Author: Fbiz

Brazil’s Jobs Crisis Lingers, Posing Challenge for Next President

After losing his job with a foreign food company in March, Alexander Costa surveyed Brazil’s anemic labor market and decided to start selling cheap lunches by the beach in Rio de Janeiro to try and provide for his young family.

“I could have stayed home, looking for work, sending out resumes, with few jobs and things very hard,” Costa said. “But I didn’t stand still. I decided to create something different … to reinvent myself.”

Many other Brazilians have also had to reinvent themselves in recent years, as Latin America’s largest economy struggles to overcome a jobs crisis more than a year after officially exiting recession.

Nearly 13 million people – or more than the entire population of Greece – are out of a job, with the unemployment rate hovering between 12 percent to 14 percent since 2016. As a result, unemployment is among voters’ top concerns ahead of next month’s election.

The desperate search for work amid a string of political graft scandals and rising violence has soured the mood, polarizing debate and distracting from the country’s underlying fiscal challenges.

But only by lowering the unemployment rate will Brazil achieve the rise in household spending it needs to maintain sustained growth, said Marcos Casarin, the head of Latin America macro research at Oxford Economics.

“The only way to have a prolonged recovery in economic activity is if unemployment starts to fall in a substantial way,” he said.

However, it could take several years to get the rate below 10 percent, he said, adding: “I’m not very optimistic.”

Divisive Figures

With no presidential candidate likely to win a majority in the first-round vote on Oct. 7, it looks increasingly likely voters will face a choice between two candidates in the Oct. 28 run-off: far-right Jair Bolsonaro and leftist Fernando Haddad of the Workers Party.

Both are divisive figures — rejected by nearly half the electorate — making it likely that either one will face an uphill battle to pass ambitious economic reforms that foreign investors have long called for.

Bolsonaro has vowed to erase Brazil’s primary budget deficit by 2020 through controversial privatizations and spending cuts.

Haddad has proposed broadening the central bank’s mandate to include unemployment, while boosting government-led investments, revoking a spending ceiling and scuttling privatizations.

Both Bolsonaro and Haddad are pitching their proposals as ways to tackle the unemployment crisis, which has pushed many into the informal sector, sapping tax income and leaving workers without paid holidays, salary raises and other benefits.

Outgoing President Michel Temer last year passed an overhaul of the country’s labor laws, which was intended to make the job market more flexible and which the government said would help create new jobs, an effect that as yet has failed to materialize.

Bolsonaro supports Temer’s labor reform and wants to further cut work regulations to boost jobs. Haddad has suggested putting the labor reform, which was opposed by unions, to a referendum, while also advocating a short-term stimulus program.

Costa, however, was unwilling to wait and see what Brazil’s next president comes up with.

His meals-on-wheels business started slowly, selling 13-reais ($3) lunches from the back of his car in Rio’s wealthy Barra da Tijuca neighborhood. But business took off when he joined forces with his friend, Stefan Weiss, whose white BMW provides a ritzier shop window from which they now sell roughly 200 hot meals each day.

“At the moment, Brazil faces a big problem in relation to the economy and the lack of jobs,” said Weiss, who works on an offshore oil platform but sells meals on days off to earn extra cash. “The people who lost their jobs are trying to find new ways to establish themselves in the market.”

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Brazil’s Jobs Crisis Lingers, Posing Challenge for Next President

After losing his job with a foreign food company in March, Alexander Costa surveyed Brazil’s anemic labor market and decided to start selling cheap lunches by the beach in Rio de Janeiro to try and provide for his young family.

“I could have stayed home, looking for work, sending out resumes, with few jobs and things very hard,” Costa said. “But I didn’t stand still. I decided to create something different … to reinvent myself.”

Many other Brazilians have also had to reinvent themselves in recent years, as Latin America’s largest economy struggles to overcome a jobs crisis more than a year after officially exiting recession.

Nearly 13 million people – or more than the entire population of Greece – are out of a job, with the unemployment rate hovering between 12 percent to 14 percent since 2016. As a result, unemployment is among voters’ top concerns ahead of next month’s election.

The desperate search for work amid a string of political graft scandals and rising violence has soured the mood, polarizing debate and distracting from the country’s underlying fiscal challenges.

But only by lowering the unemployment rate will Brazil achieve the rise in household spending it needs to maintain sustained growth, said Marcos Casarin, the head of Latin America macro research at Oxford Economics.

“The only way to have a prolonged recovery in economic activity is if unemployment starts to fall in a substantial way,” he said.

However, it could take several years to get the rate below 10 percent, he said, adding: “I’m not very optimistic.”

Divisive Figures

With no presidential candidate likely to win a majority in the first-round vote on Oct. 7, it looks increasingly likely voters will face a choice between two candidates in the Oct. 28 run-off: far-right Jair Bolsonaro and leftist Fernando Haddad of the Workers Party.

Both are divisive figures — rejected by nearly half the electorate — making it likely that either one will face an uphill battle to pass ambitious economic reforms that foreign investors have long called for.

Bolsonaro has vowed to erase Brazil’s primary budget deficit by 2020 through controversial privatizations and spending cuts.

Haddad has proposed broadening the central bank’s mandate to include unemployment, while boosting government-led investments, revoking a spending ceiling and scuttling privatizations.

Both Bolsonaro and Haddad are pitching their proposals as ways to tackle the unemployment crisis, which has pushed many into the informal sector, sapping tax income and leaving workers without paid holidays, salary raises and other benefits.

Outgoing President Michel Temer last year passed an overhaul of the country’s labor laws, which was intended to make the job market more flexible and which the government said would help create new jobs, an effect that as yet has failed to materialize.

Bolsonaro supports Temer’s labor reform and wants to further cut work regulations to boost jobs. Haddad has suggested putting the labor reform, which was opposed by unions, to a referendum, while also advocating a short-term stimulus program.

Costa, however, was unwilling to wait and see what Brazil’s next president comes up with.

His meals-on-wheels business started slowly, selling 13-reais ($3) lunches from the back of his car in Rio’s wealthy Barra da Tijuca neighborhood. But business took off when he joined forces with his friend, Stefan Weiss, whose white BMW provides a ritzier shop window from which they now sell roughly 200 hot meals each day.

“At the moment, Brazil faces a big problem in relation to the economy and the lack of jobs,” said Weiss, who works on an offshore oil platform but sells meals on days off to earn extra cash. “The people who lost their jobs are trying to find new ways to establish themselves in the market.”

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Into the Fold? What’s Next for Instagram as Founders Leave

When Kevin Systrom and Mike Krieger sold Instagram to Facebook in 2012, the photo-sharing startup’s fiercely loyal fans worried about what would happen to their beloved app under the social media giant’s wings. 

None of their worst fears materialized. But now that its founders have announced they are leaving in a swirl of well wishes and vague explanations, some of the same worries are bubbling up again — and then some. Will Instagram disappear? Get cluttered with ads and status updates? Suck up personal data for advertising the way its parent does? Lose its cool? 

Worst of all: Will it just become another Facebook?

“It”s probably a bigger challenge (for Facebook) than most people realize,” said Omar Akhtar, an analyst at the technology research firm Altimeter. “Instagram is the only platform that is growing. And a lot of people didn’t necessarily make the connection between Instagram and Facebook.”

Instagram had just 31 million users when Facebook snapped it up for $1 billion; now it has a billion. It had no ads back then; it now features both display and video ads, although they’re still restrained compared to Facebook. But that could quickly change. Facebook’s growth has started to slow, and Wall Street has been pushing the company to find new ways to increase revenue.

Instagram has been a primary focus of those efforts.

Facebook has been elevating Instagram’s profile in its financial discussions. In July, it unveiled a new metric for analysts, touting that 2.5 billion people use at least one of its apps — Facebook, Instagram, WhatsApp or Messenger — each month. While not particularly revealing, the measurement underscores the growing importance Facebook places on those secondary apps. 

Facebook doesn’t disclose how much money Instagram pulls in, though Wedbush analyst Michael Pachter estimates it’ll be around $6 billion this year, or just over 10 percent of Facebook’s expected overall revenue of about $55.7 billion. 

Facebook CEO Mark Zuckerberg has long seen Instagram’s promise. At the time, it was by far Facebook’s largest acquisition (although it was dwarfed by the $19 billion Zuckerberg paid for WhatsApp two years later). And it was the first startup allowed to operate mostly independently. 

That has paid off big time. Not only did Instagram reach 1 billion users faster than its parent company, it also succeeded in cloning a popular Snapchat feature, dealing a serious blow to that social network upstart and succeeding where Facebook’s own attempts had repeatedly failed. Instagram also pioneered a long-form video feature to challenge YouTube, another big Facebook rival.

Recently, Instagram has been on a roll. In June, Systrom traveled to New York to mark the opening of its new office there, complete with a gelato bar and plans to hire hundreds of engineers. Only a month earlier, Instagram had moved into sparkly new offices in San Francisco. In a July earnings call, Zuckerberg touted Instagram’s success as a function of its integration with Facebook, claiming that it used parent-company infrastructure to grow “more than twice as quickly as it would have on its own.”

But Instagram has also been a case study in how to run a subsidiary independently — especially when its parent is mired in user-privacy problems and concerns about election interference, fake news and misinformation. And especially when its parent has long stopped being cool, what with everyone and their grandma now on it.

Instagram’s simple design — just a collection of photos and videos of sunsets, faraway vacations, intimate breakfasts and baby close-ups — has allowed it to remain a favorite long after it became part of Facebook. If people go to Twitter to bicker over current events and to Facebook to see what old classmates are up to, Instagram is where they go to relax, scroll and feast their eyes.

So, will that change?

“I don’t think Zuckerberg is dumb,” Akhtar said. “He knows that a large part of Instagram’s popularity is that it’s separate from Facebook.”

As such, he thinks Facebook would be wise to reassure users that what they love about Instagram isn’t going to change — that they are not going to be forced to integrate with Facebook. “That’ll go a long way,” he said. 

Internally, the challenge is a bit more complicated. While Systrom and Krieger didn’t say why they’re leaving, their decision echoes the recent departure of WhatsApp’s co-founder and CEO Jan Koum, who resigned in April. Koum had signaled years earlier that he would take a stand if Facebook’s push to increase profits risked compromising core elements of the WhatsApp messaging service, such as its dedication to user privacy. When Facebook started pushing harder for more revenue and more integration with WhatsApp, Koum pulled the ripcord.

One sign that additional integration may be in Instagram’s future: Zuckerberg in May sent longtime Facebook executive Adam Mosseri to run Instagram’s product operation. Mosseri replaced longtime Instagrammer Kevin Weil, who was shuffled back to the Facebook mothership. 

That likely didn’t sit well with Instagram’s founders, Akhtar and other analysts said. Now that they’re gone as well, Mosseri is the most obvious candidate to head Instagram. 

“Kevin Systrom loyalists are probably going to leave,” Akhtar said. 

Which means Facebook may soon have a new challenge on its hands: Figuring out how to keep Instagram growing if it loses the coolness factor that has bolstered it for so long.

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Into the Fold? What’s Next for Instagram as Founders Leave

When Kevin Systrom and Mike Krieger sold Instagram to Facebook in 2012, the photo-sharing startup’s fiercely loyal fans worried about what would happen to their beloved app under the social media giant’s wings. 

None of their worst fears materialized. But now that its founders have announced they are leaving in a swirl of well wishes and vague explanations, some of the same worries are bubbling up again — and then some. Will Instagram disappear? Get cluttered with ads and status updates? Suck up personal data for advertising the way its parent does? Lose its cool? 

Worst of all: Will it just become another Facebook?

“It”s probably a bigger challenge (for Facebook) than most people realize,” said Omar Akhtar, an analyst at the technology research firm Altimeter. “Instagram is the only platform that is growing. And a lot of people didn’t necessarily make the connection between Instagram and Facebook.”

Instagram had just 31 million users when Facebook snapped it up for $1 billion; now it has a billion. It had no ads back then; it now features both display and video ads, although they’re still restrained compared to Facebook. But that could quickly change. Facebook’s growth has started to slow, and Wall Street has been pushing the company to find new ways to increase revenue.

Instagram has been a primary focus of those efforts.

Facebook has been elevating Instagram’s profile in its financial discussions. In July, it unveiled a new metric for analysts, touting that 2.5 billion people use at least one of its apps — Facebook, Instagram, WhatsApp or Messenger — each month. While not particularly revealing, the measurement underscores the growing importance Facebook places on those secondary apps. 

Facebook doesn’t disclose how much money Instagram pulls in, though Wedbush analyst Michael Pachter estimates it’ll be around $6 billion this year, or just over 10 percent of Facebook’s expected overall revenue of about $55.7 billion. 

Facebook CEO Mark Zuckerberg has long seen Instagram’s promise. At the time, it was by far Facebook’s largest acquisition (although it was dwarfed by the $19 billion Zuckerberg paid for WhatsApp two years later). And it was the first startup allowed to operate mostly independently. 

That has paid off big time. Not only did Instagram reach 1 billion users faster than its parent company, it also succeeded in cloning a popular Snapchat feature, dealing a serious blow to that social network upstart and succeeding where Facebook’s own attempts had repeatedly failed. Instagram also pioneered a long-form video feature to challenge YouTube, another big Facebook rival.

Recently, Instagram has been on a roll. In June, Systrom traveled to New York to mark the opening of its new office there, complete with a gelato bar and plans to hire hundreds of engineers. Only a month earlier, Instagram had moved into sparkly new offices in San Francisco. In a July earnings call, Zuckerberg touted Instagram’s success as a function of its integration with Facebook, claiming that it used parent-company infrastructure to grow “more than twice as quickly as it would have on its own.”

But Instagram has also been a case study in how to run a subsidiary independently — especially when its parent is mired in user-privacy problems and concerns about election interference, fake news and misinformation. And especially when its parent has long stopped being cool, what with everyone and their grandma now on it.

Instagram’s simple design — just a collection of photos and videos of sunsets, faraway vacations, intimate breakfasts and baby close-ups — has allowed it to remain a favorite long after it became part of Facebook. If people go to Twitter to bicker over current events and to Facebook to see what old classmates are up to, Instagram is where they go to relax, scroll and feast their eyes.

So, will that change?

“I don’t think Zuckerberg is dumb,” Akhtar said. “He knows that a large part of Instagram’s popularity is that it’s separate from Facebook.”

As such, he thinks Facebook would be wise to reassure users that what they love about Instagram isn’t going to change — that they are not going to be forced to integrate with Facebook. “That’ll go a long way,” he said. 

Internally, the challenge is a bit more complicated. While Systrom and Krieger didn’t say why they’re leaving, their decision echoes the recent departure of WhatsApp’s co-founder and CEO Jan Koum, who resigned in April. Koum had signaled years earlier that he would take a stand if Facebook’s push to increase profits risked compromising core elements of the WhatsApp messaging service, such as its dedication to user privacy. When Facebook started pushing harder for more revenue and more integration with WhatsApp, Koum pulled the ripcord.

One sign that additional integration may be in Instagram’s future: Zuckerberg in May sent longtime Facebook executive Adam Mosseri to run Instagram’s product operation. Mosseri replaced longtime Instagrammer Kevin Weil, who was shuffled back to the Facebook mothership. 

That likely didn’t sit well with Instagram’s founders, Akhtar and other analysts said. Now that they’re gone as well, Mosseri is the most obvious candidate to head Instagram. 

“Kevin Systrom loyalists are probably going to leave,” Akhtar said. 

Which means Facebook may soon have a new challenge on its hands: Figuring out how to keep Instagram growing if it loses the coolness factor that has bolstered it for so long.

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Global $500M Data Drive Aims to Boost Harvests, End Hunger

A $500 million data drive aims to improve the harvests of hundreds of millions of farmers worldwide as rising hunger levels threaten a global goal to end hunger by 2030, organizations involved in the initiative said Tuesday.

Developing countries and donors launched the “50 X 2030” scheme on the sidelines of the U.N. General Assembly, seeking funding to gather farming data through surveys in 50 nations across Africa, Asia and Latin America over the next 12 years.

Basic statistics, such as what farmers are planting, their yields and access to finance, are often lacking, incomplete or unreliable, making it difficult for governments and donors to know where or how to invest their cash, the United Nations said.

“Each year, governments, businesses and the private sector invest hundreds of billions of dollars in agriculture and design policies without this critical information,” said Emily Hogue, a U.N. Food and Agriculture Organization senior adviser. “This could cause losses in agricultural productivity and income and could also lead to continuing hunger and poverty.”

The push for better data was announced weeks after new U.N. figures showed world hunger has risen for three years running, with 821 million people — one in nine — going hungry in 2017.

Eliminating hunger is one of the 17 U.N. sustainable development goals ( agreed upon by world leaders in 2015.

The initiative aims to increase the coverage and frequency of agricultural surveys so that governments have the information needed to plan and implement the right policies, experts said.

In sub-Saharan Africa, where at least one in four people is estimated to have suffered from chronic hunger in 2017, only two out of 44 nations have high-quality agriculture data, according to the Global Partnership for Sustainable Development Data.

For example, agriculture experts puzzled for years over why milk production was stagnant in an area of East Africa with an abundance of grazing land and rising consumer demand. A detailed survey conducted in 2014 discovered that a lack of basic livestock services, including veterinary care, was hampering production, which rose after the needs were addressed.

“Better data means governments can get the right support to farmers at the right time to increase production and improve their lives,” Claire Melamed, head of the Global Partnership — a network of 300 partners — told the Thomson Reuters Foundation. “It’s a long-term investment.”

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Global $500M Data Drive Aims to Boost Harvests, End Hunger

A $500 million data drive aims to improve the harvests of hundreds of millions of farmers worldwide as rising hunger levels threaten a global goal to end hunger by 2030, organizations involved in the initiative said Tuesday.

Developing countries and donors launched the “50 X 2030” scheme on the sidelines of the U.N. General Assembly, seeking funding to gather farming data through surveys in 50 nations across Africa, Asia and Latin America over the next 12 years.

Basic statistics, such as what farmers are planting, their yields and access to finance, are often lacking, incomplete or unreliable, making it difficult for governments and donors to know where or how to invest their cash, the United Nations said.

“Each year, governments, businesses and the private sector invest hundreds of billions of dollars in agriculture and design policies without this critical information,” said Emily Hogue, a U.N. Food and Agriculture Organization senior adviser. “This could cause losses in agricultural productivity and income and could also lead to continuing hunger and poverty.”

The push for better data was announced weeks after new U.N. figures showed world hunger has risen for three years running, with 821 million people — one in nine — going hungry in 2017.

Eliminating hunger is one of the 17 U.N. sustainable development goals ( agreed upon by world leaders in 2015.

The initiative aims to increase the coverage and frequency of agricultural surveys so that governments have the information needed to plan and implement the right policies, experts said.

In sub-Saharan Africa, where at least one in four people is estimated to have suffered from chronic hunger in 2017, only two out of 44 nations have high-quality agriculture data, according to the Global Partnership for Sustainable Development Data.

For example, agriculture experts puzzled for years over why milk production was stagnant in an area of East Africa with an abundance of grazing land and rising consumer demand. A detailed survey conducted in 2014 discovered that a lack of basic livestock services, including veterinary care, was hampering production, which rose after the needs were addressed.

“Better data means governments can get the right support to farmers at the right time to increase production and improve their lives,” Claire Melamed, head of the Global Partnership — a network of 300 partners — told the Thomson Reuters Foundation. “It’s a long-term investment.”

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European Union Sets Up Payment System with Iran to Maintain Trade

The five remaining parties to the Iran nuclear deal have agreed to establish a special payment system to allow companies to continue doing business with the regime, bypassing new sanctions imposed by the United States.

Envoys from Britain, France, Germany, Russia, China and Iran issued a statement late Monday from the United Nations announcing the creation of a “Special Purpose Vehicle” that will be established in the European Union. The parties said the new mechanism was created to facilitate payments related to Iranian exports, including oil. 

Federica Mogherini, EU’s foreign policy chief, told reporters after the deal was announced that the SPV gives EU member states “a legal entity to facilitate legitimate financial transactions with Iran…and allow European companies to continue to trade with Iran in accordance to European Union law and could be open to other partners in the world.”

Mogherini said the financial agreement is also aimed at preserving the agreement reached in 2015 with Iran to scale back its nuclear program in exchange for relief from strict economic sanctions. The deal was reached under then-President Barack Obama, but Obama’s successor, Donald Trump, pulled out of the accord in May of this year, saying it didn’t address Tehran’s ballistic missile program or its influence in the Middle East.

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European Union Sets Up Payment System with Iran to Maintain Trade

The five remaining parties to the Iran nuclear deal have agreed to establish a special payment system to allow companies to continue doing business with the regime, bypassing new sanctions imposed by the United States.

Envoys from Britain, France, Germany, Russia, China and Iran issued a statement late Monday from the United Nations announcing the creation of a “Special Purpose Vehicle” that will be established in the European Union. The parties said the new mechanism was created to facilitate payments related to Iranian exports, including oil. 

Federica Mogherini, EU’s foreign policy chief, told reporters after the deal was announced that the SPV gives EU member states “a legal entity to facilitate legitimate financial transactions with Iran…and allow European companies to continue to trade with Iran in accordance to European Union law and could be open to other partners in the world.”

Mogherini said the financial agreement is also aimed at preserving the agreement reached in 2015 with Iran to scale back its nuclear program in exchange for relief from strict economic sanctions. The deal was reached under then-President Barack Obama, but Obama’s successor, Donald Trump, pulled out of the accord in May of this year, saying it didn’t address Tehran’s ballistic missile program or its influence in the Middle East.

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