People hold banners during a rally to support a nationwide teachers’ strike in central Warsaw, Poland April 24, 2019. Banner reads “Nationwide demonstration for the school”. Agencja Gazeta/Jedrzej Nowicki via REUTERS
April 24, 2019
WARSAW (Reuters) – Poland’s governing nationalists announced legislation on Wednesday to ensure final high school exams are held next month despite a teachers’ strike that has shut thousands of schools for more than two weeks.
Teacher demands for a pay rise of up to 1,000 zloty ($260)evoke the competing demands of various groups for a slice of the fast-growing prosperity of central Europe’s largest economy, at a time when the ruling Law and Justice party (PiS) is expanding benefits for families and pensioners ahead of elections.
Critics say the government lacks incentive to find extra money for teachers as they broadly oppose the PiS over accusations that it is undermining Polish democracy by seeking to impose more political control over the judiciary, the state media and other public institutions. Meanwhile, the populist PiS has announced more payments for farmers who raise pigs and cows.
Teachers polled by the Rzeczpospolita daily say they earn 1,750-2,800 zloty a month after taxes. The average net salary in Polish enterprises amounts to around 3,700 zloty.
Students and parents are anxious to know whether final high school exams – allowing students to apply to university – will be held as planned at the beginning of May.
“The state must guarantee that in every school every exam candidate will be able to take their exam at the scheduled time, this is necessary for the peace of mind of students and parents and for the state to be seen as serious and responsible,” Prime Minister Mateusz Morawiecki said in a televised speech.
He announced pending legislation that would allow school directors to grant permission for exams to go ahead if the teachers’ committees at schools remained on strike.
The emergency bill is expected to be put to a vote on Thursday. Given the PiS’s majority of 237 seats in the 460-strong lower house of parliament, the announced legislation is likely to be passed.
Despite a majority of Polish schools not holding lessons for a third week, final exams for children finishing primary and middle schools were held without disruptions.
Thousands of teachers took to the streets of Warsaw on Wednesday as the strike stretched into its 17th day, brandishing placards with slogans such as “Without respect and money, education drowns in poverty”.
In recent months, some opinion polls conducted before the European Parliament election in May have raised the possibility that PiS might lose power after Poland’s national election due in October or November. It is the first such signal since the strongly conservative party took office in 2015.
($1 = 3.8296 zlotys)
(Reporting by Alan Charlish, Anna Wlodarczak-Semczuk and Marcin Goclowski; Editing by Mark Heinrich)
FILE PHOTO: Saudi Arabia’s Energy Minister Khalid al-Falih talks during the 23rd World Energy Congress in Istanbul, Turkey, October 10, 2016. REUTERS/Murad Sezer
April 24, 2019
By Saeed Azhar and Stephen Kalin
RIYADH (Reuters) – Saudi Arabia’s energy minister said on Wednesday he saw no need to raise oil output immediately after the United States ends waivers granted to buyers of Iranian crude, but added that the kingdom would respond to customers’ needs if asked for more oil.
Khalid al-Falih said he was guided by oil market fundamentals not prices, and that the world’s top oil exporter remained focused on balancing the global oil market.
“Inventories are actually continuing to rise despite what is happening in Venezuela and despite the tightening of sanctions on Iran. I don’t see the need to do anything immediately,” Falih said in Riyadh.
The United States has decided not to renew exemptions from sanctions against Iran granted last year to buyers of Iranian oil, taking a tougher line than expected.
“Our intent is to remain within our voluntary (OPEC) production limit,” Falih said, adding that Riyadh would “be responsive to our customers, especially those who have been under waivers and those whose waivers have been withdrawn.”
“We think there will be an uptick in real demand but certainly we are not going to be pre-emptive and increase production,” the minister said.
He said Saudi Arabia’s oil production in May was pretty much set with very little variation from the last couple of months. June crude allocations would be decided early next month, he said.
The kingdom’s exports in April will be below 7 million barrels per day (bpd), while production is around 9.8 million bpd, Saudi officials have said. Under the OPEC-led deal on supply cuts, Saudi Arabia can pump up to 10.3 million bpd.
Falih said there would most likely be “some level of production management beyond June” by OPEC and its allies, but it was too early to predict the output targets now.
Oil prices rallied to their highest level since November after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran and further tightening global supply.
Eight countries, including China and India, were granted waivers for six months, and several had expected those exemptions to be renewed.
Brent crude futures fell on Wednesday, trading at $74.18 per barrel at 0848 GMT, after the International Energy Agency said oil markets were “adequately supplied” and “global spare production capacity remains at comfortable levels.”
A senior U.S. administration official said on Monday that Trump was confident Saudi Arabia and the United Arab Emirates would fulfill pledges to compensate for any shortfall in the oil market following Washington’s decision to end the Iran waivers.
OPEC and industry sources told Reuters on Tuesday that Gulf OPEC producers could meet any oil supply shortage but would first wait to see whether there was actual demand.
The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, agreed to cut output by 1.2 million bpd. They meet on June 25-26 to decide whether to extend the pact.
A panel of energy ministers from major oil producers, known as the JMMC, meets on May 19 to discuss the oil market and make recommendations before the June meeting, OPEC sources said.
(Writing by Rania El Gamal; Editing by Dale Hudson and Edmund Blair)
FILE PHOTO: Ukrainian presidential candidate Volodymyr Zelenskiy reacts following the announcement of the first exit poll in a presidential election at his campaign headquarters in Kiev, Ukraine April 21, 2019. REUTERS/Valentyn Ogirenko/File Photo
April 24, 2019
By Margaryta Chornokondratenko and Matthias Williams
KIEV (Reuters) – When the Ukrainian president played by actor Volodymyr Zelenskiy faces a corrupt parliament in his TV comedy, he fantasizes about blasting them all away with two submachine guns.
Now that Zelenskiy has been elected president in real life, Margarita Bulava, who voted for him, hopes he will have a similarly transformative effect on the country’s politics.
One of Zelenskiy’s biggest challenges will be meeting the expectations of voters like 28-year-old event hostess Bulava, who had never voted before last Sunday’s presidential election. Now she has an ambitious wish-list.
There should be no inflation. People like her mother, who works in a laundry in Poland, should stop needing to move abroad for better paid jobs. There should be peace with Russia. Wages should be higher, and pensioners should be able to afford their heating bills without having to sell flowers in the subway.
“It’s a huge plus that he has never been in politics because he is completely from another sphere. He sees the situation in the country through the eyes of the people,” said Bulava.
But what if the new president fails to deliver? “It’s very scary if really none of this succeeds because expectations are really very big and everyone believes that something really should happen,” she said after working out at her gym in Kiev.
A comedian and actor with no prior political experience, Zelenskiy, 41, beat incumbent Petro Poroshenko by a landslide, promising change to a country at war with Russian-backed forces and facing some of the worst poverty in Europe.
In a wildly successful election campaign, Zelenskiy remained vague on some key policy questions, trading on the image of the honest everyman he plays on TV: a schoolteacher who accidentally becomes president after a rant about corruption filmed by one of his students goes viral.
But his outsider status may hamper his ability to deliver on his promises, especially early in his presidency when he has no lawmakers representing his party in parliament.
And if he disappoints voters early on, that could make the problem worse, hurting his new party’s prospects going into October parliamentary elections that will determine the make-up of the cabinet with which he must share power.
Zelenskiy’s vague positions on the campaign trail won him support from a wide array of voters who wanted to see new faces in politics. But that makes his popularity “fragile”, said Agnese Ortolani, an analyst at the Economist Intelligence Unit.
His support “could dissipate quickly when it comes to making decisions that could alienate part of his constituency,” Ortolani said.
An April survey by the Kiev International Institute of Sociology (KIIS) highlighted two issues in particular that are high on voters’ wishlists. Thirty-nine percent of Ukrainians expect Zelenskiy to cut their heating bills in his first 100 days in charge, and 35 percent expect him to act on an election pledge to strip lawmakers of their immunity from prosecution.
On heating tariffs, Zelenskiy is likely to face the same painful choice as his predecessors. Raising them will antagonize voters but lowering them risks derailing Ukraine’s $3.9 billion aid program from the International Monetary Fund, which has demanded Kiev allow gas prices to rise to market levels.
For now, the question is mainly in the hands of the cabinet, picked by parliament, rather than Zelenskiy.
Prime Minister Volodymyr Groysman see-sawed on the issue, first agreeing to raise tariffs early in his term in 2016 but then stalling on further increases. When the need for IMF loans became acute, he agreed to raise them last October.
Zelenskiy called on Wednesday for the government to lower gas prices within days. Bonds fell after Zelenskiy’s statement.
If his party wins the parliamentary election, and a Zelenskiy-picked government takes charge, the need for new IMF loans might box him into raising prices again.
As for stripping lawmakers of their immunity, it was the sort of proposal aimed at cleaning out politics that won over voters such as bar owner Oleksiy Kostenyuk.
“In my opinion, this will change our parliament radically. Those who break the law will go away, those who earn money illegally will go away, and we will get a new type of politician,” Kostenyuk said.
Zelenskiy promised to introduce the necessary legislation but parliament may not play ball. Volodymyr Ariev, a lawmaker in Poroshenko’s faction, the largest in the chamber, told Reuters he did not expect such a move to succeed because politicians fear being prosecuted in political vendettas.
Sooner or later, political reality will puncture the image of Zelenskiy’s straight-shooting TV persona, Ariev said.
“We will see the demolition of many dreams of the people who had voted for Zelenskiy, and the demolition of his image from the movie.”
(Editing by Peter Graff)
U.S. President Donald Trump attends the 2019 White House Easter Egg Roll on the South Lawn of the White House in Washington, U.S., April 22, 2019. REUTERS/Shannon Stapleton
April 24, 2019
WASHINGTON (Reuters) – President Donald Trump is expected to tout his fight against opioid abuse in remarks in Atlanta on Wednesday, a day after his administration brought its first related criminal charges against a major drug distributor and company executives.
America’s opioid epidemic, especially damaging in rural areas where Trump is popular, has been a focus for the Republican president.
Little has come of Trump’s calls for executing drug dealers, but on other fronts the administration has taken some action. Trump has worked to boost funding for treatment and raise awareness of the problem.
On Tuesday, the government charged Rochester Drug Co-operative Inc and executives of the major drug distributor. The company agreed to pay $20 million and enter a deferred prosecution agreement to resolve charges it turned a blind eye to thousands of suspicious orders for opioids.
Deaths from opioid overdose in the United States jumped 17 percent in 2017 from a year earlier to more than 49,000 according to the Centers for Disease Control and Prevention.
Deaths from synthetic opioids like fentanyl surged 45 percent in that time, according to the CDC.
Hundreds of lawsuits by state and local governments accuse drugmakers such as Purdue Pharma of deceptively marketing opioids, and distributors such as AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp of ignoring that they were being diverted for improper uses.
Trump has said he convinced Chinese President Xi Jinping in a December meeting in Argentina to designate fentanyl as a controlled substance.
China last month listed all fentanyl-related substances as controlled narcotics after criticism from Trump, though its government blamed U.S. culture for abuse of the drug and said the amount of fentanyl going from China into the United States was “extremely limited.”
Trump declared the opioid crisis a public health emergency in October 2017. He plans to provide an update on his administration’s work on the issue at the Rx Drug Abuse and Heroin Summit, a White House spokesman said.
Trump has used the crisis to support his call for building a wall on the border with Mexico, saying it would help keep out drugs and curb the crisis.
Heroin from Mexico accounted for 86 percent of the heroin found on U.S. streets, according to the Drug Enforcement Agency’s most recent annual narcotic report. Heroin, unlike fentanyl, is derived from the seeds of the opium poppy plant.
Last week, U.S. health officials said they will spend $350 million in four states to study ways to best deal with the opioid crisis on the local level, with a goal of reducing opioid-related overdose deaths by 40 percent over three years in selected communities in those states.
(Reporting by Roberta Rampton; Writing by Caroline Stauffer; Editing by Kevin Drawbaugh and David Gregorio)
Patrick McHugh lectures to an information technology class at the Milwaukee Area Technical College in Milwaukee, Wisconsin, U.S., March 28, 2019. REUTERS/Howard Schneider
April 24, 2019
By Howard Schneider
MILWAUKEE, Wis. (Reuters) – As a record-breaking economic expansion nears the decade mark, people like Marty Groth may determine whether it is forced into a lower gear.
Not long ago, the 60-year-old Groth found himself out of a job and considered retiring on a pension built over a career of maintaining computer servers and printers.
Instead, he returned to school to update his computer skills and will soon join a Wisconsin labor force that is decidedly short of workers.
“I could retire now if I wanted,” Groth said. “But I am thinking, I like working.”
Over the last three years, around 3 million Americans over 55 joined or rejoined the workforce, federal data show. The addition of these older workers not only contributed to economic growth, experts say, but helped stop a national decline in the share of adults working or looking for work.
The trend may have run its course. After adding 5 million new and returning workers of all ages from 2016 to 2018, the U.S. labor force shrank during the first three months of this year. (Graphic: https://tmsnrt.rs/2IpdXGq)
From healthcare to manufacturing, companies in places like Wisconsin are taking longer to hire as they struggle to find workers; some have delayed projects, others have become more willing to hire ex-convicts and less experienced workers bypassed when labor markets were looser, local officials say.
Blue-collar workers are putting in more hours, data show, while overall labor productivity is increasing. Nationally, wages are rising.
The upshot, according to policymakers, business executives and labor experts interviewed by Reuters, is that the labor market may be nearing its limits.
Over a long enough period, labor shortages can spark investment and raise productivity as companies retool. They can also improve opportunities for minorities with unemployment rates higher than those for whites.
But in the short run they pose a drag.
“Any employer, if they are willing to raise wages enough, at some point will get all the workers they need,” said Gad Levanon, chief economist at the Conference Board and author of a recent report on labor market constraints. “But it is coming at a higher cost… Projects that were profitable in a lower wage environment are not profitable anymore.”
DEALING WITH IT ‘DAY IN AND DAY OUT’
The corridor connecting Chicago to Milwaukee is a testament to the long-running economic expansion.
This is not the Wisconsin of pastures and dairy farms, but a landscape brimming with fulfillment centers and factories. A new interstate lane will allow autonomous trucks to deliver supplies for a high-tech plant being built by China’s Foxconn.
But the combination of low unemployment and an older population puts Wisconsin at the leading edge of where the country’s workforce as a whole is heading.
It is also a political battleground state, meaning the health of its economy will likely have consequences for the 2020 presidential election. Democrats will hold their convention in Milwaukee next summer.
Wages in Wisconsin rose 5 percent in 2018, compared to around 3 percent nationally, and the unemployment rate hit a record low 2.9 percent for several months in 2018 and again in February.
As chief economist at the Wisconsin Department of Workforce Development, Dennis Winters keeps close tabs on the state’s hiring. The labor shortage, he says, “is real, and people are trying to deal with it day in and day out.”
Sarah Condella, senior vice president for human resources at Exact Sciences Corp, is among them.
She joined the Madison-based company in 2012 when it employed 50 people and oversaw its growth to roughly 2,000 workers as doctors expanded use of its colorectal cancer test.
Along the way, Exact Sciences lifted starting pay to $15 an hour, roughly double the state’s minimum wage. It added perks like bus passes and flexible shifts and has plans for food service at its expanding campus.
Still, it has more than 400 vacancies, and the time to hire entry-level workers has grown from fewer than 30 days to around 45. Finding them requires radio ads, billboards and other tools not typical for a life sciences company.
It is a story repeated across Wisconsin.
Banking officials say deals are being delayed because supply chains are clogged and service companies booked, nipping the financial sector’s potential.
Half of respondents to a survey by the Wisconsin Manufacturers & Commerce trade group cited labor shortage as the top issue facing companies and the state, ahead of healthcare and regulation. A majority said they planned to increase wages at least 3 percent as they add headcount this year.
Coupled with productivity, the number of people working is the core reason economies expand, and the expected slow growth of the labor force a main reason why Federal Reserve officials and others expect the U.S. economy will cool.
SEEKING: EX-CONVICTS, RECOVERING ADDICTS
Scott Jansen, chief operating officer of Employ Milwaukee, said his work is an exercise in finding anyone available.
A semi-trailer packed with advanced machine tools now tours state prisons so inmates can be released with an in-demand skill. In Milwaukee, his agency works through churches and community groups to contact the homeless, the less educated, immigrants and others who might be reluctant to appear at a government office.
It is a reversal from the years following the economic crisis, when employers had their pick of applicants, and workers often took jobs for which they were overqualified. Millions were simply sidelined. (Graphic: https://tmsnrt.rs/2X9mu3q)
Today, Jansen said, employers are more willing to adapt job requirements to disabled workers, and more open to hiring those hardest hit during the financial crisis, like ex-convicts and those coping with addiction.
Throughout his 20s, Lee Baumann said he bounced between idleness and marginal jobs as he battled opioids. After training as a computer technician he was hired by Northwestern Mutual and is now a senior technical analyst.
“That life took me away. Three years of solid use,” Baumann said. A recent promotion raised his pay to $20 an hour, and he is saving to finish his associate degree.
Nationally, the labor force participation rate for prime-age workers like Baumann between the ages of 25 and 54 reversed a long decline around 2013. It is now near the peak hit in the 1990s.
It was largely people like Groth, the 60-year-old who is back in school, who padded the workforce. According to the Bureau of Labor Statistics, that over-55 age group was the only one whose participation rate grew from 2006 to 2016.
A recent study by economist Jay Shambaugh and others for the Brookings Institution concluded the decision of so many older workers to remain in the workforce, or rejoin it, was the main reason the U.S. participation rate stabilized at around 63 percent.
But even that group cannot be relied upon: Some 226,000 over-55 workers left the labor market in March, the most in nearly three years.
Even if people like Groth are motivated to work a bit longer, they will eventually leave. Wisconsin will see that frontier first. The share of state population over 55 jumped from 26 percent to over 30 percent from 2010 to 2017; the share 65 and over, a traditional retirement plateau, jumped from 13.6 percent to 16.4 percent, according to census data.
“Adding more workers is a big part of getting GDP to grow,” Shambaugh said. With an aging population, choices by those like Groth are “a big part of your growth over the next decade.”
(Reporting by Howard Schneider; Editing by Dan Burns and Paul Thomasch)
FILE PHOTO: A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing, Jiangsu province, China February 13, 2019. REUTERS/Stringer
April 24, 2019
By Andrew Galbraith
SHANGHAI (Reuters) – Equity markets in Asia rose on Wednesday morning after upbeat earnings helped the Nasdaq and S&P 500 indexes reach record closing highs on Wall Street overnight, while oil retreated from its near six-month highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1 percent in early trade in Asia. The gains followed a strong performance on Wall Street, driven by robust results from Coca-Cola, Twitter, United Technologies and Lockheed Martin.
The Dow Jones Industrial Average rose 0.52 percent to 26,647.97, the S&P 500 gained 0.91 percent to 2,934.31 and the Nasdaq Composite added 1.35 percent to 8,123.25.
On Wednesday morning, S&P 500 e-mini stock futures were up 0.03 percent at 2,938.75, just short of a record high of 2,944.75 on October 3.
Australian shares gained 0.6 percent, while Japan’s Nikkei stock index was 0.3 percent higher. Seoul’s Kospi was up 0.1 percent.
Analyst said that alongside better-than-feared corporate earnings, a more supportive policy environment is helping to boost risk appetites.
“The Fed has been joined in its dovish tilt by major central banks across the globe … the tilt globally reflects genuine concern not to allow individual countries and the globe to tip into recession. That risk has receded,” Greg McKenna, strategist at McKenna Macro in Australia, said in a note to clients.
Equity market gains had been bolstered on Tuesday by rising energy shares after Brent crude, the global benchmark, hit its highest level since Nov. 1.
Oil prices had surged after the United States ended six months of waivers that allowed Iran’s eight biggest buyers, most of them in Asia, to continue importing limited volumes of Iranian oil.
Gulf OPEC members said that rather than offset any shortfall resulting from the U.S. decision on waivers, they would raise output only if there was demand.
But early on Wednesday, Brent had given up some gains, trading down 0.54 percent at $74.11 per barrel. U.S. crude dipped 0.54 to $65.94 a barrel.
U.S. Treasury yields ticked lower. Benchmark 10-year Treasury notes yielded 2.5686 percent compared with a U.S. close of 2.57 percent on Tuesday, while the two-year yield, slipped to 2.3516 percent, compared with a U.S. close of 2.364 percent.
The U.S. dollar index, which tracks the greenback against a basket of six major rivals, eased 0.03 percent to 97.606. The dollar was down 0.04 percent against the yen to 111.82.
The euro edged 0.08 percent lower to buy $1.1216.
Spot gold fell about 0.1 percent to $1,271.07 per ounce.
(Reporting by Andrew Galbraith; Editing by Richard Borsuk)
FILE PHOTO: Traffic is pictured at twilight along 42nd St. in the Manhattan borough of New York, U.S., March 27, 2019. REUTERS/Carlo Allegri
April 23, 2019
By Richard Leong and Trevor Hunnicutt
(Reuters) – American middle class consumers are enjoying the strongest wage growth in a decade, but higher gasoline prices are eating a good chunk of that increase for many, and it looks like pump prices are headed higher.
Gasoline pump prices have already jumped about 25% this year, the fastest rate in three years. Trump administration sanctions against Iranian crude oil exports had something to do with that, and this week’s move to tighten sanctions could soon send prices even higher.
Crude oil prices hit their highest in about six months on Tuesday.
Some analysts expect the national average pump price, currently near $2.85 a gallon, will climb above $3 a gallon for the first time since 2014. Few goods prices aggravate U.S. consumers as much as high gasoline prices.
“It’s an important part of consumers’ psyche,” Mark Zandi, chief economist at Moody’s Analytics, said of a further rise in energy prices. “They live with it everyday.”
Zandi and other analysts said higher gasoline prices would irritate U.S. motorists heading into the summer driving season, but they do not think a moderate fuel price hike would force people to cut spending in other areas.
For now, consumer spending has remained resilient, with wages growing in a tight job market. Average hourly earnings in the private sector are rising at roughly 3.2% year over year, the strongest in a decade.
Those bigger paychecks helped pay for costlier gasoline after the Organization of the Petroleum Exporting Countries (OPEC) and allied producers including Russia reduced output to prop up prices. Retail prices for regular gasoline have risen around 55 cents a gallon so far this year from $2.30 at end of 2018, according to AAA, an automotive advocacy group.
“So far it hasn’t been a particularly large headwind for U.S. consumers,” said Matt Luzzetti, senior economist at Deutsche Bank AG.
The Trump administration called for buyers of Iranian oil to stop purchases by May 1 or face sanctions, ending six months of waivers that allowed Iran’s eight biggest buyers to keep importing limited volumes.
Analysts noted that U.S. domestic crude production is surging and said higher output from OPEC and Russia could help offset losing about 1 million barrels per day of Iranian oil from world markets. But sources on Tuesday said Gulf OPEC members were ready to raise output only if they saw sufficient demand.
(GRAPHIC: U.S. wages, gasoline link: https://tmsnrt.rs/2IC9wbu)
Some U.S. consumers are already paying $3 a gallon at the pump, and will feel the squeeze if prices rise further. In February, filling a 25.5 gallon tank of a sports utility vehicle with regular gasoline would have cost around $57 on average. That has risen to nearly $73, based on government data.
For a $15-an-hour employee working 35 hours a week, filling up once a week now costs 14% of gross pay, up from less than 11% just 10 weeks ago.
“I’m hyper-aware of the gas pricing,” said Brittany Trotter, a part-time driver for Lyft Inc based in Washington, D.C. She said rising fuel costs have cut her profits and stretched her budget.
Even before the latest Iran news, drivers expected rising prices at the pump to cut their income. A survey in March showed consumers expected prices to rise 4.7% over the next year, the largest figure in nine months, according to the Federal Reserve Bank of New York. The consumers surveyed expected their wages to rise 2.6% over the year, though earnings growth expectations slipped for people with a high school diploma or less education.
(GRAPHIC: U.S. gasoline demand, prices, GDP link: https://tmsnrt.rs/2Dtnnga).
(GRAPHIC: Iran seaborne crude oil & condensate exports link: https://tmsnrt.rs/2DE8CHt).
(GRAPHIC: Russian, U.S. & Saudi crude oil production link: https://tmsnrt.rs/2EUHeFO).
(Additional reporting by Dan Burns; Graphic by Stephen Culp, Richard Leong; Editing by David Gregorio)
A migrant from Honduras watch other migrants’ cellphones as they gather in an improvised shelter during a break in their journey towards the United States, in Escuintla, Mexico April 19, 2019. REUTERS/Jose Cabezas
April 23, 2019
WASHINGTON (Reuters) – The Republican and Democratic leaders of the U.S. House of Representatives Foreign Affairs Committee urged the Trump administration to reconsider its plan to cut aid to Central America, warning in a letter released on Tuesday that it could lead to increased Chinese influence.
The State Department said last month it would cut aid to El Salvador, Guatemala and Honduras after President Donald Trump sharply criticized them because thousands of their citizens had sought asylum at the U.S. border with Mexico.
“Assistance … is having positive results, and while improvements can be made, we believe that cutting assistance would be counterproductive and lead to increased migration flows to the U.S.,” Representatives Eliot Engel, the committee’s Democratic chairman, and Michael McCaul, its ranking Republican, said in a letter to Secretary of State Mike Pompeo.
Cutting the aid would also raise doubts over the reliability of the United States as a consistent partner and create a void that China and other adversaries will look to fill, they said.
World leaders are meeting in Beijing next week for a summit on China’s Belt and Road Initiative, which envisions connecting China with Asia, Europe and beyond with massive infrastructure spending. But it is viewed warily by Washington, which views the program as a way to spread Chinese influence and saddle countries with unsustainable debt.
Several members of Congress, where several lawmakers, including some of Trump’s fellow Republicans as well as Democrats, have rejected the plan, saying it was cruel to cut off aid to countries grappling with hunger and crime and more likely to increase the number of migrants than decrease it.
State Department officials did not immediately respond to a request for comment on the letter from Engel and McCaul.
Mark Green, the administrator of the U.S. Agency for International Development, told a Foreign Affairs Committee hearing earlier this month that the administration had no plan to change its decision until Trump is satisfied that the countries are doing enough to address migration.
Trump has made a hard line on immigration a central theme of his presidency, particularly regarding undocumented newcomers from Latin America via the southern border.
(Reporting by Patricia Zengerle; Editing by Susan Thomas)