Watchdog, Bitcoin group set for talks
US regulators and law enforcement agencies are expected to meet on Monday with an advocacy group for Bitcoin, a digital currency that has been under fire for its purported role in facilitating anonymous money transfers and supporting online purchases of illegal street drugs.
The meeting in Washington was arranged by the Treasury Department's anti-money laundering unit at the request of the Bitcoin Foundation, an advocacy group of Bitcoin-related businesses.
It will be an opportunity for wide-ranging discussions about the digital currency, a Treasury official said.
Bitcoins, which have been around since 2008, first came under scrutiny by law enforcement officials in mid-2011 after media reports surfaced linking the digital currency to the Silk Road online marketplace where marijuana, heroin, LSD and other illicit drugs are sold.
In recent months, the US government has taken steps to rein-in the currency and more regulatory action is expected.
Tokyo-based Mt. Gox, the world's largest exchanger of US dollars with Bitcoins, had two accounts held by its US subsidiary seized this year by agents from the Department of Homeland Security on the grounds that it was operating a money transmitting business without a license.
The Federal Bureau of Investigation reported last year that Bitcoin was used by criminals to move money around the world, and the US Treasury said in March that digital currency firms are money transmitters and must comply with rules that combat money laundering.
The Senate Committee on Homeland Security and Government Affairs launched an inquiry into Bitcoin and other virtual currencies earlier this month, asking a range of regulators to list what safeguards are in place to prevent criminal activity.
South Sudan passes oil bill
South Sudan's parliament has passed a long-awaited petroleum bill after years of consultation and waits for final approval by President Salva Kiir, a senior lawmaker said on Monday.
Officials hope the bill, which regulates for the first time how the government can spend oil revenues, will make the African producer more attractive for foreign investment by improving transparency.
South Sudan has struggled to build up state institutions and establish the rule of law since winning independence from Sudan in 2011 after decades of civil war.
The Petroleum Revenue Management Bill was approved in final reading late in July and is now waiting for Kiir's approval, Henry Odwar, head of the petroleum and mining committee, told.
He said the bill which Western donors have long urged - will set out rules on how the government can spend oil revenues, the main source of its budget.
Odwar gave no details but previous versions of the bill show that up to 10% of the revenues will have go to a new future generation fund, a nest egg for the time when oil will run out. Part of the money must also go to oil-producing communities.
Diplomats see the bill as key to start legislation and transparency in the oil sector - there is so far almost no data available how oil revenues are being spent, with some of the money ending up in corruption. Business deals are often handed out by officials without tenders or clear rules.
Western oil firms mostly shun South Sudan, a war-torn country which seceded from Sudan in 2011 after decades of conflict with Khartoum.
Mainly Chinese, Indian and Malaysian firms operate in South Sudan, which used to pump some 300 000 barrels a day until the government turned off wells in 2012 in a row with Sudan through which all exports must go.
Cross-border flows resumed in April with much lower volumes but Sudan has threatened to close the export pipelines in a conflict over alleged rebel support.
South Sudan hopes to explore with the help of France's Total and U.S. firm Exxon a large area in Jonglei state but rebel and tribal violence has made it impossible to start. It also hopes for a foreign investor to build an alternative pipeline through Kenya or Djibouti to end dependency on Sudan's infrastructure.
World tourism shows surprise surge
International tourist numbers surged by 5.2% to nearly half a billion people worldwide in the first half of 2013, beating earlier expectations, the United Nation's World Tourism Organisation said Monday.
Some 494 million international tourists spent at least one night abroad in the first six months of the year, the Madrid-based agency said in a report of preliminary results for the period.
As a result of the "robust" performance, the WTO said it was boosting its 2013 forecast. After originally tipping growth of three to four percent for the whole year, it now expects the increase to be at the higher end of that range "or to slightly exceed it".
Europe enjoyed growth of 5.1% in international tourist numbers in the six months, it said.
The Asia-Pacific region reported growth of 6.2% including an 11.6% surge in tourists going to Southeast Asia.
But results were weaker than anticipated in the Americas, which posted growth of just 2.2%.
International tourist numbers grew 3.1% in North America, but South America reported growth of just 0.3% and the Caribbean had growth of a meagre 0.1 percent.
In Africa, international tourist arrivals rose by 3.8%.
In the Middle East, tourist numbers soared by 12.9%, but these figures should be viewed "with caution" because of uneven results and limited data, the report said.
Greece plans market return
Greece could test market confidence in the cash-strapped country by mounting a new government debt auction in the second half of 2014 if the nation manages to return to economic growth, Greek Finance Minister Yannis Stournaras said Monday.
"That would be a great success, which would allow us to test the market with a new bond issue in the second half of 2014," Stournaras told the German business daily Handelsblatt.
He said that the size of the auction was likely to be small, perhaps less than €3bn ($4bn).
Greece has been stuck in a recession for six consecutive years as it battles to cut high debt and deficit levels through steep cuts in public spending and tough economic reforms.
Inspectors from the troika of the International Monetary Fund, European Central Bank (ECB) and European Commission are expected to travel to Athens at the beginning of September to determine whether the government is able to generate the revenue needed to meet its 2015-2016 budget targets.
Last week, German Finance Minister Wolfgang Schaeuble admitted that Greece would probably need a third bailout. Germany carried the bulk of the weight of the previous two rescue packages.
On Sunday, Stournaras agreed that a new bailout might be necessary, but the amount would be lower than previous aid packages.
"If there is a need for further support to Greece, it will be in the amount of about €10bns," newspaper Proto Thema quoted him as saying.
He also ruled out any new austerity conditions to be attached to the bailout.
Athens received its first bailout of €110bn in May 2010, followed by another €140bn in 2012.
Following its implementation of austerity measures, Greece is set to receive another bailout payment of €5.8bn by the end of September. It will be eligible for another €1bn in October if it meets the troika's conditions.
Stournaras joined other leading European figures, including German Chancellor Angela Merkel, in ruling out a second round of debt relief for Athens.
"Debt relief that results in us being in the same situation in five years time would be counterproductive and would send the wrong signal to countries receiving aid," ECB governing council member Jens Weidmann told Handelsblatt Monday.
Weidmann is also head of Germany's central bank, the Bundesbank.
Violence stifles Iraq's economic promise
In the past month, bombs exploding down the street from Fawzy Hassan's snack shop in central Baghdad have frightened away many customers, and those who do still come to stock up on fruit, potato chips and candy are spending less than before.
"People bought one kilo before - now they only buy half," said the 73-year-old Hassan, who has worked on the street since he was 10 years old. "People are suffering financially because year after year, making a living gets more difficult."
Such gloom underlines a deterioration in Iraq's economic prospects over recent months. A year ago, many Iraqis were optimistic that a long, oil-fuelled boom that would raise living standards and, over the next decade, narrow the prosperity gap between Iraq and its wealthy Gulf Arab neighbours.
Now, rising political and sectarian violence is forcing businessmen to scale back investment plans and economists to cut growth forecasts. The promise of the country's vast oil wealth has not disappeared, but realising that promise is proving slower and more painful than hoped.
"The security situation has killed the economy, investment, reconstruction and public services in Iraq," said lawmaker Nahida al-Dayani, a member of the economic and investment committee in the national parliament.
Prices fluctuate chaotically and money is not being properly invested by the state, said analyst Maijd al-Swari from the Iraqi Economic Forum, a research body.
He thinks one of the main problems is personal consumption, which should be a motor for the economy but has remained relatively sluggish even as economic output has grown - perhaps because worried Iraqis are saving instead of spending. Some savings are sent abroad for safety, to countries such as Jordan.
"Iraqis are not motivated to carry out normal daily social and economic activities," he said.
Potential
The country has one of the biggest reserves of crude oil in the world and production has increased rapidly over the decade since the U.S. invasion in 2003, causing gross domestic product per capita to more than quadruple to $6,300 in 2012, according to the International Monetary Fund.
The growth was due in part to an improvement in security, as authorities clamped down on bomb attacks and other militant violence. Economic expansion raised hopes for a virtuous circle in which rising living standards and the reduction in violence would reinforce each other.
This year has diminished those hopes. A Sunni insurgency and other violence have revived; once again, Baghdad often wakes up to the sound of explosions, wailing sirens and police helicopters. National death tolls from sectarian violence this summer have reached around 1 000 people a month, the highest for five years.
The impact on day-to-day business activity can be seen at the checkpoints which have proliferated around Baghdad, slowing traffic and sending cars on winding, time-wasting journeys.
Iraqis are again avoiding crowded shopping areas prone to bomb attacks. This is obvious on the streets of Karada, an upmarket Baghdad district on the banks of the Tigris River.
"There is no one here because of the security situation," said 46-year-old government official Zainab Zukuk, browsing open-air garment stalls with her daughter. "We plan to go home immediately because we are worried. This is a sensitive place."
Poor security in urban areas might have only a minor impact on the economy as a whole if Iraq's oil industry were unaffected. But the insurgents have begun to target the industry because of its strategic role in the economy.
Iraq's oil exports reached 2.62 million barrels per day last November, the highest level in decades, and the country hopes to increase them eventually to as high as 6 million bpd. But security and maintenance problems mean they have stopped rising and totalled about 2.54 million bpd this month, below the government's target for this year of 2.9 million bpd.
One of the main reasons for the fall is damage inflicted by insurgents on the Kirkuk pipeline, built in the 1970s to bring 1.6 million bpd to the Turkish Mediterranean port of Ceyhan. The pipeline has been attacked at least six times this month.
Partly because of the security crisis, economists have gradually scaled back their estimates of Iraq's future growth. In April 2012, the IMF predicted Iraqi GDP growth of 13.5% in 2013 and 11.0% in 2014; it now forecasts rates of 9.0% and 8.4% for those years.
Trickle-down
Such growth is still well above the pace of expansion of Iraq's population, so thanks to oil, the country as a whole may continue to get richer in coming years as long as a minimum level of security exists to keep basic infrastructure operating most of the time.
Oil exports mean the country's external position is comfortable enough to avoid heavy pressure on its currency; the IMF estimates Iraq's foreign reserves at about $70bn, covering 10 months of imports much higher than levels of three or four months for struggling states such as Egypt and Tunisia.
So even if security continues to worsen, Iraq may avoid the balance of payments and state budget crises suffered by other, resource-poor Arab countries caught up in political unrest.
But the violence may hurt Iraq's long-term prospects by preventing wealth from spreading through society. Distracted by the security challenge and by partisan political feuding, the government can do little to improve education, housing and other infrastructure - policies which are needed to reduce unemployment and poverty.
"The positive trend in oil production and exports contrasts with the weakening economic governance deriving from an increasingly difficult political process and worsening security," the IMF said in a report.
Unemployment was officially estimated at 11% in 2011 but the IMF said actual levels were likely to be considerably higher, especially among the young. About 40% of the population is under 15, and if these people do not find jobs in coming years, political tensions may worsen further.
In south Baghdad, taxi driver Ahmed Abul Hussein said he was struggling to make ends meet because he spent so much of his time in traffic jams caused by checkpoints. A journey costing a passenger just 6 or 7 dollars can take over an hour, he said.
"Sometimes I am not able to earn back the amount that I paid for the fuel," the 44-year-old said. "But this is the only way I can earn a livelihood for my family."
China oil executive probed for graft - report
Chinese authorities are investigating a top official of the country's largest oil and gas producer for "discipline violations", state media said Monday, using a term that typically refers to corruption.
The Communist Party's graft watchdog was investigating Wang Yongchun, a vice-president of state-owned China National Petroleum (CNPC), the official Xinhua news agency reported.
The brief report gave no details of the allegations against Wang, beyond saying he was suspected of "severe" violations of party discipline.
Wang is also general manager of the Daqing Oilfield Co, which manages China's largest oilfield. He is one of five vice-presidents of CNPC, according to its website.
The announcement came as the trial of disgraced politician Bo Xilai for bribery, embezzlement and abuse of power ended after five days of hearings.
Chinese President Xi Jinping has vowed to crack down on corruption at all levels of the government, calling graft a threat to the future of the ruling Communist party.
But critics say a significant effort to reduce corruption would require increased transparency from the ultra-secretive party, as well as a loosening of controls on the media and courts.
Wang, a senior petroleum engineer, became general manager of the Daqing company in 2009 and a CNPC vice=president in 2011.
He has over 30 years experience in the industry, earlier working at another oil field in the northeastern province of Jilin, according to the CNPC website.
EU's Mugabe sanctions depend on poll verdict
The European Union said it will review relations with Zimbabwe because of its "serious concerns" about the election, EU foreign policy chief Catherine Ashton said on Thursday. Its verdict on the vote will be crucial to a decision on whether it continues to ease sanctions.
The EU in March eased most sanctions against Zimbabwe after the country's voters approved a new constitution which paved the way for the July 31 election, but kept President Robert Mugabe and nine of his closest associates on the list.
Mugabe and prominent members of his Zanu-PF party, which won a two-thirds majority in the July poll, are the targets of financial and travel sanctions imposed by the United States and the European Union. These were applied by Washington and Brussels to punish alleged election-rigging and abuses of power.
Britain said last week Mugabe's re-election could not be deemed credible without an independent investigation into allegations of voting irregularities.
US officials also said the July 31 election was flawed and Washington had no plans to loosen sanctions until there were signs of change in the country.
Mugabe threatened "tit-for-tat" retaliation against companies from Britain and the United States on Sunday if the Western nations persisted in pressuring his government with sanctions and what he called "harassment".
Mugabe's latest verbal broadside against his main Western critics followed their questioning of his re-election in a July 31 vote that his rival Morgan Tsvangirai denounced as a "coup by ballot" which he said involved widespread vote-rigging.
Mugabe, who at 89 is Africa's oldest leader, has rejected the fraud allegations and was sworn in on Thursday for a new five-year term in the southern African nation that he has ruled since its independence from Britain in 1980.
"They should not continue to harass us, the British and Americans," he told supporters at the funeral of an air force officer.
"We have not done anything to their companies here, the British have several companies in this country, and we have not imposed any controls, any sanctions against them, but time will come when we will say well, tit-for-tat, you hit me I hit you."
British companies in Zimbabwe include banking groups Standard Chartered and Barclays. These are already the target of a its indigenisation policies which require them to cede a majority stake to black Zimbabweans.
The policy has also been applied to foreign mining houses in the mineral-rich country, including those owned by South African companies such as Impala Platinum.
The United States has a far more limited corporate presence in Zimbabwe than Britain.
Mugabe still enjoys support in Africa for his role in the liberation
guerrilla war that helped end white-minority rule in what was formerly Rhodesia, and led to its independence.
He frequently accuses his critics of racism and of wanting to recolonise
Zimbabwe. "They think, we the blacks are inferior, they are superior. But
in Zimbabwe we will never accept that a white man, merely because he is white is
superior, no. We will chase them away," Mugabe said about Western powers
on Sunday.US new-home sales fall in July
Sales of new homes in the United States fell in July and June's strong data was revised much lower, the Commerce Department said on Friday.
Dimming the picture somewhat of a recovering housing market, the department's newest data put July new-home sales at an annual pace of 394 000, down from June's 455 000.
June's number was originally reported at a five-year high pace of 497 000, which fueled confidence that home-buyers were shrugging off higher mortgage rates.
The lower numbers on Friday suggested however that the rise in rates might be impacting the market.
The number of homes on the market jumped to a 5.2 months' supply at the current sales pace, compared to a 4.3-4.5 ratio over the previous quarter.
But July sales were still up 6.8% from a year earlier.
Sales fell in all regions, though the north-east appeared relatively stronger.
The average sales price rose to $322 700, compared to the 2012 full-year average of $292 200.
Food worth $6.8bn rots in India each year
Agriculture minister Sharad Pawar said on Friday that food grains, fruits and vegetables worth $6.8bn go to waste in India every year because of inadequate storage facilities.
Pawar said the country's storage requirement was 61.3 million tons against the current capacity of around 29 million tons, citing a report commissioned last year.
"The present gap is around 32 million tons," he said in the upper house of the parliament, according to the Press Trust of India news agency.
Pawar said the government had initiated various steps to encourage the creation of new storage capacity, which is in focus as the ruling Congress party rolls out a massive new food programme to feed the poor.
The Food Security law, which the government is attempting to steer through parliament, will offer subsidised grains to nearly 70% of the population, or more than 800 million people.
Nearly two-thirds of India's 1.2 billion population still depends on agriculture for their livelihood and the government is the country's biggest purchaser of produce through its centralised procurement system.
Crashing markets spell trouble for India
The collapse of the rupee is derailing India's hopes of raising more than $6bn from the sale of stakes in state-run firms, jeopardising a key plank of Finance Minister P Chidambaram's blueprint to reverse the country's economic malaise.
Investor confidence has evaporated amid fears over the rising cost of funding India's gaping current account deficit, prompting New Delhi to delay plans to raise much-needed funds through partial privatisations, finance ministry sources said.
Hit by the U S Federal Reserve's preparations to wind down monetary stimulus, which is driving up borrowing costs globally, India's rupee has lost 17% since May - touching an all-time low of 65.56 to the dollar on Thursday - and the stock market is close to its lowest in 12 months.
"In the current situation, we cannot go to the market. We may have to wait for some more time before the market stabilises," said an official who attended a meeting with the finance minister on Monday to plan for the next three months.
Three weeks ago the cabinet deferred a decision on selling an 11% stake in hydropower producer NHPC, which it had hoped would raise $300m, after the power ministry raised concerns it would be undervalued in the current market.
Chidambaram announced in February a target of 400 billion rupees ($6.2bn) for this fiscal year through partial sell-offs of state-run firms, as part of his efforts to stave off a threatened ratings downgrade by reducing the fiscal deficit to 4.8% of gross domestic product.
His ministry has not officially abandoned the target - which many private sector economists already considered optimistic and is hopeful conditions will improve before the financial year ends next March.
The top official from the finance ministry's divestment department, Ravi Mathur, is on a tour this week to Singapore and Malaysia to drum up investor interest in the stake sales and in a proposed exchange-traded fund of state-run companies.
"We need a short window of two months to raise the funds," a senior government official with direct knowledge of the stake-sale programme said. He asked not to be named because of the sensitivity of the issue.
"No one can say with certainty for how long the market will remain volatile," he said, adding that if it stabilised by the end of next month, the government could sell stakes in companies in October and November.
Currency slide
Past experience, however, shows that hitting the stake-sale target might be difficult. Similar goals were missed in each of the last three fiscal years, when market conditions were better.
India raised 239.56 billion rupees in fiscal 2012/13 against an initial target of 300 billion, and 138.94 billion rupees in the previous year against a target of 400 billion.
While a weak rupee makes Indian assets more affordable to foreign buyers, with no end in sight to the current crash rupee assets bought now will likely lose value in dollar terms.
Currency weakness particularly reduces the attractiveness of Indian Oil Corporation (IOC). Sales of shares in IOC and Coal India Limited were expected to raise the bulk of the total stake sale target for this year.
IOC, the country's biggest refiner and retailer, sells fuels at state-set lower prices and gets partial compensation for the revenue losses through federal subsidies. However, because of the rupee's slide, its oil import bill has risen sharply, which has derailed plans to end subsidies on diesel by June 2013.
IOC's shares have dropped 30% since the beginning of May, when the rupee began its descent.
"All our oil companies now face difficult times," another finance ministry official said, noting it would not be easy to sell the stake in IOC because of the growing revenue losses.
In this fiscal year, which began in April, the government has so far raised $203m by selling stakes in seven companies, including Hindustan Copper, MMTC Indian Tourism Development Corp. and Neyveli Lignite.
Union pushback
Plans to sell a 10% stake in Coal India have already been scaled back to 5% because of resistance from unions that now oppose any privatisation of the world's largest coal company. They plan a three-day strike next month to stop the 5 percent sale from going ahead.
"Maybe the process (stake sale) itself might get delayed. (It) may not take place unless the market looks up," Coal India's personnel and industrial relations director, R. Mohan Das, told.
In June, Chidambaram said the government planned to raise nearly 200 billion rupees ($3.15bn) from the sale of the 10% stake in Coal India alone. Now the government could expect to raise just $2bn jointly from the sales of Coal India and IOC stakes, given current market valuations.
The cabinet approved the IOC share sale this month, the officials said. Divestments in Hindustan Aeronautics and Bharat Heavy Electricals before March 2014 are also key to the government's plans.
Radiation spots found at quake-hit plant
The operator of Japan's crippled Fukushima nuclear plant said on Thursday new spots of high radiation had been found near storage tanks holding highly contaminated water, raising fear of fresh leaks as the disaster goes from bad to worse.
The announcement comes after Tokyo Electric Power Co (Tepco) said this week contaminated water with dangerously high levels of radiation was leaking from a storage tank.
A tsunami crashed into the Fukushima Daiichi power plant north of Tokyo on March 11, 2011, causing fuel-rod meltdowns at three reactors, radioactive contamination of air, sea and food and triggering the evacuation of 160,000 people.
It was the world's worst nuclear accident since Chernobyl in 1986 and no one seems to know how to bring the crisis to an end.
In an inspection carried out following the revelation of the leakage, high radiation readings - 100 millisieverts per hour and 70 millisieverts per hour - were recorded at the bottom of two tanks in a different part of the plant, Tepco said.
Although no puddles were found nearby and there were no noticeable changes in water levels in the tanks, the possibility of stored water having leaked out cannot be ruled out, a Tokyo Electric spokesman said.
The confirmed leakage prompted Japan's nuclear watchdog to say it feared the disaster was "in some respect" beyond Tepco's ability to cope.
The UN's International Atomic Energy Agency (IAEA) said on Wednesday it viewed the situation at Fukushima "seriously" and was ready to help if called upon.
China said it was "shocked" to hear contaminated water was still leaking from the plant, and urged Japan to provide information "in a timely, thorough and accurate way".
