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The International Monetary Fund said on Thursday it had not pressured Venezuela to release economic indicators after years of silence, while two sources said the country’s surprise data release this week was due to pressure from China.

The central bank on Tuesday unexpectedly released data confirming Venezuela is suffering hyperinflation and massive economic contraction. The release reversed President Nicolas Maduro’s unofficial policy of classifying economic indicators as state secrets.

The data reported a 22.5 percent contraction in Venezuela’s economy in the third quarter of 2018 from the same period of the previous year. The bank did not provide a full-year 2018 figure for economic activity.

Monthly inflation in April 2019 was 33.8 percent, while 2018 full-year inflation reached 130,060 percent, the bank said.

The IMF said it suspended work with Venezuela on its economic data in January, when opposition leader Juan Guaido invoked the constitution to assume the interim presidency, arguing Maduro’s 2018 re-election was illegitimate.

Most Western countries, including the United States, have backed Guaido as the OPEC nation’s interim head of state.

However, Maduro and ruling socialist party continue to control state institutions including the military, state oil company PDVSA and the central bank.

The Fund said in March it was awaiting guidance from member countries on whether to recognize Guaido as the country’s leader. The United States and Venezuelan ally China are important IMF members, as they have the world’s two largest economies.

“Work in this area has been suspended since late January as political developments gave rise to questions regarding government recognition,” the spokesman said.

Last year, the IMF issued a “declaration of censure” against Venezuela for failing to report timely and accurate economic data, such as gross domestic product and inflation.

The move was a warning that Caracas could be barred from voting on IMF policies, and eventually expelled, unless it resumed timely and accurate reporting.

Maduro has repeatedly dismissed the IMF as an agent of U.S. colonialism and criticized the institution for leading harsh austerity programs in developing countries.

China, which has for years sought to increase its influence within the IMF, had pressured Maduro’s government to release the data, according to two sources with knowledge of the matter.

One of the sources said China had hoped releasing the data would help bring Venezuela into compliance with the IMF, making it harder for the institution to recognize Guaido.

An IMF spokesman said the fund could not fully assess the quality of the data because there was no contact with the government.

“We cannot offer a view on data quality as we have not had the opportunity to make a full assessment in the absence of contacts with the authorities,” the spokesman said.
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The International Monetary Fund said on Thursday it had not pressured Venezuela to release economic indicators after years of silence, while two sources said the country’s surprise data release this week was due to pressure from China.

The central bank on Tuesday unexpectedly released data confirming Venezuela is suffering hyperinflation and massive economic contraction. The release reversed President Nicolas Maduro’s unofficial policy of classifying economic indicators as state secrets.

The data reported a 22.5 percent contraction in Venezuela’s economy in the third quarter of 2018 from the same period of the previous year. The bank did not provide a full-year 2018 figure for economic activity.

Monthly inflation in April 2019 was 33.8 percent, while 2018 full-year inflation reached 130,060 percent, the bank said.

The IMF said it suspended work with Venezuela on its economic data in January, when opposition leader Juan Guaido invoked the constitution to assume the interim presidency, arguing Maduro’s 2018 re-election was illegitimate.

Most Western countries, including the United States, have backed Guaido as the OPEC nation’s interim head of state.

However, Maduro and ruling socialist party continue to control state institutions including the military, state oil company PDVSA and the central bank.

The Fund said in March it was awaiting guidance from member countries on whether to recognize Guaido as the country’s leader. The United States and Venezuelan ally China are important IMF members, as they have the world’s two largest economies.

“Work in this area has been suspended since late January as political developments gave rise to questions regarding government recognition,” the spokesman said.

Last year, the IMF issued a “declaration of censure” against Venezuela for failing to report timely and accurate economic data, such as gross domestic product and inflation.

The move was a warning that Caracas could be barred from voting on IMF policies, and eventually expelled, unless it resumed timely and accurate reporting.

Maduro has repeatedly dismissed the IMF as an agent of U.S. colonialism and criticized the institution for leading harsh austerity programs in developing countries.

China, which has for years sought to increase its influence within the IMF, had pressured Maduro’s government to release the data, according to two sources with knowledge of the matter.

One of the sources said China had hoped releasing the data would help bring Venezuela into compliance with the IMF, making it harder for the institution to recognize Guaido.

An IMF spokesman said the fund could not fully assess the quality of the data because there was no contact with the government.

“We cannot offer a view on data quality as we have not had the opportunity to make a full assessment in the absence of contacts with the authorities,” the spokesman said.
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U.S. stocks lost ground again on Thursday, as conflicting comments on trade talks from President Donald Trump and Beijing  reinforced investor nervousness that a lengthy battle could be in the offing and harm global growth.

Trump said talks with China were going well but those comments were countered by a senior Chinese diplomat who said provoking trade disputes is “naked economic terrorism.”

The lack of clarity around the trade battle has rattled investors of late, after the S&P 500 had risen more than 17% through the first four months of the year on optimism a trade deal between the two countries could be reached.

That optimism has faded, however, as the escalating dispute between the two countries has weighed heavily on Wall Street in May, with each of the three main indexes declining at least 5% for the month. The benchmark S&P 500 is nearly 6% lower from its closing high on April 30.

“The market is coming to that realization that we are not getting really clean or clear information and it is going to be a lot of noise and just prepare for that,” said Ben Phillips, chief investment officer at Eventshares in Newport Beach, California.

“It is a difficult market right now. There are a lot of macro signals that are starting to roll over and the question is the trade dispute causing that or is it other factors.”

A government report on Thursday showed U.S. inflation was much weaker than initially thought in the first quarter on a sharp slowdown in domestic demand, while growth was also slightly lower than estimated in April.

The Dow Jones Industrial Average fell 27.59 points, or 0.11%, to 25,098.82, the S&P 500 lost 2.11 points, or 0.08%, to 2,780.91 and the Nasdaq Composite dropped 9.19 points, or 0.12%, to 7,538.12.

The trade jitters helped sustain demand for safe haven debt, as U.S. Treasury yields held near 20-month lows. The yield curve between three-month bills and 10-year notes remained inverted, the inversion the widest in nearly 12 years.

That, in turn, weighed on interest-rate sensitive bank stocks, which dropped 1.5% and were on track for a third straight day of declines, while the broader financial sector declined 0.8%.

The energy sector fell 1.3%, as oil prices continued their slump in part due to a smaller-than-expected decline in U.S. crude inventories. The sector has fallen more than 10% this month.

Among stocks, Dollar General Corp jumped 7.2% after the discount retailer’s same-store sales and profit topped expectations.

Viacom Inc climbed 3.6% after report that CBS Corp is preparing for merger talks with the media company. CBS rose 2.5%.

PVH Corp plunged 14.2% as the worst performer on the S&P 500, after the Calvin Klein owner cut its annual profit forecast as it grapples with tariffs and slowing retail growth.

Declining issues outnumbered advancing ones on the NYSE by a 1.11-to-1 ratio; on the Nasdaq, a 1.38-to-1 ratio favored decliners.

The S&P 500 had 1 new 52-week high and 25 new lows; the Nasdaq Composite 25 new highs and 119 new lows.
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U.S. stocks lost ground again on Thursday, as conflicting comments on trade talks from President Donald Trump and Beijing  reinforced investor nervousness that a lengthy battle could be in the offing and harm global growth.

Trump said talks with China were going well but those comments were countered by a senior Chinese diplomat who said provoking trade disputes is “naked economic terrorism.”

The lack of clarity around the trade battle has rattled investors of late, after the S&P 500 had risen more than 17% through the first four months of the year on optimism a trade deal between the two countries could be reached.

That optimism has faded, however, as the escalating dispute between the two countries has weighed heavily on Wall Street in May, with each of the three main indexes declining at least 5% for the month. The benchmark S&P 500 is nearly 6% lower from its closing high on April 30.

“The market is coming to that realization that we are not getting really clean or clear information and it is going to be a lot of noise and just prepare for that,” said Ben Phillips, chief investment officer at Eventshares in Newport Beach, California.

“It is a difficult market right now. There are a lot of macro signals that are starting to roll over and the question is the trade dispute causing that or is it other factors.”

A government report on Thursday showed U.S. inflation was much weaker than initially thought in the first quarter on a sharp slowdown in domestic demand, while growth was also slightly lower than estimated in April.

The Dow Jones Industrial Average fell 27.59 points, or 0.11%, to 25,098.82, the S&P 500 lost 2.11 points, or 0.08%, to 2,780.91 and the Nasdaq Composite dropped 9.19 points, or 0.12%, to 7,538.12.

The trade jitters helped sustain demand for safe haven debt, as U.S. Treasury yields held near 20-month lows. The yield curve between three-month bills and 10-year notes remained inverted, the inversion the widest in nearly 12 years.

That, in turn, weighed on interest-rate sensitive bank stocks, which dropped 1.5% and were on track for a third straight day of declines, while the broader financial sector declined 0.8%.

The energy sector fell 1.3%, as oil prices continued their slump in part due to a smaller-than-expected decline in U.S. crude inventories. The sector has fallen more than 10% this month.

Among stocks, Dollar General Corp jumped 7.2% after the discount retailer’s same-store sales and profit topped expectations.

Viacom Inc climbed 3.6% after report that CBS Corp is preparing for merger talks with the media company. CBS rose 2.5%.

PVH Corp plunged 14.2% as the worst performer on the S&P 500, after the Calvin Klein owner cut its annual profit forecast as it grapples with tariffs and slowing retail growth.

Declining issues outnumbered advancing ones on the NYSE by a 1.11-to-1 ratio; on the Nasdaq, a 1.38-to-1 ratio favored decliners.

The S&P 500 had 1 new 52-week high and 25 new lows; the Nasdaq Composite 25 new highs and 119 new lows.
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President Donald Trump said Thursday he still believes China “would love to make” a new trade deal with the United States and might now regret backtracking on some agreements negotiators for the two countries had reached.

“We had a deal and they broke the deal,” Trump said at the White House. “I think if they had to do it again they wouldn’t have done what they did.”

Trump contended that tariffs he has imposed on hundreds of billions of dollars worth of Chinese imports has prompted some manufacturers in China to move their production to other countries.

“I think we’re doing very well with China,” he said, adding that tariffs have had little effect on inflation in the U.S.

Trade talks between officials of the world’s two biggest economies broke off recently, but U.S. Treasury Secretary Steven Mnuchin has said he likely will travel to Beijing “in the near future” to continue negotiations.

Meanwhile, Chinese Vice Foreign Minister Zhang Hanhui  accused the U.S. of engaging in “naked economic terrorism” in the trade war. He leveled the accusation in Beijing during a news briefing on President Xi Jinping’s official visit to Russia next week.

Beijing and Washington have been engaged in a trade war since last July, when Trump first imposed tariffs on hundreds of Chinese products worth billions of dollars, leading to a set of retaliatory tit-for-tit tariff increases. Trump and Xi had agreed to de-escalate the trade war last December while they started negotiations to reach a lasting deal.  

But Trump recently boosted taxes on $200 billion worth of Chinese goods after accusing Beijing of reneging on promises to make structural changes to its economic practices. He has threatened to add tariffs to all Chinese imports, which could amount to levies on another $300 billion worth of Chinese exports to the U.S.  

Zhang said while China does not want a trade war, it is not afraid of it, and described the Trump administration’s actions as “economic bullying.”

Beijing countered Trump’s levies by announcing new tariff increases on $60 billion worth of U.S. exports that will take effect Saturday.

An editorial Wednesday in The People’s Daily, the official newspaper of China’s ruling Communist Party, warned that China could end exports of rare earth minerals to the U.S. as leverage in the trade war. Rare earths are a group of 17 chemical elements used in everything from smartphones and other high-tech electronics to military equipment. 
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The highly-anticipated showdown on Wednesday night between Trish Regan of Fox Business and Liu Xin of China Global Television Network (CGTN) — the overseas arm of state-controlled China Central Television (CCTV) — turned out to be a tame question-and-answer session with little exchange of barbs.

Some observers say that, as both are neither policymakers nor experts on trade, their “disappointing” talks contributed nothing of substance, but stoked up emotions of national pride in China.

Others, however, welcome such dialogues that allow free exchange of differing views to continue and set an example for U.S. and Chinese officials to resume their trade negotiations.

The media hype has not only shed light on the increasingly sharp divide between the two countries over trade but also press freedom in China as well, they add.

Face-off

The buildup for the debate started last week when Liu released a commentary, accusing Regan of “economic warmongering,” which led to Regan’s invitation via Twitter for an “honest” debate and Wednesday’s face-off between them.

Liu appeared as a guest, via satellite from Beijing, on Regan’s U.S. based show.

Citing rights issues, CGTN wasn’t allowed to live-stream the segment, but many Chinese appeared to watch it on the internet.

As expected, during the 16-minute-long segment, Liu stuck closely to China’s talking points on every question Regan raised, be it China’s intellectual property (IP) theft, state capitalism or tariffs.

When asked by Regan to respond to a hypothetical question if the United States “forces” China’s Huawei to share its technological developments, Liu replied: “if it is through cooperation, if it is through mutual learning… if you pay for the use of this IP or this high-tech knowledge, I think it’s absolutely fine. Why not? We all prosper because we learn from each other.”

Liu, however, admitted that cases of IP theft do exist, but that doesn’t mean all Chinese people are stealing. And IP protection has been a consensus in China, she added.

Analysts, in general, believe Liu is on a mission to defend China’s trade stance although Liu insisted she is neither a member of the Communist Party of China, nor speaks for the party, which controls her station.

State mouthpiece?

“They [state media broadcasters including Liu] all come on the debate or shows with a mission. Many won’t show their true color as the mouthpiece of the Communist Party, but in fact, deep in their mind and thoughts, they have long joined the party,” Lu Nan, an outspoken Chinese dissident, who now lives in the United States, said during a Mingjin TV discussion.

Lu added that he gave Liu credit for having skillfully argued her way out in a language that is not her mother tongue although truth beat many of her arguments.

David Bandurski, co-director of the China Media Project, an independent research program in partnership with the Journalism & Media Studies Centre at the University of Hong Kong, also noted “the seemingly ever-present hand of the Chinese party-state,” saying that Liu can’t afford to act as she pleases in a country, where media professionals are asked to pledge loyalty to the party-state.

Stoking nationalistic emotions

“Their debate, so-called… could play a substantial role in stoking emotions of national pride in China, regardless of the outcome. Liu is already being portrayed on social media as a national champion,” Bandurski told VOA in an email, adding the show has little substance.

The show has indeed attracted so much attention in China that, right after it ended, the top-trending sentence on Weibo — a Twitter-like microblogging platform in China — was “Liu was interrupted by Trish three times in the first 30 seconds of the show.”

Many Chinese netizens cheered for Liu’s success.

One Weibo user praised Liu to be “neither overbearing nor servile and have showed good demeanor from a big country” while another wrote that Liu “stands to reason and has done a good job.”

There were, however, others who said they were disappointed with the show because it came nowhere near a heated debate.

Set an example

Nevertheless, Harley Seyedin, president of the American Chamber of Commerce in South China, said the conversation between Regan and Liu could set an example for both the United States and China to follow and reach a final resolution for the trade dispute.

“As these two super anchors can come to together and held a very civilized conversation on very difficult issues, I think, as two nations, we should be able to sit down at the table and resolve the issues,” Seyedin told a CGTN show right after the Regan-Liu talk.

Xu Huiming, an associate professor of journalism at Guangzhou University, agreed, saying talks are better than no talks.

“Shall there be no exchange of views, you won’t know what’s on the mind of the others. Any exchange of views, even if they differ from one another, raises attention to those who are interested in the matter,” the professor said.
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In recent weeks, Australia and India have re-elected incumbent prime ministers. These Asia-Pacific countries, who have a difficult relationship with China, are unlikely to make the kind of policy changes that Beijing has been seeking for a long time, analysts said.

Australia this month re-elected Prime Minister Scott Morrison stunning pollsters who had anticipated his defeat for several months. India gave a landslide victory to Prime Minister Narendra Modi’s Bharatiya Janata Party, who campaigned largely on a nationalistic agenda.

China wants support from Australia and India on issues like the U.S.-China trade war, the Huawei controversy, South China Sea controversy and the Belt and Road Initiative.

The Communist Party in Beijing attaches great importance to obtaining support from democratic countries as a means to enhance China’s global influence. It has spent huge sums to obtain the support of the relatively poor European countries like Greece in order to expand the Chinese footprint. But Australia and India are unlikely to support China on many of the issues that are core to Beijing’s foreign policy.

But there may be some exceptions. India has invited Huawei to start trials of its 5G telecommunications network while Australia has blocked it.

“Australia was the first country to reject Huawei’s 5G technology and it is very hard to see how it is going to revisit the decision,” said Richard McGroger, senior fellow at Lowy Institute in Sydney.

China’s official media expressed dissatisfaction over a statement by Morrison describing China as a customer of Australia and the United States as a friend. He made a clear distinction between the two countries when he said, “China is an incredibly important country for Australia’s future. Our relationship with China is of course different to our relationship with the United States,” he said during the elections.

McGregor said there was no reason to be upset over the remarks. “I think it was not a good choice of words. I am sure the Prime Minister did not intend to send any kind of wrong signal and I doubt very much he will be describing China that way again,” he said.

Beijing may have preferred a change of government in Australia which would revisit some of the decisions taken by the coalition under Morrison earlier. But Morrison is back as Prime Minister and he is unlikely to review past decisions.

Besides, Australia has its own domestic reasons to support the United States on issues like opposing China’s military build up in the South China Sea.

“Of course, Australia is worried about the Chinese bases in the South China Sea, since most Australian trade passes through those waters,” he said.

China-India relations

In his congratulatory message to India’s re-elected prime minister, Chinese President Xi Jinping called on Modi to continue joint efforts with China in “promoting multi-polarization and economic globalization as well as upholding multilateralism.”

Analysts see this statement as a sign that Xi wants India to join in a broad coalition against the dominating influence of the United States.

Xi’s choice of words is significant because they come ahead of the meeting of Shanghai Cooperation Organization in Kyrgyz Republic capital, Bishkek, on June 13-14. He will meet Modi along with Russian President Vladimir Putin, Pakistan Prime Minister Imran Khan and heads of central Asian countries. China will once again push forward its agenda for opposing U.S. trade policies.

As the re-elected government settles down in New Delhi after a stormy election, envoys from India and China are making swift preparations for a series of exchanges between the leaders. A meeting of foreign ministers will happen soon.

Modi is inviting Xi to his election constituency and pilgrimage city of Varanasi in northern India for an informal summit in September.

The first Mar-a-Lago style informal summit took place with the two leaders meeting each other without aides took place in the Chinese city of Wuhan last year. The idea is for the two leaders to understand each other, see issues from a larger canvass and give “strategic guidance” to their ministers on enhancing India-China relations.

The Wuhan summit took place one year after India and China were engaged in a 72-day long border spat at a place called Doklam near the Bhutan border.

“There will be some serious effort to improve relationship. I think they will also look at the possibility of finding an early solution to the border dispute between the two countries,” said Phunchok Stobdan, former Indian diplomat and strategic expert.

“They might also discuss the Dalai Lama issue,” he said. The Tibetan leader fled China and came to India in 1959. He has since been demanding “greater autonomy” for Tibetan speaking people in China while Chinese leaders describe him as a “separatist and splittist” element who is instigating a section of Tibetans to break up from China.

Modi will also be careful about allowing implementation of China’s Belt and Road Initiative because it can be an emotional issue, more so because the Indian public regards Beijing as Pakistan’s biggest ally and protection. Modi and his party fought the election speaking against what he regards as Pakistan based terrorists causing mayhem in India.

An important issue on Xi’s mind is to garner support from different countries against Washington’s aggressive trade actions, which has also affected India and other countries. An important question is whether he will manage to persuade Modi to come out openly against the trade war.

“India usually tries to stay middle of the road instead of choosing between the U.S. and China. It is unlikely to come out strongly against U.S. trade actions,” Stobdan said.

India cancelled oil shipments from Iran under pressure from Washington, incurring huge losses. But it is likely to go back to the earlier practice of importing Iranian oil despite U.S. sanctions, Stobdan said.

“India is ready to make exceptions when it comes to its long-term a relationship with Iran and Russia. Everyone’s watching if India would regard its relationship with China at the same level,” he said.
…

In recent weeks, Australia and India have re-elected incumbent prime ministers. These Asia-Pacific countries, who have a difficult relationship with China, are unlikely to make the kind of policy changes that Beijing has been seeking for a long time, analysts said.

Australia this month re-elected Prime Minister Scott Morrison stunning pollsters who had anticipated his defeat for several months. India gave a landslide victory to Prime Minister Narendra Modi’s Bharatiya Janata Party, who campaigned largely on a nationalistic agenda.

China wants support from Australia and India on issues like the U.S.-China trade war, the Huawei controversy, South China Sea controversy and the Belt and Road Initiative.

The Communist Party in Beijing attaches great importance to obtaining support from democratic countries as a means to enhance China’s global influence. It has spent huge sums to obtain the support of the relatively poor European countries like Greece in order to expand the Chinese footprint. But Australia and India are unlikely to support China on many of the issues that are core to Beijing’s foreign policy.

But there may be some exceptions. India has invited Huawei to start trials of its 5G telecommunications network while Australia has blocked it.

“Australia was the first country to reject Huawei’s 5G technology and it is very hard to see how it is going to revisit the decision,” said Richard McGroger, senior fellow at Lowy Institute in Sydney.

China’s official media expressed dissatisfaction over a statement by Morrison describing China as a customer of Australia and the United States as a friend. He made a clear distinction between the two countries when he said, “China is an incredibly important country for Australia’s future. Our relationship with China is of course different to our relationship with the United States,” he said during the elections.

McGregor said there was no reason to be upset over the remarks. “I think it was not a good choice of words. I am sure the Prime Minister did not intend to send any kind of wrong signal and I doubt very much he will be describing China that way again,” he said.

Beijing may have preferred a change of government in Australia which would revisit some of the decisions taken by the coalition under Morrison earlier. But Morrison is back as Prime Minister and he is unlikely to review past decisions.

Besides, Australia has its own domestic reasons to support the United States on issues like opposing China’s military build up in the South China Sea.

“Of course, Australia is worried about the Chinese bases in the South China Sea, since most Australian trade passes through those waters,” he said.

China-India relations

In his congratulatory message to India’s re-elected prime minister, Chinese President Xi Jinping called on Modi to continue joint efforts with China in “promoting multi-polarization and economic globalization as well as upholding multilateralism.”

Analysts see this statement as a sign that Xi wants India to join in a broad coalition against the dominating influence of the United States.

Xi’s choice of words is significant because they come ahead of the meeting of Shanghai Cooperation Organization in Kyrgyz Republic capital, Bishkek, on June 13-14. He will meet Modi along with Russian President Vladimir Putin, Pakistan Prime Minister Imran Khan and heads of central Asian countries. China will once again push forward its agenda for opposing U.S. trade policies.

As the re-elected government settles down in New Delhi after a stormy election, envoys from India and China are making swift preparations for a series of exchanges between the leaders. A meeting of foreign ministers will happen soon.

Modi is inviting Xi to his election constituency and pilgrimage city of Varanasi in northern India for an informal summit in September.

The first Mar-a-Lago style informal summit took place with the two leaders meeting each other without aides took place in the Chinese city of Wuhan last year. The idea is for the two leaders to understand each other, see issues from a larger canvass and give “strategic guidance” to their ministers on enhancing India-China relations.

The Wuhan summit took place one year after India and China were engaged in a 72-day long border spat at a place called Doklam near the Bhutan border.

“There will be some serious effort to improve relationship. I think they will also look at the possibility of finding an early solution to the border dispute between the two countries,” said Phunchok Stobdan, former Indian diplomat and strategic expert.

“They might also discuss the Dalai Lama issue,” he said. The Tibetan leader fled China and came to India in 1959. He has since been demanding “greater autonomy” for Tibetan speaking people in China while Chinese leaders describe him as a “separatist and splittist” element who is instigating a section of Tibetans to break up from China.

Modi will also be careful about allowing implementation of China’s Belt and Road Initiative because it can be an emotional issue, more so because the Indian public regards Beijing as Pakistan’s biggest ally and protection. Modi and his party fought the election speaking against what he regards as Pakistan based terrorists causing mayhem in India.

An important issue on Xi’s mind is to garner support from different countries against Washington’s aggressive trade actions, which has also affected India and other countries. An important question is whether he will manage to persuade Modi to come out openly against the trade war.

“India usually tries to stay middle of the road instead of choosing between the U.S. and China. It is unlikely to come out strongly against U.S. trade actions,” Stobdan said.

India cancelled oil shipments from Iran under pressure from Washington, incurring huge losses. But it is likely to go back to the earlier practice of importing Iranian oil despite U.S. sanctions, Stobdan said.

“India is ready to make exceptions when it comes to its long-term a relationship with Iran and Russia. Everyone’s watching if India would regard its relationship with China at the same level,” he said.
…

Water restrictions are to be imposed in Sydney, Australia’s biggest city, for the first time in almost a decade because of falling reservoir levels and a long-standing drought. Residents who breach the regulations could be fined US$150.

The flow of rainwater into some of Sydney’s reservoirs is at its lowest since World War II. From Saturday, households will face restrictions that will target the use of water outdoors. Garden sprinklers will be banned, and tougher measures could follow. The New South Wales state government says that “early and decisive action” will help to conserve supplies as a record-breaking drought worsens.

Australia’s Bureau of Meteorology is predicting below-average rainfall and higher temperatures for the next three months across the much of the continent.

“With the lowest inflows into Sydney’s water storage since 1940, the government has come to a decision that it is best to go into water restrictions,” said Melinda Pavey, the New South Wales state Minister for Water. “We may get rain. The Bureau of Meteorology’s predictions are not fabulous, but as we know as we plan weekends, they are not always right and I hope that they are wrong. We are taking the appropriate course of action to take it to level one.”

New South Wales has been in drought since the middle of 2017.

Catherine Port, from Sydney Water, a government-owned company, says its officers will patrol to ensure the water ban is not broken.

“Sydney Water have a team of community water officers that will be out in the community to monitor and ensure that water restrictions are complied with. Penalties that will apply is AUD$220 for individuals and $550 for businesses,” she said.

Critics, though, insist that Sydney’s plight is in part the result of poor planning and a failure to take water recycling seriously.

Falling reservoir levels prompted authorities to switch on a multi-million dollar desalinization plant in January. At full capacity, it could supply Sydney, a city of 4.6 million people, with 15 per cent of its water needs.

Smaller towns in New South Wales, Australia’s most populous state, are also facing water crises. In Tamworth, residents are on level four restrictions that ban all use of water outdoors, and swimming pools cannot be filled or topped up. Level five restrictions are considered to be an emergency measure.

Australia is the world’s driest inhabited continent.

 
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