Thursday, July 2, 2015

Zimbabwe: Time To Come Together For The Economy, 2 JULY

Zimbabwe: Time To Come Together For The Economy

Time To Come Together For The Econnomy

Benny Tsododo Correspondent

Against a backdrop where the Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya is calling for a freeze in salaries and a reduction in prices of goods and services, it is worrying that the Zimbabwe Congress of Trade Unions (ZCTU) has publicly registered its disquiet over the initiatives while ZESA Holdings is reportedly planning to increase its tariffs by six percent.

During his 2015 Monetary Policy Statement, Dr Mangudya said: “Given the lack of competitiveness and its negative effects on the economy, we do not see any room for wage and salary increases within the economy. 
Instead, the prevailing circumstances call for a downward adjustment in the prices of goods and services in order to promote competitiveness and ultimately for the recovery of the economy.”

Dr Mangudya’s proposal found support from the Zimbabwe Revenue Authority (ZIMRA) boss Gershem Pasi, who further proposed a cut in salaries, among other measures, saying: “Why not say cut by 20 percent across the board: cut the wages, interest rates, everything because it will be a social contract. We will give ourselves room to start the growth process.”

At a time the country is searching for solutions to bust sanctions and revive the economy, these well thought-out initiatives by Government through the RBZ, should be applauded.

They demonstrate Government’s commitment to improving the overall welfare of its people, despite the debilitating economic challenges gripping the country through the agency of sanctions.

If fully supported, such initiatives could breathe life into our limping industries, safeguard employment and boost Government revenues.

The price reductions could stimulate demand for locally manufactured goods and provide the much-needed bulwark against the incessant flow of cheap imports that are depleting the country’s foreign currency reserves and at the same time ravaging local industries.

However, these noble initiatives by Government could be derailed if competing and somehow contradictory interests from other sectors of the economy such as labour and business are not addressed.

It should be appreciated that labour groups would continue to push for the improvement of the worker’s welfare and, naturally, this does not condone wage freezes or cuts.

On the other side, business is known to push for maximum profits and this too runs counter to any suggestions of price controls or profit cuts as entailed in the latest Government proposals.

Already one labour organisation has registered its opposition to Government’s proposal to freeze or cut salaries.

Reacting to the proposals last week, ZCTU secretary-general Japhet Moyo released a press statement that partly said: “while we agree that the economic situation in the country is abnormal with 92 percent of the Government revenue being channelled towards recurrent expenditure, we do not think that cutting salaries would remedy the situation. The Government must first get rid of thousands of ghost workers milking the Treasury.”

Such flaunting of defiance by the ZCTU heralds the resistance that awaits plans to reduce the cost of goods and services in the country.

 We also heard contradictory signals coming from business. Reports that ZESA Holdings is planning to increase its tariffs by six percent in order to clear its salary arrears are a slap in the face of those spearheading the national cost-cutting initiative.

Without delving into the legal discourse shaping the planned ZESA tariff increments, it is indisputable that such an increase would have a big ripple effect on the prices of other commodities and services in the country.

An increase in electricity prices or of any other source of energy would definitely have an inflationary knock on all production processes in industries and at farms.

The contagion effect of such a move on the pockets of workers could be devastating and might further lend credence to perennial calls for salary increments by some workers’ organisations.

Also given the intermittent power supplies, an increase in electricity costs could also push away foreign investors, who usually require a steady supply of inexpensive electricity.

On this basis, an increase in electricity tariffs would clearly defeat efforts by Government to cut the country’s cost structure. LINK

TISHWASH POST FROM TNT :Message carried by "Haider al-Abadi" from America to IRAN!, 2 JULY

A report prepared by the links Centre for the selection of Washington to the Prime Minister Haider al-Abadi for the communication of a fifth letter addressed to President Barack Obama to the Iranian leadership on the eve of the deadline to reach an agreement on the Iranian nuclear issue. 

The report said the governing body in the Iranian Shura Council member Mehrdad Bdhirbah revealed a secret message from Obama in the nuclear matter was transferred to officials in the country by an official in one of the neighboring countries. 

The report noted that the message conveyed by al-Abadi include reassuring US believes that the strategy for the Iranians, not reckless and perceive their interests as rationally as the letter included assurances that he can rely on Obama's policies and reliable to what he says is his because he wants to make a difference in the history of the American presidency, which could be acceptable to Iran. - See more at: http://www.ikhnews.com/index.php?page=article&id=140542#sthash.LtcPEDrW.dpuf


7-2-15 Frank26: Yesterday PR became like Greece ..... Talking when they KNOW they should not.

There is NO CRISIS ........ Well not anymore....... These actions are solutions formulated by 12 years ago ...... About 9.

Look .......... This TYPE of SLATE SOLUTION ........ WILL BE OURS TOO!

Tell You much more on M's CC ....... Promise. 

7-2-15 daz: Puerto Rico paid $1.9B in debts due today: Sources CNBC‎ - 30 mins ago Debt-riddled Puerto Rico paid all of its $1.9 billion in obligations due on Wednesday, sources told CNBC. Here’s the link on Puerto Rico: http://www.cnbc.com/id/102789589


tman23: In 2011, Dr. Essawi (Finance Minister) and Dr. Shabibi drafted a Letter of Intent to the IMF... In this letter they described the policies to be initiated in which the major focal point was meters being installed at all oil production and export stations...This was near completion at the time of the LOI as stated in the letter...The Kurd region agreed to the monitoring meters in February 2014...The meters began "LIVE" reporting January 2015.
The IMF regarding currency policy changes and revaluing... The IMF states; Specific laws DO NOT need to be in place... as long as they are in the process... That said; The CoM has drafted the laws...The Minister of Justice has reviewed and published them in 3 languages...The CoM has sent them to Jabouri and he has introduced them in Parliament... By IMF standards...The laws being in Parliament and in progress is good enough for a rate change... The oil meters are in place...electronically read! 

Indonesia makes rupiah mandatory for all transactions, 2 JULY

From today, Indonesia has made it mandatory for the rupiah to be used for all transactions in the country, from booking a hotel room to paying rent, in a move to shore up the currency.
The rupiah is the second-worst performing currency in Asia this year after the Malaysian ringgit. Yesterday, it closed at 13,339 to the US dollar. Over the last few weeks, it has fallen to levels not seen since the financial crisis in August 1998.Those who flout the regulation can be fined at least 1 per cent of the value of the illegal transaction or up to 1 billion rupiah (S$100,000).
There are exemptions, such as transactions related to the state Budget or international trade, the central bank said in a statement.
Singapore companies with operations in Indonesia say they have made arrangements to comply, noting that the regulation had been floated since 2011 but not fully enforced. "For Kendal Industrial Park, land sales are transacted in rupiah that are determined by US dollar exchange rates. As we are allowed to convert from rupiah to US dollar any time, there is minimal exchange rate exposure for us," said Mr Kelvin Teo, chief executive officer of Sembcorp Development, referring to its industrial zone in Central Java.
From today, Singapore Airlines will accept payments in rupiah only and its air tickets would show both the fare in US greenback and the equivalent amount in rupiah using the daily exchange rate issued by Bank Indonesia, said its Indonesia public relations manager Glory Henriette. But this will not be possible in certain cases.
"Many backend systems are currently unable to support transactions of more than 100 million rupiah," she said, referring to how fares that have more than nine digits cannot be reflected on the ticket. While some say the govern- ment's move could realise the short-term goal of increasing the use of the rupiah, others are concerned it could result in unintended consequences, such as companies hiking prices to avoid absorbing losses from a volatile rupiah.
Mr Bill Sullivan, a Jakarta-based legal adviser to the mining as well as oil and gas sectors, said that while the day-to-day transactions could proceed smoothly, relying on a volatile currency may not give an accurate measure of performance for Indonesia-based executives of multinational corporations whose performance globally is ranked in US dollars.
There is still some uncertainty over currencies to be used on e- commerce sites, but some observers say sites that sell Indonesian services such as hotel bookings but are not based in Indonesia can still charge in a foreign currency.
Mr Danny Oei Wirianto, co-founder of social media MindTalk, and who was chief marketing officer of Indonesia's largest online forum, Kaskus Networks, welcomed the mandatory move.
"After all, it is the currency of the country," he said, adding that it could help boost the economy.
But he is sceptical whether all companies will comply.
Mr Franky Sibarani, chief of the Indonesia Investment Coordinating Board, told The Straits Times that many investors raised concerns over the lack of clarity surrounding the exemptions.
He said he would raise the matter with the central bank and see how to allow reasonable leeway.
"Say, for example, a vessel approaches our port. Do we really expect them to have rupiah, or international currency like the US dollar? We can't possibly have money changers on standby - it's not practical," he said.
Summing up, Mr Sullivan said: "This rule is dealing with only the symptoms of the problem, not tackling the wider issue... (which is) the erosion of investor confidence." LINK