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The OECD warns of signs of weakness of the economy in Europe and the G7 countries

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  • The observation of the international organization coincides with fears of the global consequences of the US-China trade war.
  • “A recession is just around the corner,” according to a Natixis analyst.
  • Gold, refuge value, reaches highs since 2013.

The Secretary General of the Organization for Economic Cooperation and Development

Signs continue to point to a cycle of weakness in the world economy, amid concerns over the consequences of the US-China trade war.

The Organization for Economic Cooperation and Development (OECD) said Thursday that it sees signs of weakening in the economy of the eurozone and the G7. Its advanced composite indicators, which reflect in advance inflections in the economic cycle, suggest that in June they lost a tenth both the eurozone and the G7 (Germany, Canada, United States, France, Italy, Japan, and the United Kingdom), is that is, the countries considered to have the greatest political, economic and military weight in the world, reports Efe.

Separately, in the G7 countries the OECD anticipates stable growth in France, Canada and the United Kingdom, a stabilization in Japan and Italy and a decline in Germany and the United States, reports EFE.

In China, India, Indonesia, Japan, and Korea (G5), the indicators remained stable in June, according to their statement. Among the main emerging economies, the international organization, based in Paris, considered that there will be stable economic growth in Brazil as well as in India and Russia.

The analysis of the organism based in Paris takes place amid the fears rekindled these days to the escalation of the commercial and currency war between the US and China. Already last March the OECD warned of the cut in its forecasts of growth of the world economy to 3.1% due to the uncertainty of tensions between the US and China from the 3.9% anticipated a year ago.

“We were in the middle of a recovery when all these decisions on trade began to be taken and not only stifled the recovery, but also caused a slowdown and the potential for further damage is present,” said OECD Secretary-General Angel Gurría, in an interview with the US network CNBC, collected by Europa Press, in which he warned that “tensions are increasing and the problem of contagion effect is becoming increasingly evident.”

“Recession around the corner”

According to Natixis analyst Philippe Waecther, “the recession is just around the corner.” He describes as “an alarming signal” the “very steep decline that has taken place since the Fed’s rate cut” in the interest rates of the different tranches of US sovereign debt. “In the past, when all rates in the US public debt rate curve traded below the federal fund’s interest rate [Fed Funds Rate], this was an omen of recession.” In his opinion, “the current period will not escape this norm.”

Gold, a refuge value for investors, has raised its price by 17% in 2019, the best year since 2013, and has exceeded $ 1,500 an ounce.

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‘Chernobyl on ice’: Russia prepares a floating nuclear power plant

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  • Russia’s expansion in the Arctic is now called Akademic Lomonosov, the immense ship that must travel six thousand kilometers to begin drilling
    NGOs defending the environment fear that the macro project will become a ‘Chernobyl on ice’, and warn that the model will be taken to other countries.
  • The thaw has opened trade routes in the Arctic, new military and economic focus that Russia has been exploiting for years.

Chernobyl on ice

A cold summer morning in Kola Bay on the Bering Sea, on the deck of the Akademic Lomonosov ship, one of its chief engineers joked. “I feel like one of the first astronauts who went to space,” he said. The ship would become Russia’s first floating nuclear power plant, another step in its expansion in the Arctic, which will travel more than 6,000 kilometers through the North Sea.

If everything goes as planned, the Akademic Lomonosov will be towed to the Arctic port of Pevek this August. From there, thanks to its two twin nuclear reactors, it will provide energy to homes and mining and drilling operations in the Russian region of Chukotka, rich in mineral resources.

Russia argues that the project will offer clean energy to a remote location and will allow the closure of an aging nuclear power plant and a coal thermal power plant. However, Akademik Lomonosov raises questions about the economic viability of the power supply of floating nuclear power plants in isolated areas and has set off the alarms of environmental defenders. Organizations like Greenpeace fear that this new project may become a “floating Chernobyl”.

The North Sea route, opened by the melting of the Arctic caps, offers new commercial possibilities between Europe and China that Russia intends to open to navigation throughout the year. In the hope of the lucrative of these new trade routes and given the military importance that the Arctic region begins to play, icebreakers, submarines and all kinds of technologies related to nuclear propulsion proliferate.

Thomas Nilsen, director of Barents Observer, a newspaper in the Norwegian town of Kirkenes, estimates that by 2035 the portion of the Arctic Ocean that belongs to Russia “will constitute the most nuclearized waters on the planet.” In that, floating nuclear power plants could play a role in that trend. Although there have been years and even the United States has already placed a small nuclear reactor on a small vessel in the Panama Canal area in the 1960s and 1970s, they have never been mass-produced.

Rosatom, the Russian state company for nuclear energy intends to sell floating nuclear power plants capable of adapting to different locations. The company has announced that it has already signed a project to develop a possible plant for Sudan, among other countries.

The Akademik Lomonosov is part of the business promotion plan of Rosatom’s growth strategy. The platform, freshly painted a bright white and stamped with a huge company logo, is a very expensive pilot project with details such as gym, pool or bar (in which alcohol is not served) for the crew. Safety on board is strict and journalists invited to visit it did so with security guards on their heels.

A nuclear Titanic

The construction of the Akademik Lomonosov has taken more than a decade and the ship carries on board two KLT-40S nuclear reactors similar to those used by Russian icebreakers. They feed on low enrichment uranium and have an electricity production capacity of 70 megawatts, which Rosatom says is enough to provide about 100,000 homes. Rosatom also states that the platform is “virtually impossible to sink” and capable of withstanding collisions with icebergs and waves of up to seven meters.

Greenpeace has described the project as a ‘nuclear Titanic’ or a ‘Chernobyl on ice’ at a time when the HBO series about the accident at the Chernobyl plant in 1986 once again attracts attention. Neighboring countries such as Norway have pressed Rosatom not to load nuclear fuel on the platform until it was towed a certain distance from its territorial waters.

Rosatom officials, concerned about comparisons with previous nuclear accidents, have explained that the reactors in operation in Chernobyl were much larger and of different models. Nuclear technology aboard the Akademik Lomonosov has already been used in the fleet of Russian nuclear icebreakers in the past.

“[Akademik Lomonosov] and a ‘Chernobyl on ice’ are night and day, we talk about totally different systems. We must always approach [new technologies] with some skepticism but they are going too far. If they say a possible accident in the reactor must present evidence “, defends Vladimir Irminku, one of the chief engineers of the project.

In the event of an accident and a reactor shutdown, according to Irminku, the icy surrounding waters could be used to cool the circuits until help arrived.

The Bellona Foundation, specializing in the Arctic environment, stated in a 2011 published report that the waves caused by a tsunami could take the nuclear power plant out of the water and launch it against the coast, which would mean a “nuclear accident with serious consequences”.

However, Rosatom alleges that the danger of the waves is limited by a bridge built around the plant and that, if thrown into the ground, the reactor’s emergency systems can cool it without the need for any additional power supply for 24 hours.

Dmitry Alekseyenko, one of those responsible for the construction and operations of the platform, added that “we have studied closely what happened in Fukushima. What would happen if the platform receives the impact of a tsunami? Or is it thrown to the ground? According to our calculations, a tsunami caused by an earthquake of magnitude nine would not move it from its base. “

Anna Kireeva, of Bellona, ​​pointed out that the organization has closely followed the development of the Akademik Lomonosov and although they are confident that Russian experts may be able to operate a floating nuclear power plant, they are worried about plans to franchise the technology.

“What really worries us is why they manufacture this floating plant. That they want to sell this technology to countries like Sudan,” Kireeva explains. “I am really worried that this nuclear technology can be used by countries where the safety, laws, and parameters related to nuclear radiation are not as high as in Russia. What will they do with nuclear fuel once used? How will they act in an emergency? “

Another issue to consider is the economic viability of floating plants. Although Rosatom invests assuming the interest of potential buyers, there is still no money on the table. Some detractors of the project refer to it with the term “frivolous.” Nilsen has called it a “public relations project” for the absence of orders and the fact that liquefied gas as an energy alternative to nuclear fuel is already available.

“If this were a very good way to supply electricity to the north coast of Siberia, we would have seen how they were built more … I think this project will not happen from a single platform,” he predicts.

Rosatom has not wanted to make public the cost of Akademik Lomonosov but it would be reduced as more platforms are built. In 2016, it was estimated that the floating nuclear power plant cost 267 million euros, and the necessary parallel infrastructure would cost another nine. After years of cost overruns and delays, Alekseyenko described the delivery of the plant as a milestone for Rosatom and the Russian naval industrialist. “It has been a long time since a commission of these dimensions was carried out,” he concluded.

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Norway, the northern NATO guardian, worried about Russian maneuvers in the Arctic

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Despite a historic peaceful coexistence, both countries are experiencing increased tensions and are expanding their military capabilities in the turbulent Arctic waters.

Norway

If there is a place in Europe that may be concerned about Donald Trump’s mysterious relationship with Moscow is Bodø, a wind-blown coastal town located just inside the Arctic Circle in Norway.

A few minutes drive north is the Norwegian military headquarters, sometimes described as the northern gate of NATO. The barracks, halfway between Oslo and Kirkenes, the closest population to the 200-kilometer border that Norway shares with Russia, is the nerve center of the country’s efforts to monitor the increasingly turbulent waters of the Arctic and the movements of Your unpredictable neighbor.

The installation is an extraordinary construction at the bottom of a deep tunnel excavated in the mountain in 1963. It has four floors with sophisticated surveillance equipment that transmit images of coastal activity, border posts, and even Al Jazeera in rooms full of screens. From the base, about 1,000 vessels are kept under surveillance at all times.

The commander of the facility, Rune Jakobsen, explains that the underground fort, built as a base run by the Nazis during World War II, was planned as a place where the Norwegian army could survive a nuclear attack by the Soviet Union. “For a long time, this quarter seemed to be outdated. Now it doesn’t seem like such a bad idea,” Jakobsen says.

Russia and Norway, the commander explains, continue to cooperate in coastguard, search and rescue and border surveillance operations. Jakobsen allows a weekly call via Skype to the base of the North Fleet of Russia, in Murmansk, just to check that the line works. For the rest, silence reigns and mutual observation.

But the apparent calm does not hide the fact that the Russian position in the North Pole has changed. Moscow has developed an increasingly sophisticated fleet of submarines and airplanes that it is testing in the North Atlantic along with long-range and high-precision missiles. The fear is that NATO could lose the ability to prevent Russia from accessing the North Atlantic and that Russia could block or disrupt US support for Europe.

“The Putin Effect”

“We are not in conflict with Russia and we have not had a border dispute with them in 1,000 years, but after what happened in Ukraine we have changed our position,” says Jakobsen. “They are developing very fast new capabilities, especially submarines. If we leave a vacuum, they will fill it,” he adds.

On the other side of Bodø, there is an airbase, home of 25 F-16 fighters capable of being in the air with a warning only 15 minutes in advance from NATO barracks in Germany. Two pilots are on duty for 72-hour shifts and a table indicates the annual number of incidents and intrusions, mainly caused by Russian fighter planes that fly over international airspace with their transponders off [an electronic device that facilitates the identification and control of aircraft]. In 2006 there were only 13, but in 2014 the number increased to 49.

“We call it the Putin effect,” says the squadron commander. “We have let things deteriorate for 10 years – response times, equipment … – and it will cost more than 20 to restore it.

In this context, Trump’s criticisms of NATO have left the Nordic countries worried about the northern flank of the alliance. Neighboring Sweden, which is not from NATO, is also strengthening its defenses and announced last week that it will restore recruitment for men and women. Finland, meanwhile, has made public its plans to expand its army by 20%. Norway does not see itself in NATO as a standardized state that compulsively stores its oil wealth, but as a key contributor to the alliance from which the US benefits.

“We are a country of only five million, but we are at the gates of the largest concentration of non-Western force in Europe. The modernized North Fleet is the main Russian deterrent tool, its main nuclear stronghold and has the capabilities to prevent an offensive and to attack the US It is also the area where the most sensitive tests of the Russian strategic team take place. We are well placed to monitor all this, “explains a high defense authority.

However, in the 80s, while the Cold War deflated, the NATO axis began to look away from the Arctic. NATO command and control changed its point of gravity towards the Mediterranean as a result of the expansion of the defensive organization and a focus on “out of area” operations, such as Afghanistan. Although 50% of the circumpolar area of ​​the region belongs to a NATO member, the organization closed its headquarters in North Norfolk, Virginia, in 2003, at the same time that US troops withdrew from Iceland.

Tensions rise: “We are in a new scenario”

Somehow, the era of the quiet Cold War adapted to Norway. There is no Norwegian natural impulse to be hostile to Russia. In fact, according to a former commander of the Norwegian Kirkenes force, “the closer to the border, the greater the historical and commercial ties. The borders arrived late to this area and the families lived on both sides. The population of Kirkenes was released by the Russians at the end of World War II. Even now, many people who live near the border have joint visas and mixed families are habitual. Norway is the only neighboring country in Russia with which it has not entered into war “.

Inside the base, there is a showcase containing the gifts exchanged with Russia over the years, including a glass rifle full of vodka.

The Nordic Minister of Defense, Ine Eriksen Søreide, insisted during an interview in Oslo that Norway does not perceive Russia as a direct threat. However, the minister stressed that after Russia’s actions in Georgia and Ukraine, “we are in a new scenario.” “In time Russia felt that it had lost its power situation, but now it speaks of legitimate spheres of influence as it had not done before.”

“Since 2008 they have been rebuilding bases in the Arctic and modernizing their long-range airplanes, submarines, and missiles. In Ukraine, we have seen that their mobility is completely different from that of the past. They are trying to impose absolute control on political progress. In our country they have demonstrated the ability to interfere in politics and the economy through cyberspace, “says Eriksen Søreide.

Norwegian intelligence has attributed the cyberattacks committed against government offices and the Norwegian Labor Party to Russian authorities. Last month, the country’s intelligence published the annual threat assessment report, in which it describes Russia as the biggest threat to Norway along with terrorism, stating that Russia could interfere in the upcoming parliamentary elections in Norway, which they will celebrate in autumn.

Russia has denied visas to Norwegian parliamentarians, and the possible participation of this country in the NATO nuclear shield – a decision to be taken this year – has angered the Russian authorities, who have claimed that Norway could become a target of a legitimate nuclear attack.

“The shield is purely defensive,” Søreide insists, adding that radars may not be installed on land, but in frigates. The permanent parking of 300 US Marines in Norway, along with a massive military exercise that will begin this week, has resulted in hostile exchanges between the two countries.

It is no coincidence that the Occupied television series, which tells the story of a Russian invasion in Norway during an energy crisis, has become the most successful series in Norway. The series is a kind of Homeland for anxious Europeans.

Reinforcement of the Norwegian defenses

In general, the new scenario has forced Norway to raise its defense budget to 5.5 billion euros. The Nordic country has invested in a new range of fighter planes, submarines and observation planes in what is considered the largest military investment in the country in its history.

However, this is still not enough for Norway to meet the NATO defensive spending objective of 2% of GDP by 2024. The Minister of Defense insists: “Everyone has an obligation to go in the direction of the goal. The trip Norway may last longer, as oil wealth is affecting economic growth.

Norwegian pilots have started a training period in the US on the first of more than 50 Lockheed F-35 fighter aircraft. It is also in the process of acquiring five P-8A maritime patrol aircraft to improve surveillance of the growing presence of Russian submarines. Together with Germany, Norway is buying a new type of submarine capable of locating the latest and elusive Russian submarines. This year more measures will be taken on the modernization of the army.

“We are the guardians of the north in the name of the alliance,” says Søreide. “Now Russia has a new capacity to threaten all of Europe from its own territory and from maritime areas such as the North Atlantic,” he adds. “This is not war. It is not conflict. It does not mean that cruise missiles will rain in Norway. The unleashing of conflict is much more likely in the Baltic or in the Black Sea, but the strategic balance has changed and we all have to be worried.”.

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“We don’t have much time left,” the cry of a Honduran community about to be submerged by the sea

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  • The sea level rises every year in a fishing community in the Gulf of Fonseca, in Honduras, which sees its territory threatened.
  • Although some areas have been declared protected, shrimp companies act with impunity obtaining millionaire benefits.
  • The struggle for natural resources in the context of the growing climate crisis is the cause of forced population movements such as the migrant caravan.

the cry of a Honduran community

Eric Pineda serves fish and rice in a modest beachfront restaurant, a business that faces imminent destruction.

The recent rise in the tide has already flooded the bar next door, of which only the pink debris remains. In the last two years, several businesses between Pineda and the Pacific Ocean have been destroyed by the sea. “Every year the ocean gets closer and increases in level. I think we have one, maybe two years, until the water also takes us. There is not much left,” says Pineda, 24.

The golden sand of the beaches helped transform this fishing community in the Gulf of Fonseca into a promising tourist destination. Today, there are barely a few meters of beach left and the rising tide and sea level have cleared roads, homes, and businesses from the map.

The local population estimates that approximately one meter of land is lost per year and that means that the entire community will soon be underwater. The same destination awaits other communities in the Honduran Pacific where both population and land disappear rapidly.

In recent years, millions of people have fled extreme poverty, the collapse of institutions and the violence unleashed in Central America. Among all the factors that expel the population, there is one that has been left unattended: conflicts over natural resources have increased due to the expansion of business activity and climate change.

The sea level rises throughout the planet but in this region, there is one more factor that helps increase coastal degradation: wide strips of coastal mangroves have been devastated to open space for shrimp farms that multiply even within protected natural spaces. Much of the Honduran shrimp is exported to the United States and the United Kingdom where large stores such as Waitrose, Sainsbury’s or Marks & Spencer are sold.

Dina Morel, a local organization focused on marine conservation believes that “the industry destroys large areas of mangroves while promising development and actually creating very few jobs. At the same time, it increases poverty by restricting access to local fishermen to fishery resources. “

According to Morel, shrimp farms are installed with authorization in protected areas. Violations of environmental protection laws are rarely punished by authorities, who often share interests with an industry that provides great benefits. “The consequences of losing such an important ecosystem are clear: environmental vulnerability, food insecurity, and social decomposition, factors that lead to forced migration,” explains biologist Víctor Bocanegra.

Mangroves are necessary for the survival of healthy and resilient coasts. The robust trees that characterize them protect the land from storms and floods and help reduce erosion through the stabilization of sediments that affirm its dense and strong roots. They are key actors in marine biodiversity as they provide food, clean water, shelter and safety for fish and invertebrates such as crabs, lobsters, and prawns.

To benefit from this natural symbiosis process, large shrimp farms have been opened at the entrance to the ocean, which once served as a safe haven for receiving tidal flows. And these facilities interfere with the natural flow of the sea causing increases in the tide and that the impacts of the storms flow to submerge the communities on the beach.

A moving shelter

On the beach of Cedeño, Ariana Tees, 70, fry the fish brought by her husband, Manuel, 67, in an improvised kitchen under a canvas a few meters from the sea. This is where they live, work, eat and sleep, the shelter that each month must place a few meters further back as the ocean penetrates the earth. 
“Of course we are scared,” Tees acknowledges. “But we have no other place to go and the government does not protect us. Not a wall puts”, criticizes.

Manuel, who fished since childhood, adds that “every year there is less fish and the tides have nowhere to go so the water passes by here looking for a way out. We have come to wake up in the middle of the night surrounded by water.” He pauses and concludes: “We’re screwed.”

The shrimp industry in southern Honduras dates back to the 1970s but grew exponentially in the 1990s. As a result of this growth without apparent braking, as of the year 2000, several mangroves covering an extension of more than 600 kilometers were designated protected areas.

Despite that and according to Coddeffagolf, half of the mangroves in the area were destroyed between 2000 and 2010 mostly due to fishing concessions in the gulf, approved before the decree of protection. No one knows exactly the extent of protected areas that still remains intact but satellite imagery suggests that the situation is critical.

The extent of the deforested area is seen from the top of a mountain in San José de las Conchas, about 30 kilometers north of Cedeño. The panorama only offers a few narrow lines of that protected mangrove caught between artificial lagoons for shrimp farming and the turquoise ocean.

The villagers say that shrimp companies secretly building, after successive mangrove rings that protect their facilities from sight and that only once lifted, do they request permits. Sales figures suggest that the business expands:  2018 exports amounted to 216 million dollars (almost 194 million euros), a figure they expect to increase by 20% in 2019.

Scarce reforestation programs

A foundation for social development created by the shrimp industry in 2014, says it invests $ 0.04 (0.036 euros) for every kilo of shrimp exported in projects related to health, education and the environment. However, reforestation programs are scarce and require years of care to ensure resistant mangroves. After numerous requests, FundeSur declined to provide his point of view for this report.

Nelson Martínez, an activist from Guapinol, a nearby community that was seriously affected by a surge in the tide three years ago, insists that “there is more deforestation than reforestation and it is obvious, anyone can see it. Unless the mangrove is saved, Guapinol it will also disappear. “

As a narrow tongue of land trapped between the Atlantic and Pacific oceans, Central America is a region very vulnerable to the global climate emergency.

Between 1998 and 2017 Honduras was the second territory most affected by extreme weather events such as floods, storms, droughts or fires according to the Global Risk Index, which classifies Puerto Rico as the most affected place.

Hurricane Mitch, the most devastating and deadly storm of the last two centuries in America, which hit Honduras in 1998, left more than 8,000 dead and millions of people affected who lost land and homes. He pushed the country back more than 50 years in its development and launched the first wave of migration after the cold war from Central America to the United States.

But investment in mitigation and adaptation to climate impacts through reforestation or flood protection does not advance. Only 0.5% of the Honduran government budget is intended for environmental protection. It has been reduced from 1.2% that was spent in 2010 according to Hugo Noé Pino, an analyst who was Minister of Finance and Governor of the Central Bank.

Since the 2009 coup d’etat, the increase in mega projects related to water, reservoirs, mines or plantations of African palm, have fueled social conflicts, repression, and migrations. Berta Cáceres, the defender of the environment and winner of the Goldman Prize for the defense of the environment, was murdered on March 2016 in retaliation for leading the opposition to the construction of a hydroelectric plant on the Gualcarque river, aquatic, food and medicinal source of the Lenca people.

“The main link between climate change and public policies is water management, political decisions on those who have priority when receiving quality water,” explains Professor Raúl Pacheco-Vega, an environmental policy specialist at CIDE (Center for Teaching and Economic Research).

In Honduras, the result of this interaction around water use is clear: every year during the rainy season, countless communities run out of supply, people die and damage to roads, bridges, and schools is recorded. It is a cycle of environmental destruction that increases poverty and causes migratory movements when families begin to look for food, water, and security.

In October, six people died after two days of torrential rains that caused landslides and the Choluteca river overflowed. Marcia, about 20 kilometers inland from Cedeño was flooded and its inhabitants had to evacuate the town. Soon after, hundreds of people from the department of Choluteca joined the migrant caravan that ventured northbound through Mexico and to the U.S. border.

Half a million Hondurans have been detained by Mexican and US authorities since October 2006. The reasons for migration are complex but in this area of ​​the planet, the environmental factor is important.

Pedro Landa, of Eric, an organization of the Society of Jesus that investigates and defends human rights, affirms that Hurricane Mitch has not taken note of the lessons. “Since the 2009 coup, the State has gradually fallen under the control of mafia politicians who have no interest in guaranteeing the water supply or the economic development of the population. They only think of themselves,” he says.

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