NZ Teachers Strike for First Time in 20 years, Challenge Government’s Fiscal Plan

New Zealand school teachers went on strike on Wednesday for the first time in more than 20 years, challenging the Labor government’s plans to balance promised fiscal responsibility against growing demands to increase public sector salaries.

The government’s first budget in May was stretched to fulfill its promise to juggle investing in much-needed infrastructure with a self-imposed rule to pay down debt and insulate the economy from potential shocks.

Almost 30,000 primary school teachers did not turn up to work on Wednesday and held protests across the country, leaving parents of children aged 5 to 13 at public schools scrambling to find childcare.

“Teachers and principals voted for a full day strike…to send a strong message to the Government that the current collective agreement offers from the Ministry of Education would not fix the crisis in teaching,” said Louise Green, lead negotiator at NZEI, the union that represents teachers, in a statement.

NZEI said it has asked for a 16 percent pay increase for teachers over two years, whereas the government has offered between 6.1 and 14.7 percent pay rises, depending on experience, over three years.

“Our view is that we need to have those discussions around the negotiating table but…there isn’t an endless amount that we have available to us in order to meet those expectations,” Prime Minister Jacinda Ardern said at her weekly news conference on Monday.

​The action comes in the wake of a one-day nationwide nurses’ strike in July and a series of smaller actions by government workers, challenging Ardern’s center-left government, which ended almost a decade of center-right National Party rule in October.

The stand-off with its traditional union support base comes nine months after Labor formed a coalition government, promising to pour money into social services and rein in inequality, which has increased despite years of strong growth.

Wage growth has remained sluggish in the island nation for years, despite soaring housing costs, which labour groups and economists say has left workers struggling despite robust growth.

The government is also struggling with gloomy business confidence, which has sunk to decade lows and contributed to a surprise signal from the central bank on Thursday that it planned to keep rates on hold into 2020 and saw downside risks to its growth forecasts.


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NZ Teachers Strike for First Time in 20 years, Challenge Government’s Fiscal Plan

New Zealand school teachers went on strike on Wednesday for the first time in more than 20 years, challenging the Labor government’s plans to balance promised fiscal responsibility against growing demands to increase public sector salaries.

The government’s first budget in May was stretched to fulfill its promise to juggle investing in much-needed infrastructure with a self-imposed rule to pay down debt and insulate the economy from potential shocks.

Almost 30,000 primary school teachers did not turn up to work on Wednesday and held protests across the country, leaving parents of children aged 5 to 13 at public schools scrambling to find childcare.

“Teachers and principals voted for a full day strike…to send a strong message to the Government that the current collective agreement offers from the Ministry of Education would not fix the crisis in teaching,” said Louise Green, lead negotiator at NZEI, the union that represents teachers, in a statement.

NZEI said it has asked for a 16 percent pay increase for teachers over two years, whereas the government has offered between 6.1 and 14.7 percent pay rises, depending on experience, over three years.

“Our view is that we need to have those discussions around the negotiating table but…there isn’t an endless amount that we have available to us in order to meet those expectations,” Prime Minister Jacinda Ardern said at her weekly news conference on Monday.

​The action comes in the wake of a one-day nationwide nurses’ strike in July and a series of smaller actions by government workers, challenging Ardern’s center-left government, which ended almost a decade of center-right National Party rule in October.

The stand-off with its traditional union support base comes nine months after Labor formed a coalition government, promising to pour money into social services and rein in inequality, which has increased despite years of strong growth.

Wage growth has remained sluggish in the island nation for years, despite soaring housing costs, which labour groups and economists say has left workers struggling despite robust growth.

The government is also struggling with gloomy business confidence, which has sunk to decade lows and contributed to a surprise signal from the central bank on Thursday that it planned to keep rates on hold into 2020 and saw downside risks to its growth forecasts.


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NZ Teachers Strike for First Time in 20 years, Challenge Government’s Fiscal Plan

New Zealand school teachers went on strike on Wednesday for the first time in more than 20 years, challenging the Labor government’s plans to balance promised fiscal responsibility against growing demands to increase public sector salaries.

The government’s first budget in May was stretched to fulfill its promise to juggle investing in much-needed infrastructure with a self-imposed rule to pay down debt and insulate the economy from potential shocks.

Almost 30,000 primary school teachers did not turn up to work on Wednesday and held protests across the country, leaving parents of children aged 5 to 13 at public schools scrambling to find childcare.

“Teachers and principals voted for a full day strike…to send a strong message to the Government that the current collective agreement offers from the Ministry of Education would not fix the crisis in teaching,” said Louise Green, lead negotiator at NZEI, the union that represents teachers, in a statement.

NZEI said it has asked for a 16 percent pay increase for teachers over two years, whereas the government has offered between 6.1 and 14.7 percent pay rises, depending on experience, over three years.

“Our view is that we need to have those discussions around the negotiating table but…there isn’t an endless amount that we have available to us in order to meet those expectations,” Prime Minister Jacinda Ardern said at her weekly news conference on Monday.

​The action comes in the wake of a one-day nationwide nurses’ strike in July and a series of smaller actions by government workers, challenging Ardern’s center-left government, which ended almost a decade of center-right National Party rule in October.

The stand-off with its traditional union support base comes nine months after Labor formed a coalition government, promising to pour money into social services and rein in inequality, which has increased despite years of strong growth.

Wage growth has remained sluggish in the island nation for years, despite soaring housing costs, which labour groups and economists say has left workers struggling despite robust growth.

The government is also struggling with gloomy business confidence, which has sunk to decade lows and contributed to a surprise signal from the central bank on Thursday that it planned to keep rates on hold into 2020 and saw downside risks to its growth forecasts.


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Tonga PM Calls on China to Write-off Pacific Debt

Tonga Prime Minister Akalisi Pohiva has called for China to write-off debts owed by Pacific island countries, warning that repayments impose a huge burden on the impoverished nations.

Chinese aid in the Pacific has ballooned in recent years with much of the funds coming in the form of loans from Beijing’s state-run Exim Bank.

Tonga has run-up enormous debts to China, estimated at more than US$100 million by Australia’s Lowy Institute think tank, and Pohiva said his country would struggle to repay them.

He said the situation was common in the Oceania region and needed to be addressed at next month’s Pacific Island Forum summit in Nauru.

“We need to discuss the issue,” he told the Samoa Observer in an interview published on Tuesday.

“All the Pacific Island countries should sign this submission asking the Chinese government to forgive their debts.”

“To me, that is the only way we can all move forward, if we just can’t pay off our debts.”

Tonga took out the Chinese loans to rebuild in the wake of deadly 2006 riots that razed the center of the capital Nuku’alofa.

Beijing has previously refused to write-off the loans by turning them into aid grants but did give Tonga an amnesty on repayments.

Pohiva said China now wanted the debts repaid.

“By September 2018, we anticipate to pay $14 million, which cuts away a huge part of our budget,” he said.

Tonga’s ability to pay has been further dented this year by another massive rebuilding effort in Nuku’alofa, this time after a category five cyclone slammed into the capital in February.

“If we fail to pay, the Chinese may come and take our assets, which are our buildings,” Pohiva said.

“That is why the only option is to sign a submission asking the Chinese government to forgive our debts.”

His comments come as Australia and New Zealand ramp up aid efforts in the Pacific to counter China’s growing presence in the region.

Australia has raised fears in recent months Pacific nations’ debts to China leaves them susceptible to Beijing’s influence.

It has resulted in a race to win hearts and minds in the region.

Canberra recently announced plans to negotiate a security treaty with Vanuatu, while also funding and building an underseas communications cable to the Solomon Islands and Papua New Guinea.

Meanwhile, Chinese company Huawei has agreed to build PNG’s domestic internet network with funds supplied by Exim Bank.


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Tonga PM Calls on China to Write-off Pacific Debt

Tonga Prime Minister Akalisi Pohiva has called for China to write-off debts owed by Pacific island countries, warning that repayments impose a huge burden on the impoverished nations.

Chinese aid in the Pacific has ballooned in recent years with much of the funds coming in the form of loans from Beijing’s state-run Exim Bank.

Tonga has run-up enormous debts to China, estimated at more than US$100 million by Australia’s Lowy Institute think tank, and Pohiva said his country would struggle to repay them.

He said the situation was common in the Oceania region and needed to be addressed at next month’s Pacific Island Forum summit in Nauru.

“We need to discuss the issue,” he told the Samoa Observer in an interview published on Tuesday.

“All the Pacific Island countries should sign this submission asking the Chinese government to forgive their debts.”

“To me, that is the only way we can all move forward, if we just can’t pay off our debts.”

Tonga took out the Chinese loans to rebuild in the wake of deadly 2006 riots that razed the center of the capital Nuku’alofa.

Beijing has previously refused to write-off the loans by turning them into aid grants but did give Tonga an amnesty on repayments.

Pohiva said China now wanted the debts repaid.

“By September 2018, we anticipate to pay $14 million, which cuts away a huge part of our budget,” he said.

Tonga’s ability to pay has been further dented this year by another massive rebuilding effort in Nuku’alofa, this time after a category five cyclone slammed into the capital in February.

“If we fail to pay, the Chinese may come and take our assets, which are our buildings,” Pohiva said.

“That is why the only option is to sign a submission asking the Chinese government to forgive our debts.”

His comments come as Australia and New Zealand ramp up aid efforts in the Pacific to counter China’s growing presence in the region.

Australia has raised fears in recent months Pacific nations’ debts to China leaves them susceptible to Beijing’s influence.

It has resulted in a race to win hearts and minds in the region.

Canberra recently announced plans to negotiate a security treaty with Vanuatu, while also funding and building an underseas communications cable to the Solomon Islands and Papua New Guinea.

Meanwhile, Chinese company Huawei has agreed to build PNG’s domestic internet network with funds supplied by Exim Bank.


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Tonga PM Calls on China to Write-off Pacific Debt

Tonga Prime Minister Akalisi Pohiva has called for China to write-off debts owed by Pacific island countries, warning that repayments impose a huge burden on the impoverished nations.

Chinese aid in the Pacific has ballooned in recent years with much of the funds coming in the form of loans from Beijing’s state-run Exim Bank.

Tonga has run-up enormous debts to China, estimated at more than US$100 million by Australia’s Lowy Institute think tank, and Pohiva said his country would struggle to repay them.

He said the situation was common in the Oceania region and needed to be addressed at next month’s Pacific Island Forum summit in Nauru.

“We need to discuss the issue,” he told the Samoa Observer in an interview published on Tuesday.

“All the Pacific Island countries should sign this submission asking the Chinese government to forgive their debts.”

“To me, that is the only way we can all move forward, if we just can’t pay off our debts.”

Tonga took out the Chinese loans to rebuild in the wake of deadly 2006 riots that razed the center of the capital Nuku’alofa.

Beijing has previously refused to write-off the loans by turning them into aid grants but did give Tonga an amnesty on repayments.

Pohiva said China now wanted the debts repaid.

“By September 2018, we anticipate to pay $14 million, which cuts away a huge part of our budget,” he said.

Tonga’s ability to pay has been further dented this year by another massive rebuilding effort in Nuku’alofa, this time after a category five cyclone slammed into the capital in February.

“If we fail to pay, the Chinese may come and take our assets, which are our buildings,” Pohiva said.

“That is why the only option is to sign a submission asking the Chinese government to forgive our debts.”

His comments come as Australia and New Zealand ramp up aid efforts in the Pacific to counter China’s growing presence in the region.

Australia has raised fears in recent months Pacific nations’ debts to China leaves them susceptible to Beijing’s influence.

It has resulted in a race to win hearts and minds in the region.

Canberra recently announced plans to negotiate a security treaty with Vanuatu, while also funding and building an underseas communications cable to the Solomon Islands and Papua New Guinea.

Meanwhile, Chinese company Huawei has agreed to build PNG’s domestic internet network with funds supplied by Exim Bank.


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Nicaragua Slashes Budget Because of Unrest

Nicaragua’s National Assembly on Tuesday approved a drastic cut to the national budget because of the economic impact of months of anti-government unrest.

The lawmakers adopted a 9.2 percent reduction of the 2018 budget, projecting $180 million less in spending to partly make up for a drop of $220 million in government income.

It was the steepest cut seen in the past 11 years that President Daniel Ortega has been in power. 

The minister for finance and public credit, Ivan Acosta, blamed the reduction on protesters accused of trying to stage a “coup” against Ortega’s government.

The demonstrations against Ortega began in April in anger at moves to cut back social security. But when security forces cracked down, they quickly spread to become marches demanding Ortega’s ouster. 

More than 300 people have died and thousands of Nicaraguans have fled what they say is harsh repression and persecution.

After operations against protest hubs in July, the president claimed the unrest was over and the country was getting back to normal. But demonstrations are continuing.

Contraction possible

Acosta said that before the protests, the economy had been expected to grow 4.3 percent this year. The government has now lowered that target to 1 percent, although some independent analysts say a contraction of 3.5 percent could be in the cards.

The minister told the National Assembly that the fallout from the unrest had forced 8,700 small businesses to close, leaving 71,000 people without work. The important tourism sector has lost $235 million, he said.

The private sector estimates that 200,000 people were left unemployed by the continuing crisis.

Acosta said the budget cuts would not affect social spending, public investment or the level of government employment.

“This reform is tough,” he said. “Right now we are working on the premise that the country is returning in the direction of normality and stability.”

Fiscal and tax reform was needed to make up for the diminished growth, he added, warning that “those who must pay will be made to pay.”

That warning appeared to be aimed at Nicaragua’s business owners who have abandoned Ortega because of the deadly violence ordered against the protesters.


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Nicaragua Slashes Budget Because of Unrest

Nicaragua’s National Assembly on Tuesday approved a drastic cut to the national budget because of the economic impact of months of anti-government unrest.

The lawmakers adopted a 9.2 percent reduction of the 2018 budget, projecting $180 million less in spending to partly make up for a drop of $220 million in government income.

It was the steepest cut seen in the past 11 years that President Daniel Ortega has been in power. 

The minister for finance and public credit, Ivan Acosta, blamed the reduction on protesters accused of trying to stage a “coup” against Ortega’s government.

The demonstrations against Ortega began in April in anger at moves to cut back social security. But when security forces cracked down, they quickly spread to become marches demanding Ortega’s ouster. 

More than 300 people have died and thousands of Nicaraguans have fled what they say is harsh repression and persecution.

After operations against protest hubs in July, the president claimed the unrest was over and the country was getting back to normal. But demonstrations are continuing.

Contraction possible

Acosta said that before the protests, the economy had been expected to grow 4.3 percent this year. The government has now lowered that target to 1 percent, although some independent analysts say a contraction of 3.5 percent could be in the cards.

The minister told the National Assembly that the fallout from the unrest had forced 8,700 small businesses to close, leaving 71,000 people without work. The important tourism sector has lost $235 million, he said.

The private sector estimates that 200,000 people were left unemployed by the continuing crisis.

Acosta said the budget cuts would not affect social spending, public investment or the level of government employment.

“This reform is tough,” he said. “Right now we are working on the premise that the country is returning in the direction of normality and stability.”

Fiscal and tax reform was needed to make up for the diminished growth, he added, warning that “those who must pay will be made to pay.”

That warning appeared to be aimed at Nicaragua’s business owners who have abandoned Ortega because of the deadly violence ordered against the protesters.


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Nicaragua Slashes Budget Because of Unrest

Nicaragua’s National Assembly on Tuesday approved a drastic cut to the national budget because of the economic impact of months of anti-government unrest.

The lawmakers adopted a 9.2 percent reduction of the 2018 budget, projecting $180 million less in spending to partly make up for a drop of $220 million in government income.

It was the steepest cut seen in the past 11 years that President Daniel Ortega has been in power. 

The minister for finance and public credit, Ivan Acosta, blamed the reduction on protesters accused of trying to stage a “coup” against Ortega’s government.

The demonstrations against Ortega began in April in anger at moves to cut back social security. But when security forces cracked down, they quickly spread to become marches demanding Ortega’s ouster. 

More than 300 people have died and thousands of Nicaraguans have fled what they say is harsh repression and persecution.

After operations against protest hubs in July, the president claimed the unrest was over and the country was getting back to normal. But demonstrations are continuing.

Contraction possible

Acosta said that before the protests, the economy had been expected to grow 4.3 percent this year. The government has now lowered that target to 1 percent, although some independent analysts say a contraction of 3.5 percent could be in the cards.

The minister told the National Assembly that the fallout from the unrest had forced 8,700 small businesses to close, leaving 71,000 people without work. The important tourism sector has lost $235 million, he said.

The private sector estimates that 200,000 people were left unemployed by the continuing crisis.

Acosta said the budget cuts would not affect social spending, public investment or the level of government employment.

“This reform is tough,” he said. “Right now we are working on the premise that the country is returning in the direction of normality and stability.”

Fiscal and tax reform was needed to make up for the diminished growth, he added, warning that “those who must pay will be made to pay.”

That warning appeared to be aimed at Nicaragua’s business owners who have abandoned Ortega because of the deadly violence ordered against the protesters.


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Brazil’s Farmers Dump Sugar for Soy as Trade War Boosts Chinese Demand

Last year, Brazilian farmer Gustavo Lopes sized up his sugar cane plantation against his soybean fields.

He looked at global trends, including rising U.S.-China trade tensions and a stubborn sugar-market glut. Then he tore up the last of his cane fields and ditched a decades-old supply contract with a local sugar mill.

Lopes planted soybeans across his 1,600-hectare (4,000-acre) farm in Sao Paulo state – a bet that paid off earlier this month when Chinese buyers loaded up on South American soy after Beijing imposed tariffs on U.S. beans. The farmer got his highest price ever for soybeans.

“It was unusual for this time of year,” Lopes said in an interview at his farm, where he’s prepping to plant another soy crop in September. “It’s got to be a result of Chinese demand.”

Shifting trade flows are redefining the Brazilian landscape, spurring more farmers to align their crops with Chinese appetites. The nation’s soy plantings have expanded by 2 million hectares in two years – an area the size of New Jersey – while land used for cane shrank by nearly 400,000 hectares, according to government data.

China’s growing demand for meat has supercharged soy imports for animal feed. The Asian nation paid $20.3 billion last year for 53.8 million tons of soybeans from Brazil, nearly half its output — and up from 22.8 million tons in 2012.

A new 25 percent Chinese tariff on U.S. soybeans — a retaliation for U.S. levies by President Donald Trump — is expected to boost Brazil’s soy exports to an all-time record this year.

Brazilian soybean exports to China rose to nearly 36 million tons in the first half of 2018, up 6 percent from a year ago.

In July, they surged 46 percent from the same month a year earlier to 10.2 million tons.

Brazil’s grains boom has it rivaling United States as the world’s top soy producer this year, after outpacing U.S. exports over the past five years.

All that soy is eating into Brazil’s sugarcane belt, which is reeling from sugar prices near multi-year lows. Chinese sugar tariffs have weighed on the global market for the sweetener as developed nations continue to cut back consumption.

“We lost 3,000 hectares of cane area to grains in the last two years,” said Roberto de Rezende Barbosa, chief executive of Nova América, one of the largest cane growers in Brazil, managing 110,000 hectares.

Rezende said he had seen farmers migrating from sugarcane into grains in nearly every state where both crops are viable.

Shuttered Sugar Mills

The crop swap is catching on quickly with farmers, threatening the survival of cane mills they once supplied.

About 60 cane mills have closed in the past five years in Brazil’s center-south cane region. About 270 that remain open must fight harder than ever to secure cane supplies.

Agroconsult, an agribusiness consultancy, said it has received requests from mills to calculate the premium they will have to pay producers to keep them from switching to grains.

Douglas Duarte, a director at the Londra mill in Itaí — which used to lease part of the Lopes farm — said he has plans to add 500,000 tons of capacity at the mill but has yet to line up enough cane supplies.

With so many farmers focused on grain, Duarte has worked to sign leases with families who are not interested in actively managing their land.

“In places where the owners have expertise with grains — the equipment and everything — then you can’t compete,” he said.

In some places, the closing of cane mills has also discouraged planting.

Farmer Antonio de Morais Ribeiro Neto gave up planting cane last year after the closure of the sugar mill that he supplied, called Usina Maracaju. Biosev SA, the Brazilian sugar arm of global commodities trader Louis Dreyfus, shut it down in a cost-cutting move.

So Riberio replaced 400 hectares of cane with soybeans, adding to the 2,000 hectares of soy he already had planted. As he watched the U.S.-China trade war escalate, he bought two new grain silos, more soybean-planting machinery and a new harvester.

‘Betting Big’

Plenty of sugar mills, which often grow part of the cane they process, have realized they cannot fight the soy boom and decided to plant their own soybeans as part of a crop rotation strategy.

Cane fields typically need to be replanted after five or six years, and mills are using the renovation window to produce soybeans.

“In the past, those areas subject to renovation would be left fallow until the following year,” said Victor Campanelli, who has exploited the niche.

His firm, Agro Pastoril Paschoal Campanelli, manages the planning, inputs and equipment for sugar mills’ one-off soy crops, sharing in the profits.

While the grains bonanza has many farmers flush with cash, some are wary about relying so much on one crop and one massive importer.

“This Chinese demand has attracted all the farmers,” said Marcos Cesar Brunozzi, who switched part of his land from sugar to grains in the state of Minas Gerais. “I hope the whole situation doesn’t change suddenly, because we are betting big.”

Lopes has no regrets about tearing up his cane fields.

Last year, his sugar cane yielded a net profit of 480 reais per hectare — compared to 2,600 reais per hectare for his soy fields.

“I know it won’t always be that way,” he said. “But still, it’s a huge difference.”


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