in Africa to increase by at least factor a 5 by 2040.

Third, the administration's plan recognizes that a global energy transition will require more than wind and solar plants. The Department of State is tasked to drive cooperation on energy storage and low-carbon transportation--both critical for emerging economies and a chance to expand opportunities for U.S. firms. The DFC should consider creating a specific early stage venture capital window for new clean energy technologies, just as the DFC's predecessor agency seeded early private equity funds.

Fourth, the United States must get into the grid game. In most African countries, efforts to bring more renewable power online are hindered by inadequate transmission and distribution. The Millennium Challenge Corporation could scale up grant funds for grid infrastructure (as it did in Senegal), while the DFC could consider replicating the British CDC Group's promising transmission investment platform. USAID could increase its technical assistance for grid performance and management, and identify early opportunities for DFC to invest in private utility concessions, rural electrification, and utility services companies. Power lines and computer systems may not make for glossy photo-ops, but they are essential building blocks for a clean energy future.

Finally, the United States needs to meet countries where they are. This means less finger wagging, a bit more humility, and a lot more financial support for the ambitious energy transitions African countries themselves have proposed. Many--including Senegal, Ghana, Mozambique, and Nigeria--see their domestic natural gas resources as key to expanding energy supply and shifting away from more carbon-intensive fuels. The U.S. Climate Finance Plan seeks to end international investment in fossil fuels, but acknowledges that "in limited circumstances, there may be a compelling development or national security reason" for continued U.S. support. Those reasons and the framework for evaluating them need to be clear.

For Africans, reliable abundant energy is the foundation for creating decent jobs and tackling climate change--just as it is for Americans. Achieving a clean energy transition will be the preeminent global challenge of the next half century. An ambitious U.S. effort to support this work in Africa and other emerging regions is smart policy for the climate, for national security, and for a prosperous and inclusive global economy.

Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.- CFR.

Uganda, DR Congo Sign 223km Roads Deal

Entebbe, Uganda | THE INDEPENDENT | Uganda and Democratic Republic of Congo (DRC) on Thursday signed two agreements aimed at enhancing bilateral trade and strengthening infrastructure development for the mutual benefit of both countries.

The signing of these Agreements follows the State visit to Uganda by Felix Antionè Tshisekedi from 9th - 10th November 2019 where both Presidents emphasized the importance of developing cross - border infrastructure which is essential to facilitate trade between the two countries.

The agreement comes from a background that despite the lucrative business opportunities between the two nations, trade has been hampered by the poor road network. This, both parties agreed, partly increases insecurity and the cost of doing business.

The Agreements, the Inter-Governmental Agreement (IGA) was signed by President Yoweri Museveni and Chrisrophe Lutundula Apala, Deputy Prime Minister and Minister of Foreign Affairs of the Democratic Republic of Congo (DRC) and witnessed by Jacob Oulanyah Speaker of the Republic of Uganda.

The Second Agreement, the Project Development Agreement was signed by Alexis Gisaro Muvunyi, the Minister of Infrastructure and Public Works of the Democratic Republic of Congo and Bageya Waiswa the Permanent Secretary Ministry of Works & Transport of the Republic of Uganda and witnessed by Anita Among, the Deputy Speaker and Biselele Fortuna, Private Advisor to the President of the Democratic Republic of Congo.

The visit by the Deputy Prime Minister and Minister of Foreign Affairs to Uganda, comes at a time when relations between Uganda and the Democratic Republic of Congo (DRC) are growing from strength to strength. This trajectory would not have been possible without the commitment and dedication by both Heads of State.

The Inter-Governmental Agreement (IGA) which covers three roads stretching 223 Kilometers and the Project Development Agreement (PDA) is therefore an important milestone for the commencement of the bilateral efforts of both countries in realizing the construction and upgrading of the following roads;

- The Mpondwe/Kasindi- Beni road (80 Kilometers)

- The Bunagana- Rutshuru- Goma Road (89 kilometers

- The integration of the Beni-Butembo Axis (54 Kilometers)

President Museveni commended his colleague in DRC Tshisekedi for leadership and the importance attached on the development of cross-border infrastructure. This is a critical enabler in facilitating trade, investment, tourism, movement of people and but more so in deepening regional integration.

The President also underscored the need to maintain peace and security to achieve prosperity and development for the benefit of all people in the Region.

Lutundula Apala hailed President Museveni for accepting to sign this historical Agreement on the Joint Road Infrastructure Project which he said demonstrates the close fraternal relations between both countries.-Independent (Kampala).

First 137 Business Mentors and 20 Startups to Graduate under the Young Africa Works in Ethiopia Program

Addis Ababa — Ethiopia’s first cohort of 137 business mentors for startups and SMEs and 20 startup enterprises will graduate at a special ceremony to be held later this month. The graduates were trained through the Center for African Leadership Studies (CALs)/xHub, which are part of the Young Africa Works in Ethiopia program, a partnership with the Mastercard Foundation and Jobs Creation Commission. The event will take place at the Sheraton hotel in Addis Ababa on May 27, 2021 at 4PM.

>From the 20 startups selected from Addis Ababa, Arbaminch, and Debrebirhan, a total of 36 entrepreneurs, including six women, participated in the training program. The participants were selected based on the strength of their business ideas in terms of solving local problems, scalability, affordability, and innovativeness.

During the one-year incubation period, the graduates received intensive training ranging from marketing to business law, and leadership development. While developing their business models, they were provided with internet access within a coworking space.

Building on the training, graduates participated in networking and experience-sharing sessions with other startups, successful entrepreneurs, and different role models in the ecosystem.  The entrepreneurs received seed funding as well as business development and services designed to accelerate their growth and success.

After their graduation, the startups will be engaged in various sectors, including digital technology, coffee production and sales, education, health, tourism, transportation, agriculture, and media communications.

“I know that my business idea is very big; it even sometimes overwhelms me. The idea creates an opportunity for me and for those around me, and it also has a chance to change the way we do business in Ethiopia. I was encouraged and decided to pursue “Freelancesira” after being accepted to the CALS/xHub Addis startup program supported by the Mastercard Foundation. I would like to say thank you to CALS/xHub and the Foundation,” says Bezawit Admasu, Founder of Freelancesira.

“CALS/xHub’s mission is to provide a robust support system for entrepreneurs and transform them into exceptional leaders and market influencers. We believe that an innovative and collaborative hub is the catalyst that young entrepreneurs need to align their skills to fit real business demands,” said Tewodros Tadesse Araya, Founder and CEO, Center for African Leadership Studies (CALS), xHub Addis.

“Since the incubation and acceleration hub were founded nine years ago, the lack of mentors and business coaches has always been a challenge in the ecosystem. Now, or the first time, we have 137 mentors entering the startup ecosystem,” adds Tewodros Tadesse Araya.

The Center for African Leadership Studies (CALS)/xHub Addis plan to scale the program and train 10,000 mentors over the next three years using the first cohort as trainers.

The graduation ceremony celebrates the dedication, ingenuity, and achievement of these impressive young entrepreneurs who have completed the year-long incubation program. Guests will enjoy short video testimonials from the innovative startups. The hope is that the program will inspire other young people to unlock their potential. It also strongly reinforces that startups will receive the support they need to achieve their goals while also contributing to the economic growth and prosperity of the country.

“This program is designed to provide holistic support to entrepreneurs—and the need for it has become more urgent in the context of the COVID-19 pandemic. More than ever, we need initiatives that strengthen the entrepreneurship ecosystem and contribute to enabling 10 million young Ethiopians to access dignified and fulfilling work over the next decade,” said Alemayehu Konde Koira, Ethiopia Country Head, Mastercard Foundation.

About the Center for African Leadership Studies

The Center for African Leadership Studies (CALS) transforms African medical, business, governmental, and nonprofit institutions and individuals with training, coaching, and organizational development that produces effective, values-based servant-leaders. The Center translated international evidence-based leadership development best practices into local cultural circumstances to meet specific needs with indigenous forward-looking solutions that respect traditions. xHub is an initiative of Center for African Leadership Studies (CALS) founded in 2014. With CALS as a strategic partner, our mission is not only to provide a strong support system for our entrepreneurs, but to transform them into great leaders as well.

About the Jobs Creation Commission

The Jobs Creation Commission (of the Federal Democratic Republic of Ethiopia) is established under the Office of the Prime Minister to advance the government’s goal around employment and job creation. JCC is uniquely positioned to lead, govern, and coordinate the jobs creation agenda at the national and subnational levels. It is committed to guide the investment of government, the private sector, and development partners to high-growth sectors through policy analysis and innovation; and to align skills development with market needs.

Directly overseen by the Prime Minister’s office, JCC is mandated to Coordinate, Govern, and Monitor all Government and Non-Government efforts in creating jobs. With a mission to drive job creation through innovation and action, the Commission aims to facilitate the creation of 3 million jobs by 2020, 14 million by 2025 and 20 million by 2030. The commission has facilitated and supported the creation of 2.4 million jobs to date.

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INVESTORS DIARY 2021

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