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India will not be cowed in internet consultations: tech minister

FILE PHOTO: A 3D-printed Facebook logo is displayed in front of the Twitter logo in this illustration
FILE PHOTO: A 3D-printed Facebook logo is displayed in front of the Twitter logo, in this illustration taken October 25, 2017. REUTERS/Dado Ruvic/Illustration/File Photo

February 20, 2019

By Sankalp Phartiyal

MUMBAI (Reuters) – India will hold wide consultations with internet companies before finalizing rules to regulate content on social media but will not hold back from framing laws that safeguard national interest, the country’s technology minister said.

India, one of the world’s biggest internet markets, in late December proposed rules that will compel platforms such as Facebook, its WhatsApp messenger service and Twitter to remove within 24 hours unlawful content, such as anything that affects the “sovereignty and integrity of India”.

The draft rules have prompted intense lobbying by technology companies, which say the proposals “impose burdensome obligations”.

The rules, if implemented in their current form, are also likely to raise costs for companies by requiring them to monitor online content around the clock.

New Delhi, which is in the process of finalizing the so-called intermediary rules, will be fair to all stakeholders, technology minister Ravi Shankar Prasad told reporters on the sidelines of an IT conference in the financial capital of Mumbai on Wednesday.

“We’ll be fair, we’ll be objective, but India’s sovereign right to frame rules and laws will always be there,” he said.

The draft rules also come at a time when India, the world’s largest democracy, heads for a general election before May and social media becomes a hotbed for circulation of fake political news.

Social media giant Facebook this month said it is toughening its advertising policies to create more transparency ahead of the vote. It also expanded its fact-checking network.

Rival Google has also conducted scores of workshops across the country to train journalists to verify news.

“As a minister, I want to assure that a social media company shall not be allowed to abuse the data of Indians to influence elections,” Prasad said.

(Reporting by Sankalp Phartiyal; Editing by David Goodman)

Source: OANN

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A Fed pivot, born of volatility, missteps, and new economic reality

FILE PHOTO: A screen displays the headlines that the U.S. Federal Reserve raised interest rates as a trader works at a post on the floor of the NYSE in New York
FILE PHOTO: A screen displays the headlines that the U.S. Federal Reserve raised interest rates as a trader works at a post on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 19, 2018. REUTERS/Brendan McDermid/File Photo

February 22, 2019

By Howard Schneider and Jonathan Spicer

WASHINGTON (Reuters) – The Federal Reserve’s promise in January to be “patient” about further interest rate hikes, putting a three-year-old process of policy tightening on hold, calmed markets after weeks of turmoil that wiped out trillions of dollars of household wealth.

But interviews with more than half a dozen policymakers and others close to the process suggest it also marked a more fundamental shift that could define Chairman Jerome Powell’s tenure as the point where the Fed first fully embraced a world of stubbornly weak inflation, perennially slower growth and permanently lower interest rates.

Along with Powell’s public comments, Fed minutes, and other documents, the picture emerges of a central bank edging towards a period of potentially difficult change as it reviews how to do business in light of that new reality. One question, for example, is whether to make crisis-fighting policies a part of the routine toolkit. Another is whether to try to prepare the public to accept higher inflation from time to time.

Policymakers have debated for years how well traditional central banking fits a world transformed by the global financial crisis a decade ago. But it was a brief Oct. 3 remark by Powell that set off the chain of events which helped settle the matter.

“We’re a long way from neutral now, probably,” Powell said at a Washington think-tank event, referring to a level of interest rates that neither cool or boost the economy.

Though Powell was effectively summarizing what the Fed had just concluded at its Sept. 25-26 policy meeting, when it raised rates amid stronger than expected U.S. growth, his characterization touched a nerve.

Investors dumped stocks and bonds, fearing the Fed aimed to drive rates higher than they felt the economy could withstand.

It was the beginning of weeks of volatility that led the Fed to recalibrate its message, with more than one misstep along the way.

In doing so, the central bank went beyond fine-tuning its language or adjusting to changing conditions. Interviews with officials as well as analysis of Fed minutes and policymakers’ public statements suggest the emergence of a long-elusive consensus that interest rates would likely never return to pre-crisis levels, and that once established relationships, such as inflation rising when unemployment fell, no longer worked.

Concern that years of solid economic growth and falling unemployment would inevitably rekindle inflation or threaten financial stability have been a staple of Fed debates, but had largely disappeared by the Fed’s Dec. 18-19 meeting, according to a review of Fed meeting minutes and officials’ public statements.

GRAPHIC – How the Fed’s meeting minutes reflected changing views on interest rates: https://tmsnrt.rs/2TX9fC0

It was a conclusion hiding in plain sight. After a year when the Trump administration pumped around $1.5 trillion of tax cuts and public spending into a full employment economy, the Fed in 2018 would miss its 2 percent inflation target yet again.

“I hate to say we were right,” Dallas Federal Reserve president Robert Kaplan told reporters on Jan. 15 in Dallas. “But we have been warning for quite some time that…the structure of the economy has changed dramatically.”

Technological innovation, globalization, and the Fed’s commitment to its inflation target all held down prices, and “those forces are powerful and they are accelerating,” he said.

His arguments echoed those made by St. Louis Fed president James Bullard and Minneapolis Fed president Neel Kashkari. New Fed vice chairman Richard Clarida and Governor Lael Brainard have flagged similar issues.

Later in January, the Fed’s policy meeting jettisoned mention of any further rate increases and cited “muted inflation” among the reasons, largely aligning the Fed with the prevailing sentiment among investors who saw conditions weakening.

At first, it was investors who appeared to have overreacted to Powell’s “long way from neutral” remark in early October.

Global markets had absorbed nearly two years of quarterly Fed rate increases in stride, but yields on U.S. 10 year Treasury bonds spiked a tenth of a percentage point that day and stocks started a slide that wiped out 10 percent of the S&P 500’s value by late November.

If sustained, It was the type of environment, with asset values falling and borrowing conditions tightening, that could hurt the Main Street economy and not just the investor class.

The initial response from Powell and others at the Fed was that the U.S. economy remained strong, and that it was not the central bank’s job to coddle Wall Street.

“We watch markets very carefully,” Powell said at a mid-November event in Dallas. “But it is one of many, many factors that go into a very large economy.”

But investors were not just reacting to the Fed and the prospect of higher rates. Weakening business and consumer confidence, slowing global growth, and potential disruptions from President Donald Trump’s trade war with China also factored in.

Over the next few weeks the Fed tried to build those concerns into its policy stance, but it became clear the situation was more fragile than they had divined.

In early December a portion of the bond yield curve “inverted,” with short term rates rising above long term ones in what can be seen as a loss of faith in economic growth.

For months, Fed officials had debated whether to discount such developments as the clash and clang of daily trading or to treat them as a significant warning. Some, including Bullard, warned against ignoring what markets seemed to be saying, and both he and Kashkari said the Fed should stop raising rates or risk trouble.

When the Fed met in December, policymakers thought they could square the circle.

Officials proceeded with another quarter-point rate increase, as expected at the time, and released updated projections showing two more rate hikes for 2019 – one less than in September, but still heading higher.

LOST NUANCE

The Fed hoped, though, that between a small change in its policy statement and Powell’s follow-up news conference, things would stay calm, a strategy Fed officials spelled out after the fact in interviews and in minutes of the December meeting.

By replacing the phrase that the Fed “expected” further rate hikes with one saying it “judged” them likely, the central bank tried to show it was now less committed to tighter policy.

But that nuance was lost on markets, and Powell’s assurance at the news conference of a newly “patient” Fed got lost as well when he described the Fed’s monthly rundown of as much as $50 billion in assets as on “automatic pilot.”

To investors, that undermined the intended message, since the regular decline in the Fed’s asset holdings effectively worked to tighten financial conditions.

The S&P 500 fell another 7.5 percent in the days that followed.

Investors felt the Fed was “not fully appreciating” how market turbulence and “softening global data” put the U.S. itself at risk, the Fed’s January minutes concluded in reviewing how the December statement was perceived.

“It was a delicate time,” New York Fed President John Williams told Reuters on Tuesday. The tweak in the December statement “was a pretty subtle message. That’s one of the challenges of trying to communicate a very complicated and complex situation in just one page.”

Over the next few weeks, the Fed eschewed subtlety for a more public acknowledgement that its view of economic reality had changed.

For a Jan. 4 question-and-answer session at the American Economic Association Powell came armed with written notes and a core message that the Fed was “always prepared to shift the stance of policy and to shift it significantly” if conditions weakened.

After the January meeting that message became official. References to the new “patient” approach and “muted inflation,” words cited in minutes of the December meeting, became part of the Fed’s policy statement. A longstanding mention of the need for higher rates was deleted.

The changes drew no dissent, with even those who have worried most about inflation and financial risk falling silent.

It was a significant moment of unanimity at a central bank that has spent the last decade wondering when, rather than whether, inflation or financial risks would re-emerge. Throughout that era some group of officials – including Powell early in his central banking career – has consistently warned that the combination of falling unemployment, cheap money, and trillions of dollars injected by the Fed’s crisis era policies would inevitably cause problems.

As the Fed’s January meeting minutes showed, not all officials have sworn off further rate increases and some noted that a possible turn for the better – a resolution of trade tensions for example – could lead them to raise rates again.

But to veteran Fed watchers, the bar is now higher. The January statement, JP Morgan analyst Michael Feroli wrote recently, showed the Fed “subtly but profoundly evolving” to a new view of the world where a variety of forces have changed the way inflation and interest rates work, and have now changed how the central bank responds.

GRAPHIC – The Fed’s new normal: https://tmsnrt.rs/2VccqWm

(Reporting by Howard Schneider; Additional reporting by Ann Saphir and Jason Lange; Editing by Dan Burns and Tomasz Janowski)

Source: OANN

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Spanish prosecutor to investigate Catalonia leader for disobedience

FILE PHOTO: Catalan Regional President Quim Torra is seen ahead of a rally of Catalan separatist organisations, in Madrid
FILE PHOTO: Catalan Regional President Quim Torra is seen ahead of a rally of Catalan separatist organisations, in Madrid, Spain March 16, 2019. REUTERS/Juan Medina

March 27, 2019

MADRID (Reuters) – The prosecutor in the north eastern region of Catalonia said on Wednesday it will investigate the Catalonia leader Quim Torra for disobedience over his failure to remove pro-independence symbols on regional government buildings.

Spain’s electoral committee ordered Torra to remove the symbols – put up for regional politicians on trial for their part in a 2017 independence referendum – which it claims are political propaganda ahead of the April 28 election.

Torra could be removed from office for up to two years if found guilty of failing to obey the order to remove objects such as pro-independence flags and yellow ribbons from government buildings in the time frame stated by the committee.

(Reporting by Jose Elias Rodriguez; Writing by Paul Day)

Source: OANN

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U.S. private sector adds 129,000 jobs in March: ADP

FILE PHOTO: Job seekers speak with potential employers at a City of Boston Neighborhood Career Fair on May Day in Boston
FILE PHOTO: Job seekers speak with potential employers at a City of Boston Neighborhood Career Fair on May Day in Boston, Massachusetts, U.S., May 1, 2017. REUTERS/Brian Snyder/File Photo

April 3, 2019

(Reuters) – U.S. private employers added 129,000 jobs in March, below economists’ expectations and the lowest since September 2017, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 170,000 jobs, with estimates ranging from 140,000 to 261,000.

Private payroll gains in the month earlier were revised up to 197,000 from an originally reported 183,000 increase.

The report is jointly developed with Moody’s Analytics.

The ADP figures come ahead of the U.S. Labor Department’s more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

Economists polled by Reuters are looking for U.S. private payroll employment to have grown by 170,000 jobs in March, up from 25,000 the month before. Total non-farm employment is expected to have changed by 180,000.

The unemployment rate is forecast to stay steady at the 3.8 percent recorded a month earlier.

(Reporting by Dan Burns; Editing by Chizu Nomiyama)

Source: OANN

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Benito Mussolini’s great-grandson enters Italian politics with far-right party

The great-grandson of Italy's fascist dictator Benito Mussolini has entered the political arena -- and wants to be known for more than just his infamous last name.

Caio Giulio Cesare Mussolini – whose name also references one of ancient Rome’s most famous leaders – is running as a candidate for the far-right Brothers of Italy in the upcoming European Union elections.

The former submariner in the Italian navy would be the third descendant of the Italian dictator to hold public office.

“I share their ideas about retaking sovereignty, protecting our country and the family,” Mussolini told The Times of London on his party. “Why spend [$113] on a migrant then peanuts on pensioners?”

JIM CARREY’S MUSSOLINI PAINTING STARTS TWITTER FEUD WITH DICTATOR’S GRANDDAUGHTER

Benito Mussolini was Italy’s dictator for two decades until his summary execution in 1945. He remains popular with many Italians today who say he modernized the country before damaging his reputation some with racist laws and an alliance with Hitler.

Three descendants of Italian dictator Benito Mussolini are in the political arena in Italy. (Photo by Roger Viollet/Getty Images)

Three descendants of Italian dictator Benito Mussolini are in the political arena in Italy. (Photo by Roger Viollet/Getty Images)

"There were a lot of good things and some mistakes,” Caio Mussolini said.

The 50-year-old told the Times that he hopes to be judged by his experience, not his name. In addition to his time in the Italian navy, he was the Middle East representative for the country’s largest defense company before entering politics.

“My experience gives me a background in international relations,” he said.

The political debut of the latest Mussolini led to protests over the weekend and even included Facebook taking down his profile. The candidate said Tuesday his profile had been restored, with apologies.

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He is not the only descendant of Il Duce to have joined the political arena. Rachele Mussolini, 44, a granddaughter, is a Rome city council member. Her stepsister, Alessandra Mussolini, 52, is an EU parliamentarian for Silvio Berlusconi’s Forza Italia party.

A keen defender of her grandfather, Alessandra Mussolini was recently involved in a Twitter feud with actor Jim Carrey, who tweeted a drawing of the dictator’s lynched corpse.

Source: Fox News World

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Heavy fighting flares between Taliban, Islamic State in Afghanistan

Afghan villagers who fled from the fighting sides arrive at the Behsud district of Nangarhar province
Afghan villagers who fled from the fighting sides arrive at the Behsud district of Nangarhar province, Afghanistan April 24, 2019. REUTERS/Parwiz

April 24, 2019

KABUL (Reuters) – Afghan Taliban insurgents are battling fighters loyal to Islamic State over control of territory in eastern Afghanistan in some of the heaviest clashes over the past year between the rival militants, officials said on Wednesday.

The fighting erupted on Monday in two districts of the eastern Afghan border province of Nangarhar, when Islamic State fighters attacked villages under Taliban control.

“Islamic State fighters have captured six villages in Khogyani and Shirzad districts but the fighting has not stopped,” said Sohrab Qaderi, a member Nangarhar’s the provincial council.

About 500 families had fled from the fighting, he said.

Casualty figures were not available.

A spokesman for the Taliban, who control more territory than at any point since they were ousted from power nearly 18 years ago, was not available for comment.

Islamic State fighters first appeared in eastern Afghanistan in around 2014 and have battled the Taliban as well as government and foreign forces.

The Afghan affiliate of Islamic State, sometimes known as Islamic State Khorasan (ISIS-K), after an old name for the region that includes Afghanistan, has made some inroads into other areas, in the north in particular.

It has also established a reputation for unusual cruelty, even by the standards of the Afghan conflict, and has been behind some of the deadliest attacks in urban centers.

While Nangarhar, on the border with Pakistan, has been an Islamic State stronghold, some villages in Khogyani and Shirzad districts have been controlled by the Taliban.

Fleeing villagers said they had to run for their lives.

“I could only rescue my family. We had to leave everything,” said Shawkat, 36, a resident of Markikhel village in Shirzad district who sought safety in a neighboring village.

Attaullah Khogyani, a spokesman for the provincial governor said, authorities would help the displaced villagers with food and medicine.

In August, more than 150 Islamic State fighters surrendered to the Afghan security forces after they were defeated by the Taliban in the northwestern province of Jawzjan.

The U.S. military estimates there are about 2,000 Islamic State fighters in Afghanistan.

Many are former Taliban. There is scant evidence of direct links with Islamic State in the Middle East, where the group has lost territory it once held in Syria and Iraq to Western-backed forces.

(Reporting by Abdul Qadir Sediqi in Kabul and Ahmad Sultan in Nangarhar; Editing by Robert Birsel)

Source: OANN

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Ex-Canada justice minister to testify about ethics allegations Wednesday

Jody Wilson-Raybould walks on Parliament Hill in Ottawa
FILE PHOTO: Jody Wilson-Raybould, former Canadian justice minister, walks on Parliament Hill in Ottawa, Ontario, Canada February 19, 2019. REUTERS/Chris Wattie

February 26, 2019

OTTAWA (Reuters) – Former Canadian justice minister Jody Wilson-Raybould on Wednesday will publicly address allegations that senior officials pressured her to help a major firm avoid a corruption trial, a parliamentary official said on Tuesday.

Wilson-Raybould will testify to the House of Commons justice committee at 3:15 pm ET (2015 GMT), said an aide to committee chair Anthony Housefather. The allegations of possibly improper behavior are rocking the government of Prime Minister Justin Trudeau just months before an October election.

(Reporting by David Ljunggren; Editing by Bill Berkrot)

Source: OANN

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Venezuela's Foreign Affairs Minister Jorge Arreaza talks to the media during a news conference in Caracas
Venezuela’s Foreign Affairs Minister Jorge Arreaza talks to the media during a news conference in Caracas, Venezuela April 8, 2019. REUTERS/Manaure Quintero

April 26, 2019

WASHINGTON (Reuters) – The U.S. Treasury Department on Friday imposed sanctions on Venezuela’s foreign minister and a Venezuelan judge, according to a statement on the department’s website.

Foreign Minister Jorge Arreaza and a judge, Carol Padilla, were targeted over the ongoing crisis in Venezuela, the Treasury Department said, the latest in a list of officials blacklisted by U.S. authorities for their role in President Nicolas Maduro’s government.

(Reporting by Susan Heavey, Makini Brice and Lesley Wroughton; Editing by Chizu Nomiyama)

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Avengers fans gather at the TCL Chinese Theatre in Hollywood to attend the opening screening of
Avengers fans gather at the TCL Chinese Theatre in Hollywood to attend the opening screening of “Avengers: Endgame” in Los Angeles, California, U.S., April 25, 2019. REUTERS/Mike Blake

April 26, 2019

LOS ANGELES (Reuters) – Marvel Studios superhero spectacle “Avengers: Endgame” hauled in a record $60 million at U.S. and Canadian box offices during its Thursday night debut, distributor Walt Disney Co said.

Global ticket sales for the film about Iron Man, Hulk and other popular characters reached $305 million for the first two days, Disney said.

(Reporting by Lisa Richwine; Editing by Chizu Nomiyama)

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Funeral of journalist Lyra McKee in Belfast
Labour Party leader Jeremy Corbyn attends the funeral service for murdered journalist Lyra McKee at St Anne’s Cathedral in Belfast, Northern Ireland April 24, 2019. Brian Lawless/Pool via REUTERS

April 26, 2019

LONDON (Reuters) – The leader of Britain’s opposition Labour Party, Jeremy Corbyn, said on Friday he had turned down an invitation to a state dinner which will be part of U.S. President Donald Trump’s visit to Britain in June.

“Theresa May should not be rolling out the red carpet for a state visit to honor a president who rips up vital international treaties, backs climate change denial and uses racist and misogynist rhetoric,” Corbyn said in a statement.

He said maintaining the relationship with the United States did not require “the pomp and ceremony of a state visit” and he said he would welcome a meeting with Trump “to discuss all matters of interest.”

(Reporting by Andy Bruce; Writing by William Schomberg)

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A bedridden 67-year-old woman and more than a dozen animals were rescued Thursday after a welfare check found that they were living in a home filled with trash, urine, and feces, Florida police said.

Pinellas County sheriff’s deputies said when they arrived at the home in Dunedin around 7:20 p.m. Thursday, they could smell the odor of rotting trash and animal feces as they walked up to the driveway.

“Inside the residence, the odor of feces and urine was so overwhelming that deputies had to don masks,” the sheriff’s department said in a statement.

FLORIDA SHERIFF ON BORDER CRISIS AFTER MAJOR DRUG BUST: ‘IT MAKES ME ABSOLUTELY CRAZY’

Walking throughout the residence, the deputies found 10 emaciated dogs and puppies living in bins filled with their own feces, five large Macaw birds flying freely, rats, bugs and overall squalor.

Puppies discovered living in their own feces inside a Florida home that was filled with trash, urine, and feces.

Puppies discovered living in their own feces inside a Florida home that was filled with trash, urine, and feces. (Pinellas County Sheriff’s Office)

Deputies said due to the large amounts of trash in the home, they had to clear a path to reach the victim’s bedroom.

“None of the home’s toilets were working and all were found to be overflowing with feces,” deputies said. “The only working sink was located on the opposite end of the house from the victim’s bedroom.”

They said there was no food or water for the victim or the animals.

FLORIDA MAN IN EASTER BUNNY COSTUME CAUGHT IN VIRAL BRAWL IS WANTED IN NEW JERSEY, HAS HISTORY OF ARRESTS

The victim was transported to a local hospital for injuries that were non-life threatening, while the animals were transported to shelters.

The woman’s caretaker, Richard Lawrence Goodwin, 65, was arrested and charged with abuse and neglect of an elderly person, disabled person, and cruelty to animals.

Richard Goodwin, 69, was arrested for abuse and neglect of an elderly and disabled person after deputies found she was living in deplorable conditions.

Richard Goodwin, 69, was arrested for abuse and neglect of an elderly and disabled person after deputies found she was living in deplorable conditions. (Pinellas County Sheriff’s Office)

The sheriff’s department said this was Goodwin’s second arrest for abuse and neglect of the same victim. He was previously arrested in May 2018.

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Neighbor Victoria Muenzerbeer told FOX 13 that Goodwin and the victim were hoarders and the conditions inside the home were horrible years ago when she visited once.

“I went in and it was absolutely, a human being couldn’t live there,” she said. “The kitchen wasn’t usable and part of the wall was falling in.”

Source: Fox News National

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Libyan Minister of Economy Ali Abdulaziz Issawi speaks during an interview with Reuters in Tripoli
Libyan Minister of Economy Ali Abdulaziz Issawi speaks during an interview with Reuters in Tripoli, Libya April 25, 2019. REUTERS/Hani Amara

April 26, 2019

By Ulf Laessing

TRIPOLI (Reuters) – Libya’s U.N.-recognized government has budgeted up to 2 billion dinars ($1.43 billion) to cover costs of a three-week-old war for control of the capital, such as treatment for the wounded, to be funded without new borrowing, the economy minister said.

Ali Abdulaziz Issawi suggested the government hoped for business to continue more or less as usual despite the assault on Tripoli, in the country’s northwest, by forces tied to a parallel administration based in the eastern city of Benghazi.

Once Africa’s third largest producer of oil, Libya has been riven by factional conflict since the fall of Muammar Gaddafi in 2011, with the country now broadly split between eastern-based forces under Khalifa Haftar and the U.N.-backed government in Tripoli, in the west, under Prime Minister Fayez al-Serraj.

Still, with Haftar’s Libyan National Army forces unable so far to pierce defenses in Tripoli’s southern suburbs, normal life and business activities continue in much of the capital and western coastal towns.

Issawi, in an interview with Reuters in his Tripoli office, also said Libya’s commercial ports and wheat imports were still functioning normally, although some roads have been blocked.

He said the Serraj government estimates it will spend up to 2 billion dinars extra on medical treatment for wounded, aid for displaced people and other “emergency” war costs.

He said this was not military spending but analysts believe that the sum will also cover expenditures such as pay for allied armed groups or food for fighters.

“We could actually spend less,” he added, in comments that gave the first insight into the economic impact of the fighting.

Issawi said the Tripoli government, which controls little territory beyond the greater capital region, would not incur new debt to fund the war costs, sticking to a plan to post a 2019 budget without a deficit.

Tripoli derives revenue largely from oil and natural gas production, interest-free loans from local banks to the central bank, and a 183 percent surcharge on foreign exchange transactions conducted at official rates.

But with centralized tax collection greatly diminished, public debt has piled up – to 68 billion dinars in the west, including unpaid state obligations such as social insurance.

Some analysts expect Serraj’s government will be forced to raise new debt if the war for control of Tripoli drags on.

With much of Libya dominated by armed factions that also act as security forces, the public wage bill for both the western and eastern administrations has soared as fighters have been made public employees in efforts to buy their loyalty.

The east has sold bonds worth 35 billion dinars outside the official financial system as the Tripoli central bank does not fund the parallel government apart from some wages.

Despite its limited reach, the Tripoli government still runs an annual budget of around 46.8 billion dinars, mainly for public salaries and fuel subsidies.

“This year we cannot finance via debt…we will not borrow (by agreement with the central bank),” Issawi said.

According to International Monetary Fund data, Libya’s central government debt-to-GDP ratio is 143 percent, making it one of the most heavily indebted in the world on that measure.

Issawi declined to say what parts of the budget would be trimmed to support the extra outlay for war costs.

However, with some 70 percent of the budget allocated to public wages, fuel subsidies and other welfare benefits, a portion devoted to infrastructure is most likely to be axed.

Widespread lawlessness has meant there have been no major infrastructural projects since 2011, when a NATO-backed uprising overthrew dictator Muammar Gaddafi, leaving schools, hospitals and roads in acute need of restoration.

FOREX SURCHARGE

Issawi said the government planned to raise as much as 30 billion dinars by the end of 2019 from hard currency deals after imposing in September a 183 percent surcharge on commercial and private transactions done on the official rate of 1.4 to the U.S. dollar. That fee has effectively devalued the official rate to 3.9, much closer to the black market equivalent.

Some 17 billion dinars have been raised since then, with hard currency allocated for import credit letters now issued without delays, Issawi said. The forex fee has helped the government forecast a budget in the black for 2019.

Despite the narrowing spread between the two rates, the black market continues to thrive. Dozens of traders remained at their favorite spot behind the central bank headquarters in Tripoli when Reuters reporters visited it last week.

But traders said it could take time for the Serraj government to register the extra forex receipts as official banking channels were taking up to six months to approve import financing, keeping the black market in play for dealers.

Issawi said authorities planned to lower the forex fee from 183 percent, without saying when. The black market rate has dropped from 6 to around 4.1 since September but it has hardly moved of late as demand for black market cash remains high.

The Tripoli government has stopped subsidizing food and bread, which used to be cheaper than drinking water in Libya. Wheat imports are now being arranged by private traders and there are surplus stocks of flour at the moment, Issawi said.

(Reporting by Ulf Laessing in Tripoli with additional reporting by Karin Strohecker in London; Editing by Mark Heinrich)

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