Month: May 2022

U.S. consumer price growth slowed sharply in April as gasoline prices eased off record highs, suggesting that inflation has probably peaked, though it is likely to stay hot for a while and keep the Federal Reserve’s foot on the brakes to cool demand.

The consumer price index rose 0.3% last month, the smallest gain since last August, the Labor Department said on Wednesday. That stood in sharp contrast to the 1.2% month-to-month surge in the CPI in March, which was the largest advance since September 2005.

But the deceleration in the CPI is probably temporary. Gasoline prices, which accounted for most of the pull back in the monthly inflation rate, are rising again and were about $4.161 per gallon early this week after dipping below $4 in April, according to the Energy Information Administration.

Russia’s unprovoked war against Ukraine is the main catalyst for the surge in gasoline prices. The war has also driven up global good prices.

Inflation was already a problem before Moscow’s Feb. 24 invasion of Ukraine because of stretched global supply chains as economies emerged from the COVID-19 pandemic after governments around the world injected large amounts of money in pandemic relief and central banks slashed interest rates.

President Joe Biden on Tuesday acknowledged the pain that high inflation was inflicting on American families and said bringing prices down “is my top domestic priority.”

The Fed last week raised its policy interest rate by half a percentage point, the biggest hike in 22 years, and said it would begin trimming its bond holdings next month. The U.S. central bank started raising rates in March.

In the 12 months through April, the CPI increased 8.3%. While that was the first deceleration in the annual CPI since last August, it marked the seventh straight month of increases in excess of 6%. The CPI shot up 8.5% in March, the largest year-on-year gain since December 1981.

Economists polled by Reuters had forecast consumer prices gaining 0.2% in April and rising 8.1% year-on-year.

While monthly inflation will likely pickup, annual readings are likely to subside further as last year’s large increases fall out of the calculation, but remaining above the Fed’s 2% target at least through 2023.

China’s zero tolerance COVID-19 policy is seen putting more strain on global supply chains, driving up goods prices. Prices for services like air travel and hotel accommodation are also seen keeping inflation elevated amid both strong demand over the summer and a shortage of workers.

Solid gains in rents, airline fares and new motor vehicle prices boosted underlying inflation last month.

Excluding the volatile food and energy components, the CPI picked up 0.6% after rising 0.3% in March. The so-called core CPI increased 6.2% in the 12-months through April. That followed a 6.5% jump in March, which was largest gain since August 1982.

Source: Voice of America

Uzbek cotton farmers are celebrating the lifting of a 13-year-old international boycott of their product following a finding that the cautiously reform-minded government is no longer using organized forced labor to harvest the economically vital crop.

The decision will open the door to long-closed markets for one of the world’s biggest cotton producers, including major American clothing retailers such as Amazon, Gap, J.Crew, Target and Walmart.

The U.S.-based Cotton Campaign, a coalition of more than 300 businesses and organizations, initiated the boycott in 2009. At that time, it said, the Uzbek authorities were “forcing over 1 million children and adults, including medical staff, public sector employees and students, to pick cotton every year during the harvest.”

The boycott ended after the Uzbek Forum for Human Rights, a Cotton Campaign partner, reported this spring that it found “no systemic or systematic, government-imposed forced labor during the cotton harvest” in 2021.

Despite the Uzbek Forum’s finding of discrete incidents of forced labor in several regions, the Cotton Campaign said, “This historic achievement comes after years of persistent engagement by Uzbek activists, international advocates and multinational brands, together with a commitment by the government of Uzbekistan to end its use of forced labor.”

The campaign now urges end users to conduct human rights due diligence at all stages of production — at cotton farms, spinners, fabric mills and manufacturing units — and ensure to have “credible, independent mechanisms in place for forced labor prevention, monitoring, grievance and remedy.”

The Cotton Campaign also fights state-sponsored forced labor in Turkmenistan, which it defines as “one of the most closed and repressive countries in the world.”

It says the authoritarian government there every year “forces tens of thousands of public sector workers to pick cotton in hazardous and unsanitary conditions and extorts money from public employees to pay harvest expenses.”

Jonas Astrup, the International Labor Organization technical adviser in Tashkent, told VOA that freeing Uzbek cotton “from systemic forced and child labor is a political victory for the country.”

“They did not get rid of the boycott to please the international community but for Uzbekistan itself. Responsibility and accountability ultimately lie with the Uzbek people for how and whether they trust the system and how and whether the government can deliver for its citizens,” he said. “But it’s time to seize economic benefits of job creation, economic growth, attracting trade and investment to the country.”

Astrup said the biggest root cause of forced labor “was the state quota system for cotton production and official complicity in it. That has been changed but will take time, of course. But the system of production quotas for provinces, districts and farmers has gone away, and this is really the key.”

The ILO has been monitoring child labor in Uzbekistan since 2013 and forced labor since 2015. It has a network of 17 independent civil society activists, including former political prisoners, who will continue to use tested tools and methodology.

“We have helped inspections grow from 200 to 400 labor inspectors. They are now issuing an annual report with data that is useful for policy and business decisions. They have the mandate to issue fines, investigate violations and submit cases for criminal prosecution,” Astrup said.

Astrup sees the end of the boycott as especially timely as Uzbekistan weathers the impact of sanctions on Russia, a key trading partner.

“We can help Uzbekistan credibly develop its textile and garment industry and give assurance to international brands and retailers that they can start placing orders,” he said.

Astrup added that the ILO and its partners will establish a Better Work Uzbekistan program, focusing on social dialogue mechanisms at factories and cotton-textile clusters, including collective bargaining and bringing employers and workers to the table with government to promote reforms.

Human rights advocates, meanwhile, are calling on the Uzbek government to accelerate reforms and adhere to its international obligations.

Speaking in Tashkent, Bennett Freeman, a Cotton Campaign co-founder and former U.S. deputy assistant secretary of state for democracy, human rights and labor, said Uzbekistan’s next challenge is “to open space for civil society and to create the enabling environment essential for responsible sourcing that will attract global brands and protect labor and human rights.”

Hugh Williamson, director of Human Rights Watch’s Europe and Central Asia division, said Tashkent must lift restrictions on activists and NGOs “to enable them to monitor forced labor and ensure this terrible abuse does not return.”

Tanzila Narbayeva, Uzbekistan’s Senate chair who has led efforts to end forced and child labor, admits the country still faces enormous problems.

“Ensuring human rights and freedom, specifically labor rights, is one of the priorities in our development strategy,” Narbayeva told VOA.

“First, we will strengthen our legal basis, synchronizing our laws with international standards. We will continue reforming agriculture and must also develop our institutions, including a solid monitoring system to base policy on reliable data and research,” she said.

Narbayeva said Tashkent hears international calls for an independent civil society. She said the government is processing registration applications and conducting a discourse with nongovernmental groups.

“We want a pro-active civil society which closely works with relevant international organizations. There will be grants for NGOs, funding for anti-forced labor advocacy and promoting rights in the workplace,” she said.

Source: Voice of America

A top U.S. energy official says Russia’s war on Ukraine has driven home the need to diversify supply chains, and that Africa can benefit from this. Jose Fernandez made the comment to VOA Wednesday at an annual conference on African mining in Cape Town, South Africa.

Jose Fernandez, the U.S. Undersecretary for economic growth, energy, and the environment, is the highest-ranking American official ever to attend the Investing in African Mining conference, or Indaba. Indaba is a Zulu word for discussions.

Speaking to VOA, Fernandez said the U.S. is very interested in working with African partners to make the kind of investments that will benefit both sides.

“That’s a message that I’m not sure has been made here in the last few years,” he said.

He said Russia’s attempts to weaponize its oil and gas exports to Europe highlights the fact that the U.S., and other countries, cannot depend on one, or two, or even three suppliers for important products.

“Something we need to diversity is our sources of energy. We need to invest more in renewables. That requires wind turbines, it requires solar panels, it requires electric batteries and other components that are going to be critical for the energy future,” he said.

Fernandez said the U.S. geological service has identified almost 40 critical minerals that are going to be needed for a clean energy future as well as in products like cars, computers and chips — noting that Africa has many of them.

How could the continent benefit?

“In order to do that, it’s going to require foreign investment and one way or the best way to attract foreign investment is to have clear rules and a transparent regulatory regime. What I am here to do, is to see how the U.S. can help Africa take advantage of the opportunity and create jobs,” said Fernandez.

Tony Carroll, executive advisor of the conference, says the importance of Fernandez’s attendance cannot be overstated.

“It’s the first truly high-ranking U.S. government official we’ve had at the mining indaba in the 28 years. He is responsible for the energy and natural resource portfolio within the State Department and reports directly to the secretary of state. His meetings here were meaningful and I think they were enthused about this event and looking forward to coming back,” he said.

Source: Voice of America