New Zealand plunges into recession first time in decades amid pandemic crisis

Amid the ongoing coronavirus crisis, New Zealand's economy fell into recession for the first time in a decade on Thursday, posting a record contraction in the June quarter, as Prime Minister Jacinda Ardern heads into next month's general election.

"The 12.2% fall in quarterly GDP is by far the largest on record in New Zealand," the national statistics agency said.

The reporting period covers April to June, coinciding with a strict lockdown that began in late March and began easing in late May.

Stats NZ spokesperson Paula Pascoe said the closure of New Zealand's borders since March 19 had also had a huge impact of some sectors of the economy.

"Industries like retail, accommodation, and restaurants, and transport saw significant declines in production because they were most directly affected by the international travel ban and strict nationwide lockdown," he said.

"Other industries, like food and beverage manufacturing, were essential services and fell much less."

The second-quarter decline follows a 1.6% contraction in the first three months of 2020, confirming widespread expectations that New Zealand is in recession.

However, the 12.2-% figure was below the 16% predicted by the government this week and fell well short of the 23.5% forecast in the budget last May.

Finance Minister Grant Robertson said the better-than-expected outcome was due to policies implemented by Ardern's government, which will go to the polls seeking a second term on October 17.

"Going hard and early means that we can come back faster and stronger," he said.

"Economists expect the current September quarter to show a record jump back to growth in the economy."

'This was traumatic'

New Zealand has recorded only 25 coronavirus deaths in a population of five million and cases have been largely contained since late May, aside from a flare-up in Auckland last month.

But the opposition National Party said Ardern's centre-left government had failed New Zealanders by failing to keep the economy moving.

National's finance spokesman compared the response to Australia, which recorded an economic contraction of 7% in the June quarter after adopting a more flexible approach to lockdowns and border controls.

"The lack of pragmatism and a clear plan from (Ardern's) Labour has made the economic hole deeper and the impact harder than it needed to be," he said.

"This economic damage was recorded in three months but will last for decades to come — this is the deepest recession in living memory."

New Zealand's most recent recession was in 2008-09 and until the first three months of this year, it had recorded non-stop quarterly growth since 2010.

Kiwibank chief economist Jarrod Kerr said the scale of the June quarter decline was unprecedented.

"We've never seen anything like this. It was traumatic," he said.

"Service exports were stonewalled, and down 40% in the quarter, consumption was down 12%, and investment was slashed by 20%."

But he said the figure was a one-off that was set to be followed by a growth surge of 10% in the September quarter, which would also be a record.

"Businesses and households have clearly adapted to trading in a world with the limited face-to-face contract," he said.

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Barbados to remove Queen Elizabeth as head of state

Barbados has announced its intention to remove Queen Elizabeth II as head of state and become a republic by November next year, as the Caribbean island nation seeks to move fully beyond its colonial past.

The decision was formalised in the so-called Throne Speech, delivered on behalf of Prime Minister Mia Mottley by the island’s Governor-General Sandra Mason to mark the state opening of parliament on Tuesday.

More than half a century after attaining independence from Britain, “the time has come to fully leave our colonial past behind,” Mason said.

“Barbadians want a Barbadian Head of State,” she said. “This is the ultimate statement of confidence in who we are and what we are capable of achieving.” Mason said “Barbados will take the next logical step toward full sovereignty and become a Republic by the time we celebrate our 55th Anniversary of Independence” — which will be marked on November 30, 2021.

When asked about the speech, a Buckingham Palace spokesman said: “This is a matter for the government and people of Barbados.” Queen Elizabeth is head of state of the United Kingdom and 15 other formerly-British ruled countries, where she is represented by the governor-general.

They are: Antigua and Barbuda, Australia, The Bahamas, Barbados, Belize, Canada, Grenada, Jamaica, New Zealand, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Solomon Islands and Tuvalu.

Many Barbadians have called in the past for doing away with the queen’s status — due to its lingering imperialist associations — and several of the island’s leaders have advocated becoming a republic.

The move was greeted with cheers on social media, with some users saying the queen was not needed, as the country’s most famous citizen, singer Rihanna, was more than enough.

“Anyway. Barbados already has a Queen and her name is @rihanna,” quipped Simon Naitram, a lecturer at The University of the West Indies at Cave Hill on the island.

Barbados — which has a population of just under 300,000 — was claimed by the British in 1625. It is sometimes called “Little England” for its loyalty to British customs.

It is typically a popular Caribbean tourist destination and cruise port, but the coronavirus pandemic has devastated the industry, with cruise ships out of operation for months.

The island’s decision comes as the historic role of the British empire comes under renewed scrutiny, as part of a global reckoning on race relations and the colonial past fuelled by mass anti-racism protests in the United States.

A government-appointed commission had concluded back in 1998 that Barbados should become a republic with a non-executive president as head of state to replace the queen — but the recommendation was not acted upon.

Mason cited a warning by the country’s first prime minister, Errol Walton Barrow, who had cautioned against “loitering on colonial premises” — saying: “That warning is as relevant today as it was in 1966.” “Having attained Independence over half a century ago, our country can be in no doubt about its capacity for self-governance,” she said.

Despite her designation, Queen Elizabeth rarely visits Barbados and the ceremonial functions of her office are performed by the governor-general.

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Rupee strengthens against dollar

The exchange rate of Pakistani rupee strengthened by 13 paisas against the US dollar in the interbank trading on Thursday and closed at Rs 166.21 as compared to the last closing of Rs 166.34.

However, according to Forex Association of Pakistan, the buying and selling rates of dollar in open market were recorded at Rs 166.5 and Rs 167 respectively.

The State Bank of Pakistan reported that in interbank trading, the price of euro depreciated by Rs 1.22 and closed at Rs 196.21 against the last day’s trading of Rs 197.43.

The Japanese Yen remained stable at Rs 1.58, whereas an increase of 67 paisas was witnessed in the exchange rate of British Pound which was traded at Rs 215.35 as compared to its last closing of Rs 214.68.

The exchange rates of Saudi Riyal and Emirates Dirham also decreased by 03 paisas each to close at Rs 44.31 and Rs 45.25 respectively.

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ByteDance's bid to keep most of TikTok faces major hurdles

China’s ByteDance faces an uphill struggle to convince the White House to allow it to keep majority ownership of its popular short video app TikTok in the United States, according to former national security officials and regulatory lawyers.

Trump ordered ByteDance last month to divest TikTok amid U.S. concerns that the personal data of as many as 100 million Americans that use the app could be passed on to China’s Communist Party government. He has threatened to ban TikTok in the United States as early as Sept. 20 if ByteDance does not comply.

ByteDance has submitted a plan to U.S. officials for it to keep a majority stake in TikTok’s global business and create headquarters for TikTok in the United States, Reuters reported on Tuesday. The proposal is being reviewed by the Committee on Foreign Investment in the United States (CFIUS), a U.S. government panel chaired by the U.S. Treasury Department.

“Conceptually I can tell you I don’t like that (ByteDance keeping a majority ownership of TikTok). That has been reported, but it has not been told to me yet. If that is the case, I’m not going to be happy with that,” Trump told reporters at the White House on Wednesday. He added that would be briefed on the deal and consider it on Thursday.

Were Trump to approve the deal, he would have to amend an executive order he signed on Aug. 14 directing ByteDance to divest TikTok in the United States, something that no U.S. President has ever done in the history of national security reviews, CFIUS experts said.

“After CFIUS made a recommendation to the President and the President issued an executive order requiring divestment, it would be unprecedented for the parties to negotiate a solution short of a divestment, though it would clearly be within the authority of the President to modify his order” said Aimen Mir, who oversaw CFIUS reviews between 2014 and 2018 as Deputy Assistant Secretary for Investment Security at the U.S. Department of the Treasury, and is now a partner at law firm Freshfields Bruckhaus Deringer LLP.

ByteDance, the White House and the Treasury did not respond to requests for comment.

To be sure, CFIUS has allowed foreign firms to keep sensitive U.S. assets on several occasions, by imposing oversight and restrictions on how they are operated.

China’s Lenovo acquired IBM’s personal computer business in 2005 and Japan’s SoftBank Group Corp acquired U.S. wireless carrier Sprint in 2013 by agreeing to CFIUS conditions such as giving the U.S. government a say on board directors and vendor relationships. ByteDance has proposed similar measures to CFIUS, sources have said.

ByteDance says China will have to approve its U.S. TikTok deal
“Even if a company’s affiliate is concerning to CFIUS, as long as that affiliate is isolated to CFIUS’s satisfaction, then the transaction can work. CFIUS has requested and has been satisfied with isolating mitigation measures in the past,” said Nevena Simidjiyska, a regulatory lawyer at Fox Rothschild LLP.

ByteDance has also explored divesting a majority stake in the U.S. business of TikTok, and in July it signed a letter of intent with Microsoft Corp that contemplated the sale of that business to the Redmond, Washington-based company.

However, Microsoft said on Sunday that ByteDance had turned down its offer, and it remains unclear whether the Chinese firm would shed most of its ownership of TikTok to clinch a deal with the White House.

SECURITY MEASURES
Another hurdle for ByteDance, CFIUS experts said, is that it is discussing offering a minority stake in TikTok to Oracle Corp, while also having the technology giant take over the management of its user data and ensuring it is ringfenced from China.

CFIUS typically calls for parties responsible for security arrangements to be independent of the companies they oversee. For example, when CFIUS allowed China Oceanwide Holdings Group Co Ltd to acquire of U.S. insurer Genworth Financial Inc two years ago, it negotiated installing a U.S.-based, third-party service provider to manage Genworth’s U.S. policyholder data. That provider had no stake in Genworth’s business.

“For CFIUS to get comfortable with a third party having both an ownership stake and a security responsibility, they would have to have a firm basis for trusting the U.S. business partner, conclude that the security measures would be technically effective, and be convinced that it is possible for the business to be commercially successful even while strictly adhering to the security measures,” Mir said.

ByteDance is referring to Oracle as a “trusted technology partner”. CFIUS previously rejected the use of trusted technology partners when considering whether ByteDance should divest TikTok, the video app disclosed in an Aug. 24 lawsuit against the United States challenging Trump’s order to ban it.

Oracle did not respond to a request for comment.

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Pakistan's Babar Azam hits 'magnificent' 114 in Somerset T20 Blast

Pakistan's shining cricket star Babar Azam on Wednesday hit a "magnificent" 114 runs in the English county's Twenty20 Blast, earning praise from his teammates and the club.

According to an update on the Somerset County cricket club's Twitter account, the team ended "with 183/3 from 20 overs".

"Magnificent from Babar Azam (114* from 62) and Lewis Goldsworthy on debut (38* from 29)," Somerset added.

Babar Azam — ranked among the top T20 batters — rejoined Somerset for this year's domestic T20 Blast, the county had announced last month. He was the leading run-scorer in the 2019 edition.

Currently captaining Pakistan in their T20 series in England after featuring in all three Tests earlier in the tour, the cricketer had agreed to return to southwest club Somerset before the coronavirus pandemic upended cricket schedules around the world.

Somerset end with 183/3 from 20 overs!!! Magnificent from Babar Azam (114* from 62) and Lewis Goldsworthy on debut (38* from 29)

LIVE STREAM -> https://t.co/dF6GhNA901#GLAMvSOM#WeAreSomerset pic.twitter.com/H10KGAVBsc

— Somerset Cricket ? (@SomersetCCC) September 16, 2020

The 25-year-old is playing Somerset's final seven group matches plus the knockout stages should they qualify.

"He is a great player, is so easy on the eye and fitted brilliantly into our environment last year," Somerset director of cricket Andy Hurry said about the Pakistani star, who had compiled 578 runs at an impressive average of 52.54 in his first season with the county.

"We consider Babar to be one of our own," Hurry had said last month.

The cricketer was toppled by England's Dawid Malan as the top T20 international (T20I) batter in the International Cricket Council's (ICC) batting rankings earlier this month, pushing Azam to the second position.

Australia's Aaron Finch and Colin Munro, as well as India's Lokesh Rahul, remained in the top five positions.

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World Bank says COVID-19 pandemic threatens child education, health gains

The World Bank on Thursday said that the ongoing coronavirus pandemic threatens to diminish progress made in the last decade in improving child education and health, particularly in the poorest countries.

The conclusion comes in the Washington-based development lender's Human Capital Index for 2020, which ranks countries on how well children are prepared for the future, with an emphasis on factors like schooling and healthcare.

This year's report shows that most countries, particularly poorer ones, have made steady gains in improving health and education prior to the pandemic.

Despite that, the bank said in a statement a child in a low-income country will likely achieve only 56% of their human capital compared to one with access to complete education and full healthcare.

The indicator purports to measure the level in life that a child born today can hope to reach by age 18.

World Bank President David Malpass told reporters those gains are now jeopardised by the pandemic.

"Human capital is absolutely vital to the financial and economic future of the country as well as the social well being," he said.

Inequalities among children are set to increase, Malpass said, warning of disturbing trends such as the eighty million children lacking essential vaccinations.

"We think more than one billion children have been out of school due to COVID, and (they) could lose as much as $10 trillion in lifetime earnings," he said, citing their reduced education level as well as the potential they would drop out of school.

He warned girls to face a "disproportionate" risk and called on countries to invest in education broadly.

First launched in 2018, this year's Human Capital Index includes data from 174 countries representing 98 percent of the world's population.

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22 educational institutes closed in 48 hours over non-compliance with SOPs: NCOC

Authorities in the country have closed 22 educational institutes in the last 48 hours for not complying with government-issued standard operating procedures, according to a statement issued by the National Command and Operations Centre (NCOC) on Thursday.

“During the last 48 hours, 22 educational institutions across Pakistan have been closed due to non-compliance of health SOPs/protocols and disease prevalence,” read the statement.

As per the breakdown, 16 educational institutions have been closed in Khyber Pakhtunkhwa, one in the federal capital and five in Azad Jammu and Kashmir.

Earlier this week, the NCOC had said a “major educational institute” in the federal capital was sealed after a spike in COVID-19 cases was reported from it.

"A major educational institution sealed in Islamabad. Due to targeted testing, 16 cases were reported from the subject institution," read the statement. The NCOC had also shared that contact tracing will be done to "ensure containment" of COVID-19 cases in the city.

Both closures came shortly after all educational institutions, including seminaries, reopened from Tuesday after a six-month break amid concerns over the implementation of COVID-19 safety protocols and fears of a second wave of the virus.

The government had decided to close schools, colleges and universities in March to curb the spread of coronavirus. Sindh, however, had suspended educational activities in the province on February 27 after detection of the first COVID-19 case in Karachi.

On September 7, Federal Education Minister Shafqat Mahmood had announced that all higher education institutions in the country will reopen in phases from September 15.

Over 30,000 religious seminaries across the country also reopened in phases from Tuesday.

According to the guidelines issued by the government, the use of masks is mandatory for all teachers and students, while schools, colleges and universities will ensure the presence of hand sanitizers at the entrance.

The NCOC has also urged the parents and teachers to comply with the standard operating procedures (SOPs) issued for the safety of students.

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