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UN: Incentives payed to keep Yemeni children in education

The United Nations children's agency says it has started paying over 136,000 teachers and school-based staff in Yemen who haven't received their salaries in over two years.

UNICEF says Sunday its scheme covers staff in over 10,300 schools and will benefit an estimated 3.7 million children. It says over 2 million children are already out of school, out of seven million school-aged children.

Geert Cappelaere, UNICEF regional director for the Mideast and North Africa, says eligible teachers and staff will be paid $50 monthly, with the first payment cycle reaching more than 97,000 professionals.

Yemen has been embroiled in a stalemated war pitting a Saudi-led coalition against Shiite rebels, since March 2015.

Cappelaere says one in five schools in Yemen can no longer be used because of the war.

Source: Fox News World

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Wife, son of suspected Indonesian militant blow themselves up: police

Police officer stand guards an area following an explosion after police arrested a suspected terrorist in Sibolga, North Sumatra province
Police officer stand guards an area following an explosion after police arrested a suspected terrorist in Sibolga, North Sumatra province, Indonesia, March 12, 2019 in this photo taken by Antara Foto. Antara Foto/Jason Gultom/ via REUTERS

March 13, 2019

By Agustinus Beo Da Costa

JAKARTA (Reuters) – The wife and son of a suspected militant Islamist blew themselves up in their home on the Indonesian island of Sumatra early on Wednesday after hours of tense negotiations with counter-terrorism officers, authorities said.

The world’s largest Muslim-majority country has in recent years struggled to contain a resurgence in homegrown radicalism inspired in part by the Middle Eastern extremist group Islamic State.

Police and bomb squad officers had surrounded the house in Sibolga, North Sumatra, after arresting her husband a day earlier over his suspected links to a planned attack on a local police headquarters. The wife and child had remained in the house.

“Police, religious figures and relatives of the suspect were negotiating with the suspects and asked them to surrender but they still stayed inside,” said national police spokesman Dedi Prasetyo.

During a standoff lasting nearly 12 hours, the wife allegedly threw an explosive device at the security forces, wounding a police officer and a civilian.

“At 1.25 a.m. the wife of the terrorist and their son blew themselves up inside the house,” Prasetyo said, adding the force of the explosion sent debris flying at least a block away.

Police found about 30 kg of explosives at the site, according to media reports. They did not elaborate on the age of the son.

Authorities believe the husband is part of Jemaah Ansharut Daulah (JAD), the largest Islamic State-linked group in the country, which was legally disbanded last year for “conducting terrorism” and affiliating itself with the foreign militant organization.

The incident is reminiscent of a series of gruesome attacks in the city of Surabaya last May, when whole families, including children as young as nine, strapped on explosive vests and blew themselves up at churches and police stations, killing more than 30 people.

Islamic State claimed responsibility for the attacks, which prompted the world’s largest Muslim-majority country to toughen up its anti-terror laws. Since then, counter-terrorism police looking to defuse homegrown radicalism have detained hundreds of suspected militants.

Under the revised law, anyone suspected of planning an attack can be held for up to 21 days for an initial inquiry and for up to 200 days for a formal investigation.

(Writing by Kanupriya Kapoor; Editing by Nick Macfie)

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Trump awards posthumous Medal of Honor to Army Staff Sgt. Trevor Atkins

President Trump awarded the Medal of Honor on Wednesday to a U.S. Army staff sergeant killed when he subdued a suicide bomber in Iraq in 2007, saving three members of his unit.

Trump presented the medal –the nation's highest military award for battlefield valor – to the family of Staff Sgt. Travis Atkins during a ceremony in the East Room of the White House.

"Today the name of Staff Sgt. Travis Atkins will be etched alongside the names of America's greatest warriors," Trump said.

Atkin’s son, Trevor, who was 11 at the time of his father’s death, received the medal for his father alongside other members of his family. Trevor remembered the stories his father told him while he was in the military and said the greatest honor his father could receive was the kind words he's heard from his fellow soldiers.

"The medal is something I take a lot of pride in, but it's those words that I take the most pride in," Atkins said.

TRUMP TO PRESENT MEDAL OF HONOR TO KIN OF FALLEN ARMY STAFF SERGEANT WHO SAVED SOLDIERS' LIVES IN IRAQ

Atkins, 31, of Bozeman, Mont., was a member of the Army’s 10th Mountain Division, based out of Fort Drum, N.Y., and was on his second tour of duty in Iraq at the time of his death.

Atkins deployed to Iraq in 2003 and was later honorably discharged as a sergeant. He re-enlisted in 2005 after attending the University of Montana and deployed to Iraq again in 2006. He was promoted to staff sergeant in May 2007, a month before he was killed.

On June 1, 2007, Atkins was on patrol with his unit, looking for a captured American soldier in the town of Abu Samak in Iraq’s volatile Anbar Province. The unit stopped a pair of suspected insurgents. Leaving the protected cover of his Humvee, Atkins approached the two men and quickly realized that one was wearing a suicide vest.

While engaged in hand-to-hand combat, Atkins wrestled the insurgent to the ground as he was attempting to detonate the vest. Atkins had the insurgent pinned to the ground and used his body as human shield to protect his fellow soldiers from the blast.

According to the White House, that valorous act saved three members of his unit that day. The three  were on hand for Wednesday's ceremony.

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Atkins' death came during the bloodiest year for U.S. forces in the campaigns in Iraq and Afghanistan, with a total of 764 service members dying in combat. Of those casualties, 85 percent were from the Army.

The Medal of Honor is the nation’s highest award for valor, and has only been awarded to 3,504 men and one woman since it was created during the Civil War.

More than half, since World War II, have been awarded posthumously. The Iraq War is the only conflict in which none of its Medal of Honor recipients – Atkins is the fifth -- survived the act of valor being honored.

Fox News’ Lucas Tomlinson and Frank Miles contributed to this report.

Source: Fox News Politics

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Exclusive: Two Belgian women, renouncing Islamic State, fear kids will never go home

Belgian women Tatiana Wielandt and Bouchra Abouallal, each 26, who joined Islamic State in Syria are pictured in Ain Issa
Belgian women Tatiana Wielandt and Bouchra Abouallal, each 26, who joined Islamic State in Syria are pictured in Ain Issa, Syria March 10, 2019. REUTERS/Issam Abdallah

March 10, 2019

By Ellen Francis

AIN ISSA, Syria (Reuters) – Two Belgian women who joined Islamic State in Syria said on Sunday they were losing hope they will ever go home after a Belgian court overturned a ruling to repatriate them with their six children. 

Tatiana Wielandt and Bouchra Abouallal, each 26, said that as much as it pains them, they would send the children to Belgium for a better life and stay behind if it came to that. 

“What do I wish to receive? A ticket home,” Abouallal said at the sprawling Ain Issa camp enclosed by wire fences in northern Syria. “I understand people are afraid … They are judging us but they don’t know us.”

European nations are wrestling with how to handle militants and their families seeking to return as Islamic State’s self-declared caliphate crumbles.

The prospect of repatriation has sparked a fierce public debate in Brussels and other European capitals, where there is little sympathy for the families of jihadists with the trauma of attacks still fresh. Few governments want to take back their citizens, who may be hard to prosecute.

Last year, a judge ordered Belgium to return the two women and the children they had with militants. But the state fought the case, fearing it would set a precedent, and won an appeal in February.

“These children can’t live. They have no education. They have nothing,” Wielandt told Reuters in the women’s first interview since the Belgian state won the appeal. Her youngest son, blond and barefoot, clung to her clothes.

The government sought to make a distinction between the mothers – sisters-in-law who were convicted in absentia of being Islamic State militants – and the children who officials say cannot be guilty of their parent’s actions.

Like other parents across Europe, the grandmother of the six children, aged from 10 months to seven years, has tried to bring them back for over a year. [L5N20N6HY]

Belgium says it will stick by a 2017 decision to allow back all children under 10 from Iraq and Syria, but it is no longer under pressure from its judiciary to act in the case of the six. 

U.S.-backed forces in Syria, holding thousands of foreign jihadists along with their wives and children, say they cannot keep them forever.

HOUSE FULL OF TOYS

Wielandt and her school friend said they turned against Islamic State as they saw its militants brutally murder people, including foreigners who had joined its cause.

They got smuggled out of Islamic State territory and surrendered to the Kurdish forces in Ain Issa in late 2017 after the jihadists lost their base in Syria’s Raqqa city, where they lived. They said they spent two months in prison before being sent to a camp in the northeast.

The sisters-in-law are among 17 Belgian women and 32 children in Syria, security sources say.

Wielandt converted to Islam to marry Abouallal’s brother when they were still teens. Soon after, they left with their husbands for Syria – each with a baby – like more than 400 Belgians who headed to the conflict zone.

Their husbands died within a year. Each pregnant with a second child, the two widows returned to Belgium in 2014. 

When Abouallal’s mother, Fatiha, was away on vacation a few months later, they fled again – leaving her heartbroken with an empty house full of toys near Antwerp.

Abouallal said they went to Syria in 2015 after feeling under “pressure” when police questioned them in Belgium or people blamed them for Islamic State attacks in Europe.

“I was thinking I’m going to live my whole life like this,” she added. “And we still had a little bit this ideology.”

“I NEED TO GET PUNISHED”

The second time they joined Islamic State, both married again and had children: Wielandt to a Dutch militant, who was killed, and Abouallal to a man from Trinidad, who surrendered with them.

The sisters-in-law said they stood ready to face jail time and get help. Abouallal said she burst into tears the last time she heard a plane flying overhead.

“I don’t even fight this. I made a mistake and I need to get punished for it,” she added. “If I ever go back to Belgium, I hope they give me an injection or whatever to forget this whole part of our lives.”

Nearly a month ago, they were moved to the Ain Issa camp, where the children live among scores of tarpaulin tents in the dirt.

They said they received threats from more extremist women for showing their faces or not wearing black.

“I don’t have a lot of hope anymore,” Abouallal said, her eyes filling with tears. “I know my mother did everything for us after everything we did to her.”

(Reporting and writing by Ellen Francis; Additional reporting by Bart Biesman and Alissa de Carbonnel in Brussels; Editing by Marguerita Choy)

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AOC faces backlash for telling war vet Crenshaw he should ‘go do something’ about domestic terror

Rep. Alexandria Ocasio-Cortez, D-N.Y., faced mounting criticism Thursday for feuding with freshman colleague Rep. Dan Crenshaw, R-Texas, over his response to domestic terrorism.

The dustup began after Crenshaw reacted to comments made by Rep. Ilhan Omar, D-Minn., who had been criticized for characterizing the 9/11 terrorist attacks as “some people did something.”

“First Member of Congress to ever describe terrorists who killed thousands of Americans on 9/11 as ‘some people who did something.’ Unbelievable,” Crenshaw tweeted.

That prompted Ocasio-Cortez to defend her Minnesota ally, going after the Texas congressman for not co-sponsoring the 9/11 Victim’s Compensation Fund.

“In 2018, right-wing extremists were behind almost ALL US domestic terrorist killings. Why don’t you go do something about that?” Ocasio-Cortez told Crenshaw.

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That sparked an avalanche of outrage, many pointing to Crenshaw’s service as a Navy SEAL in the war in Afghanistan as well as his sacrifice.

Crenshaw did not immediately respond.

Source: Fox News Politics

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Brazil’s Embraer to appoint current CEO of Marcopolo as new CEO: filing

FILE PHOTO: The Embraer logo is seen during the LABACE fair in Sao Paulo
FILE PHOTO: The logo of Brazilian aviation company Embraer is seen during the Latin American Business Aviation Conference & Exhibition fair (LABACE) at Congonhas Airport in Sao Paulo, Brazil August 14, 2018. REUTERS/Paulo Whitaker/File Photo

April 9, 2019

SAO PAULO (Reuters) – Brazilian planemaker Embraer SA appointed Francisco Gomes Neto, current chief executive officer of bus body maker Marcopolo, as its new CEO and president, the company said in a filing on Tuesday.

Embraer’s board of directors will decide on his nomination on April 22. Gomes will replace Paulo Cesar Silva, who will leave the company this month, as previously announced.

(Reporting by Carolina Mandl; Editing by Chizu Nomiyama)

Source: OANN

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U.S. trade chief says addressing structural issues in China talks ‘with precision’

Lighthizer testifies on Capitol Hill in Washington
FILE PHOTO - U.S. Trade Representative Robert Lighthizer testifies before House Ways and Means Committee hearing on "U.S.-China Trade” on Capitol Hill in Washington U.S., February 27, 2019. REUTERS/Kevin Lamarque

March 12, 2019

WASHINGTON (Reuters) – The United States is addressing structural intellectual property issues “with precision” in trade negotiations with China, U.S. Trade Representative Robert Lighthizer said on Tuesday but declined to say whether Washington will require evidence first before lifting tariffs.

Speaking at a Senate Finance Committee hearing, Lighthizer said President Donald Trump will not agree to a deal with China unless it is enforceable, and added that an agreement with Beijing will open up a lot of agricultural sales for U.S. farmers.

(Reporting by David Lawder and Humeyra Pamuk; Editing by Chizu Nomiyama)

Source: OANN

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Members of The Cranberries, bassist Mike Hogan, drummer Fergal Lawler and guitarist Noel Hogan speak to Reuters during an interview in London
Members of The Cranberries, bassist Mike Hogan, drummer Fergal Lawler and guitarist Noel Hogan speak to Reuters during an interview in London, Britain, April 24, 2019. REUTERS/Gerhard Mey

April 26, 2019

By Hanna Rantala

LONDON (Reuters) – Irish rockers The Cranberries are saying goodbye with their final album released on Friday, a poignant tribute to lead singer Dolores O’Riordan who died last year.

“In the End” is the eighth studio album from the band that rose to fame in the early 1990s with hits likes “Zombie” and “Linger”, and includes the final recordings by O’Riordan, who drowned in a London hotel bath in January 2018 due to alcohol intoxication.

Work on the album began during a 2017 tour and by that winter, O’Riordan and guitarist Neil Hogan had penned and demoed 11 tracks.

With O’Riordan’s vocals recorded, Hogan, bassist Mike Hogan and drummer Fergal Lawler completed the album in tribute to her.

“When we realized how strong the songs were, that was the deciding factor really… There was no point… trying to ruin the legacy of the band,” Noel Hogan said in an interview.

“It was obvious that Dolores wanted this album done because when you hear the album, you hear the songs and how strong they are, and she was very, very excited to get in and record this.”

The Cranberries formed in Limerick in 1989 with another singer. O’Riordan replaced him a year later and the group went on to become Ireland’s best-selling rock band after U2, selling more than 40 million records.

O’Riordan, known for her strong distinctive voice singing about relationships or political violence, was 46 when she died.

“She was actually in quite a good place mentally. She was feeling quite content and strong and looking forward to a new phase of her life,” Lawler said.

“A lot of the lyrics in this album are about things ending… people might read into it differently but it was a phase of her personal life that she was talking about.”

The group previously announced their intention to split after the release of “In The End”.

“We are absolutely gutted we can’t play (the songs) live because that’s something that’s been a massive part of this band from day one,” Noel Hogan said.

“A few people have said to us about maybe even doing a one off where you have different vocalists… as kind of guests of ours. A year ago that’s definitely something we weren’t going to entertain but I don’t know, I think it’s something we need to go away and take time off for the summer and have a think about.”

Critics have generally given positive reviews of the album; NME described it as “(seeing) the band’s career go full-circle” while the Irish Times called it “an unexpected late career high and a remarkable swan song for O’Riordan”.

Their early songs still play on the radio. This week, “Dreams” was performed at the funeral of journalist Lyra McKee, who was shot dead in Londonderry last week as she watched Irish nationalist youths attack police following a raid.

“We wrote them as kids, as a hobby and 30 years later they are on radio and on TV, like all the time… That’s far more than any of us ever thought we would have,” Noel Hogan said.

“That would make Dolores really happy because she was very precious about those songs. Her babies, she called them and to have that hopefully long after we’re gone… that’s all any band can wish for.”

(Reporting by Hanna Rantala; additoinal reporting by Marie-Louise Gumuchian; Writing by Marie-Louise Gumuchian; Editing by Susan Fenton)

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2020 Democratic presidential candidate Elizabeth Warren participates in the She the People Presidential Forum in Houston
2020 Democratic presidential candidate Elizabeth Warren participates in the She the People Presidential Forum in Houston, Texas, U.S. April 24, 2019. REUTERS/Loren Elliott

April 26, 2019

By Joshua Schneyer and M.B. Pell

NEW YORK (Reuters) – Senator Elizabeth Warren will introduce a bill Friday that offers new protections for U.S. military families facing unsafe housing, following a series of Reuters reports revealing squalid conditions in privately managed base homes.

The Reuters reports and later Congressional hearings detailed widespread hazards including lead paint exposure, vermin infestations, collapsing ceilings, mold and maintenance lapses in privatized base housing communities that serve some 700,000 U.S. military family members.

(View Warren’s military housing bill here. https://tmsnrt.rs/2Dy5aht)

(Read Reuters’ Ambushed at Home series on military housing here. https://www.reuters.com/investigates/section/usa-military)

The Massachusetts Democrat’s bill would mandate both regular and unannounced spot inspections of base homes by certified, independent inspectors, holding landlords accountable for quickly fixing hazards. The military’s privatization program for years allowed real estate firms to operate base housing with scant oversight, Reuters found, leaving some tenants in unsafe homes with little recourse against landlords.

The bill would also require the Department of Defense and its private housing operators to publish reports annually detailing housing conditions, tenant complaints, maintenance response times and the financial incentives companies receive at each base. The provisions aim to enhance transparency of housing deals whose finances and operations the military had allowed to remain largely confidential under a privatization program since the late 1990s.

The measure would also require private landlords to cover moving costs for at-risk families, and healthcare costs for people with medical conditions resulting from unsafe base housing, ensuring they receive continuing coverage even after they leave the homes or the military.

“This bill will eliminate the kind of corner-cutting and neglect the Defense Department should never have let these private housing partners get away with in the first place,” Warren said in a statement Friday.

The proposed legislation comes after February Senate hearings where Warren, a member of the Senate Armed Services Committee who is seeking the Democratic nomination for the 2020 U.S. presidential election, slammed private real estate firms for endangering service families, and sought answers about why military branches weren’t providing more oversight.

Her legislation would direct the Defense Department to allow local housing code enforcers onto federal bases, following concerns they were sometimes denied access. Warren’s office said a companion bill in the House of Representatives would be introduced by Rep. Deb Haaland, Democrat of New Mexico.

In response to the housing crisis, military branches are developing a tenant bill of rights and hiring hundreds of new housing staff. The branches recently dispatched commanders to survey base housing worldwide for safety hazards, resulting in thousands of work orders and hundreds of tenants being moved. The Defense Department has pledged to renegotiate its 50-year contracts with private real estate firms.

Congress has been quick to take its own measures. Earlier legislation proposed by senators Dianne Feinstein and Kamala Harris of California, along with Mark Warner and Tim Kaine of Virginia, would compel base commanders to withhold rent payments and incentive fees from the private ventures if they allow home hazards to persist.

(Editing by Ronnie Greene)

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FILE PHOTO: Offices of Deloitte are seen in London
FILE PHOTO: Offices of Deloitte are seen in London, Britain, September 25, 2017. REUTERS/Hannah McKay/File Photo

April 26, 2019

By Noor Zainab Hussain and Tanishaa Nadkar

(Reuters) – Deloitte quit as Ferrexpo’s auditor on Friday, knocking its shares by more than 20 percent, days after saying it was unable to conclude whether the iron ore miner’s CEO controlled a charity being investigated over its use of company donations.

Blooming Land, which coordinates Ferrexpo’s Corporate Social Responsibility (CSR) program, came under scrutiny after auditors found holes in the charity’s statements.

Ferrexpo on Tuesday said findings of an ongoing independent investigation launched in February indicated some Blooming Land funds could have been “misappropriated”. It did not provide any details or publish its findings.

Shares in Ferrexpo, the third largest exporter of pellets to the global steel industry, were 23.4 percent lower at 206.1 pence at 1022 GMT following news of Deloitte’s resignation.

“Ferrexpo’s shares are deeply discounted vs peers … following the resignation of Deloitte, we expect downside risks to dominate Ferrexpo’s shares near term.” JP Morgan analyst Dominic O’Kane said in a note on Friday.

Swiss-headquartered Ferrexpo did not provide a reason for the resignation of Deloitte, which declined to comment, while Blooming Land did not respond to a request for comment.

Funding for Blooming Land’s CSR activities is provided by one of Ferrexpo’s units in Ukraine and Khimreaktiv LLC, an entity ultimately controlled by Ferrexpo’s CEO and majority owner Kostyantin Zhevago, Ferrexpo said on Tuesday.

Ferrexpo’s board has found that Zhevago did not have significant influence or control over the charity, but Deloitte said it was unable reach a conclusion on this.

Reuters was not immediately able to contact Zhevago.

In a qualified opinion, a statement addressing an incomplete audit, Deloitte said it had been unable to conclude whether $33.5 million of CSR donations to Blooming Land between 2017 and 2018 was used for “legitimate business payments for charitable purposes”.

Deloitte said on Tuesday that total CSR payments made to Blooming Land by Ferrexpo since 2013 total about $110 million.

Ferrexpo, whose major mines are in Ukraine, has said that the investigation was ongoing and new evidence pointed to potential discrepancies.

Zhevago, 45, who ranked 1,511 on Forbes magazine’s list of billionaires for 2019 with a net worth of $1.4 billion, owns the FC Vorskla soccer club and has been a member of Ukraine’s parliament since 1998.

(Reporting by Noor Zainab Hussain and Tanishaa Nadkar in Bengaluru and additional reporting by Pavel Polityuk in Kiev; editing by Gopakumar Warrier, Bernard Orr)

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Children walk past a damaged building in the aftermath of the Cyclone Kenneth in Pemba
Children walk past a damaged building in the aftermath of the Cyclone Kenneth in Pemba, Mozambique April 26, 2019 in this still image obtained from social media. SolidarMed via REUTERS ATTENTION EDITORS – THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT. NO RESALES. NO ARCHIVES

April 26, 2019

By Emma Rumney and Stephen Eisenhammer

JOHANNESBURG/LUANDA (Reuters) – Cyclone Kenneth killed at least one person and left a trail of destruction in northern Mozambique, destroying houses, ripping up trees and knocking out power, authorities said on Friday.

The cyclone brought storm surges and wind gusts of up to 280 km per hour (174 mph) when it made landfall on Thursday evening, after killing three people in the island nation of Comoros.

It was the most powerful storm on record to hit Mozambique’s northern coast and came just six weeks after Cyclone Idai battered the impoverished nation, causing devastating floods and killing more than 1,000 people across a swathe of southern Africa.

The World Food Programme warned that Kenneth could dump as much as 600 millimeters of rain on the region over the next 10 days – twice that brought by Cyclone Idai.

One woman in the port town of Pemba died after being hit by a falling tree, the Emergency Operations Committee for Cabo Delgado (COE) said in a statement, while another person was injured.

In rural areas outside Pemba, many homes are made of mud. In the main town on the island of Ibo, 90 percent of the houses were destroyed, officials said. Around 15,000 people were out in the open or in “overcrowded” shelters and there was a need for tents, food and water, they said.

There were also reports of a large number of homes and some infrastructure destroyed in Macomia district, a mainland district adjacent to Ibo.

A local group, the Friends of Pemba Association, had earlier reported that they could not reach people in Muidumbe, a district further inland.

Mark Lowcock, United Nations under-secretary-general for humanitarian affairs, warned the storm could require another major humanitarian operation in Mozambique.

“Cyclone Kenneth marks the first time two cyclones have made landfall in Mozambique during the same season, further stressing the government’s limited resources,” he said in a statement.

FLOOD WARNINGS

Shaquila Alberto, owner of the beach-front Messano Flower Lodge in Macomia, said there were many fallen trees there, and in rural areas people’s homes had been damaged. Some areas of nearby Pemba had no power.

“Even my workers, they said the roof and all the things fell down,” she said by phone.

Further south, in Pemba, Elton Ernesto, a receptionist at Raphael’s Hotel, said there were fallen trees but not too much damage. The hotel had power and water, he said, while phones rang in the background. “The rain has stopped,” he added.

However Michael Charles, an official for the International Federation of the Red Cross and Red Crescent Societies (IFRC), said heavy rains over the next few days were likely to bring a “second wave of destruction” in the form of flooding.

“The houses are not all solid, and the topography is very sandy,” Charles said.

In the days after Cyclone Idai, heavy inland rains prompted rivers to burst their banks, submerging entire villages, cutting areas off from aid and ruining crops. There were concerns the same could happen again in northern Mozambique.

Before Kenneth hit, the government and aid workers moved around 30,000 people to safer buildings such as schools, however authorities said that around 680,000 people were in the path of the storm.

(Reporting by Emma Rumney and Stephen Eisenhammer; Writing by Emma Rumney; Editing by Janet Lawrence and Alexandra Zavis)

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A worker holds a nozzle to pump petrol into a vehicle at a fuel station in Mumbai
FILE PHOTO: A worker holds a nozzle to pump petrol into a vehicle at a fuel station in Mumbai, India, May 21, 2018. REUTERS/Francis Mascarenhas

April 26, 2019

By Manoj Kumar and Nidhi Verma

NEW DELHI (Reuters) – Surging global oil prices will pose a first big challenge to India’s new government, whoever wins an election now under way, especially as domestic prices have been allowed to lag, meaning consumers are in for a painful surge as they catch up.

For oil-import dependent India, higher global prices could lead to a weaker rupee, higher inflation, the ruling out of interest rate cuts and could further weigh on twin current account and budget deficits, economists warned.

But compounding the future pain, state-run fuel suppliers and retailers have held off passing on to consumers the higher prices during a staggered general election, which began on April 11 and ends on May 23, according to sources familiar with the situation.

That delay is expected to be unwound once the election is over. And there could be additional price increases to make up for losses or profits missed during the period of delayed increases, the sources said.

In some major Asian countries, such as Japan and South Korea, pump prices are adjusted periodically so they move largely in tandem with international crude prices.

That was what was supposed to happen in India but the election means there have been many days when pump prices have been unchanged.

In New Delhi, for example, while crude oil prices have gone up by nearly $9 a barrel, or about 12 percent, in the past six weeks, gasoline prices have only risen by 0.47 rupees a liter, or 0.6 percent.

State-controlled fuel suppliers and retailers declined to say why they had delayed price increases, or discuss whether there has been any pressure from the government of Prime Minister Narendra Modi.

A government spokesman declined to comment.

The opposition Congress party said Modi’s government was violating its own policy of daily price revision by advising the state oil companies to hold prices steady.

“The government should cut fuel taxes otherwise consumers will have to pay much higher oil prices once the elections are over,” said Akhilesh Pratap Singh, a senior leader of the Congress party.

(GRAPHIC: India Polls: Fuel price hike lags crude surge – https://tmsnrt.rs/2XLlxik)

Nitin Goyal, treasurer at the All India Petroleum Dealers Association, representing fuel stations in 25 states, said prices were similarly held down for 19 days in the southern state of Karnataka last year, when it held state assembly elections.

Only for them to surge after the vote.

“Consumers should be ready for a rude shock of a massive jump in retail prices, similar to the level we have seen in the Karnataka state election,” Goyal said.

‘CREDIT NEGATIVE’

Sri Paravaikkarasu, director for Asia oil at Singapore-based consultancy FGE, said retail prices of gasoline and gasoil prices would have been up to 6 percent, or about 4 rupee, higher if they had been allowed to rise in line with global prices.

“Indian pump prices have failed to keep up with the recent uptrend in crude prices,” Paravaikkarasu said.

“With the country’s general elections underway, the incumbent government has been keeping pump prices relatively unchanged.”

India had switched to a daily price revision in June 2017 from a revision every two weeks, as the government allowed retailers to set prices.

But the government faced protests last October when retailers raised prices by up to 10 rupees a liter after the crude oil price went above $80 a barrel, forcing it to cut fuel taxes.

Global prices rose to their highest level in 2019 on Thursday, days after the United States announced all Iran sanction waivers would end by May, pressuring importers including India to stop buying Tehran’s oil. [O/R]

Higher oil prices will mean Asia’s third largest economy is likely to see growth of less than 7 percent rate this fiscal year, economists said. Growth slowed to 6.6 percent in the October-December quarter, the slowest in five quarters.

Rating agency CARE has warned that a 10 percent rise in global oil prices could increase demand for dollars, putting pressure on the rupee and widening the current account deficit.

India’s oil import bill rose by nearly one-third in the fiscal year ending March 31 to $140.5 billion, against $108 billion the previous year.

“The increase in international oil prices is a credit negative for the Indian economy,” ICRA, the Indian arm of the Fitch rating agency, said in a note.

“Every $10/ bbl increase in crude oil prices increases the fiscal deficit by about 0.1 percent of GDP.”

Any big price rise would also build a case for the central bank to keep rates steady, or even raise them.

The Reserve Bank of India’s Monetary Policy Committee, which cut the benchmark policy repo rate by 25 basis points this month, warned that rising oil and food prices could push up inflation.

Policymakers are worried that a sustained increase in the oil price in the range of $70-75/barrel or higher can move the rupee down by 3-4 percent on an annual basis.

The rupee has depreciated by 1.24 percent against the dollar since a year high in mid-March.

($1 = 70.1800 Indian rupees)

(Reporting by Manoj Kumar and Nidhi Verma; Editing by Martin Howell and Rob Birsel)

Source: OANN

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