Indonesia: Global financial leaders wrapped up an annual meeting of the International Monetary Fund and World Bank on Saturday by urging countries to brace for potential risks from trade disputes and other tensions.
The meetings in Bali, Indonesia, this week were overshadowed by a spate of financial market turmoil and by the threat to global growth from the trade clash between the U.S. and China over Beijing’s technology policies.
The International Monetary and Financial Committee, which advises the IMF’s board of governors, issued a communique on Saturday urging countries to keep debt under control, engineer policies ensure credit is available in line with their levels of inflation and ensure sustained economic growth “for the benefit of all.”
IMF members also pledged to avoid devaluing currencies to seek a trade advantage by making a country’s exports relatively cheaper.
IMF Managing Director Christine Lagarde said that while global growth is still strong, it has leveled off. The IMF started the meetings in Bali by downgrading its 2018 estimate for global growth to a still robust 3.7 percent from an earlier forecast of 3.9 percent.
“I think it’s not inconsistent to have a plateaued growth and downside risks that are the clouds on the horizon, some of which have begun to open up,” Lagard said. Adding that given the level of debt around the world, “we’ve given strong recommendations and in terms of trade: de-escalate and please dialogue.”
Countries should seek to ensure their levels of debt are manageable and that policies foster growth for all, she said. “Sail together and we will be stronger. Focus on your policies. Don’t drift and let’s cooperate as much as we can because we will be better off together.”
China’s central bank governor, Yi Gang, joined the chorus of consternation over the trade standoff, which has resulted in Washington imposing penalty tariffs on tens of billions of dollars of imports of Chinese products and Beijing responding in kind. Protectionism and trade tensions are “major risks” for the world economy, he said in a statement to fellow financial leaders.
U.S. Treasury Secretary Steven Mnuchin downplayed the level of alarm, saying he doesn’t lose sleep over the possibility that China might step up its sales of U.S. treasuries in retaliation for pressure from Washington to alter national economic strategies aimed at nurturing Chinese leaders in many advanced technologies.
Mnuchin said it was still not certain if President Donald Trump would meet with his Chinese counterpart Xi Jinping at a Group of 20 summit late next month in Buenos Aires. Reports that such a meeting was likely raised hopes for progress on the impasse between the world’s two largest economies, stilling disquiet on financial markets Friday.
“I don’t think any decision has been made in regards to a meeting,” he said, saying he favored one. “The president will decide.”
It’s unclear if the two sides can make enough progress before then given the limited room for maneuvering. Apart from chronic U.S. trade deficits, the policies Washington objects to are central to Beijing’s strategy for guiding the economy for decades to come.
Stepping up Chinese imports of U.S. goods and commodities such as liquefied natural gas won’t cut it, Mnuchin said.
It’s “about structural issues,” he said. “This is not about buying more soybeans and buying more LNG.”
“There have to be meaningful commitments to create a rebalanced trading relationship,” he said.
Yi, the head of China’s central bank, said China “stands ready” to cooperate with everyone to support freer trade and investment.
“Countries should jointly take measures against trade protectionism and strive to make economic globalization more open, inclusive, balanced and beneficial to all,” he said.
Pakistan says airspace closure led to loss worth $50 million
Islamabad: The closure of airspace by Pakistan after the Indian Air Force carried out airstrike in Balakot made the country suffer a loss worth $50 million. The same was confirmed on Thursday by Pakistan’s Federal Minister of Aviation Ghulam Sarwar.
The minister, however, added that India suffered loss worth more than $50 million, saying that the restriction hit India harder and New Delhi’s loss was almost double than Pakistan’s, reported Pakistani media.
Addressing a press conference, the minister further said that the exact figure of loss was yet to be ascertained.
Pakistan decided to open its airspace after a gap of almost five months. The Indian government welcomed the move, with the Ministry of Civil Aviation confirming that there were no more airspace restrictions.
“After cancellation of NOTAMS by Pakistan and India in the early hours of Tuesday, there are no restrictions on airspaces of both countries, flights have started using the closed air routes, bringing a significant relief for airlines,” read a statement released by the Ministry of Civil Aviation on microblogging site Twitter.
India had previously requested Pakistan to lift the ban and allow commercial airlines to make use of its airspace. Pakistan, however, had said that it would do so only if India agreed to remove its fighter jets from forward bases along the border.
The development came as a boon for aviation carrier in India, especially state-carrier Air India.
Apart from ensuring shorter flying time, the opening of airspace over the neighbouring country has also curtailed the cost incurred on aviation turbine fuel. According to Air India officials, the closure of airspace was leading to loss worth Rs 6 crore.
The flights from India had to travel via Vienna to avoid the Pakistani airspace. The aircraft also needed to halt in Vienna, which led to increased travel time.
Investments of Rs 5 lakh crore required in Transmission to meet energy needs of a $5 trillion- economy: CII
New Delhi: The Confederation of Indian Industry (CII) has said that Prime Minister Narendra Modi’s vision of a 5 trillion-dollar economy will require an estimated investment of Rs 5 lakh crore in the transmission sector over the next few years.
As per estimates, India will be consuming 1.8 trillion units by 2025 as India’s growth trajectory accelerates, and this requires large investments in the transmission sector, particularly at the state level. The transmission sector has seen a fall in the investments to below 1.8 lakh crore in the last five years but this will need to see a significant jump as 500 GW of renewable energy is added to the grid by 2030, CII said.
CII has worked on a white paper “New Age Power Systems: For 21st Century India Challenges, Solutions and Opportunities” with a view to partner with the government in developing a blueprint for efficient transmission system.
The 8-point agenda drawn up for a robust transmission system includes recommendations on planning, operations, costs to name a few. The report seeks to draw up a blue print for country’ vision on power for all and electric mobility which is a stated goal of the GoI.
“There is a need to recalibrate our power systems in line with the changing energy scenario. With more than 90 percent of the capacity addition in the renewable sector, there is a need to make transmission grids more suited to handle the intermittent power while adhering to the challenges of urbanization and paucity of land,” Ranjan Mishra Co-Chairman of CII National Committee of Power and Managing Director, CLP India said.
The major recommendations include urgent need to upgrade capacities within existing infrastructure, clearly distinguishing the role of the central transmission utility from the functions of the developer, redefining the scope of planning for the center which should be based on the capacity of the transmission line instead of the geography where the same is located, and finally the need to bring in competition and move away from the cost-plus approach or regulated tariff mechanisms.
The creation of an independent Central Transmission Utility (CTU) completely distinct from any developer will ensure a transparent planning and development and operation process and encourage private investments. Also in a bid to ensure efficiency of costs and better consumer prices, the report has called for competitive award of transmission projects. Addressing the media Mr Pratik Aggarwal, Chairman of CII’s Core Group on Transmission and the Group CEO of Sterlite Power Transmission Ltd. said that the report illustrates that competitive bids have ensured tariff reductions by almost 30 percent compared to projects awarded on a nomination basis that follow a cost-plus approach.
Jet Airways interim RP receives claims of over Rs 24,000 crore from lenders
Mumbai: The interim resolution professional (IRP) handling Jet Airways insolvency has received claims of more than Rs 24,000 crore from its lenders, vendors, travel agents, and employees. The IRP has admitted 33 claims from banks worth Rs 8,462 crore, and is verifying Rs 15,044-crore claims from operational creditors and staff.
Naresh Goyal-owned group companies, including the airline’s general sales agents in India, the UK, the UAE and a car rental firm, are among those who have filed the claims. Jet Privilege (Jet’s loyalty programme), Etihad Airways, and its group companies have filed the claims, too. The IRP has rejected Rs 230-crore debt claim from Jetair (India general sales agent) and is verifying its Rs 87-crore claim as an operational creditor. The UAE-based general sales agent has claimed Rs 426 crore.
Only claims related to Jet are being considered and those of subsidiary JetLite will not be accepted, IRP Ashish Chhawchharia said in a notification on Thursday. “The corporate insolvency process of only Jet has been initiated, the wholly owned subsidiaries being a separate legal entity is outside the purview of the process and hence only the claims pertaining to Jet shall be considered,” he said.
Jet shut operations on April 17. Last month, its lenders decided to refer it to the insolvency court with the hope of finding a buyer. The National Company Law Tribunal has asked the IRP to complete the process in 90 days.
Creditor claims are being received as part of the insolvency process. Claims worth Rs 8,462 crore of domestic and overseas lenders have been admitted, while claims of Rs 1,380 crore rejected.
Lenders are voting this week to decide who can bid for the airline as they don’t want any frivolous players in the race, the committee of creditors (CoC) discussed in its first meeting on Tuesday.
E-voting should be over by Friday and advertisements inviting expressions of interest for Jet are scheduled to be out by July 20, said sources who attended the meeting. The suitors will get time till the first week of August to submit EOIs.
The CoC has finalised the voting rights of each lender based on amount owed. State Bank of India has 19.43 per cent votes, highest among all lenders followed by YES Bank (12.81) and Punjab National Bank (11.31).
In the first CoC meeting, the lenders took stock of the assets of the company, which include six planes, spare parts, slots, Jet Privilege shares, and other intangible assets. Interestingly, the plane confiscated by Dutch authorities is being treated as an asset. Sources said the team working for the IRP, Grant Thornton, had been engaging with the aviation ministry and the Directorate General of Civil Aviation regarding the slots that had been given away to other airlines temporarily. The interim RP has admitted the claims of the financial creditors worth Rs 8,500 crore.