World News
Philippine Investors Alarmed Over President Duterte’s Policies and Flip-Flopping Pronouncements
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MANILA – Philippine President Rodrigo Duterte’s bloody anti-drug war and his foul-mouthed outbursts in defense of the campaign have unnerved foreign investors in one of Asia’s fastest-growing economies.
Analysts and businessmen point to uncertainties about Duterte’s policies and flip-flopping pronouncements as largely to blame for foreign selling in the stock market and the peso’s plunge to a seven-year low, reversing the initial optimism after his June 30 inauguration.
Some experts say unpredictability is slowing longer-term foreign investment in the Philippines. Photos and reports in the media of killings of suspected drug dealers and users – more than 3,000 since July 1 – have contributed to sagging confidence.
“We can all deal with risks. We can put measures in place to provide for risks,” said Guenter Taus, the head of the European Chamber of Commerce in the Philippines. “But uncertainty is a factor that we do not like in business, and that is exactly what we’re experiencing right now because we don’t know where we are heading.”
Taus said several companies that had intended to establish operations to the Philippines now prefer to wait and see what happens under Duterte. He declined to say which companies had changed their plans.
He said investors unsure about the Philippines may choose to look at other Southeast Asian countries to gain access to the region’s common market of more than 600 million people.
The American Chamber of Commerce of the Philippines said in September that while the country’s economic fundamentals are strong and its potential high, there is growing concern that Duterte’s policies and behavior could affect long-standing optimism by American businesses in the Philippines.
The chamber said that the large number of deaths in the anti-drug campaign is harming the Philippines’ image, and that some investors are asking if the drug war “reduces the rule of law.”
“In addition, traditionally excellent bilateral relations between the U.S. and the Philippines have recently been strained by language from Philippine leaders,” the chamber said.
Last month, before heading to a regional summit in Laos where he had been scheduled to meet with President Barack Obama, Duterte used the Tagalog phrase for “son of a bitch” as he told Philippine reporters he wouldn’t accept questions from Obama about extrajudicial killings that have occurred during the drug crackdown. Obama cancelled the meeting.
After the European Parliament recently called for an end to the drug killings and expressed concern over the scale of deaths, Duterte hit back with a profane insult and raised a fist with his middle finger thrust out. And this week Duterte said U.S.-Philippine joint military exercises end this year, though his foreign minister said later that they will continue until 2017 as previously agreed.
On several fronts, Duterte has had an uneasy relationship with Western countries, including the United States, an important treaty ally. He has said he’s charting a foreign policy that is not dependent on the U.S., and has taken steps to bolster relations with Russia and revive ties with China that had been strained under his predecessor, Benigno Aquino III, over territorial conflicts.
He said he won’t allow government forces to conduct joint patrols of disputed waters near the South China Sea with foreign powers, apparently scrapping a deal Aquino reached with the U.S. military earlier this year. Duterte has also said he wants U.S. forces out of the southern Philippines, saying minority Muslims there resent the presence of American troops.
All of this has raised concerns about a Philippine economy that grew 7 percent in the second quarter and 6.9 percent over the first half of the year compared to the same periods last year – among the fastest rates in the region.
The credit-rating agency S&P Global warned Sept. 20 that the stability and predictability of policymaking in the Philippines “has diminished somewhat under the new presidency.” It kept the country’s credit rating at investment grade, with a stable outlook, but said that rating was unlikely to rise over the next two years.
Last Monday, the peso hit its lowest level against the dollar since September 2009. It fell further Friday, closing at 48.50 pesos per U.S. dollar.
Central bank Deputy Gov. Diwa Guinigundo said foreign direct investment continues to grow. It stood at $4 billion for January to June this year compared to $2.2 billion for the same period a year ago. He noted that while Duterte became president June 30, his election victory came nearly two months earlier.
“As far as fundamentals are concerned I think they are outstanding fundamentals, but then the sentiment is something else,” he told reporters late Wednesday on the sidelines of an economic forum. Sentiment is driven by both external and domestic factors and it’s difficult to attribute negative sentiment to a specific factor like Duterte’s statements, he added.
Guinigundo said the government’s economic program follows the broad strokes that have produced 70 quarters of economic growth, low and stable inflation and a healthy banking system. “And yet the stock market is dropping and the exchange rate is moving consecutively down such as we are now the worst-performing currency in the region,” he said.
Budget Secretary Benjamin Diokno said Wednesday that the depreciation of the peso is a result of the strengthening of the dollar more than the weakening of the local currency, and should not be a cause for concern.
But Joey Cuyegkeng, ING Bank’s senior economist in Manila, said the peso was the only Asian currency that slid in the third week of September, despite favorable economic reports, including an increased balance of payment surplus in August.
Presidential spokesman Martin Andanar said that the fundamentals of the economy are solid and strong, and that the anti-drug campaign will enhance the Philippines’ image to attract more foreign investment.
In a speech to troops the day after the S&P Global warning was released, Duterte shrugged off the agency’s remarks. He said if business and the economy are affected, “so be it.”
“Get out, then we start on our own,” he said, apparently referring to Western investors. “I can go to China. I can go to Russia. I had a talk with them. They are waiting for me. So what the hell.”
World News
Marine Le Pen’s National Rally Wins the First Round in France 2024 Election
Exit polls in France showed that Marine Le Pen’s right-wing National Rally (RN) party made huge gains to win the first round of election on Sunday. However, the final outcome will depend on how people trade votes in the days before next week’s run-off.
Exit polls from Ipsos, Ifop, OpinionWay, and Elabe showed that the RN got about 34% of the vote. This was a big loss for President Emmanuel Macron, who called the early election after his party lost badly in the European Parliament elections earlier this month.
The National Rally (RN) easily won more votes than its opponents on the left and center, including Macron’s Together group, whose bloc was predicted to get 20.5% to 23% of the vote. Exit polls showed that the New Popular Front (NFP), a hastily put together left-wing alliance, would get about 29% of the vote.
The results of the exit polls matched what people said in polls before the election, which made Le Pen’s fans very happy. But they didn’t say for sure if the anti-immigrant, anti-EU National Rally (RN) will be able to “cohabit” with the pro-EU Macron in a government after the runoff election next Sunday.
Voters in France Angry at Macron
Many French people have looked down on the National Rally (RN) for a long time, but now it is closer to power than it has ever been. A party known for racism and antisemitism has tried to clean up its image, and it has worked. Voters are angry at Macron, the high cost of living, and rising concerns about immigration.
Fans of Marine Le Pen waved French flags and sang the Marseillaise in the northern French district of Henin-Beaumont. The crowd cheered as Le Pen said, “The French have shown they are ready to turn the page on a power that is disrespectful and destructive.”
The National Rally’s chances of taking power next week will rest on what political deals its opponents make in the next few days. Right-wing and left-wing parties used to work together to keep the National Rally (RN) out of power, but the “republican front,” which refers to this group, is less stable than ever.
If no candidate gets 50% of the vote in the first round, the top two candidates and anyone else with 12.5% of the registered voters immediately move on to the second round. The district goes to the person who gets the most votes in the runoff.
France is likely to have a record number of three-way runoffs because so many people voted on Sunday. Experts say that these are much better for the National Rally (RN) than two-way games. Almost right away on Sunday night, the horse trade began.
Macron asked people to support candidates who are “clearly republican and democratic.” Based on what he has said recently, this would rule out candidates from the National Rally (RN) and the hard-left France Unbowed (LFI) party. Leaders on the far left and the center left both asked their third-placed candidates to drop out.
Minority government
Jean-Luc Melenchon, leader of France Unbowed, said, “Our rule is simple and clear: not a single more vote for the National Rally.” But the center-right Republicans party, which split before the vote when some of its members joined the RN, didn’t say anything.
The president of the RN party, Jordan Bardella, who is 28 years old, said he was ready to be prime minister if his party gets a majority of seats. He has said he won’t try to make a minority government, and neither Macron nor the communist NFP will work with him.
“I will be a “cohabitation” Prime Minister, respectful of the constitution and of the office of President of the Republic, but uncompromising about the policies we will implement,” he said.
A few thousand anti-RN protesters met in Paris’s Republique square on Sunday night for a rally of the leftist alliance. The mood was gloomy.
Niya Khaldi, a 33-year-old teacher, said that the RN’s good results made her feel “disgust, sadness, and fear.”
“This is not how I normally act,” she said. “I think I came to reassure myself, to not feel alone.”
Election Runoff
The result on Sunday didn’t have much of an effect on the market. In early Asia-Pacific trade, the euro gained about 0.23%. Fiona Cincotta, a senior markets expert at City Index in London, said she was glad the outcome “didn’t come as a surprise.”
“Le Pen had a slightly smaller margin than some of the polls had pointed to, which may have helped the euro a little bit higher on the open,” she noted. “Now everyone is waiting for July 7 to see if the second round supports a clear majority or not. So it does feel like we’re on the edge of something.”
Some pollsters thought the RN would win the most seats in the National Assembly, but Elabe was the only one who thought the party would win all 289 seats in the run-off. Seat projections made after the first round of voting are often very wrong, and this race is no exception.
On Sunday night, Reuters reported there were no final results for the whole country yet, but they were due in the next few hours. In France, exit polls have usually been very accurate.
Voter turnout was high compared to previous parliamentary elections. This shows how passionate people are about politics after Macron made the shocking and politically risky decision to call a vote in parliament.
Mathieu Gallard, research head at Ipsos France, said that at 1500 GMT, nearly 60% of voters had turned out, up from 39.42% two years earlier. This was the highest comparable turnout since the 1986 legislative vote. It wasn’t clear when the official number of people who voted would be changed.
World News
Pakistan Seeks US Support for Counter-Terrorism Operation Azm-e-Istehkam
(CTN News) – Pakistan’s Ambassador to the United States, Masood Khan, has urged Washington to provide Pakistan with sophisticated small arms and communication equipment to ensure the success of Operation Azm-e-Istehkam, a newly approved counter-terrorism initiative in the country.
The federal government recently approved the reinvigorated national counter-terrorism drive, which comprises three components: doctrinal, societal, and operational.
Ambassador Khan noted that work on the first two phases has already begun, with the third phase set to be implemented soon.
Addressing US policymakers, scholars, and corporate leaders at the Wilson Center in Washington, Khan emphasized the importance of strong security links, enhanced intelligence cooperation, and the resumption of sales of advanced military platforms between Pakistan and the US.
He argued that this is crucial for regional security and countering the rising tide of terrorism, which also threatens the interests of the US and its allies.
“Pakistan has launched Azm-i-Istehkam […] to oppose and dismantle terrorist networks. For that, we need sophisticated small arms and communication equipment,” said Ambassador Khan.
Pakistan–United States relations
The ambassador observed that the prospects of Pakistan-United States relations were bright, stating that the two countries “share values, our security and economic interests are interwoven, and it is the aspiration of our two peoples that strengthens our ties.”
He invited US investors and businesses to explore Pakistan’s potential in terms of demographic dividend, technological advancements, and market opportunities.
Khan also suggested that the US should consider Pakistan as a partner in its diplomatic efforts in Kabul and collaborate on counterterrorism and the rights of women and girls in Afghanistan.
He stressed that the bilateral relationship should be based on ground realities and not be hindered by a few issues.
“We should not base our engagement on the incongruity of expectations.
Our ties should be anchored in ground realities, even as we aim for stronger security and economic partnerships. Secondly, one or two issues should not hold the entire relationship hostage,” said the ambassador.
World News
China Urges Taiwanese to Visit Mainland ‘Without Worry’ Despite Execution Threat
China has reassured Taiwanese citizens that they can visit the mainland “without the slightest worry”, despite Taiwan raising its travel alert to the second-highest level in response to Beijing’s new judicial guidelines targeting supporters of Taiwanese independence.
Last week, China published guidelines that could impose the death penalty for “particularly serious” cases involving “diehard” advocates of Taiwanese independence.
In response, Taiwan’s government urged the public to avoid “unnecessary travel” to mainland China and Hong Kong, and raised its travel warning to the “orange” level.
However, Zhu Fenglian, a spokeswoman for a Chinese body overseeing Taiwan affairs, stated that the new directives are “aimed solely at the very small number of supporters of ‘Taiwan independence’, who are engaged in malicious acts and utterances”.
She emphasized that “the vast majority of Taiwan compatriots involved in cross-strait exchanges and cooperation do not need to have the slightest worry when they come to or leave mainland China”.
“They can arrive in high spirits and leave fully satisfied with their stay,” Zhu added.
What’s Behind The China-Taiwan Tensions?
The tensions stem from the longstanding dispute over Taiwan’s status. Mainland China claims Taiwan as part of its territory and has refused to rule out using force to bring the democratic island under its control, while Taiwan sees itself as a sovereign state.
Beijing has not conducted top-level communications with Taipei since 2016, when the Democratic Progressive Party’s Tsai Ing-wen became Taiwan’s leader. China has since branded her successor, President Lai Ching-te, a “dangerous separatist”.
“The DPP authorities have fabricated excuses to deceive the people on the island and incite confrontation and opposition,” Zhu said in her statement.
Despite the political tensions, many Taiwanese continue to travel to mainland China for work, study, or business.
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